Fiat Currency

"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 Wikipedia,
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 your Government.

 

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 computer.

 

Without gold as money, governments can print as much money as they want, destroying wealth through inflation.

Since August 1st, 2013 iGolder is no longer accepting new accounts and balances can only be redeemed. During the past years, we have been recommending Bitcoin more than our own payment system. We believe in physical gold ownership, and developed iGolder as a mechanism for people to acquire physical gold by trading with one another.

Since iGolder has a central point of failure (our server may be raided by thugs wearing some kind of uniform), we feet it is safer for us to cease operations. The iGolder experiment has been personally rewarding as we met many gold enthusiasts and also learned about Bitcoin in the process. For those who have no idea what Bitcoin is, we recommend doing your own research. Bitcoin is far superior to iGolder in every way, both in privacy and security as our server is always vulnerable to confiscation. Bitcoin is a communication protocol with a built-in "escrow service" capable of protecting both the buyer and the seller, rendering our Safetransit completely redundant. To learn more about the Bitcoin protocol and its feature, please watch "http://www.youtube.com/watch?v=mD4L7xDNCmA (Bitcoin 2012 London: Mike Hearn).

For those having gold in their iGolder account, we will ship the physical metal to anyone having more than 1 ounce of gold, assuming the owner is willing to assume the shipping costs. For smaller quantities, we offer to settle in Bitcoin, however we will also settle with any other reasonable payment system. We will give everyone at least two full years (until 2016) to contact us to claim their gold. After that period, any unclaimed gold will go to fund an economic development project in Honduras helping local people to become entrepreneurs.

We sincerely wish you the best in life and hope to keep in contact with you.

Yours in liberty,
The iGolder Team.


Update 2014: Since we announced we no longer accept gold transfers, we have received countless emails asking to keep the free gold charts and the PGP encryption tools. We plan to keep running the domain iGolder.com for both the gold charts and the encryption tools. Better, we are developing state of the art open-source software for a secure decentralized social network with a built-in wallet. We will announce when we have a product ready for use. Stay tuned!