I was not surprised to hear that Ben S. Bernanke advanced to head of the Federal Reserve Board with little fanfare earlier this week. Dubbed the Prince of Paper because of his suggestion that the the US could simply print its way out of economic troubles (a frightening idea to anybody who understands money) I expect that he will continue in the footsteps of those who have lead the Fed before him. This might come as a surprise to most people out there, but this won’t be good for the country.
With the national debt now over 8 trillion dollars, 4 trillion of it being held in private hands (which means we pay interest on that portion of the debt) The question really becomes “why are we paying others to carry debt that we owe ourselves?”
I was listening to a local talk show host, Patrick Timpone, recently; and heard excellent idea from the guest. Didn’t catch who he was (don’t think I heard his name) but his argument amounted to “…if we are going to endorse the fiat money system as the way to do money in the modern age, then we need to make sure that the citizens of the US are the ones who profit from the use of our money, not the banks and individuals who own the debt.” The treasury should take back the ability to print money (this will require a constitutional amendment) and simply print the money it needs itself. Any subsequent benefit to the debt’s existence would accrue to the Americans to whom the debt is owed.
Maybe the way to make money more elastic (without engaging in inflationary money printing ventures like the Paper Prince will embark on) is to adopt a system like the Ripple or Cyclos monetary systems, allowing us to privately monetize ourselves what we currently have to go to the banks for.
Something to think about. But I’d still prefer to have the silver in my hand rather than any IOU, even if that IOU is backed by the full faith and credit of the United States.