Liberty Forged

the State has no money of its own, so it has no power of its own. ` Nock

Posts Tagged ‘currency’

World Reserve Currency – China says yes.

Posted by Jesse on March 23, 2009

Bernanke: Oh no, no, no. No ones talking about a World Reserve Currency. We can print our way out of this mess.

Barack Obama: Geez, ya know. We’d be taking a stronger lead towards achieveing the goals I set forth during the campaign, but all these setbacks….this crisis, you know, we couldn’t have anticipated it.

Ron Paul: We are going to have a dollar crisis. I ran for Congress in the 70’s because Nixon removed the last remnants of the gold standard and I knew that would lead to disaster. We need to have sound money, move towards a new gold standard and abolish the Federal Reserve. (Also see: The Case for  a Genuine Gold Dollar)

Financial Times: China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.

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MSNBC asks Ron Paul for education on the economy.

Posted by Jesse on January 27, 2009

“The Federal Reserve pyramids debt“. A fraud and ponzi scheme if there ever was one.

Does Obama even entertain discussion on this issue? Hahahaha.

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The Prospect by Marc Faber

Posted by Jesse on October 23, 2008

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°For a more in-depth perspective I would recommend Frank Shostak, adjunct scholar the Mises Institute and chief economist at MF Global. Recently interviewed by Jefferey Tucker (Sept 30, Oct 13, Oct 22) and Lew Rockwell (Oct 10), his analysis is clear, sound, and priceless. [see: Is the Fed an Inflation Fighter or Creator]

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Jörg Guido Hülsmann, Senior Fellow at the Mises Institute, author of a new publication, The Ethics of Money Production. Interviewed by Lew Rockwell [Aug 4, Aug 11, Sept 28, Oct 8, Oct 12]

______________________UPDATE——-Friday Oct 24——–UPDATE___________________

°Just watched Charlie Rose interview David Smick, well known for his book The World is Curved, and more-so as Founder of The International Economy. This Magazine is “edited for … central bankers, politicians, and members of the financial community including professional investment managers, macroeconomic specialists, and high net-worth global investors.

I’d give it a 2 out of 10. (And keep in mind please, I like Charlie’s show!)

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Also see: °Matthew Beller’s , Inflation, Deflation, Red-flation, Blue-flation, [mp3] that talks about, you guessed it, definitions. More importantly it pinpoints the importance of each in the economy and how each is caused by the various actions within the market.

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Downsize DC: The Easy Revolution (honest money)

Posted by Jesse on March 13, 2008

Quote of the Day:

“The Revolution was effected before the War commenced. The Revolution was in the minds and hearts of the people; a change in their religious sentiments of their duties and obligations … This radical change in the principles, opinions, sentiments, and affections of the people, was the real American Revolution.”
— John Adams, February 13, 1818

Subject: The Easy Revolution

Last Saturday, in the middle of the night, we crossed the 1-million mark for messages to Congress.

This Wednesday, in a move reminiscent of the kind of self-generated activity sparked by the Ron Paul Revolution, DC Downsizer Tom Leser purchased the url HonestMoney.org, and pointed it at our “End the Inflation Tax” campaign in support of Ron Paul’s honest money bills. He plans to use the URL on signs and flyers. Wonderful! Thank you Tom.

Currently, in Congress, because of the intense pressure received from constituents, the Democrats are taking serious steps to make sure that no bill coming out of Congress grants immunity to the telecom companies that helped the government to illegally spy on the American people. This is very good news, and it happened because of people like you, who have given the Democrats reinforcement. We will have more to say about it in the days ahead.

Right now, so far in March, we are on track for another good month of recruitment, education, and pressure on Congress. As things stand now we have a decent chance of meeting or exceeding the record setting results we achieved in February.

We have a fascination with these kinds of incremental, but relentless, bits of progress. We report them to you on a regular basis because we believe measurement is important, and because we believe such a process of “relentless incrementalism” is the only way to change America.

Rome wasn’t built in a day. America wasn’t messed up overnight. Very few things in the world happen quickly. Get-rich-quick schemes rarely work, and neither will schemes to change-America-quick. But there is something even more important about our strategy of relentless incrementalism than these kinds of common-place observations . . .

It is very well understood how government grows, and why it is so difficult for taxpayers to protect themselves from the large-scale looting that goes on in Washington . . .
Government confers huge, concentrated benefits on select groups of people, while spreading the cost over all taxpayers
The groups that benefit from government favors have large incentives to fight for those benefits, while taxpayers have small incentives to fight any particular instance of looting
This essential insight tells us something very important about strategy . . .

NO strategy for curtailing government growth has ANY chance of success UNLESS that strategy makes it EASY for taxpayers to fight government growth, and, as a result, more DIFFICULT for politicians to make government grow. We have built our entire organization, and we are basing all of our future plans, on this crucial insight.

Our specific legislative proposals like the “Read the Bills Act,” the “One Subject at a Time Act,” the “Write the Laws Act,” and others we will propose in the future, show one of the ways we can make it HARDER, and MORE COSTLY, for the politicians to do the things they do. But . . .

To actually pass bills like these we must also make it very cheap — very EASY! — for taxpayers to apply the kind of relentless, overwhelming, resistance-numbing pressure that will be needed to make Congress submit.

Some of these EASY methods are obvious. We have empowered DC Downsizers to educate, recruit, and apply pressure on Congress in one EASY, seamless, low cost process. All it takes is a few mouse clicks and keyboard strokes. But . . .

More than this is needed.

We must also be able to change the environment. We must be able to counter the bad ideas and propaganda of the government schools, and the establishment news media. The requirement here is the same — we must make it EASY and CHEAP for taxpayers to fund the Downsizing counter-message. Toward this end . . .

We do the exact opposite of most organizations. Most groups focus on major donors first, and smaller donors second. We understand why they do this. A single $10,000 donation covers a lot of $25 donations. But finding and cultivating major donors is very time consuming and staff intensive. And we don’t want to have a large staff, or to spend a lot of our time on fundraising. In addition . . .

We think the best sales pitch we can make to a major donor is that we have lots of smaller donors, and that we have a small overhead and a big devotion of resources to our mission. This sales pitch becomes stronger every time we gain . . .

A new monthly, credit-card pledger at $5, $10, $25 or more.

On the one hand, all it requires is a few mouse clicks and keystrokes to educate, recruit, and apply pressure. On the other, all it would take is a few cents per day from a lot of people to begin to make the message heard by everyone, everywhere, every day.

We want to spend most of our money on advertising for things like the “Read the Bills Act” — to educate, recruit, apply pressure, and change the environment. But to reach that point we need to have secure funding for our very small basic operating expenses. We thought we would achieve that last year, but we didn’t, for reasons we all know and understand. But maybe 2008 can be the year.

We want to make everything we do EASY for the people who support us. If you like what we do, how we think, and where we’re going, please consider becoming a monthly pledger. Or . . .

If you have the capacity to make a larger investment, and would like to discuss it with me before making your decision, just reply to this email, and we’ll make a time to chat on the phone.

You can start your monthly pledge here.

Thank you for being a part of our Easy Revolution.

Jim Babka
President
DownsizeDC.org, Inc.

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Keynes’ General Theory. Much like cluster bombs for the world.

Posted by Jesse on March 5, 2008

The Crisis Point of the Inflationary Boom
By Sean Corrigan

Posted on 3/4/2008

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In a recent survey — jointly conducted by CFO magazine and Duke University — one of the top concerns being expressed by industry executives across the United States, Europe, and Asia was that of the rising cost and — to a slightly lesser extent — the reduced availability of labor, especially that of the skilled variety.

The worry most forcibly competing with this angst was that of whether “consumer demand” would hold up in coming months.

For a Keynesian this conflict can have no meaning, for the central chicanery around which the General Theory is constructed is that depressions can be warded off through monetary debasement, simply by stuffing the workers’ pockets with extra cash, while simultaneously fooling them as to the real value of the nominal wages being received in such a newly clipped coinage.

In the case where wages are rising (labor costs are mounting) because employment is near full (suitable candidates for work are hard to find) then, assuming the mythical “propensity to consume” remains broadly constant, consumer demand should be a shoe-in, and unlearned industrialists need not lose too much sleep over their prospects for either sales or profits.

Granted, “end demand” could also become (temporarily) curtailed by a sudden outbreak of thrift, that virulent, unpredictable strain of global pandemic feared by the macromancers more than dirty bombs, bird flu, melting ice caps, and a direct asteroid strike, combined, for its potency in disrupting the pristine, academic beauty of their consumption functions and ISLM curves.

The unlikelihood of this taking place in a world whose mail boxes bulge daily with unsolicited offers of new credit, and whose masses have been conditioned to view shopping as a sacramental rite, should be all too apparent.

In fact, what our survey results really display are the classic symptoms of the unhealthy discoordination that an unbacked credit expansion induces in the body economic.

What we see here is that most of the businessmen canvassed are finding their costs are rising and, in particular, the dominant cost they typically bear: that associated with retaining a competent and motivated workforce. At the same time, those who do not directly play a part in satisfying the needs of end consumers (an overriding majority, if our sample is representative of industrial and commercial organization as a whole) are beginning to fret about a slackening of demand for their (mainly higher and intermediate goods) output.

As Mises, Hayek, et al. took great pains to explain, what this means is that the seemingly golden age — in reality, a thinly gilded one — during which the first, most favored issuers of cheap credit and artificially boosted equity prices enjoyed almost effortless success, has reached the limit of its ability to postpone the workings of fundamental economic law.

Even if financial capital once appeared so abundant as to provoke strange, Swiftian fantasies about the “saving glut” and the “asset shortage,” real, physical capital was never called into being quite so readily, since its creation requires not the staccato keystroke of a fiat banker, but entrepreneurial vision, hard work, and genuine saving.

By that last we mean a voluntary abstention from current consumption, undertaken in order to improve the chance of greater plenty in the future, and not the corrupt preemption of a man’s spending power — effected with monetary trickery — which inflationists laud as “forced saving.” Being a species of initially unrecognized compulsion, this is a deceit doomed to fatal self-contradiction, once its dupes wake up to the nature of the con being practiced upon them.

Since the boom has been driven forward according to the projections of the borrowers and the low-hurdle eagerness of their lenders, rather than being predicated on meeting the imperatives of consumer sovereignty, we eventually find ambition has come to overmaster achievability and hope to have triumphed over hardheaded calculation.

To be harmonious and self-consistent, production should be guided by the wants of those whose ability to express them comes by virtue of being in harness to the same web of mutually supportive processes that help satisfy the needs of others, in turn. If not, scarce physical resources will be squandered in trying to realize misplaced visions of a world as overbrimming with affordable means as the unnaturally low interest rate treacherously seems to imply.

Worse still, once the fever of the boom spreads from its initial promoters and their preferred clients to infect the populace at large, sobriety and forbearance tends to vanish in a kind of Gresham’s Law of the spirit. A world awash with “liquidity” is not one where the steady flame of good husbandry can outshine the neon-lit promise of instant gain.

To recap, what then we find is that not only does the availability of financial capital become wholly divorced from the extent of the pool of physical capital goods; not only does much of that pool become misused (and, hence, ultimately, stripped of its original “capitalness”); but that the wellspring of capital maintenance and augmentation — namely, voluntary saving — is concreted over to provide a gaudy, Baroque fountain of greater exhaustive consumption.

As this happens, many final-goods prices will rise as they are revealed to have been undersupplied in relation to the monetary means now pouring into the hands of their would-be consumers. Where such goods also comprise inputs to production taking place further upstream (as is archetypically the case with, say, energy), this increase in expense will primarily add to costs and may therefore begin to sap profitability, if these are not either offset with greater efficiencies or fully recouped in higher selling prices.

Furthermore, as they find their standards of living slipping, those workers who are so enabled — and they will be legion at the height of the boom — will be far less shy about insisting upon more from their employers, by way of compensation for their efforts. Labor costs will now feature in the list of boardroom anxieties.

Simultaneously, since “demand” will have come to a white-hot focus of insistency on end-consumer items, all those who can do so will be shifting resources towards meeting it. If this means abandoning half-completed schemes for long-duration projects in favor of pursuing more mundane but now more lucrative goals, such as putting food on the average man’s table and keeping his boiler stoked with fuel in the here-and-now, so be it.

Unfortunately for the Keynesians, with their quaint, quasi-hydraulic depiction of the economy, such intensified end demand will not automatically translate into higher revenues for all the businesses strung out along the chain of production, just as a sudden appetite for beef will not instantly cause the grass upon which the cattle feed to grow more luxuriantly in the pasture.

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What it will tend to do instead is to strip those not immediately involved in meeting that end demand of their ability to call upon productive resources on the same terms as before.

Squeezing margins as in a vice, this development may also diminish the orders received from those closer to the shop front, since these erstwhile business customers will now be too busy scrambling to restack their emptying shelves to contemplate closing off the sales area for a refit, much less to ponder the purchase of a gimmicky new IT system, or to think of splashing out on an expensive and distinctly nonessential corporate makeover.

This last may not wholly be a matter of discretion since, besides seeing their own wage bill expand, consumer-goods merchants are likely to see inventory replacement come complete with higher invoices, so working-capital needs may soon start to crowd out much more deferrable fixed-investment schedules.

Costs up, labor more pricey, yet demand flagging: this is the fate of all too many of the myriad businesses which comprise the vast, hidden, submarine bulk of the iceberg that is our modern, highly specialized, vertically stratified, distributed assembly-line economy — to the befuddlement of a mainstream lacking a proper theory of capital or a true appreciation of the role of time.

Welcome to the crisis point of the inflationary boom!

Sean Corrigan is Chief Investment Strategist at Diapason Commodities Management. Send him mail. See his articles. Comment on the blog.

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