Posted on 11/16/2005 9:38:57 AM PST by Sonny M
Good stuff, simple and easy to read.
Inflation is what is going to ultimately shrink the national debt, again.
Meanwhile, the crew of the ship have turned off the M3 transponder monitor down in steerage. They are calling down "All is well! No worries! Return to your cabins!" as they prepare the lifeboats.
Bingo.
Moo.
A pond is equivalent to the money stock, and the creeks which feed it, the money supply.
In the old days, the money supply was gold and silver mining, and the gold and silver provided means for wealth storage and more efficient trade and markets rather than inefficient barter. So people with wealth, farmers; would trade wealth, wheat; for gold and later buy a tracter which would increase productivity; or some consumable the farmer doesn't have the time to make for himself.
Today, the money supply is the central bank and its relationship with treasury to conduct open market operations, and back money with bonds the interest and principal of which will be paid for out of the hides of 1040EZ taxpayers.
The government has a great position because it gets to use the new money first, when it has the greatest purchasing power. By the time it passes hands a few hundred or thousand times, prices have risen and the last person to earn that dollar sees the price tag and squeals about the "high cost of living."
Under the old way, prices were more or less stable for over 100 years. Since 1970, prices have gone up ten times. This inflation robs the holder of FRNs. Old folks like my dad have to pay $300 for medicine with money that was saved when it would buy the same medicine for $30. The difference, 90% of the purchasing power that my dad lost, was expropriated, stolen, by the criminals in government, and in the central bank.
Neglecting the 1980 crisis peak, and 20 years following of dropping prices in gold: If he had bought gold coins at $35/oz, and kept them 30 years, TODAY, he'd find his wealth was preserved. Generally: Gold preserves wealth. Paper currencies erode wealth.
But if you can sell FRNs for gold, doesn't that mean FRNs have real value? I mean, who would sell gold to someone for, as you describe it, "symbolic money"?
I did not mean to infer that I wanted deflation to happen.
Just that the house of cards is less stable every day.
They limited stuff in the constitution to compromises.
Hamilton and Jefferson led just 2 factions that were split on monetary policy.
Ironically (or not so), several other founding fathers had different views.
To really get into it, you have to go back and read either their biographies or essays or writings.
That said, just about any founding father in approach, would be raising hell today about us being off the gold standard, to all of them it was a basic common sense thing.
"When inflation is unanticipated, as it so often is, there's a redistribution of wealth from creditors to debtors" . . .
Nonsense.
Look at all the 'real estate millionaires.' Just look at them, basking in their self-reflected glory. NOT! Real estate has been hyper-inflated approximately 20% + per year for the past four years. It has been inflated by the Fed easy money lending policies. This is all smoke and mirrors and is a house of cards. It is all hype and B.S. Real estate used like an ATM machine is not real wealth.
Example: Shoe box sized houses in La La Land drug town selling for over $ 600,000? Get real. It's all B.S. people. Los Angeles County increases its property taxes accordingly. Piling more B.S. on top of B.S. Portland, Oregon is hyper-inflating at about 25% + a year for the past three years. Drug houses only sell for $ 250,000 here. Wake up, people. This entire economy is smoke and mirrors. Just like Wal-Mart represents a 'vital U.S. economy.' LOL, LOL, LOL! That one company represents China getting richer while America is losing more jobs every day. (Learn More?)
There has been no "redistribution of wealth from creditors to debtors." No way! The redistribution never happened. Not really. When the real estate bubble bursts, these debtors will still owe the money to lenders. Even after they have lost their homes to foreclosure, debtors will pay, and pay, and pay for years. Under the new Bankruptcy Act, lenders win and debtors lose. Thank your corrupt Congress who accepted bribes from lenders to change the law. And thank "Mr. Bubbles" himself, Alan Greenspan.
Ah, a zero-sumist.
Something about "siezing the means of production?" ;)
Odd you mentioned Real Estate.
I happen to work in the field.
Even better, I've always done better after a "bubble" has burst then during one.
And I have yet, in my years, ever lost to the lendor....though inflation while it may hold some benefits for me, would cause other different problems.
If money borrowed is still owed (and it is) but is now worth less, lendors are not walking away winners.
Comparing prices in gold in U.S. of 1833 with 1933, just prior to the abandoning of the domestic gold standard, the index of wholesale commodity prices increased only of 0.9 percent in one hundred years. Since then the index increased 350% by 1971 when president Nixon announced that no more gold would be given in exchange for dollars. In the last twenty years ('03) the index has gone up around 400%.
Are you talking about campaign contributions or actual cash bribes to people in congress? Regarding one of your other statements, I can assure you that no "shoe-box sized" houses in LA county sell for $600K. A house selling for that price would have to be in a good area in LA county and at least 1,500 sq ft. I'm concerned that you don't do enough reading, research, and thinking before you post at FR.
I've read the coin act, or whatever it was called. The bottom paragraph declares that anyone in the mint who debased the coins would be given the DEATH penalty. It's pretty clear about what they meant by Money: Gold and Silver.
He is a national treasure. I'm feel quite fortunate to have corresponded with him and made his personal acquaintance.
So to pay taxes, you must use FRNs, and to use them, you must enter into a commercial relationship with the entity or group of entities that maintain them, government and central bank. To do this you must accept their terms, their rights against you. Next time you withdraw $10,000 for a lawful purpose and are told they will file a report so the authorities can keep an eye on your money flow, and you feel spied on, your privacy violated, remember this.
This is what I mean by symbolic, to get what you need to pay your taxes, you must not offer anything real of your own, you must agree to allow the bank to symbolically represent part of your wages and wealth in their media allowing them to be trustees for your wealth until the transaction is complete. And often people just stay in the system and keep their savings there too. But people with excess wealth, if timed properly, can preserve it in gold, and prevent erosion from inflation, and buy back cheaper dollars at a later time with some gold, enough to pay taxes. This plan wouldn't have worked well between the 1980 peak and the 2000 double bottom. But it would have worked well between 1970 and today. Everything has its risk of not working out.
Our forefathers were once free from this burden, as they could just pay their just taxes with their own property, gold coins. With no one in between, there was no spying, no extra fees, etc. Their money was not symbolic, it was simple.
Gold is a sought after commodity for many reasons, and its natually occurring demand in the market is what gives it its value relative to other goods and services. And it could be used to buy those other goods and services.
It is intresting to note that I could print a paper with my picture on it and it would not have any value because I cannot enforce legal tender laws.
Is it fair that our government enforces legal tender laws for paper money that belongs to a private bank? No it is not the government's money! The last time we had a shot at government's money was with JFK United States Notes, and he was shot and the EO repealed. Since then, FRNs, notes of private banker phonies who pass as government.
Final point: Alan Greenspan is quoted as having said, "Gold is the ultimate form of payment on the Earth."
It is no accident he places gold at the ultimate position for payment and all other things beneath it. I never speak of buying gold. There is no substance "higher" than gold with which to buy gold. Gold buys lesser things. Lesser things do not buy gold. I also don't speak of selling gold. Instead, I buy dollars with gold.
It is a mental game to some degree. In my mind, gold is money, the only money. FRNs are low quality tickets that are a money substitute and allow me to do some of the same things I could with real money: buy and sell. Not to go too far off the deep end but what you do with FRNs is you discharge your debt with limited liability. This is the benefit the central bank gives us. Since this nation is insolvent with respect to gold coin.
ping
IT IS BAD for USA. It is good for China.
"Let London manufacture those fine fabrics of hers to her heart's content; let Holland her chambrays; Florence her cloth; the Indies their beaver and vicuna; Milan her brocade, Italy and Flanders their linens...so long as our capital can enjoy them; the only thing it proves is that all nations train their journeymen for Madrid, and that Madrid is the queen of Parliaments, for all the world serves her and she serves nobody."
(Prominent Spanish official - Alfonso Nunez de Castro in 1675)
Too many dollars chasing too few goods?
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