Feeds:
Posts
Comments

Archive for the ‘Economics’ Category

“The greatest threat facing middle and working class Americans is our depreciating paper currency.”

    – Ron Paul

Gold, Peace, And Prosperity, The Birth Of A New Currency
by Congressman Ron Paul (Auburn, Alabama: Ludwig Von Mises Institute, 2011, 91 pages with index).

There is, perhaps, no more critical subject facing our nation at the moment than the activities of the Federal Reserve, the central bank of the United States of America. But while the Fed’s actions over the past 100 years have had a profoundly negative effect on the lives of nearly all Americans, very few people are aware of the ways in which they are robbed by Fed policy. Even more frustrating from the standpoint of those who believe in sound money is that that there appears to be little desire on the part of Americans to cure their ignorance by studying the machinations of these masters of the universe who run the Fed.

Gold_Peace_Prosperity

One of the principle reasons people remain in the chains of ignorance concerning the Fed is the reporting of mainstream financial journalists. The stories one sees in the mainstream press about financial matters – whether in print or on television, it matters not – seem designed more to steer people away from the truth about the workings of the Fed rather than lead them to understanding.

In stark contrast to the long-winded flim-flam one hears on most news outlets about the Fed, Ron Paul’s Gold, Peace, An Prosperity, The Birth Of A New Currency (hereafter Gold, Peace And Prosperity) is a breath of fresh air. In his typical fashion, Paul manages to be both profound and concise in his comments. This book, a short 91 pages including introductions by Henry Hazlitt and Murray Rothbard plus an index, equips the reader with more sound teaching about the problems with our current Federal Reserve system as well as how to fix it than entire shelves full of books by most authors.

Did I mention that this is a short book? Just to give you a sense of what I mean, it can be read in one sitting. When I re-read it for this review, it took me a little over two hours reading at a leisurely pace and taking notes. As John Robbins noted in his exposition of Philemon, many scholars make the assumption that nothing short can be profound. But this is a mistake. Gold, Peace, An Prosperity stands as proof of this.

Worth noting is that this book was first published in 1981. That is significant for the reason that Ron Paul was part of the Gold Commission convened by President Reagan at the time to study the possibility of returning the United States to the gold standard, an option that ultimately was voted down by the Commission. The next year, the Minority Report of the Gold Commission was published under the title The Case for Gold (see here for free pdf and epub downloads), which is considered something of a modern day classic by advocates of sound money. I would by all means recommend reading The Case for Gold, but I think Gold, Peace, An Prosperity is an even better place to start. While The Case for Gold provides more detail than Gold, Peace, And Prosperity, the latter is less technical in its language and much shorter, making it an ideal read for those just starting to learn about sound money, or, for that matter, those who would like a refresher course from one of the few statesmen of recent times who actually understands the monetary problems we face as a nation as well as what is needed to fix them.

In the first chapter of the book titled “Impending Social Strife?,” Paul writes, “We probably will see widespread civil disorder in the 1980s.” Looking back 38 years, some may be tempted to discount Paul’s argument for sound money by accusing him of being an alarmist. “You see,” they will say, “we didn’t have widespread civil unrest in the 1980s, so all this talk about economic collapse in 2019 is just so much conspiracy theory nonsense.”

What shall we say to this? Does the fact that widespread civil unrest did not occur in America in the 1980s refute Paul’s argument against the Fed and for sound money? No, it does not. While it may seem odd to many today that there was serious consideration of a return to the gold standard in the early 1980s, one has to remember the context. America had just gone through the terrible stagflation – stagflation was a term coined in the 1970s to describe a situation where there was simultaneous inflation and little or no economic growth, a state of affairs that the standard Keynesian economics of that time could not account for – of the 1970s that followed hard on the heels of President Nixon’s decision to take America off the Bretton Woods gold exchange standard in 1971. Just to give you a sense of the inflation of the 1970s, gold went from $35 dollars and ounce in 1971 to around $800 an ounce at its peak in 1980, a surge of roughly 2000%.

Second, all the problems that Paul identified in 1981 with the Fed are still with us today and are far larger than what they were when he first wrote. On October 22, 1981, 38 years ago almost to the day, the federal debt first topped $1 trillion. Today in 2019, it stands at over $22 trillion. According to this CCN article, the 2019 federal deficit – the deficit is the yearly amount by which federal spending outstrips tax revenue; the debt the total of all previous budgetary shortfalls – was $984 billion. Stop and think about that for a moment. It took the federal government over 200 years to accumulate $1 trillion debt, an amount it’s now adding on a yearly basis.

What Ron Paul did not foresee in 1981 was the cunning ruthlessness of the central bankers and the politicians to not only maintain the corrupt system, but also to expand it. In 1981, there was no Plunge Protection Team. No one had ever heard of Quantitative Easing and if anyone had spoken of negative interest rates, he would have been laughed to scorn. Yet the bankers, politicians and news media have managed not only to sell the public on all this financial flim-flam, but they make it seem downright normal. This was possible largely because the American people did not take to heart Paul’s warnings from 1981.

Ron Paul was right on target when he wrote, “The greatest threat facing middle and working class Americans is our depreciating paper currency.” This was true in 1981, and it’s true today in 2019.

I highly recommend Gold, Peace, An Prosperity. Not only is it a great primer on the dangers of the central banking, paper money and the importance of sound money, reading it makes me want to shout the title of a more recent book by Paul, End the Fed!

Chapters include: Foreword by Henry Hazlitt; Preface by Murray Rothbard; Impending Social Strife?; The People are Demanding an End to Inflation; Depreciation is Nothing New; “Not Worth a Continental”; The Best Medium of Exchange; Cross of Paper; How Our Money was Ruined; The Stage is Set; Is Business to Blame?; Are Banks to Blame?; Are Unions to Blame?; Inflation and the Business Cycle; The Guilt of the Economists; The Alternative to Inflation; Money and the Constitution; Morality and Transfer Payments; Citizen Control of Money; Day of Reckoning; Free Market Money?; Legal Tender Laws; An Historical Precedent; The End – or the Beginning; Index.

 

Read Full Post »

Financial Crisis

A prudent man foresees evil and hides himself; The simple pass on and are punished.

    – Proverbs 27:12

In light of the recent upheavals in the financial markets, it seemed good to me to take this occasion to update my comments on ongoing financial crisis. I say ongoing, because it is my contention that the crisis that first manifested itself in 2008 has never really gone away.

In Ezekiel we read God’s complaint against the prophets of Israel. At one point he says, “Because, indeed, because they [the prophets] have seduced My people, saying, ‘Peace!’ when there is no peace – and one builds a wall, and they plaster it with untempered mortar – say to those who plaster it with untempered mortar, that it will fall. There will be flooding rain, and you, O great hailstones, shall fall; and a stormy wind shall tear it down. Surely, when the wall has fallen, will it not be said to you, ‘Where is the mortar with which you plastered it?’ ”

Such a wall, one built with untempered mortar, may appear sound. But when faced with the elements, it’s shoddy construction becomes evident to all.

In his Sermon on the Mount, Jesus expressed a similar idea when he compared the man who built his house on sand with the man who built upon the rock. For all we know, the house built on sand may have been beautiful in appearance, but it lacked a firm foundation and it fell. The house built on the rock took the beating and stood strong.

It is the contention of this author that the relative prosperity that the West has enjoyed since 2008 is rapidly coming to an end for the same reason that both Ezekiel and Jesus described: The real causes of the 2008 crisis have never been addressed, only papered over with fake solutions. Fakery, it would appear, is coming to an end.

In the following post, and perhaps posts, I’d like to explore at least some of the factors that are driving the West to bankruptcy. I’d also like to discuss what Christians can do to prepare themselves for the difficult financial times that lie ahead. Finally, I’d like to discuss what Christians can do once the collapse occurs to begin to rebuild our civilization on a sounder footing than we have today.

(more…)

Read Full Post »

Betsy Ross

Proclaim liberty throughout all the land unto all the inhabitants thereof.

    – Leviticus 25:10

Independence Day. July the Fourth. I don’t recall a time when it was anything other than one of my favorite dates on the calendar.

What’s not to like about it? As a kid, it was always a great time. Warm summer days. Family, friends and fireworks. Great stuff.

Oh, and then there was that whole liberty thing. And really, what’s not to love about liberty?

Fast forward forty or so years, and all those things I loved about the Fourth? I still love ’em. But with the passing of time, and growth in knowledge and wisdom, Independence Day has taken on a deeper meaning for me.

(more…)

Read Full Post »

Lew Rockwell_LRCLewRockwell.com was at it again this weekend, publishing another hit piece on the Reformation.

Now some readers may be asking themselves, just what on earth is LewRockwell.com and why should I care what they publish or whether they attack the Reformation.

Fair questions, those. So before talking about their latest attack on the Reformation, a little explanation is in order.

By number of unique monthly visitors, LewRockwell.com (LRC) is one of the largest, perhaps the largest, Libertarian website in the world. Now by percentage of the population, Libertarians are a fairly small group, so it may be tempting to dismiss LRC as a big fish in a small pond and move on.

The LRC website describes itself thus, “The daily news and opinion site LewRockwell.com was founded in 1999 by anarcho-capitalists Lew Rockwell and Burt Blumert to help carry on the anti-war, anti-state, pro-market work of Murray N. Rothbard.”

From this description, we see that LRC, in addition to being Libertarian also calls itself “anarcho-capitalist, anti-war, anti-state, and pro-market,” and indicates that Murray N. Rothbard is its primary intellectual influence.

So why should you care about any of this? For one, in spite of their relatively small numbers Libertarians are a vigorous intellectual force in the fields of economics and politics. Unlike most schools of thought in our decadent age, Libertarians actually take logic seriously. Further, they defend individualism and private property against the statist big-government philosophies that dominate our age.

A second related reason is that although Libertarianism ultimately fails the test of Scripture – central to Libertarian thought is the ethical doctrine known as the Non-Aggression Principle; Christians, on the other hand, locate their ethics in the Law of God, and these two systems are incompatible – its respect for logical consistency and individual liberty make it attractive to Christians.

And it is because Libertarianism in general and LRC specifically take ideas and liberty seriously, that I have read the website for years, and know of other Christians who do so as well.

(more…)

Read Full Post »

Fed Speak: A Translation

Eccles Building

The Eccles Building in Washington D.C., home office of the Federal Reserve.

“We have a 2 percent symmetric inflation objective. For a number of years now, inflation has been running under 2 percent, and I consider it an important priority to make sure that inflation doesn’t chronically undershoot our 2 percent objective.” So said outgoing Federal Reserve chair Janet Yellen last week in the course of assessing her on the job performance over the past year.

According to her, everything else is pretty awesome. Unemployment’s down. The economy’s growing at a 3 percent clip. The stock market may be a little pricey but it’s really nothing to get too excited about.

Why, if it weren’t for that persistently low inflation, she’d be batting close to 1.000 and having an all around MVP year here in 2017.

What shall we say to all this? It seems to me that the first order of business is to translate Yellen’s inflation comments into plain English. Academics, politicians and others who wish to hide their meaning from the general public love to use obscure language. But one of the chief jobs of any Christian teacher, whether he’s a blogger or a preacher it makes no difference, is to penetrate the fog to permit a fruitful discussion.

That said, here’s my translation of Janet Yellen’s Fed Speak: “Our objective here at the Fed is to steal 2 percent of the value of the deplorables’ savings each year by creating credit a pace that is faster than the actual rate of growth of the economy. This, combined with our holding interest rates near 5,000 year lows to keep the rubes from earnings any interest in their savings accounts, represents a one-two punch to the middle class. By employing these policy tools, we enlightened folks here at the Fed can strip mine wealth from unsuspecting nobodies, who don’t deserve what they have anyway, and put it into more worthy hands, namely, those master of the universe types who own the banks and pay our salaries. Unfortunately, I was not as successful in this regard as I would like to have been.”

Now that’s more like it. We’re finally getting somewhere. No doubt, Janet Yellen would be greatly offended by my translation, as would pretty much any other central banker, mainstream economist, investor, or financial commentator. Perhaps some of the defenders central bank orthodoxy in academia, the press and in government really do honestly think that debt-based, central bank issued, fiat currencies actually serve the public interest. But that hardly gets them off the hook. They should know better, for the evidence is overwhelming that the current system – which is of, by and for the bankers – is a massive, and profoundly immoral, wealth transfer mechanism.

(more…)

Read Full Post »

Read Full Post »

Older Posts »

%d bloggers like this: