JohnAl

The Foundations of the Current Crisis: Don't Shoot the Messenger

"I will spend a brief moment defending Bernanke here. He didnt' make the decision that the federal gov't spend massively in excess of the tax take. I am long tbt and I follow Paco so I like a lot of what he says. But many of these discussions demonize Greenspan and Bernanke and I don't know if I buy it."

During the 80's and 90's I was a Greenspan fan, and thought of him as a free marketer. But then, I was fairly ignorant back then.

Greenspan certainly understands markets and economics. No doubt about that, so he clearly is NOT a free marketer. If he were, he would not have ever taken the job of Fed chair. In so doing, he bought into the system that feeds the growth of FedGov. Without the Fed, there is NO way the federal government could have accumulated it's level of debt, and without that debt, there is NO way the politicians could have grown FedGov to it's current, smothering size.

Greenspan enabled it, and he knew what he was doing. Bernanke is doing the same.

Neither of these men are free marketers.

The Foundations of the Current Crisis: Don't Shoot the Messenger

Another excellent article. Thank you.

As for questions about your patriotism, there's nothing unpatriotic about trading on the expectation that the future value of the FRN will drop when the government and the fed are doing what they're doing to my grandchildren.

Unless, that is, it's now unpatriotic to display common sense.

Nothing About This Economy Is Surprising

“The doorstep to the temple of wisdom is a knowledge of our own ignorance.”
- Benjamin Franklin

Our problem is that we are not being led by wise men.

We're being led by men and women who think that they are smarter and more knowledgeable than our ancestors, and thus that history cannot teach us anything.

If there is even one among us today who possesses the insights of Thomas Jefferson, then he is staying well hidden. Yet even the average Joes, not to mention the arrogant politicians, dismiss Jefferson's warnings about central banking as quaint. "Things are different now", they rationalize.

But things are actually the same. People will always try to find ways to exert power over others and steal from them. When you get right down to it, while we walk around in well tailored clothing and put men on the moon, we're just a bunch of well dressed uberchimps with the ability to build things.

History tells us that human liberty to the degree experienced in this country only comes around rarely. I count myself fortunate to have experienced it, even if only at the tail end of the run.

I'm afraid it's gone though, and won't be seen again in this country for a very long time.

What's Going to Replace the Dollar?

"It's IDIOTIC to think WAMPUM (gold, silver etc.) will replace any currency."

Is it really? PMs have been used as money by many cultures throughout much of human history, and as the author points out, a modern PM backed money wouldn't necessitate carrying around metal. The conveniences of modern banking would still exist.

I do think it's likely that before we arrive at this juncture, though, there will be attempts to replace the dollar with other fiat currencies. Governments don't give up easily, and they need the fiat currency to maintain their power and their growth.

My guess is that the next step, which will come only after things get worse in the US and the government gets increasingly desperate, is that there will be an attempt at a world currency. This would necessitate the US giving up much of it's advantage though, which is why I don't see it happening until things are much worse here. They may even make a show at tying this new currency to PMs in some way. But it will be a sham. They will want to maintain their ability to create money out of thin air.