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Dec 5, 2006 This Award-winning documentary video, featuring presidential candidate RON PAUL, was inspired by the book, “The Creature From Jekyll Island” This explains it all in layman’s terms anyone can understand.

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Using Digg, I was able to find this really well done documentary on the gold standard, sound money, and the dangers of our current paper (fiat) money system. Going through the comment section, I found several arguments against this video that I wanted to comment on here.

Lame. This is a very weak argument. All money and valuation is “smoke and mirrors” – gold doesn’t hold an actual value – just intrinsic in the eyes of the people. There is no difference between our fake valuation of gold & silver vs our valuation of dollar bills and soon our valuation of a single number that represents our wealth in a computer database somewhere …

There is some truth to what the person is saying above. No good or service has an objective value. Something acquires a subjective value when people want it, and are willing to trade real good and services for it. People desire paper currency because they believe they can exchange it for other goods and services. However, what they don’t understand is that paper is not stable, as the government is able to print as much of it as they want. As a crime, this is not different than what counterfeiters do. All governments of all stripes do this. The advantage of having your money backed by something real is that government can’t do this.

Dollars are backed by the same force that everything is backed by: supply and demand. Just how gold really shouldn’t be worth what it’s worth (it’s just a shiny metal a neat ability to avoid oxidation), dollars can be exchanged for goods and services even though you can’t go to a bank and ask for something physical. And as long as we all agree to use dollars instead of chickens or gold as an exchange, then the system works.

My point above kind of answers this as well. He makes an interesting point, however, probably without intending too. As long as we all agree to use dollars … That’s kind of the rub, isn’t it? As the government keeps printing more money, that paper is worth less and less (this is called inflation). When this happens, people stop using it, and the currency collapses. People see their life savings wiped out, their lives ruined. See what happened to Germany in the 1930’s, or to a lot of Latin American or African countries today. It is always a bad idea to let anyone (whether counterfeiters or the government) create money out of thin air. Personally, I’d take chickens over the US dollar at this point.

It amazes me how many people can talk on this subject without having a graduate level constitutional law class or even an college economics class….

I bet this person has a university level education. This is going to be a future post all by itself, as it nicely shows the problem with our entire education system. Stay tuned.