Why Choice?

If every year we become more efficient due to new technology and new production methods, should things cost more or less? Things should cost less. And the cost of things does fall, but the value of your money falls faster, so prices rise. Your money is worth less because banks create more each year. You need the freedom to choose other money. You need monetary choice.

In many important areas of your life, you have choice. You can choose your spoken language, your computer’s operating system (Windows, Apple, etc.), and your mobile phone service (Sprint, AT&T, T-Mobile, etc.). However, when it comes to money, you don’t have a choice. You must accept and use the local national currency—the dollar if you live in the United States—for your salary, contracts, and to pay taxes.

The problem is the dollar can lose value like any other item. If you negotiate a salary in dollars, and during the next 12 months the value of the dollar falls 10 percent, then your salary fell 10 percent. Unless you get a 10 percent raise, you’ll be making less value the next year.

Don’t count your money. Value it.

Wealth is not about money, it’s about value. Don’t count your money; value it. To calculate the real value of your salary, divide it by the cost of a product you regularly purchase.

For example, the “dollar price” of gas in 2004 was about $2 and has since doubled to about about $4 in 2012 (see data). Measured in gas, your salary would need to be twice what it was in 2004 for you to be making the same value.

If you earned $25,000 in 2004, which was 12,500 gallons of gas, you would need to make $50,000 in 2012, just to earn the same value, or 12,500 gallons of gas. And that’s assuming you weren’t promoted or given a raise, a real raise.

2004    $25,000  12,500 gallons of gas @ $2 per gallon
2012    $50,000  12,500 gallons of gas @ $4 per gallon

However, most people in this situation were probably given a raise of about five percent per year and that would be a final salary of $37,000. What’s the value? 9,200 gallons of gas. A loss of 3,000 gallons of gas, which is a 25 percent salary decrease! Because of inflation.

2012    $37,000  9,200 gallons of gas @ $4 per gallon

What happened is the value of the dollar declined possibly by 50 percent between 2004 and 2012 and your salary increases have not kept pace. You’re earning more dollars, but less value. Had you been paid in another product, such as gold or coffee or wheat, you might be living as well as you did in 2004.

Just as your salary can lose value, so you can your savings. If you earn and save 100 dollars and at that time the price of a movie ticket is five dollars, then you earned the equivalent of 20 movie tickets (100 divided by 5). If the value of the dollar falls 50 percent in five years, ticket prices will rise to 10 dollars. Then the value of your $100 savings will buy just 10 movie tickets (100 divided by 10). Inflation, or the issuing of new money, took 10 movie tickets from you.

Like Stock Fraud

The value of the dollars declined because more dollars were issued. Like anything else, if there is more of something, that thing is worth less. A bank called Federal Reserve, partially created by the U.S. Government, regularly creates more dollars that are lent to the government, which usually runs a deficit, and to poorly managed banks that need funds to stay in business. You pay for the deficit through inflation.

It’s like stock fraud. If a company wants to take value from existing shareholders, some fraudulent executives would issue more shares. Your dollars, or yen, or euros, are, in essence, your share of what can be purchased with those currencies. If there are 100 dollars, and you have 10 dollars, then you own 10 percent of what can be bought. If the government issues 100 more dollars, raising the total to 200 dollars, then your 10 dollars are five percent of what can be bought. You still have the same amount of dollars, but they are worth less.

2% Poorer Every Year

Because of inflation, most people get poorer every year, in terms of their income and savings. Central banks actually target a two percent annual price increase, meaning your salary must rise two percent annually to stay even, or you will be two percent worse off. The central bank’s legions of economists calculate how much they can devalue the currency without causing a protest.

Every year, better production methods and new technology make it easier to make things, yet prices rise. The truth is that costs go down, but the value of your money falls more, and merchants raises prices to receive the same value. For example, if money is suddenly worth 50 percent less, then prices will double. The problem is the money, not the prices (or shortages or greedy merchants).

You never benefit from new inventions. If the central bank targets a two percent annual price increase, and calculates a new invention such as email reduced costs by two percent, then the central bank issues new money to devalue money by four percent, leading to a price increase of two percent. That new money goes to other banks that earn interest on new loans or to the government and its contractors.

Money Choices

Money is popular product used for indirect exchange. It is the middle-man in a transaction. You make a sweater and trade it for a product, such as a gold coin, that you do not intend to use, but instead will trade for something you will use like a meal. You could have also traded your sweater for silver, stock shares, or a maybe a gift card for a specific number of digital songs. All would be widely accepted. The key is you would have choice.

Don’t worry about carrying around gold or an oil drum. Money substitutes are convenient ways to trade money products and come in many forms: credit cards, bank checks, and paper notes or receipts. At one time, the dollar bill used to be a substitute or receipt for a silver coin referred to as a “dollar.” Now the paper note is a substitute or receipt for…nothing, and that is one reason the value is not stable.

Throughout history, people have chosen many items to use as money, from salt to copper to tobacco to silver. The evolution of money should continue, and the digital age and robust international trade creates new opportunities for money products, previously impossible.

You’ve heard of start-up companies such as Google and Apple or new start-up chains such as Starbucks. We need start-up monies. Bitcoin is a start, but has some flaws, such as not having inherent value. Still the bitcoin growth is somewhat predictable, unlike the manipulated growth of national currencies.

Using different forms of money could be as easy as using different credit cards. Businesses now accept Visa, Mastercard, Amex, and cash. Imagine if they accepted charge cards that transferred oil, silver, wheat, or even combinations of these and other items.

Political Reform

To end the hidden inflation tax and return to a rational economy, we recommend these changes:

  1. Individuals should have the right to use any product as money.
  2. Taxes should apply to only one side of a transaction.
  3. Remove the monopoly privilege that only one “central” bank can issue bank notes or currency.
  4. Exclude government from money.

This will generate these benefits;

  • Stable or lower prices each year due to productivity improvements
  • Savings protected from inflation theft
  • A government limited by direct, visible taxes.

You should have the right to choose your money. You should have monetary choice. Better than a gold standard, it will be your standard.

Take Action

  • Learn how money works.
  • Value your money in another product, such as gallons of gas, so you can track if the money is losing value.
  • Tell your senator and representative to enact the political changes listed above.
  • Consider converting any dollars or euros you have saved into another item not at risk from inflation.

    Visit the Take Action page.


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