The printed Dollar hangs in the "im"balance

In the long run,, the value of paper money becomes zero. Money is a natural development in the open marketplace. In the past as governments gained power they assumed monopoly control over money. History has shown us that in time governments learned to outspend their revenues. New or higher taxes have always ticked people off, so it wasn’t long the learned power learned how to inflate their currencies by reducing the amount of gold in each coin. Of course the governments did this action always hoping their subjects wouldn’t discover the fraud. They always found out, and they always objected.

It was back in January of 1980 when gold reached a record high or $835. Base this on today's prices to include inflation and you come up with $2,250. That said, gold, right now is a bargain.

Currencies rise. Point in fact, the Euro, in its infancy (2002) was worth $ .86 to the dollar. Currencies fall. As now it takes $1.48 dollars to buy that same one Euro. Peso's, Rupee, Rupiah, and many other currencies are on the rise, as the dollar slides. What is our Government doing about this today? What can be done for tomorrow? These are questions that are being discussed at this time in Washington as they ponder a new rate increase possibility. What will this do to the U.S. Economy? The big question is what will other countries do if this continues on?

There is a rising concern with inflation throughout the planet as other countries position themselves and take shelter from this storm. The oil rich states consider turning their backs on the greenback and peg their currency to a basket of various other currencies and not rely solely on the dollar. Without an action such as this they may find it difficult to curb inflation in their economies. This action will create a more flexible interest rate policy, but it may not be good for the greenback paper currency status as the world's reserve currency.

Since the Bretton Woods agreement in 1944, the dollar became the predominant world reserve currency replacing the British Pound. At that point in time the U.S. had a huge amount of physical gold, and a huge amount of political clout and military might, which it displayed in World War II. Impressed, the world accepted our dollar at a value of 1/35th of an ounce of gold as the world’s new reserve currency. This is where the saying that the dollar was “as good as gold,” came in. It was convertible to all foreign central banks at that rate. However, for American citizens, it remained illegal to own. This was a gold-exchange standard that was doomed to fail from its inception.

The U.S. did exactly what many predicted she would do, just as in the past of Kings and Ceasars. The saying goes that history repeats itself. The U.S. printed more dollars for which there was no gold backing. Since it is paper, and easy to print, that became the easy out. But the world was content to accept those dollars for more than 25 years with little question-- until the French and others in the late 1960s demanded we fulfill our promise to pay one ounce of gold for each $35 they delivered to the U.S. Treasury. Economically, this should be true. If any commoner were to borrow from a bank, their loans need be paid back. There are very serious circumstances if this action does not happen such as bankruptcy, lawsuits, and more. This is simply what the French were looking for. We have always been a society that spends more than it earns, so we “make” more. This resulted in a huge gold drain that brought an end to a very poorly devised pseudo-gold standard. This all ended with Richard Nixon on August 15, 1971, when he closed the gold window and refused to pay out any of our remaining 280 million ounces of gold. In essence, we declared our insolvency and everyone recognized some other monetary system had to be devised in order to bring stability to the markets. There has been no resolution to this date.

Which brings us to a quote by George Bernard Shaw:

"You have to choose [as a voter] between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold."