The Way to Save the Dollar

As I read about the demise of the U.S. dollar’s status in world trade, I’m struck by the misdirection and irrational “thinking” employed by our politicians and bureaucrats. In this article, legislators think another law, rule or regulation will solve the underlying problem.

Going back on the gold standard is not a bad solution. Had we been on the gold standard in 2008, the Fed Reserve could not have printed 8 trillion U.S. dollars and driven us into such extreme debt, resulting in dollar devaluation and inflation. In fact, the gold standard is a good way to limit the Federal Reserve’s ability to print dollars, but this is not the long-term solution.

Today’s dollar problems are avoidable, with or without the gold standard. The long-lasting solution is a mindset, a way of thinking, a principle.

First, we need to understand why the U.S. dollar is the reserve or safe harbor currency on which the vast majority of nations and businesses rely for safe, steady transactions. They must be certain of two things: first, that the value of the currency will not fluctuate rapidly, and second, that the currency remains strong for the duration. Will the trading currency remain stable so they don’t lose value in the transaction?

The question is, how do nations and businesses evaluate the safety of a particular currency? Contrary to federal thinking, it is not only government action, or inaction, that sustains the value of currency. In fact, federal action can more easily devalue the dollar than sustain its worth.

We have seen the Federal Reserve’s Monetary Policy, specifically printing U.S. dollars under Quantitative Easing, devalue the dollar significantly and thereby cause the inflation we see today. This is truly a tax on earnings due to inflation, which is simply devaluation of the dollar’s purchasing power. In other words the consumer must spend more dollars for the same product. That is a direct cost to all, a tax brought on us by Fed Reserve action and government spending.

The most powerful force to increase the value of the dollar is the private sector, or private business and citizens, building a strong economy through capitalistic markets: free trade between a willing buyer and willing seller that establishes a fair price. The private economy is a function of transactions between individuals, not a federal construct. Its foundation is the freedom of the individual to decide for himself.

Unfortunately, government’s nature is to expand and control through taxation and regulation. These actions are antithetical to free enterprise. That is the reason for our Constitution. It established the Rule of Law and restricts the government to limited powers in order to protect the rights and freedom of the individual. Too bad our current government has forgotten that lesson.

If we want to protect the value of the U.S. dollar, and that is very important, we need to restrict government incursion in the private sector, especially the individual. We do so, first, by reducing government spending and borrowing. These actions take from the individual. Next we need to reduce the regulatory burden on citizens and businesses and stop the unholy alliance (subsidies) between government and large corporations. The strength of the dollar relies on individual freedom, not control by the government.

Even if individuals don’t engage in foreign transactions, all are affected by the dollar’s status in two ways. First, since our government spends more than it takes in, government debt is a precursor to federal spending. That debt is in the form of Treasury Bonds. Citizens pay back that debt through income tax and inflation tax (we pay more dollars due to inflation).

Second, debt requires a larger amount of money supply or liquidity. That increased liquidity causes dollar devaluation and inflation. Inflation means that we can’t buy as much with the same income, hence the inflation tax. We are hit from two sides: massive debt, which we pay, and lower value on the dollar as we pay debt back.

Just about all Democrats and many Republicans think we need to raise the debt ceiling to fund government spending. That is wrong. They ignore the other half of the equation — namely, reduce government spending. Spending reduction benefits the private citizen and our economy. Think about this when a politician talks about expanding another government program. Nobody and no nation can borrow forever.

Our nation can work its way out of this dead end. It requires that all citizens demand a cessation to debt and spending and thereby allow the private economy to thrive and save the day, as it has done in the past.

Written by Jay Davidson for American Thinker ~ September 16, 2023

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Please allow me to introduce myself; I am Jeffrey Bennett, President of Kettle Moraine, Ltd., the parent of Sierra Madre Precious Metals. I have been married for 52 years with two children and four grand-children, a veteran of Viet Nam, student of history (both American and film), and was host for fifteen years of Perspectives on America on the alternative airwaves, covering such subjects as, health and wellness, news, political satire, education and editorial commentary on current events through the teaching of history, and Protecting Your Wealth. In early 2018, I took a several month hiatus to complete some family business but returned to airwaves April 17, 2018). At the age of ten, I sat in a bank-vault in the Citizens Bank of Mukwanago, Wisconsin with my grandfather going through bags of old American Peace dollars, hand-selecting each coin as dated rolls of 20 coins were carefully put together and rolled. Learning of the history of these beautiful pieces of Americana, I asked my grand-father, "Why are we doing this?" to which he replied, "Because someday they are going to do the same thing with the silver in our money that, that (S.O.B.) Roosevelt did with gold in 1933." It took only six-years for his prediction to come to pass at the hands of a disciple of Roosevelt's... and what will a Federal Reserve 'dollar' purchase today - and what will that old 90% Silver Peace Dollar purchase? Although at the age of ten, there was little understanding of the meaning of it all, over the next half-century I became well-versed on the subject matter. During this summer of my education, I began to purchase silver coins as a collector and some small, international gold coins two years later - not an easy feat in the shadow of the Roosevelt confiscatory policies of 1933. Although those policies remained in effect until the mid-1970's, it was not until 1991 that I found that one could make a living providing precious metals and collectible, historic numismatic coins to a willing and concerned clientele. It was also during that year, that I began a relationship with one of the first Trust companies to give the public access to gold and silver as part of an Individual Retirement Account (IRA) - and Kettle Moraine, Ltd., founded in 1995, but have ceased providing service due the the intense change-over of the provider. In November 2011, after a 15 month broadcast on another network, I returned to the airwaves with my then revamped program, Life, Liberty & All That Jazz, and for over a quarter-century, I have been proud to serve the family of listeners of my numerous broadcast programs for physically-held precious metals for investors and collectors alike. On March 23, 2020 I launched my brand new - appropriately named program, The Edge of Darkness on the Republic Broadcasting Network, and thus continue to  remain available to our long time clients and their families. Ah yes - find out what "inter-generational" wealth provision has done for our clients over the past three decades. Don't buy the sizzle of that steak until you understand the cost! In other words, don't buy the bull being dispensed by the 'rare coin' pitchmen until you understand the full story. We, at Sierra Madre Precious Metals, will be proud to serve your needs.
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