Money, Not So Funny

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Of all the government’s criminal activities, probably none is more egregious, but less apprehended by the general public, than its handling of our money, or what passes for it. The Constitution, of recent memory, assigns Congress the task of coining money, while prohibiting that power to the states, which are bound, by that selfsame Constitution, to make nothing but gold and silver coin a legal tender in payment of debts. If the officials who swore an oath to obey the Constitution actually did so, the mints would be coining gold and silver coins, and the people of the states would be using them to pay their debts. Inflation would be non-existent, prices would be stable or gradually falling, and savings would retain their value, or appreciate. Worthwhile, don’t you think?

These very advantages of a precious-metal currency were extolled by none other than Alan Greenspan, before he succumbed to the siren song of insider fame and power. They are, after all, simply common sense. But the failure of government officials, both federal and state, to obey these strictures of the Constitution means that inflation is a more or less conscious government policy. Inflation favors the borrower, and Uncle is a big borrower indeed. And without the power of the printing press, government could never have achieved its present size and scope.

Career criminals are apt to be liars. They are also, at least in the lower echelons of crime, apt to be stupid. Whether or not these characteristics apply to our government officials responsible for the printing of "money," I’ll leave for you to decide.

"The Bureau of Engraving and Printing Monday unveiled a redesigned version of the $50 bill, the latest in a series of currency redesigns intended to thwart counterfeiters." So read the CNN headline. The article reminded us that when the re-designed $20 was introduced, the Bureau launched a "large, consumer-focused marketing campaign to explain the redesign to the public. The government spent about $12 million in advertising—." At first blush, spending $12 million to advertise money is absurd. Do the feds really believe the people give a rap about the "design" of the currency? And, after all, is there competition? If you don’t like the Federal Reserve’s $20 bill, whose would you prefer? But remember: the outfit that’s spending $12 million to advertise money gets money for nothing — they print it. (And don’t tell me that they at least have to pay for paper and ink! How do you think they pay for those?) This time, there will be more of a "business-to-business focus to our public education efforts," said a BEP spokesman. No cost estimate was given, but it doesn’t matter, anyway.

What does matter is the oft-repeated assertions that the tinkering with our paper monetary devices is to discourage counterfeiting. Federal Reserve Board governor Mark Olson, in a speech given at the "unveiling ceremony," (!!!) said that fighting forgery "is a job that’s never finished." What an honest person would have said is that fighting competition is the job that’s never finished!

Counterfeit is defined in my dictionary as "made in imitation of something else with intent to deceive." Much the same definition, only wordier, is given in the law dictionary. The fake Gucci purses, or Rolex watches, that the tourist encounters in bazaars all over the world are counterfeit: made to fool the purchaser into thinking he’s buying the real thing. But of course, tourists are sufficiently sophisticated today to know that the item is fake; they just don’t care. In fact, we were recently in Ephesus, Turkey, where a vendor of watches operated under a large sign that read "Genuine Fake Watches." And they were.

But genuine fake money? That’s another story. If a counterfeiter comes to town, and leaves a month later with much of the community’s goods obtained in return for his bogus "notes," the townspeople have been robbed. Ah, but here’s the rub: they don’t know they’ve been robbed until someone tells them so. So long as they think that the paper gotten from the thief is good, it is. It’s only when some wise guy from the big city tells them they’ve been robbed that they become indignant. Mr. Olson, of the Federal Reserve Board, is one of those wisenheimer city slickers. If he sees you using some of the 20s or (old style) 50s I printed myself in my basement, he’ll quickly point out that they are FAKE and that I am robbing you.

Of course, he’d be right. If you took my home-printed "note" to the bank and tried to cash it, the banker would laugh at you. He might point out that there was nothing on deposit, anywhere, to justify my issuance of my phony "note." Right again. On the other hand, if I took one of Mr. Olson’s nifty new 50s to the bank and tried to cash it, the banker would laugh at me. And if I pointed out to him that there was nothing on deposit anywhere to justify its issuance, he’d agree. But he’d take it, anyway. All counterfeiters are equal, but some are more equal than others. Mr. Olson’s gang finances the government, and that grateful organization has bestowed "legal tender" status upon his outfit’s output. Talk about equal protection of the law! The Fed has the monopoly on Monopoly money.

There’s another difference. The Fed’s "bills" enter circulation, indirectly (because no one borrows cash from a bank) as a loan. Interest is being paid on every one, in that it is being paid on the bank credit that "bought" the bill. My homemade 20s and 50s, though, enter circulation interest-free.

So who’s the bigger crook: the "legal" counterfeiter, or the do-it-yourselfer?

Dr. Hein [send him mail] is a retired ophthalmologist in St. Louis, and the author of All Work & No Pay.

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