" ... "I like what I call 'rational systems of money'. I liked then in 1944 and I still like them today. Fiat money is not rational and Keynes' philosophy of economic growth can lead only to fiat currency."
The Bretton Woods conference disturbed Dr. Borsodi so deeply that he soon wrote a small paperback in which lie prophesied what are substantially the economic problems that we're experiencing right now. The booklet, published in 1948 by The School of Living, was titled Inflation is Coming and What to Do About It. Despite the fact that the publication sold nearly half a million copies, however, few individuals in positions of power seem to have read it or to have heeded Borsodi's warnings.
And so we find nearly every nation in the world frantically trying to run up . . . an increasingly rapid down escalator of debased currency. It costs more and more every day, in other words, just to stayeven than it did the day before. During the 28 years from 1945 to 1973, the value of the United States dollar depreciated by a good two-thirds . . . and a 1974 dollar has shrunk an additional 10%. And there's no end to the madness in sight. "If we continue this foolishness," says Borsodi, "we're eventually going to witness a debacle followed by a depression worse than that of the 1930's."
[ ... ]
By issuing a certificate firmly based on real wealth , in other words—instead of politicians' empty promises—Borsodi thought he could create a medium of exchange that would be inflation-proof . . . or "constant". And he decided to call his new currency just that . . . the constant.
Does the idea work? Well, Borsodi presented his thoughts to a number of people who—over a period of about three years—have "deposited" a total of approximately $100,000 in something called the Arbitrage International "bank". (Deposits and withdrawals can be made by an individual at any time just as if he or she were dealing with a real bank, and all monies are fully protected by the Federal Deposit Insurance Corporation.) The funds, in turn, have been used to buy and sell Borsodi's 30 basic commodities on the world market.
Result: The pioneers in the experiment have seen their constants rise in value (in relation to the dollar) a whopping 17% in just three years.
Or, to put it the other way around, a constant bought in 1970 can still be traded for exactly one constant's worth of goods . . . while a dollar will now buy only 85% of what it would purchase three years ago. ... "
~ From The Borsodi Constant An Inflation-Free Currency ~
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