Economic Reality Vanished. When?

By Paul Stone

Because of the United States' strong economic foundation and political stability, investors regard the U.S. dollar as a safe haven, and it has continuously maintained its position as the world's most valuable reserve currency. Michael Saylor, the co-founder, and chairman of MicroStrategy, is, nevertheless, quite dubious of the dollar.

Recently, on Patrick Bet-David’s PBD Podcast, Saylor compared the U.S. dollar to the Argentine peso.

“The only difference [between] the U.S. dollar and the [Argentine] peso is, whereas it takes 20 years to lose your family's fortune in the peso, it takes about 90 years to lose your family's fortune in the dollar,” Saylor stated.

“My house in Miami Beach was $100,000 in 1930. It was appraised at $46 million a few years ago,” he said. “Do the calculation. It's on a path to be worth $100 million, which means that the U.S. dollar will have lost 99.9% of its value over 100 years. Warren Buffett knows this. Charlie Munger knows this.”

In the movie, A Wonderful Life, when Jimmy Stewart’s partner loses the $8000 deposit at the bank. It slips out of his coat into the bad guy’s lap… that would be $106,000 today!  A perfect illustration of the destruction of perhaps 60% of Americans wealth or savings value.

The point Saylor is making is the extinction of the dollar (which I completely agree with) but the case he makes for Bitcoin, let’s leave that proposal to the side for now. In my aim to be helpful, let’s apply Saylor’s awareness of the nearby death of our currency’s utilization to embolden you the choice-maker on what to do next.

My pastor would always speak for a few minutes then he’d interrupt himself and yell out, “What’s the point!?” – so what is the point? Who cares? So what?!?!

Here is so what: this destruction happened to your family system, gutted the pride heads of households once carried, scrambled your view of the future, and increasingly makes it harder and harder for you to enjoy peace. Peaceful finances would be essential to have peace in life is it not?

So, here is the perspective of truth I speak of, let me bring you back to the unfettered mindset of one who receives plenty of adulation for his leadership of the Federal Reserve.

I, personally, lean into what Alan Greenspan – a former chairman of the Fed (ironic) - was an avid proponent of a gold standard (wait-huh?) and critic of the government fiat money system (oh my when did he switch sides?).   The side he then endorsed - a system based on paper money rather than backed by a precious metal such as gold, in which paper money can be created “out of thin air,” thus causing inflation and the erosion of the value of the dollar. 

But before he was that guy, he wrote in an essay in 1966 titled, Gold and Economic Freedom. Please stop, when you read this, thinking about gold. It’s not about gold per se, it’s about a limitation that literally prevented the government from printing one solitary dollar, which was not backed by gold. And that folks equaled Reality in Living.

Here is part of what he wrote:

Gold and economic freedom are inseparable, . . . the gold standard is an instrument of laissez-faire and . . . each implies and requires the other.

What medium of exchange will be acceptable to all participants in an economy is not determined arbitrarily. Where store-of-value considerations are important, as they are in richer, more civilized societies, the medium of exchange must be a durable commodity, usually a metal. A metal is generally chosen because it is homogeneous and divisible: every unit is the same as every other and it can be blended or formed in any quantity. Precious jewels, for example, are neither homogeneous nor divisible.

More important, the commodity chosen as a medium must be a luxury. Human desires for luxuries are unlimited and, therefore, luxury goods are always in demand and will always be acceptable. . .

The term “luxury good” implies scarcity and high unit value. Having a high unit value, such a good is easily portable; for instance, an ounce of gold is worth a half-ton of pig iron. . .

Under the gold standard, a free banking system stands as the protector of an economy’s stability and balanced growth.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. . .

The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the “hidden” confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.

You must wonder how a man who wrote so passionately, so exacting, so confidently in opposing a monetary scheme that allows the government to print money backed by nothing, then once in power, engaged in deficit spending and the expansion of government. Which only help to erode the value of the dollar through the hidden tax of inflation could effectively become the nation’s economic dictator-in-chief.

How does he become okay with the paper monetary system? He literally was the participant in these growing deficits. Greenspan always blamed Congress. Greenspan, had been given toys. Toys that didn’t exist and should have never been created.

His toy allowed for fu*king with nature’s way of economies here on Earth – not gravity itself, but financial gravity. Even the most ardent follower of truth and principles can or likely will fall once given, toys… religious leaders, political, military, wealthy - when those toys are nothing anyone is used to playing with.

But Congress couldn’t do it if the Fed weren’t complicit. If the Fed wasn’t directing the pre-deployment of logic and reasoning to the imbecile politicians who came seeking advice on how much ‘they’ could get away with.

If we don’t want a tax… and we can’t borrow… then, they have to print the money in order to accommodate ‘spending beyond our means’ which equals dis-reality in living.

There is a great story about Ron Paul (gold standard advocate) confronting Greenspan’s 180-degree turn. The Texas Congressman and the Fed Chair had a meet and greet – but Paul brought an old copy of Greenspan’s essay.

Paul pointed out the irony and juxtaposition – he then asked Greenspan to autograph it. As he was signing it Paul asked if Greenspan wanted to write a disclaimer. The Chairman wouldn’t do it, because get this – Greenspan said, “No because I believe in what I wrote.”

So… how does that work? The Fed’s Chair believes we need to be on the gold standard to stop so many evils and yet here he was doing just the opposite.

Now, today – let me ask you, the reader, “What has changed?”

EXACTLY.

Here is a quote from the current Federal Reserve Chairman, Jerome Powell, "The level of debt we have is completely sustainable but the path we are on is unsustainable." Then he said, the Biden administration was taking excessive risks by "running a very large deficit at a time when we are at full employment.  You can’t run these levels in good economic times for very long."

So here we are… the truth hasn’t changed – opinions and decisions on how it needn’t be adhered to or respected is what changed. 

Gold might best be described as “Truth in Money,” and the language of mathematics and the history of humans governing humans is shit. It shows presiding over destruction, so reality will roar back into the pole-position and when it does, per history and per math… that will also be a destruction, but the type that sets men free.  

Since the government does not show a track record of course correction, the decision falls to you. You must make your own decision. Do your savings, or a portion of your savings continue, situated as they are?

Maybe the best way to start viewing your savings is to call it a resource. Your financial hay in the barn. If you see smoke on the horizon, the wind is blowing that inferno toward you and the wind has never showed it changing direction…you cannot move the damn barn, so move what’s in it, right?

Make the move to gold since the government will not restore your finances to the REALITY.

History is confirming for you and experts, at the very top of their game, are telling you - the wind is blowing and the flames are not imaginary.