You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold.  William Jennings Bryan

Once upon a time, government budgets were balanced, our money was sound, the streets were safe, and taxes imposed by all levels of government took less than 10% of our income. -- Harry Browne

As you begin reading this treatise on the three legged dollar, please resist the temptation to think you  "know" where I am headed with it.  These are my words and MY ideas, not some empty phrases plucked up from op-eds published in the local newspaper.  And Yes, I realize most people are not ready to take so huge a step as I propose here. My message here about money is written for generations yet to come when these truths will be self-evident, a time when the future American housewife needs a mark on her forehead to buy her bread and a wheelbarrow to haul her money to market in so she can bring home a dozen eggs for her starving children.

Before we start, we also need to face some facts.
Fact #1: America is no longer rich; 
Fact #2: America’s biggest claim to monetary fame today is that it now owes Communist China more money than any other nation on earth.. Last year alone, we ended our financial fiasco owing Red China $232.5 billion more than we could pay back, or barter goods for.  Our auto industry is crumbling.  Our financial institutions needed massive bailouts just to keep a nose above the waters of insolvency.  We can't protect our borders from invasion at home, we can't win a war with little old Iraq, now we're rushing off to Pakistan and Turkey, and North Korea is thumbing its nose at US.  Hobbled at home, bruised abroad, it is little wonder inflation holds the reins of power over what was once coveted as the soundest money on earth.  Inflation is king and as long as this nation believes that more inflation is the only answer inflation will continue to be king.

People have been squabbling over the nature and cause of inflation since time began. 

What does it?

You've probably been taught that inflation is something that "just happens" to the economy.  I'm telling you that inflation is something governments do to the economy.  That has been true for the last fifty centuries and it will still be true tomorrow.  It is also true that every government entity seeks ever more monetary donations from its citizens. 

When citizens grow unruly about donating too much then the government entity diversifies its source of income.  For example: President Taft proposed a constitutional amendment on June 16, 1909 in an address to Congress to allow federal income taxes on individuals and an excise tax "upon the privilege of doing business as an artificial entity and of freedom from a general partnership liability enjoyed by those who own the stock"
On February 25, 1913, the Secretary of State, Philander Knox, proclaimed that the amendment had been ratified by the necessary three-fourths of the states, and thus had become part of the Constitution. Subsequently, the Revenue Act of 1913, an income tax, was passed by the Congress.

Only an innocuous 1% was collected at first.  Can you imagine how grateful you would feel if you went back to 1% today?  Yet Congress was uneasy about possible reactions to the 1% tax.  When no rebellion ensued, the tax was doubled and a confiscation of 2% became standard fare. 

During the Great Depression that followed, that "Indomitable Citizen of the United States" meekly put his face down deep into the mud and kissed the hand that bit him until assessments of up to 75% were meekly accepted with gratitude; "At least it isn't me!" 

Unfortunately, any of the grumbling was done in dark shadows and came from lips that trembled in terror that they might be singled out as heirs of their great American Patriot forefathers.  Along with losing the right to own our own property US lost the right to privacy.  Tax collectors can bust into your home without a search warrant and confiscate all your papers, receipts and deeds in an effort to ascertain just how much you MIGHT be hiding.  Don't believe for one second that such invasions only happen to men like Al Capone; ANY citizen of the United States can be so invaded and property confiscated, sold at auction and then that citizen made responsible for any subsequent indebtedness decreed by the invading agent. 

"Oh, they have to make assessments by law."  No, SORRY, they don't; they go by estimation and inclination.  If you are belligerent you will get socked in the gut much harder than if you meekly kneel down to put your face deep into the mud and kiss the hand that bites you.

Another Way To Steal

Adam Smith, author of the still much studied book The Wealth of Nations, says that historically "the avarice and injustice of princes and sovereign states, abusing the confidence of their subjects, have by degrees diminished the real quantity of metal, which had been originally contained in their coins."

He then mentions that the English coins (at that time) were only worth 1/3 what they had been, and that the French government had reduced theirs to 1/66 of its original value, all in order that the rulers could pay off their debts with money worth far less than it had been when they borrowed it.

History repeats itself, repeatedly. 
Compared to just fifty years ago, right now all the money you have is worthless.

Your Money is not backed up by gold.

It is not backed up by silver.

The only thing backing your money up is inflation. 
Inflation has your dollar backed up to the wall.

I invite you to join me in the next frame

Not long before Interstate highways, modern factories and the miracle advances of super electronics were on the scene, merchants, suppliers and manufacturers could all make a profit on a pair of pants which sold retail for one dollar. And there was NO sales tax for customers to fork over. 
Today the same kind of pants sell for $30 a pair.
"But wait a minute," you say. "That isn't the same money. Some people were working for 10 cents an hour back then, today they won't work for less than $4.25."

Old Buddy, the problem is that it IS the same money.  The only difference is how much highway robbery the American public is willing to overlook now.  Maybe you're smart enough to count up the costs of some of the thefts.  Let's do some more counting:  At 10 cents an hour it took 10 hours of work by the common back to buy a pair of pants in 1900, but let's remember that was with no taxes to fiddle with.
At $4.25 an hour you'd still be working a whole 7.06 hours for that pair of pants.
Yes.  Yes, I know -- you are impatiently frowning at my stupidity already, but we're not through counting yet.
From that $4.25 per hour -- because of increased taxes --  you only get to use $2.39 for spending purposes.  Therefore, in actual spendable income, when you revalue today's scandalized buck so you can compare it with yesterday's slightly sounder dollar you are only earning $0.096 an hour. That means that in spite of all the modern technology we now have that has increased productivity 340%, today's common laborer is earning less than the common laborer of 1900 was at ten cents an hour!  That's right.  In real money US poor people are earning less than a dime an hour. 

Okay, Okay. I'll concede that today's pants do look better on women -- if you will concede that by adding in the 14% sales taxes collected on that $30 pair of pants to our figures here – that the year 2000 workers would be even worse off.

Why Do They Print More Money?

We NEED MORE MONEY! That has always been the government's excuse for printing more money. Money makes the world go round, therefore we need to print more money to go around. No, huh, uh! Printing more money just makes money worth less, and that cheats the poor people that make our money valuable. Way back in 1935 when our friend Rooseyvelt confiscated all the gold American citizens had, what we should have done was make our money more valuable BY DIVIDING IT.

“Divide it?” Yes. Money is a lot like real estate. If you have a thousand acres worth $10,000 an acre you can make it far more valuable by DIVIDING it up so more people can take advantage of it. Land has to be in the right place at the right time to be enhanced by subdivision, and money has to be in the right time to divide it up too.

“How can you divide money up?” Take the good old American dollar. It will have to be an old dollar because the Representatives of the people have been savaging our economy for their friends ever since Hamilton got his face plastered on a piece of paper. So yes, let's go back to gold for just a moment. Tricky Dick said he had to take us off the gold standard because there wasn't any gold left to back up our dollar. I won't go into the stupidity we the people let bring us to that point. Let's just make it status quo. Virtually every ounce of gold we had has been shipped off to pay for our little affairs outside the country. Yes, yes, don't argue this point. If we had owed it to anyone in the United States our gold would still be here. It might not be ours individually but it would still be here with men like Charles Schwaab grinning broadly while we paid the rent for the storage shed that protected their gold. But I will say that the only reason our gold was frittered away is the same one that has our country bankrupt today: we (collectively) have been spending more than we earned.

Okay, let's get back to status quo again so we can take off in a different direction. The status is that 35 paper dollars are worth an ounce of gold before Tricky Dick tricked us off down the primrose lane. But let's go down another lane and divide our money up so as to make 10 paper dollars worth an ounce of gold.

“Huh? You're going in the wrong direction.”

Oh, if we had started behaving ourselves in a sensible financial manner before Roosevelt stole our gold we could have done this one little step at a time. $34 an ounce, $33 an ounce, $32 an ounce. You know, one step at a time, we could have made our money more valuable, and because it became more valuable – like real estate getting scarcer when we need it more – we could have sub-divided it. You younguns will have to imagine a time when a silver dollar was made out of silver but I can assure you that once upon a time our money was so valuable that one dollar would buy an ounce of silver, and a quarter would buy – HEY, a quarter ounce! Amazing what systems those old fogeys dreamed up, isn't it? Let's drop on down a bit here and invent pennies that are worth their weight in – copper. YES!

I'm only 66 years old and I can personally remember vividly being able to buy two pieces of candy for a penny. You take a penny to the store today and tell me how much candy you can buy. However, if we had come to our collective senses and sub-divided our money back then, today a penny would have bought a pound of candy.

“HUH?” That kind of thinking boggles the mind, doesn't it? It's about the same feeling George Washington would have experienced if he had been told that one fourth of an acre could be worth a million dollars. Why, his wooden teeth would have fallen right out of his mouth, his incredulity would have been so great. “Where? Where at is this property so valuable?” New York, New York City to be even more precise. George, these little wooden buildings will be chopped down for firewood and up, up, up higher than the tallest tree you can imagine, will sprout these buildings of steel and concrete that can hold thousands of people at one time – thousands and thousands of people at one time, and every one of them can be taxed to pay the President's salary.

By this time George has gone out cold and is stretched full length on the concrete sidewalk. Let's step around old George and hop on down this new trail we have discovered.

Yeah, let's throw our shoulders back bravely and be REAL proactive here, since you haven't fainted yet. The reason money fuels the economy is because it changes hands easily. Once upon a time 35 paper dollars was worth an ounce of gold. We need more money to change hands so everyone can feel like their palm has been greased. So let's make 35 CENTS worth an ounce of gold. If you think of this step like real estate you won't be lying down there beside George on the sidewalk.

Now remember, we have only gone back a few years. Good britches only cost about $5 a pair back then – No, no. That's wrong. Back then 5 paper dollars would have bought a good pair of britches, I think you call them jeans these days and you pay from $50 to $250 for the same quality I used to wear – britches sold for $5 and jeans for $50, who was smarter?

So, what we are going to do is sub-divide our money so that PANTS can be bought for 50 CENTS. In other words, after sub-dividing our money, 50 cents are now worth a pair of pants. Same quality, and they look just as good on girls as ever, wonderful, huh? Wonderful, gleaming, brand new financial policy – sub-dividing our money.

Let's grab that penny by the nape of the neck and shake it a few times until it is sub-divided into one hundred units that we will invent the word MILLS for. We now have some new coins to work with. One hundred of them are worth one of today's pennies. No wonder people are willing to work for 7 cents an hour. Even illegal aliens will realize that when people are willing to work for 7 cents an hour then 7 cents is worth an hour of labor.

We also have a 50 mill piece and a 25 mill piece, a 10 mill piece and a 5 mill piece. One penny is now worth as much as the dollar was yesterday. The dollar is now worth as much as it was 80 years ago. George, are you still down there on the sidewalk? Stand up like a man and look at this new money we've got. That worthless piece of paper with your picture on it is now worth almost a whole dollar again!

Why call our new coins “mills?” The word mill goes hand in glove with a basic unit of taxes called MILLAGE. If the tax collector accepts them, who can argue with this new terminology?

“Okay, we have sub-divided our currency, now WHO is going to work for less than they were getting?”

Well, I'm glad you asked. Let's start with those public-spirited servants in Washington D.C.. I'm sure they'll be glad to work for less.  Why, back in 1847 they were glad to earn just $8 per day.  It makes sense to me if we start out by paying them what they are worth and see where we go from there.

“Them? Take a pay cut? Why, that's the dumbest thing you've said today! Them people want more bonus for all the mistakes they make than if they had run a big corporation into the ground!”

You're right. We might have to take a club to them.