Swami Prabhupada exposed the falsity of the Federal Reserve scam in Srimad Bhagavatam 1.17.39 (Purport):
"According to Srimad-Bhägavatam...Even a gold-standard exchange and currency is bad. Gold-standard currency is based on falsehood because the currency is not on a par with the reserved gold. The basic principle is falsity because currency notes are issued in value beyond that of the actual reserved gold. This artificial inflation of currency by the authorities encourages prostitution of the state economy. The price of commodities becomes artificially inflated because of bad money, or artificial currency notes. Bad money drives away good money. Instead of paper currency, actual gold coins should be used for exchange, and this will stop prostitution of gold...This will discourage lust, envy and enmity. When there is actual gold currency in the form of coins, the influence of gold in producing falsity, prostitution, etc., will automatically cease. There will be no need of an anticorruption ministry for another term of prostitution and falsity of purpose."
I am personally convinced that Swami Prabhupada's books are genuine transcendental literature. The Swami expounded upon this issue in a recorded conversation on January 21, 1977:
Ramesvara: There was one question I had, Srila Prabhupada. You have
written in the Third Volume of the First Canto different instructions for
the age of Kali, how there'll be compulsory marriage and so on and so on.
And you mentioned about the gold standard, that this is very bad, this
artificial standard of monetary exchange.
Prabhupada: Oh, yes. It is very bad.
Ramesvara: In the future this is something that we should try to correct.
Prabhupada: You should introduce coin, real money.
Hari-sauri: Real gold coins. No paper.
Prabhupada: Anyone has got money... It is fact. And what is this nonsense,
keeping some paper and thinking he has got money? How cheating it is going
on, from government's side. And therefore artificial inflation. You can
print, so the price is increased. Because you haven't got to pay him real
money, you print and pay him, and he will ask, "Give me this money. Then
I'll supply." "All right, take." You print and pay.
Ramesvara: It's definitely a means that the government has for
controlling. Because they can withdraw money, pull it back out of
circulation by increasing the interest the banks give, or they can get
more money in...
Prabhupada: Anything done artificially.
Ramesvara: They control the amount of interest on loans. It's all
standardized from what they call the Federal Reserve system. This was
introduced during the Depression by the bankers.
Prabhupada: Whatever they do, when you receive money in the paper it has
no value. Bad money. It is bad money. It is not good money.
Ramesvara: Actually most purchasing in America is done on credit now. Even
a step beyond paper money is credit, no money, buying on no money, loans.
Prabhupada: That is in India also.
Ramesvara: We don't find these things in Vedic culture too much.
Prabhupada: There was never paper money.
Hari-sauri: No. They used to...
Prabhupada: That barter system. You have got rice; I have got something
else. So I give you something; you give me something.
Hari-sauri: But isn't inflation possible even with coins? Even if you have
gold coins, isn't inflation still possible?
Prabhupada: No, gold is acceptable by everyone.
Ramesvara: The main point is the barter system.
Hari-sauri: Yes, well its value is recognized by its purchasing power.
Prabhupada: Yes.
Hari-sauri: So you can alter... Say, you have one gold coin. You can alter
what it...
Prabhupada: No. If you introduce real metal coin, then there will be no
inflation.
Hari-sauri: There's only a certain amount of metal.
Prabhupada: That's all right. The exchange... The more demand, more price.
So suppose here is a spectacle. I am demanding ten rupees. So both of you
are customer, and you are asking for this spectacle. Then I am increasing
my price. So if you can pay me by printing paper, you'll accept any price.
That means artificially price is increased. Is it not?
Ramesvara: Yes.
Hari-sauri: So the idea is that with coins the man who has the goods, he
can't...
Prabhupada: Therefore... Suppose he has got ten coins; you have got ten
coins. I am wanting fifteen coins. So there will be no competition. I have
to accept either from you or you, ten coins.
Hari-sauri: Right. Because there's only that much money.
Prabhupada: But if I increase price and if you print... If you have got
power to print, "All right. Take fifteen coins, er, fifteen rupees." But
you print and pay me. But if the gold, the coin, is there, you cannot
increase on that.
Hari-sauri: He can't increase the price of the product, and the man who
got..., 'cause there's only a certain amount of money there.
Prabhupada: But I can increase the price provided you pay me. But by
printing, it is easier. But if you have to collect coins, that will be difficult,
so there will be no artificial increase of...
Hari-sauri: Yes. Coins is a check...
Prabhupada: Yes.
Hari-sauri: ...on charging too much.
Prabhupada: That is wanted. And these rascals, they are artificially
printing paper as money. And I am a rascal; I'm demanding more because I
have got customer.
Ramesvara: The difference between Vedic culture and..., the Krsna
conscious culture and the modern culture is very, very dramatic, very big
difference. So the transforming of society...
Prabhupada: And besides that, if we concentrate in farm project there will
be no need of exchange, because I'll be satisfied with my products. That's
all. There is no need of exchange. Whatever I need, I get in my farm.
Ramesvara: Weaving, cloth.
Prabhupada: Everything I get. So I haven't got to go outside for exchange.
If you are satisfied in your farm--I am satisfied--then where is question
of exchange? There is no need of artificial... So this banking, "fanking,"
everything will collapse automatically. There is no money, who is going to
keep money in the bank?
Hari-sauri: Who needs it?
Prabhupada: (laughs) So this artificial way of banking, that will be also
collapsed.
Hari-sauri: This is revolutionary.
Ramesvara: It's very hard for the mind to...
Prabhupada: No, simply do this.
Ramesvara: Such a dramatic transformation of society.
Prabhupada: Yes. Whatever it may be... We should be satisfied locally by
our food, by our cloth, by our milk. That's all. Let the whole world go to hell.
We don't care. If you want to save yourself also, you do this. Here is an
example. If you want artificial life, city life, and hellish life, you do. But we
shall live like this. This is the ideal life.
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