November 03, 2011 – Gold bullion prices are climbing steadily this week while the Dow has dropped some 2 1/2 %. And neither means anything.

Stock prices might as well be set by a spin of the wheel. A snippet of news sends them soaring, but then traders mull it over briefly and the same news sends them right back down. They are so busy trying to row the boat with just one oar that nobody has noticed the gaping hole in the hull.

Gold bullion, meanwhile, is tugging against the reins. I am hoping that is a sign that investors are beginning to see beyond the blinders the Fed put on us. Inflation is not the problem. Deflation is not the problem. Unemployment is not the problem. Even debt is not the problem. They are all just symptoms.

The problem is a systemic disease called fiat money. If you are into conspiracy theories, fiat money is the mother of them all. Only this one is real. And it is old hat.

Precedents reach back to the very beginnings of government. Regardless of good intentions, once a government is in place it will always seek to extend its power and control. Always. Our forefathers knew that all to well and they knew how to prevent it from happening here: severely restrict the federal government’s power and above all else, forbid fiat money.

Sadly the framers of the Constitution could not foresee an America in which the people would willingly to give up their liberty in exchange for a government handout. After nearly a century and a half of robust economic development the government finally got its mitts on the money supply through legislative trickery and it’s been straight downhill ever since.

The government threatened us with 10 years in prison if we didn’t hand over our gold, and we acquiesced. They paid us $20 an ounce then turned around and sold it for $35. Nobody complained.

In direct violation of the Constitution they unilaterally voided all private contract clauses stipulating repayment in kind (gold), wiping out fortunes held in extended term corporate bonds. But the people were hurting and needed a scapegoat. We took our free lunch and said to hell with the free market.

So now we are in the end game. You don’t need a crystal ball to see where the markets will go – you need only a history book.

When the fiat system fails all that will remain of today’s wealth will be that held in gold bullion.

Daily Updates Archive

Jonathan Monroe

Senior Staff Writer - Gold-Bullion.org