The Crazy Truth About Money

The Crazy Truth About Money

Robert Kiyosaki

Brian Maher

Contributor, Freedom Financial News
Posted Jan 27, 2025

Dear Reader,

Twentieth-century philosopher Bertrand Russell once gave a public lecture on astronomy.

One attendee — as the story runs — insisted Earth was not situated in space, despite all astronomical evidence.

This zany claimed instead that Earth rested upon the back of a gargantuan turtle.

Bemused, the philosopher posed a question to the zany:

Upon what structure does the turtle itself rest?

The zany had the answer. No structure whatsoever undergirded the turtle.

It was “turtles all the way down.”

In today’s byzantine, bewildering and beguiling monetary system, it is not turtles all the way down.

It is credit all the way down.

Credit supports the entire monetary universe upon its broad yet frail shoulders.

Money Is Credit, Credit Is Money

The dictionary defines credit this way:

  • The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.

Yet therein lies a vast tale.

The dictionary refers to future payment. But payment in what? What constitutes payment in this goldless age of fiat currency?

You say the dollar or some parallel currency constitutes payment.

Yet the dollar itself is a manifestation of credit.

The dollar bill that rots away in your wallet is a Federal Reserve note.

A note is a debt instrument.

Your dollar may represent an asset to you, it is true. Yet it represents another man’s debt.

Your dollar — all dollars — are borrowed into existence.

Again I ask: What precisely constitutes payment in this goldless age of fiat currency?

The answer — ultimately — is credit.

And credit is debt’s twin. Credit is merely a debt disguised.

Without Debt There Is No Money

On Sept. 30, 1941, Federal Reserve Chairman Marriner Eccles sat in front of the House Committee on Banking and Currency.

Committee chairman Wright Patman asked this fellow where the Federal Reserve had acquired the wherewithal to purchase $2 billion in government bonds.

Their exchange ran this way:

ECCLES: We created it.

PATMAN: Out of what?

ECCLES: Out of the right to issue credit money.

PATMAN: And there is nothing behind it, is there, except our government’s credit?

ECCLES: That is what our money system is. If there were no debts in our monetary system, there wouldn’t be any money.

Foundations of Air

Did you catch that? “If there were no debts in our monetary system, there wouldn’t be any money.”

It is credit all the way down. It is therefore debt all the way down.

Thus today’s financial system is is erected not even upon the shifting foundations of beach sand — sand at least enjoys tangible existence.

Today’s financial system is erected upon foundations of air. It lacks all anchoring in material substance.

Anchoring in, for example… gold.

Credit Cannot Be Money

Economist Alasdair Macleod:

  • Under a gold standard, incorporeal property (credit) took its value from a material property (gold). Under today’s fiat dollar standard, all forms of incorporeal property take their value from another incorporeal property, banknotes, which are a central bank’s liability. 

Again, it is credit all the way down. Yet since ancient eras, adds Mr. Macleod:

  • It was made clear that the value of credit was based on money, which was physical gold and silver. Without the value-link to gold or silver, there was no means of valuing credit, and all promises, which are the essence of credit, require to be valued…
  • Even though it doesn’t feature as such in modern economies and economics, gold still remains the principal corporeal form of medium of exchange. 

Today’s financial system confuses the ghost of money with money itself.

That is, today’s financial system confuses credit with money.

“Gold Is Money. Everything Else Is Credit”

Thus I am with the very late James Pierpont Morgan:

“Gold is money. Everything else is credit.”

Credit must have anchoring in authentic money. It cannot be credit all the way down.

In conclusion:

  • Today… the entire structure of national credit hinges on the government’s credibility as issuer of currency obligations…
  • The only solution to prevent fiat currencies from collapsing entirely is to officially recognize and reintroduce gold as money, making it the standard against which all credit is valued.

Governments Hate Gold

Yet this Macleod fellow is no fantasist.

He understands well that no government will voluntarily place its wrists in golden handcuffs.

Government spent centuries wriggling its way out of them… and it is not about to slip back into them.

As well expect the devil to gulp holy water.

Government has too many guns to purchase, too much butter to buy.

Government must distribute too much bread, stage too many circuses.

And gold is in its way.

Yet does its restraining factor diminish the case for gold? It does not. It fortifies and strengthens the case for gold.

The Money of Freedom

You are reading a publication that publishes under the banner of Freedom Financial News.

I therefore assume you place high value upon freedom. Then perhaps you should place high value upon gold.

For gold is the money of freedom itself.

As I have argued before, gold is “sound money.” And sound money equals sound government.

“Austrian” economist, Ludwig von Mises:

  • It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments.
  • Ideologically it belongs in the same class with political constitutions and bills of rights. The demand for constitutional guarantees and for bills of rights was a reaction against arbitrary rule and the nonobservance of old customs by kings. The postulate of sound money was first brought up as a response to the princely practice of debasing the coinage.

A government broken free from golden handcuffs is a dangerous government.

It is an invasive and grasping government that respects no limit to its dominion.

It runs on credit — credit all the way down is its credo.

I say enough.

I say gold all the way up.

Regards,

Brian Maher

for Freedom Financial News