Excellent piece on money that everyone should see
Submitted by matias.rosendahl on Fri, 03/20/2009 - 18:21
http://montanasoundmoney.org/parksvideo.html
Collapse of the Dollar.
This is the Power Point presentation made by Dr. Larry Parks before the Montana state legislative committee on sound money.
I think it is an excellent overview of the case against fiat money and for a return to gold or silver-backed money.
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A must-see!
Spread this video everywhere.
(More info here http://www.dailypaul.com/node/86762)
One Salient Oversight
Gold vs Fiat
Do we really want Foreign Gold Mining Companies replacing the Federal Reserve Banking System ? If currency were backed by gold, what would happen if there was an oversupply of gold? With more supply comes lower prices, which means that money backed by gold can easily devalue (and cause inflation) if gold supplies increase. Restricting gold mining is an option, These companies are not mining gold in order to keep the world economy stable, they are mining gold because it makes them rich. If a gold mining company strikes a very rich gold seam and begins to flood the market with gold then it would, of course, result in a currency devaluation.
Does anyone believe returning currency to the gold standard will somehow solve the current economic crisis ? Remember the simple fact a Gold standard was in place before the 1929 great depression and continued through it. The gold standard did not cause the great depression, and it was not the gold standard that helped the world's economies recover from the depression. Similarly, the current economic crisis is not a result of fiat currency and the fractional banking system.
A fiat currency is created within a fractional banking system - ie not backed by gold - can and does retain its value. Japan, for example, has a fractional banking system, and they have experienced deflation over many years (deflation is when money rises in value against goods and services). The supply of money can be easily regulated through monetary tools like interest rates, bonds and reserve requirements. While it is true that a fractional banking system could create an infinite amount of money, the reality is that money is used by humans, who pick and choose when to buy or save or invest or borrow. This slows down money creation. It is therefore entirely possible (and proven in Japan's case) that a fractional banking system can maintain price stability.
I never agreed with Ron Paul about a Gold Standard, only quit squandering our national wealth.