Thanks to the Montana Sound Money movement I was able to view the testimony given by Dr. Lawrence Parks (Executive Director of the Foundation for the Advancement of Monetary Education). It is the best overview of sound money I have yet seen. Do you have 55 minutes to watch it?
Even better than the YouTube video above is the entire video in a single file at http://montanasoundmoney.org/parksvideo.html
Dr. Parks has been endorsed by Ron Paul. Highlights from the video:
1) Watch a streetsweeper in 1940s Hungary sweep thousands of Hungarian dollars into the street’s sewer gutter. The worthless paper currency was a nuisance, impeding street traffic.
2) The Constitution actually defines a “dollar” as “371.25 grains (0.77 troy oz) of pure silver”, the content of the then-widely-circulated Spanish Milled Dollar. Constitutionally, there is no such thing as a gold dollar. And, certainly, there is no such thing as a paper dollar.
3) Why was Thomas Jefferson was so vehemently opposed to paper currency? He had been swindled out of tens of thousands of dollars (worth over a million in today’s dollars) when he sold his father-in-law’s estate after his death. This put him so far in debt he had to sell his own collection of books to the gov’t: it is now known as The Library of Congress.
4) The motivation behind FDR’s confiscation of gold was the reality that US banks could no longer honor the paper currency’s promise to “pay the bearer $20 in gold”–they didn’t physically have the gold. FDR outlawed gold to avoid a nationwide run on the bank’s little remaining gold.
5) Originally, Federal Reserve Notes promised to “pay to the bearer on demand X dollars.” You see, Federal Reserve Notes were NOT dollars BUT a promise to redeem them FOR dollars. And a dollar was defined as a US Silver Dollar.
Once silver and gold were no longer used as money this “promise to pay” was irrevocably broken. And the “broken promise” to pay a dollar was redefined as a dollar.
6) In 2005 the Federal Reserve admitted that they create money out of nothing and that “money exists simply as a bookeeping entry at a bank.” Federal Reserve Bank of NY “The Story of Money” page 17.
7) The massive gutting of the United States’ industrial manufacturing capability is due, primarily, to the rampant creation of money once we left the gold standard in the 70s. (I had always thought it was because of NAFTA, WTO, etc.)