Author, The Happiest Man in the World: Life Lessons from a Cultural Economist
The
first paper money in America came not from banks but from the governments of
the new colonies. In 1690, Massachusetts
issued paper money, but it had no tangible asset to back it up, only a promise
to redeem it later. That privilege was soon abused, and the market was flooded
with the junk paper money trying to purchase any available goods. Prices
soared.
The
paper money drove the metal coins out of circulation simply because everyone
began hoarding the metal coins. By 1751,
Britain demanded that no more paper money could be issued. The Mint Act of
1792, that has survived almost intact until the present, adopted the dollar as
the standard unit of currency and the decimal system of counting. But what has
backed up the U.S. dollar and given so many people the confidence in it as a
secure store of wealth?
Some
folks would tell you that the reason for the confidence is that there is one
dollar worth of gold in Ft. Knox, KY for every dollar that is placed into our
money system by the Federal Reserve Bank. Sorry, but that hasn’t been the case
since the U.S. abandoned the gold standard in 1933. By August, 1971, we had
sloughed off over $12 billion of the gold reserve in Fort Knox.
Saying
that our currency was backed up by the equivalence of gold in Fort Knox was a
sick joke. To make things even worse, it was agreed that if we owed a debt to any
sovereign government, they could demand and receive our payment in gold from
our reserve. In 1971, President Nixon realized that when the U.S. had trade
imbalances with other countries, and we bought more from them than they bought
from us in traded goods, they could and were demanding payment from us in gold
out of our reserves in Fort Knox. We possessed
less than one penny at that time in reserves for every dollar issued.
On
August 15, 1971, President Nixon closed the gold window. That severed the
critical link between international currency and real gold. From that time on
the U.S. would pay their balance of international payments in dollars. That was
the first time that link had been broken in 1,500 years! Since that time the
world has accepted the U.S dollar as the international standard of payment.
Other
countries are now demanding to know how much real gold the U.S. has stored in
Fort Knox to back up our standard of currency. That’s another sick joke. There
isn’t enough there to even make a quantifiable difference. There is really only
one thing that gives any form of money acceptance and usability: confidence!
People will only accept U.S. dollars as long as they
believe that someone else will have confidence enough in the currency to take
it from them in true form of payment. That national and international
confidence is very quickly melting away.
(Research Ideas from Dr. Jackson's new writing project on Cultural Economics)
Dr. James W. Jackson often describes himself as "The Happiest Man in the World." A successful businessman, award-winning author and humanitarian, Jackson is also a renowned Cultural Economist and international consultant, helping organizations and governments to apply sound economic principals to the transformation of culture so that everyone is "better off."As the founder of Project C.U.R.E., Dr. Jackson traveled to more than one hundred fifty countries assessing healthcare facilities, meeting with government leaders and "delivering health and hope" in the form of medical supplies and equipment to the world's most needy people. Literally thousands of people are alive today as a direct result of the tireless efforts of Project C.U.R.E.'s staff, volunteers and Dr. Jackson.
To contact Dr. Jackson, or to book him for an interview or speaking engagement: press@winstoncrown.com
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