Wednesday, July 28, 2010

Cross of Paper

We could not maintain the gold standard nor the silver standard. We could not maintain the copper standard, and now we cannot even maintain the zinc standard." Ron Paul referring to U.S. pennies.

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The title Cross of Paper is a spin on the phrase Cross of Gold, which was used to attack and debase the gold standard in the early 20th century.  Systemic inflation is a relatively new phenomenon in our United States.

Consumer Price Index 1800-2005 (source)

Notice that older wars (1812, Civil War) correlate with an increase in CPI followed by deflation back to a nominal value. Later wars (WW1,WW2) inflate but then do not deflate. The Federal Reserve Central Bank was chartered in 1913 with the power to expand the money supply, which they promptly did. After 100 years, our 2010 dollar is only worth about 2 or 3 cents of your grandparents' dollar. Their savings were stolen; your savings are next.

End the Federal Reserve's monopoly of money (legal tender laws) and allow competing currencies.

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