A Liberty Moment: Hyperinflation looms for nation

In 1919, a German citizen purchased a loaf of bread for 26 pfennigs. Just four years later in November 1923 that same loaf of bread cost the German citizen 80 billion marks.
 
In the former Yugoslavia between October 1993 and January 1995 the cost of living jumped five quadrillion percent. Five quadrillion is a five with 15 zeros after it.
 
In November 2008, Zimbabwe's annual inflation rate was put at approximately 80 billion percent.
 
The common elements shared by all three of these examples of hyperinflation and the many others strewn throughout history include the drying up of credit and the deficit spending of the central government financed by the printing of money by the central banking authority, resulting in tyranny.
 
Inflation is the increase in the supply of money in circulation. To inflate means to blow up, and in economic terms, it means the blowing-up or expansion of the money supply. One of the many basic natural laws of economics is that as the supply of any commodity increases the value of each individual unit of that commodity decreases. Money is nothing more than a very specialized commodity that is universally accepted in the trade of goods and services.
 
Money is not wealth. If it were, then all one would have to do to become wealthy would be to create any amount of money he desired or needed. If everyone did that, there would be nothing to consume because all of the production of goods and services would cease and whatever did exist would be consumed. It is the reason why counterfeiting is illegal.
 
Counterfeiting steals value from others who already hold money. If the power to create money is given to a central authority, such as the Federal Reserve System, the end result is no less the same. The more money the Federal Reserve creates in order to pay for the deficit spending, government officials create through all of the monetary bailouts and all of the proposed business stimulus packages, the more prices of everything increase. Actually, the price level really does not increase. Rather, it is the value of the money that decreases.
 
Paper is a very poor commodity to be used as money since it can be copied very easily. Gold and silver throughout history are the commodities that have served best as money because of their rarity, the difficulty of getting them out of the ground and the fact that they literally last forever. They are elements of the earth.
 
Every paper currency in history has seen its eventual demise once government officials are given the power to create paper money to pay for the expenses of government, since there is never any end to the amount of money government officials will spend.
 
Whether hyperinflation comes to America to the extent it did in the examples above is anyone's guess.
 
However, there is currently no indication by any government official, including the president of the United States, his Cabinet, and many senators and representatives in Congress that the printing of money to pay for the government deficits that are multiplying daily will stop.
 
As a result of the continuous occurring bailouts, government officials estimate that the deficit for the current fiscal year ending Sept. 30, 2009 could reach the tune of $1 to $2 trillion dollars. This is not the budget that is being discussed; it is the difference between the revenues and expenses of the budget. $1 trillion is the equivalent of spending approximately $34 million a year for 30,000 years, a very incomprehensible sum.
 
The founders of America experienced hyperinflation and the collapse of the Continental dollar. They understood very well the detriments of using paper money by government officials to pay for government expenditures. Their experience led them to write into the United States Constitution that under no circumstances could paper money (bills of credit) ever be used in the payment of debts; only gold and silver, real commodity money, could be used for that purpose.
 
Contrary to many individuals, especially those elected to office, the United States Constitution is not an anachronism and has many natural law principles imbedded in it, not the least of which is the elimination of paper money (bills of credit).
 
The United States Constitution has not been followed by elected officials for a very long time. However, if America is to get off the hyperinflation train and avoid tyranny, America must return to her guiding document, the Constitution.

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Howard J. Blitz is a local libertarian and president of The Freedom Library Inc., 2435 S. 8th Ave.