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What We Need Is 'Independent Money'Dominic Frisby In this article, I am going to introduce two short animated films I recently made for YouTube. The first describes the injustice that is inherent in the 'fiat' system of money and credit that is now used worldwide. So much is it the monetary norm, most people do not realise there are alternatives. The gap between rich and poor is the widest it's ever been in history. And it keeps on getting wider. Plato is purported to have said (but I can't actually find the quote) that, ideally, the person at the top of an organisation should earn six times more than the person at the bottom. J.P. Morgan said it should be 20 times. Barclays is currently advertising for a cashier in one of its West Midlands branches, salary £12,665. If I multiply that by 500 times I still don't get to the £6.5m bonus (on top of £250,000) that Bob Diamond, the Barclays boss, was recently awarded. Bob Diamond and whoever gets the West Midlands job have almost become different animals. It doesn't take an anthropologist to tell you that a society has become extremely distorted when you have gulf like that between top and bottom. I can remember hearing people complaining about this on TV 30 years ago when I was a child. But the gap just keeps getting wider. All attempts by government to deal with this through taxation or legislation have failed. There are calls for more, but I'm wondering if we've reached 'peak regulation'. The fact is it's a simple, inevitable, direct consequence of our modern fiat system of money. This fiat system, in which governments and banks have the power to create money, benefits those closest to the issuance of money - those who get it first - at the expense of those furthest away - those who get it last. And this short video, beautifully animated by Pola Gruszka, shows how the whole process works. Have a watch - it's only three minutes long - and by all means discuss some of the issues raised in the comments section below. A shorter version of the video appears in the soon-to-be released Renegade Economist film, The Four Horsemen, on which I helped out as a writer. As you've probably gathered, I would like to see this system of money changed. What are the alternatives? Hayek makes some excellent suggestions in his essay Denationalisation Of Money. The problem with this, as is the case with a lot of Hayek, and other writers from the Austrian school - indeed economists in general - is that, while the ideas are excellent, the prose is verging on the unreadable. If economists want to be heard, and have their ideas taken on by the mainstream, they have to make their ideas more accessible. The overall point is, we need 'independent money'. Gold is one possibility. There are others. But governments should not have control of money. It gives them too much power and they inevitably abuse it. They spend too much, indebting themselves and us all, they take us into wars nobody wants and so on. This next video, once again beautifully animated by Pola Gruszka, explains. ### Oct, 2011 Dominic Frisby is a private investor and Moneyweek Magazine's expert on precious metals and commodities. He also hosts the podcast Frisby's Bulls And Bears. (frisbysbullsandbears.com) He may be contacted through his website, www.dominicfrisby.com 321gold Ltd |
