By Stephen Buller
“Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants, but debt is the money of slaves.” ~ Norm Franz
You and I use debt as money.
“Like everyone else, you were born into bondage. Into a prison that you cannot taste or see or touch. A prison for your mind.” ~ The Matrix
Technology continues to advance exponentially, and what computers can do today would be pure magic to humans even 100 years ago. We’ve avoided an AI takeover, as portrayed in “The Matrix,” “The Terminator,” “I Robot,” or many other dystopian imaginings – so far – and so our worst enemy remains ourselves.
For all our advancements, we still appear much like apes throwing feces at each other. Homo sapiens have remained largely unchanged since we evolved in Africa 300,000 years ago, or since we learned to use tools and art 50,000 years ago. Despite our intelligence and civilization, we are still warring over resources, ideologies, and pride.
The disconnect between our biology and technology could be likened to a toddler with a gun. Except, our weapons now have the capability of destroying the planet – or at least making it uninhabitable. Biology evolves slowly, and so we must use our intelligence and ability to think in the abstract to understand and grapple with our physical limitations.
I argue that one pillar of a peaceful and prosperous society is sound money, one powerful tool of war is fake money, and even though change seems impossible sometimes, you and I can at least change our own lives for the better by breaking free of this money prison.
Is it overly dramatic to call this slavery? We’ve all entered into a social contract whether we think about it or not – with our family, neighbors, employers, and government. If we don’t abide by the laws and norms in our daily lives, there are consequences. This by itself isn’t unfair or bad.
Does being a father make me a slave to my children? Maybe from one angle … but I entered into that contract willingly – happily even. Some people call taxes theft, but they’re also part of the social contract when born into a nation that provides infrastructure, security, and services for its citizens. (The value of those services compared to the amount we pay in taxes is up for debate.)
But I would argue the debasement of our hard-earned currency was never part of the contract. The United States constitution states – for good reason – that only gold and silver shall be money. The debasement of our currency is theft from every person holding dollars to whomever is given the newly created dollars.
Currency debasement is nothing new. In ancient Rome, the emperor would collect taxes in gold and silver coinage, melt it down, add base metals such as copper, and mint more coins with greater overall face value. Or they would collect taxes by clipping the edge of a gold coin but allow the coin to continue to circulate with the same face value.
Even an uneducated slave could perceive the debasement: He could see the clipped edge, hear the different pitch of the coin when it fell, and taste the copper within.
Today’s technology makes debasement abstract and omnipresent: When our government spends, it borrows from its citizens’ future labor; when a bank loans $10M, even though it only has $4M in the vault, it makes promises that are impossible to keep; when a financial institution bundles good debt with bad, it obfuscates the value therein.
These financial institutions are part of our monetary system, but they simply operate within the constraints set by our government. Our governments are the ones who choose to spend money they don’t have for wars we don’t want and services we don’t need. And the only way they can do this is because we use debt for money.
Here’s how it works: The US government creates and sells treasuries to the Federal Reserve, which creates new currency to buy them, stealing our purchasing power and adding to the federal debt. That federal debt must be paid back or at least serviced, year after year. Those who own treasuries are the beneficiaries. It is paid by every US taxpayer and every person who uses dollars, now and in the future. And there is no physical limit to how much our government can promise.
The practical solution is to continue earning and using dollars, investing in a diversified portfolio, and saving for the future outside the system in gold and silver. In dollar terms, the price of these metals will fluctuate. But if precious metals are real money, then they aren’t doing anything. It’s the dollar that’s going down – a mathematical certainty as more dollars must be created to pay the interest on the debt.
Precious metals won’t save all of our problems, but they will empower the individual to save for the future. They will make productive things like shelter, food, and technological advancements more affordable because they will make destructive things like war more expensive – or the cost more transparent.
In the movie “The Matrix,” we learn that an earlier attempt by the machines to enslave humans failed because it simulated a utopian world where everyone would be happy, and the human mind simply couldn’t believe in a world so wonderful.
Can you?
