Chapter 2: Findings and Analysis- Price Stability - National Reserve Currency

2.7.3    Price Stability

Price Stability

Inflation would not occur to the same scale as it does if a nation adopted the Gold Standard. One need not look further than the price of gold as a commodity over the last few years. This is a symptom of people losing confidence in Fiat currencies and also the weakening in the purchasing power of such currencies. The real evil of the system behind the endless manufacturing of money becomes evident in the next section where the real motives of increasing money in all its forms are explored. The net effect of the endless creation of money is a transfer of wealth to the elite factions in society and this is done under the false pretext of price stability.

The risk of hyperinflation is significantly increased under a system of unrestrained money supply as evident in the recent hyperinflation in Zimbabwe were the annual inflation rate in 2008 reached over 200 million per cent. A similar fate could befit the US dollar if the world loses confidence in the ability of the US government to pay back its debts. China has already started to move away from buying US debt in the form of long-term government bonds and Treasury bills, which could act as a catalyst to create a run on US debt and a similar fate for the dollar under this regime of Fiat money creation backed by nothing of value unlike the Gold Standard.

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