Imposter Dollar

OUZILLY, France – We’re going back to basics here at the Diary. We’re getting everyone on the same page… learning together… connecting the dots… trying to figure out what is going on.

The new three dollar bill issued by the Apprehensive States of America.

We made a breakthrough when we identified the source of so many of today’s bizarre and grotesque trends. It’s the money – the new post-1971 dollar. This new dollar is green. You can buy things with it.

Yes, it has lost more than 80% of its buying power since it was put in place. But still, it’s not so bad. Compared with the Argentine peso (current inflation rate: 47% a year), it is splendidly solid.

But the new dollar is an imposter. The old one was connected to gold at a fixed rate. And gold was anchored in the real economy. The new dollar has no gold backing.

Billionaire investor Warren Buffett believes it’s silly to pay someone to take gold out of the ground, and then put it back in the ground and pay someone to guard it for you.

There is actually a half ounce Warren Buffett gold coin. He’s not the guy to ask about gold though.

But Buffett misses a vital point: Real money is essential to building real wealth. It’s what makes the economy operate smoothly. It helps us all decide when to buy and when to sell, when to invest and when to refrain from investing, and where to apply our scarce time and resources.

Real Money, Real Value

Real money has real value. Gold-backed money increased about as fast as the mining industry could extract gold from the ground – which was about the same rate as the economy was growing.

So, when people got more money, they had a claim on more real wealth. But the new money was phony. Governments and banks could add as much of this new money as they wanted. But it did not create or even track real wealth; it just took it away from those who owned it.