The Impending Monetary Revolution, the Dollar and Gold by Edmund Contoski. Quality paperback, cover design by Paul Kielb, October 2012, $19.95, 210 pages, 29 illustrations with 28 in color, ISBN 978-0-9655007-0-8
A Brief Synopsis | Critical Response | About the Author
A Brief Synopsis
The crisis began in a small country, Greece, but it revealed financial vulnerabilities that are overturning the monetary system of the world. For years the Greek government spent beyond its means and borrowed to make up the difference. Just like the U.S. government. The U.S. has not yet suffered the dire economic consequences of Greece because of the dollar's status as the world's reserve currency. That means it is the only country in the world that can pay its debts by simply printing more of its own money. Those days will come to an end.
American and European banks have gotten into trouble because of unsound banking practices that would not have been possible under a gold standard. And governments are on the verge of bankruptcy because there is no restraint—which a gold standard would provide—on their spending and manipulation of credit.
American politicians have debauched the currency for agendas contrary to our Constitution and to get themselves elected. And the Federal Reserve has provided a means of financing uneconomic political agendas and pushing the costs onto future generations. But debt and credit cannot expand forever—as America's housing/mortgage bubble demonstrated. When the credit bubble bursts, hard times must follow.
Eventually sound money will return. Because it is necessary. It will be gold because of its intrinsic characteristics and because no government has an unlimited supply of it which it can pay out to keep reckless borrowing and spending growing indefinitely. If sound money doesn't return in the U.S., it will return somewhere else. Then not only the dollar but America will lose its primacy in the world. It will lose that primacy as much for the neglect of its original constitutional principles as for the fate of the dollar itself. In fact, it was the neglect of those principles that led to the the frightening expansion of government and the demise of the dollar.
The national debt limit has been raised 77 times since March 1962. Federal spending keeps increasing, and the value of the dollar keeps declining. Today it takes $5.69 to buy what one dollar would buy in 1971. Everyone knows this loss of value should be stopped, yet it continues—even accelerates. The skyrocketing rise in paper assets of the Federal Reserve, shown on the cover of Mr. Contoski's new book, The Impending Monetary Revolution, the Dollar and Gold, portends an ominous future. This book explains factors—including international ones—that brought us to this point and what must be done to stop impoverishing Americans through monetary manipulations and restore a sound currency.
Critical Response
Contoski's book is “a ray of sunshine in an otherwise bleak world...[of] fiscal cliffs, uncontrolled money creation, all you can eat for a buck healthcare, and European 'I owe you nothings.'”—-Arthur Laffer, Ph.D., the “Father of Supply-Side Economics,” member for eight years of President Reagan’s Economic Policy Advisory Board, former Chief Economist at the Office of Management and Budget, and nominee for the F.A. Hayek award in 2009.
"Nowhere is the question and issue of trust more essential that the trust of citizens in any nation in the value of their currency. The Impending Monetary Revolution, The Dollar and Gold by Edmund Contoski ($19.95, American Liberty Publishers, Minneapolis, MN, softcover) provides the reader with an historic review of how money, currency, developed over the centuries, from trading furs and tools to today’s paper money. He also provides an easily comprehensible explanation of the ways governments debase their currency while, in past decades, spending too much—mostly on social programs—and relying on the national and international cartels of national banks or, in our case, the Federal Reserve (not part of the federal government, but granted the ability to simply print money without any actual value except trust. It is a very scary book. “As of June 2008, the notional amounts (face value) of financial derivatives, according to the Bank for International settlements, totaled $673 trillion—over 12 times the world’s nominal gross domestic product!” He warns that no nation has ever been able to spend its way to prosperity and, it must be said, that is exactly what the U.S. has tried to do with the failed “stimulus” program and other comparable efforts. If you want to understand what is happening in the U.S. and worldwide, this is the one book you absolutely need to read." -- Alan Caruba in Bookviews
"Edmund Contoski's The Impending Monetary Revolution, the Dollar and Gold is as an important addition to the discussion and understanding of monetary policy and its effects on economies, societies, and individuals.
"The book will improve your understanding of what money is, why the European Union is doomed to failure, why inflation ultimately creates recessions, and why it is impossible for a country to inflate its way out of a recession...
"Probably few readers have a real grasp of the complex financial instrument called the credit default swap. These insurance-like contracts pay buyers when bonds default. CDS prices rise when bonds' creditworthiness deteriorates. Contoski explains how incredible volumes of these contracts are temporarily propping up bankrupt members of the European Union, and how they became bankrupt.
"Seen Long Ago
"The author notes problems of this nature were recognized by Thomas Jefferson and George Washington, who said, "Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest and open the door to every species of fraud and injustice."
"Washington was speaking of "fiat" money, which is now used in major countries around the world. It's called fiat because it is created by government order, or fiat. It is paper money that has nothing of real value supporting it, such as gold or silver. The U.S. dollar is a fiat currency.
"Contoski explains how bank notes and checks simply grew out of receipts given by goldsmiths who were the keepers of the valuable resource in an earlier day. The U.S. Constitution never gave the federal government the power to print paper money, he says, but the government eventually assumed that power.
"Few people today realize that President Franklin Delano Roosevelt, feeling his administration threatened by the value of gold in the face of the government's paper money, made it illegal to own gold. Everyone was forced to turn in their gold or risk going to prison.
"Contoski also tells wonderful contemporary stories of intrigue, such as how a woman working at Goldman Sachs was able to disguise Greece's debt for several years while collecting $300 million for the effort. JP Morgan worked similar magic for Italy.
"Fannie's, Freddie's Failures
"Contoski makes the failures of government mortgage behemoths Fannie Mae and Freddie Mac easy to understand, and he names politicians who created the housing bubble, starting with the Community Reinvestment Act in 1977 and its subsequent amendments, and continuing through the Dodd-Frank Act of 2010.
"President Richard M. Nixon ended all pretense the dollar was backed by gold in 1971 by unilaterally ending the Bretton Woods Agreement of 1944 that linked the dollar to gold. Nixon did this because some other nations' governments were stockpiling gold instead of dollars in recognition of the eventual worthlessness of most paper money.
"Contoski also dismantles the economic theory of Depression-era economist John Maynard Keynes, who argued governments can stimulate economies by spending lots of money. It never works over the long haul. Contoski states Keynes' doctrine grew out of his desire to subordinate liberty and individual rights to a plan of coerced social "improvement."
"Contoski also explains the history of property rights and their importance to a free society, noting the Founding Fathers feared what the French economist and philosopher Frederic Bastiat later wrote about more than 160 years ago: "When plunder becomes a way of life for a group of men living together in a society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it."
"Redistributionist government policies and handouts of social welfare and corporate welfare are the plunder the Founders feared and Bastiat described.
"Constitutional Corrections
"A most refreshing part of this book is Contoski's recognition that it is unlikely any politician can cure the nation's economic problems, considering their never-ending desire to win votes by pleasing their constituents. He concludes only a Constitutional convention to change the rules for running government can work, and state legislators should be willing to call one in order to get their government back.
"Contoski recognizes the difficulty of reforming the federal government, but he convinced me that a few Constitutional amendments, in the states' favor, could right a century of wrongs and bring the federal government back under the states, which created the federal government. States have allowed themselves to become subservient to the Feds, which was never intended by the nation's Founders.
"Contoski describes a relatively simple set of amendments that could easily pass in a convention and put us back on track. I will not divulge them here--you must get the book for that.
"I promise you that every fifth page of this book you will be thinking, "If only my economics teacher had been able to explain things this well years ago, I would not have had to be silent on so many issues in which the government undermined our free society."--Jay Lehr, Ph.D. (jlehr@heartland.org) is senior fellow and science director of The Heartland Institute.
"Investment lecturer Edmund Contoski presents The Impending Monetary Revolution, The Dollar and Gold, a wake-up call about what the severe fiscal problems rocking Europe and especially Greece imply about America's troubling debt problems. The American dollar enjoys the high status of being the world's reserve currency, and the American government currently has the option of printing more money to answer its debts. Contoski warns that both these situations will soon change, and criticizes the reckless gambling that modern banking has become under the fractional reserve system. A return to the gold standard would make impossible some of the worst shenanigans that precipitated the financial crises of 2008 onward, and so Contoski argues heavily in favor of such a measure, to the extent of claiming it will inevitably become necessary. A wealth of data and numerous full-color charts and graphs offer supporting evidence for Contoski's thesis on why he believes the gold standard is part of the antidote to reckless government expansion, excessive debt, and the threat of hyperinflation. 'Despite growing inflation, the dollar probably won't be replaced with a new currency, at least not if the Constitution is to be followed... The only other way to get around this Constitutional limitation would be a Constitutional amendment to permit a new currency - one backed by gold. Since there is virtually no chance of such an amendment being initiated by Congress, it would likely have to be done through a new Constitutional convention.' The Impending Monetary Revolution is an eye-opening and forceful argument, thought-provoking and extremely critical of the Obama administration."--John Taylor, Reviewer, Midwest Book Review.