The Cultural Perils of Fake Money

A root cause of all our woes.

Atlanta, GA

April 16, 2025

"I must study politics and war that my sons may have liberty to study mathematics and philosophy. My sons ought to study mathematics and philosophy, geography, natural history, naval architecture, navigation, commerce and agriculture in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry, and porcelain."

- John Adams

Civilization grows as time preference shrinks.

Paleolithic man foraged and hunted for his daily provision. Planning didn’t extend beyond the time required to consume his catch. Once satiated, he started seeking his next meal.

Tomorrow is irrelevant if we can’t feed ourselves today. The history of civilization is the story of how man made tomorrow matter.

Free Market Money

We’ve frequently fingered funny money as the cause of modern maladies. It depresses purchasing power, distorts the economy, diverts resources, queers investments, and encourages conflict.

But that’s the surface damage that’s easiest to see. The rot goes deeper, corroding the foundation and fabric of functioning society.

Sound money abets delayed desire. If people are confident their money will retain value, they are less inclined to rid themselves of it today, and more willing to invest it for tomorrow. Doing so cultivates capital, which nourishes production and multiplies wealth.

This is how civilization develops, grows, and prospers. It’s how and why it thrived under the nineteenth century gold standard…roughly between the Congress of Vienna and the Guns of August…when industry bloomed, innovation blossomed, prices fell, quality-of-life rose, and poverty plummeted.

By the late nineteenth century, the United States were essentially on a classic gold standard. During this period output flourished as prices fell.

Modern economists would have us think that’s impossible. They assume declining prices cause depressions.

But that’s only because in their fake money system, falling prices are result of popped bubbles inflation caused. Deflation is the cure, not the disease.

When you have a money that can’t be reproduced on a whim, people can be sure it will retain its value over time. This makes them comfortable saving it and investing it, which expands the capital base and increases production. Doing so with stable money means prices fall.

This is what should happen in a free market, sound money environment. And it did.

Until the Fed was founded.

Worse Money, Worst Wars

At that point, the US took a detour from sound money road. Since 1879, dollars had been backed 100% by gold. But Federal Reserve notes replicated the Bank of England’s 40% gold backing.

This number rapidly declined.

By 1933, no Americans could own any gold. In 1971 international gold redeemability was eliminated. Twice in four decades, the US government defaulted on its debt.

Since then, the world has drifted on a floating abstraction. These are the counterfeit currencies we’re all commanded to accept. They depresses purchasing power, distort the economy, divert resources, and encourage conflict… starting with the First World War.

In fairness, that disaster would’ve occurred without the Fed. But it wouldn’t have been as catastrophic.

The Fed allowed the US to fund the Allies and enter the war. This tipped the scales toward a Carthaginian Peace. Rather than salt the soil, Versailles poured manure… which allowed subsequent catastrophes to take root.

It’s no coincidence that since 1913, calamitous wars have been commonplace. But the fiat curse was true before the Fed too.

The Bank of England was founded to fights wars against Louis XIV. A century later, Napoleon established the Bank of France to fund his own conquests.

The War Between the States was as horrific as it was because both sides printed paper to keep it going. Same with the War for Independence, which bankrupted the nascent states and Bourbon France… helping ignite a revolution there.

The Fed was following a cleared path. But where else did it lead?

Ceiling Drop

There’s a natural rate of interest on the market, reflecting an aggregation of individual time preference. When capital is abundant, time horizons (and interest rates) fall. When the capital stock is low, time preference rises, bringing interest rates with it.

This discourages consumption and entices investment, erecting the scaffolding by which civilization’s structure stays sturdy. Free market interest rates are the joists and beams of the economic edifice.

When central banks artificially lower them, society’s ceiling drops. People are enticed to consume when their natural tendency is to replenish.

Rather than replace the wiring and restore the walls, society is encouraged to strip the copper and steal the stones. Over time, as the metal rusts and the mortar cracks, centuries of construction begin to collapse. Eventually, the roof caves in, burying society under the rubble.

Bad Striptease

Slowly and subtly, amid the compiling debris and ongoing decay, attitudes shift. The culture seeks quick fixes rather that root causes. Short-cuts are more acceptable when long-runs seem less relevant. When their money dissipates fast enough, today is all people think they have.

Under Keynesian influence, like a bad striptease, the dollar spent six decades slowly shedding the chastening garment of constrictive gold. On August 15, 1971, the last tassel was tossed aside. In terms of gold, the dollar has lost 98% of its purchasing power since.

Modern money is a melting ice cube and a hot potato. It rewards borrowing, punishes thrift, and makes suckers of savers. Whereas hard money encourages thrift, capital investment, and reduced time preference, fiat money promotes short-term thinking and perpetual debt.

That’s because fiat money is debt. It comes from commercial banks extending credit and making loans. It disappears when those loans are called in, repaid, or go bad.

As in any counterfeiting ring, those who are nearest the tap get the most to drink. Everyone else simply gets soaked.

The fiat racket is a funhouse mirror that makes cash a liability, pretends opportunity costs don’t exist, and assumes time preference (which free markets reflect thru interest rates) works in reverse. Success in this system entails borrowing money to accumulate assets, or issuing credit to get others in debt.

The pseudo-economic “rationale” for this scheme is that a diluted, debt-addled currency will discourage saving and stimulate risk to promote “investment.”

But this conflates credit with capital. Investment requires (but is not synonymous with) savings, which can only accumulate by deferring consumption. Extending loans at arbitrary interest creates no new capital. It merely reallocates the existing pool to less desirable projects.

But the funny money pox does much more than raise prices, enable wars, cause mal-investments, punish savers, and create boom-and-bust cycles (bad as those are). It also has cultural consequences. The planks of fiat currency sustain (and spread) infestations that rot every aspect of life.

Deadbeat Dad

Money may be the mother of commerce. But it can also be a deadbeat dad. When it goes, everything goes.

It leaves behind a dilapidated, disposable world that looks a lot like the one we endure today…a present-oriented orgy of debt, debauchery, mass consumption, increased crime, broken families, destructive fads, endemic corruption, and capital decay.

How does shady money cause such a calamity?

Free market, hard money prices aren’t merely numbers or amounts. They’re information, and a communication mechanism.

Dodgy currency jams the signal. The static enables the State to meddle in every aspect of life, accruing benefits not to those who provide productive services in a thriving society, but to connected connivers who are experts at playing political games.

Delusions overflow like parking lot dumpsters. Sketchy money disguises the natural necessities of giving to get, rendering to receive, and working for reward. Being phony cash conjured from thin air, it provides the tempting illusion that trade-offs are irrelevant and opportunity costs don’t exist.

When consequences are camouflaged, the present moment is all that matters. So people borrow and spend like there’s no tomorrow. And they treat their health, relationships, morals, and manners the same way.

Funny money society comes to believe it can have the bender without the hangover, the fling without the divorce, the harvest without the planting, and that we can all go to Heaven without anyone having to die.

Yet death comes to us all, and to every fiat system that’s ever existed. But while it survives, it provides plenty of pavement for the road to Hell.

Family and Faith

The manners, morals, and decency that sustain civilization wither away as time preferences are buoyed on an inflationary flood. Amid the torrent, family and Faith are prone to drown.

These pillars of society are natural enemies of the predatory State. Healthy communities place kin before government, and God above it. But these are instincts ruling regimes can’t abide.

Forming a family and adhering to religion require long time horizons… from many generations to all eternity. The Faithful resist temptation in order to honor God. Parents sacrifice present pleasures to facilitate a future for their children. But also for themselves, for whom their grateful kids provide elder care.

An inflated currency inhibits families from sustaining themselves. Phony money enables the State to assume responsibilities relatives historically shouldered.

As it does, the rationale for couples to marry, stay together, and bear the burden of raising kids or to care for their elders is significantly reduced. Families separate, disperse, shrink, and subside in the shadow of fake money subjugation.

As ersatz money causes societal disruption, it provides its suppliers with excuses and diversions to cover it up. Its detrimental consequences become their own rationale to blame others for its effects, and to promote self-serving policies that the Fiat Regime wants to impose.

Drop of Sewage

Without the heavy anchor of hard money, society drifts…until it drops. It rides unpredictable swells into heavy storms, till it’s eventually dashed on the rocks of depravity, distress, and despair.

Sound money serves as a reliable benchmark, a way to preserve, measure, and appreciate value across time. Bad money, like a drop of sewage in a magnum of Margaux, corrodes civilization in imperceptible, yet undeniable, ways.

In a debt-addled fake money society, time preferences shrink, and short-term thinking prevails. By forcing rates below natural levels…like pressing a beach ball under water…central banks finagle the currency to fight the tide. But they can do this only so long before the ball shoots up, and everyone gets soaked.

Under sound money, gratification is deferred to not deprive our future selves. We increase savings, suppress primal instincts, and prepare for days yet to come.

When time preference rises, the present takes precedence. We’re more inclined to down the shot, have the affair, and roll the dice.

The Cheapest

This is reflected in our surroundings, in the places we go and way we look. Several decades ago, people dressed up to board a plane. Now they couldn’t care less how they look going anywhere. Sweats and shorts seem almost de rigueur.

Photos from the 50’s show women dressed going shopping then than they do going to weddings today. At many “formal” galas, half the men don’t even bother to wear ties.

Compare this to how (not too long ago) people dressed when invited for dinner with friends:

Cheers (1987): I know it’s fiction, but it reflects the times

This reflects respect not only for others around them, but for their own reputation. Our reputation is what other people think about us. We’d only care about it in a society that looked further ahead than the next few years.

But it’s not just what we wear. It’s where we go.

Take a look around any major city in the western world. We all recognize the architectural atrocities that rose in the wake of the fake money system. Few of us admire the Brutalist affronts and insipid banalities that litter the landscape.

Banks are an obvious example. Gold standard banks were big, sturdy, and stately. Today’s bank buildings could be a renovated Wendy’s. Some probably are.

Churches used to be instantly recognizable as holy places giving glory to God. Many now look like abandoned Moose Lodges. Most schools resemble prisons, which is probably appropriate.

Aside from disorienting the public, contemporary architecture is concerned with constraining current cost. But, as with most things that matter, the best is ultimately the cheapest.

Rather than raise buildings to last for centuries, modernity erects eyesores to be (mercifully) razed within decades. The ultimate price to repeatedly renovate and replace these degraded piles far exceed that of sturdy structures built to last.

In hard-money eras like the Florentine Renaissance, Neoclassical France, or the Victorian Age, the present was ceded to honor the future. Many edifices were designed and constructed by men who’d never see (and knew they’d never see) the end result.

That’s why many of these gems are still around. They were built to last, and to ennoble. Their flimsy faux money successors are designed to deteriorate, and most serve as people-repellents while they’re here. They’re structures indicative of (and conducive to) high time-preference society.

Done to Ourselves

But it’s not just aesthetics that depreciate under a funny money regime. Other essentials decline too. By reducing purchasing power, unsound money forces people to prioritize the present. It’s better to spend now than save for later.

Over time, the inability to delay desire infects society. Why not commit crime if time is limited? What’s the point of preserving beauty if tomorrow is tenuous? Hedonism is happiness if the eternal is ephemeral.

For the first time in history, life expectancy is declining. Religious observance… an obvious deference to a redemptive future… is falling. As in ancient Rome, when the money erodes, the rest goes with it.

Yet the Romans were lucky. They had Christianity to save them. We’ve ditched that too.

Doing so may have seemed like a good idea at the time, and fun while it lasted. But now the gold is gone, and so is God.

We evicted both, and did this to ourselves.

JD