Let’s begin with facts. Cold hard unadorned facts.
Water boils at 212 degrees Fahrenheit at standard atmospheric pressure. Squaring the circle using a compass and straightedge is impossible. The sun is a star.
Facts, of course, must not be confused with opinions, which are based upon observations. Barack Obama throws like a girl. The Federal Register is for idiots. Two slices of chocolate cake are one too many. Are these opinions right or wrong?
The answer depends on who you ask. What’s certain about opinions, however, is that like bellybuttons, everybody has one. Moreover, unlike free drugs from the government, everyone is in fact entitled to their own opinion.
Moving on from facts and opinions, the next classification we encounter is the wholly asinine. This broadly contains the absurd and ridiculous. Take most university teachers, barring physical science professors, for instance. They’re wholly asinine. The wholly asinine also extends to editors at the New York Times, Washington Post, circus hunchbacks, and the like.
Lastly, we want to mention the downright sinister. This includes sociopaths like Hillary Rodham Clinton, John McCain, nearly all of Congress, the Federal Reserve, fractional reserve banking, Washington lobbyists, a good part of Wall Street, and much, much more. Clearly, such people and professions don’t represent honest work. Rather, they epitomize less than honest work that’s performed by less than honest people.
Nixon Casts the Die
From this point forward, the weight of today’s reflection falls squarely on the shady shoulders of the downright sinister. But within this category, we dig deeper and uncover a certain subcategory: grand larceny. Namely, we want to better understand the incessant pilfering going on about us. Where to begin?
When Tricky Dick Nixon closed the gold window in 1971, severing the last tether holding the money supply in orbit, the national debt was under $400 billion. Today it’s over $20 trillion. What’s more, it’s now common for a single year’s budget deficit to top $1 trillion.
But it’s not just government debt that has drifted into deep space due to the Federal Reserve’s ability to issue limitless credit. Corporate and consumer debt has also drifted out of orbit. Since 1971, nonfinancial corporate debt has increased over 3,200 percent. And consumer debt is now at a record high of $12.8 trillion.
However, while public and private debt has radically increased, and the money supply has radically inflated, economic growth has lagged. Certainly, one would expect this radical money supply inflation and debt growth to show up in consumer prices. Yet somehow consumer prices are always reported as being nearly flat.
One reason for this is that the government’s statisticians at the Bureau of Labor Statistics have made a fine art of subtracting price inflation from their monthly propaganda reports. Hedonic price adjustments. Price deflators. Seasonal adjustments. These all serve to mask the rate of consumer price inflation and to conceal the effects of the Federal Reserve’s ongoing currency debasement program.
Specifically, these various adjustments and deflators paint an incomplete picture of what’s going on. For what good is it if you can get a really powerful laptop computer for $500 and a new pair of jeans for $20, when half your paycheck goes to pay the rent and another quarter of it goes to cover medical insurance and transportation costs? In addition, it has become near impossible to get a college education without going tens of thousands of dollars into debt.
The Downright Sinister Rearrangement of Riches
The discrepancy between low cost consumable goods and living, transportation, medical, and education costs illustrate the true effects of the government’s incessant pilfering of the wage earner, student debtor, and fixed income retiree.
Those who’ve never scratched below the surface to take a closer look at what’s going on may be unclear how Nixon’s closure of the gold window has been so destructive for so many people. This is understandable; most are unable to diagnose it. However, the ultimate effect of these actions, including debt servitude, has been demonstrated for millennia.
Ironically, John Maynard Keynes, the godfather of modern day economic intervention by governments, confessed to this fact. If you didn’t know, Keynes provided one of the better explanations of the relationship between money debasement and the economy. What follows is an excerpt of Keynes from The Economic Consequences of the Peace, written in 1919.
“Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth.
“Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become “profiteers,” who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.
“Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. 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.”
Could there be a more accurate characterization of the present structure of systematic grand larceny? More importantly, what should one do?
First, one should grin and bear it. Then one should grin and bear it some more. After that, one should buy gold.
for Economic Prism
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