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COMMENTARY
July 20, 2011
Faith-based money
As any well-trained religious zealot could tell you, it is not enough to have faith. You must have faith in something that can provide a return on your investment. Faith in ghosts, lucky charms, nice witches, elves, Peter Pan, circus magicians, astrology, palm-reading, flying saucers, political promises, or paper money, would be terribly misplaced.Go to almost any website on "common superstitions" and you will find more associated drivel. Here I'm referring not to the "beliefs" they list, but to other nonsense. Example: "Modern science has eliminated most popular superstitious beliefs." ... Not true. Indeed, modern scientism has enhanced popular belief in all kinds of magical rubbish, through the grand superstitious imposture that science can answer questions that cannot be answered. And a priestly caste of credentialed "experts" confidently predict effects from ultimately non-existent causes. Example: "Most superstitions go back to the Middle Ages." ... Not true. Most go back either to the beginning of time, or to the beginning of modernity. The Middle Ages were, to those with a mild acquaintance with them, centuries remarkably free of "common superstitions." Unless, of course, you count faith in God as a superstition. But even if so, you should notice that it tends to preclude faith in a lot of other superstitions; and that the medieval mind, though not yet aware of many later scientific discoveries, was hard-boiled when it came to gnostic and "spiritualist" sludge. Let us consider money, for instance; or political promises. The notion that some government could print (or in that age, decoratively scrawl) a value on a piece of paper, with nothing whatever behind it, could not have flown. Your typical medieval merchant understood that gold was money, that silver was money, and that the real issue wasn't who stamped them, but the purity of the coins (which could be tested by very simple means), and how much they weighed. The modern Asiatic mind retains a bit of this hard edge, and I applaud it. India, for instance, is reputed to hold perhaps half of the planetary gold reserve, discreetly packed away in coins, bars, votive objects, and jewelry. The Chinese, though addled by a century of nationalist and communist revolutions, heroically maintain the good sense not to worship the almighty paper dollar. And to round out my multicultural survey, let me report that the bazaars of the Middle East and North Africa are places in which skepticism retains its grip; in which, to this day, you will find old "Maria Theresas" (the Austro-Hungarian silver dollars), British gold sovereigns, and Ottoman lira, circulating as backup for "petrodollar" paper scrip. These are not stupid people. We are stupid people. We have built, and alas exported to the gullible, an economic order founded upon the equivalent of greeting cards. I am looking just now at a Canadian banknote. "Legal tender" is just two words; but modern, liberal, progressive people are superstitious believers in words, and have extraordinary confidence in the result of rubbing two words together. Formerly the banknotes said, on behalf of Her Majesty, "I promise to pay the bearer on demand." But with the creation of pure fiat currencies, the question became, "Promise to pay me what?" Take your 50-dollar notes to a bank, and they will give you, maybe, twenties instead. I am not so very old as I pretend, yet as a child I would take my hardearned paper dollars to a CIBC on Main Street, Georgetown, Ont., and actually exchange them for silver dollars. (I was born with an Asiatic mind.) The plug was pulled on this possibility at the end of Centennial year; the last tenuous link to a gold standard lapsed in the 1970s; and since, we have been walking in space. Now, the joke is, people who advocate a return to the gold standard, or anything beyond government control, have been dismissed for decades as medieval charlatans. But these are mere words. Check the news, and you will notice a growing fear that the U.S. dollar, and simultaneously the euro, are mortally debt-stricken and about to hyperinflate. Or if you prefer, "move to parity at zero." The surging spot price of gold meanwhile confirms a growing consensus that this may be the case. And, we now find perfectly respectable economists and bankers thinking aloud about the need for a stable currency, and inevitably turning to gold (plus or minus some "basket" of other fairly reliable commodities). In the words of Peter Hambro, chairman of Britain's biggest gold dealership, quoted in the Daily Telegraph moments after he'd been "texted" by a major U.S. bank: "I feel terribly sorry for anybody on fixed incomes tied to a fiat currency because they are not going to be able to buy things with that paper money." Let me advise gentle reader to be perfectly medieval and Asiatic about this. David Warren
© Ottawa Citizen
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