”Now you see why the creature is so dangerous, added Grandpa Tuttle. A lot of people have suffered around the world because it (the creature) controls fiat currency and causes inflation.”
- The Tuttle Twins
While the media focuses all their COVID-19 reporting on the death counts, infection rates, and mask compliance, more eyes are needed on the fiscal consequences resulting from the unprecedented response of the federal government. Congress, the President, and the Federal Reserve all reacted to the pandemic with increased spending, loans, grants, and massive subsidies for individuals, businesses, and state governments. Per the COVID Money Tracker, nearly ten trillion dollars has already been authorized and is currently in play, with the promise of more, much more. So where is all this money coming from? Well, a long time ago a group of wealthy bankers and government bureaucrats convened and established the mother of all slush funds, the Federal Reserve (the Fed).
It was in 1910, off the coast of Georgia, at a resort on Jekyll Island, that this clandestine meeting was first held. This new central bank would hold a monopoly on monetary policy and the banking system. Its influence would extend beyond the United States. The goal, ironically, was to stabilize the business cycle and maintain a sound banking system by manipulating short-term interest rates and the money supply. Yet, since that time, government policies and intervention have caused the value of the dollar to fall by 96 percent. Even Biggie couldn’t have predicted how government interference would make mo’ money, and lead to mo’ problems.
The Fed’s primary role is to artificially manipulate the money supply through expansions and contractions, creating boom and bust cycles. The expansion of the money supply produces inflation by creating money out of thin air. This new money magically appears by adding a few more zeros to the Fed’s supreme ledger. The money does not exist; it didn’t come from the production of goods and services, bought and sold in a free economy. It is monopoly money, funny money. Now the economy has more money available to purchase the same number of products, forcing prices to rise. Inflation is the explicit result of the Fed artificially increasing the money supply. It is a hidden tax that diminishes prosperity. Individual savings are reduced because more money is needed to maintain one's current standard of living. Those hit hardest are individuals on a fixed income, who must pay higher prices without receiving additional income.
Fiat money is paper money that is not backed by a commodity, like gold and silver. The Constitution prohibits fiat money run by the government. The Constitution, instead, backed gold and silver. Gold has been used as a means of trade and recognized legal tender since 600 BC. Its scarcity and stability brought sound money and greater wealth. The Gold Standard, in the US, was abandoned by Nixon in 1971. This gave bureaucrats, politicians, and bankers complete control of the money with little oversight. The Gold Standard, up to that point, provided a hedge against inflation. Prices would only rise and fall with changes in production, as a result of supply and demand.
In Conner Boyack’s 2015 book, “The Tuttle Twins: Creature from Jekyll Island”, Boyack uses his children’s series to provide introductory information on money, banking, and, in particular, the Federal Reserve. In this Tuttle Twin tale, the Federal Reserve is the inflation monster that debases the currency and artificially makes prices go up. The twins learn how this creature directly affects their ability to make money and, in turn, reduces the amount of money left for them to spend.
Like most governments, the Federal Reserve creates a problem and then masquerades as the cure. In a perfect world, the Federal Reserve would be abolished. It would no longer operate as the lender of last resort or provide continuous taxpayer bailouts. Instead, a return to private markets would allow citizens to use whatever medium of exchange they wish, backed by gold and silver.
Several states have already acted. The Sound Money Defense League is working with states to restore gold and silver to their proper place as legal tender in the United States. Utah, Louisiana, and Texas have already done so. In June 2018, Texas opened a Bullion Depository for gold storage that helps facilitate the use of gold and silver in everyday transactions. Several other states are moving forward to eliminate the tax on the sale of precious metals, to start gold depositories, and recognize gold and silver as money. All these states, working together, will help to lead us back to fiscal sanity.
Comments