What cost $1.00 in 1981 would cost $2.36 in 2006. Also, if you were to buy exactly the same products in 2006 and 1981, |
Well... socialism certainly hasn’t died; it’s alive and well and living right here in the USA. And communism, one of the worst and most tyrannical afflictions ever visited upon humanity by the sheerest variety of idiocy, is also maintaining its longevity around the globe.
I don’t buy it. The “yellow metal” is also subject to the rules of economic supply and demand. If a huge supply was suddenly found in some mountain that was easy to retrieve the “true” value would drop, not stay constant. Likewise if industry suddenly had no demand for gold for making things the “true” value of gold would also drop.
The picture is much more complicated than the author’s statement.
“political mischief in the form of protectionism....”
Mr. Forbes makes some great points but the premise that a strong pro-domestic trade/tariff bias is ‘mischief’ is what gets us:
* State Department Lenovo computers that are rejected for possible bugs
* cheap imported foodstuffs and food supplements and toothpaste with harmful contents
* reduced capacity for rapid war footing if necessary
* outsourced jobs and internal layoffs that cost a fortune in human misery here—while subsidizing slave wages and profound human misery in Third World countries.
* and so on and so on.
What cost $1.00 in 1981 would cost $2.36 in 2006. Also, if you were to buy exactly the same products in 2006 and 1981, |
The USD is a terrible investment. I use it as a measurement of inflation. Investment goods I bought two years ago have gone up about 25%, as indicated by sales I made the past few weeks. But the FED tells us inflation is only 2, maybe 3%.
The Fed has their measuring tools, but I prefer mine - the USD.
Listen to Hillary Clinton and you will find Marxism alive and well.
Socialism can never be as successful economic system as one based on liberty. Socialism is based on three violations of the Ten Commandments: lies, coveting and theft.
But this begs a moral question that goes to the heart of the fiat money/central-banking system: where does wealth come from, and whose money is it?
Government, as Friedman also pointed out, does not have any money of its own to spend. Friedman said that taxes are not as important as spending when it comes to controlling the size of government simply because government must get the money it spends from somewhere. It can either print it, borrow it, or get it via taxation.
When government printed money that was “backed” by gold or silver, the money served as a substitute. The US paper currency used to be Silver Certificates. A holder could go to a bank and exchange the paper for the same value in silver. The paper currency was a kind of warehouse receipt.
At one time, the value of the dollar was coded into law at 1/20th of an ounce of gold. In 1933 it was devalued to be 1/35th of an ounce of gold and private citizens were forced to exchange their real gold for paper money from the Federal Reserve, a private corporation.
But the key point is that government must get the gold and silver through legal taxation in order to have it to devote to the monetary system.
But today, our money is no longer based on gold or silver. It is just based on supply and demand. And what happens when government prints money based on nothing? It is “borrowed into circulation”.
This is a very sophisticated form of theft from citizens.
When the founders of Google created $150 billion in new wealth, the Federal Reserve says the economy “expanded” by that amount, which is a small percentage of the total. Under the theory that they must keep the money supply expanding in parallel with the expanding economy, they will have to “borrow into circulation” a certain billion of dollars to grow the money supply by that same percent.
The money was created simply by notational entries in a computer ledger, so the money cost the government nothing, yet it will be used to buy real goods and services. When this money comes into circulation, it does in effect, compete with the existing money to bid up prices.
In short, private wealth is being taken from every holder of dollars when the economy is expanded when these same individuals work and produce new wealth. This is theft by government. It manifests itself in the way that prices behave and in the steady erosion of the purchasing power of the dollar. We can see it most easily in the price of real assets such as oil, gasoline and gold.
Central Bankers know full well what they are doing. Government itself is addicted to this system because of the rivers of money that it brings in to be spent and controlled, and the debt it makes it so easy to accumulate and seemingly never to have to repay. Every country on earth uses this system. If fear it will be all but impossible to wean any government from it.
No economic, historical, literary, or political idea ever dies. It gets a fresh coat of paint now and then.