We’re linking to the third segment of my Internet show in today’s FFF Email Update. I think you’ll enjoy it. I’ve entitled it “Gold, the Constitution, and the Fed” since I spent the entire hour on that subject.
The talk begins with an overview of what the Fed is doing to us today, in the name of “stimulus.” It’s stealing from us, which is what inflation is all about. It’s a hidden tax, one that they impose to avoid the wrath that comes with overt tax increases.
This is what they’ve done ever since the Fed was established in 1913. Decade after decade, they’ve run up the spending and the debt and then debased the dollar by printing up the money to pay for it all. That’s the real purpose of the Fed — to enable public officials to spend to their heart’s content without overtly raising taxes.
I then reviewed the monetary system that the Constitution established, one in which people used gold coins, silver coins, and copper coins, not paper money. I go into why the Framers did this (“not worth a Continental” is pertinent). I then explain how the gold standard worked and the purpose of “gold clauses” in long-term bonds.
I then delved into the roots of destruction, beginning with Lincoln’s legal-tender law, which required people to accept paper money at face value. Then, I explained how the major watershed event took place with Franklin Roosevelt, who used the Great Depression (which h had been caused by the Fed) to nationalize and confiscate gold (much like the Soviet Union was nationalizing property), to make it a felony to own gold, and to nullify gold clauses in private contracts.
The final break with sound money came in the Nixon years, when Nixon closed the gold window to foreign countries. That made the dollar fully irredeemable paper money. Even though it is called a Federal Reserve “note,” it promises to pay nothing. The entire shameful process opened up the floodgates to out-of-control spending, debt, and monetary debasement.
Here’s the link to my Saturday night talk: ““Gold, the Constitution, and the Fed” (video).