Home > political-economy > The Golden Grimace (Part Five: The Dollar as an instrument of class violence)

The Golden Grimace (Part Five: The Dollar as an instrument of class violence)

We stated in the last segment of this series that, paper money is “the relentless intensification of the enslavement of the worker, the ruthless application of financial violence of the most extreme sort by the most inhumane and predatory gang of sociopaths ever to dominate society in the entirety of human history.”

Over the top, you say.

Mad hyperbole!

Okay, fine. So let’s see how this scam works.


After money has been debased from gold, the metal no longer serves as legal means for normal daily transactions. It permanently reverts to a lifeless stagnant hoard, excluded from normal daily transactions and completely superfluous to them.

We could assume that this lifeless hoard sits idle in the safe deposit boxes of the Plutocracy, or the vaults of central banks simply because it is no longer money. but the actual situation is precisely the reverse: Gold is no longer money because it was expelled from the economy by the very daily transactions it once facilitated.

If you do not understand this, you will never get a handle on why the two measures of GDP diverge in our charts, and, therefore, why paper money is nothing more than an act of violent class war being waged against you and all working families to this day.

Indeed, you will not understand why the worthless piece of paper in your wallet serves no purpose except to stamp you as a slave.

As you can see from the green line on the chart below, as economic activity contracted during the Great Depression, from 1929 to the end of 1932, the amount of money in circulation fell and did not start to recover until 1933 when money was debased from gold.

A Graph of Money in the United States, 1929-38

Since, economists tend to treat the movement of money as the cause of economic activity rather than the result of this activity, many of them argue based on the above chart that the contraction of money in circulation shown above was the cause of the Great Depression. We argue here, that the logic of economic activity points toward the opposite conclusion.

First, think of it this way: No one wears money, no one eats money, no one lives under or in money. It simply passes from hand to hand in a chain of transactions. If promiscuity had a face, it would be the dollar; which is, in turn, possessed and dispossessed by more individuals than even the most prolific porno star.

Money is a true whore. Having been used to satisfy some or another want of an individual, a dollar is, within a very brief period, used for this very same purpose by any number of other individuals scattered throughout the economy. Yesterday, you used that dollar bill to buy groceries; tomorrow some lunatic in Jerusalem uses that same dollar bill to pay for cluster bombs. It, thus, stands ready for any use we make of it, and passively moves through the economy – but only to the extent we need it to complete some transaction.

Second, as your parents were probably fond of telling you, real money doesn’t grow on trees. It comes into your possession when you sell something in return for it – whether this something is a 42 inch, wide-screen high definition television, or your capacity to work. The value of the thing you sell is reflected in the money price of the good.

Logically speaking then, all economic activity begins with somebody selling something, and money only serves as a means to transfer that thing from one hand to another. Again, it plays a purely passive part in all of this.

This passive part is two-fold: First, as the volume of transactions increase, so does the movement of money from one hand to another. As the volume of transactions decrease, the movement of money slows, or even halts.

Second, this relationship is also influenced by the prices of these goods: As the money price of each transaction increases, so does the movement of money from one hand to another. As the money price of these transactions decrease, the movement of money slows.

The drop of the green line in the chart above, from 1929 to the end of 1932, was the result of the decreasing volume of transactions taking place in the economy, and, of the decreasing prices for those goods. Money did not cause those decreasing transactions nor the collapsing prices.

So what happens when the volume of transactions and prices in the economy decrease owing to a depression?

Before 1933, depressions resulted in a more or less lengthy halt in some portion of money moving through the economy. When that portion of money halted its movement entirely, it became a hoard of gold sitting in some bank vault or private deposit box. This hoard represented an accumulation of social wealth that could no longer be profitably employed.

Throughout the economy, therefore, when the Great Depression erupted, vast quantities of this social wealth fell out of circulation and congealed into a huge hoard of social wealth concentrated in the private hands of the very wealthy and of government central banks.

The important takeaway from this tedious little exposition is not that the rich had all the gold – they have always had all the gold; which is why we call them “Filthy Fucking Rich,” and not, “Dad.” The takeaway is that money, once it was debased from gold, does not act like money when it was backed by gold.

Which, of course, is why it was debased in the first place.

Although the dollar does not actually grow on trees, it might as well, since it is composed of cotton and linen, and even dancing electrons. Unlike gold – which requires a great deal of effort to pull it from the places where nature safely hid it – the dollar can be created in very large volume with little or no labor.

And, since it does not have any value of its own, no one in their right mind would want to hold onto it. Moreover, it constantly depreciates in purchasing power as large quantities are issued by Washington; which means, even if you were dumb enough to hide it in your mattress, the purchasing power of your hoard would soon evaporate.

It is actually misleading to call the dollar bill money in the first place. When it was backed by gold, it was only a token of real (gold) money, a convenient substitute for gold in normal daily transactions. Something to be redeemed later for the real thing, if its owner wished, or transferred again in another transaction.

Without the backing of gold, the dollar is just a worthless piece of cotton and linen cloth.

But, it is this piece of cotton and linen cloth that becomes one of the most insidious means ever created to further your degradation – and precisely because the dollar no longer behaves like money.

Once detached from gold, the dollar no longer plays the passive role of faithfully reflecting the volume and prices of transactions in the economy. Washington can create dollars in large quantities out of thin air and inject it into the economy for whatever purpose it finds appropriate.

From this point forward, the relationship between money and transactions is inverted: instead of money faithfully reflecting the volume of transactions and the prices of the goods in those transactions, this worthless money now determines both the volume of transactions and their prices.

By injecting dollars into circulation (for instance, by putting in a large order for military ordinance destined to Afghanistan, Iraq, or Israel) Washington creates a wavefront of higher prices, which propagate through the economy driving up the prices of goods everywhere this wavefront touches.

As the cost of living moves upward, instinctively you begin to adjust your level of work to reflect these higher prices. You try to increase your income with more work, and longer hours of work to compensate for the higher costs of living.

Of course, you cannot work continuously, and no matter how many jobs you try to hold down, and how rapidly your wages rise – if they rise at all – you cannot keep pace with the effortless creation of new money, because, even as you compensate for past injections, Washington sets off a new round of injections to which you must adjust.

But, don’t worry, Washington feels your pain. And just to help you out, it makes more worthless dollars available to you in the form of cheap, easy credit.

Can’t save for a new car?

Can’t afford a place to live?

Baby needs a new pair of shoes?

Don’t worry!

Washington and its controlling oligarchy of private banks, also known as the Federal Reserve, has your back – in return for the shirt covering it, of course. They keep interest rates low to encourage you to sink deeper into debt peonage the like of which has never been witnessed in human civilization.

Which is a shame really, since your very act of taking on debt now adds to the quantities of dollars sloshing around the economy. Although minuscule in comparison with the tsunami of fiat flooding the economy from Washington, millions like you are in the same predicament, and the combined flow of all of you soon dwarfs even Washington’s.

Both the volume of transactions, and the prices at which they are realized, spiral upward – overwhelming your pitiful attempts to keep your head above water.

To put it another way: You are running up the economy’s down escalator; an escalator that is accelerating with your every step!

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