Alright, children, listen up. Mother Grimgold is going to show you something really, really basic and really, really important, that is no longer taught in our schools, and that you need to understand.
Long, long ago, when we had ice boxes rather than refrigerators, and a man was as good as his word, there was a thing called the silver certificate. The silver cert was the dollar bill. Your dollar bill today is not a silver cert, but it used to be.
So why a silver certificate? Because you could go to the Federal Reserve, turn in your silver certs, and get silver. Yes. You could actually take possession of little bags of silver.
Well, why on earth would the Fed do a silly thing like that? Why bother?
Wrong question. The correct question is why did they quit doing it?
But I digress.
The point is, paper money used to be redeemable. Huh? Why? What’s this about?
Really, really simple.
When people came to the Federal Reserve window and said “Gimme money,” the Fed would accept silver and hand over paper dollars. The Fed, in effect, would put more money into circulation. When people came to the window and said “Gimme silver,” the Fed would automatically take back the paper dollars, removing them from circulation.
So why is this boring economic stuff important? Why am I bothering to write this?
Because when this was the way the Federal Reserve operated, we had no inflation.
Sure, prices fluctuated because of supply and demand pressures, but that’s not inflation. Inflation is the dollar itself becoming worth less, this caused by continually pumping more and more of them into the economy. And even a little inflation is not a good thing.
Now, the bleeding hearts among us whine about the plight of the poor and those on fixed incomes. They also feel empathy for the working man, who never quite makes a living wage and has to “fight” for more pay.
But if there was no inflation don’t you see that it would be easier on these people? In ten years, prices have easily increased 30% (that’s only 3% per year).
Why?
Inflation!
This is really hard on the poor, the elderly, and the working man.
So how’s this problem solved?
Make money redeemable once again, and respond accordingly. When people need money, print it. When they don’t, stop printing it. You’ll know when to print it because people will be asking for it to run their businesses and such. You’ll know when to quit, because they’ll be demanding silver.
For 130 years, America had no inflation. Then, beginning in 1930 (approximately) we began to have inflation and have had it ever since.
Your federal government says “A little inflation is a good thing.” Oh yeah, right. Your money becoming worth less is a good thing? I don’t think so.
I say let’s begin printing redeemable dollars again and kill inflation.
Think about this, please. It’s important. And don’t be intimidated by the Greenspans and Bernankes of the world. They want you to believe economics is so complex and so filled with weird words and ideas, that you will never understand it.
But they have something that sticks out like a sore toe – a poor track record. If they, in all their grandness and wonderfulness, were so darn good, how come today we fear “renewed out of control inflation”? Let them experiment and play with someone else’s economy. We need a solid, stable, redeemable dollar.
Now you understand.
Most people still don’t. That’s why the federal government gets away with this.
Please join me in calling for the return to non-inflating money.
Grimgold