The 2005 Gold Surge

Mr. T's gold blingIt’s a little known secret that our US currency (also known as Federal Reserve Notes) devalues every year due to the increase in quantity of circulation. Normally this devaluation is so small that it only becomes appreciable over long periods of time. However, the printing press has been cranking away quite heavily over the last few years to keep the market bubbles afloat, so much so that the Fed has decided to hide it’s tracks and discontinue it’s publication of M3 data. Now it will be a bit harder to determine just how many dollars are floating around the world, which has made many nervous.

Because let’s face it, fiat currencies are all a fraud. The ability to just create funny money out of this air is a power so great it can’t help but be abused. For those that feel this is merely hyperbole, I give you a quote from Sir Josiah Stamp, president of the Bank of England in the 1920’s.

The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was every invented. Banking was conceived in inequity and born in sin. Bankers own the earth. Take it away from them but leave them the power to create money, and with a flick of a pen, they will create enough money to buy it back again. Take this great power away from them and all great fortunes like mine will disappear, for then this would be a better and happier world to live in. But if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit.

Even Ron Paul is weighing in on this issue, noting among others that gold has surged to a 24 year high. In fact, all the precious metals are kicking ass lately, though some of it is certainly the result of rampant speculation and some panic.

There are alternatives to unbacked paper money, though they are somewhat impratical for the impatient. The Liberty Dollar and the newly introduced Phoenix Dollar offer silver backed currencies to replace the Federal Reserve Notes. But hey, that’s what free market competition is all about!

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