The State and Monetary Debasement
Posted by Orrin Woodward on September 25, 2013
There is probably no area of government where the Five Laws of Decline (FLD) are harder at work than in the monetary system. I cannot emphasize enough for citizens in every society to understand how the monetary system works and how to check the FLD from destroying justice. Simply stated, justice within society leads to production and prosperity. In contrast, injustice within society leads to exploitation and poverty. Everywhere we identify the FLD at work is an area where injustice is destroying society’s prosperity. Therefore, men and women of character must ensure the injustice stops and society provides justice for all.
If you haven’t read LeaderShift, I encourage the reader to do so as a primer for the new book coming out. LIFE Leadership is capturing truth in the 8F’s and sharing with the world! 🙂
Sincerely,
Monetary Debasement
USA Monetary Debasement
The second way that government damages the distribution of goods is through manipulation of the monetary units. Although many believe the state created the monetary units within society, in fact, as Ludwig von Mises demonstrated, money originated through the free market process of bartering. Therefore, the only valid governmental function, with respect to money, is to ensure an honest Bureau of Weights and Measures to protect against the debasement of society’s money. Unfortunately, as Murray Rothbard, so aptly explained in his classic book Mystery of Banking, government routinely violates this sacred responsibility:
The problem is that governments have systematically betrayed their trust as guardians of the precisely defined weight of the money commodity. If government sets itself up as the guardian of the international meter or the standard yard or pound, there is no economic incentive for it to betray its trust and change the definition. For the Bureau of Standards to announce suddenly that 1 pound is now equal to 14 instead of 16 ounces would make no sense whatever. There is, however, all too much of an economic incentive for governments to change, especially to lighten, the definition of the currency unit; say, to change the definition of the pound sterling from 16 to 14 ounces of silver. This profitable process of the government’s repeatedly lightening the number of ounces or grams in the same monetary unit is called debasement.
In other words, the government delegated to protect against debasement and ensure justice has, instead, monopolized the monetary system and debased currency for the political leaders benefit. Regretfully, because society’s remains woefully ignorant of government’s systematic fraud, governments increasingly have used debasement to meet its financial obligations. In fact, the Five Laws of Decline thrive within most nation’s monetary systems as debasement and inflation lead to further exploitation. Rothbard, again, cogently explained how debasement leads to the state accumulating unjust profits when he wrote:
How debasement profits the State can be seen from a hypothetical case: Say the rur, the currency of the mythical kingdom of Ruritania, is worth 20 grams of gold. A new king now ascends the throne, and, being chronically short of money, decides to take the debasement route to the acquisition of wealth. He announces a mammoth call-in of all the old gold coins of the realm, each now dirty with wear and with the picture of the previous king stamped on its face. In return he will supply brand new coins with his face stamped on them, and will return the same number of rurs paid in. Someone presenting 100 rurs in old coins will receive 100 rurs in the new.
Seemingly a bargain! Except for a slight hitch: During the course of this recoinage, the king changes the definition of the rur from 20 to 16 grams. He then pockets the extra 20 percent of gold, minting the gold for his own use and pouring the coins into circulation for his own expenses. In short, the number of grams of gold in the society remains the same, but since people are now accustomed to use the name rather than the weight in their money accounts and prices, the number of rurs will have increased by 20 percent. The money supply in rurs, therefore, has gone up by 20 percent, and, as we shall see later on, this will drive up prices in the economy in terms of rurs. Debasement, then, is the arbitrary redefining and lightening of the currency so as to add to the coffers of the State.
22 Responses to “The State and Monetary Debasement”
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Chad said
Hi Orrin,
These books will open eyes however it will take a small group to help stop people from continually turning there back on the information gained! We are our own worst enemy as most don’t even vote today knowing the goverment is corrupt and just going on with their day. I’m not pointing fingers as before LIFE I was one off those people choosing to be ignorant. May these books go out and teach just one more who is willing to change the future and capture back what society should be and have! Trust and government will be a long road however starting the journey is the first step and educating oursleves along the way to understand! Society has let this happen and society has to help undo whatneeds changed!
Orrin truly thank you for leading the way to helping the world change their perspective and mine aswell!
Your truly a servant leader!
God Bless!
Today Is The Day!
See you next month!
Chad.
Richard Kroll Jr. said
Great article Orrin! Can’t wait for the book!!
The hypothetical case of debasement really helped me better understand the concept of debasement.
This information is so needful!! Keep it coming!!!
Clint Fix said
Another great article! I’ve been amazed at how many people turn a blind eye to currency debasement in our own country. The Fed just keeps on printing (or at least creating new currency on a computer) $85 BILLION per month! I don’t understand how our society seems to think this is a good thing. All aboard the QE train! Destination currency crisis!
Wendi Witkowski said
Great blog Orrin! I never enjoyed learning in school. The LIFE community has changed my interest in learning and reading books of substance vs entertainment. I was one of the sheep until I came into this community and started to have the film removed from my eyes! I love Leadershift, the freedom series and I am looking forward to the next book!
Joe McGuire said
Great post thank you. And thank you for the Life Leadership opportunity.
Carlo Cipollina said
Thank you for continuing to share your wisdom with the world!
Olivier Jean-Baptiste said
Thanks Orrin for speaking the truth:
Indeed, either by coin clipping or the printing press, currency debasement is plain injustice
Referring to Leviticus 19:35-36 this was asked of the Israelites:
“You shall do no injustice in judgment, in measurement of length, weight, or volume. 36 You shall have honest scales, honest weights, an honest ephah, and an honest hin: I am the LORD your God, who brought you out of the land of Egypt”
Joseph R. Peden who was a close friend of Murray Rothbard gave lecture on the subject of Inflation and the Fall of the Roman Empire said the following:
“Monetary policy therefore always serves, even if it serves badly, the perceived needs of the rulers of the state. If it also happens to enhance the prosperity and progress of the masses of the people, that is a secondary benefit; but its first aim is to serve the needs of the rulers, not the ruled.”
Thanks,
Olivier
Scott Staley said
Its a definite eye opener for sure. Great article, and I look forward to more details. Has anyone outside of the political system attempted to tackle this issue through other means – such as the legal system?
Bob Brandimarte said
Great article Orrin, I cannot help but think of Ephesians 6:12 for we wrestle not against flesh and blood but against principalities and powers against rulers of the darkness of this world, against spiritual wickedness in high places.
God bless and keep you safe!
Rick Craig said
Orrin,
Thanks for your relentless pursuit of truth principles! I greatly admire all that you are doing! I do have a question in regards to the structure of todays government system. I have been studying our founding for years as well as many years of Congressional Records available on the Library of Congress website.
As we know, our constitution states that every State shall be guaranteed a Republic form of government. My question relates to an Act of Congress in 1871 that appears to have changed the Constitution of one ‘By the People’ to a corporation structure. Have you come across this in your studies? There is a school of thought that believes this was the point that the train started its derailment. Allen West has been quoted as saying that the president is the CEO. This leads me to believe the constitution has been radically changed to serve only those within the corporation. I look forward to your thoughts! Once again, Thank you for your character to pursue the truth!
God bless!
Rick
Orrin Woodward said
Rick, I haven’t heard of that, but I will do some research on it. Thanks for the heads up! Orrin
Larry VanBuskirk said
Great, simple explanation! Thanks for your continuing research and sharing of truth!
KellyJack Nelson said
Getting good information out to build guardians of “the guardians” of our weights and measures, our currency and our liberties. It’s worked before. We will make it work again. Thanks again Orrin. God Bless
Robby Palmer said
Perfect story to teach the principle! I get it!! Thanks Orrin!!
Elizabeth Sieracki said
This reminds me of Chris’s Camel in the Tent cd. We obviously have slowly continued to let the “camel” shove his head under the tent in the monetary system.
I feel like I just keep saying this but I have never heard this type of teaching before. Thank you so much. I know that there are so many others that could benefit from this information.
Thank you Orrin.
Randy Robson said
Great stuff!
Greg Oesch said
So is it really the government who is in control of the money supply or is it the bank cartel of the Federal Reserve that is in charge of the money supply? And this is a world bank isn’t it? Not just American banks. Thank you Orrin for helping us think about these things.
Elaine Mallios said
I should have read this one first. I will review both anyway. Great teaching.
Steve Meixner said
Thanks Orrin, Again an easy and precise explanation on how our Government is cheating the hard working people. Thank you for doing the research and getting this out to us!
Steve
CJ Calvert said
Orrin, our nations needed their high schools teaching these principles a hundred years ago. Perhap you and the other PC could be persuaded to create some more EDGE cds that start to teach these principles to our children and their classmates. They are the voters of tomorrow!
robert wilcox said
I cannot wait for your book! America needs to hear know and understand the FLD … it needs to be passed on from generation to generation i am just in awe to how vital this is to not just to the American Culture but the culture of the world!!! thank you for your studies, writing and Leadership!
Adam Gonzales said
Man that’s good!