Penthouse Retrospective

by James Dale Davidson Originally Published: August, 1980

Money Hungry | 40 Years Ago This Month

Since a secret meeting in 1910 at the island estate of J. P. Morgan, bankers and their hireling politicians have progressively devalued the dollar and our labor to make themselves even richer. A long-term depression will be the result.

Penthouse Magazine - August, 1980The Planned Destruction of the Dollar

Despite my views about the value to society of greater publicity for the affairs of corporations, there was an occasion, near the close of 1910, when I was as secretive-indeed, as furtive — as any conspirator… I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System. — Frank Vanderlip, president of the National City Bank of New York.

One of 1979’s remarkable movies was The In-Laws, a helter-skelter farce starring Peter Falk and Alan Arkin. It was interesting, not only as entertainment but also for what it said about our economy. The In-Laws was the first movie to take the U.S. dollar as its comic premise.

The plot goes something like this: Falk, an apparently demented intelligence agent, draws his would-be in-law, Arkin, through a series of desperate adventures in an effort to save the U.S. economy from hyperinflation. What does it all mean? “Trust the common man,” Arkin shouts, demanding an explanation. Falk responds by describing the Eurodollar market. It seems that less-developed countries (now known as L.D.C.’s) have racked up a debt in the billions, so big that “they’ll never pay it back.” To help repudiate the debt, a Latin dictator (who is a cross between Gen. Omar Torrijos and the fellow who used to peddle velveteen paintings in the parking lots of gas stations) has a plan to destroy the world’s monetary system. He has stolen the engraving plates used to print various currencies, and as soon as he gets the plates for printing the dollar, he plans to run off hundreds of billions. The result, according to Falk, will be an inflation “so big that money is not worth anything. They will be papering walls with it. A six-pack of beer will cost $1,200.”

The funny thing about this movie is that its premise is basically true. Only the details are false. There is a concerted effort to print more and more money, in part to help underdeveloped countries repay their staggering debts with ever more worthless currency. The leaders of this scheme are not the dictators of banana republics but Wall Street bankers and officials in the Carter White House. They are the inflationists who are working to destroy the dollar. They don’t have to steal the plates from the Bureau of Printing and Engraving to do so. They already have them. They use them day in and day out to print more and more money, money that never existed before, money that is nothing but paper with ink on it, money that buys less every day because there is more of it every day.

With the inflationists running the printing presses, you will be lucky if you don’t end up paying $1,200 for a six-pack.

To protect yourself, you need to know more than you can find out at the movies. By the time the evils of paper money have become prominent enough to be impressed upon scriptwriters, directors, and producers in a money-grubbing community like Hollywood, you can be sure that the problem is far advanced.

Inflation has become so pronounced that even persons of the simplest understanding know that money doesn’t buy what it used to. What few understand is why this is so and how the whole process came about. What follows is an account telling who bankrupted America and why.

It is no coincidence that your dollar is worth less today than it was 5, 10, or 20 years ago. Powerful persons want it that way. America has been a wealthy country, and its people have been productive. Only a concerted effort over generations could have emptied your money of value to the point where it is now worth only one-eighth as much as a Confederate dollar, a currency backed by a government that has been defunct for 115 years. Seen another way, it now takes ten times as many paper dollars to buy an ounce of gold as it did ten years ago.

For most of American history, our Treasury Department bought and sold gold at $20 per ounce. Anyone with a paper dollar, from the neighborhood grocer to a foreign government, could turn up in the Treasury with $20 and obtain an ounce of gold. Under those circumstances the dollar quite literally was “as good as gold.” It had to be. The people kept it that way. Not that the politicians and bankers did not try to reduce the value of money; they did. Yet in spite of all the wars and innumerable inflationary banking “bubbles” of the nineteenth century, the dollar in 1913 was worth as much as it had been in 1813. The dollar remained a sound money because the government could not create additional dollars beyond what the people really wanted. As long as the people retained an easy way of bringing inflation to a halt, it was impossible for inflation to get out of hand. People merely had to go to the Treasury and redeem their paper for gold.

The politicians and bankers, of course, did not want to be controlled by the people. In 1913 the Federal Reserve Act was passed, largely as a way of facilitating inflation. The new system reduced popular control over the money supply. It made printing money easier by making it more difficult for consumers to withdraw assets from inflationary banks. With the people less able to reduce the money supply, bankers were able to increase their profits by expanding the money supply.

Inflation, deflation, bull markets, bear markets, bare breasts ... they all point to a seemingly inbred American philosophy: Money Hungry.

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