Biden Will Extinguish The Dollar

If president Biden wants to save the US economy, his first measure should not be to print $trillions of worthless new money but instead tell his secretary of the treasury Janet Yellen to withdraw all debased currency from circulation just as Aristophanes suggested in 405BC, Copernicus in 1517 and Gresham in 1560.

There is only one problem with withdrawing the debased dollars… THERE WOULD BE NO MONEY IN CIRCULATION AT ALL since all dollars are totally debased.

QUEEN ELISABETH I WITHDREW THE DEBASED COINAGE

But this didn’t worry Queen Elisabeth I (daughter of Henry VIII) in 1560 in England. She ordered her adviser Sir Thomas Gresham to withdraw all debased currency from circulation and replace it with silver and gold coins with the highest fineness.

Queen Elisabeth’s father Henry VIII did not only got rid of many of his wives but also of good money. Gresham counselled her to get rid of the bad money that Henry had introduced. Henry had a lavish lifestyle and also conducted expensive wars against France and Scotland. Thus he did what virtually every nation has done in history and debased the currency.

Gresham noticed that bad money drives out good money. The consequences were that people saved the good money and only traded in bad money. Also, merchants in the Low Countries (Belgium, Netherlands) insisted to have bigger quantities of the new money since the purity was much lower.

THE BIG SWINDLE

The problem with paper or fiat money is that you can’t evaluate the fineness. The fact that $100 in 1971 has been debased by 98% is impossible to tell since it is still called $100 although the purchasing power in 2021 is only $2!

And this is how governments and central banks continually swindle their people by debasing their money without people’s understanding or knowledge.

Imagine if Biden instructs Yellen to take all dollars (bad money) out of circulation and to replace it by good money – gold.

Good money could naturally not be another fiat currency or digital money but would have to be gold-backed money. There are many ways to calculate what the gold price would need to be, depending on which measure for money supply is used.

But if we take US M3 which is a broad measure of money supply, and 100% gold backing, that would value gold at over $70,000.

This is obviously not a forecast but just a theoretical calculation. And as we know, gold is an international currency so China and Russia would have a major say in this issue.

Also, it is very questionable if the US has the 8,000 tonnes that it officially declares. There has been no full physical audit since the 1950s when Eisenhower was president.

China and Russia declares holdings of around 2,000 tonnes each. But China’s real holdings could be well in excess of 20,000t and Russia’s also well above the official 2,300t.

SPEND TODAY BEFORE IT IS WORTHLESS TOMORROW

Gresham was clearly right that bad money pushes out good money. This is why most people in the world spend bad money today since it is continually debased and worthless tomorrow.

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