Leadership is about trust. Therefore, when the State manipulates the money supply, it violates the trust of society's members. The goal of LIFE Leadership is to instill the proper principles to restore trust in society and the State. Recently, Orrin Woodward has written two books that would help to restore trust - And Justice For All and The Leadership Train. Below is an article Orrin wrote on debasement of the money supply.
Debasement Leads to Inflation
German Hyper-Inflation
Nonetheless, this gain to the state’s coffers is no free lunch; rather, society pays in full for the state’s abuse of its powers. For debasement leads to a hidden tax on society’s members known as inflation. Society’s members recognize that prices are rising, but cannot identify its true cause. Ignobly, the government, instead of ensuring justice through protecting society against fraud and counterfeiters, has entered the counterfeiting business to benefit the ruling elite. To be sure, the government hammers anyone else attempting to benefit at society’s expense through the printing of fake dollars that cause inflation within society. Evidently, however, this aggressive government action is less about ensuring justice and more about ensuring the exclusive rights on the systematic counterfeiting fraud. Furthermore, since inflation is a disguised tax upon society, it is one of the safest methods of exploitation. Rothbard observed:
Direct, overt taxation raises hackles and can cause revolution; inflationary increases of the money supply can fool the public— its victims—for centuries. Only when its paper money has been accepted for a long while is the government ready to take the final inflationary step: making it irredeemable, cutting the link with the gold. After calling its dollar bills equivalent to 1/20 gold ounce for many years, and having built up the customary usage of the paper dollar as money, the government can then boldly and brazenly sever the link with gold, and then simply start referring to the dollar bill as money itself. Gold then becomes a mere commodity, and the only money is paper tickets issued by the government. The gold standard has become an arbitrary fiat standard. The government, of course, is now in seventh heaven. So long as paper money was redeemable in gold, the government had to be careful how many dollars it printed. If, for example, the government has a stock of $30 billion in gold, and keeps issuing more paper dollars redeemable in that gold, at a certain point, the public might start getting worried and call upon the government for redemption. If it wants to stay on the gold standard, the embarrassed government might have to contract the number of dollars in circulation: by spending less than it receives, and buying back and burning the paper notes. No government wants to do anything like that.
Manipulation of Money Supply
Simply stated, inflation, through society’s ignorance, allows exploiters to bilk society with little resistance. Governments, in effect, as they transform into powerful states, promote monetary sophisms to disguise its scheme of systematic exploitation of the nation’s money supply. Indeed, without public acceptance of the state’s control of the monetary system the Five Laws of Decline would be severely limited. Unfortunately, however, most of society’s members remain ignorant of monetary matters, leaving them susceptible to state propaganda. For the state and its servants argue that, since all production is good and increases wealth, the state must increase the money supply to increase wealth in society. The fallacy, however, in this argument is, unlike all other consumer goods, money is not used up in the consumption or production process. True, it is indispensable to both steps, but only as a medium of exchange for goods and services. To quote Rothbard one more time:
Unlike consumer or capital goods, we cannot say that the more money in circulation the better. In fact, since money only performs an exchange function, we can assert with the Ricardians and with Ludwig von Mises that any supply of money will be equally optimal with any other. In short, it doesn’t matter what the money supply may be; every M will be just as good as any other for performing its cash balance exchange function.
Society, in other words, can practically use any stable non-manipulated money supply level to use in its role as a medium of exchange for all other goods and services; however, the exploiters resist this economic truth for they cannot manipulate a money supply operating within free market environment. Accordingly, the state utilizes all the means at its disposal to gain control of a nation’s money thus ensuring its ability to exploit society. Interestingly, American President James Garfield emphasized the FLD risk when the state’s “monopoly of force” controlled the money supply when he declared, “He who controls the money supply of a nation controls the nation.” Garfield understood that, since money is the lifeblood of the entire economy, when the state is given control of the economy’s blood, it controls its life. For if the money supply can be expanded and contracted at will, the state can bankrupt any person, business, or political rival it chooses. Perhaps the simplest way to clear the fog on the false reasoning of financial elites is to ask: in what other field would it be proper for government to cartelize the entire field and claim the procedure is for society’s benefit?
For instance, if a monopoly was delegated complete control over car manufacturing in the USA, would that improve or hinder the quality, quantity, and price of future cars? Historically, when competition is reduced, so is the quality. In fact the only thing that increases is the price. All of this, in short, because the monopoly has no competitors for customers to flock to when the entity is unresponsive to their needs. However, if monopolies and cartels are damaging to the Six Duties of Society in every other field, why does the state/financial elites insist on making an exception when it comes to banking and the money supply? Indeed, because the money supply is used for all other businesses transactions within society, the monopoly control over the monetary policy indirectly allows one to control all other economic activities. This is summum bonum for exploiters, allowing them to profit through foreknowledge of the inflation and deflation cycles under their control. In fact, for society to remain free, there is no greater assignment for the people than to ensure the FLD do not infect the nation’s money supply. Paradoxically, however, in no area of society is the state given a freer reign than in the nation’s money supply. In consequence, since men are not angels, the FLD temptation to expropriate the wealth of society is too great for the state’s rulers to resist.
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