ROMNEY WORDSWORTH – Our currency is in trouble and it needs to be fixed. The dollar has been on an unbroken trajectory of decline in value for the last 200 years. The decline has accelerated precipitously since 1940. One dollar now has the purchasing power that seven cents had in the year 1800.
There are two problems with the dollar. First, it is a “floating” currency not backed by anything. Second, the dollar is being over-printed by the Federal Reserve, a “private” bank whose books are secret and is unaccountable to Congress. Once upon a time, currencies were “pegged” to a commodity like gold or silver. In fact, currency used to BE precious metals, with its own intrinsic value. When your money is a commodity with intrinsic value, it is impossible for it to collapse and become worthless. No, that only happens when you use paper money that is backed by nothing except the “full faith and credit of the United States”, which is to say, nothing but empty, meaningless promises.
The second problem with the dollar is that it is being inflated on purpose. The Federal Reserve is printing trillions of dollars out of thin air, and every additional dollar printed dilutes the value of yours sitting in your wallet. Under the Obama Regime, the Federal Reserve, without notice or consent of the people through their congressional representatives, has been engaged in two particularly destructive policies:
The first destructive policy is that the Fed is monetizing the debt of the U.S. government. What does this mean? It means that the Fed is buying up U.S. Treasury Bills. One arm of the government is “buying” the government’s debt from another arm of the same government. The U.S. has run out of private creditors willing to buy our debt bonds, so now we’re just writing ourselves I.O.U.’s and running the printing presses 24/7, creating the needed trillions of dollars out of thin air.
The second destructive policy of the Fed is that it has been using dollars it prints up to buy foreign sovereign debt. The Fed has reportedly propped up the Euro to the tune of over seven trillion dollars, lashing our currency (through the full faith and credit of the United States) to the Euro. Both the European Union and the Euro that props it up are today heading for destruction and dissolution over the migrant crisis created by Angela Merkel.
So, to sum up, our currency is in trouble because it has no intrinsic value, we have been over printing our currency by trillions of dollars, and the government credit that is supposed to back our dollar is itself massively in debt, and holding trillions of dollars of bad foreign sovereign debt.
The answer to stabilizing the value of the dollar is to go back to linking it to a commodity. I do not propose going back to the gold standard for several reasons. First of all, most of the world’s gold is not located inside the United States, which is to say we cannot control the supply of gold. Secondly, the price of gold is too high for it to be a feasible commodity to link the dollar to. The U.S. government is in 29 trillion dollars of debt, with additional liabilities of 120 trillion dollars if you count all of the obligations the government is going to incur to pay its obligations under Medicare, Medicaid, Social Security, and this figure doesn’t even include the trillions that Obamacare will cost. With gold costing around $1200.00 an ounce or more, how is a broke, massively in debt government supposed to buy enough gold to back our currency? The answer is that it
Lastly, I would not choose gold because the confidence in the dollar is so low, and the value of gold so high, there would be a guaranteed run on the Mint to redeem dollars for gold. It is too easy to transport gold because it is a relatively compact store of wealth. At the same time, you want the dollar to be redeemable for something more tangible than quantities that would amount to dust.
THE ANSWER IS COAL! The United States has 275 billion tons of coal reserves, more than any other nation on Earth. By the way, this represents a 250 year supply of energy at current rates of consumption. U.S. coal deposits contain more energy than all the Earth’s oil reserves combined. The Federal government lists U.S. recoverable coal reserves (feasibly mined) at 261 billion short tons. A short ton is 2,000 pounds. Total U.S. coal reserves, including those not easily minable or proven, are estimated by the U.S. government to be as high as an astounding 4 trillion short tons. Approximately one third of U.S. coal production comes from Federally owned land.
Now, that last sentence is the key. One third of U.S. coal production comes from Federally owned land. In other words, our debt ridden government is actually the owner of vast stores of wealth in the form of natural resources, not the least being our coal reserves. That means the government doesn’t have to acquire the coal, it already owns it. That means the government can control the supply.
The Federal Reserve Bank charter should be revoked, the Fed dissolved, and their property and records seized by the Justice Department for criminal investigations. The U.S. Mint can be restored as the issuer of U.S. currency. The new “coalback” will replace the “greenback”. Average citizens will be able to exchange their green backs for coal backs at a rate of one to one. Banks that are sitting on trillions of dollars received from the Fed under TARP and Quantitative Easing will have a much, much less favorable rate of exchange. This will have the salutary effect of removing all those trillions of empty dollars and keep them from getting out into the private economy and causing massive inflation. Banks will be allowed to fail. The U.S. government will get out of the banking business, as it has no place under the Constitution running sectors of the private economy.
Coal has the advantage of being bulky. It is impractical to have a run on our mint to redeem dollars for coal, simply because you can’t walk away with much coal from the teller’s window. Bring in a few trains of coal cars and park it outside the mint for show. Anyone who wants to redeem their dollars for coal is responsible for transporting the coal themselves, at their own cost. Now, how much can an average person redeem at any one time? While we have linked our dollar to a commodity with intrinsic value, it will not be practical for those dollars to be redeemed in quantity.
Confidence in the dollar will be restored. People will know the dollar represents real value and that it can never become worthless. Global investors desperate for a safe haven for their money will eagerly buy dollars over other currencies. Obviously, all those anti-coal regulations being issued by the Obama EPA will have to go, but that too is in the national interest. We need to encourage production and use of coal, natural gas, and shale oil within the U.S. The only thing standing in the way of U.S. energy independence is a bunch of Luddite environmentalists and a hoax called global warming. Enough of this lunacy. We have the means to fix our currency, and our economy. All we lack is the political leadership to do it.