Honest Money

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HONEST MONEY
The Biblical Blueprint for Money and Banking

Gary North

www.garynorth.com

copyright, Gary North, 1986, 2005 If you want more information on biblical economics, visit www.garynorth.com. See the section, Capitalism and the Bible. There are over a dozen books offered for free. If you want detailed information on successful financial planning, it is available at www.garynorth.com.

Table of Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1. The Value of Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2. The Origins of Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 3. Maintaining Honest Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 4. Debasing the Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 5. The Contagion of Inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 6. When the State Monopolizes Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 7. Legitimate Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 8. Fractional Reserve Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 9. Protecting the Counterfeiters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 10. A Biblical Monetary System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110

INTRODUCTION
I wrote this book in 1986. I have converted it into a new format: a manual rather than a printed book. The book was originally part of a series called the Biblical Blueprints Series, jointly published by Dominion Press and Thomas Nelson Sons (first four volumes). There were ten volumes. The set is still available in the original format, except for this book, which has been reprinted by another company. All of them are available free of charge on this Website: http://www.freebooks.com This is a book on money, a subject that has defied analysis by professional economists for as long as there have been professional economists. At the same time, it is a topic for which the most ill-informed people think they have the answers. Very often the most ill-informed people are professional economists. I will give you an example. In the fall of 1985, I suggested to a research assistant to a U.S. Congressman that he conduct a quick study of the Mexican peso. I thought that the sharp increase in cash American money in circulation might be explained by Mexican nationals substituting dollars for pesos in Mexico. At the time that he began his investigation, the peso was selling for about 250 per dollar. I suggested that he ask a staff economist at the Federal Reserve System, our nation’s central bank, if he thought that Mexicans were hoarding cash dollars. I suspected that Mexican citizens were using the U.S. dollar as a substitute for the collapsing peso. He phoned back a few days later. Two staff economists, one of whom was a specialist in the Mexican economy, had told him that it was quite unlikely that Mexicans were hoarding dollars, because Mexicans could take cash dollars to their local bank, exchange their dollars for pesos, and the bank would pay them interest in pesos. Within one week, the peso fell to 500 to the dollar. Thus, anyone who had followed the advice of the expert economists had lost half of his capital. On the other hand, those who had bought cash dollars with their pesos and never went near a bank had doubled...
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