Gary North’s Reality Check
The conservative movement has always been filled with monetary cranks. This has been true for well over a century.
These cranks have never read a book on economics. They have never taken a class in economics. They have zero practical experience in finance.
They come before the conservative public and present crackpot schemes of monetary inflation, all in the name of conservatism.
Their victims are equally unread, equally unskilled amateurs who think, “Gee, that sounds great! Let’s do it.”
Let’s do what? These cranks never have a plan to get from here to there: the Promised Land. They are like Moses with no escape route into the Promised Land by way of the wilderness. They want to wave a magic wand and get True Money (always capitalized).
These crackpot schemes all partake of the same flaw. They want a government-appointed committee of unelected experts to set up the money and banking system at a zero interest rate. Usually, they want a central bank run by engineers and government statisticians. But all of these schemes rely on government statisticians. All of them reject a gold coin standard where owners of private property — coins and bank accounts — are in charge.
These crackpot schemes begin with this presupposition, which is never admitted by any of the designers: “We do not trust private property and the free market. We trust only government experts.” Their zombie followers line up. “Yes, yes, we too believe only in government-employed experts. This is because we are conservatives.” Then out into they night they march, looking for other conservatives with brains to eat. They find them. They always find them.
The bank reformers have no political support for their schemes. But they spend time describing the wonders of their system. They call on people to get behind it. Except for a few crackpot schemes, such as Social Credit or Greenbackism, no one ever joins the political movement. There is no political movement. There are only mindless zombies.
ELECTRICITY AS CURRENCY
Here is a recent example: “Electricity As Currency? 10 Reasons It Could Work.” This was subtitled: “Energy-backed currency concept”
It began with a deliberate deception.
Remember the good old days when gasoline only cost $1.50/gallon way back in the ancient times of 2000? Why does it cost more than double that today ($3.71)? A gallon of gas is still a gallon of gas, so it seems obvious that the dollar has lost value.
If you are going to prove currency depreciation by an appeal to statistics, use the Consumer Price Index or the Median CPI. The CPI is most common. Using the Inflation Calculator on the site of the Bureau of Labor Statistics, we learn that consumer prices since 2000 have risen by 35%. That is 2.3% per year. This is bad, but it is not anything like mass inflation.
The anonymous writer goes on:
This rapid devaluation of the U.S. dollar makes it an unstable medium of exchange and certainly not a good store of value — two aspects considered to be the main functions of money. This has led many to examine the flaws of the current monetary system and search for possible alternatives.
This is not rapid devaluation. This is steady-as-you-go monetary depreciation. Hardly anyone notices. Hardly anyone cares.
ANTI-GOLD COIN STANDARD
Some have suggested that returning to the Gold Standard (pegging the dollar to gold) will help control the fraudulent expansion of the money supply and protect the value of the currency.
This is familiar. There is both economic theory and economic history that supports this view.
Others say eliminating the interest attached to each dollar created will get rid of scarcity and provide abundance.
This is Greenbackism.
Each of these ideas has merit since they correct some of what’s broken, yet they both also have flaws which make them difficult to fully support.
Greenbackism is totally wrong. It is intellectually bankrupt. Ellen Brown is a prominent Greenbacker. For my detailed refutation of her economic theory and her historical inventions, which she has never answered, go here: http://www.garynorth.com/public/department141.cfm. (She in fact is a Leftist. She has come out in favor of Bernanke’s QE programs.)
(For the rest of my article, click the link.)