Does Your Freedom Depend on Gold?

By Adam Murdock, MD

Many believe, and rightly so, that gold has intrinsic value. As a result, gold served as the ultimate and most stable form of currency in the 19th century. A gold-backed U.S. dollar permitted unprecedented economic growth in the background of a relatively deflationary economy. However, despite the clear economic advantages to having a gold-backed currency, this is not its most important purpose.

Throughout world history, the greatest threats to the freedom of men and women have most often come from the very individuals that have claimed to be their protectors, namely, their own rulers and governments. And, contrary to popular belief, the situation is no different today.

Over the past few years, the rhetoric from Washington would have us believe that we should be primarily concerned with an attack from Muslim extremists, while in actuality the focus of the "anti-terrorism" departments, such as Homeland Security, has increasingly been on homegrown terrorists. These terrorists, according to recent MIAC and DHS reports, include people with mainline conservative viewpoints, military veterans, supporters of the constitution, and even Ron Paul supporters (1, 2). Due to this shift, a massive spying apparatus involving both public and private elements has been invoked to monitor these individuals.

While these threats to our freedoms are egregious, they pale in comparison to the confiscation of wealth and loss of economic sovereignty coming as a direct result of government intervention in the economy, via the Federal Reserve. In fact, what Osama bin Laden was not able to accomplish from his cave in Pakistan was accomplished right here from within the halls of our very own government. Just look at how a relatively small group of bankers and government officials have profited while single-handedly sinking the U.S. economy. The damage caused by these individuals will dwarf any perceived threat from a small group of cave dwellers. Yet, where is the outcry? Clearly, the horror elicited by seeing the smoke coming from the twin towers is easy to understand, while the mysterious economic policies of the Federal Reserve and our government are not.

Why do I bring these events to your attention? Many of you are already familiar with these threats to our freedoms. However, many of you might not have made the connection that these acts of our government have been made possible because of the American public's faith in paper money instead of gold.

In order to understand the relationship between our freedoms and gold we need to understand the most important aspect of gold. This aspect has nothing do to with inherent aesthetic qualities of gold or the ease with which it can be made into coins. Instead it has to do with supply of gold. Most importantly, the supply of gold is limited and the increase in the yearly gold supply is minuscule compared to the overall supply. Unlike fiat money which inflates with the amount of paper printed, gold cannot be created out of thin air. The inability to be able to create gold is therefore its most important property. By implication this means that the government or Federal Reserve can only increase its spending by increasing its gold supply. In a gold economy, this can only happen by borrowing gold from others or from taxing more gold from the government's constituents. It cannot simply make more of it. As you can see, this limits severely what the government or Federal Reserve can do. This is because most governments can only tax their citizens to a certain degree and foreign governments eventually demand repayment of borrowed money in terms of gold. In fact, this demand for gold by foreign governments was the precise reason that President Nixon officially announced the dropping of the gold-backing of the U.S. dollar in the early 1970s. The reasons President Nixon did this are now clear. The welfare/warfare demands imposed by the government on the U.S. treasury meant that there were far more dollars printed than the deposits of gold. Finally, when foreign governments wised up to the charade and began demanding gold for their dollars, the US government was not able to comply and therefore ended the gold backing.

The consequences of removing the gold-backing have been predictable. It is no surprise that the explosion in social welfare programs, foreign adventurism, and the security state coincides closely with the loosening from the gold backing of the dollar. As I discussed in a previous article, the Bush and Obama administrations have embarked on an aggressive domestic spying agenda which has included enlisting private individuals (3). These threats would have been largely restricted in a gold economy.
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