Good Money and the Fall of Bankers
NEW YORK (TheStreet) -- Last week, I wrote The Return to Good Money, based on the practical and innovative proposal from Hugo Salinas Price for the U.S. to return to a quasi-silver based monetary system, where silver "money" would be circulated parallel to the bankers' paper-dollars.
This is totally different from the current gold and silver coins minted by the U.S. (and Canadian) government. In the monetary system envisioned by Price, silver coins would be introduced as a parallel form of currency, giving citizens a free and direct choice between securing their wealth with precious metals, or holding paper-dollars. Naturally such a system represents a grave threat to the world of paper-currencies created by bankers, where scamming and stealing from people has been made incredibly simple through forcing everyone to hold the bankers' ever more diluted paper.
Before getting into today's topic, I want to spend a moment briefly expanding upon how our current, paper monetary systems make it so easy for the bankers to take advantage of us, for those who are still unfamiliar with this centuries-old scam. To begin with, we must take note of the rabid desire by the Federal Reserve to "create more inflation."
This comes in the context where real U.S. inflation (using the same methodology the government used to use) has been averaging between 8.5% and 9.5% all year. Since inflation is literally the speed with which our currencies are plunging toward zero, the higher the inflation-rate, the greater the need for people to "invest" their wealth (with bankers) -- to prevent that one form of banker-stealing. However, the higher the rate of inflation, the more that ordinary people are forced to invest in high-risk "investments" -- which these same bankers are trying to sell to us. This gives us a "choice" of investing directly in their (rigged) equity markets, or buying-into the "innovative financial products" (i.e. scams) created by Wall Street bankers in their own, private casino (the derivatives market).
This is the reason why bankers have a pathological hatred for any "money" (i.e. gold and silver) which they cannot dilute or debauch with a printing press. If people are not perpetually having their wealth confiscated by inflation, then they are not forced to hand that wealth to the bankers to be "invested." Obviously the bankers can't scam people if they can't debauch their money and can never get their hands on their wealth. But Price goes even further in his own proposal.
Price suggests that our currency laws be intentionally designed so that if anyone chooses to "deposit" their silver money with banks that those banks would not be obligated to provide the holder with their (original) silver (plus interest) upon withdrawal, but rather that the banks would be free to give silver depositors their own paper when the depositor sought to make a withdrawal. I had to read this twice (thinking it a misprint) before the beauty of Price's idea took hold.
If people who deposit their "good" (i.e. inflation-proof) silver money with banks are almost certain to get only paper back from their banker when they make a withdrawal, the obvious question is who would ever deposit their silver with a bank? The answer, of course, is no one.
We would have a monetary system where more and more currency-holders will choose to hold silver currency instead of paper currency -- as people quickly see how silver-holders are protected from the ravages of inflation -- and where none of that silver would ever fall into the hands of the bankers. The trend is obvious: bankers would only have access to a permanently and rapidly-shrinking pool of paper capital, and the worse that bankers robbed the paper-holders with the inflation induced by their incessant money-printing, the more rapidly that pool of wealth would shrink (as people fled to the safety of silver money).
Conversely, the bankers would be presented with an obvious choice for themselves: they could stop diluting their paper -- which would be all it would take for people to stop the inexorable process of switching their banker-paper for good money. Keep in mind that the official legislative mandate of all central banks is "price stability" (i.e. zero inflation). This was the "promise" which the bankers made to our societies when our governments allowed these private bankers to own our nations' printing-presses.
Instead of honoring that commitment, the bankers have cynically and shamelessly sought to do the exact opposite of what they promised: they try to create as much inflation as possible -- to steal from people once through diluting their money, and then steal from them a second time as people are forced to "invest" in the bankers' high-risk scams.
Not satisfied with 9% inflation, Bernanke has vowed to engage in more "quantitative easing": printing up $1 trillion or so, for the sole, explicit purpose of increasing inflation still further.
Yes, Bernanke has expressed "hopes" for other positive spin-offs from increased money-printing, but all of those hopes are derived from the supposedly "virtuous" consequences of higher inflation: people save less, borrow more, and generally "spend" money they don't have -- exactly what created all of the economic problems which Bernanke pretends he can solve with more money-printing. This is conceptually identical to a crack-addict who tells his doctor that the only "cure" for his withdrawal symptoms is even higher doses of "crack."
In my original commentary, I strongly advocated Price's proposal, purely based upon its guarantee of a means to permanently protect people from banker-inflation via giving the people "good money." However, the added "bonus" of this proposal as a means to permanently prevent the bankers from victimizing us with their other forms of stealing as well makes this literally "an offer we cannot refuse."
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
