Monday, December 07, 2009

Jim Grant: requiem for the dollar

Over the weekend, I started reading what has to be the article of the week, and very possibly, one of the top choices for Article of the Year: Jim Grant's latest WSJ opinion piece, "Requiem for the Dollar".

Here's an excerpt from that piece:

"Ben S. Bernanke doesn't know how lucky he is. Tongue-lashings from Bernie Sanders, the populist senator from Vermont, are one thing. The hangman's noose is another. Section 19 of this country's founding monetary legislation, the Coinage Act of 1792, prescribed the death penalty for any official who fraudulently debased the people's money.

Was the massive printing of dollar bills to lift Wall Street (and the rest of us, too) off the rocks last year a kind of fraud? If the U.S. Senate so determines, it may send Mr. Bernanke back home to Princeton. But not even Ron Paul, the Texas Republican sponsor of a bill to subject the Fed to periodic congressional audits, is calling for the Federal Reserve chairman's head.
I wonder, though, just how far we have really come in the past 200-odd years. To give modernity its due, the dollar has cut a swath in the world. There's no greater success story in the long history of money than the common greenback. Of no intrinsic value, collateralized by nothing, it passes from hand to trusting hand the world over. More than half of the $923 billion's worth of currency in circulation is in the possession of foreigners..."
If you want a great, article-length review of our money system and how we got to where we are today, definitely check out Grant's essay in full.

PS, if you'd like to know more about the country's monetary laws, you may want to seek out Edwin Vieira's very thorough book, Pieces of Eight.

Related articles and posts

1. Jim Grant on CNBC: get set for inflation - Finance Trends.

2. Rothbard: The Founding of the Federal Reserve - Finance Trends.