Warren Buffett’s Father, Gold, And Liberty by Jeff Nielson, Sprott Money
Is there a connection between Human Freedom and a Gold Redeemable Money? At first glance it would seem that money belongs to the world of economics and human freedom to the political sphere.
But when you recall that one of the first moves by Lenin, Mussolini and Hitler was to outlaw individual ownership of gold, you begin to sense that there may be some connection between money, redeemable in gold, and the rare prize known as human liberty . [emphasis mine]
- Rep. Howard Buffett, 1948
So said the Honourable Howard Buffett (1903–1964), the father of none other than the Oracle of Omaha, Warren Buffett. Were these just the flowery words of a politician, geared at nothing more than garnering votes?
No. These were the thoughts of a statesman, whose concern was only for his own constituents, explained in a well-reasoned essay . Warren Buffett begins his argument:
In a free country the monetary unit rests upon a fixed foundation of gold or gold and silver independent of the ruling politicians. Our dollar was that kind of money before 1933. Under that system paper currency is redeemable for a certain weight of gold, at the free option and choice of the holder of the paper money.
That redemption right gives money a large degree of stability. The owner of such gold redeemable currency has economic independence. He can move around either within or without his country because his money holdings have accepted value anywhere.
Economic liberty sounds nice, but is it really useful or necessary? As our leaders continually tell us, our liberties get in the way of their “War on Terror,” which is why they have already found it necessary to eliminate many of those liberties. Warren Buffett continues:
The subject of a Hitler or a Stalin is a serf by the mere fact that his money can be called in and depreciated at the whim of his rulers.
Here, we require greater elaboration, as many readers may not see the connection between the ability of rulers to depreciate currencies at their whim, and the transformation of citizens into serfs. A familiar quote from a more famous monetary authority sheds some light:
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.
- Alan Greenspan , 1966
When you depreciate a currency, you create inflation. They are two sides of the same coin. Devalue a currency by 10%, and prices increase by a commensurate amount. It’s what charlatan economists call “inflation.” Give a Hitler or a Stalin (or a Greenspan or a Bernanke) the unlimited capacity to devalue currencies and create inflation by printing paper currency, and you give these Tyrants the unlimited capacity to steal wealth – our wealth.
Howard Buffet warns that citizens can be reduced to serfs (via penury), through the mere whim of our corrupt leaders choosing to devalue our paper currencies. Sir Alan Greenspan, a central banker knighted for his purported sagacity, warns us that without a gold standard there is nothing to prevent corrupt governments and corrupt central bankers (like himself) from confiscating (stealing) our wealth, by deliberately manufacturing inflation by devaluing our currencies.
What do we see around us today? “Competitive devaluation” is the official policy of all the regimes of the Corrupt West. Traitorous rulers race to see who can devalue their currency the fastest, and thus steal the wealth of their citizens the fastest.
Proving that this systemic theft of wealth is malicious, rather than the product of mere incompetence, all of these regimes lie about the actual rate of inflation . They grossly understate the actual rate of inflation, with statistics which have been “massaged” (i.e. perverted) beyond any resemblance to reality. Then the traitor politicians and their central bank masters continually whine that “inflation is too low,” meaning they want (and intend) to steal our wealth even faster.
Skeptical readers will rebel at such assertions, no matter how obvious the arithmetic, no matter the pedigree of the authorities who stand behind such math. Surely our “democratic” governments would and could never betray us in such an overt and malicious manner? Warren Buffett disagrees:
Also, when you find that Lenin declared and demonstrated that a sure way to overturn the existing social order and bring about communism was by printing press paper money, then again you are impressed with the possibility of a relationship between a gold-backed money and human freedom.
The connection between a gold standard, and preventing (corrupt) governments from stealing the wealth of their citizens may still be unclear in the minds of many readers. In a White Paper on the gold standard , this connection was explained via a reference to history’s ultimate gold-hater (and inflation-creator) John Maynard Keynes.
It was Keynes who infamously referred to a gold standard as “the Golden Handcuffs.” So corrupt was his vision of economics that Keynes didn’t even comprehend that his attempt to smear the gold standard with this scornful nickname inadvertently illustrated its primary virtues.
How and why is a gold standard a set of Golden Handcuffs? Even Keynes can explain that, because it exposes the two greatest horrors in the mind of this charlatan. A gold standard dramatically limits the ability of governments to take on new debt, and equally limits the capacity of central bankers to print more currency (and thus devalue that currency).
With a gold standard, governments must run a balance of payments. Enslaving us in debt, as the traitor politicians have done, would never have been possible. Devaluing our currencies, manufacturing inflation, and systemically stealing our wealth (as our thieving central banks have done) would never have been possible. Buffett is vehement here:
There is only one way that these spending pressures can be halted, and that is to restore the final decision on public spending to the producers of the nation. The producers of wealth – taxpayers – must regain their right to obtain gold in exchange for the fruits of their labor. This restoration would give the people the final say-so on governmental spending, and would enable wealth producers to control the issuance of paper money and bonds.
How does a gold standard put citizens back in charge of their own government? How does a gold standard put citizens back in charge of their own, national currencies? Via the right of redemption, to which Buffett refers at the beginning of his essay.
Here it is necessary for readers to grasp the mechanics of a hard gold standard, where every note issued must be backed by a specific amount of gold. When the citizens redeem their paper currency for gold, this extinguishes those paper instruments. The paper currency ceases to exist.
Taken to an extreme, if citizens completely lost confidence in their government and redeemed all of their currency, the government’s treasury would be emptied. The government could not embark on new, grandiose spending commitments (like waging another war), because it would have no funds to finance it.
Similarly, with our currencies backed by gold, and with a treasury