Gold, Money, and the Parable of the Three Little Pigs
by Charles Goyette: Mad
Cows, Meat Inspection, and Regulation
The end of
America's current monetary system is certain, and it is approaching
fast. The only question is what will replace it?
of the American dream demands sound money, so to avoid being victimized
by yet another monetary flim-flam when the dollar reserve standard
collapses, it is very important that the people understand our monetary
In my new book,
and Blue and Broke All Over: Restoring America's Free Economy,
I told the story of our monetary system in a way that even those
who would otherwise never think about the nature of money can remember,
and can use it to tell others. Our monetary history and perhaps
its future can be told in the tale of the three little pigs.
Except that this version of the story is in reverse and it comes
with a warning
Once upon a
time and for a very long time Americans lived in a solid
gold monetary system. They owned gold and used it for money. The
dollar was literally as good as gold. It was a monetary system so
solid that it was like a house of bricks. And then, in 1933, the
state decided it wanted all that gold for itself, and it demanded
all the gold bricks from the monetary house. It even threatened
the people with 10 years in jail if they didn't turn over all the
gold, brick by brick.
So the people
were forced from their brick house and moved into something called
the gold exchange system. This was a monetary system that pretended
to be built of gold. It represented that the dollar was still exchangeable
for gold. But it really wasn't, at least for the people who lived
in it. In fact, most gold ownership remained a crime. It was a monetary
system so flimsy that you could say it was built like a house of
sticks. Of course, it couldn't hold up long. It collapsed in 1971.
When the house
of sticks collapsed, the people were told that they must now move
into a monetary house made of straw the dollar reserve standard.
This, they were told by the state, was even better than a house
of bricks or sticks. But, of course, it wasn't. And now the winds
of economic reckoning have begun to blow. And as the straws of today's
dollar reserve system begin to be scattered to the four winds, the
people must look for a new monetary home.
Will they be
guided by those responsible for their rude and flimsy dwellings,
the statists and Keynesians and politicians and bureaucrats who
have driven them from home to home, each one more decrepit than
the one that preceded it?
Some of the
people have begun hoping for a return to a sound monetary system
and a move into something built like a brick house, such as the
solid gold one they had before.
But this tale
must be accompanied by a warning. The monetary and fiscal authorities,
sensing the people's unhappiness with their diminishing circumstances
and their nostalgia for the permanence of the monetary brick house
of gold, are likely to offer them something that purports to be
tied to gold. Instead, it will be just another contrivance, but
one that is represented as somehow pegged to gold.
the president of the World Bank, referred recently to introducing
gold into the monetary system as "an international reference
point of market expectations."
But if the
currency is not redeemable in real gold that you can take anywhere
you go and keep anytime you wish, it is not really a gold house
at all, but only another monetary flim-flam by the state. It may
be constructed to appear like the brick house made of gold, but
it will only be a house of paper, painted to look exactly like bricks
that a house of paper is even more flimsy than a house of sticks
or a house of straw.
is adapted from New York Times bestselling author Charles
Goyette's new book Red
and Blue and Broke All Over: Restoring America's Free Economy.
© 2012 Charles Goyette
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