They will have to trim their overhead expenses and eliminate some of the plush. Profit margins will be tightened. Efficiency will improve. They used to offer 'free' services which actually were paid out of interest earned on their customers' demand deposits.
Now they will charge for those services, such as checking and safe storage of deposits. Customers probably will grumble at first at having to pay for those things, and there will be no more free toasters.
Electronic transfer systems will probably become popular for their convenience, but they will be optional. Cash and check transactions will continue to play an important role. Government monitoring will be illegal. Although there will be fewer dollars in circulation than there were Federal Reserve Notes, the value of A REALISTIC SCENARIO
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each one will be correspondingly greater. Each person will end up with the same purchasing power he had before the conversion. For a short period, both the old and the new money will circulate together, and some people will have difficulty making the necessary calculations to determine their relative values. But that is a routine operation for people who live in Europe or for anyone who travels to a foreign country. There is no reason to think that Americans are too stupid to handle it.
SOME BAD NEWS AND SOME GOOD
We should not delude ourselves into thinking that this will be an easy transition. It will be a very difficult period, and people will have to get used to a whole new way of thinking and doing. The freeze on the current money supply may trigger panic in the stock market and the business community. Stock prices could tumble, causing paper fortunes to disappear back into the computers from which they came. Some businesses may fold for a lack of easy credit. Weak banks will be allowed to close rather than be bailed out with taxes. Unemployment may worsen for a while. Those who have been used to a free ride will now have to walk or push or pay their way. The masses on welfare will not give up their checks and food stamps quietly. The media will fan the flames of discontent.
The Cabal will be at every switch to derail the train.
This will be the moment of our greatest danger, the moment when the people could tire of their hard journey in the desert and lose interest in the promised land. This is the time when they may long for a return to captivity and head back to the slave pits of Pharaoh.
The important point, however, is that most of these problems would be temporary. They would be present only during the period of transition to a new money. As soon as free coinage is available at the Mint, and as soon as people see how much demand there is for silver and gold coins, there will be a steady stream of miners and jewelers who will add great new stores of precious metal to the nation's monetary stock. Foreigners undoubtedly will add to the inflow. Old silver and gold coins will also reappear in the market place. Very quickly, as the stores of precious metal respond to supply and demand, the quantity of money will
increase and its per-unit value will drop to its natural equilibrium.
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THE CREATURE FROM JEKYLL ISLAND
Won't that be inflation? Yes it will, but it will be significantly different from inflation by fiat money on four counts: (1) instead of being caused by politicians and bankers attempting to manipulate the economy to enhance their personal agendas, it will be caused by natural economic forces seeking an equilibrium of supply and demand; (2) instead of being harmful to the nation, leading to the destruction of the economy, it will be part of a healing process, leading to prosperity; (3) it will be less severe than what we will experience if we do
inflation.
No matter what scenario unfolds in the future, there is white water ahead. We had better tighten our straps and prepare for the rapids. We owe it to ourselves and our families to take measures which will increase our chances of coming out at the other side. If the pessimistic scenario is played out, it will make little difference what we do, because there will
To fully appreciate the wisdom of some of these measures, it is well for us to pause and consider the possibility that a transition to economic safety and sanity will not be orderly. Another variant of the realistic scenario is that our entire system could collapse, including the international structure being assembled at the UN. If that should happen, we won't have to worry about an orderly transition to a sound monetary system, because it won't happen.
Our primary concern will be basic survival.
Economic chaos and civil disorder would not
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people were well enough informed to know in advance what the enemy's game plan is, and especially if they were in the right places within the system, they might be able to provide leadership at the critical moment. If there is blood in the streets and long periods of anarchy, it is theoretically possible that groups of enlightened individuals who have prepared in advance could move into the power vacuum and take charge. That may sound like another pessimistic scenario, but it is not. In the final analysis, it may be the most realistic one of all. But we should not hope for it. All we can do is prepare for it should it come to pass.
HOW TO PREPARE
What can we do to prepare financially? To avoid making this a lengthy dissertation, let's use the outline form. Elaboration should not be necessary.
1. Get out of debt. A mortgage on one's home is a logical exception, provided the price is right. Borrowing for one's business is also an exception if based on a sound business plan. Speculative investments
