Go to Gold

We have been discussing the paper money system that the U.S. uses for quite some time now. It's called a "fiat" money system....which means that the entire system is based on faith and confidence of the country issuing the paper. When the faith in the government vanishes...so does the value of the paper. If you read your history books you will quickly find out that this has happened MANY times throughout history....in fact it's an absolute certainty...it's just a matter of WHEN.

Yesterday we talked about the growing push to audit the Federal Reserve system which is ultimately in charge of our paper money...how much to issue and what interest rate they can invent to heat up or slow down the movement of that paper. Of course the Fed DOES NOT want anyone to see their books....as we might lose confidence in the paper.

Ironically, (coincidentally?) today's Wall Street Journal has a very intelligent article making the case for the USA to return to the gold system...because the world financial markets are getting VERY jittery as countries start mentioning the word "collapse" on a fairly regular basis.

Washington's elites are quietly preparing a post-election fiscal compromise that will fund much of President Barack Obama's domestic spending agenda with huge tax increases. They aim to create a value-added tax and will argue that there is no alternative even though doing so will leave the United States resembling the stagnant, bureaucratic nations of Western Europe.

But there is an alternative. The U.S. could return to a gold standard, a system that would not only prevent the government from running chronic budget deficits but would also curb attempts to manipulate the value of the dollar for political reasons.

But for the U.S., the dollar standard has proven to be less like a bed of roses than a whack-a-mole game. In the 1960s, the mole that popped up was a weak dollar, which triggered accelerated gold outflow from the U.S. to foreign governments. In the 1970s, the mole took the form of high inflation and stagnation. In the 1980s, high interest rates and big budget deficits that reared their heads. In the 1990s, regional or one-sector investment bubbles triggered emergency easing of interest rates by the Federal Reserve. Finally, reacting to deflation fears following the bursting of the dot-com stock-market bubble, the Greenspan Fed pushed the federal-funds rate down to 1% or less and kept it there for far too long.

This brought forth the Mount Everest of bubbles, a boom in U.S. residential real estate derivatives that spread all over the world. When credit-worthy investors and firms can borrow money for virtually nothing and aggressively leverage their investments in a market that seems headed in only one direction, no force on earth—not even an Obama-appointed regulator—is going to stop them from making that bet.

See it here;http://online.wsj.com/article/SB10001424052702303695604575181693906532202.html?mod=WSJ_Opinion_LEFTTopOpinion

Clearly, Milton Friedman was right....no one TRULY understands how money works. Why have rocks and shells worked in some civilizations...and others require coinage of gold and silver...but yet the biggest economy in the history of the world relies on paper?

I have one idea that actually is a well used saying...."Easy come, easy go!"

Can anyone find America anywhere in future Bible prophecy??....I didn't think so.