"Surprising Strength On The Hustings"
Via Daniel Larison, I caught this New York Sun editorial on Ron Paul, which is worth the quick read. What's notable about the media's focus on the dollar during the past few weeks is how right-of-center outfits like the WSJ have finally sounded the alarm. But here's what the dollar has done since the Bush administration took office. Currencies don't trade in a vacuum; they merely reflect underlying policies. So where have those alarm bells been for the past six years?
posted by The Cunning Realist at Thursday, November 15, 2007
8 Comments:
It's interesting that the $ dipped below 100 on the index on 3/1/03, right around the time we started the war, and hasn't gone above it since.
I heard on the Diane Rehm show that in the late 90's the dollar was too strong.
How do we determine what value the dollar should have relative to other currencies and commodities? What is the right policy?
I haven’t voted for any federal government elected office since Harry Browne ran as a Libertarian. I don't vote because I think the only solution is to beat, drag through the street, shoot in the head, and hang from DC lampposts like Mussolini all congressman...and leave their bodies to rot as a warning to the next group of criminals to take office. Maybe leave a warning note attached to each body...executive and judicial branches are next. If we did that we could guarantee about 20 years of good governance before the corruption would start settling in again.
But I digress...others I have talked politics with for years have given me Ron Paul bumper stickers and about 50 Ron Paul business cards to hand out. I even took them. I mean I love Ron Paul and everything but I don't think there is much he could do even if he was allowed to become president. Honestly what can he do anyways? Every senator and congressman will be opposed to everything he stands for and Ron Paul will succeed in bringing the constitution back. It will be dusted off and used to justify limiting anything and everything he has influence over. The congress will be king again with the judicial branches approval and the crimes and corruption will continue. Hell they will probably even declare war on Iraq to make sure Ron has to continue the war! All in all though I think I might go ahead and vote for him. If there is any good that might come from his movement it is getting liberty minded people involved in local politics....and then using local politics to stifle the influence of state and federal agencies. I think at least on the local level people are beginning to finally figure out that the state and federal governments are nothing but organized crime. I mean when I have people who have been calling me crazy for the last 10 years...start handing me Ron Paul paraphernalia something new is definitely going on!
To neils...
“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”
John Maynard Keynes
One of the reasons Republicans were successful in taking over congress in the 90s was the philosophy that defecits don't matter. They understand that they don't have to raise taxes to tax the people. They can run deficits and print their way out of it. Very smart political strategy. The democrats claimed they needed taxes to keep the government going and the mean Republicans would shut down all these cherished government institutions. Not only did they not shut them down they increased their size and created new ones. The Democrats looked stupid. When you hear people arguing about too strong of a dollar...what you are hearing an argument for is getting the printing presses running and flooding the financial system with cheap dollars. So loans will be less expensive and business will boom! It is kind of like setting up a counterfit shop in every town. At first the new money lets everybody buy and spend...but as stuff flys off the shelves...items become scarcer...prices go up. It is the classic boom and bust cycle. This is what you get when you believe that an economy should be centrally managed. Don't be fooled by people talking about "free markets". We haven't had anything resembling a free market since the fed was created and the federal income tax was made permanent. If you can forget government propaganda and public school education...this should all be obvious wiht a bit of common sense thinking. The reason the gold standard was a good idea was it prevented the government from doing this kind of nonsense.
If nothing else, one can register a protest against Washington's power brokers, not to mention the "mainstream media," by voting for Ron Paul in the Republican primary. I intend to do so.
to goldhorder et al.
On the other hand, isn't it true that inflation deflates the values of loans so that people who owe a lot of money to banks are paying back the loans in cheap dollars?
It seems to me that that was one of the issues that came up during the turn of the century and Wm Jennings Bryan's sppech "Cross of Gold" speech.
So doesn't inflation favor those who owe money?
Neils, yes inflation does favor those who owe, but what the right hand giveth the left hand taketh away: interest rates go up to compensate and most of the other things you need cost more; if wages go up to compensate for that then inflation gets goosed some more and if they don't you starve.
A vicious feedback loop (but a deflationary spiral can be even scarier).
The real crime is what it does to the working poor and retired on a fixed income. It makes upward mobility almost impossible and robs the elderly of their savings...because what little money you save or have saved becomes meaningless as it is wiped out by inflation. If you have assets to back your loan...and are one of the first people in line to get the "free money" (Wall Street). The advantages it gives you are enormous. The people who get the "free money" last are the ones who suffer the worst. Check N Go, Check Smart, Etc...they don't loan money out at %5. They loan it out at %25!!! You as a consumer in a great deal of debt....as long as you can keep it backed by a real asset (Home loans) can do OK...as long as you are working at a job that gives raises to match inflation....and as long as you continue to work. But that isn't even the worst problem. The worst problem is that throughout history the more a government juices the economy...the harder the crash when it does finally occur. The Markets get distorted. People think of their homes as an ATM machine, Nobody works in manufacturing anymore...why make anything useful when you can make money by moving piles of money around?, The increase in the number of people working in the financial sector explodes (is moving piles of money around really value added work?). This is when other countries start wondering why they take your dollars!!! When other countries start wondering why they take your dollars is when bad...bad...bad things start to happen. What happened at Bretton Woods? Why did Nixon go off the gold standard? Why did Volcker raise the Fed rate into double digits? Is this what ended the stagflation of the 70s? Or was Volcker just a meanie who hated poor people...LOL! Is the US experiencing the beginnings of another era of stagflation? Can't the fed just raise rates one day...lower them the next...so everything just hums along like a clock?
...As I've mentioned before. Gold has a long...long...long...history of maintaining its value as a storage of wealth. It had such a good history the founding fathers of this country made it the base of our currency. Nixon broke the last tie to this standard in 1972. America was in a fairly favorable position when he did this. We still had a great manufacturing base, We still had military power, We had an enemy in the Soviet Union that most of Europe and Asia feared, etc.
Times are a changin. The world doesn't think the same way about us anymore. Our leaders have for many years believed they could bring about one world government...the problems with such a belief is that even if you think you can manage this fairly...will the rest of the world believe you? I'm an American...and I don't trust our government. I don't think the average Chinamen, or Indian, or Russian, or Iraqi thinks anymore of our political elite than I do.
Just one more comment...Gold has a history of a storage of wealth for over a thousand years. The US dollar not backed by gold has a history of a storage of wealth for 35 years.
You can back these fools all you want to. You can "help the people" with high inflation if you want to. Me...I've got my gun, I've got my pail, and I've got my gold.
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