"Permit me to issue and control the money of a nation, and I care not who makes its laws." Mayer Amschel Rothschild (1744-1812, attributed) "The best way to destroy the capitalist system is to debauch the currency." Lenin (1870-1924, attributed by Lord Keynes in The Economic Consequences of the Peace, 1919) "Money has to serve, not rule." Pope Francis (May 16, 2013)
Pope Francis makes his first ever visit to the United States this month, and America's elite are uncomfortable at the prospect. His criticisms of modern global capitalism, not to mention his recent encyclical on climate change, have struck a sensitive chord. As the former Soviet Union learned, an informed and charismatic pope is a dangerous opponent. Francis, whose education included training in hard science (chemical technician), urges action on the environment: "Human beings, while capable of the worst, are also capable of rising above themselves, choosing again what is good, and making a new start."
Just as John Paul II had personal experience with the evils of communism in his home country, Francis lived through fascism and extreme monetary disorder in his. Few countries in the last century have declined as much as Argentina. In Philadelphia, Francis will visit Independence Mall, where at the National Constitution Center he will find much information about our nation's founding charter, adopted after its first disastrous experience with fiat money, the continental currency. There, if he had the time, he could peruse The Federalist Papers, and ponder whether in No. 44 James Madison had not elucidated the fundamental truth about unlimited paper money:
The extension of the prohibition to bills of credit must give pleasure to every citizen, in proportion to his love of justice and his knowledge of the true springs of public prosperity. The loss which America has sustained since the peace, from the pestilent effects of paper money on the necessary confidence between man and man, on the necessary confidence in the public councils, on the industry and morals of the people, and on the character of republican government, constitutes an enormous debt against the States chargeable with this unadvised measure, which must long remain unsatisfied; or rather an accumulation of guilt, which can be expiated no otherwise than by a voluntary sacrifice on the altar of justice, of the power which has been the instrument of it.
Indeed, the Holy Father might reflect on whether Madison's indictment of fiat money is not equally applicable today. After all, the Fed's goal of two percent inflation would have appeared to the Founding Fathers as simple coin clipping, a capital offense. His Holiness might ask himself whether much of what he criticizes in "unfettered" capitalism flows not so much from free markets as from bad money freed from the discipline of precious metal. And he might then conclude, as he did with respect to the environment, that the best remedy is to make a new start and to choose again money credibly linked to silver or gold, or to borrow some of Madison's words, to expiate the accumulated guilt for the pestilent effects of fiat money by sacrificing the power which has been the instrument of it.
Today that power resides in the banks and central banks, which finance governments and other spendthrifts at the expense of savers and pensioners, Wall Street in preference to Main Street, malinvestment to the detriment of the environment, and that most expensive of all government endeavors: the military-industrial complex and war. It is no accident that what Raymond Aron labeled The Century of Total War (Doubleday, 1954) coincided with the demise of the classical gold standard and the rise of central banking.
Unfortunately, as well-documented at this site and elsewhere, the monetary provisions of Constitution of the United States have been turned upside down, and the people no longer enjoy their constitutional right to the use and benefits of sound money linked to silver or gold. As a constitutional crisis, Watergate's long term impact has proved trivial compared to President Nixon's closing of the gold window in 1971, when the demands of financing the Vietnam War finally overpowered the fixed $35 per ounce gold price. Since then, and especially over the past 25 years, Western governments and their central bankers have waged an undeclared but nevertheless savage war on gold -- a war against sound money -- to preserve and extend their own powers and privileges to dominate the planet. The casualties are uncounted; advocates of honest money -- isolated and scorned as gold bugs -- comprise but a tiny fraction.
It is sometimes said that there are no atheists in foxholes. At the height of the Battle of the Bulge, desperate for air cover to help rescue the beleaguered defenders at Bastogne, General Patton ordered the composition of a prayer for good flying weather. So taking a page from his wartime strategy, and recognizing that honest money is as much if not more a moral than an economic issue, we make bold to offer a prayer for the rescue of sound money:
Our Father in Heaven, lead Francis, Your vicar on Earth, To fight the sins of fiat money, Which impoverishes the honest, Enriches the wicked, and funds Wars and discord among nations. Inspire him to work for the return of Sound money based on metals Put on Earth for this purpose -- Silver and gold -- permanent natural Money, and by right and design, The universal monetary standard. Direct witness in his home country To monetary promiscuity causing Economic, social and moral decay, Give the former bishop from Argentina Strength and guidance to champion a Worldwide campaign for sound money. So should success crown his efforts, Francis may in the fullness of time Take his place among the saints, Known forever as The Pope of Gold.