“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world, no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government run by the opinion and duress of a small group of dominant men”

-President Woodrow Wilson, in reference to the Federal Reserve Act of 1913, upon signing it into law.

This week, Italy announced that it would utilize its gold reserves to help alleviate its national debt, currently running at 107 percent of Gross National Product, or the entire productivity of the country.

The country goes deeper into debt the more wealth it generates. As unsustainable a situation as is possible, in economic terms.

“Obviously this is a drop in the sea,” commented economist Mario Pianta of Urbino University, ”But what I believe the government has in mind is to use this money for servicing the debt during 2008. With interest rates that could rise further, this is something that the Italian government is very worried about.”

Professor Pianta also said, “The very idea of having gold reserves is left over from the 19th century. In practice a currency as strong as the Euro has no need for gold reserves, which could be better used as investments to further strengthen Europe’s economy.”

Italy has never been renowned for its economic ingenuity. The preceding statement only underscores the government’s inability to comprehend the relationship between a stable currency and stable interest rates and inflation.

The Italians would liquidate their gold holdings, but maintain their foreign currency reserves, which are primarily in U.S. dollars. Talk about bolting the barn door after the horse has fled!

The more central bankers deplete their gold holdings, the more difficult it will be for their economies to transition back to the inevitable gold-backed currency once their fiat currencies implode upon themselves.

It is imperative for the average citizen to know why central banks and economists are invariably drawn to floating currency monetarism as opposed to a stable gold standard.

The reasons are numerous, but it essentially boils down to the fact that a gold standard frustrates the machinations and manipulations of government bankers because it unifies the value of all currencies, at least in their relationship to the price of gold.

Thus arbitrage businesses, where traders take advantage of the latency between adjustments in the currency rates relative to various commodities and other currencies, are diminished.

So it’s all about money. The more stable the currency, the less able the financial institutions are of wringing business opportunities and profits from the complicated transactional framework they have created for themselves, which only they can navigate and comprehend.

Critics of this line of thinking argue that central banks are, for the most part, private institutions and not affiliated with governments.

The implication that the Federal Reserve Bank of the United States doesn’t enjoy the tacit, if not actual sponsorship of the U.S. government is laughable.

The financial elite who have fabricated this system of immense complexity do so on behalf of governments, and in sole pursuit of a program of mututal self-enrichment.

In the words of Andrew Carnegie in his classic tome of 1891, “The ABC of Money”:

“Nothing places the farmer, the wage-earner, and all those not closely connected with financial affairs at so great a disadvantage in disposing of their labor or products as changeable money. You all know that fish will not rise to the fly in calm weather. It is when the wind blows and the surface is ruffled that the poor victim mistakes the lure for the genuine fly. So it is with the business affairs of the world. In stormy times, when prices are going up and down, when the value of the article used as money is dancing about – up today and down tomorrow – the waters are troubled, the clever speculator catches the fish and fills his basket with the victims . . . Hence the farmer and the mechanic, and all people having crops to sell or receiving salaries or wages, are those most deeply interested in securing and maintaining fixity of value in the article they have to take as ‘money’.”

Thus are Central Bankers complicit in the grand fraud of fiat floating currencies.