Remember Dorothy from the 1939 film The Wizard of Oz? What many people don’t know is the film was based on L. Frank Baum’s book, The Wonderful Wizard of Oz, a political allegory for American politics. It was about the demonetization of silver in 1873. The Yellow Brick Road represents the gold standard, the Silver Shoes (slippers) represent the Silverite, and the City of Oz comes from the abbreviation of ounces “Oz” in which gold and silver are measured.
The same year that the film released, President Franklin D. Roosevelt had increased defense spending for World War II and the Great Depression came to an end. There was the Dust Bowl in the Southern Plains region of the United States, and Dorothy and her house were swept away from Kansas to the Land of Oz. We all know the story. What you probably don’t know is what happened next, after the Wizard flew away in a hot-air balloon—a new epic life and another great con.
If you understand enantiodromia, then you believe in cycles. The Greek philosopher Heraclitus figured out that everything is always changing, but it’s not chaotic. When something has reached an extreme along a continuum, it will snap back toward its opposite, creating what we call a “cycle” over time. So the Wizard traveled around for many years, thinking and planning the next phase of his life. When his father passed away in 1940, he settled in New York City with his inherited stake in central banking and power in the U.S. Federal Reserve.
The U.S. had done really well from all the wartime production. Treasury reserves rose to 628.4 million troy ounces (19,546 metric tons), 80 percent of the entire world’s gold reserves. In 1941, these reserves peaked at 651.4 million troy ounces (20,262 metric tons). At the end of World War II, world leaders came together to figure out how to deal with all the problems the war caused for everyone but the U.S. They needed to create a new financial system or the global economy would collapse.
Since the U.S. had 80% of the world’s gold reserves, they decided that the dollar would be the new world reserve currency, backed by gold, as good as gold, and exchangeable for gold at $35 per ounce. Gold was the real money and the dollar was just an IOU. All the other currencies would then be pegged to the dollar, and this agreement (otherwise known as the Bretton Woods Agreement) would be accepted on trust. The problem was the Wizard got involved—political promises were made, and the U.S. printed many more dollars than it had gold backing.
As they always do, men used politics for personal gain instead of for the good of humanity. The U.S. broke its agreement and the trust it had with the rest of the world. It printed all the dollars that its men wanted and needed to get elected and to make their friends happy. This changed the relationship between the dollar and gold and the landscape of the relatively new financial system. It was no longer an IOU for gold because the U.S. no longer had $35 of gold for all the dollars in existence. France and other countries immediately caught on to this con and started redeeming their dollars for the precious metal, until President Richard Nixon stopped it in 1971 and the dollar became fiat.
Forty-nine years went by and the unbacked dollar grew into a gargantuan pile of debt. The World Trade Organization had shifted production from the West to the East and commodities had lost enormous value. Back in Kansas, Dorothy was no longer alive, but her great great granddaughter whose name was Dory had a similar experience. A tornado called Covid19 picked up her and her house, and carried them away. Instead of landing on and killing the Wicked Witch of the East, this time it landed on and killed the Wicked Witch of the West (the USA), who had kept the world’s minions in bondage to a debt-ridden dollar system held up by the military.
Dory is frightened. All the minions are wearing masks and are social distancing. She doesn’t like this place and wants to go home. Her adventure starts when a Fairy Godmother, the Good Witch of the North, shows up out of nowhere. “How can I help you, my sweet child?”
“I want to go home,” cries Dory. “This place, these minions are scaring me.”
“I’m sorry, my dear. I think the only person who can help you is the Wizard of Dollars. Follow this green paper road and it will take you to him at the Federal Reserve. It’s a dangerous road, so be careful.
The Good Witch of the North pretends to remove the slippers of the dead Wicked Witch of the West and puts them on Dory. “These slippers are magical, adorned with Bitcoins,” she says.
Dory was not amused—she couldn’t see or feel the slippers. “These slippers look like my bare feet,” she said.
The Good Witch giggled, “Do not worry, my sweet child. These slippers cannot be seen or felt, for they are magic. If the storm comes before you can reach the Wizard, they will take you home. All you have to do is close your eyes, tap your heals together three times and the invisible bitcoins will turn into all the money you need to take you anywhere in the world.” The storm she was talking about was de-dollarization, so the magic slippers wouldn’t work unless dollar lost its illusory luster.
Reluctantly, Dorothy starts down the green paper road. First, she meets the Tin Woodman who was locked down and rusted solid, from all the industry that was lost to the World Trade Organization over the past two and a half decades and all the businesses now closed from the 2020 pandemic. But the Tin Woodman’s real problem was he did not have a heart, having been dehumanized by all fiat currency and big government regulations that turned minions into displaced workers. Leisure and entertainment had taken center stage. Nobody really labored anymore in the nation, except the farmers and grocery stores. Making big money became about gaming.
Later, Dorothy meets the Scarecrow who is without a brain. The Democrats believed that the Republicans lacked the intelligence to recognize what was best for the country. And the Republicans thought that the Democrats were blind to the press, arm of the Deep State, and mesmerized by the Wicked Witch of the East. The Democrats muzzled all the mouths of Republicans and forbade them to speak in public while they exiled the president who they thought was evil. They ushered in a new president, someone who had close ties with the Wicked Witch of the East. He was much nicer than the other man, more likeable to the Democrats, and politically correct in every way you could imagine.
Next Dorothy meets the Cowardly Lion, who needs courage. He’s afraid of saying anything because every time he has tried to think critically and share his point of view about racial issues or problems in our democracy or financial system, he is attacked by minions. Over time, he learned not to confront anyone about anything anymore, because his feelings were always hurt or he was censored and silenced with shame. People were hostile in this world and tensions were high. Social media giants and the press were compromised by the Wicked Witch of the East and worked hard to silence all the disagreeable minions. They didn’t encourage debate, and didn’t want people to think and reason for themselves.
Together these four friends head further down the green paper road to the Federal Reserve in the hope of finding the Wizard of Dollars who might be able to help Dory get out of this hell hole and back home. After many days of walking and several unpleasant encounters with the Wicked Witch of the East, who kept trying to stop them from seeing the Wizard, they finally reach the Federal Reserve and the man behind the curtain. Like he did to all the minions, the Wizard played on their fears, appearing in different forms to each of the friends. To Dory he was a disembodied head, to the Tin Woodman he is a bright ball of fire, to the Scarecrow he is insensitive and mean, and to the Lion a predatory beast.
Soon they discover the Wizard to be a fake. He is leading along many little old men and central bankers who like to pretend they are almighty and powerful. They are, so long as they fool people. As the story goes, Dory and her friends figure out how everyone has been duped. They see now that all the U.S. production and gold has shifted Eastward, the trade surplus was massive under the Wicked Witch of the East (China) and the U.S. had a big deficit. Thanks to the Wizard, the U.S. was buried in counterfeit fiat dollars and debt they could never repay. And while everyone was running to them, asking for money, they couldn’t pretend any longer. They were broke and bankrupt the whole country.
Scarecrow shouts at the Wizard: “You’re a humbug!”
Unfortunately, Dory does not melt the Wicked Witch of the East like Dorothy melted the Wicked Witch of the West. The Wizard flies away in his gulfstream to a new life again, this time in the East. The Scarecrow is left in charge of the U.S. and the country falls apart. Hyperinflation takes hold and destroys the value of the dollar. The Tin Woodman rules the East in the West and ushers in socialism, which eventually leads to communism. The central bankers and elites get richer and richer. And the populist dream of racial equality and new presidents solving their problems never materializes because the Cowardly Lion runs away back into the forest, and doesn’t do anything even though he knows he can really roar.
Dory returns to Kansas, but she has lost her magical Bitcoin slippers, signaling the end of the fight for fiat money, and a return to Oz. Natural resources and commodities soar! The government creates a digital currency, a one world currency backed by all the gold held in the vaults of 100+ sovereign nations, which they revalue to cover the debt. They do this to regain the trust of the people, and make their money great again. As production starts growing, so grows the money supply, steadily and in pace with the world’s gold growth. The new IOU remains intact. A new system and a new cycle begins, the great reset ushers in a more acceptable society for the minions, and they find their way forward…until the Wizard shows up again!