Imagine our congress responding to the cries of the people, that there isn't enough hours in the day to do all that needs to be done. They write a law that defines a day as having 25 hours. So to keep Noon and Midnight in their proper phase, each hour now has 57 minutes and 36 seconds. At first, our workers continuing to work an eight Gov-hour day, realize a 16 minute bonus in free time, but over time the business day stretches out again because the work still takes a full day to accomplish, and workers earning the same in a day actually realize a drop in their hourly wage which necessitates working that extra 16 minutes to make up for it. In other words, nothing really changed; a days work is still a days work.
That is exactly the effect of our central bank loaning congress money whenever they wish to stimulate the economy or fund government programs such as Medicare and Social Security. Green paper money, in itself, has no value. The value of money stems from the goods and services which we, the workers, create with our labor, which remains constant. If our labor is static and more money is introduced into the system, then the costs rise in proportion to the new money.
Ordinarily, printing money to fund programs and the resultant inflation would be a short route to ruin. But with the United States, we had a once-in-a-lifetime sweet deal. Coming out of World War II the United States was THE Super Power. Our economy was the biggest and the strongest in the world with no five other countries to match it, combined. With that clout and through an agreement known as Bretton-Woods, our dollars became the standard exchange medium for transactions around the world, especially in consideration to the reported amount of gold we were holding in Fort Knox. In the fifties and sixties any nation could exchange the dollars they held with gold at $35.00 per ounce. Following the "War on Poverty", the "War on Drugs" and the actual war in Vietnam, those other countries realized the we were gaming the system by printing money and that there was no way that every dollar out there was backed by gold at an ounce for each thirty-five bills. They began a "run on the bank" by exchanging their dollars, which they had collected in international trades, with our gold. President Nixon stopped the run by closing the exchange and declared that our dollars would henceforth backed by the good faith and credit of the American people. Even then the dollar slipped in value (inflation), but the Bretton-Woods system held and life went on.
It was under President Johnson that we started borrowing money as a routine method with no intention of paying it back and it was Bretton-Woods which made that possible. The effect of borrowing with no payback is exactly the same as printing and that is continuous inflation. We experienced the effects of inflation from then to now. That is why a house bought in 1964 for $60,000 sold in 2005 for $300,000 and the seller could not buy another like it with the $300,000. The system always told us that our home values were going up, but in reality it was the value of our hard earned money going down. We went through a credit explosion as everybody was borrowing that free money the government was handing out and today our nation's debt is staggering with the national debt over $64,000 per citizen and our personal debts averaging over $57,000 per citizen. The Omnibus Bill which President Trump just signed was our latest desperate effort to keep the game alive as it borrowed $1.3 trillion dollars to be spent into our economy in six months. We have been living on printed-borrowed money since the seventies and the game would have ended long ago were it not for Bretton-Woods.
As I said, ordinarily such policies would have been a short route to ruin, but thanks to Bretton-Woods, the agreement which forced other countries to use our dollars, it has become a long route to greater ruin and I believe our time is out. Very soon those other countries, especially China and the oil producing countries of the world, will find a way to transact their trades without our dollars because they know we have been cheating and no longer wish to pay the bill. Very soon, the devastating effects hyper-inflation will be felt here in the United States as those green pieces of paper come flooding back in with demands of payment in goods and services. Very soon, we will hear wailing in the streets as people realize their savings, their 401ks, their pensions and government promises have vanished into oblivion. Very soon, we will realize the crime our politicians have signed us up for with their promises of something for nothing. May God have mercy on us for letting them do it.