Topic: Economics
Freedom, Gold and God
How are these terms related to one another? It may not be immediately apparent but they are very significantly interconnected and interdependent.
by Lou Poumakis
(libertarian)
Monday, April 20, 2009

The radicals in control of our government today seem hell-bent to destroy every last vestige of the freedoms will still have and to move us into a totalitarian, socialist state. We have a President takes over bank and manufacturing concerns without compunction and seems determined to bankrupt the entire nation through a totally irresponsible and utterly profligate waste of public funds. Our cowardly Congress has deserted their responsibilities and given him a blank check to take virtually total control of the nation. The excuse is the economy, which is suffering from a history of horrible mismanagement at the money and banking level. A ninety-five year long experiment with paper money and fractional reserve banking has finally ended in an economic disaster, one that responsible economists for many years have been predicting must eventually come. Left alone, after some pain, the economy could recover but our great leaders will not let that happen. They insist that what is needed is more spending and less saving by the public. And, since sensible Americans have decided to reduce their spending and increase their savings, our leaders have decided that they will either force us to spend or will spend our money for us. They are desperately attempting to maintain the status quo, a situation in which they retain control of our money and thereby reap great profits and, even more importantly, keep control over us. The great danger today, much more than the loss of our jobs and our money, is this rapid transition into socialism and the consequent erosion of our freedom.

In an earlier and better day, the gold standard kept crooked bankers and politicians in check. Without any need for governmental regulations and enforcement agencies, it limited the ability of bankers to manufacture phony paper money. Without it we are at their mercy (a quality they don't possess in any significant degree). They tell us that all our problems are due to a lack of controls and restraints and, in a sense, they are correct. Without gold there are never enough regulations or government agencies to control the actions of irresponsible or predatory individuals from defrauding the public. John M. Keynes, the supposed inventor of fractional reserve banking, said that he thought it could be instituted here but that the best environment for its implementation would be a totalitarian political structure. He seems to have understood the implications much more clearly than most people do today. As systemic problems arise, the answer is always more regulation, more controls and less freedom for us. The end of that road is slavery and serfdom, a prospect that draws nearer each day.

The root cause of the Great Recession we are experiencing today is that the world has rejected God's law, a law which mandates only gold and silver as money, and followed the advice of men like Keynes. His message was very appealing and was warmly welcomed by an unprincipled banking community. They saw a great and prosperous future awaiting them in a world in which they controlled the nation's money, a world in which they would live like kings, milking the entire population in every monetary transaction they made, a world without gold and a world without God. But it was God who made this world and everything in it. He, the Creator of us all, gave us a book in which we can find instructions for all of life, including how we handle money, banking and government. It isn't just a guide to get a few of us through life in this evil world and into a better place after we die. God has all of mankind in view and has given us marching orders. We have been told, very simply, live by these words or die. Christians, that say they believe in God, are expected to lead others to the truth and to set an example for them to follow. We have not done this, specifically with regard to money and banking. American Christians are remiss in not having opposed fiat money and fractional reserve banking to any significant degree and are, in great measure, responsible for allowing the current debacle to take place.

Fifty years ago a very wise man, R. J. Rushdoony, said: "Humanism is wallowing in failure all over the world, in failure but not in defeat, because there is no consistent Christian force to challenge and overthrow it." It was true then and is even more true today, Christians, called by God to be the salt and light of the world, have nothing to offer in response to this failure because they themselves don't believe that God's law is applicable to the whole world. They don't see that the world is lost without it and don't even try to submit it as the only reasonable foundation for law in this country. Humanism is in control because humanists live out their faith very consistently; they apply its principle, that man is the measure of all things, in every area of life, including politics and government. Christians, on the other hand, have imbibed so much humanism into their faith that they have lost contact with reality. They seem to believe that these two highly contrary and totally incompatible worldviews can live side-by-side sharing a common law system. This, of course, has never been possible, one or the other faith must predominate and become the basis for law in that society. If Christians continue with this head-in-the-sand attitude, America will surely complete the transition into a totally humanistic culture.

I've said it before but much more could still be said about God's law and its applicability to our nation and society today. Indeed, virtually all our troubles can be traced back to our forefathers' failure to fully implement and adhere to that divinely inspired law-word. Likewise, we today will continue to flounder and flail in one program after another until we realize we need to go back to the basics, the basics of God's law and God's word. God's word very clearly tells us that we are not able to govern ourselves: "O LORD, I know that the way of man is not in himself: it is not in man that walketh to direct his steps" (Jeremiah 10:23). The choice is simple, we can adopt God's law to govern us or we can continue on the path of least resistance that we have been following, the end result of which is despair, failure, poverty and slavery.

©2009 Lou Poumakis, all rights reserved. You must have written permission from the author in order to republish this work.
Published: Monday, April 20, 2009
Last modified: Monday, April 20, 2009

The views expressed in this article are those of Lou Poumakis only and do not represent the views of Nolan Chart, LLC or its affiliates. Lou Poumakis is solely responsible for the contents of this article and is not an employee or otherwise affiliated with Nolan Chart, LLC in his/her role as a columnist.

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Reader Comments:

Posted By: Walt Thiessen
Date: 2009-04-20 07:10:56

As much as I support the use of hard metals (gold, silver) as money, I must take issue with your article. First, the banking crisis did not happen because of God or rejection of God's law. I presume by "God's law" you mean what's written in the Bible. I reject God's law as expressed in that book because I do not believe it is really God's law. To my mind, the version of God represented there is a bastardized, twisted version of God. The real God I know bears little relationship to the God of the Bible, particularly the God of the Old Testament. Yet, I favor the use of hard metals as gold and silver. Clearly, favoring gold and silver does not require what you think of as "God's law." By your argument, my adherence to gold and silver should be impossible, as should the adherence of atheists and agnostics to gold and silver. Given the fact that most of the world is not Christian, yet most of the world preferred the use of gold and silver until the governments of the world (both Christian and otherwise) abandoned them shows quite clearly that "God's law" as you call it had little to do with what happened. 

Further, the history of big bankers both prior to the creation of the Fed and after its creation clearly shows that they were generally highly religious and considered themselves Godly and followers of "God's law." While a few were Jewish, the vast majority were Christians who attended church "religiously" (if you'll pardon the play on words). You conveniently ignore this fact. JP Morgan (both Sr. and Jr.) were fervent Episcopalians. Henry P. Davison, a senior partner at the Morgan bank and founder of Banker's Trust as well as one of the authors of the Aldrich Bill, which later became the basis for the Federal Reserve Act, was a life-long Presbyterian known for his generous philanthropic work. His biographer describes how his Uncle Merrick had the most influence on his life and read the scriptures to him daily. John D. Rockefeller was a devout Baptist and heavily involved in his church, as was his brother William Rockefeller. The list of heavily religious, Christian bankers goes on and on.

Second, the gold standard did not provide a limit on the banker's ability to print "phony money." To the contrary, this is not the role of gold. I know that many people have claimed that gold does have that effect, but history shows us the invalidity of the claim.

The gold standard still existed when the Federal Reserve System was created in 1913. It didn't go away until twenty years later when FDR pulled us off the gold standard. Yet, during that time, the Fed and the banks managed to inflate the money supply grossly, leading to the stock market crash of 1929 and the Great Depression. The Great Depression, by the way, occurred when the Fed countered its earlier massive inflationary policies by contracting the fiat money supply. In combination with what FDR did to gold, the result was what fiat monetary contraction always produces: recession, leading to depression.

Also, the gold standard did not prevent banks from issuing excess paper currency prior to 1913 any more than it did after 1913. In fact, the main justification given by the advocates of the Fed for its creation was their contention that the money supply must be even more "elastic" as a means for combatting the various panics and crises that seemed to occur on Wall Street every few years under gold's watch, panics which themselves were heavily influenced by excessive issuance of paper currency in relation to gold and silver reserves. By "elastic" they meant that the money supply should be increased by issuance of money well beyond gold and silver reserves. Ultimately, gold could not deter the ravages of the pre-Fed banking predators, just as it could not deter the ravages of the post-Fed calamities.

The only thing that can limit the issuance of counterfeit currency (by which I mean currency in excess of gold or silver reserves) is force of law. Lacking such law strictly enforced, nothing gold or silver can do can possibly cancel the fraudulent activity of bankers or governments.

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Posted By: Lou Poumakis
Date: 2009-04-20 08:41:10

Dear Mr. Thiessen,

I must agree with much of what you say but I'm sorry to hear that you have such a low opinion of the Bible.  It is the basis of Christianity and the foundation of the Western World, the most free and prosperous civilization the world has ever known.  I'm not sure which god it is that you know that is so superior to the God of the Bible but history has demonstrated that cultures that followed the Bible's precepts have prospered far more than those that did not.

It's true that one can support gold and silver as money without believing the Bible and that others that affirm the Bible can become fractional reserve bankers.  Inconsistency is ever present and none of us are immune from it.  God's law though, is much more than just gold and silver money.  The panics you referred to came about because the bankers and money manipulators of that day were in violation of other aspects of the law, summarized by "love your neighbor as yourself."  Nevertheless, the damage done in those panics was contained and did not compare with what has been done since 1914.

Your final statement about counterfeit currency is surprising, especially coming from a Libertarian.  Isn't the US dollar the most widely distributed counterfeit currency ever?  And it's the very "force of law" you call for that is supporting it! 

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Posted By: Jake, the Champion of the Constitution
Date: 2009-04-20 12:20:32

Dear Lou,

I thought you might be interested in this article I wrote on the 4 types of "gold standards" in use in the beginning half of the 20th century.  The 4 types are certainly not equivalent to each other.

Bernanke's Great Lie - The "Gold Standard" and the Great Depression (PART 2/2)

Jake

 

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Posted By: Lou Poumakis
Date: 2009-04-21 08:42:35

Jake,

Good article, well written and very thorough! I see we need to be careful to define what we mean when using the term "gold standard."

I read Human Action back in the 70's but didn't appreciate all Von Mises had to say.  It is surely coming home to roost today.

 

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