Looks like a number of great men in our history believed in fiat money. looks like we can add Benjamin Franklin to the list.
As a result of scarcity of gold, the colonists turned to alternative forms of money including wampum, tobacco, and copper coins. Most silver coinage in circulation came from Spanish America, Spain, the Netherlands, the German States, France and other foreign countries. The colonies began issuing colonial script that was paper fiat currency not backed by gold or silver. This type of money was also known as colonial bills of credit. This radically differed from the bills of debit issued by the central banks of Europe.
During a visit to Britain in 1763, The Bank of England asked Benjamin Franklin how he would account for the newfound prosperity in the colonies. Franklin replied:
“That is simple. In the colonies we issue our own money. It is called ‘Colonial Script’. We issue it in proper proportion to the demands of trade and industry to make the products pass easily from the producers to the consumers…. In this manner, creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay to no one.”
In response, the Bank of England influenced the British Parliament to put a stop to this activity. Under the Currency Act of 1764, King George III decreed that the Colonists cease printing their own money. The colonial script in circulation was to be exchanged at a two-to-one ratio with notes drawn from the Bank of England. This caused widespread unemployment and economic depression in the colonies.
“In one year, the conditions were so reversed that the era of prosperity ended, and a depression set in, to such an extent that the streets of the Colonies were filled with unemployed.” (Benjamin Franklin) Reference Link
A reader asked me for greater clarification of my thinking on money and economics
I basically did this with the article entitled “The Five Points.” I could probably write a book giving more details supporting those points, but will add a few thingshere.
It matters not what kind of system you have where power is concerned you have the possibility of dishonesty, theft and corruption. By the use of the word “power” this can imply political power, power over money, religious authority, business leadership and other avenues. Wherever power is involved, the misuse of power under our current principles of organization are a common occurrence. Now Mises himself recognized this problem and stated that even a strict gold system is not immune from problems of corrupt people misusing and manipulating it.
Now, if the Molecular Relationship were applied to organizations where people have a stewardship over power of any kind then the misuse of power would go down dramatically because the leadership can be challenged and replaced at any time. On the other hand, the best of all possible systems is still no guarantee that there will not be problems.
You recall the scriptures give the story of the War in Heaven where Satan challenged God and wanted to take his place. The majority, two thirds supported God and Satan was rejected. Instead of accepting the vote he and his supporters rebelled. Because they were no longer Molecular they had to be separated from the body or the body would die so they were thrown out of heaven into the earth. In the higher spheres the Molecular Order is thus still maintained and available for linkup to those on the earth.
If therefore the Molecular Order governed those who have power over our money we would have economic stability for long periods of time, perhaps thousands of years without a rebellion as happened in heaven. In this situation a money system could be created backed by a commodity or labor which could be stable.
Now we can’t just snap our fingers and change the status quo to the Molecular Relationship so we have to look at what should be done right now within the system which is not being done now.
Several laws can be passed which, if followed, could improve our current economic system.
- A law requiring a balanced budget, except in times of national emergency.
- A law restricting the issuing of excess dollars into the system that will cause inflation. The value of new money into the system should approximately match the projected expansion of goods and services. Economists can come pretty close to predicting this, but because of many factors, and especially lack of law, this balance is frustrated.
The current housing crisis is caused, for instance, because of the unwise release of too much money into the system because of outrageous loan approvals that would have been laughed out of town a few years ago.
- Switching the issuing of money from the Private Federal Reserve to the Treasury Department thus saving the government from paying interest on its own money and saving the people themselves untold amounts of money.
- Streamlining our spending by cutting back on many of the current entitlements.
- Those who participate in stealing the public’s money should be prosecuted. For instance, the government stole all our Social Security savings and used it for their own purposes. Those who do this and other outrageous acts of infamy need to be held accountable. So far Congress can violate the public trust all they want and the only thing they get for it is a pay raise they vote for themselves.
Now if I were to write of an economic system that would lay the foundation of Zion I would have an altered approach. When the gathering comes we will have to first look at the assets we have and create an initial system that will give us power to purchase goods and services in and out of the group. All the details cannot be ironed out until the gathering becomes possible. I’m sure I will be writing more on various principles involved before the gathering. Who knows, we may discover an unlimited source of energy and use power itself as a backing for money used with the world. I like to cross bridges when they come. Before that time, I tend to speak in general principles, which, when understood, will allow for the safe crossing of the bridge.
Better is the enemy of the good. — Voltaire
Mach 5, 2008
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