How Money Became Worthless? Decades-old misguided economic policies have created a global fraudulent system that has persisted to this day but is set to end.
The Death Knell of Money: A Bitter or Sweet End?
August 1971 remains one of the most significant events in the history of global economics, even for future generations. It marks a turning point whose shadow will linger over nations’ economies for centuries. In this article, inspired by the End of the Road: How Money Became Worthless report from the YouTube channel Best Documentary, we delve into the flawed economic policies initiated decades ago. These policies have left a lasting impact, still visible in people’s daily lives worldwide. We will explore how this global fraudulent system has endured until now and how it is poised to end.
Table of Contents
Futile Billion-Dollar Bailouts of 2008
In 2008, the world experienced one of the greatest economic crises in history. Global markets plunged into a massive recession, and even economic giants, once deemed invincible, began their downward spiral. Governments quickly intervened, supporting major banks and financial institutions with cash injections and bailout packages to keep the global economy afloat. This action proved effective, as the global economy rebounded much faster than expected, averting a catastrophic collapse.
However, something still feels off—nothing is quite the same anymore. A growing sense of dissatisfaction is evident among people, and cracks have formed in the world economy and various aspects of modern life. People are struggling with economic hardships, unable to connect with the rapid economic changes around them. They wonder: Why, despite governmental support (like that in the United States) and subsequent multi-billion-dollar deficits, has there been no real economic growth? Why has unemployment risen, and why don’t people feel the same economic security as before?
The answers to these questions likely aren’t tied solely to the events of 2008 or the governmental efforts to revive the economy. Instead, they require a look back 80 years, to the end of World War II, marking the start of a prosperous era for many.
The Bretton Woods Agreement
In 1944, over 700 delegates from 44 Allied nations convened in Bretton Woods, New Hampshire, USA, to devise a new global economic system superior to the traditional pre-war model to ensure post-war economic stability. This meeting ignited what would become the golden age of the U.S. economy. By its conclusion, the U.S. dollar was established as the global reserve currency and medium of exchange, replacing gold. The agreement also led to the creation of the World Bank and the International Monetary Fund (IMF), backed by the United States, to oversee the system. According to the agreement, countries would peg their currencies to the U.S. dollar, backed by gold at $35 per ounce. This system allowed nations to exchange their currencies for U.S. dollars, effectively exchanging their money for gold. This model ensured that gold-backed all global currencies. The system also eliminated the need for physical gold transportation for international trade. Gold was securely stored in the U.S., and governments could exchange dollars for their reserves when needed.
1971: The Beginning of the Darkest Economic Era
Peter Schiff, CEO of Euro Pacific Capital, describes the shift: “After the Bretton Woods system, during the implementation of Lyndon B. Johnson’s Great Society program, we (the U.S.) faced budget deficits. The Vietnam War and massive gold purchases by other nations put immense economic pressure on the U.S. government. Countries realized that America had printed more dollars than its gold reserves could support. Consequently, they started exchanging their dollars for U.S.-stored gold and repatriating it.”
To prevent further depletion of U.S. gold reserves, President Richard Nixon temporarily halted the dollar’s convertibility to gold.
James Turk, CEO of GoldMoney, asserts that all modern financial issues stem from the decision made on August 15, 1971, to decouple currency values from gold. Gold provided a framework and discipline for governments to control currency value.
Jim Puplava, the chief strategist at Puplava Financial Services, explains: “Under the old system if a country had a budget deficit, it lost gold until the economic balance was restored. Without gold backing, countries perpetually run deficits. For instance, the U.S. has never had a budget surplus since 1971. Exiting the gold standard put us on a path of perpetual financial stimulus.”
Peter Schiff adds: “When Nixon ended the gold standard in 1971, he claimed it was temporary. It’s been 40 years, and we’re still waiting for this ‘temporary’ measure to end. The U.S. has faced massive deficits since the 1960s, exacerbated by the Vietnam War, the arms-and-butter economy, and the moon landing program, all funded by printing unbacked money. Foreign nations saw this and understandably wanted their gold back, knowing the U.S. couldn’t meet its obligations.”
When the dollar-gold link was severed, Nixon created a system where all global currencies were backed by “nothing”—what we now call fiat currency.
The number of countries that experienced economic crises from 1800 to 2009. Between 1945 and 1971, during the Bretton Woods system, almost no economic crises were observed.
James Turk defines fiat currency as money backed solely by governmental promises. “fiat” comes from Latin, meaning “money enforced by authority.” Fiat systems rely on public trust and government enforcement, but this trust is fleeting and fragile.
Mike Maloney, CEO of GoldSilver.com, states: “Today, no one in the world uses money. We all use currency, and a day will come when everyone understands the difference.”
G. Edward Griffin, author and conspiracy theorist, adds: “Money, as a medium of exchange, evolves to reflect intrinsic value. In the modern era, politicians have dismissed the need for intrinsic value in money, claiming it unnecessary. They’ve created a system where paper is declared money, and we are forced to accept it. This is the problem destroying the global economy today.”
Global currencies, lacking tangible backing, are now valued only in relation to each other. Weaker currencies allow cheaper production, incentivizing countries to devalue their national currencies to become more attractive trading partners.
Alasdair Macleod, a British economist, explains: “Every currency is valued against the dollar. When the dollar weakens, central banks intervene to stabilize their economies, ensuring that fluctuations in global dollar prices don’t disrupt domestic markets.”
What is a Ponzi Scheme?
To better grasp the impact of U.S. monetary policy on other nations, reviewing the concept of a Ponzi scheme is essential. This scheme has ensnared countless unsuspecting individuals over decades through various deceptive methods. A Ponzi scheme is a fraudulent investment plan promising high returns with little risk. Unlike legitimate investments, where money is used to create wealth (e.g., investing in real estate or the stock market), Ponzi schemes rely on recruiting new investors. The funds from these new investors are used to pay returns to earlier participants, giving the illusion of profitability. Over time, as fewer new investors join, the scheme collapses. At this point, the organizers—having pocketed substantial sums—vanish, leaving a trail of victims who lost their investments.
The “American Trick”
The removal of the gold standard from the dollar has allowed the U.S. Treasury to spend as much as it wants or lend to other countries. When the U.S. government needs money, it borrows from the Federal Reserve (the central bank of the United States). The Federal Reserve prints the money and gives it to the government, in return for a debt receipt called government bonds. This receipt is commonly known as an “I Owe You” (IOU).
With the money received through loans or bonds, the U.S. government pays its obligations to various governmental agencies. Meanwhile, the U.S. Treasury and the Federal Reserve work closely together to auction off these bonds. The auctions are held among the central banks of other countries, pension funds, and even private individuals so that the bonds are sold.
But why do customers buy these bonds? Or, in other words, why lend money to the U.S. government? Lending to the U.S. government is considered a risk-free investment. But if these loans are used for government payments and to pay back previous loans, where will the U.S. government obtain the funds for new debt from the sale of bonds and their interest? Is investing in these bonds like investing in a massive Ponzi scheme?
Edward Griffin believes that the U.S. Federal Reserve system is undoubtedly a devious Ponzi scheme, implemented by lending to other governments, which fall into the trap thinking they will reclaim the loans with high profits. Similarly, by receiving money in exchange for buying government bonds, countries are effectively handing over their money to the U.S. government, and this has become a norm. Central banks do not go through much trouble to acquire these bonds; with a few clicks on a computer, they enable the U.S. government to accumulate trillions of dollars.
This creates a responsibility for the Federal Reserve to return the money along with its interest. When the time comes to repay debts, the U.S. government cannot afford to do so and therefore begins selling new bonds to pay off old loans. Meanwhile, the U.S. Congress also has its own expenses, so part of this money must be paid to Congress, which causes the U.S. government’s debt to other countries to continually rise.
Mike Maloney says: “Under the current financial system, we borrow money and commit to paying it back with interest. If you borrow the first dollar produced, and that is the only dollar in the world, and you promise to pay it back with a little more as interest, where will you get the second dollar from? The answer is that you have to borrow it too. Therefore, this is a Ponzi scheme, because you can never pay it back and will thus keep sinking deeper into this pit.”
Since 1971, the U.S. government has faced trade deficits with other countries. This means that the volume of U.S. imports has always exceeded the volume of U.S. exports. The Japanese and Koreans provide cars and electronics, the Middle Eastern countries supply oil, and the Chinese supply nearly every item in U.S. stores. The U.S. government pays for these products with dollars, and all parties are satisfied with this transaction.
However, if countries convert these dollar profits into their own currencies, their national currencies would appreciate, making trade with them less cost-effective. Therefore, instead of cashing in their dollars, countries invest their dollar earnings by purchasing U.S. government bonds. As a result, countries sell their products to the U.S. and receive dollars that were borrowed from the Federal Reserve in exchange for IOUs. These dollars are then spent on purchasing more IOUs.
The funds received from the sale of these bonds are once again used to cover the U.S. government’s expenses; however, for this process to continue, larger loans are needed so that the government can pay back old loans and their interest. By paying off previous loans with newer loans, it seems that the entire world is investing their hard-earned money into a massive Ponzi scheme.
Edward Griffin interprets the situation as follows: “In the business of money production by governments, if the process of printing and producing money halts, the economy of that government will collapse, because the government is where the money is injected to pay debts. For this reason, printing money without backing is a classic Ponzi scheme, not an economic solution.”
Like anything unlimited, printing more money always leads to a decrease in its value, resulting in inflation. There was a time when a gallon of gas in the U.S. cost only $5, but now it has risen to between $50 and $220!
Peter Schiff defines the destructive effects of money printing more tangibly: “The process of printing money has even overshadowed the efforts of human labor. In the past, a person with a high school diploma and a technical job could easily provide for a large family in a country like the U.S. But today, even with higher education, people struggle to cover the costs of a small family. For this reason, people must work harder every day to meet their basic needs. On the other hand, instead of one person, all family members are now forced to earn income to maintain their standard of living.”
Since the gold standard was abandoned in the 1970s, people have been forced to work harder, and by the 1990s, household savings nearly reached zero, with families today relying on loans to make ends meet. This shift from normal living to survival mode has also resulted in governments being forced to tax their citizens more.
Adam Fergusson, a British author and journalist, and the author of When Money Dies, points out an interesting issue. He says: “Central banks tried to present a 2-3% inflation rate as a sign of a healthy economy, so they turned it into a target. The question is, why is 2-3% inflation better than zero inflation? You are told it’s certainly better than negative inflation! Because people are pleased with gradual increases in wages, assets, and capital. But in reality, this price increase is theft, because wage increases mean a decrease in the value of people’s labor.”
Eric Sprott, a Canadian billionaire and CEO of Sprott Asset Management, stated: “In the global economy, where the value of currencies is only measured relative to each other, countries are able to manipulate and devalue their national currencies to make their economies more competitive.” A country with a lower currency value can produce a product at a lower price, which creates better conditions for exporting that product.
This is a policy that is frequently applied in many countries, and yet many countries still have not recovered from their economic losses.
Have We Reached the End of the Road?
Since 2008, Americans have been continuously taking loans from the government to maintain their standard of living. However, it appears this approach has reached its limit, as people can no longer push their lives forward by increasing debt. On the other hand, banks are less inclined to provide additional credit to consumers, and many individuals are concerned about how they will repay their existing debts. This indicates we are at a precarious juncture because this model seriously threatens the global economy. The massive Ponzi scheme within the global economic system relies solely on continuous debt growth for its survival.
Mike Maloney compares this policy to a black hole: “If we want to manage the situation with the current amount of dollars in circulation, paying deposit interest erodes the money supply. Thus, we will be forced to borrow more currency each month. A system structured this way compels us to print more money, or else the system will collapse. Politicians and leaders make lofty promises about reducing debt, but this is impossible without the complete collapse of the economy. This means we are being swallowed by this black hole, and unless world leaders find a way out, they will witness an overnight collapse beyond their imagination.”
Peter Schiff shares a similar sentiment, stating: “The problem is that we have strayed from the main path and can no longer lift this heavy log. Each round makes the log heavier, and eventually, it will crush us.”
The 2008 financial crisis marked the onset of the first symptoms of cancer in this Ponzi scheme. Global leaders did not stand idle; they delayed the inevitable collapse by supporting financial institutions and banks. To support their citizens and financial institutions, they began taking massive loans, hoping to navigate through the crisis.
James G. Rickards, CEO of Tangent Capital Partners, describes the events following the 2008 crisis: “In 2009 and 2010, the U.S. government managed the crisis by injecting money, issuing bank guarantees, printing money, and increasing liquidity. Governments have this power, and we should not underestimate their ability to dictate and regulate the economy. However, this only works in the short term, not in the long term, as the problems remain unsolved, and debt continues to grow. Banks are still in debt, and economic growth has stalled; therefore, we have not resolved anything.”
Edward Griffin also agrees that creating more money does not solve the problem: “The method governments have employed to manage the crisis—producing unsupported money and injecting it into the economy to increase purchasing power—has not solved the problem. Instead, it has worsened the situation and postponed the crisis to the future. The Federal Reserve’s money injections gave the economy a temporary boost, but what will be the long-term and larger-scale consequences?”
Peter Schiff predicts that the United States will soon witness a sharp decline in the value of the dollar, possibly by 20% to 40%. People worldwide have purchased dollars as a store of value for years. Once they realize the dollar has lost its value, they will seek alternatives to protect their wealth. Currently, the dollar benefits from fear-based trading. But what happens when this fear turns against the dollar itself? The Federal Reserve’s printing of unsupported money has not only triggered severe inflation but also raised the risk of a global loss of trust in the U.S. dollar.
James G. Rickards is confident that the U.S. will face a monetary crisis, saying: “It’s hard to predict what event will trigger it and when, but it will undoubtedly happen. This is like a natural disaster that will cause a significant political shock and lead to the erosion of international trust.”
Peter Schiff explains: “This disaster could resemble putting the U.S. Treasury up for auction, but the problem is that there will be no buyer, and interest rates will begin to rise. Economic players, large investment funds, and central banks will rapidly devalue the dollar.”
As with all Ponzi schemes, when participants realize they’ve been deceived, they withdraw, and the scheme collapses. When key players like foreign central banks stop buying dollars, the Federal Reserve attempts to create demand. However, this time, the only buyer in the market will be the Federal Reserve itself. This marks the end of the game—or the beginning of hyperinflation.
James Turk describes hyperinflation as follows: “Hyperinflation is defined by a very rapid increase in inflation rates. It occurs when a currency loses public trust. During this time, the government spends all its assets and is forced to borrow money. The central bank then converts this debt into currency by printing more money.”
Adam Ferguson adds: “The question is, how high will inflation go—15%? 20%? Or 30%? Whatever the rate, it will create widespread panic when it happens. Hyperinflation drives up the prices of goods and services, feeding itself. People shift to barter systems to move away from the dollar. They spend their dollars on essential items, turning money into necessities. As a result, demand for cash rises because everyone wants to spend their money quickly. Life becomes a daily struggle. Retirees may return to work, homes fall into disrepair as people prioritize essentials, and landlords struggle to maintain properties. How will they pay taxes? I think hyperinflation will collapse the entire economy. The Federal Reserve’s initial response will likely be more inflation, printing even more money to stimulate the economy, which is the root of the problem.”
At first glance, this seems like a problem confined to the United States. However, many countries have heavily invested in U.S. government bonds. The loss of trust in the dollar could trigger a global economic crisis affecting every country.
James Turk reflects on the consequences of U.S. hyperinflation: “If the U.S. dollar experiences hyperinflation, the ramifications will be profound. When hyperinflation devastated a country like Zimbabwe, what catastrophe could unfold if the world’s reserve currency collapsed? The magnitude of the consequences would be unprecedented and unpredictable. Logic suggests that most countries will face severe economic problems since much of their reserves are in U.S. dollars. Mismanagement and poor policy decisions have historically devalued currencies worldwide, and the U.S. is currently following the same path, heading toward what I call the fiat currency graveyard.”
Interestingly, in 2002, Ben Bernanke stated that the U.S. government possesses a technology—the printing press—that allows it to produce unlimited amounts of dollars at no cost. Bernanke is now the chairman of the Federal Reserve!
Hyperinflation may be one of the scenarios the world faces today. History has shown that whenever governments propel economies forward with artificial fiat systems, the result is always a disaster.
Mike Maloney asserts: “Failure is a 100% proven statistic with no exceptions; fiat money is destined to fail. We experienced this bitter truth 40 years ago when the entire world shifted to fiat currency, marking the end of the Bretton Woods system. If trust in the dollar collapses—and I believe this will happen within this decade—people will turn to a safe and reliable alternative, one of which is gold.”
Edward Griffin agrees: “The only real solution is a unified currency backed by real assets. While this doesn’t necessarily have to be gold or silver, societies have historically reverted to these assets through trial and error. This is a clue worth exploring.”
Amid global distrust, a return to a gold-backed economy seems entirely logical. So why isn’t it being seriously discussed? The answer is simple: those at the top of the pyramid benefiting from this Ponzi system don’t want the game to end. Many now believe that gold and silver prices are manipulated to prevent their use as global exchange tools. Governments suppress gold’s value to maintain the dollar’s status as a store of value, even though the dollar has lost a significant portion of its value over the years.
Research by the Gold Anti-Trust Action Committee (GATA) points to deliberate suppression of gold prices using various methods.
Bill Murphy, chairman of GATA, states: “Over 12 years, we’ve gathered extensive evidence of gold price manipulation. It’s akin to a murder trial where the jury has no doubt about the defendant’s guilt, yet we must still present every piece of evidence to the court.”
Mike Maloney provides evidence of manipulation, emphasizing that while proving certain methods is challenging, clear examples exist, such as central banks varying their sales volumes at specific times.
Between 1999 and 2002, the Bank of England shockingly sold off a substantial amount of Britain’s gold reserves at an average price of $275 per ounce, using the proceeds to purchase euros and U.S. dollars. Subsequently, governments in Canada, France, and Switzerland also sold significant portions of their gold reserves.
Eric Sprott explains the reason behind this: “Central banks sold 400 tons of their gold annually. But the question is, why did they do this? Surely, it was the most foolish decision anyone could make. They repeated this every year. Now that gold is above $2,000 per ounce, why were they selling? Because they wanted to keep prices low. It was a coordinated effort to divert all beliefs and focus towards money.”
How is the global price of gold manipulated?
Alan Greenspan, former Chairman of the U.S. Federal Reserve, admitted to gold price manipulation during a congressional hearing.
While central banks are allowed to sell their gold reserves, they also have methods to suppress its price. Some investors believe that Western central banks lend their gold reserves to bullion banks. These bullion banks sell the gold with the intention of repurchasing it later at a lower price, using the proceeds to buy U.S. bonds. This practice in itself isn’t an issue; central banks report having thousands of tons of gold reserves but also count the gold they’ve lent out as part of their holdings.
Thus, when a central bank declares its gold reserves, part of the reported amount might actually be with a bullion bank and possibly already sold to purchase bonds. Sales of gold by bullion banks lead to a decline in global gold prices, similar to when central banks sell directly. The difference lies in the fact that such loans don’t appear on central bank balance sheets.
Years ago, the U.S. Treasury altered its method of calculating gold reserves. It began including gold held in custody from other countries, summing it with U.S. reserves. This was a blatant example of fraudulent accounting. But why is there so much effort to keep gold and silver prices low? Why are the true values of these metals threatened by Ponzi scheme designers?
Peter Schiff answers: “There’s a fierce competition between gold and national currencies because gold is the only real competitor to them. Gold is money, and these national currencies are derivatives of money that circulate in its stead. Fiat currency gives power to governments, while real money returns power to the people. If you have real money, governments are limited. They can ultimately only tax money in circulation, and people are always resistant to taxation. Thus, as long as governments can print nothing and lend it, they can easily control and run the economy—something all of them do.
Gold protects people from irresponsible government policies and curbs governmental freedom. Yes, gold is a major enemy for governments because it is a friend to freedom and a safeguard for people against governance.”
Bill Murphy agrees: “Gold competes with the dollar, and when it rises, inflation is threatened. Gold serves as a barometer for the performance of the U.S. government. When gold roars and shakes the world, it commands all attention. In such cases, the U.S. government turns to Wall Street and politicians to pull the price-release valve!”
The U.S. government and Wall Street don’t want you to trade gold and coins; they’d rather sell you paper instead. -Jim Puplava
Despite governments’ enthusiasm to suppress gold and silver prices, there’s always been increasing demand for these metals over time. This has become a significant issue for central banks. Over the years, they’ve sold vast amounts of their gold reserves to control prices. The fact that everyone is now a gold buyer is alarming for them. -Alasdair Macleod, Gold market analyst
To keep gold prices low, Western central banks have had to sell or lease their reserves. Consequently, their vaults have gradually emptied, and no one knows if the gold sold or leased exceeds their physical assets. If this is the case, it would constitute one of the world’s largest frauds—a cunning conspiracy orchestrated by all governments. Most of the world’s gold reserves are held by the Federal Reserve Bank of New York and the Bank of England. The gold rarely leaves these facilities; it is merely moved from one shelf to another, with ownership tags being swapped.
Edward Griffin raises the question: If all gold owners, especially key players, simultaneously demand their physical gold, would it be physically possible? He argues that this game cannot continue indefinitely. Sooner or later, people will demand their physical gold and silver, a process already underway. The lack of transparency in central bank gold sales hasn’t drawn significant attention yet. However, as demands for physical gold surge, central banks’ reserves are depleting, setting the stage for an imminent scandal.
Edward Griffin holds no hope for governments to rectify the situation, blaming it on politicians:
“Central banks and the politicians in power can only create unbacked money to induce inflation. They have no other solution for this predicament. As long as we let them lead us and rely on them to solve the problem, how can we expect improvements? This is their only tactic. You can’t expect a fraudster to start a legitimate business because they don’t know how. Likewise, you can’t turn to statesmen for solutions—they simply don’t have them.”
Today, it’s increasingly clear to people that gold preserves value far better than paper money. Edward Griffin makes a critical point: “What you need to understand about gold’s price is that it isn’t gold becoming more valuable; rather, the dollar’s value is collapsing. Gold’s value, established through human effort and financial might, has remained constant. The gold we buy today has the same intrinsic value it had 2,000 years ago. The actual cost of mining and acquiring gold today matches the effort required two millennia ago.”
Gold is financial insurance; you buy it to preserve the value of your assets. You are compelled to do so because history is replete with financial crises. -Jim Puplava
The current financial system might eventually collapse. But where there’s a threat, there’s also opportunity. Peter Schiff views the global economic situation optimistically: “Today might not be the apocalypse or the end of America, but it could signify the beginning of a massive economic boom for many countries. A world where we no longer need to hand over trillions of dollars to Americans or rely on goods produced in other countries. This is something not to fear but to embrace as a free and new world.”
While this Ponzi scheme has devoured people’s wealth and labor for decades, the future belongs to the world’s people. By adopting a realistic perspective and avoiding political and economic bias, we can envision a future free from dependency on governments—a reality that will inevitably arrive.
