Why Politicians Will Never Embrace Sound Money
The comments below are an edited and abridged synopsis of an article by Rebel Capitalist
The destruction of sound money over the past century has had a devastating effect on socio-economic relations in the West.
At one time, the gold standard limited the ability to grow the state and allowed the middle class to emerge in an economically sustainable fashion. With a gold standard in place, people’s savings were safe from the wealth-destroying scourge of mass inflation.
That changed with the creation of the Federal Reserve in 1913. Politicians knew that direct taxation could only go so far in terms of facilitating the growth of government. Eventually, it would have to be raised on the general population, which is generally a politically suicidal move.
It made more sense to debase the currency through inflation and pass the costs of big government to future generations. In the meantime, the middle class watched their wealth being whittled away by inflation.
America’s transition to fiat money has been devastating; the dollar has lost 98% of its purchasing power since the US ditched the gold standard in 1971. Things will only get worse due to the ruling class’s commitment to fiat money. There is no desire to scrap the current system.
As a result, the US is looking at a series of economic crises ranging from defaults to inflationary collapses. The former could be a harsh reality in the next decade or so. Will the US government eventually default on its enormous debt?
Watch George Gammon’s video (link provided) to get the scoop on how the US government’s fiscal profligacy is going to create a massive fiscal crisis.