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If the Masses Lose Confidence in the Currency…

- Mac Slavo - ShtfPlan

Slavo demonstrates for us yet once again that when it comes to monetary history, he skipped a lot of classes. He writes: "Yet, as we have seen throughout history, and especially in the last decade, currencies backed by nothing are always debased, eventually being worth even less than the paper they’re printed on."

Slavo has given us a partial truth. Yes, it is true that paper money (supposedly backed by nothing) gets debased. But it is also true that when gold has been used to represent money, it too has been debased. The only way to get around that fact is to ignore it, which he and others of his ilk do with great consistency. (Do you ever wonder why that might be?)

Slavo would have us believe that unlike gold, which has never become worthless, paper inexorably does so. Another partial truth. Yes, gold has never gone to zero. But the only paper currencies to become worthless have all been in nations that had no bond market; countries like Hungary, Yugoslavia, Argentina and most recently, Zimbabwe. Countries with a bond market have seen the purchasing power of their paper money diminished, that is certainly true, but there has never been an example where it has gone to zero.

Slavo and those like him have never bothered to stop and ask themselves just what is money. Were you to ask him, you would get a one word answer: gold. But gold is not money any moreso than is paper. Money is a mental construct and throughout recorded history, various substances have been used to represent that mental construct. All got debased over time.

The key to having sound money will never be resolved by switching from one representation to another. It can only occur when those entrusted with its management are legally required to be fiscally responsible.

That being said, with the stewards of our various currencies being criminally (?) irresponsible at this juncture of history, now is most certainly the time to own at least some gold and silver.

Commented 4077 days ago

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Beginning of the headline :At a recent meeting of the American Economic Association a vote was held about whether or not the United States should back its currency with gold. Not surprisingly, 100% of mainstream economists educated by our most prestigious universities were against such a measure. From the top down, there is a cult-like belief that our paper monetary system is absolute and infallible. Yet, as we have seen throughout history, and especially in the last decade, currencies backed by nothing are always debase... Read More

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