Wednesday, November 10, 2010

“All that glitters ...”

A new report from the Department of Agriculture warns of massive inflation of food prices. Somewhere in all this, the Government is going to minimize the damage by printing more money. Not everyone is happy about this.

There was a time when you would hear the expression that a thing of value was "as sound as the American dollar." This is because the dollar was based upon a measure of a valuable commodity, namely 1/20th of an ounce of gold. This measure was known as the “Gold Standard.” Every dollar you possessed had a certain amount in gold to back it up. In other words, if you had $320.00 in paper currency in your possession, there was one pound of gold in a place like Fort Knox with your name on it -- figuratively speaking.

Then in 1971, President Nixon eliminated the gold standard, reportedly to alleviate the fiscal burden of the Vietnam War, which was in turn a culmination of other post-World War II monetary crises in parts of Europe. Or something. Critics say that this made it possible for the Federal government to manipulate the value of currency, by increasing the money supply at will. Don't have enough money? No problem, just print more.

That's the simple explanation. Really.

The idea has surfaced more recently, along with the reasons why, according to this report from our favorite news source,

Multiple sources. The real story. Just the way I like it.

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