Gert Fröbe

The reason for his name as the title will become readily apparent to anyone with an ounce of knowledge of pop culture.

The gold standard. Up until 1971, The United States had its currency backed by gold. What that meant, basically, was that you could go in to any bank in the United States with any substantial amount of money, and leave that bank with its equivalent in gold. Theoretically, this meant that there was a fixed amount of money in the American marketplace. Obviously, this was not true; we had more dollars in circulation than there was actual gold.

However, Section Ten of Article One of The United States Constitution states that "No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

It goes on, but the point of this blog entry is focusing on the gold standard. Now, why do we use paper money or pieces of plastic with magnetic strips on them instead of gold and silver coin? Gold and silver is bloody heavy, and it is bloody rare.

The drawbacks of gold and silver in one arena are its strengths in another arena, however. We keep all of our gold in Fort Knox because it is easily defensible, and it would take MONTHS to move all of it. You can't out-and-out rob Fort Knox because the laws of physics prevent it. Which is why Auric Goldfinger wanted to irradiate the gold in Fort Knox, not steal it.

Still, this does not answer why the founders of our republic wanted gold and silver to be the foundation of our monetary system. What IS gold? Well, it has the atomic number of 79, the atomic weight of 196.97 (as compared to lead's weight of 207.2), and is bright yellow, a color considered by many to be attractive.

Still, that doesn't mean anything. What gold really is... is stored energy. The combined effort and toil of hundreds, perhaps thousands, of human generations is distilled into ingots. That is what makes gold valuable; the amount of effort that has been put into the acquisition of it. You see, energy is the currency of the universe, yo.

So, the founders wanted the finances of the republic to be guaranteed by an obvious metric of human effort, that can be defended easily. It makes sense, doesn't it?

However, the gold standard has its problems. You see, paper money, if backed by a hard currency, is tied in to a national identity. It is the marker of how much gold a country actually has. If a country does not have a lot of gold, its currency, under a gold standard, is destined to be worth less than a country with a lot of gold. A country could have untold and unknown wealth within its borders as defined by the talent of its people, its natural resources, and... its military might.

Ah, military might. Potential energy. In 1971, the United States removed itself from the gold standard. A good thing, too, because today there is about 38,000 dollars in circulation to every troy ounce of gold held by the United States. Gold... is trading somewhere around 800 dollars an ounce as of this writing. Think about that for a second.

The perceived strength of the United States, in talent of its people, natural resources, products exported, and her military might are what backs the U.S. dollar today. It is a good system, but it has its problems, too.

For instance, we import a great, Great, GREAT deal of ENERGY from other countries. Remember, energy is the currency of the universe. While we export a great deal of our effort to other countries, thermodynamics, entropy... guarantee that the amount of energy we put out is ALWAYS going to be less than what we take in.

Ron Paul is talking about the gold standard, monetary policy, and the whole bad idea that foreign wars and adventures are. I am going to vote for Ron Paul. Muckrake all you want about newsletters from twenty years ago... he is telling the cold hard truth, and we ignore him at our peril.