Inside This Issue You Will Discover…

*** The Finest of the Finest
*** William Stanley Jevons
*** A Wrong Against The Human Race
*** And More

The Finest of the Finest

We’ve been painstakingly reviewing the best philosophical and historical writings of the ages on the subject of gold and money.  Through this undertaking we’ve compiled the finest of the finest works on the topic into a new five volume publication.

We’ve also penned a white paper outlining the inherent problems of paper fiat currencies used in today’s global markets to underscore the importance of discovering these extraordinary works.  We’re currently putting the final touches on this exhaustive effort and will have it to you very soon.

Enough about us…

William Stanley Jevons

In our research we came across a fascinating article by William Stanley Jevons, the great 19th Century English economist and logician.

Interestingly, by the mid to late 1800’s the flood of gold from both California’s and Australia’s gold rush had significantly increased the global gold denominated money supply.  Not since the Spanish Conquistadores returned from the new world with their tall masted galleons loaded with gold booty some 300 years prior had the world seen such an expansion of the quantity of money in circulation.

It was thought by many, with all the new money floating around, that everyone should now be rich.

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While some individuals made money off their mining ventures, society as a whole did not.  Jevons astutely asked the question: “Have the Gold Discoveries added to the Wealth of the World?”

We won’t spoil his observations with our own half wit analysis.  But we will add that the key insight discerned by Jevons below has been lost by today’s central bankers who – unrestrained by the need for a massive gold discovery – believe that depreciating a currency by increasing its supply makes an economy richer…smarter…and better looking too.

Take it away William…

Have the Gold Discoveries added to the Wealth of the World?

-- William Stanley Jevons, 1884 

“If we take wealth to be that which is agreeable and useful to mankind, it may be safely said that the mere gold produced by Australia and California represents a great and almost dead loss of labour.

“A century or more ago it was the fashion to consider gold and silver as the only wealth, because it happened to be the measures and vehicles of wealth.  Now it is more correctly seen that gold is one of the last things which can be considered wealth in itself, and that in its most useful employment as money, the very scarcity of gold is its recommendation, rendering the value greater, and the weight or quantity to be carried as money less.  It is only so far as the cheapening of gold renders it more available for gilding and for plate, for purposes of ornament, and for use in other ways than as money, that we can be said to gain directly from the gold discoveries.  To over-estimate the indirect effects of these discoveries in creating new colonies, in spreading the English people and language, and in newly animating commerce, is not easy.  But in itself gold-digging has ever seemed to me almost a dead loss of labour as regards the world in general – a wrong against the human race, just such as is that of a Government against its people, in over-issuing and depreciating its own currency.” 

A Wrong Against The Human Race

Last week the Federal Reserve lowered the federal funds rate 75-basis points to 2.25 percent.  The latest Consumer Price Index (CPI) data released by the U.S. Bureau of Labor Statistics showed that prices in February 2008 have increased 4.0 percent from a year ago. 

This percent change in the CPI is a measure of inflation.  The CPI does not include food and energy…and we all know these essential items have been costing more and more.  So in this respect, a 4.0 percent inflation rate is a conservative measurement.

Here’s the point of all these details…

The Federal Reserve’s set the rate for banks to lend money amongst themselves at 2.25 percent.  The rate of inflation is 4.0 percent.  That means the Federal Reserve’s artificially set the price of money at well below the rate of inflation…fundamentally they are allowing money to be given away for less than free.

In other words, the Federal Reserve’s over-issuing and depreciating its own currency.  William Stanley Jevons considered this a wrong against the human race.

We tend to agree.

Sincerely,

M.N. Gordon
Great Depression Online

P.S.  The actions of the Federal Reserve are inflationary.  And things could very quickly get out of hand.  We believe that the best way for you to prepare for the great financial unraveling is through discovering the lessons of the French experience with hyperinflation during the French Revolution.  Learn more at: Surviving The Next Great Depression -- Unknown Secrets from The French Revolution.