Morally-Correct Money
For The 21st Century

Sep 4, 2009

Our original, morally-correct money system was wisely established by our Founding Fathers over 200 years ago. Millions of Americans are rediscovering that system today as credit, stock and housing market bubbles have popped in the new millennium.

Through it all one asset class has shined the brightest this year and every year since 1999: GOLD. In fact, gold has not only maintained its store of value, it has increased in buying power over the last half century.

Buying a new home or car today costs 10-20 times more than it did back in the 1950s, with one exception. If instead of holding wealth in dollars (paper IOUs) you owned gold, a new home or car today would actually cost less than it would have in 1954 IF paid for in gold coins.

The Golden Decade

As the 20th century closed, the advent of paper and electronic money challenged gold's monetary role after thousands of years serving as the world's coined money. Gradually throughout the 1980s and 1990s, gold assumed a new role as a monetary reserve medium, rather than a medium of exchange. This subtle yet powerful monetary shift went mostly unnoticed by the American public.

By 1999, the powerful central banking community which controls all modern money creation began advocating the abandonment of gold as a monetary reserve. Due to a major economic super-cycle change in 2000, this quantum leap toward the total manipulation of the masses into a single, manageable global political, social and economic system failed. Instead, substantive, moral-money once again triumphed over symbolic, central banker-created money.

Ironically, today central banks are again buying gold ... Turning point for gold as Central Banks become buyers: "Gold has reached a turning point with purchases from official sources - Central Banks and sovereign wealth funds - perhaps outweighing sales as attitudes to the metal as a reserve asset become much more positive. China and Russia are two key nations with relatively low proportions of gold in their reserves as likely to be net buyers in the future," according to Specialist gold analyst Jeff Nichols reports Mineweb (9-2-09).

A quick review of America's monetary history will show gold's upward trend should be strong over the next decade. Scores and scores of experts today agree that since the new century began precious metals have turned out to be, "the financial light of the world", as we proudly proclaimed in our 27th annual newsletter, Real Money Perspectives.

Some Fatherly Advice

All truly moral money must be derived from a commodity, or at least have a substance to back it up, or it will gradually become fraudulent, or fiat money. Historically, the most common substance used as a medium of exchange and a store of value has been gold or silver coins of a standard weight and fineness.

The U.S. Coinage Act of 1792 specifically defined a dollar as "one twentieth of an ounce of gold (25.8 grains of 90 percent fine) or a silver coin containing one ounce of silver (421.5 grains of 90 percent fine)." The Founding Fathers specifically prohibited the federal government from issuing Bills of Credit, (paper money) in the U.S. Constitution.

"Congress shall have Power to coin money and regulate the value thereof ... No State shall make any Thing but gold and silver Coin a Tender in Payment of Debts." -Art.1 Sec. 8 & 10

So America began with a solid, moral foundation for our money system but over time due to ignorance, delusion and smoke and mirror economics (aka Keynesian economics) our financial world has become warped. Today we call debt "money." We exchange IOUs as if they were the asset itself. We denominate wealth in an ever-changing measure of value know as a "dollar". (more ... Rediscovering Gold in the 21st Century 2001 book.)

Here are a few famous quotes about pitfalls of paper money that are just as relevant today as they were 200 years ago ...

"All the perplexities confusion and distress in America arise not from defects of the Constitution, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation." -John Adams, in a letter to Thomas Jefferson in l787

"Of all the contrivances devised for cheating the laboring classes of mankind, none has been more effective than that which deludes him with paper money." -Daniel Webster

"It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -Henry Ford

What to expect next

Today the U.S. dollar is on the same trajectory as Obama's approval ratings, which have fallen one-third -- from 65% to 45% -- the lowest level since the election. Meanwhile, the dollar index has dropped 11% ytd and is also down one-third since 2001. Consider a few "dollar" headlines featured at recently ...

Dollar Is Funny Money in Push for World Currency: "The U.S. dollar is rapidly transforming into a Mickey Mouse currency. This has led to a rising call for the creation of an alternative to the dollar in the form of a new world currency." -Bloomberg (9-1-09)

Debt undermines faith in the dollar: "Economists, worried about the effects of growing U.S. debt, say the huge liabilities the U.S. is taking on to dig its way out of the crisis could ultimately undermine faith in the dollar. -WSJ (8-26-09)

Slow Growth and The Greenback Effect: "Unchecked greenback emissions will certainly cause the purchasing power of currency to melt says billionaire Warren Buffet." -NY Times (8-19-09)

U.S. Dollar: No Long-Term Bottom: "We do not believe the conditions for a major low in the dollar are in place yet. Continued U.S. policy reflation should see the dollar index overshoot to new lows in the months ahead. Stay strategically short dollars." -Bank Credit Analyst

Immoral vs. moral money

Today's dollar (immoral money) is in decline, while gold and silver (moral money) are both inclining. As America sinks further into unfathomable debt, Americans are finally waking up and converting debt-based money into gold. The only asset-based money left on earth without counterparty risk.

Looking ahead to the next decade, the simplest solution for protecting your time, your labor and your family's nest egg is to convert a portion (10%-25%) of your assets and retirement savings into precious metals.

The value of our greenbacks appears to be destined to hit new lows in the years ahead, based on solid economic fundamentals, out of control government spending and 200 years of monetary history. The U.S. "strong dollar policy" has not existed in this country since we abandoned our moral money foundation first under FDR in 1933, then finally and completely under Nixon in 1971. This means each American must personally take steps now to place their family back on a gold standard or face the consequences of a continually shrinking dollar. (Free Shrinking Dollar Report Offer).

Related Stories:
-Gold & Obamanomics: 5-Year Investment Scorecard, 2-27-09 By Craig R. Smith, Harvest TV
-The Grand Illusion, 8-7-09 By James M. Carrillo, Sr. Broker SATC
-The Case for $2,000 Gold: Why the Quiet Bull Market of the 21st Century is About to Roar! 11-2-07 By Craig R. Smith & David Bradshaw

Disclaimer: All of the facts and information is believed to be true, however errors are possible. All investments have risk and past performance is no guarantee of future performance.

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