Round 2:
Round 1:
Showing posts with label Capitalism. Show all posts
Showing posts with label Capitalism. Show all posts
Thursday, April 28, 2011
Wednesday, April 6, 2011
Thursday, September 9, 2010
Is Ayn Rand’s Atlas Shrugged Future Possible?
I highly suggest you read Dollar Commentary's post "Is Ayn Rand’s Future Possible?" DC has done an great job of summing up Atlas Shrugged and where we as a country could be heading.
Read More at www.dollarcommentary.com
I have been saying, if you have ever wanted to read Atlas Shrugged,now is the time because as you read the book, you turn on the TV and the ideas and situations that Rand talks about in the book are happening everyday.
Read More at www.dollarcommentary.com
I have been saying, if you have ever wanted to read Atlas Shrugged,now is the time because as you read the book, you turn on the TV and the ideas and situations that Rand talks about in the book are happening everyday.
Thursday, September 2, 2010
The Sacred Cow
Socialism: If you have two cows, you give one to your neighbor.
Communism: If you have two cows, you give them to the government and the government then gives you some milk.
Fascism: If you have two cows, you keep the cows and give the milk to the government; then the government sells you some milk.
New Dealism: if you have two cows, you shoot one and milk the other; then you pour the milk down the drain.
Nazism: If you have two cows, the government shoots you and keeps the cows.
Nanny Stateism: If you have two cows, we’re going to show up at your house at dawn with a cease-and-desist letter and forbid you to do anything useful with their milk until you comply with General Laws Chapter 94, Sections 13 and 16 through 16K, Chapter 94A, and the regulations found in 330 CMR 27.00 et seq.
Capitalism: If you have two cows, you sell one and buy a bull.
Communism: If you have two cows, you give them to the government and the government then gives you some milk.
Fascism: If you have two cows, you keep the cows and give the milk to the government; then the government sells you some milk.
New Dealism: if you have two cows, you shoot one and milk the other; then you pour the milk down the drain.
Nazism: If you have two cows, the government shoots you and keeps the cows.
Nanny Stateism: If you have two cows, we’re going to show up at your house at dawn with a cease-and-desist letter and forbid you to do anything useful with their milk until you comply with General Laws Chapter 94, Sections 13 and 16 through 16K, Chapter 94A, and the regulations found in 330 CMR 27.00 et seq.
Capitalism: If you have two cows, you sell one and buy a bull.
Friday, April 9, 2010
Wednesday, March 24, 2010
Economics: Fiat Currency
In Ayn Rand's Egalitarianism and Inflation she demonstrates the consequences of the introduction of paper money into a thriving agrarian gold-based economy. And she shows how the resulting inflation actually destroys the real-world capital that had previously been accumulated by shifting society's focus from production to consumption.
"Now project what would happen to your community of a hundred hard-working, prosperous, forward-moving people, if one man were allowed to trade on your market, not by means of gold, but by means of paper—i.e., if he paid you, not with a material commodity, not with goods he had actually produced, but merely with a promissory note on his future production. This man takes your goods, but does not use them to support his own production; he does not produce at all—he merely consumes the goods. Then, he pays you higher prices for more goods—again in promissory notes—assuring you that he is your best customer, who expands your market.
"Then, one day, a struggling young farmer, who suffered from a bad flood, wants to buy some grain from you, but your price has risen and you haven’t much grain to spare, so he goes bankrupt. Then, the dairy farmer, to whom he owed money, raises the price of milk to make up for the loss—and the truck farmer, who needs the milk, gives up buying the eggs he had always bought—and the poultry farmer kills some of his chickens, which he can’t afford to feed—and the dairy farmer can’t afford the higher price of alfalfa, so he cancels his order to the blacksmith—and you want to buy the new plow you have been saving for, but the blacksmith has gone bankrupt. Then all of you present the promissory notes to your “best customer,” and you discover that they were promissory notes not on his future production, but on yours—only you have nothing left to produce with. Your land is there, your structures are there, but there is no food to sustain you through the coming winter, and no stock seed to plant.
"Would it make any difference if that community consisted of a thousand farmers? A hundred thousand? A million? The entire globe? No matter how widely you spread the blight, no matter what a variety of products and what an incalculable complexity of deals become involved, this, dear readers, is the cause, the pattern, and the outcome of inflation."
From FOFOA:
Indeed, this is a big problem. Wouldn't you agree? Perhaps she is right, we must return to gold money if we hope to save the Western world from its ultimate destruction. Maybe this is the only way. But what if returning to an economy based only on gold and silver coins in your pocket is a complete pipe dream? What if this will never happen? Is there no hope for our future?
"Now project what would happen to your community of a hundred hard-working, prosperous, forward-moving people, if one man were allowed to trade on your market, not by means of gold, but by means of paper—i.e., if he paid you, not with a material commodity, not with goods he had actually produced, but merely with a promissory note on his future production. This man takes your goods, but does not use them to support his own production; he does not produce at all—he merely consumes the goods. Then, he pays you higher prices for more goods—again in promissory notes—assuring you that he is your best customer, who expands your market.
"Then, one day, a struggling young farmer, who suffered from a bad flood, wants to buy some grain from you, but your price has risen and you haven’t much grain to spare, so he goes bankrupt. Then, the dairy farmer, to whom he owed money, raises the price of milk to make up for the loss—and the truck farmer, who needs the milk, gives up buying the eggs he had always bought—and the poultry farmer kills some of his chickens, which he can’t afford to feed—and the dairy farmer can’t afford the higher price of alfalfa, so he cancels his order to the blacksmith—and you want to buy the new plow you have been saving for, but the blacksmith has gone bankrupt. Then all of you present the promissory notes to your “best customer,” and you discover that they were promissory notes not on his future production, but on yours—only you have nothing left to produce with. Your land is there, your structures are there, but there is no food to sustain you through the coming winter, and no stock seed to plant.
"Would it make any difference if that community consisted of a thousand farmers? A hundred thousand? A million? The entire globe? No matter how widely you spread the blight, no matter what a variety of products and what an incalculable complexity of deals become involved, this, dear readers, is the cause, the pattern, and the outcome of inflation."
From FOFOA:
Indeed, this is a big problem. Wouldn't you agree? Perhaps she is right, we must return to gold money if we hope to save the Western world from its ultimate destruction. Maybe this is the only way. But what if returning to an economy based only on gold and silver coins in your pocket is a complete pipe dream? What if this will never happen? Is there no hope for our future?
Thursday, March 11, 2010
Jim Rogers on Bailouts
Daily Bell: Do you believe in the bailouts taking place in America?
Jim Rogers: Of course not. This is what the Japanese tried to do in the 1990s and it led to zombie banks, zombie companies, lots of problems generally. And the same thing is going to happen this time too. America already has its zombie companies. We are going deeper and deeper into debt. With Fannie Mae and Freddy Mac, the debt is just staggering. And of course all those derivatives and off balance sheet items are obligations of the US taxpayer. This will continue to get worse and is a horrible disaster.
The way things are supposed to work is, when somebody goes bankrupt or somebody fails, he goes bankrupt. Then competent people come in, take over the assets, reorganize and start over from a sounder base. Just as what happened in Scandinavia, Korea or Mexico or Russia, or many other countries in the past twenty years. Yes it is horrible for two or three years but then things get much better. The Japanese did it the other way round, and they still have not recovered. What America is doing is taking the assets away from the competent people and giving them to the incompetent people - and then saying, "OK now you can compete with the competent people with THEIR ASSETS." I mean it is absurd economics, it's outrageous morally and the politicians don't care about morality of course, and it's a disaster that is being imposed on America and the rest of the world.
See rest of interview at The Daily Bell
Jim Rogers: Of course not. This is what the Japanese tried to do in the 1990s and it led to zombie banks, zombie companies, lots of problems generally. And the same thing is going to happen this time too. America already has its zombie companies. We are going deeper and deeper into debt. With Fannie Mae and Freddy Mac, the debt is just staggering. And of course all those derivatives and off balance sheet items are obligations of the US taxpayer. This will continue to get worse and is a horrible disaster.
The way things are supposed to work is, when somebody goes bankrupt or somebody fails, he goes bankrupt. Then competent people come in, take over the assets, reorganize and start over from a sounder base. Just as what happened in Scandinavia, Korea or Mexico or Russia, or many other countries in the past twenty years. Yes it is horrible for two or three years but then things get much better. The Japanese did it the other way round, and they still have not recovered. What America is doing is taking the assets away from the competent people and giving them to the incompetent people - and then saying, "OK now you can compete with the competent people with THEIR ASSETS." I mean it is absurd economics, it's outrageous morally and the politicians don't care about morality of course, and it's a disaster that is being imposed on America and the rest of the world.
See rest of interview at The Daily Bell
Thursday, February 4, 2010
¡El Pueblo Unido Jamás Será Vencido!
More comments from Zerohedge.com this time from a commenter JR - These are well thought out comments that address history and how free people are willing to fight/die for freedom:
I hope it doesn't come to this point. We as citizens of this country have to get together and get the government out of our business. Governments, since the beginning of time, have always been oppressive and the bigger and bigger it grows, the harder it is for the people to gain control. This isn't about politics as usual, its about government growing to a point that they want more and more control and power. Once they get drunk off power, they will do whatever it takes, to not lose control, including what are in these videos. They have a strangle hold on the US economy and are a part of almost every aspects of our life...
medicare
medicaid
social security
SSI
extended unemployment benefits
emergency unemployment benefits
socialized medicine
corporate welfare
bailouts
just to name a few..
They tax us to death, and they try to tell us what to spend and not spend our money on, and they claim to know what is best for us. Last time I checked, they are the ones that got us into this problem, why do I believe they are going to get us out of it? I DON'T, it is time for this government to step aside and allow for the free market to get us out of this recession. Wake up America? Demand less involvement of you incompetent government and its policy makers!
The US fiat dollar did not become the global ”reserve currency” until 1944. That is not what built America. But in the hands of the Fed, IMO, it is what is destroying America.
The American Dream was about individualism and the opportunity to achieve success without interference from others. The American Dream was about freedom; its lifeblood was free enterprise.
Its heartbeat was America’s superior patent system. That’s what gave men the incentive to burn the midnight oil--a chance to own a property right in their own invention. A 1997 study of the inventors honored in the National Inventors Hall of Fame in Akron, Ohio, revealed that 91% of the world’s greatest inventors worked in America and only 9% in other countries.
Global fascism or Red China pseudo capitalism can never give the spring to invention that our Founding Fathers gave to Americans when they included in the United States Constitution the provision “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”
I have faith that men who have known freedom will always, in the end, sacrifice everything to retain that freedom. Americans are close to that point now where they will tap into that thirst for freedom that brings revolution if the few now wielding raw power do not respond to the call for change – real change, not Obama “change.”
“Government exists off surpluses created by the people whom they rule. The ruling classes, i.e., those people who refer to themselves as ‘government,’ do not produce wealth, thus their existence depends upon the expropriation of assets from others.” -- Robert J. Ringer in “Restoring the American Dream.”
It is now a question of opportunity—as things get worse, and they are going to get much worse, and when the government clamps down more and more with no redress, that desire for freedom is going to kick in, and men are going to drop everything to get that freedom back. And they are going to fight: and will kill if they have to kill as they always have, in the cause of freedom.
I hope it doesn't come to this point. We as citizens of this country have to get together and get the government out of our business. Governments, since the beginning of time, have always been oppressive and the bigger and bigger it grows, the harder it is for the people to gain control. This isn't about politics as usual, its about government growing to a point that they want more and more control and power. Once they get drunk off power, they will do whatever it takes, to not lose control, including what are in these videos. They have a strangle hold on the US economy and are a part of almost every aspects of our life...
medicare
medicaid
social security
SSI
extended unemployment benefits
emergency unemployment benefits
socialized medicine
corporate welfare
bailouts
just to name a few..
They tax us to death, and they try to tell us what to spend and not spend our money on, and they claim to know what is best for us. Last time I checked, they are the ones that got us into this problem, why do I believe they are going to get us out of it? I DON'T, it is time for this government to step aside and allow for the free market to get us out of this recession. Wake up America? Demand less involvement of you incompetent government and its policy makers!
Read Atlas Shrugged and open you mind, trust me I know very little, but I have started to open my mind and what I am finding out is scary. At least I know that I am doing my best to wake up the people to be united.
¡El Pueblo Unido Jamás Será Vencido! (The people united will never be defeated!)
¡El Pueblo Unido Jamás Será Vencido! (The people united will never be defeated!)
Thursday, January 21, 2010
USA watchdog Greg Hunter
Audio from Greg Hunter of USAwatchdog would take the time and listen to these men. They address the deficit's, spending and entitlements.
And David Walker, former Comptroller General of the U.S. On America's economic comeback. He is the guy in I.O.U.S.A, you can read more about that here.
Audio from Brad & Brit Show
And David Walker, former Comptroller General of the U.S. On America's economic comeback. He is the guy in I.O.U.S.A, you can read more about that here.
Audio from Brad & Brit Show
Friday, January 15, 2010
Thoughts from Chumbawamba
Here is some thoughts from (Chumbawamba) poster over at Zerohedge.com:
In a nutshell (because my education took years, so you can't expect me to give you the important background to my argument in one posting, or even several) this system is f*cked. Our debt-to-GDP ration is well beyond what other empires experienced just before their collapse. Our central bank is monetizing thin air to pay off the financial blackholes created by unregulated/out-of-control over-the-counter derivatives that are valued at well over $600 trillion globally, and our government is planning to borrow every last unit of currency under the moon in order to keep from falling into a fiscal abyss. How the hell does anyone expect this is going to turn out anything but very, very badly?
There are now literally tens of trillions of dollars of liabilities stretching from here on decades into the future. Our debt-based monetary system means these liabilities will only increase in cost and interest as time goes on. From where are the revenues going to come? The pace of productivity and wealth creation in this nation will have to inflate accordingly. How is this going to be accomplished? Do you have any answers? Does anyone?
We took a quantum leap from billions to trillions--a thousand-fold increase--in our economic discourse. It follows then that our GDP will have track this increase to keep up with the new normal. Again, from where are the revenues going to come? Are they going to be conjured up again like magic, so that we go from trillions to quadrillions as the new new normal? Or are you going to be expected to magically increase your productive output 1000 times to make up the difference, along with every other American (including children 1 and older, since we’ll also be needing more manpower for the job, way more than we have even if you include the illegals)?
WHO IS GOING TO PAY FOR ALL OF THIS?
The answer never comes. Oh yeah, this is simple to solve, they say. They'll just "add liquidity" to the market, then "drain it", as if this was just a matter of doing the dishes, and all the complaining and fussing and fearing and loathing and hemming and hawing was all just a matter of no one wanting to pony up to the sink to actually do the deed. But no, that’s just a cheap distraction. So the question remains:
WHO IS GOING TO PAY FOR ALL OF THIS?
I’ll tell you who: Us. As in you. And I. Or at least those of us that are silly enough to file and pay taxes (I don't know about you two, but I do not submit to extortion, otherwise known by the letters I-R-S). And how many people like me do you think there are now? Probably just a relative few. We're the "out there" nutballs. We're the ones that make wild-eye predictions of economic collapse and social chaos to follow. We're the ones who get pooh-poohed. Until the government keeps pulling shit like this. Then we grow in numbers. The disgusted; the disenfranchised; the disaffected. We find each other, learn from each other, and spread the wisdom. We watch as the government creeps upon our God-given freedoms like a depraved predator, one after the other, picking them off until one day we’ll be left naked and defenseless. But we prepare, and in the meantime we keep introducing new people to the mouth of the rabbit hole. And if you’re courageous, and intelligent, you’ll go in. And the deeper down the rabbit hole you go, the more you realize that real money—gold and silver—is the answer.
As more people discover the answer, the dollar takes one step closer to irrelevancy. Once it reaches that point, you have hyperinflation. Once the dollar enters hyperinflation the game is over; or rather, it just begins. But then that's a matter of perspective :)
Will the dollar cross that line of confidence? After all of my study, I sincerely believe it will and am convinced beyond a shadow of doubt about that conviction. I’ve been waiting for someone to come along and explain how I’m wrong about this. Despite my rhetoric, my eyes and mind are open. Convince me. Anyone?
In short: follow Austrian school of economics. I'm not saying they have ALL the answers, but so far it seems they have pretty damn nearly all of them.----------------------------------Ask yourself these questions:
1) What system is collapsing? The one in the US? I.E. the dollar?
1a) If the dollar collapses, what does that mean domestically?
1b) What does it mean internationally?
2) Is the FDIC solvent?
2a) If not, how safe are your bank accounts?
3) Are the firms in which you have your various retirement accounts solvent?
3a) Really? Are you sure? Did you check their balance sheet?
3b) Including all their hidden liabilities?
3c) If not, how safe are you accounts with them?
4) Does America strike you as a financially strong country?
4a) If not, do you think America will remain the world's sole superpower indefinitely under these conditions?
4b) If not, what does that mean for the dollar, the world's reserve currency, and the unit of account upon which all other world currencies (except gold) are based (again, domestically and internationally)?
Mull that over.
But here's a spoiler. The answer to all the above is:
Don't wait until inflation eats away your savings. Every day you wait is like an ounce of silver slipping out of your hands, lost forever.
History is your teacher. All others are substitutes. Including me.
I am Chumbawamba.
This might seem extreme, but he does ask some tough questions...cannot say I disagree and yes I tend to ignore what he says but doesn't mean that I don't feel this way down deep within my beliefs.
Thursday, October 1, 2009
Thursday, September 24, 2009
Surfing, To Big To Fail, and Capitalism
*Monday December 5th, 2005 was a dark day at shaping bays and in surf shops around the country. Orange County-based Clark Foam -- far and away the world's largest supplier of surfboard blanks -- shut its doors after over 45 years in business due to a series of ongoing environmental and safety concerns.
*It's estimated that 90% of the world's blanks came from Clark Foam. Sure, there are other blank manufactures in Australia and a few here in the US, but no one is prepared to deal with the huge gap left by Clark Foam's closure. Surfboard prices will go up overnight and shapers still aren't quite sure what will happen next.
*Some folks think Clark Foam's closure is the beginning of the end.
*Grubby Clark, sole owner of Clark Foam and its patents, could throw in the towel on his long-standing battle with the EPA, effectively starting the board-building Great Depression. Can you say Black Monday?
*“This could be the surfboard industry’s H-Bomb,” says Randy Adler “I can’t even imagine how many people this will affect.”
*“This is going to affect everyone,” says a stunned Bob Hurley, of Hurley International
*Even those more apt to look for silver linings are having a tough time with this one. Overnight, the careers of hundreds of shapers and glassers across the globe are effectively over.
These were just some of the stories coming out that day in December 2005. The surf world had come to a stand still. Clark foam, the too big to fail in the surf industry had been pressured to shut its door by the United States Environmental Protection Agency. It was a shock to the system for sure, overnight the prices of surfboards had doubled and tripled, there was a panic from the industry. The future of surfboard building was uncertain, how was the industry going to survive?
In 2005 the economy was booming (bubbling), life was good, and the government did not bail out companies/industries that went out of business, especially the ones that were forced to quit by the government. Clark invented the polyurethane foam and blank designs used by surfboard shapers worldwide, in what was estimated to be a $200 million dollar (USD) industry in the U.S. alone. How could we allow a $200 million dollar industry to be so effected without the help of the government? If it was 2009, and we treated Clark Foam like the to big to fail companies of today, we the tax payers would give money to restructure, re-innovate and create something new and environmental friendly, whatever it took to be viable.
Well, government never stepped in and Capitalism roared it strength in the early first half of 2006 when shock gave away to opportunity. Diverse groups of entrepreneurs and suppliers quickly adapted and filled the void. Not only did new polyurethane companies step up, but alternative technologies popped up at a recorded setting pace. The surfing industry today is still seeing new technologies, which has pushed the sport to new levels. If you do not believe me read this article, excerpt from article:
“In the four months following the Clark closure, startup Just Foam (San Clemente, Calif.) grew from 3 to 26 employees and from 25 to 150 blanks produced daily on the strength of founder/president Scott Saunders' proprietary hybrid-TDI chemistry, which reportedly meets environmental regulations with unusually low VOC emissions.”
“In one of the more unusual developments, researchers at Sandia National Laboratories (Livermore, Calif.) are marketing TufFoam, a low-density, water-blown, modified MDI/polyether urethane foam.”
Gary Linden, now operations manager of Walker Foam (Wilmington, Calif.), a long-time Clark Foam competitor, admits that Clark's were some of the best engineered blanks in the world, but believes that Walker's TDI-based polyether urethane is denser, with better cell bonding.”
These are just a few of the examples...
With Clark Foam, polyurethane was roughly 90% of what surfboards were made of back then. Since the collapse, polyurethane has become more environmentally safe. Other new technologies including polystyrene, expanded polypropylene, compression molded, hollow(using aerospace composite technology), carbon fiber, and polyfoam have all come to the forefront in 4 short years. Each bringing with them lighter, stronger, and more durable surfboards, not to mention better performance, including Firewire—my preference in surfboards.
Unfortunately for America we have missed this opportunity for capitalism to step in. We have missed out on smaller, more innovating companies coming to the forefront and leading us out of this recession. To take us into new heights, producing new and better technologies. We have missed out on those same smaller companies to grow and to expand, to create new jobs for the unemployed. Instead we are stuck with the same companies that have made bad business decisions after bad decision while producing bad products. Now that they have the government on their sides they are "supposedly" starting to change their act, this time with the unlimited backing of us, the taxpayers.
Capitalism is a beautiful thing when is it given the opportunity to flourish. It is a shame that we are at a place which is a total distortion of capitalism. This is just the beginning, from here on out, it is going to be even harder. With the greed on wall street, the media, and the **sheeple that will hang onto Michael Moore's new movie "Capitalism", which will distort it even farther. I am sure that he will twist the movie to show that capitalism caused the economy to collapse. I believe he will not speak on that crony capitalism was the reason.
Please understand...Capitalism is not perfect, but it by far the best economic system we have and it is not an opinion, a theory, or hope. Captain Capitalism says it best:
Our ideology is based in truth. What makes us capitalists, and free-marketers, is the fact that our belief in capitalism is not a belief at all, but rather a knowledge, a knowing that capitalism is the best system. And it is because the truth forms our ideology, that capitalism will always surpass socialism and communism as economic systems.
Please pass along to anyone who has any doubts about capitalism and the theory of "To Big To Fail", as they obviously do not know America and what has made this such a great country.
**Sheeple - It is often used to denote persons who voluntarily acquiesce to a perceived authority, or suggestion without sufficient research to understand fully the scope of the ramifications involved in that decision, and thus undermine their own human individuality or in other cases give up certain rights. The implication of sheeple is that as a collective, people believe whatever they are told, especially if told so by a perceived authority figure believed to be trustworthy, without processing it or doing adequate research to be sure that it is an accurate representation of the real world around them.
Great Article from Entrepreneur Magazine about Firewire surfboards:
http://www.firewiresurfboards.com/pdf/EntrepreneurMag.PDF
*Quotes from the following articles:
http://www.surfline.com/surfnews/article.cfm?id=1618
http://www.surfingmagazine.com/news/surfing-pulse/clark-foam-120505/
http://www.surfermag.com/features/onlineexclusives/clarkfoam/
http://www.firewiresurfboards.com/pdf/EntrepreneurMag.PDF
*Quotes from the following articles:
http://www.surfline.com/surfnews/article.cfm?id=1618
http://www.surfingmagazine.com/news/surfing-pulse/clark-foam-120505/
http://www.surfermag.com/features/onlineexclusives/clarkfoam/
photo by RB surfboards
Feel free to leave me a comment and let me know your thoughts!
Thursday, September 17, 2009
Ron Paul Q&A: Audit the Fed, Then End It
Reprinted from The Wall Street Journal
What would a world without the Fed look like?
You’d go back to the day that if you wanted to borrow money to build a house, somebody would’ve had to save some money. You wouldn’t have zero savings and all the credit in the world. That’s just a total distortion of capitalism. Capital comes from savings. The part you don’t use for everyday living which you have left over, you reinvest and you save or you loan it out. We were living with something absolutely bizarre that had nothing to do with capitalism. We had no savings whatsoever yet there was all the credit in the world.
So without the Fed, there wouldn’t be as much credit.
Yeah, it would be different. If you were selling me a car and the car was worth $10,000 and I didn’t want to pay cash, you could take credit from me. You’ve got to have something to measure it by. What is a dollar? We don’t even know what a dollar is. There’s no definition for a dollar. There’s never been a time in law that said a Federal Reserve note is a dollar. That’s the basic flaw. There’s no definition for money. We’ve built a worldwide economy on a measuring rod that varies every single day. That’s why it was fragile, and that’s why it collapsed. There was no soundness to it. So that’s why you have to have a stable unit of account.
If you live in a primitive society, you’d trade goods. And if you wanted to advance, then you would trade a universal good, which would be a coin. But we’ve become sophisticated and smart and say, ‘Oh, you don’t have to go through that. We’ll just print the money. And we’ll trust the government not to print too much, and distribute it fairly.’ That’s often just a total farce. People are realizing that it is.
Don’t you think the Fed has moderated the business cycle over the past century?
Yes, I think they did smooth things out. The market’s always demanding the correction of the malinvestment and the excessive debt. … Since Bretton Woods broke down, I think every recession has been moderated by the Fed. That’s why the trust kept being built. That’s all a negative. You have to get rid of the mistakes. Moderating it means that we have slowed up the correction. The fact that they have been successful is probably the worst part about it. They’re moderating the rapidity of the crash and the correction by holding the mistakes in place.
What if, years from now, we see that the Fed has returned its balance sheet to its old size and pulled that money back from the system? Would that not be a validation of its approach?
There has only been one time that I know of where they have done that significantly, to withdraw anything of significance. That was after the Civil War. They withdrew greenbacks to a degree, they quit printing greenbacks, and they balanced the budget. I don’t think you can find any other time in our history and probably the history of the world. Because it’s an addiction, and the withdrawal is always much more serious than the continuation. The immediate problem of continuing the inflation is always more acceptable than withdrawal symptoms. Politically there will be continued inflation until it self-destructs.
So you don’t think it’s possible to pull it off?
They might try a little bit. With a weak economy, they’ll say it’s better for the economy to have low interest rates. If we didn’t have a Federal Reserve today, interest rates might be market driven. A lot of people would go bankrupt, but it would benefit the people who save. Capitalism is supposed to benefit the people who save. Even though they’re cheating the people who save, they’re cheating those on fixed income and the elderly, they will not quit inflating. The pain will be too great. They’re smart enough to know? They weren’t smart enough to know when they printed. They created the bubble. All of a sudden they’re going to get smart enough to know when to withdraw this? There’s not one chance in a million that’s going to happen.
But if the Fed were to pull this off and return its balance sheet to a normal size, where would that leave you?
If they were able to shrink their assets by 50%, to a trillion dollars or so … I would say it would challenge a lot of people. But I think the economic laws are in place. It’s only going to be temporary. It’s not going to happen. The only way you could do that is what I’ve been advocating for these last several years. You’ve got to cut spending, you’ve got to balance the budget, you’ve got to stop fighting these wars, you’ve got to bring our troops home, you’ve got to quit expanding the welfare state here at home… But I just don’t think the conditions exist. In theory you could, but if you do that without shrinking the size of the government and shrinking the deficit, it will be disastrous. It won’t work.
How would an audit lead to ending the Fed?
It’s a stepping stone. I think what’s going to lead to the next step is the destruction of the dollar, just like economic events moved further ahead than my legislative process. I wasn’t getting anywhere. But the economic events demanded that we look into it. So even if this bill passes and we have more information and we’re talking about monetary policy reform, I don’t think that’s the way this system is going to be ended. I think it’ll be ended when it’s a total failure and then it’ll have to be replaced by something. It could be replaced with a more authoritarian government, a more socialistic government.
Do you think the Fed will be abolished during your career?
I always thought the day would come… This economy is going to get worse and this dollar is going to get a lot worse. It’ll take care of itself. My real goal is educating people to the nature of money so that when this system fails, that they’ll know what to do and not just say ‘Well, we need a better manager.’
For three decades, Rep. Ron Paul has waged a lonely battle in Congress to abolish the Federal Reserve. But he has more foot soldiers across the nation today, particularly after the financial crisis, who are leading the drive for wider congressional audits of the central bank.
What would a world without the Fed look like?
You’d go back to the day that if you wanted to borrow money to build a house, somebody would’ve had to save some money. You wouldn’t have zero savings and all the credit in the world. That’s just a total distortion of capitalism. Capital comes from savings. The part you don’t use for everyday living which you have left over, you reinvest and you save or you loan it out. We were living with something absolutely bizarre that had nothing to do with capitalism. We had no savings whatsoever yet there was all the credit in the world.
So without the Fed, there wouldn’t be as much credit.
Yeah, it would be different. If you were selling me a car and the car was worth $10,000 and I didn’t want to pay cash, you could take credit from me. You’ve got to have something to measure it by. What is a dollar? We don’t even know what a dollar is. There’s no definition for a dollar. There’s never been a time in law that said a Federal Reserve note is a dollar. That’s the basic flaw. There’s no definition for money. We’ve built a worldwide economy on a measuring rod that varies every single day. That’s why it was fragile, and that’s why it collapsed. There was no soundness to it. So that’s why you have to have a stable unit of account.
If you live in a primitive society, you’d trade goods. And if you wanted to advance, then you would trade a universal good, which would be a coin. But we’ve become sophisticated and smart and say, ‘Oh, you don’t have to go through that. We’ll just print the money. And we’ll trust the government not to print too much, and distribute it fairly.’ That’s often just a total farce. People are realizing that it is.
Don’t you think the Fed has moderated the business cycle over the past century?
Yes, I think they did smooth things out. The market’s always demanding the correction of the malinvestment and the excessive debt. … Since Bretton Woods broke down, I think every recession has been moderated by the Fed. That’s why the trust kept being built. That’s all a negative. You have to get rid of the mistakes. Moderating it means that we have slowed up the correction. The fact that they have been successful is probably the worst part about it. They’re moderating the rapidity of the crash and the correction by holding the mistakes in place.
What if, years from now, we see that the Fed has returned its balance sheet to its old size and pulled that money back from the system? Would that not be a validation of its approach?
There has only been one time that I know of where they have done that significantly, to withdraw anything of significance. That was after the Civil War. They withdrew greenbacks to a degree, they quit printing greenbacks, and they balanced the budget. I don’t think you can find any other time in our history and probably the history of the world. Because it’s an addiction, and the withdrawal is always much more serious than the continuation. The immediate problem of continuing the inflation is always more acceptable than withdrawal symptoms. Politically there will be continued inflation until it self-destructs.
So you don’t think it’s possible to pull it off?
They might try a little bit. With a weak economy, they’ll say it’s better for the economy to have low interest rates. If we didn’t have a Federal Reserve today, interest rates might be market driven. A lot of people would go bankrupt, but it would benefit the people who save. Capitalism is supposed to benefit the people who save. Even though they’re cheating the people who save, they’re cheating those on fixed income and the elderly, they will not quit inflating. The pain will be too great. They’re smart enough to know? They weren’t smart enough to know when they printed. They created the bubble. All of a sudden they’re going to get smart enough to know when to withdraw this? There’s not one chance in a million that’s going to happen.
But if the Fed were to pull this off and return its balance sheet to a normal size, where would that leave you?
If they were able to shrink their assets by 50%, to a trillion dollars or so … I would say it would challenge a lot of people. But I think the economic laws are in place. It’s only going to be temporary. It’s not going to happen. The only way you could do that is what I’ve been advocating for these last several years. You’ve got to cut spending, you’ve got to balance the budget, you’ve got to stop fighting these wars, you’ve got to bring our troops home, you’ve got to quit expanding the welfare state here at home… But I just don’t think the conditions exist. In theory you could, but if you do that without shrinking the size of the government and shrinking the deficit, it will be disastrous. It won’t work.
How would an audit lead to ending the Fed?
It’s a stepping stone. I think what’s going to lead to the next step is the destruction of the dollar, just like economic events moved further ahead than my legislative process. I wasn’t getting anywhere. But the economic events demanded that we look into it. So even if this bill passes and we have more information and we’re talking about monetary policy reform, I don’t think that’s the way this system is going to be ended. I think it’ll be ended when it’s a total failure and then it’ll have to be replaced by something. It could be replaced with a more authoritarian government, a more socialistic government.
Do you think the Fed will be abolished during your career?
I always thought the day would come… This economy is going to get worse and this dollar is going to get a lot worse. It’ll take care of itself. My real goal is educating people to the nature of money so that when this system fails, that they’ll know what to do and not just say ‘Well, we need a better manager.’
Related Reading:
Thursday, August 20, 2009
Inflation a Real Threat: Warren Buffett & Peter Schiff
Buffett in his latest New York Time Op-Ed says that the federal debt poses a serious risk to our economy. He writes:
Legislators will correctly perceive that either raising taxes or cutting expenditures will threaten their re-election. To avoid this fate, they can opt for high rates of inflation, which never require a recorded vote and cannot be attributed to a specific action that any elected official takes. In fact, John Maynard Keynes long ago laid out a road map for political survival amid an economic disaster of just this sort: “By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens*.... The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
He also goes on to say:
Our immediate problem is to get our country back on its feet and flourishing — “whatever it takes” still makes sense. Once recovery is gained, however, Congress must end the rise in the debt-to-G.D.P. ratio and keep our growth in obligations in line with our growth in resources.
Really? I listen to Buffett, but just don't get his logic sometimes. In the US, debts are way to high and demand is down, it cannot come back anytime soon because of consumer debt and unemployment. Like Schiff says we need a natural correction.
This whole Keynesian economics has to stop and it has to stop now! Why can people not see what is happening all around us? Why can they not think for themselves and not listen to the media? I ask anyone seriously interested in the wealth of this nation and the wealth of yourself to go and study the Austrian School of economic principles.
*actually one thing I agree with John M Keynes
Wednesday, August 19, 2009
The Culture that Spawned the Crisis
Summary
The Seventh Annual John M. Templeton, Jr. Lecture on Economic Liberties and the Constitution considers the social, cultural, and moral causes of the current financial crisis in the United States.
In doing so, the Lecture revisits basic lending principles and examines our nation's skyrocketing debt, our lack of savings, and basic understanding of economic principles within the household, as well as corporate America, and the effects of our political and legislative effort to reduce discriminatory credit practices.
Wednesday, July 29, 2009
The Significance Atlas Shrugged
From The Ayn Rand Institute"I refuse to apologize for my ability -- I refuse to apologize for my success -- I refuse to apologize for my money."
The U.S. economy is in shambles, with every nightly newscast bringing word of new government interventions. Americans are alarmed and desperate for answers: How did we get here? How will we recover? That might sound like a description of today's world, but in fact it's also a sketch of the world Ayn Rand created in her classic novel Atlas Shrugged.
The tea parties testify to the outrage that many Americans feel toward Washington's explosive growth in the past few decades -- especially under Presidents Bush and Obama. Atlas Shrugged not only gives voice to this outrage, it provides both a profound explanation of the cause of today's crisis -- and a positive, radical solution to it.
Why is it that every problem seems to call for increased government intervention at the expense of freedom? Why is it that businessmen inevitably take the blame for any crisis? Why are the most competent, most successful Americans smeared as greedy and selfish? To these questions and many others, Atlas Shrugged gives answers unlike anything you've ever heard.
"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns -- or dollars. Take your choice -- there is no other -- and your time is running out."
* * *
"If we who were the movers, the providers, the benefactors of mankind, were willing to let the brand of evil be stamped upon us, and silently to bear punishment for our virtues -- what sort of ‘good' did we expect to triumph in the world?"
* * *
'Yes, this is an age of moral crisis. You are bearing punishment for your evil. But it is not man who is now on trial and it is not human nature that will now take the blame. It is your moral code that's through, this time. Your moral code has reached its climax, the blind alley at the end of its course. And if you wish to go on living, what you now need is not to return to morality . . . but to discover it."
Learn the meaning of these quotes -- and the revolutionary ideas behind them -- by picking up Atlas Shrugged. Discover why Ayn Rand held that nothing less than a total separation between state and economics can save this country. Discover Ayn Rand's defense of the individual's moral right to pursue his own happiness -- the indispensable precondition of his political right to pursue his own happiness. Discover a gripping novel that challenges today's intellectual mainstream and provides an alternative to the anti-freedom ideas that are undermining American liberty.
Discover Atlas Shrugged.
©2009 The Ayn Rand Institute
Monday, July 20, 2009
Milton Friedman on Limited Government
Milton Friedman was an American economist, statistician and public intellectual, and a recipient of the Nobel Memorial Prize in Economic Sciences. I love watching old videos of him and you can tell how much of a deep thinker he was. I have watched a lot of videos of him and no interviewer can seem to stumble him with any question. He is such an intellect, and you can tell that he speaks from his true beliefs, unlike modern day politicians that just completely spin a question without fully answering them. I would recommend taking some time to learn more about Milton Friedman, I personally, have learned a great deal from him.
One thing that is very interesting about Friedman is that he was originally a Keynesian supporter of the New Deal and advocate of government intervention in the economy. Then in the 1950's he challanged the basic Keynesian model(reinterpretation of the consumption function). While he was at the University of Chicago, Friedman became the leader of the first recognized counterrevolution against Keynesianism.
Here is a great quote by Friedman:
"Nobody spends somebody else's money as carefully as he spends his own. Nobody uses somebody else's resources as carefully as he uses his own. So if you want efficiency and effectiveness, if you want knowledge to be properly utilized, you have to do it through the means of private property."
Related Links
Milton Friedman "Power of the Market" A series of brief lectures
Tuesday, July 14, 2009
How an Economy Grows and Why It Doesn't
Here is a link to the PDF version it is a book by Irwin Schiff. As the title suggest, the book breaks down the simple basics of "How an Economy Grows and Why It Doesn't". Peter Schiff mentioned on his Vlog that the book is going to be reprinted.
The banks could have used this book, along with the majority of American. Read it, study it, pass it along so we can learn from our mistakes. Have a great day!
Wednesday, July 8, 2009
Banking Crisis, Government Regulation and Ron Paul
This is one of the best examples I have seen regarding the banking crisis with the Mid South Bank President and CEO R.J. “Rusty” Clouthier. I would ask you take 5 minutes of your day and listen to what he says. He says that he saw this coming back in 1999 with the Gramm-Leach-Bliley Act. I believe we cannot solve the problems of today without looking back at what got us here in the first place.
The host says an amazing thing "If you cannot fail, the whole system breaks down—then you take to many risk and taxpayer eats it". Clouthier follows up by saying that "Free enterprise has to have the right to fail". Every American should know this no matter their situation. It should be a very solid and understandable principle.
I haven't spend a lot of time studying the subject, but it seems to me that we need to get back to sound banking. The policy that gave us all this trouble isn't going to be the policy that helps us recover. You hear most people say it was the lack of regulation that got us here. We had banking, SEC, FDIC and many more regulations which have failed! WE DONT NEED ANYMORE REGULATION! Listen to Ron Paul below:
Ron Paul is one smart man, why can't we not have him or someone like him running our country that understands economics and understands policy that is hurting our country. I think one investment idea that I have is to donate to Ron Paul if he runs for president next time.
If we do not wake up soon the only people that will have wealth will be wall street, banks and the government. Once that happens or if it hasn't already we are in a world of hurt.
This blog is about my financial journey and it has turned half political because the two are connected. Every cent that the government spends comes out of taxpayers pockets. This ultimately hurts us, the people that care about personal finances. Ronald Reagan said "We are a nation that has a government" and as my father pointed out, it seems like we are a government that has a nation.
Am I in left field? I know we need a government, but a limited one. Should I stop blogging about political subjects? or stick to PF? leave me a comment!
Monday, June 22, 2009
New York: John D. Rockefeller and Atlas Shrugged
This past weekend we went to visit my sister in New York. I have been to New York a few times and each time I enjoy going to see something new. We arrived in NY Friday morning and one of the things I wanted to see was the Atlas sculpture at the Rockefeller Center which is on the cover of Atlas Shrugged soft cover. It was definitely one of the highlights of the trip.
One of my favorite parts besides the Atlas was reading the inscription on this granite slab that faces the Rockefeller building over looking the ice rink as written by John D Rockefeller Jr.
“I believe in the supreme worth of the individual and in his right to life, liberty, and the pursuit of happiness.I believe that every right implies a responsibility; every opportunity, an obligation; every possession, a duty.
I believe that the law was made for man and not man for the law; that government is the servant of the people and not their master.
I believe in the dignity of labor, whether with head or hand; that the world owes no man a living but that it owes every man an opportunity to make a living.
I believe that thrift is essential to well ordered living and that economy is a prime requisite of a sound financial structure, whether in government, business or personal affairs.
I believe that truth and justice are fundamental to an enduring social order.
I believe in the sacredness of a promise, that a man’s word should be as good as his bond; that character — not wealth or power or position— is of supreme worth.
I believe that the rendering of useful service is the common duty of mankind and that only in the purifying fire of sacrifice is the dross of selfishness consumed and the greatness of the human soul set free.
I believe in an all-wise and all-loving God, named by whatever name, and that the individual’s highest fulfillment, greatest happiness, and widest usefulness are to be found in living in harmony with His will.
I believe that love is the greatest thing in the world; that it alone can overcome hate; that right can and will triumph over might.”
Wow, what can you say except that it is incredible that a man could express his beliefs in such an amazing way. We as individuals and our government need to take a hard look at the list of principles in which John D. Rockefeller Jr. believed. We as a society could learn so much from this, I can honestly say that I believe in every word he says here.
If you are ever in NYC, I would recommend going and seeing the Rockefeller Center. What do you think of Rockefeller's beliefs? Leave me a comment and let me know!
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