If you’re here you probably know that I’m a very enthusiastic Ron Paul supporter. There is one place that I disagree with Dr. Paul heartily, and that is the gold standard. Don’t get me wrong, the gold standard is good enough in a tight spot… but it doesn’t represent true value as Ron Paul says. If that were true the gold rich countries would be the wealthiest countries in the world. Just look at Africa for a minute, I understand it’s not a unified country, but the continent of Africa is the most gold rich place on earth… so where is the wealth? More gold comes out of South Africa than EVERY OTHER COUNTRY IN THE WORLD COMBINED!!!!!!!! Therefore why is it that most of the cities in South Africa look like the encampments of central park during the great depression? No, golds value is manipulated, faked, forged, and often conjured out of thin air. The difference between gold and a fiat currency is that you have thousands of years of manipulation backing gold. Well, I guess that’s not the only difference… there is value to gold, just like there is value to paper. When you’re talking about paper currency the value of that paper is far less than stated, just like when you’re holding a gold bar the value of it is far less than you’d have to pay for it. Gold is useful in a lot of industries, but often impractical for use because of the hording that occurs.

With that said, I actually do believe very strongly in the fiat currency system. As with any currency (gold, silver, platinum, paper, salt, pepper, etc.) its value is determined by its perceived value. Now gold has been around for a long time, and it has been used as currency for a very long time, so its perceived value is very high. However, since gold is not useful in the average persons daily life it is easy for the perceived value of gold to sharply drop in times of hardship. What good is a piece of gold in a drought? You can’t eat the gold, you can’t bribe the clouds to rain, and if a farmer doesn’t have enough food to feed his family you probably can’t buy food from him either. What is still useful in a drought is hard work. In a drought you might be able to dig a well, you might be able to dig a ditch from a creek to your crops, you might be able to lay out a dew catching system to capture the morning dew… of course in a severe drought none of this will help you, but you can still move your family to where there is water. It’s not pretty, and no one wants to leave their land behind, but droughts in life come and the only thing that will get you through it is the hard work of yourself and the community around you. Money, all money, is just a place holder. Money holds the place of food, clothing, shelter, cars, computers, and anything else you might find useful or necessary in your day to day life. So why not go to the root, quit fiddling around the edges and hold the place of the work ethic of Americans?

So in my mind the only currency system that makes any sense is one based upon the work ethic of those around you. That’s right, we’re going to start freezing sweat, coining it, and passing it out as currency! Okay, not so much… But here’s what I perceive as the best system possible. You take the average pay of all Americans probably something like $150,000 a year (I’m guessing, but between the average workers pay of $50,000 a year and the few multi-millionaires around you probably hit 6 digits), then you take the number of Americans working (be sure to include home makers and anyone who adds value to the country), and you end up with the amount of money in our system. You see when the recession hit and the unemployment rate skyrocketed the Fed printed money, lots and lots of money to ease the burden on those people… printing money makes it cheap to borrow money because it’s not worth as much… so in theory it creates jobs… the problem is that it does not. What should of happened is money should have been removed from the system. Fewer jobs means fewer people adding value to our economy, so the amount of money in the system should have dropped… this would have actually helped those who were laid off, instead of their savings accounts being drained by devaluation the money they have saved would have become more valuable. With fewer dollars in the system your dollar buys more. It allows you to float longer, it means that businesses can buy more with their money, and eventually will start to hire again because they were able to do more with the resources they had at hand. While printing money makes it cheap for businesses to borrow money, it really only helps out the large corporations, most small businesses don’t borrow that much money they have to rely on the resources they have on hand. If the resources they have on hand become more valuable (as they would in a recession with my system) they’re able to do more without relying on the banks, they’re able to hire more. A work ethic based currency would have several down falls though… for starters it’s really, really, REALLY good for the middle class, the middle class is the most likely class to run/own small businesses. As stated before small businesses don’t borrow money as much as large corporations do, the only way that large corporations work is that they operate almost entirely on “future” funds… or loans. They get the money now to make a product through the stock market (just a big loan office in my mind), banks, etc. then after they’ve made their money from a product they actually make the product… which seems ass backwards to me. Small businesses don’t have the luxury of operating that way, so a system that made their work ethic the most valuable asset would be too good for the middle class. This in turn would make for some big pushes to get rid of the system from some very wealthy people… Because of that it could not be controlled by a small group of people like the Fed currently is… it would have to either be an amendment to the constitution… or simply have an addendum that required 2/3 vote in congress or by the American people to change the “value” of the employed Americans… or the definition of who was employed… or how often the census of who was employed was taken.