Over the course of this year, many have expressed their fears that the U.S. dollar will lose more of its value, which in turn will cause hyperinflation. Historically, such a condition for currency is a bane for the country that uses the currency.
As a historic example, one of the worst cases of inflation happened in 1923 during the Weimar Republic in Germany. To understand how bad the value of their currency was, a five million mark coin was worth about $714.29 USD in January of 1923. Later in that same year, the same coin was worth a thousandth of one cent in U.S. dollars. As a matter of fact, it is believed that the hyperinflation of German marks was one of the primary catalysts for World War II. Imagine if hyperinflation of that caliber were to happen to the U.S. dollar? It would cost $50 for a loaf of bread or $75 for a gallon of milk, yet people will only make what most people make presently. Better yet, imagine using dollar bills as toilet paper because it is too expensive to buy regular toilet paper.
To be honest, there are many who don’t follow such news. They probably don’t know that hyperinflation is a threat to the U.S. dollar, nor do they care. The world, on the other hand, has taken into account its falling value. The Inquisitr reported on this, in which other countries are attempting to no longer be dependent on America’s currency. A new world bank known as BRICS — which has both China and Russia as members — was recently established with $100 billion just so its member countries could no longer be dependent on the U.S. dollar. Such a bold move can cause finance issues between the United States, Russia, and China entering either a World War 3 or a Cold War 2.
How can the United States prevent this possible dauntless event from happening? According to an article by Voices of Liberty, which was followed-up by The People’s Voice, Alan Greenspan detailed the chapter on gold in his new book. During the interview, he said something about gold that is very interesting.
“Gold is the premier currency where no fiat, including the [U.S.] dollar, can match it.”
Such words would be taken with a grain of salt if it were said just by any regular Joe, but that is not the case for Alan Greenspan. From 1987 to 2006, Greenspan was Chairman of the Federal Reserve System. During his tenure, Greenspan enacted inflationary policies which defined an era of economic bubbles that eventually popped, thus hurting the economy. His recent words indicate he has returned to his old way of thinking, as detailed in an essay praising the gold standard back in 1966.
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process.”
It should also be reported that before we used fiat money, the United States used the gold standard for its currency. That is the reason why we have all that gold in Fort Knox. Back then, our money was backed by a precious metal that is both tangible and worthy. Today, that same precious metal is still both. This is good news, and what makes it better is that gold is not the only precious metal the United States can back its money with. Silver is another precious metal that has proven its value. This is best exampled in the possibility that the Mexican peso may surpass the U.S. dollar if Mexico decides to back their money with the precious metal. In conclusion, if the United States wants to bring value back to the U.S. dollar, it needs to once again back its money with gold (and/or silver) instead of calculating and predicting its worth with an equation.
What do you think of Alan Greenspan’s words on gold being worth more than fiat money? Should we back the U.S. dollar with gold again before the Federal Reserve was established?
[Image via Bing]