The most needed bill that will never pass

By Bob Livingston

Back when he was Alan "Goldspan" — in 1962, long before he got on the government's payroll and became Federal Reserve chairman — Alan Greenspan said this: The abandonment of the gold standard made it possible...to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which — through a complex series of steps — the banks accept in place of tangible assets and treat as if … What was true in 1962 — that "there are now more claims outstanding than real assets" — is true now on order of magnitude billions of times over. Where the dollar was once backed by gold and redeemable by gold, now the world is drowning in fiat (unbacked) "money." The money creators have unleashed the presses and, as a result, in the progression of time the U.S. currency has depreciated toward zero. The public understands this as rising prices, but it is more specifically depreciating paper money. Occasionally a politician comes along who understands this cause and effect. Representative Ron Paul was one. His son, Senator Rand Paul is another, though son is not like father in most respects. Rand is more a politician and less a statesman. Ron Paul regularly championed a gold standard and challenged the banksters about their insidious work to debase the currency and steal the wealth of the American people. Now comes along a new gold standard champion, Republican Representative Alex Moony of West Virginia. In March Mooney introduced H.R. 5404, a bill that would define the dollar as a fixed weight of gold. In the bill's text, Mooney notes the deleterious effects of fiat currency as found in Congressional research: The United States dollar has lost 30 percent of its purchasing power since 2000, and 96 percent of its purchasing power since the end of the gold standard in 1913. Under the Federal Reserve's 2 percent inflation objective, the dollar loses half of its purchasing power every generation, or 35 years. American families need long-term price stability to meet their household spending needs, save money and plan for retirement. The Federal Reserve policy of long-term inflation has made American manufacturing uncompetitive, raising the cost of United States manufactured goods by more than 40 percent since 2000, compared to less than 20 percent in Germany and France. Between 2000 and 2010, United States manufacturing employment shrunk by one-third after holding steady for 30 years at nearly 20,000,000 jobs. The American economy needs a stable dollar, fixed exchange rates, and money supply controlled by the market not the government. The gold standard puts control of the money supply with the market instead of the Federal Reserve. The gold standard means legal tender defined by and convertible into a certain quantity of gold. Under the gold standard through 1913 the United States economy grew at an annual average of 4 percent, one-third larger than the growth rate since then and twice the level since 2000. The international gold exchange standard from 1914 to 1971 did not provide for a United States dollar convertible into gold, and therefore helped cause the Great Depression and stagflation. The Federal Reserve's trickle down policy of expanding the money supply with no demand for it has enriched the owners of financial assets but endangered the jobs, wages, and savings of blue collar workers. Restoring American middle-class prosperity requires change in monetary policy authorized to Congress in Article I, Section 8, Clause 5 of the Constitution. During his campaign for president, Donald Trump regularly spoke of the need for the U.S. to return to the gold standard. "We used to have a very, very solid country because it was based on a gold standard," Trump told WMUR television in New Hampshire during a March 2015 interview. But he said it would be tough to bring it back because "we don't have the gold. Other places have the gold." In another interview with GQ, Trump said, "Bringing back the gold standard would be very hard to do, but boy, would it be wonderful. We'd have a standard on which to base our money." Trump may or may not be correct about whether "we don't have the gold." We don't know because the Federal Reserve and bankster-owned politicians have refused to assent to an audit of the Federal Reserve and Fort Knox, the purported location of America's gold. Why should the U.S. be on a gold standard, as the Founding Fathers intended? Gold is essential to personal liberty. On the other hand, paper money, personal freedom and privacy are incompatible. Paper money centralizes power to the state and diminishes the individual. This is the first cause of all you see happening. The only way for true economic growth is by the transfer of services, goods or wealth between people (or businesses) who actually produce something. In other words, if someone provides a service and gets gold or silver (actual wealth) or widgets for compensation, both the service provider and widget maker have benefited and each has something that has bettered his standard of living. If the one who performed the service uses the widgets to acquire trinkets that help him perform his service, then the service performer has benefited. The trinket maker has also benefited, and he can put the widgets to use. This sort of transfer has worked from the beginning of time, when the farmer took his produce to market, where it was sold or bartered in exchange for wealth, tools, supplies and seeds so he could begin producing food for next year. Gold prices have historically indicated the confidence in or the failure of fiat currencies. An ounce of gold can still be exchanged for the same items an ounce of gold could be exchanged for 100 years ago. That's not the case of a dollar, which now is worth only pennies compared to what it was in 1913, or even 1971 when Richard Nixon completely disconnected the U.S. dollar from gold. In 1936, you could buy a very nice suit for $34. At the time, gold was $34 per ounce. Today, you can buy an extremely nice suit for $1,000 to $1,500. An ounce of gold can be had for about $1,250. Suppose someone had put $34 in a shoe box in 1936, set it on the top shelf of the closet and forgotten about it. If you found it today, it would still be $34, albeit $34 that will buy a lot less than $34 did in 1936. But suppose someone had put away for safekeeping an ounce of gold in 1936. If you pulled it out today, it would be worth $1,250 or more. In 1933, the Consumer Price Index (CPI) — the price of a basket of common goods purchased by the average consumer — was 12.8. The current CPI is 251. In other words, that same basket of goods has increased from just less than $13 to $251. The rise in gold's price from $34 to $1,250 does not reflect an increase in the value of an ounce of gold. It reflects an increasing loss of confidence in the U.S. dollar and the devaluation of the dollar through money printing. Every dollar printed dilutes the value of those already in circulation. Unfortunately, Mooney's bill looks like another pie in the sky. Although introduced in March, not one co-sponsor has signed on the bill and it remains in committee. And not a peep about it has been heard from Trump. If he was a true populist and for the people as he says, Trump would address money printing post haste. But I don't expect it to happen. The banksters wouldn't stand for such a thing.