Once the money printers get started – whether by actual paper or more modern digital money printing – it usually ends in catastrophe.
As our present monetary crisis of unrestrained Washinton spending and unpayable US debt continues to unfold, we think it is instructive to recall the utter madness of another modern money printing episode. The following is an excerpt from my book REAL MONEY FOR FREE PEOPLE: The American Gold Story.
Gideon Gono does not look like a man you would single out at a glance as an idiot or a crazy person. He looks intelligent enough. There is no hysterical giggle with eyes darting wildly about that would cause him to be remembered through the ages as a madman.
But looks can be deceiving.
For a long time to come, when people speak about monetary madness Gideon Gono’s name will come up. He is the man who made his nation an international laughingstock. Monetary historians and hobbyists keep evidence of his handiwork framed on their office walls.
This author has evidence of Gideon Gono’s achievements tucked away in a drawer somewhere: a 100,000,000,000,000 Zimbabwean dollar bill. That is a one-hundred-trillion-dollar bank note issued by the Central Bank of Zimbabwe in 2008. It is the highest denomination that has ever graced a nation’s paper money.
The hyperinflationary Zimbabwe dollar has all the characteristics of a modern currency. It is printed on a fine paper stock, with carefully engraved scrollwork. It has both a serial number and a security strip running through it. There are also authenticating marks that are disclosed under ultraviolet black light. It bears iconic Zimbabwean images: the balancing rocks at Epworth on the obverse, and cascading Victoria Falls and a cape buffalo on the reverse.
It is all very dignified and official. It also bears the signature of the governor of the Reserve Bank of Zimbabwe, Dr. G. Gono.
The numbers that describe Zimbabwe’s monetary practices are so astronomical that the exact details hardly matter, but by 2009 the Zimbabwe dollar/US dollar exchange was Z$2,621,984,228,675,650,147,435,579,309,984,228 to US$1. That would be said as 2 decillion, 621 nonillion, 984 octillion, 228 septillion, 675 sextillion, 650 quintillion, 147 quadrillion, 435 trillion, 579 billion, 309 million, 984 thousand, 228 Zimbabwe dollars in exchange for one US dollar. Gideon Gono was printing money as fast as he could to stave off national bankruptcy.
But Zimbabwe was already bankrupt. Its people were trillionaires who could not afford their next meal. Carrying trillion-dollar notes, they began asking one another what comes after “quadrillion.” The currency was not worth the paper it was printed on. Indeed, the printing made perfectly good paper worthless.
Just over a decade ago, Zimbabwe was one of the most memorable modern inflationary episodes.
Despite the impoverishment that resulted from that period, today’s Zimbabwe persists in a similar monetary madness. This summer has seen monthly inflation rates thereof over 101 percent in July and about 77 percent in August.
Once a nation departs from sound money, gold, and silver, inflation, corruption, cronyism, ruinous interest rates, and wealth destruction are bound to follow. This brings us to the unfolding of our monetary crisis, driven by unrestrained Washington spending and unpayable US debt.
The following charts are from a Heritage Foundation report called The Road to Inflation: How an Unprecedented Federal Spending Spree Created Economic Turmoil.
First, Washington’s blow-off spending spree between March 2020 and December 2022 of almost $7.5 trillion.
Next, a chart of America’s exploding debt. In the way it has turned straight up, it can only be described as a “hockey stick” graph. Note that this chart represents so-called “debt held by the public,” which actually understates total US debt of $33.75 trillion.
And finally, a depiction of the Federal Reserve’s money printing (Quantitative Easing) dating back to the housing bubble in 2008. Federal Reserve assets basically consist of financial assets like the US government and mortgage bonds that the Fed has purchased with made-up money. To repeat, it acquired the trillions of dollars of assets shown below with money it simply digitally printed.
As the Heritage report says, “The Fed increased its asset holdings from roughly $900 billion to more than $8.9 trillion (mostly Treasuries) from 2008 through April 2022 during the multiple rounds of QE.
“Fifty-eight percent of this increase has been in the past two and a half years.”
Washington spending has exploded and has been paid for by Fed money printing. To repeat, “Once a nation departs from sound money, gold and silver, inflation, corruption, cronyism, ruinous interest rates, and wealth destruction is bound to follow.”
REAL MONEY FOR FREE PEOPLE tells the entire American gold story in a clear and easy-to-understand way. And because our own monetary madmen have gone down a Gono pathway of their own, you desperately need to see where it leads so that you can protect your wealth and your family. That is why we want you to have a copy of this important book absolutely free!
