"Every fiat currency ever created in the history of the world has collapsed in disaster"
German woman using money as fuel in
her wood burning stove. During the 1923-
1924 hyperinflation in Germany, it took
less paper money to generate the needed
heat in the stove by burning the money
than it did to use it to buy wood to burn.
© AdsD der Friedrich-Ebert-Stiftung
This picture was originally on
however the picture is no longer there.
Using banknotes as fuel for cooking.
Hungary 1946 - Banknotes were so worth-
less that they were discarded like trash.
A fiat currency is a worthless piece of paper having no intrinsic value,
since it cannot be redeemed for a tangible asset such as gold or silver.
Fiat money's only intrinsic value
is fuel: you cannot reuse the paper money for printing because the paper has
already been spoiled with ink from the Central Bank, and you cannot use the fiat
money as toilet paper because of its poor absorption. If you cook on a wood stove or live
in a cold area, at least paper money has some intrinsic value to you (energy),
otherwise paper money remains trash - an expensive pollutant brought to you by
A fiat currency is money issued by a government order that it must be
accepted as a means of payment by law
extortion. Without the threat of using
force (such as jailing or killing recalcitrant's), no fiat currency would ever come to existence. A fiat currency
remains in circulation as long as its government make it illegal to its citizens
to conduct business in gold or silver. If a government would partially
legalize freedom, that is, allowing people to trade in gold or silver, and the
courts would be allowed to recognize and enforce a contract settlement in gold
or silver, then the government's Central Bank would become useless within months.
Because a fiat currency can be printed on paper, it makes it easy for the
government to spend more than they tax, thus inflating the money supply.
Printing fiat money is the favorite means for politicians to buy votes. Since most people are ignorant
about inflation, voters are misled to believe they are receiving more money from the
government compared to what they pay in taxes. The truth is government cannot
create any wealth. All the government can do is confiscating wealth from one group and
give it to another group, in exchange for a few votes. Ironically, the
inflation tax affects the poorest in society, usually the very ones voting
for more government.
Printing Money and the Inflation Tax
What most people fail to realize that inflation is a tax.
They know only that the cost of living has gone up, however they don't
understand why. Politicians and the media use propaganda to blame the
rising cost of living to greedy businesses, however the root of the problem
is the printing of fiat money.
Ending inflation would cause your money to buy more and more as the economy
grows, instead of less and less, as it does today. Stopping inflation would
also end bubbles and booms, and the recessions they cause.
Past inflations, booms, and busts were created through essentially the same
process, including the recent stock market and housing bubbles. The Central
Bank (or the Federal Reserve) is simply the government's latest-and-greatest
tool for legalized counterfeiting.
Printing Money Creates Unemployment and Mass Poverty
Lenin is said to have declared that the best way to destroy the capitalist
system was to debauch the currency. By a continuing process of inflation,
governments can confiscate, secretly and unobserved, an important part of the
wealth of their citizens. By this method they not only confiscate, but they
confiscate arbitrarily; and, while the process impoverishes many, it actually
enriches some. The sight of this arbitrary rearrangement of riches strikes not
only at security but [also] at confidence in the equity of the existing
distribution of wealth.
Those to whom the system brings windfalls, beyond their deserts and even
beyond their expectations or desires, become "profiteers," who are the object of
the hatred of the bourgeoisie, whom the inflationism has impoverished, not less
than of the proletariat. As the inflation proceeds and the real value of the
currency fluctuates wildly from month to month, all permanent relations between
debtors and creditors, which form the ultimate foundation of capitalism, become
so utterly disordered as to be almost meaningless; and the process of
wealth-getting degenerates into a gamble and a lottery.
Inflation decreases the purchasing power of the currency, thus making goods
and services more expensive. Inflation decreases the value of real wages,
decreases savings and investing which is necessary to create jobs, inflation
increases the interest rates and increases the production costs.
Lenin was certainly right. There is no subtler, no surer means of overturning
the existing basis of society than to debauch the currency. The process engages
all the hidden forces of economic law on the side of destruction, and does it in
a manner which not one man in a million is able to diagnose.
It is a Crime to Counterfeit
The Founding Fathers of the United States knew that a fiat currency would create poverty, slowly
increasing it until it overcomes us. All our modern presidents, Republican
and Democrat, are doing is taking advantage of the ability we gave them to
print money. Greed has corrupted our government. It is our own fault
because we allowed it, and the longer we let it continue, the less we can do
to change it without complete revolution. The shrinking middle class is
only a symptom of a deeper problem, and we are perpetuating and falling
victim to it by using debt as a financial tool in everyday living.
Our founding fathers debated this very issue and Thomas Payne said in 1786 that it should be considered treason for
anyone to even suggest that fiat currency be allowed. John Adams said that
"paper money" (meaning by fiat) is a great theft, stealing from the society
where it is used. Yet the U.S. Supreme Court opened the door for congress
in 1884 with the Julliard vs. Greenman case, and an amendment to the
constitution was later passed making it constitutional. (See
"A Plea For The Constitution" by George Bancroft.).
Over the last 230 years we have let laws
accumulate on the books that are contrary to our
values as a country. That has accumulated to the
point that our courts are starting to use
unconstitutional laws to justify decisions not
directly related to the case in question, yet it
goes unchallenged still because people rarely sue to
change unconstitutional laws, which in effect puts
the court’s stamp of approval on the law. Congress
doesn't consider the constitutionality question to
be its responsibility, when it passes law - that is
the Court's job.
Over time, what was considered treason and punishable by death at the Constitutional Convention is now allowed and even
legislated into law.
The root of the problem is the fact that we have
allowed our government to violate the original
intent of our constitution and pass an amendment
that allows them to create a fiat currency.
Gold is the Antithesis of Fiat Money
Gold is money, however gold cannot be printed. Any currency backed by
gold cannot be inflated without mining more gold. By contrast, a fiat
currency can be printed or created out of thin airy with a few keystrokes on a
Without gold as money, governments can print as much money as they want, destroying wealth through inflation.