Best of the Week
Most Popular
1.US Paving the Way for Massive First Strike on North Korea Nuclear and Missile Infrastructure - Nadeem_Walayat
2.Trump Reset: US War With China, North Korea Nuclear Flashpoint - Video - Nadeem_Walayat
3.Silver Junior Mining Stocks 2017 Q2 Fundamentals - Zeal_LLC
4.Soaring Inflation Plunges UK Economy Into Stagflation, Triggers Government Pay Cap Panic! - Nadeem_Walayat
5.The Bitcoin Blueprint To Your Financial Freedom - Sean Keyes
6.North Korea 'Begging for War', 'Enough is Enough', is a US Nuclear Strike Imminent? - Nadeem_Walayat
7.Bitcoin Hits All-Time High and Smashes Through $5,000 As Gold Shows Continued Strength - Jeff_Berwick
8.2017 is NOT "Just Another Year" for the Stock Market: Here's Why - EWI
9.Gold : The Anatomy of the Bottoming Process - Rambus_Chartology
10.Bitcoin Falls 20% as Mobius and Chinese Regulators Warn - GoldCore
Last 7 days
Stock Market Time to Go All-in. Short, That Is - 19th Oct 17
How Gold Bullion Protects From Conflict And War - 19th Oct 17
Stock Market Super Cycle Wave C May Have Started - 19th Oct 17
Negative Expectations, Will the Stock Market Correct? - 19th Oct 17
Knowing the Factors Affect your Car Insurance Premium - 19th Oct 17
Getting Your Feet Wet In Crypto Currencies - 19th Oct 17
10 Years Ago Today a Stocks Bear Market Started - 19th Oct 17
1987 Stock Market Crash 30th Anniversary Greatest Investing Lesson Learned - 19th Oct 17
Virgin Media Broadband Down, Catastrophic UK Wide Failure! - 19th Oct 17
The Passive Investing Bubble May Trigger A Massive Exodus from Stocks - 18th Oct 17
Gold Is In A Dangerous Spot - 18th Oct 17
History Says Global Debt Levels Will Lead to Another Crisis - 18th Oct 17
Deflation Basics Series: The Quantity Theory of Money - 18th Oct 17
Attractive European Countries for Foreign Investors - 18th Oct 17
Financial Transcription Services – What investors should know about them - 18th Oct 17
Brexit UK Vulnerable As Gold Bar Exports Distort UK Trade Figures - 18th Oct 17
Surge in UK Race Hate Crimes, Micro-Racism, Sheffield, Millhouses Park, Black on Asian - 18th Oct 17
Comfortably Numb: Surviving the Assault on Silver - 17th Oct 17
Are Amey Street Tree Felling's Devaluing Sheffield House Prices? - 17th Oct 17
12 Real-Life Techniques That Will Make You a Better Trader Now - 17th Oct 17
Warren Buffett Predicting Dow One Million - Being Bold Or Overly Cautious? - 17th Oct 17
Globalization is Poverty - 17th Oct 17
Boomers Are Not Saving Enough for Retirement, Neither Is the Government - 16th Oct 17
Stock Market Trading Dow Theory - 16th Oct 17
Stocks Slightly Higher as They Set New Record Highs - 16th Oct 17
Why is Big Data is so Important for Casino Player Acquisition and Retention - 16th Oct 17
How Investors Can Play The Bitcoin Boom - 16th Oct 17
Who Will Be the Next Fed Chief - And Why It Matters  - 16th Oct 17
Stock Market Only Minor Top Ahead - 16th Oct 17
Precious Metals Sector is on Major Buy Signal - 16th Oct 17
Really Bad Ideas - The Fed Should Have And Defend An Inflation Target - 16th Oct 17
The Bullish Chartology for Gold - 15th Oct 17
Wikileaks Mocking US Government Over Bitcoin Shows Why There Is No Stopping Bitcoin - 15th Oct 17
How to Wipe Out Puerto Rico's Debt Without Hurting Bondholders - 15th Oct 17
Gold And Silver – Think Prices Are Manipulated? Look In The Mirror! - 15th Oct 17
Q4 Pivot View for Stocks and Gold - 14th Oct 17
Gold Mining Stocks Q3’17 Preview - 14th Oct 17
U.S. Mint Gold Coin Sales and VIX Point To Increased Market Volatility and Higher Gold - 14th Oct 17
Yuan and Gold - 14th Oct 17
Tips for Avoiding a Debt Meltdown - 14th Oct 17
Bitcoin Hits New All-Time High Above $5,000 As Lagarde Concedes Defeat and Jamie Demon Shuts Up - 13th Oct 17
Golden Age for GOLD, Dark Age for the Stock Market - 13th Oct 17
The Struggle for Bolivia Is About to Begin - 13th Oct 17
3 Reasons to Take Your Invoicing Process Mobile - 13th Oct 17
What Happens When Amey Fells All of a Streets Trees (Sheffield Tree Fellings) - Video - 13th Oct 17
Stock Market Charts Show Smart Money And Dumb Money Are Moving In Opposite Directions—Here’s Why - 12th Oct 17
Your Pension Is a Lie: There’s $210 Trillion of Liabilities Our Government Can’t Fulfill - 12th Oct 17
Two Highly Recommended Books from Bob Prechter - 12th Oct 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

Gold Cross, The End of Honest Money

Commodities / Gold and Silver 2013 Feb 14, 2013 - 12:15 PM GMT

By: Bill_Bonner

Commodities

You shall not crucify mankind upon a cross of gold. ~ William Jennings Bryan

The season of fasting is upon us. No more high living. It's time to cinch up our belts... to put on a gaunt face and a smug look. Alone among friends and associates, we will keep Lent.


So neglected is Lent that even Google has forgotten about it. When we searched for it, it proposed "lentil soup."

Lent is meant to rehearse the 40 days and nights that Jesus spent fasting in the desert before going public. We remember the lean days with prayer, meditation and self-denial. No alcohol will cross our lips from Ash Wednesday till Easter Sunday. (Except on Sundays. And saints' days. And national holidays. And days that begin the letter "T" or have a date that is a prime number.)

Yes, dear reader, we will be true to the church calendar, with a few emendations of our own.

Why? Because we wish to remember that periods of gluttony and wantonness must be followed by periods of fasting and correction. Yin and yang must be kept in balance. Pain and pleasure... good and bad... right and wrong – all must get what is coming to them. Otherwise, the entire world gets out of whack.

We fast to remind ourselves that there are hardships... there are lean periods in life. Not just in our drinking lives... but in our economic lives... and in our emotional lives too. There is adversity. There is pain and penance. We fall in line, observing church rituals, so that we don't fall apart when real adversity hits us in the face. We endure Lent so we can enjoy Easter.

Yes: Corrections are a part of life.

You correct your mistakes... or you are corrected by them. No other outcome is possible.

But along comes the doctrine and practice of modern central banking. All these MIT-educated central bankers have a different idea. They work tirelessly to avoid correction... to prevent pain... and to bring back the good times of free-spending revelry. Now they have a program – "QE to Eternity" – which promises to keep the economy pain free forever.

A "Wicked Project"
To fully understand how this came about, we step back to the founding of the United States of America, in whose Constitution today's central bank money was specifically prohibited. The states (which had the power then to mint their own money) were not to "make any thing but gold and silver coin legal tender in payment of debts."

James Madison, in The Federalist Papers, described allowing paper money as "improper or wicked project." And in his 1819 Dartmouth College v. Woodward decision, Chief Justice John Marshall explained that paper money had "weakened the confidence of man in man and embarrassed all transactions between individuals by dispensing with a faithful performance of engagements."

Not that paper money was necessarily the work of the devil, but Satan had a hand in it. When you can counterfeit money – and get away with it – it's a hard habit to stop. You are soon hooked on it.

Congress resorted to paper money – greenbacks – during the War Between the States. Five hundred million paper dollars were issued. This led to higher prices, which pleased debtors. They borrowed in expensive money; they repaid in cheap greenbacks. Prices in the North rose 75% from 1860-1865.

A Cross of Gold?
After the war, the greenbacks went away. But the desire for cheap money continued.

Farming was the largest sector of the economy in the 19th century. Typically, farmers borrowed to expand their farms during booms, when prices were high. Then, in the correction, they cursed the bankers who had lent them money and railed against the gold standard.

Late in the century, William Jennings Bryan took up their cause as his own. The rural proletariat had gone bust in the farm crash of the 1880s... and now found itself so deep in debt it was willing to take up with a fool like Bryan, if he promised relief.

The roads choked up with dust when Bryan came to a cow town in the Midwest. There, he ranted and raved against all that the farm folk detested – often sweating like a hot shower in the summer heat.

"You shall not crucify mankind upon a cross of gold," he roared to the approving hallelujahs of the yokels.

The speech had a ring to it. It was a rhetorical flourish with great power. Remembered and repeated, it is still today probably more readily recognized than Lent. But it was empty: nothing more than bombast and fraud.

There is some liturgical disagreement about it. But Lent generally ends on Good Friday, when Jesus was crucified on a cross of wood. Since then, millions have been crucified financially by paper money (a wood product). No one has ever been nailed to a cross of gold.

What Bryan had against gold was the same thing that all paper money pushers – including modern central bankers – have against it. Gold is uncooperative and stiff-necked. You borrow it and you have to pay it back. The lender expects to get his money back in real money.

And since the supply of gold rarely grows faster than the supply of goods and services for which it is exchanged, prices remain more or less stable. Debtors are not let off the hook.

Prices rose from 1800-1913, when America's central bank was founded, by 176%, says Paul Moreno. New discoveries of gold in Alaska, South Africa and Australia had increased the money supply significantly. But that was nothing. In the 100 years since, when paper money was the stuff most often issued by the U.S. Treasury, prices have gone up 448%.

Bryan got his way after all. Nobody in America suffers from an honest currency. Nobody pays back as much as he has borrowed. Even contracts with "CPI adjustment" clauses fail to make the lender whole; the feds have seen to that too.

Bill Bonner
The Daily Reckoning

Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century and Empire of Debt: The Rise Of An Epic Financial Crisis and the co-author with Lila Rajiva of Mobs, Messiahs and Markets (Wiley, 2007).

http://www.lewrockwell.com

    © 2013 Copyright The Daily Reckoning, Bill Bonner - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife