(Editor’s note: very busy today… here’s a guy well worth a few minutes of your time; he’s a Bakersfield investment counselor writing in The Bakersfield Californian /GA)
By Andrew Wahrenbrock
As noted early 19th-century economist Frederick Bastiat once observed,
"The state is the great fiction by which everyone tries to live at the expense of everyone else." If we only knew now what we knew then.
Perhaps there are more lessons from "then." By all means, we the people should demand in the most expedient fashion that the words "In God We Trust" be removed from our paper currency. Then, if the people of this nation can again muster the resolve to institute sound money, (note Article I, Section 10, of the U.S. Constitution), we could easily, and with our national head held high, put the words back.
Meanwhile, we are eyewitnesses to the end times of an irredeemable currency. Researchers generally agree that the most recent period in which the purchasing power of a dollar was a dollar was the early 1930s.
Post the Gold Reserve Act of 1934, and the events of 1971, the current purchasing power of a dollar is approximately 5 cents. We are likewise witnessing the lesson of a few millennia wherein gold prevails as the ultimate store of value. The algebraic proof of this rests in how a debt is genuinely cleared. Gold remains the method that does not include a requisite obligation from another party.
I submit to the reader that the demise of these last few cents of our dollar's purchasing power will be a wild and woolly affair and the process is well under way. Correspondingly, the explosion of debt (debt is money, money is debt) since the 1971 default of gold backing on U.S. Treasury obligations is noteworthy. In 1971, the U.S. public debt was $436 billion.
Currently, according to analyst Darryl Schoon, that figure is in excess of $100 trillion. For the record, the $100 trillion includes public debt plus the debt attached to failed agencies (Fannie Mae, etc.) plus unfunded liabilities and pensions (Social Security, Medicare, etc.). Try as I may, I cannot come to grips with the scale of such parabolic growth. I wonder what the Roman numeral for $100 trillion is.
Still, we are subjected to politicians, the proverbial deer in the taillights, who claim we have to get the deficit under control. Apparently, they are unable to grasp the concept that it's over. A decade or so ago, mathematically, we passed the point of no return. Several decades ago, we passed the political point of no return.
And so those of us that watch financial markets observe a rapid shift up the financial food chain from bank crisis into sovereign debt crisis, wondering how quickly the next size-15 shoe will drop in a grossly over-leveraged system that is managing to take on even more leverage. The entire scheme has the potential to dismantle in days as market-system liquidity can disappear in an instant. Signs of this process are evident in the market actions of the recent period.
I contend that our grandchildren need not worry about paying off our debts as much as what form of government we will leave them.
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Like I always say…. liberals have never seen real hunger first hand… that’s why they’ oppose the Second Amendment.
Thousands show up at Tulsa food pantry Friday
“We estimate there were 2,000 people here this morning,” said Connie Cronley, executive director. “The heat, the crowd and the incorrect information they have received rendered, in my judgment, a situation that was unsafe.”
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