Why Gold and Silver Will NOT Work Well As Money
Due to the fact that gold and silver are provided by nature, when such metals are used as money the lending of such money will always be under private ownership. This worked quite well when the Constitution was adopted because at that time there was no refrigeration of food because electricity had not yet been tamed. With no refrigeration there was no long distance shipping of food and the vast majority of the population was required to grow their own food on farmland acquired through homestead.
Additionally, at that time the population was relatively small and families could acquire farmland simply by claiming desirable land and filing a homestead claim. There was no need to borrow money and/or take out an interest bearing mortgage.
With the advent of electricity corporate farming developed and millions of small farmers opted to move to cities where they found employment working in factories building automobiles, washing machines, refrigerators and all the other appliances and gadgets enabled by the taming of electricity.
It is important to understand that the suburban areas of cities are comprised of subdivided parcels of land usually about 60' wide by 100'deep, where commercial developers built thousands of homes to sell to these former farmers and others who have moved to the cities. These newcomers to the cities did not have cash to purchase these commercially built homes so, in order to purchase such homes it was necessary for them to borrow the needed money from privately owned banks and other private lenders.
These loans were always extended on the basis of an interest bearing mortgage. The lenders only provided the amount of money to needed to pay the sale price of the house (known as the "principle") but the borrowers on the common 30 year mortgage contract were required to pay approximately three times the amount borrowed. If the purchase price was $100,000.00 gold dollars then the amount provided by the gold lender would be approximately $100,000.00 gold dollars, but the total paid to the gold lender by the borrower over the thirty year contract would be approximately $300,000.00 gold dollars. Where would the additional $200,000.00 gold dollars come from?
The only possible source such borrowers would have would be other gold dollars brought into circulation by other means than borrowing. There is no doubt that there would be hundreds of millions of other gold dollars in circulation that would have NOT arrived in circulation because such dollars had been borrowed from any gold lender and all these additional gold dollars would be available in circulation enabling mortgage borrowers to pay triple the amount they had borrowed.
As the borrowers used the extra circulating gold to pay the interest on their mortgage loans how long do you think it would be before all the extra gold used by the borrowers to pay the interest on their mortgages became owned by the private gold lenders, then what would the borrowers use to pay the interest on their mortgage loans?
How long would it be before the private gold lenders became the owners of all the gold, then, through foreclosure, they also became the owners of all the houses and everything and everybody?
Gold and silver will not work well as money in a society where there is refrigeration of food!
Read my essay explaining who it is that actually funds all loans, no matter if the money lent and borrowed is paper or gold and silver coin. The lender is NOT who you have been led to believe it is! There is no need. justification or proper authority for any manner of taxation.
Eric Williams, Yellville
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