Tuesday, August 16, 2011
By Hugo Salinas Price:
For many years the real reason L. Frank Baum Wrote The Wizard of Oz has been a mystery. While throughout his life Baum remained insistent that it was written to entertain children, many suggest that it was really an allegory for the populist movement.
Henry M. Littlefield was one of the first to connect the book to the populist movement. Through an evaluation of Baum's works before The Wizard of Oz, Littlefield connected each character to a real-life political figure and claimed that Baum himself was a populist.
In the book, the famed wizard was really just a man behind a curtain. Littlefield suggested that this was representative of the political bosses of the time who were secretly corrupt. He also claims that the yellow brick road is the "gold standard", the scarecrow represents farmers, and the lion represents presidential candidate William Jennings Bryan.
In addition to the Littlefield's startling connections between the book a real life, it is known that Baum was living in the mid-west during the populist movement. This causes further suspicion of the book's purpose as the mid-west was the center of the populist movement. Many suspect that his time there may have cause him to become a "populist sympathizer" if not a populist himself.
On the other side of the coin, most of the evidence that suggests Baum wrote The Wizard of Oz as an allegory is subjective. While some of Baum's works may suggest he was a populist, some of his other works suggests the exact opposite. In 1891 he published an article in Chicago newspaper saying "When McKinley gets the chair, boys, There'll be a jollification" This suggests McKinley was in fact a republican not a populist.
In "The Wizard of Oz as a Monetary Allegory" (1990), Hough Rockoff claims that not only does The Wizard of oz relate to the populist movement but also to the economic systems of that time. In addition, in "The fable of the Allegory: The wizard of Oz in Economics" (2002) Robert Hansen claims that The Wizard of Oz relates to the monarchy system of government.
So the question remains; was The Wizard of Oz a well hidden allegory for the rise of Populism or an extremely relatable children's story? Because all arguments on both sides are so subjective and up for interpretation I tend to believe the only real evidence left. In the words of L. Frank Baum, "The story of The Wonderful Wizard of Oz was written solely to pleasure children of today."
In L. Frank Baum's original story, Dorothy's slippers are silver - not ruby as they are in the 1939 MGM film. In Henry Littlefield's interpretation of The Wizard of Oz as a Populist allegory, the silver slippers play a key role in the political-economic imagery of the story. Where the yellow brick road represents the gold standard, the silver slippers represent the silver standard. The Populists wanted "bimetallism", or the use of both silver and gold as the monetary standard. Farmers who joined the Populist movement embraced the idea of "free silver" as a way of easing the money supply and giving them greater access to credit. The issue took on a deeper meaning as a sort of salvation for farmers in the 1896 election. William Jennings Bryan seized upon this and used that imagery to great effect in his famous "Cross of Gold" speech in the 1896 presidential campaign. Bryan infused his speech with religious imagery, declaring that farmers were being crucified on a cross of gold. These images resonated with farmers but did not sway industrial laborers (the Joe Sixpacks) who did not have the same interests.
Returning to a bimetallism monetary standard would do away with wars (no country could afford them) eliminate inflation (you can't print precious metals) expose the Keynesian Economists for the toady frauds they are, and put the criminal banksters of the world out of business.
Why not re-monetize the silver dollar? Re-monetization could put the silver dollar and its subsidiary silver coinage into circulation in parallel with FRNs - "Federal Reserve Notes".
There are several reasons that make this action possible, and only one that might be considered as an unimportant material obstacle.
The silver dollar is the money that is still the Constitutional "coin of the realm", defined by Act of Congress as 371.25 grains of pure silver. (The Troy ounce contains 480 grains.)
The silver dollar is familiar or at least known to almost all Americans.
A considerable quantity of these silver dollars is owned by Americans.
The silver dollar is a cherished symbol of a great past.
The monetized silver dollar would ignite a desire to save such as America has perhaps never seen before. The very first thing that must be done, to encourage people to save, is to give them something worth saving. As the US government gallops toward the abyss of bankruptcy by unlimited spending, the American people desperately require a refuge for their savings!
In this writer's opinion, a large majority of the American people can see themselves as owners of silver money and, if a poll were taken, one can imagine that most Americans would express themselves in favor of silver money. Not so with gold, towards which the American people have little emotional attachment: gold is seen as the money of the élite. William Jennings Bryan exploited this fundamental attitude of the American people with his "Cross of Gold" speech. (Note: this should not be taken as disparaging gold; it is simply the statement of an opinion about the attitude of Americans regarding gold.)
The silver dollar bears a value stamped upon it: "One Dollar".
The branch of government which the Constitution has designated as the agency "to coin money [and] regulate the value thereof" is the Treasury.
If the Treasury were to monetize the silver dollar coin by attributing to it a monetary value in terms of FRNs - "Federal Reserve Notes" - the public would very probably ignore the inscription of "One Dollar" upon the coin and accept it as legal tender money for the amount of the Treasury quote given to it. It would not be necessary to explain that twice, to anyone owning a silver dollar coin! In a short time, people would regard the term "One Dollar" as the name of a coin, rather than as a numeric indicator of legal tender value.
Determining the value of the silver dollar falls quite nicely into the Constitutional mandate to the Treasury: "To coin money [and] regulate the value thereof..."
How would the Treasury go about determining a quote to regulate the value of the silver dollar? Let bureaucrats and lawyers write books about how it should be done; here it is in a few words:
Suppose the price of silver bullion is $35 per ounce.
The silver dollar contains 77.34166% of a Troy ounce.
$35 X .7734166 = $27.07, the value of the silver in the silver dollar.
The Treasury will quote the silver dollar's value in FRNs, with a margin of 15%, and round the figure to the next highest multiple of four:
$27.07 X 1.15 = $31.13, rounded up to $32.
The silver dollar as a legal tender coin worth $32 FRNs. The American public would eagerly purchase these silver dollars, worth $32 FRN dollars, and which could be used for all transactions without any haggling. The silver dollar worth $32 FRNs could even be deposited for that value in banks, if anyone had a mind to do such a thing.
If the price of silver rose to $37.61, the margin of profit of the Treasury, or seigniorage as it is formally known, would be reduced to 10%; at that point, a new and higher quote would be issued, to restore the 15% profit of the Treasury:
$37.61 X .7734166 = $29.09 value of silver in the silver dollar X 1.15 = $33.45, rounded up to $36 FRNs - 36 being the next highest multiple of four.
Why "the next highest multiple of four"? Because by doing so, the result would be the re-monetization of the entire silver currency system of the United States as it existed up until the Sixties of the last century.
In the last example, the silver half-dollars would automatically be worth $18 FRNs, the quarter-dollars would be worth $9 FRNs, and the dimes would be worth one-tenth of the silver dollar: $3.60 FRNs.
As pointed out in many articles at www.plata.com.mx, in the section in English, the last quote of the Treasury would remain firm and not subject to reduction, just as if the value in FRNs had been re-stamped upon the coin. The Treasury quote would simply take the place of a stamped quote, which cannot be reduced. The Treasury quote would only be raised, to follow the rising price of silver. In this way, the silver dollar would be a coin that would remain in use permanently.
This program would return the silver dollar and its subsidiary silver coinage of half-dollars, quarters and dimes to the American people in such a way as never to disappear again: all rises in the price of silver would be matched with rises in the quoted monetary value of the silver dollar and by derivation, of its subsidiary coinage: the silver half-dollar, the quarter and the dime.
This program would not cost the Federal Government - or the taxpayers that support it - one single cent! And yet, it would constitute the greatest gift to the American people that any US Congress could possibly invent, next only in importance to the return of the Gold Standard. The restoration of the silver currency of the United States to circulation, in parallel with the fiat FRN, can be considered the prelude to the revived Gold Standard.
By paying the Treasury a premium of 15% over the bullion price of silver, the American people would actually be subsidizing the Treasury's work of monetization. This cost would be a one-time cost of obtaining real money of permanent value and utility, independent of the Fed and the banking system.
The re-monetization of the silver currency of the United States would create a new, vast market for physical silver and drive the price of silver very much higher. Those who might not be able to afford the purchase of monetized silver dollars could purchase half-dollars, quarters or dimes, which would provide the same security: they too, would rise with the rise in the price of silver. The rise in the price of silver would affect gold, which would also rise in price.
In order to facilitate larger transactions in silver, the Treasury could once again issue "Silver Certificates" attesting to the existence of silver held in its vaults.
With regard to the present faux-silver coinage in circulation, the American people are too intelligent to be deceived by it; this coinage may remain in circulation until the Treasury issues new coins for the purpose of making change in small transactions.
Though the restored silver currency may legally circulate, in practice it will be saved in its entirety and only be used in cases of emergency. Its "velocity of circulation" will be effectively close to zero.
Dorothy wore silver shoes, in L. Frank Baum's classic book. Silver shoes on the yellow brick road! Dorothy symbolized then and still does today, the American people. Dorothy was unaware of the magic power of her silver shoes - and the American people are still equally unaware of the magic power of the re-monetized silver dollar: the power to recover America as the land of Hope and Opportunity!
What are the obstacles to regaining the silver dollar as money which can circulate in parallel with Federal Reserve Notes? The main obstacle will be the weapon of fear wielded by the entrenched interests of banking and the Federal Reserve, the intellectual centre of the banking cartel. These fiat money-mongers will rely on generating fear of the consequences of silver money so that they can maintain their huge fraud of fiat money FRNs; the Fed and the "Too Big to Fail" Banks are deathly afraid of the competition of silver. They know that the slightest crack in their monopoly of issuing fiat money will expose their scheme.
The Fed and the banking system will without doubt claim that "silver money is very costly", but they will certainly not mention that the American people will fall over themselves to acquire it and even pay a premium of 15% to the Treasury, for the blessing of owning real money. Nor will the Fed and the banking system ever mention the gigantic costs that the depreciating FRNs have inflicted upon American savers; nor will they wish to recognize that the fiat FRN and the Fed are directly responsible for the present financial and economic destruction of the once great United States of America.
Another objection which will be put forward forcefully is that what the American economy requires is more spending on the part of the public. They will argue that more savings on the part of the American people spells doom for the economy: "More drink for the drunkard" is essential, according to the prevailing Keynesian thinking.
However, the humbug wizard has already been exposed and the Fed has lost its prestige forever. Toto has drawn the curtain! The State of Utah has already voiced its dissatisfaction with the present monetary system, by legislating in favor of gold and silver as legal tender money. If this project - monetizing the silver dollar by the Treasury's giving it a numeric monetary value in FRNs, which immediately places it alongside the Federal Reserve Note as money - if this project comes to the notice of the several States of the Union, they together may force the issue.
The present policy is to "kick the can down the road" and postpone the final reckoning. But, the end of the road is already in sight! The condition is one of utter helplessness. The re-monetization of the silver dollar is the first step toward regaining health for the economy of America. Paper, fiat money will probably remain in use for some time, but the presence of the monetized silver dollar will force the Federal Reserve, the banking system and the US Government itself, to a more prudent financial course. It will be possible to regain financial health, because an alternative is available. Savings, the foundation of prosperity, will bloom as Americans opt for massive voluntary austerity by saving monetized silver dollars, half-dollars, quarters and dimes.
The banking system in the United States will be anxious to receive the massive savings in silver of the American people as deposits, but this will only be possible when the price of silver bullion has stabilized. Thus, the American people will have the upper hand; they will bend the banking system to their will by refusing to deposit their silver in the banks and thus force the banking system to reform itself to prudent monetary practice and desist from inflating by expanding credit out of nothing. After a stabilization of the banking system, the way would be open to a resumption of the Gold Standard.
Americans are today caught in a financial calamity with no parallel in history. They are being told this every day by every medium of communication. But they watch their crumbling economy in utter paralysis, because there is no alternative to which they may turn. The whole world is a mirror of their plight.
The restoration of the silver currency of the United States of America by the very simple procedure outlined here can provide the life-saving alternative. There is, at present, no other practical proposal for a viable action in the field of money. Perhaps there can be no other practical proposal? Perhaps a return to silver money is the only path out of the present crisis of civilization?
Let us hope that a political leader in the United States understands this message. The popular appeal of silver is universal; "silver shoes" will take that leader far - and the American people will follow him on that road!
By Edmund Conway
That's right: come Monday morning we will have managed to survive four decades of fiat money – though, given the chaos in markets in recent weeks, it is anyone's guess how much longer it will last.
On 15 August 1971, with the US public finances straitened by the cost of the war in Vietnam, Richard Nixon finally cut the link between the US dollar and gold. Until then, the US Treasury was duty bound to exchange an ounce of gold with central banks willing to pay them $35.
Suddenly, for the first time in history, the level of the world's currencies depended not on the value of gold or some other tangible commodity but on the amount of trust investors had in that currency. Central banks were allowed to set monetary policy based on their instincts rather than on the need to keep their currency in line with gold.
It was one of those seminal moments whose significance has only gradually become apparent, obscured as it was at the time by Vietnam and then Watergate. But the more one examines economic history, the more obvious it is that this was one of the most important policy decisions in modern history.
Were it not for that decision, it is quite feasible that we would not have suffered the financial crisis of the past four years; or indeed the crisis after crisis that have beset the world's markets. We might not have just faced the most volatile few weeks in markets since 2008......read on