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The Secret of Oz


By Aves Hawk


This movie presents a thorough and accurate account of US monetary history. It discusses the roles of the Constitution, Gold, Silver and the Paper Credits that we have today. However, I would reccommend you skip the solutions section or take it with a large grain of salt. I'll explain why below.



The makers of this movie get the solution completely wrong. The solution is Ellen Brown's Greenbacker Movement, which is to restore the power to control the money supply to Congress instead of leaving it with a private banking cartel called the Fed. In my mind this is only the lesser of two evils, since both still represent a monopoly over the control of the money supply. Paper money is also far easier to manipulate than either gold or silver. Also, paper merely represents an IOU, so paper money is debt by definition. Gold and silver represent payment in full.


Gold is much easier to manipulate than silver which is why the Wizard of Oz is such a compelling story. It shows the importance of bi-metallism as put forward by the constitution, and perhaps chosen by the free-market as well. It shows the importance of this quote:

"Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves." - Norm Franz 


A gold only standard is too easy for the kings to control because there is very little gold in existence. Silver is much more abundant and provides the necessary liquidity so that peasants and slaves can become gentlemen. And it prevents the gentlemen from being exposed to the jostle for control of gold.


Antal Fekete, who I have a lot of respect for, talks a lot about a return to a gold standard. He also insists that Real Bills Doctrine (a paper money monoply) is necessary to provide the liqudity in the gold market. The Wizard of Oz suggests that it is silver that provides the liquidity. That is why silver is commonly called the poor man's gold, or the people's money. Presently, the USD has replaced the functions of both silver as the medium of exchange and gold as the wealth reserve. If the USD becomes worthless, these metals will likely reclaim their former roles, at least until we move into the next paper money era. 


The creators of the movie completely miss their own message. They stressed the importance of silver but then go on to support a paper money monopoly and don't even mention silver again.  


According to Austrian Economics, all government is a coercive monopoly because the definition of government is to rule or control with authority. This is directly at odds with the individual and the free market, both of which are champions of voluntary exchange. Even democracy only works for the top 51%;the other 49% doesn't agree but is forced to play along. Austrian Economics provides a far stronger foundation for economics than any alternatives. Gold and silver always have been and today still are the best forms of money we have voluntarily come up with. 


Keep in mind though, that a 100% free-market and the complete absence of government are utopian ideas. My perspective is that we are part of a larger cycle as suggested by Martin Armstrong, FOFOA, and to an extent Austrian Economics; a cycle where we move from periods of hard money to periods of soft-money, or periods of relative freedom to periods of relative socialism. History tells that when one collapses, we switch to the other because the previous policy gets the blame. With this looking like the collapse of soft or paper money, perhaps we are close to a new era? The problem is that the transition phase usually gets rather rough.


I would suggest watching the original Wizard of Oz, or get the children's book. It is a very important story.

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