Currency and Freedom
A Journey from Gold to Digital ID: A Tale of Diminishing Freedom
10/26/2024
- The ‘Fed’
- How We Lost the Gold Standard
- Why Printing More ‘Money’ Is Bad
- CBDCs and the Downfall of Freedom
Hello, friends,
First, here’s an overview of the ‘Fed’: Federal Reserve System (the Fed). The Federal Reserve is the primary central banking system in the United States. It was established in 1913 and is composed of twelve regional banks. The Federal Reserve is independent within the government and is tasked with conducting monetary policy, regulating and supervising banks, and maintaining financial stability. There is a Board of Governors, the central governing body of the Federal Reserve System. It is responsible for making key decisions related to monetary policy and banking regulations.
Who is this Board of Governors? It consists of seven members, nominated by the President of the United States and confirmed by the Senate. Each appointed member serves a 14-year term. The Board operates independently, meaning its decisions are not subject to direct control by Congress or the President once members are confirmed. The selection process has drawn criticism for potentially favoring elites with connections to political or financial sectors. Its members often come from backgrounds in academia, banking, or public service. Some concerns about potential elitism stem from the reality that many appointees have significant ties to Wall Street or influential financial institutions, raising questions about conflicts of interest and whether they adequately represent the broader public’s interests. The Federal Reserve's power and independence have sparked debate. Critics argue that the concentration of financial oversight in the hands of appointed officials can lead to decisions that favor the financial elite while ordinary citizens bear the brunt of inflation and economic instability. So, as you can see, this Federal Reserve System isn’t really governmental, is it? Not elected, but selected. It would appear that those selected and the Senate ‘confirmers’ are not likely thinking about you and me when they make those critical decisions. I conclude that because history certainly seems to make it fact.
The Federal Reserve Bank (in actuality twelve regional banks) are spread across major cities in the U.S. These banks work in conjunction with the Board of Governors to implement monetary policy, supervise banks, and provide financial services to banks and the U.S. government. Okay, after some research, and to cut to the chase, coordination between the regional banks and the Board of Governors includes members from both the Board and regional banks. Both sets of personnel tend to be dominated by those with ties to banking, finance, and academia, raising concerns about bias toward the interests of financial elites and Wall Street.
The concentration of economists and banking professionals in decision-making roles has led to criticism. Some argue that the system lacks sufficient public accountability and transparency, with decisions that might favor financial institutions over ordinary citizens.
The Federal Reserve System, comprising the Board of Governors and the twelve regional Federal (not really) Reserve Banks, collectively serves as the central banking system in the United States. I guess you could say we are already suffering under a central bank (CB); now they’re working on the digital currency part (DC). Ah, CBDC, Central Bank Digital Currency.
Next, let’s talk about America’s journey from the gold standard to fiat currency and the subsequent management (or mismanagement) of the nation’s monetary policy by the Federal Reserve (Fed), which has brought profound, negative consequences to everyday citizens. Let’s explore the transition to fiat currency, how the Fed’s policies have contributed to economic instability, and the potential risks of adopting Central Bank Digital Currencies (CBDCs), as outlined in Biden’s Executive Order 14067. From economist Murray Rothbard’s book, ‘What Has Government Done to Our Money?’, we learn why fiat currency and digital control of money pose serious threats to economic freedom and personal liberty.
Abandoning the Gold Standard. The gold standard, a system where currency value was directly linked to gold, served as a stable foundation for monetary policy. The U.S. dollar was backed by a specific amount of gold, restricting how much money the government could print. In 1971, the Nixon administration’s decision to abandon the gold standard fully severed the dollar’s ties to gold. This shift allowed for an unrestricted printing of currency, resulting in fiat money - paper currency with no intrinsic value, backed only by government decree. Basically ‘Monopoly’ money.
While the gold standard provided a natural limit on government intervention in the economy, safeguarding citizens from reckless spending and inflation, fiat currency gives the federal government a dangerous level of control over the economy because they can print currency without any true value behind it. This not only devalues the currency but also leads to cycles of inflation and economic instability, all at the public’s expense. And, my oh my, have we seen that in the last five decades, particularly since 2020. Get this - about 80% of all U.S. dollars in existence were printed between January 2020 and October 2021.
Printing money without a corresponding increase in goods and services devalues the dollar, leading to inflation. Of course, this is exactly why we’re where we are today, as inflation rates have hit 40-year highs since these interventions. Even the Federal Reserve has acknowledged that excessive money printing contributes to inflation, especially when it coincides with supply chain disruptions and increased consumer demand following pandemic restrictions being lifted.
These recent policies have drawn comparisons to the hyperinflation episodes of the Weimar Republic in the 1920s and Zimbabwe in the 2000s, though the U.S. situation has not reached such extreme levels - yet. However, the rapid expansion of the money supply poses a significant risk: it undermines trust in the currency and makes it harder for everyday Americans to keep pace with rising costs, further widening economic inequality. (So all that ‘free money’ just made us all less well off.)
According to the formula for the debt-to-GDP ratio, the U.S. debt is roughly 129%. A debt-to-GDP ratio exceeding 100% indicates that the debt is larger than the country's annual economic output. Very concerning for America’s future.
For the current dollars and details about the U.S. debt, visit https://www.pgpf.org/national-debt-clock.
The Federal Reserve, established in 1913, was intended to stabilize the economy by managing inflation and employment. However, Rothbard and many other economists argue that the Fed’s actions have often exacerbated problems rather than solved them. By manipulating interest rates and engaging in large-scale asset purchases, the Fed has distorted natural market forces, created economic bubbles, and weakened the purchasing power of the dollar.
The 2008 financial crisis and the inflation surge following the COVID-19 pandemic are prime examples of the Fed’s mismanagement. During the pandemic, the Fed injected trillions of dollars into the economy, which, while intended to stimulate growth, has instead contributed to inflation levels not seen in decades. These interventions often shift wealth to the financial elite while everyday Americans bear the brunt of price increases and devalued savings.
Executive Order 14067: A Step Toward CBDCs and Digital Control. Biden’s Executive Order 14067 lays the groundwork for the exploration and potential implementation of Central Bank Digital Currencies (CBDCs) in the United States. While CBDCs promise efficiency, transparency, and innovation in the financial system, they also carry significant risks. These digital currencies would be issued and controlled by the Federal Reserve - remember, not really government, they’re appointed - effectively eliminating cash and traditional banking privacy.
CBDCs raise serious concerns about government overreach. In a system where every transaction is monitored, personal privacy would be at risk. Unlike cash, which allows for anonymous transactions, digital currencies could allow the government to track spending, control how money is used, or even freeze accounts deemed problematic. This kind of surveillance opens the door to citizen control, like China’s social credit score. And with all the recent censorship, cancelling, debanking, de-platforming, jailing people for praying or expressing a non-conforming opinion, it’s a certainty that control is on the agenda. (Think about how no cash would affect things like tips, donations on the side of the road, garage sales, lemonade stands, Girl Scout cookie sales, even the joy on young kids’ faces when they open a birthday card.)
While proponents say that CBDCs could reduce fraud, create efficiency, and provide financial inclusion, these so-called benefits come at the cost of loss of privacy as all transactions would be monitored by the government, potential for increased government control over personal finances, including the ability to freeze or limit access to funds, a slippery slope toward a cashless society, where individuals are forced to rely entirely on digital systems vulnerable to cyberattacks or outages, and threats to financial freedom, as spending could be restricted or programmed according to government policy. (We’ve already been threatened with kill switches in cars and a ‘carbon’ tax. That’s a control on nearly everything, including eating beef and breathing.)
CBDCs represent the culmination of government control over money. Once citizens must rely exclusively on digital currency controlled by the state, the ability to make independent financial choices is greatly diminished. As Rothbard warned, the more control governments have over the money supply, the more they can manipulate the economy to their advantage, often at the expense of individual freedoms.
Further, and extremely concerning, it pretty much IS a digital ID. What could remain private if every aspect of your life was known and controllable?
Digital Currency and the Loss of Freedom. The move from the gold standard to fiat currency gave the government unchecked power to print money and manipulate the economy, creating a fragile system prone to inflation and financial crises. Now, with CBDCs on the horizon, the risks to economic freedom are even greater. President Biden’s Executive Order 14067 signals a dangerous shift toward digital control that would enable unprecedented government surveillance and financial repression.
Rothbard’s insights remind us that sound money is essential to personal and economic freedom. Fiat currency and digital money empower governments, while undermining individual autonomy. A free society requires a monetary system that respects privacy and limits the power of the state. Cash, gold, and decentralized financial systems preserve freedom in ways that digital currencies controlled by the government simply cannot.
Americans must be vigilant in resisting these encroachments and advocate for a return to sound money principles that prioritize freedom and limit government overreach. In a world where everything is becoming digital, maintaining control over our money is essential to preserving our liberty.
God bless you and God bless America.
United we stand. Divided we fall. We must not let America fall.
Additional Sources:
https://www.whitehouse.gov/briefing-room/presidential-actions/2022/03/09/executive-order-on-ensuring-responsible-development-of-digital-assets/
https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/09/fact-sheet-president-biden-to-sign-executive-order-on-ensuring-responsible-innovation-in-digital-assets/
https://www.pwc.com/us/en/industries/financial-services/library/biden-executive-order-digital-assets.html
https://today.tamu.edu/2022/03/31/what-the-biden-administrations-executive-order-means-for-the-crypto-industry/
https://nomadcapitalist.com/global-citizen/executive-order-and-the-future-of-cbdcs/
https://www.brookings.edu/articles/how-bidens-executive-order-on-cryptocurrency-may-impact-the-fate-of-digital-currency-and-assets/
https://www.reuters.com/article/fact-check/biden-did-not-announce-the-us-dollar-will-become-cryptocurrency-idUSL1N39025R/
https://www.csglaw.com/newsroom/president-biden-signs-executive-order-signaling-the-development-of-a-united-states-central-bank-digital-currency-and-shaping-up-regulations-of-digital-assets/
https://chatgpt.com/share/61bba214-4c1f-4fdb-93ec-189bf80d7367
VoteTexas.gov, https://www.votetexas.gov/get-involved/index.html
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