Why Are We Defending A Worthless Currency?

Submitted by Danny Gill
FIAT Money

FIAT Money

The economic historians tell us that around 5,000 years ago, the Egyptians (who by the way were Black people) were using gold and silver as their currency. However, as the pieces of gold and silver were odd sizes and weight, they could not be considered as money. These economic historians indicated that the Egyptians needed to satisfy certain criteria for their currency to be considered money.

Currencies are defined as: Portable (they can be carried around); Durable (they will last long); Divisible (they can be broken down into units or dollars etc); Fungible (they are interchangeable. A dollar is a dollar where ever it is); and they are media of exchange. On the other hand, Money is defined similarly except that it has a store of value over a long time. For instance, most currencies can be devalued, but money in the form of gold and silver always retain its value.

The Barbados Dollar is pegged to the US Dollar at an exchange rate which fluctuates slightly. In other words, the Barbados Dollar is only as strong as its anchor the US Dollar. When the US Dollar first emerged, each unit or dollar bill was backed by its unit worth of gold.

That is, a twenty US Dollar Bill was worth a similar value of gold dollar coins which were kept or preserved in the Federal Reserve. The currency or dollar bill was only a receipt or claim ticket which on presentation at a Bank would result in the claimant receiving twenty gold dollar coins.

During and the World Wars, things changed; the US Government was almost the sole provider of goods and services to the warring countries and as a result, more US Dollars saturated these countries than the supposed gold that should have been in the Federal Reserve. Countries were paying for their goods and services in gold and the US Government was printing more and more dollar bills to satisfy the market. Things changed around the late sixties when the Government of France insisted and called for its worth of gold in proportion to the US Dollars it had. This caused a run on the Federal Reserve and it lost one third of its value of gold, as other countries followed suit. The US Government had been indulging in deficit spending and debasing the value of its dollar, something not unheard of in our modern times. In fact by 1971, President “I am not a crook” Nixon totally removed the US Dollar from the Gold Exchange Standard. Thus, paving the way for the numerous bail outs and financial packages supported by Presidents Bush and Obama.

In short, the economic historians are accusing Washington of abandoning the solid, tried and true backing of its currency by gold to the current Fiat Currency which is backed by the US Government’s good will and IOU’s in the form of Treasury Bills and other instruments. Not only the US Government but most other Governments worldwide have chosen this course of financial action as the Fiat Currency process allows government to print money and engage in deficit spending without batting a sweat. Yet, this flies fully into the economic adage which insists that currencies do not store value (like precious metals) but lose their value even further when governments print money. It is also flies in the face of Milton Friedman’s definition of Inflation which he said is the expansion of the currency supply which in turn causes prices to rise. To date the countries guilty of this practice are, to name a few: China, Singapore, South Africa and India. The top economists here would have to say whether Barbados is also guilty of this practice.

Now if what the economic historians are saying is true, then most currencies are useless pieces of paper. The world could also be sitting on a paper currency bubble which is about to burst. It also means that by extension the Barbados Dollar could be a useless piece of paper. Why then are we defending it so mightily?

51 thoughts on “Why Are We Defending A Worthless Currency?

  1. @Danny

    If you listened to the talk show today you heard Dr. Clyde Mascoll and Jerry Stephens – both economists – rubbish the idea devaluing of the Barbados dollar. Their argument was we pay for most of our imports in US dollars and and depreciation of our dollar would mean twice as many tourists would have to visit Barbados if we devalued the currency say 4:1.

  2. By the way, where is the first quarter report from the governor of the central Bank? Even if he was away, could not the deputy governor deliver the report? But there again, this governor has so politicised the Central Bank that maybe no one would want to do the dirty work………leave him to it!

    Gosh the big man on DLPTV now after seemingly being in hiding for weeks…………..some bad news must be coming this week!

  3. What’s not mentioned above is how the US keeps the value of the US dollar relatively high compared to other major currencies by ensuring the role of the US dollar as the global reserve currency (especially for oil sales, AKA the petrodollar system) is not allowed to be challenged by any upstarts who might set a bad example for other nations to follow – e.g. Saddam Hussein ( was selling Iraqi oil for Euros under the UN approved oil for food deal), Col. Gaddafi (before his demise was making plans to sell Libya’s oil for Libyan gold-backed dinars), and now the latest one straying off the reservation is none other than Vladimir Putin ( who – surprise, surprise – has declared that Russia is going to start selling its oil for rubles).

    Preparing for the Collapse of the Petrodollar System
    by Jerry Robinson


    This brief article details the actions, incentives, and related consequences that the United States has created through its attempts to maintain global hegemony through something known as the petrodollar system.

    This article will begin with a look back at the important events of the 1944 Bretton Woods Conference which firmly established the U.S. Dollar as the global reserve currency. Then we will examine the events that led up the 1971 Nixon Shock when the United States abandoned the international gold standard. We will then consider what may be the most brillant economic and geo-political strategy devised in recent memory, the petrodollar system. Finally, we conclude by examining the latest challenges facing U.S. economic policy around the globe and how the petrodollar system influences our foreign policy efforts in oil-rich nations. The collapse of the petrodollar system, which I believe will occur sometime within this decade, will make the 1971 Nixon Shock look like a dress rehearsal.

    If you have never heard of the petrodollar system, it would not surprise me. It is certainly not a topic that makes it’s way out of Washington and Wall Street circles too often. The mainstream media rarely, if ever, discusses the inner workings of the petrodollar system and how it has motivated, and even guided, America’s foreign policy in the Middle East for the last several decades.

    More at:

  4. David;

    Given what the economic historians are saying, the Barbados Dollar’s future shall not be controlled by Barbados. Dr. Mascoll as a student of developmental economics knows that very well, especially where the country finds itself in a position where it is borrowing to prop up its dollar. When those institutions refuse to loan funds for that propping up enterprise, the dollar devalues.

    Where others are pushing the purchasing of gold and silver, I believe that as Barbadians the purchasing of land would be a sure way of riding this bubble when it bursts, but that too may be priced out of hands of ordinary Barbadians. From what is being said the tie to the US Dollar shall be a very very shaky tie, but we have built our economic tent around it.

    Never mind what economic jargon is attached to the narrative, when the US Dollar goes so goes the Barbados Dollar!

    • @Danny

      The reordering of the global economy is therefore instructive:

      Crowning the dragon

      Apr 30th 2014, 0:02 by J.M.F. and L.P.

      • China will become the world’s largest economy by the end of the year

      UNTIL 1890 China was the world’s largest economy, before America surpassed it. By the end of 2014 China is on track to reclaim its crown. Comparing economic output is tricky: exchange rates get in the way. Simply converting GDP from renminbi to dollars at market rates may not reflect the true cost of living. Bread and beer may be cheaper in one country than another, for example. To account for these differences, economists make adjustments based on a comparable basket of goods and services across the globe, so-called purchasing-power parity (PPP). New data released on April 30th from the International Comparison Programme, a part of the UN, calculated the cost of living in 199 countries in 2011. On this basis, China’s PPP exchange rate is now higher than economists had previously estimated using data from the previous survey in 2005: a whopping 20% higher. So China, which had been forecast to overtake America in 2019 by the IMF, will be crowned the world’s pre-eminent country by the end of this year according to The Economist’s calculations. The American Century ends, and the Pacific Century begins.


    It dont matter what CHINA do , it will not matter what the USA does, When Emmanuel was Born they gave him Gold
    When he was sold out it was for Silver
    Silver was worth more then Gold in Europe
    USA made Gold with more than Silver on this side of the Atlantic
    Gold and Silver as money is to be COINED US CONSTITUTION
    AND PAYMENT OF ALL DEBTS, and not so-called paper
    Barbados put up Gold to be able to pay the printing game ,, anti up
    The US debt in the ratio to Barbados debt ran far from Barbados,
    SO Barbados debt might have to go up by 10time or more to be equal , before it goes up, Barbados seem strong ,
    Its the Fraud of internal Ministers is the problem , The World have nothing to do with Barbados problems ,
    Look to COW and Ham being friends working with Standford ,
    Big crooks need big crook lawyers, We need to get rid of UDC and VAT , and do not tax local made or grown goods,
    No matter the news, the flying fish and trees will still grow food ,
    try not to be fooled
    .Barbados is being baited .

  6. Green Monkey:

    The petro dollar system is still another economic ruse. Oil does not have the stability in terms of value as precious metals or land.

    My concern is that we have as a country invested in training a number of economists and at times like these their voices should be echoing not been heard mainly as voice pieces for political parties.

  7. Crowning the Dragon
    China has been heralded as this enormous economic giant that shall swallow the west. But if Europe and the US do not buy her good and services where will China sell them. China’s other problem is its population; there remains a deep divide between the skills to be found in rural areas and the urban areas. Therefore a revamping of the economy can throw up the specter of structural unemployment. China is not ready for this world domination that has been bantered about for a while.Furthermore, she is tied to the US with the enormous amount of treasury bills she owns or has invested in.

    • @Danny

      China has a large undeveloped domestic market.

      On Sunday, 4 May 2014, Barbados Underground wrote:


  8. David:

    Africa also has a massive underdeveloped market. I don’t hear any one talking about Africa being an economic power or having the potential. Remember, China built the wall; went domestic and was left behind by all. You should also be aware that the great population growth will be in Africa!

    • @Danny

      Africa us a collection of countries at various stages if development not to mention political leadership. China is operating at a different level.

      On Sunday, 4 May 2014, Barbados Underground wrote:


  9. My concern here is that we in the Caribbean are facing what shall be in the future bumpy economic times. Yet, the effects shall be felt by the ordinary man and woman who can not get a Bank account in the US. We are also facing the possibility of getting up one morning to find that the savings in the credit unions and the banks which Bajans love to do are worthless or worth a lot less. But no one is discussing the night mare. If the US Dollar collapses, then the money in the US accounts shall be useless.

    We are like a rider on an angry economic bull.

  10. David:

    Africa still remains a large market. China is not homogeneous; it is a collection of numerous people and cultures.

  11. I agree with you Danny Gill, paper currency is worthless. Let us all burn it in Independence Square on Friday evening.

    You can come for mine tomorrow. My address is

  12. The writer has asked a pertinent question. It is a question pregnant with meanings. With the writer’s permission we shall attempt this short answer.

    Barbados is still a colonial state despite the mouthings of most. Implicit in this national mindset is the acceptance of the fate of others. Barbados has not even been able to do a strategic re-deploment of foreign reserves. A move if taken some years ago would have benefited from the downward valuation of the dollar viz a viz certain commodities and other currencies. Barbados is prepared to live or die by the once almighty US dollars. Sine die!

  13. There are many serious and erroneous misconceptions, myths and falsehoods contained in the above lead thread.

    The PDC has evolved so far thirteen (recently twelve) fundamental principles concerning money and its uses in Barbados.

    It on the basis of these very vaunted and very well conceived principles and other truisms, that we propound that there are these gross and fundamental errors, myths and falsehoods contained in the said thread.

    Moreover, it is the continued propagation and practice by many people in this country ( especially DLP/BLP governments and so-called economists) of those and other kinds of foolish errors, myths and falsehoods, that are helping to create massive, and in some instances irreversible, problems and adverse implications for the long term social, political, material and financial growth and development of this country.

    We shall just state some of the downright errors, myths, misconceptions and falsehoods without explaining why at this stage significantly because we have on numerous occasions in the past on here and elsewhere given clear lucid ideological philosophical factual scientific explanations to why they are so and duly providing much evidence of such.

    So here we go:

    1) Money (local or foreign ) do not contain values – they contain, among other things, denominations. Values – in this sense – are digitized characters images in the “minds” of the relevant people. They CANNOT be devalued. Thus too monies/currencies CANNOT be devalued by any means in the local international commercial realms in which they are used. No wonder there is a massive and illogical contradiction between the author’s claim that currencies are fungible (which is another patent falsehood) and his claim that most currencies can be devalued.

    2) Money is and can NOT be a medium of exchange. Money is a non-tradeable, non-ingestible (non-consumable), measurable, usable, recyclable, socio-psychologically reactable to, physical commodity – and the only one of its kind in the world that carries denominations for purposes of its users creating its uses out of their own incomes, revenues and transfers (nominal). The fundamental purposes of money therefore are to represent such incomes, revenues, transfers and to measure such incomes, revenues and transfers (nominal).

    3) There is no exchange rate that exist between the Barbados Dollar and the US Dollar or any other monies, dollars or currencies. There are no relationships between these monies/currencies. None whatsoever!! What there is are mere contrived artificial ratios in terms of how the relevant people operate such ratios in relationship to the said monies/currencies in the international money/monetary systems over. Such has emerged out of the subject of mathematics.

    4) The expansion of the amount of money does NOT cause prices to rise. That is utter rubbish by the late Milton Friedman and some other monetarists. The fact is that PRICES do NOT exist!! Putting together letters, and calling the word PRICES, do not mean that what the speakers signify – in the real world – by PRICES exists. So there is no connection between the fact of an expansion in the money available to the public and the devious vulgar misconception myth of prices.

    Therefore the great educational political thrusts, for us, does NOT revolve around the false and unstudied perceptions about the value of the Barbados Dollar, the devaluation of the Barbados Dollar, etc. since we have already long powerfully repudiated disproved them, but revolve around directing our political educational against the different wicked evil financial currency systems/subsystems and policies that are in place in this country to make the real actual cost of use of money (local) by the vast majority of people in Barbados so staggeringly astronomically high (as is the case now in Barbados) and therefore to be of tremendous henious burdens on their incomes, revenues and transfers.


  14. @ Danny Gill | May 4, 2014 at 10:52 PM |
    “Africa still remains a large market. China is not homogeneous; it is a collection of numerous people and cultures.”

    Africa is a continent which is also ‘not homogeneous’ but a geographical space of over 50 countries with numerous people and cultures from Berbers to Zulus from Islamists to voodooists.

    You ought to take these ‘facts’ into your analysis.

  15. @ Prodigal Son | May 4, 2014 at 7:08 PM |
    “By the way, where is the first quarter report from the governor of the central Bank? Even if he was away, could not the deputy governor deliver the report? But there again, this governor has so politicised the Central Bank that maybe no one would want to do the dirty work………leave him to it!”

    Is there a valid reason for the delay in reporting on the country’s economic performance for the first quarter, a most crucial period for the country’s forex earnings?

    What has become of the commitment to the principle of accountability and the said Governor’s call to greater productivity which indeed should include timeliness in reporting.

    If this week goes by without some sort of report you should start ringing bells of warning.
    Is this week going to have a good day to bury bad news? Only ac and pompey the BU JA can answer.

    “Just Asking”, where art thou? Your presence is sadly missed!

  16. @ Danny Gill
    Of course your analysis is sound….the US dollar is dead….only the coroner’s pronouncement awaits…
    Our dollar and our way of life is tied to the US $….

    But you know, and Bushie knows….that not a fella bout here will be able to take ANY proactive actions to soften the blow….
    We have been “flying high” on borrowed fuel…. and now that the tank is running on ‘E’ and no refueling tankers are lined up to aid us, Freundel and his band continue to yank back on the yoke until the very end…..a stall is inevitable….with the inevitable crash and burn…
    The chief navigator Worrell says that we MUST fly at this altitude…

    A skilled pilot would have eased forward on the stick long ago, gone into a gradual dive – losing altitude while looking to glide to an available landing strip…..but no one wants to experience the ” sinking” feeling…associated with descending…

  17. A conscientious BLP should have put away a little something to easy the heavy burden the DLP carriers with integrity and a honest sense of duty. It tells us sometime very fundamental about the BLP government, when after sisteen- years of BLP control, poor people are still shiting in yard and bathing at the standpipe.


    Well Well | May 5, 2014 at 2:31 PM |

    Barbados would be fine, if hey had a couple gold mines…….but unfortunately……….@@

    You have some good jokes, remember They CROOKS LIARS AND SCUMBAG DBLP GOVERNMENT would have all the Gold in an offshore accounts and still robbing the WILL of PM Errol Barrrow/ FREE UWI. , robbing the Will of PM David / REVERSE TAX CREDIT , ROBBING the WILL of Queen Beatrice Henry /Of her lands and bank accounts at BARCLAY’S , As u can see as soon as you are dead ,they change your WILL and do as they Please, Gold Mines ? What are they doing with OIL WELLS?

  19. Plantation……you are right i forgot all about those thieving sell-outs, they probably forgot about the oil wells, have not heard a word in years, that is a now for now crowd, robbing old people is much easier than digging 70 feet in the sea for oil that might not be there, the will are tangible, handy and easier to access….lol

  20. PDC

    Reread what I have posited and then review what you have written:

    You said: Money has no value. Money can not be devalued. Dollars have no exchange rates. Prices do not exist. This is minus your verbose and fluff.

    What is clear is that having misread what I wrote, you clearly do not have clue as to the difference between Currency and Money. The other thoughts are so preposterous that they defy logic.

    I think you would do well delving into the “fiveness” of five in mathematical philosophy.

    I took the time to really read your thread; return the favor and then make a reasoned response. That is if your are capable of it.

  21. Bust Tea:
    You have a more illustrative way of describing the need to really look at this economic phenomenon. But I agree.

  22. Miller:

    I am glad you are making that point about the make up of Africa because the westerners tend to treat it as one land mass with inhabitants who continue to be fooled by toys and trinkets. See how our cousins make war with their toys of death manufactured in the west.

    What has me baffled is that the “futurists” tend to look across the globe and select some spot that is about to take off economically. Some years ago, it was Asia and then China, but NEVER have they seen where circumstances and situations could so aligned themselves that Africa could take off again.

    Currently, these futurists are indicating that our future meals shall be coming from the insect world where we shall be having fried cock roaches dipped in honey, and fried and boiled almost every insect that there is.

  23. Well Well

    If we had a couple of gold mines we would still be a colony of England. We would have to discover them soon any way.

    • The West has not problem seeing Africa’s geopolitical or strategic importance by establishing Africom BUT when it comes to humanitarian or other efforts handouts seem to be first option.

  24. David:

    Its geopolitcal importance can not be ignored and they know that. However, it serves some purpose to keep them fighting among themselves. The fear as Walter Rodney indicated in his classic is allowing the Black man to get his hands again on knowledge and technology. Every time they look at the wonders of Egypt it bothers them. This why the system has been set up in the US to make sure that freedom was only a word.

  25. Lemuel……and that is why so much more information on African culture was destroyed in Egypt by fire in the last 2 years.

  26. Mr Danny Gill,

    You and Artaxerxes are cut from the same cloth.

    Just as we told him some time ago on here, you must also regard the fact that you are responding to a political organization – represented by members, associates, supporters, mouthpieces, and such like, and who have common and various (personal) positions on various things.

    There are also official established ideological philosophical perspectives and policy positions of the political party itself.

    So, you do not know exactly who you are referring to.

    Yet you write so clumsily obtusely in a way as to give the impression that you know you are referring to a single person.

    If you cannot understand such simple things how are you going to deal with those far deeper ideological philosophical psychological arguments that we have propounded in the above PDC instalment.

    We are really not going to wasting time responding to you.

    Go and do some serious thinking.



    Well Well | May 6, 2014 at 10:15 AM |

    Lemuel……and that is why so much more information on African culture was destroyed in Egypt by fire in the last 2 years.

    Well Well @

    that hurts if the last 2 years they are burning our History and like wise in Barbados, We all need to know our Roots.

  28. Plantation….they have been hiding information for so many centuries that outside of their control, all the information is still coming to the fore to their consternation and then there is the internet to spread it all around….lol

  29. PDC:

    Before responding to all of you, I did pause and held my breath. There is none so blind as he or they who refuse to see. In your case, it may that essential capacity to see beyond the small confines of your pretentious wisdom.Fare well my brothers!

  30. David:

    Based on the governor’s latest report. There seems to be some conjecture as to the role of domestic banks in the fight against this crisis. However, the same governor who denied printing money some time ago, I think Dr. Mascoll lead that charge, now admits that he had no qualms about assisting the government by intervening in the economy. But the laughable thing is the only tool he has is to print money. The other usual financial tools would be meaningless. Furthermore, is this current Central Bank’s main purpose to make money? I hope not!!

    • @Lemuel

      What do you mean about domestic banks?

      Heard his comment about the printing of money, reasonable Bajans may understand a temporary printing but the extraordinary deficits being run in recent years accords with IMF assesment. Also the soaking up of government paper manipulates the rate and has wider implication for the market.

  31. David:

    I agree our banks are not domestically owned.

    It seems as if the Governor has the idea that he can print money like fire and then when the economy recovers, he would be in a position to right the situation or the situation shall be most likely somebody’s problem and not his. This speaks to scenario which is very frightening to say the least and Bajans like sheep and wishing and hoping following the Governor for he is an economist!!

  32. @Dompey May 5, 2014 at 3:57 PM :A conscientious BLP should have put away a little something to easy the heavy burden the DLP carriers with integrity and a honest sense of duty.”

    But Dompey it was David Thompson self who said that the “fatted calf will be slaughtered and shared”

    And that calf could only have been fattened during Owen Arthur’s excellent administration

    Wha’ happen you ain’t get your share?


    Well Well, As you can see they are in deep She-it, they never needed the money, they loan they was looking at was to take the money that was there, the crooks liars and scumbags may have been looking to take 300 million and then took a loan for 300 million , Now the CB says they dont need the loan , Now they are stuck in the middle of layoffs and tax hikes,
    setting up for the next elections as a recovery looms right before elections and rehiring ,

  34. My real concern is that given what is now a low beating drum but shall soon heighten in a loud noise. The Governor or someone needs to say clearly how they shall protect this sacrosanct Barbados Dollar.

    All of his measures like helping out the government speak to printing money. The banks also seem not willing anymore to create money through credit. The forex is dwindling. Taxation measures are not bearing or realizing the projected returns. The economy is in a state of stagflation.

    When the IMF comes with their bailout money and demand the devaluation of the Barbados Dollar, how can the governor protect it? Remember the DLP had a similar cry about no public servants going home.

    People take your savings and purchase something tangible that would at least retain some value when this wham bam thank mam comes from the IMF!!

  35. David,

    Have there been any particular regulations that have been put in place by the Minister of Finance to support the Central Bank of Barbados non issuing of one cents in this country?

    Does the Central Bank of Barbados have any legal political powers to really help effect this policy of rounding off of cents?

    Do those businesses that are helping to effect this particular policy have any real legal political powers to effect this policy of rounding off of cents?

    Are the Central Bank of Barbados and the particular businesses – when helping to implement this policy – violating the constitutional rights of individuals to their own remuneration properties in this country?

    Are those businesses that are engaging in the practicing of this policy not agreeing to their own deprivation of some of their own remuneration properties?

    Where are some of the progressive lawyers in this country?


    • @PDC

      There are precedents all over the world to support the rational for currency denominations.


  37. Plantation Deeds:

    I do not believe this 3 plus hour video shall add any thing to PDC’s enormous non knowledge!!!

  38. The above video, is way too long for most people. They neither know nor care who prints their money, except when they see inflation taking food from their mouths, gas from their gas-tanks, and electricity from their houses.

    There’s a book available on Scribd.com (“The Coming Battle – 2013”) that tells the whole tale from start of the banking hegemony in England in 1694, to the crisis so-far in 2013.

    The banksters are slowly enslaving the world, and in the future, our children will not forgive us, unless the world returns to a fixed value for value – and President De-Gaulle of France realised this in 1965 and later when he asked for Gold for his nation’s dollars.

    A new world reserve currency is in the making, and it won’t be the dollar.

    The Yuan or Renminbi, is about to take centre stage. The Chinese have been accumulating all the European Gold, and they ain’t getting it back any time in the next 1,000 years.

    If you don’t use your savings to accumulate Gold and/or Silver you will be toast…


  39. Your comments are very enlightening and food for thought. You analysis about China’s purported and mythical economic dominance is spot on.

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