The Federal Reserve was created in 1913, with a goal of stabilizing the U.S. money supply. I've posted charts of what happened afterward dozens of times (the blue line below).
Since 1913, the money supply - and therefore, prices - have slowly gone through the roof.
I've never seen the previous hundred years contrasted with the century of 1813 to 1913 (the red line below).
The disastrous blue line was the unintended consequence of some Washington D.C. blowhards trying to smooth out the little blips in the red line. Truly amazing.
6) Participated in 9/12 marches and had speakers at 9/12 meetings
7) We would’ve participated in Peace Marches, but the Peace Movement doesn’t really exist during Democrat administrations, and we don’t have the numbers to shut down the streets by ourselves.
8) Supported anti-Eminent Domain candidates for our regional Water Board. And won!!
Stuff like that makes for a diverse group off allies. But those groups have something in common....
Economic conservatives generally fear the Fed the government.
Pot smokers fear the police the government.
Gun owners fear the anti-2nd amendment lobby the government.
Gays and Lesbians fear the influence of religious conservatives the government.
Tea Party activists, supposedly neutral on social issues, fear the national debt the government.
The 9-12 groups, as best I can tell, fear socialists the government.
The Peace Movement fears the military-industrial complex the government.
Eminent Domain opponents fear thieves the government.
Most members of these sub-groups will tell you that they oppose Democrats. Or Republicans. This is like declaring your loyalty to The Crips because if you stop supporting The Crips, then The Bloods will take over. Republicans and Democrats might go at each other like cats and dogs, but at the end of the day, neither group is going to endanger the oppressive system that makes their leadership (and their leaches) very, very wealthy and very, very powerful.
Our challenge, as Libertarians, is to convince those who fear the government to merely oppose the government in all its unholy acts, instead of trying to kill off Dr. Jekyll while saving Mr. Hyde. On almost every issue, John Boehner and Nancy Pelosi are different in degree, not in kind. And I'm struggling to think of any issues (maybe guns?) where Bush/Obama differ by a significant degree.
(No, I take that back. They don't even differ on guns. Barack approves of giving guns to Syrian rebels, and to Mexican Drug Lords via Operation Fast And Furious.)
When government gets big enough, it prints money, oppresses non-conformists, confiscates citizen weaponry, determines who can and can’t marry, racks up a lot of debt, nationalizes industries, starts wars, and confiscates property. That's all part of the package.
Any government big enough to abuse the group you dislike is big enough to abuse all the rest.
Let’s stop talking about Red vs. Blue. Let’s reframe the debate as Free vs. Slave.
From Tarrant County Libertarian Party Chair John Spivey's Facebook page:
Hey Federal Reserve fans! I just did some fun research - Shortly after the Fed was hatched, in 1916, Chevy released it's "Model-T Slayer", the 490! Very slick, this roadster with the optional "full electrical system" ran $550 or 28.9 ounces of gold. Today, the Chevy's roadster, the Camaro Convertible 2 SS with several fun options runs $47,145... or 28.3 OUNCES OF GOLD! ALMOST EXACTLY THE SAME!!!!!!
This is a one hundred trillion dollar Federal Reserve Note. (It's from the Zimbabwe printing press, not the Bernanke Publishing Company.)
No one in Zimbabwe thought they would ever hold one of these.
The people who inflated Zimbabwe's currency to the point of uselessness claimed to be doing so for the good of The People.
This piece of paper isn't linked to anything of value, just like the U.S. currency isn't linked to anything of value.
Printing one hundred trillion-dollar banknotes creates massive problems for the general populace, but it solves problems for the elite few who run the government printing presses. Therefore, the elite few are going to run the shit out of the government printing presses.
Like Zimbabwe, the U.S. has very few safeguards in place to prevent someone from printing all the money they think we need, and using it to pay their buddies for stimulus packages, TARP plans, deficit non-reduction schemes, and the like.
This is a counterfeit $100 bill.
Counterfeiters are printing them in China, and they are virtually indistinguishable from the ones that The Fed prints over on Blue Mound Road in Fort Worth.
The FBI is working with the Secret Service to figure out how to stop these guys. According to an agent that I met at a wedding, they're magnifying these fake bills to the size of a basketball court, and trying to detect little mistakes that will help distinguish these fakes from the real thing.
This counterfeit money isn't backed by any commodity (gold, silver, etc.) and it could wreak havoc on our economy.
This is a genuine $100 bill.
There is almost no way to distinguish this one from the Chinese counterfeit one. It isn't backed by any commodity (gold, silver, etc.) and it could wreak havoc on our economy.
If you take either of these to a bank, you can swap them for 100 pictures of George Washington, or 20 pictures of Abraham Lincoln, or 5 pictures of Andrew Jackson. The bank will not give you any gold or silver in exchange for them. They are only worth what people think they're worth.
Chinese counterfeiters and Ben Bernanke are both paying their bills with worthless paper. All discussions of the new debt ceiling are fundamentally silly, because we've been paying our debts with worthless paper for about 35 years.
In the meantime, don't bother looking at your paper money very closely. All of it is fake.
"The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man" - George Bernard Shaw
Mother Jones magazine recently took Ron Paul to task for being too extreme. (As if there's a painless and moderate way to get out from under a 14 trillion dollar debt.)
Here are Dr. Paul's beliefs that made Mother Jones run for the smelling salts, along with additional commentary on my part.
1. Eviscerate Entitlements: Believes that Social Security, Medicare, and Medicaid are unconstitutional, and has compared the failure of federal courts to strike them down to the courts' failure to abolish slavery in the 19th century.
People of good will can indeed argue that the constitution's General Welfare clause gives Congress enough wiggle room to collect their party money via Social Security, Medicare and Medicaid contributions. And all of those funds will be out of money by the time I retire. The constitutionality of those programs is irrelevant. Our government will never, ever use the money responsibly, and the contributions to those funds went to other programs ages ago. This one is irrelevant, and the sooner I'm allowed to put my own money into my own retirement fund, the better off I'll be. The sooner you can do the same for yourself, the better off you'll be. It takes a lot of humility to admit that I have no idea what is best for you. I wish that our Washington Lords and Masters felt the same way. This one is a moot point.
2. Lay Off Half His Cabinet: Wants to abolish half of all federal agencies, including the departments of Energy, Education, Agriculture, Commerce, Health and Human Services, Homeland Security, and Labor.
Ok, let's beat hook the winch and the chain hoist up to this dead horse and drag it out of the bushes for another beating.
Since its founding, the Department of Education has almost doubled education expenses and test scores haven't budged.
Since its founding (to decrease our dependence on foreign oil) the Department of Energy has spent billions and our foreign oil purchase percentage is within 1% of where they started.
The Department of Agriculture gives subsidies to some of the wealthiest people in the nation. They also support ethanol subsidies. For this alone, their building should be nuked.
If the Department of Commerce were to cease their endless quotas, tariffs, protectionism, kickbacks and allotments and let us have a more frictionless economy, we just might be able to get out of this recession. But no. They've got to do something. Why does anyone need an 800 page Free Trade Agreement? Why not just say "Fort Worth can trade freely with Dallas". "Oklahoma can trade freely with Florida". And last but not least, "You can trade freely with Canada". We wouldn't need to take in so much in import duties if we didn't have to support these unnecessary a-holes. I occasionally have to get things done via companies that are afflicted with Teamster's Union members. Screw the Department of Labor, and all that they stand for. If your boss promised you X, but didn't give it to you, take him to court. If your boss had faulty equipment that took off one of your fingers, take her to court and sue her until she glows. It's that simple.
If we could get the CIA on a shorter leash, we wouldn't need a Department Of Homeland Security. If we could get our troops out of Germany, Korea, Japan, and the Middle East, and bring 'em back to the house, we wouldn't need a Department Of Homeland Security. We could cut troop levels in half, and still not be able to see the beach because of all the troops defending our borders. Ok, imagine you won $100 million in the lottery, and you wanted to give it away to good, helpful institutions. Make your list of your top 20. Did you include the Department Of Health And Human Services? Good. Nobody else would either, including Ron Paul, or whoever wrote this tripe for Mother Jones.
3. Enable State Extremism: Would let states set their own policies on abortion, gay marriage, prayer in school, and most other issues.
It's called States' Rights. If a state wants to legalize gay marriage, abortion, etc., the state should be allowed to do so. Gays and lesbians could be married in those states. Women wanting an abortion could travel to those states. Before long, those states would have an advantage that others did not. The alternative is having the heavy hand of Washington oversee everything, with a one-size-fits-all policy.
4. Protect Sexual Predators' Privacy: Voted against requiring operators of wi-fi networks who discover the transmission of child porn and other forms online sex predation to report it to the government.
The U.S. House of Representatives on Wednesday overwhelmingly approved a bill saying that anyone offering an open Wi-Fi connection to the public must report illegal images including "obscene" cartoons and drawings--or face fines of up to $300,000.
That broad definition would cover individuals, coffee shops, libraries, hotels, and even some government agencies that provide Wi-Fi. It also sweeps in social-networking sites, domain name registrars, Internet service providers, and e-mail service providers such as Hotmail and Gmail, and it may require that the complete contents of the user's account be retained for subsequent police inspection.
Most wi-fi providers have other things to do. I don't want to spy on my neighbors. I can also promise you that my definition of "obscene" doesn't match yours. And then there's the 4th Amendment:
5. Rescind the Bin Laden Raid: Instead of authorizing the Navy Seals to take him out, President Paul would have sought Pakistan's cooperation to arrest him.
Would that have worked? Who knows. But our potential Paki enemies would be a lot less pissed if we had given Dr. Paul's method a try. How would you feel if a group of VietNamese invaded D.C. with a helicopter raid and took out Henry Kissinger?
6. Simplify the Census: The questions posed by the Census Bureau's annual American Community Survey, which collects demographics data such as age, race, and income, are "both ludicrous and insulting," Paul says.
True. The race questions are often used to reenforce tribalism. They don't need to know anything but your name and address.
7. Let the Oldest Profession Be: Paul wants to legalize prostitution at the federal level.
I believe you can find other instances where he says its a States' Rights issue. There's something funny about these people....
....enforcing a ban on whoring.
8. Legalize All Drugs: Including cocaine and heroin.
Yes !! And if we do, are you going to suddenly start doing coke and heroin? I'm not. I hope you don't. But it'll end almost all of our problems on the Texas/Mexico border, they way the end of alcohol prohibition ended our problems on the Canadian border in the 1920's. Which monopolies do you want to preserve for the Drug Lords of Mexico and Afghanistan?
9. Keep Monopolies Intact: Opposes federal antitrust legislation, calling it "much more harmful than helpful." Thinks that monopolies can be controlled by protecting "the concept of the voluntary contract."
Yep. Can anyone name a true monopoly that has existed without help from Uncle Sugar?
10. Lay Off Ben Bernanke: Would abolish the Federal Reserve and revert to use of currencies that are backed by hard assets such as gold.
And speaking of monopolies that answer to no one, here's what The Fed has done to our money supply. Folks, prices aren't going up because of weather, China, India, famine, or Global Warming/Cooling/Climate Disruption. Dollars are less scarce. Therefore it takes more of them to swap for something else.
11. Stop Policing the Environment: Believes that climate change is no big deal and the Environmental Protection Agency is unnecessary. Most environmental problems can be addressed by enforcing private-property rights. Paul also thinks that interstate issues such as air pollution are best dealt with through compacts between states.
Yep. The EPA is a jobs program.
12. Not Do Anything, but Still...: Would not have voted for the Civil Rights Act of 1964 because it was a "massive violation of private property and contract, which are the bedrocks of a free society."
This is true. I discriminate. You discriminate. There are some people that I won't allow into my house or my truck. There are others that I welcome. A business has the right to do this also. But if you don't allow people in because they're black, gay, coneheaded, hispanic, or green, I'm not going to shop at your business. Lots of other people will follow suit. The market works, and is more efficient that setting up a feast for lawyers.
13. Let Markets Care for the Disabled: "The ADA should have never been passed," Paul says. The treatment of the handicapped should be determined by the free market.
Has the percentage of handicapped people in the workplace gone up or down since the passage of the Americans With Disabilities Act? Google it. (Hint: It's gone down. Government regulations screw up the best intentions, without fail.)
14. First, Do Harm: Wants to end birthright citizenship. Believes that emergency rooms should have the right to turn away illegal immigrants.
It's called "Birth Tourism". It's a huge problem as long as we have a welfare state. Have your kid on this side of the border, and your kid is an American. End the welfare state, and its no problem. Go here to join the Facebook group called "Ron Paul Supporters For Open Borders".
15. Diss Mother Teresa: Voted against giving her the Congressional Gold Medal. Has argued that the medal, which costs $30,000, is too expensive.
When time permits, read "The Missionary Position", Christopher Hitchens' devastating attack on the life and works of Mother Teresa. The expense is the least of the problems.
************************
Those are Ron Paul's positions that scare the bejeebers out of Mother Jones magazine. What's funny is that getting out of our current mess is going to require people who make Ron Paul look moderate. Hope this helped ! Have a good Memorial Day !!!
Next time you see a higher price on milk, eggs, gasoline, rent, Coca-Cola, detergent, bacon, or anything else you purchase with your Bernanke Bucks, stick a "Hope And Change" Post-It note beside the price.
The United States Department of Justice delivered a very clear and unfortunate message on Friday:
“Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism. While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country.”
These remarks were released by the US Attorney’s office in the western district of North Carolina following the conviction of one Bernard von NotHaus, the creator of the ill-fated Liberty Dollar.
As you likely recall from a few years ago, Liberty Dollars were privately minted gold and silver rounds. Paper certificates, akin to warehouse receipts were also issued, effectively giving the bearer a right to claim a certain amount of gold or silver at the group’s warehouse in Coeur d’Alene, Idaho.
This is traditionally how the system of money used to function– precious metals would be stored in private, secure storage facilities, and paper certificates were issued as a medium of exchange that entitled the bearer to redeem metal from the vault. Liberty Dollars represented a return to that system.
Clearly, the Justice Department feels otherwise… instead viewing these silver rounds as an attempt by terrorists to undermine the US dollar.
Hit the link to read the rest of Sovereign Man's post. It's worth the trip.
Anyway, back during the previous Great Depression, FDR decided that he didn't want gold to compete with his valueless paper money. Here's Wikipedia on the infamous Executive Order 6102:
Executive Order 6102 required U.S. citizens to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per troy ounce. Under the Trading With the Enemy Act of October 6, 1917, as amended on March 9, 1933, violation of the order was punishable by fine up to $10,000 ($167,700 if adjusted for inflation as of 2010) or up to ten years in prison, or both. Most citizens who owned large amounts of gold had it transferred to countries such as Switzerland.
Order 6102 specifically exempted "customary use in industry, profession or art"—a provision that covered artists, jewelers, dentists, and sign makers among others. The order further permitted any person to own up to $100 in gold coins ($1,677 if adjusted for inflation as of 2010; a face value equivalent to 5 troy ounces (160 g) of Gold valued at about $6200 as of 2010). The same paragraph also exempted "gold coins having recognized special value to collectors of rare and unusual coins." This protected gold coin collections from legal seizure and likely melting.
The price of gold from the Treasury for international transactions was thereafter raised to $35 an ounce ($587 in 2010 dollars). The resulting profit that the government realized funded the Exchange Stabilization Fund established by the Gold Reserve Act in 1934.
So what?
Well, if people are ever allowed to swap real honest-to-god silver and gold coins in exchange for goods and services, it won't be long before people refuse to do business with Bernanke Bucks. There is a relatively limited supply of gold and silver. Bernanke's capacity to print $20.00 bills is unlimited. If you ever wrap your mind around why counterfeiting is illegal, and why debtor governments love inflation, then you'll understand why our government doesn't want a currency competitor.
If I agree to accept a gold nugget as payment for goods and services, it's nobody's business but mine. If I agree to accept Mickey Mantle baseball cards, ditto. I'm making the choice. As long as nobody mis-represents the nuggets or the cards, government has no business getting involved.
But if people continue to accept worthless paper from Bernanke's printing press? Well, somebody ought to be a good neighbor and suggest some alternatives. I'm just sayin'.....
The picture of Bernanke's Printing Press came from here.
Kimberly-Clark is about to raise the prices of diapers and toilet paper.
DALLAS, March 17, 2011-Kimberly-Clark Corporation (NYSE: KMB) today announced that its baby and child care and consumer tissue businesses are notifying customers of plans to raise prices in North America during the second and third quarters of 2011. The company said the increases are necessary to offset inflationary pressure from higher raw material and energy costs.
Net selling prices in the U.S. and Canada for Huggies baby wipes and diapers, Pull-Ups training pants and GoodNites youth pants will increase on average between 3 and 7 percent, with implementation timing ranging from June 19, 2011 to August 17, 2011. In addition, net selling prices in the U.S. for Cottonelle and Scott 1000 bathroom tissue will increase approximately 7 percent, effective June 19, 2011. The price changes vary by brand and pack size. Kimberly-Clark's net sales in North America for these consumer products exceeded $4 billion in 2010.
DALLAS — A Dallas non-profit is keeping a close eye on the disposable diaper price hike soon to hit stores, and it worries it will hurt their budget.
"We can't afford to be hit," said Jeanne Reyer, executive director of Captain Hope's Kids.
Every week, the charity distributes 9,000 diapers to agencies that help homeless babies and toddlers across North Texas.
"We are spending nearly $7,000 in diapers a month," Reyer said.
Irving-based Kimberly-Clark Corporation announced it is going to increase its prices in North America for products including diapers, tissue paper and toilet paper.
For example, the cost of Cottonelle toilet paper will go up 7 percent; the price for Huggies diapers, baby wipes and and training pants will jump between three and seven percent.
Kimberly-Clark claims the hike is needed because of the rising costs for raw materials to make its products.
Other companies, including Procter & Gamble and Colgate-Palmolive, are also looking at rolling out price increases.
And here's the reaon for all of this misery, as explained by Dr. Ron Paul. Ron Paul's political opponents paint him as naive, out-of-the-mainstream, an extremist, and overly pessimistic. They call him Dr. No. But he's almost always right. This is an excerpt from his book The Revolution: A Manifesto:
When the Fed intervenes like this, increasing the money supply with money and credit it creates out of thin air, it causes all kinds of economic problems. It decreases the value of the dollar, thereby making people poorer. and in the long run even the apparent stimulus to the economy that comes from all the additional borrowing and spending turns out to be harmful as well, for this phony prosperity actually sows the seeds for hard times and recession down the road.
First, consider the effects of inflation, by which we mean the Fed's increase in the supply of money, on the value of the dollar. By increasing the supply of money, the Federal Reserve lowers the value of every dollar that exists.
(That's why the government is trying to get you out of dollars, and into purchases of things they want you to buy. Like purchasing all the houses that they're stuck with from their Community Reinvestment Act/Fannie/Freddie real estate debacle, or purchasing cars and trucks from those new auto companies they acquired. They are honest to God trying to get you to spend money by announcing that your money will soon be worth less. Good God in heaven.)
If the supply of Mickey Mantle baseball cards were suddenly to increase a millionfold, each individual card would become almost valueless. The same principle applies to money: the more the Fed creates, the less value each individual monetary unit possesses. When the money supply is increased, prices rise - with each dollar now worth less than before, it can purchase fewer goods than it could in the past. Or imagine an art auction in which bidders are each given an additional million dollars. Would we not expect bids to go up? The market works the same way, except in a free market there are numerous sellers instead of the one seller in an auction.
All right, some may say, prices may indeed rise, but so do wages and salaries, and therefore inflation causes no real problems on net.
This misconception overlooks one of the most insidious and immoral effects of inflation: its redistribution of wealth from the poor and middle class to the politically well connected. The price increases that take place as a result of inflation do not occur all at once and to the same degree. Those who receive the new money first receive it before prices have yet risen. They enjoy a windfall. Meanwhile, as they spend the new money, and the next wave of recipients spend it, and so on, prices begin to rise throughout the economy - well before the new money has trickled down to most people.
The average person is now paying higher prices while still earning his old income, which has not yet been adjusted to account for the higher money supply. By the time the new money has made its way throughout the economy, average people have all this time been paying higher prices, and only now can begin to break even. The enrichment of the politically well connected - in other words, those who get the newly created money first: government contractors, big banks, and the like - comes at the direct expense of everyone else.
These are known as the distribution effects, or Cantillon effects, of inflation, after economist Richard Cantillon. The average person is silently robbed through this invisible means and usually doesn't understand what exactly is happening to him.
And almost no one in the political establishment has an incentive to tell him.
And that, ladies and gentlemen, is why the price of diapers and toilet paper is going up. There isn't a long-term shortage of wood pulp, paper, or anything else. There's an increase in the money supply. Ben Bernanke is printing it. If you caught someone in your home stealing 3-7% of your savings, I hope that you would shoot him, or at least knock him in the head, "civility" be damned.
Nobody voted for this, nobody is debating it. The Fed is paying off Washington's debts by printing more money. It doesn't hurt the rich that much, since they typically get to spend the funny money first, and it's a horrible burden on the poor.
If current trends continue, we won't have to worry about the high cost of Kimberly Clark's toilet paper. Ben Bernanke's will be a lot less valuable.
Unbelievable.
We're about to have some hyperinflation. Printing money is the only way that Uncle Sam can pay his debts.
It's not the fault of the Republicrats or the Demoblicans, who have spent money like they'll all be dead before the bills are due.
It's not because of the Federal Reserve, which is now printing money faster than the stimulus projects can spend it.
It's not the fault of the Nanny State.
It's not because of open-ended wars.
No, Time magazine, which I'm hoping will soon go the way of Newsweek, has found the culprit !
....if President Obama had showed up at the press conference immediately following the elections and announced that regardless of the results of the elections, he was proposing a new 600 billion dollar stimulus plan, and that he expected Congress to pass it immediately, reporters would have thought he was delusional.
Now imagine that President Obama said: "And if Congress doesn't act immediately to pass my 600 billion dollar stimulus package, I'll simply enact it myself without Congress." Reporters would have thought he was doubly delusional. And a dictator to boot!
Now imagine that President Obama also said: "And, you know what, I'm going to structure my new 600 billion dollar stimulus by giving the banks windfall profits. That's right, the very same banks that got those lovely bailouts before!" The Republicans' heads would explode!
So what exactly did Fed Chairman Ben Bernanke do on that very same Wednesday? He ordered the Fed to purchase 600 billion dollars of United States bonds. Who owns those bonds? Well, um, banks, investment banks, brokerage houses and other financial institutions; you know, many of the same players who got those lovely bailouts that the voters hated so much. And by purchasing 600 billion dollars in bonds in a relatively short period of time, he is effectively driving up their price, thereby giving a windfall to their owners. (Even better: many of the owners are in foreign countries-- so it's effectively a bailout for foreign banks too! I'm sure the voters will love that.)
And he can do all this without asking Congress's permission. Why? Because he's Ben Freaking Bernanke, the chairman of the Federal Reserve, that's who.
He doesn't have to pay attention to any polls or popular outrage about bank bailouts or Republican opposition to a second stimulus. He don't need no stinking stimulus package! He's more powerful than the President of the United States! He's our maximum leader.
If you've made it this far, I can predict that your eyelids are getting heavy. This isn't as interesting as ObamaCare, Abortion, Gun Control, Gay Marriage, or even NAFTA, is it?
True.
Our leaders are happiest when you're wondering if Christine O'Donnell is a witch, if Rand Paul worships Aqua Buddha, or if Barack Obama wants to take away your Bible.
The Federal Reserve is about to create $600 billion dollars from someplace, probably that big printing press they have on Blue Mound Road in Fort Worth, Texas.
If there are 300 million Americans, that means that your share of the cash in the U.S. is about to be worth $2000 less than it was before this announcement. Here's Ron Paul on the subject. This is from his book The Revolution: A Manifesto.
When the Fed intervenes like this, increasing the money supply with money and credit it creates out of thin air, it causes all kinds of economic problems. It decreases the value of the dollar, thereby making people poorer. and in the long run even the apparent stimulus to the economy that comes from all the additional borrowing and spending turns out to be harmful as well, for this phony prosperity actually sows the seeds for hard times and recession down the road.
First, consider the effects of inflation, by which we mean the Fed's increase in the supply of money, on the value of the dollar. By increasing the supply of money, the Federal Reserve lowers the value of every dollar that exists.
(That's why the government is trying to get you out of dollars, and into purchases of things they want you to buy. Like purchasing all the houses that they're stuck with from their Community Reinvestment Act/Fannie/Freddie real estate debacle, or purchasing cars and trucks from those new auto companies they acquired. They are honest to God trying to get you to spend money by announcing that your money will soon be worth less. Those who know how the system works have responded appropriately. Notice the recent stock jump?)
If the supply of Mickey Mantle baseball cards were suddenly to increase a millionfold, each individual card would become almost valueless. The same principle applies to money: the more the Fed creates, the less value each individual monetary unit possesses. When the money supply is increased, prices rise - with each dollar now worth less than before, it can purchase fewer goods than it could in the past. Or imagine an art auction in which bidders are each given an additional million dollars. Would we not expect bids to go up? The market works the same way, except in a free market there are numerous sellers instead of the one seller in an auction.
All right, some may say, prices may indeed rise, but so do wages and salaries, and therefore inflation causes no real problems on net.
Bullshit.
This misconception overlooks one of the most insidious and immoral effects of inflation: its redistribution of wealth from the poor and middle class to the politically well connected. The price increases that take place as a result of inflation do not occur all at once and to the same degree. Those who receive the new money first receive it before prices have yet risen. They enjoy a windfall. Meanwhile, as they spend the new money, and the next wave of recipients spend it, and so on, prices begin to rise throughout the economy - well before the new money has trickled down to most people.
The average person is now paying higher prices while still earning his old income, which has not yet been adjusted to account for the higher money supply. By the time the new money has made its way throughout the economy, average people have all this time been paying higher prices, and only now can begin to break even. The enrichment of the politically well connected - in other words, those who get the newly created money first: government contractors, big banks, and the like - comes at the direct expense of everyone else.
These are known as the distribution effects, or Cantillon effects, of inflation, after economist Richard Cantillon. The average person is silently robbed through this invisible means and usually doesn't understand what exactly is happening to him.
And almost no one in the political establishment has an incentive to tell him.
If we've won over The God Of Thunder, can the rest of America be far behind?
And just for the heck of it, I think I first saw this on Harper's site. Here's Gene Simmons doing a military medley for the troops. It kinda works, doesn't it?
Here's an old one dollar bill from the 1920's. It's a "silver certificate", meaning that you could swap it for one dollar's worth of silver. The current one dollar bills couldn't be swapped for enough silver to fill a gnat's rear end. Our government has printed too many of them.
See this picture of Andrew Jackson? In 1905, a $20.00 bill could be swapped for $20.00 worth of stuff, including gold.
If you made the foolish decision to save a $20.00 bill from that era, it will now only purchase 5% of what it could in 1905.
This hundred dollar bill will only do the job once done by a $5.00 bill. The Federal Reserve system, created in the early 1900's to stabilize our currency, has succeeded in destroying 95% of our currency's value.
And if you've got any of these, you might want to spend them now. If current trends continue, they're going to have to print enough of them for all of us.
This is a variation of a chain email sent to me by The Whited Mama.
This is why LIbertarians are so adamant about a small government. We want a very small government. In the words of Grover Norquist, we want a government small enough to drown in a bathtub.
Here's Rep. Maxine Waters, quizzing Ben Bernanke and confusing the heck out of the Discount Rate and the Federal Funds rate.
Please remember, Rep. Waters has been on the House Financial Services Committee for years. Years. She has a staff.
I'm no Ben Bernanke (or Federal Reserve) fan, but you have to enjoy the look on Bernanke's face. Remember the Fed hearings where Alan Greenspan had to answer questions that Mary Bono (the late Congressman Sonny Bono's widow) was reading from index cards? This is kinda like that, but worse.
Here's a graph showing the increased cost per pupil (since 1919) as compared to the increased cost of everything else.
Go here for more details.
One other thing, slightly off topic....The Federal Reserve was founded in 1913, and given the task of stabilizing the nation's money supply, which had been fairly stable until that point. That's why most studies of runaway inflation begin around 1920, after the Fed had a few years to screw everything up.
Say you're a prudent and thrifty ninety-year-old, and you saved $100 dollars under your mattress in 1920. Relative to their original worth, those dollars will now purchase about $6.50 cents worth of stuff, by 1920's standards.
We used to say that a dollar saved is a dollar earned. WRONG ! A dollar saved is .94 lost.
So here's a big "hope you go out of business" to the Fed, and to the public schools.
If you go to the site, notice how many banknotes said "payable in gold" or "two dollars in silver" or "payable to the bearer on demand", or similar verbiage. You could walk into the bank and swap this piece of paper for some silver or gold.
Do you think our government was a little more careful about printing batches of these babies?
Compare that system to the junk you see below. The little piece of paper that you sometimes see blowing down the street, and don't even bother to chase after? It says "THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE".
Why is it legal tender? Because they say so.
There are no longer any safeguards in place to prevent our government from spending these in the billions and printing these things by the trillions. You can to RonPaul.com for a good explanation of Fiat Money, Inflation, and Dr. Paul's proposal for an open competition in currencies.
Good luck when prices start doubling. A special prize will be awarded to the reader who sends me the first earnest MSM editorial blaming greedy corporations for the price increases.
Ben Bernanke, violently fighting against Ron Paul's "Audit The Fed" movement, is Time Magazine's Person Of The Year.
Gag me with a dirty diaper.
My vote would go to The Climaquiddick hacker/whistleblower. Remember when whistleblowers (who saved taxpayers and investors millions of dollars) were lionized and admired?
The Climategate Hacker's achievements makes Bernanke's inflationary achievements look small.
Now we're getting somewhere. Ron Paul has made a motion for Congress to consider allowing alternative currencies in the United States.
Why is this a good thing? We in the U.S. now have what is called a "fiat" currency. A fiat, according to these folks, is "a command or act of will that creates something without or as if without further effort".
In other words, all those pictures of dead presidents printed on greenish paper in your purse or wallet or checking account? They're only worth something because our government has declared that they are worth something, and must be accepted for all debts, public and private.
But that sounds like a reasonable system, doesn't it? What would happen to retail cashiers if they had to have registers with 3,682 different bill and coin slots? What would happen to pricing? Exchange rates? Wouldn't things get complicated?
Yes, having only one type of currency in circulation is convenient. But who controls the amount of this fiat currency in circulation?
Senators who have to be re-elected every few years. Representatives who believe that their congressional district is somehow special, and needs money. Presidents who want to send the kids off to Foreign Adventures in a sandbox somewhere on the other side of the world.
Our government spends more than it takes in because they know if they get in trouble, they can always print more money. Here's a chart showing the number of dollars printed, in billions, ever since the creation of The Federal Reserve. Note the Obama uptick on the far right. A 2009 dollar is now worth a 1913 nickel.
This devalued crap was printed to pay off government debts.
The Federal Reserve was created to stabilize the money supply. The dollar has lost 95% of its value since then. Things have less value as they become more common.
What do you think this new mega-increase in the money supply will do to the price of eggs and butter and beer?
(A special prize will be given to the first reader to email me an editorial blaming these upcoming price hikes on GREEDY CORPORATIONS.)
And why can our government get away with this? It's because our currency doesn't have a competitor. If someone owes me money, I'm required to accept Obamabucks as payment. (Or Bushbucks, Clintonbucks, Reganbucks, Bernankebucks, Greenspanbucks, etc. I'll be fair.)
What would happen if some banks were once again allowed to print their own currency, the way many banks did prior to the government monopoly? (One of our worst presidents once made it illegal to own gold, BTW. Statists hate, hate, hate competition.)
What would happen if some of these banks had honest managers/owners, and conscientious boards of directors, and they vowed to keep their money supply at a constant level?
Whose currency would you prefer? The system run by these hypothetical banks, or the system currently overseen by Reid, Pelosi, Obama, Bernanke and Company?
