Our Monetary Ponzi Scheme

Money MachineWhen you hear there is a “currency war” or that “reducing the value of a currency will increase a countries exports” you are hearing propaganda. There is no mechanism by which printing money makes manufacturing more efficient. That’s silliness. The real story is that the Dollar is dying, and financial collapse and chaos will result. The U.S. is printing money to stave off the collapse, and central banks around the world are printing money in effort to prop the dollar up! Everyone will suffer when the Dollar goes up in smoke, so everyone is participating in kicking judgement day down the road.

The U.S. Dollar was debased in 1971. It has no backing, which means in real terms, it has the same value as an expired coupon. You could have traded 35 dollars in for an ounce of gold, but that offer has expired. Every currency that has been debased has ceased to exist. It’s just a matter of how long the public will remain in a delusional state about the meaning of their currency. In the end, the hard fact – it’s nothing but a piece of paper, will force the issue. The root problem with the financial markets right now has to due with people trying to trade in their paper assets for real stuff, and the real stuff isn’t there. Shockingly, printing money didn’t create more real stuff. This financial strife will continue until people demand paper assets that are guaranteed to represent real stuff – a backed currency.

To slow down this result, and to give the banks time to trade their paper for real stuff, we are being fed lies. We hear that printing money is “good”. Or “The Dollar is backed by the faith and credit of the United States.” What is the nature of such backing? They promise to give you a government bond in exchange for your Dollar? And to pay you back for that bond with devalued Dollars? The whole thing is a scam. It’s a monitary ponzi scheme.

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The Riot Act of 2011

Gavel Breaking SurfaceThe rioters in London really need to be taught a lesson – but perhaps they have already learned the lesson our culture has to teach. Our leaders continually say that problems are solved by carpet bombing people, and killing innocent people is an unfortunate necessity. Clearly rioters simply buy into the same ‘might makes right’ line of thinking. Sure, it’s easy to bludgeon the rioters’ character, as many are “just waiting for any opportunity” to go out and create havoc. However they are disparaged people who simply believe the lesson that violence brings resolution.

Our schools, beginning in kindergarden preach the ethic of “being nice”, and “sharing”, but people don’t learn this way. Instead they learn the actions and attitudes behind the lecture. They learn that if they don’t go to school, their parents and/or school will get what it want via threats or actual violence. Later when they are older they learn that the school get’s paid by taking money from others, again under threats, backed up by the ability to inflict violence.

Distressed is the poor soul that buys into this mess as good and righteous. They believe that are entitled to an education, and the government is a weapon we use to create such advantages for them. So what happens when they see the system as “broke”? Instead of rejecting the system of violence, they believe it isn’t working for them, and they need to take it upon themselves to inflict the violence needed to “right” things. So they lay in wait, for the right opportunity to administer violence.

I am not apologizing for this behavior. Every person has the innate ability to see the error of this process without any help. But, if you think we must extort money from home owners to teach people “good values” then you are just as guilty of believing in the use of violence as the rioters. People believe that good acts will come back to them and the same is true of the bad acts. Measures backed by violence will come back to bite you regardless of how deeply you hide the lever of coercion, or wether you make it ‘legal’. The more force we apply to make things right, the more violent the outbreaks will be when things go wrong, because that is the ethic we teach.

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Fox News Blames Propaganda On Media

Today on Fox News, I heard a presupposition from hell: “the mainstream media is blaming the Republicans for a deal not being reached.” This deal they are talking about would raise the debt ceiling, thus the presupposition is that not raising the debt ceiling is ‘bad’.

Note that the language is not, “The Democrats are butt-hurt that the Republicans are standing strong against further increases in debt.” That type of talk would communicate strong support for not making our debt problems worse. Instead the language suggests to the largely republican audience that the “mainstream” world is trying to peg blame on them, for not making the debt problem worse. I see this type of thing from Fox News all the time. They support conservatives… becoming national socialists.

It’s a fun game to play with people of mid to lower level intelligence. You just suggest that it’s their fault for whatever is going on, and the next thing you know they’re arguing against it – even if it was their idea. Presuppositions in general flip peoples’ heads without them knowing, and in a strikingly irreversible way.

Tell someone that you are done reading for the day, and later they may reference back to you as if you had been reading earlier. “What were you reading?” they may ask. You tell them that you were not reading, and they still bring it up three more times. I had one person even say, “Why do I keep thinking you were reading?” They often can’t figure out where the information came from, and the presumptive reasoning throws the information into the mind so far that it doesn’t want to go away.

 

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Simple explanation of the Austrian Business Cycle

The austrian business cycle can shed light on a few of the reasons for our economic predicament. Most economists who work from this theory predicted the latest bust, long before anyone else. The basic frame starts with the understanding of the connection between people’s future needs and the investment activities that satisfy those needs in a healthy economy.

When people have future needs, like to buy a house, they will save money. They put money in the bank, and the supply of loanable funds increases in that bank. An interest rate is simply the price one can “buy” a loan of those funds, and the law of supply and demand tells us that if the supply of something goes up, the price will go down. So, as people save for future purchases, interest rates go down.

When interest rates go down, businesses can more easily borrow money to produce machines and tools that will provide goods in the future. Also, because of the nature of compounding interest rates, the lower the interest rate, the more likely a business is to purchase a long term loan. This means that at really low interest rates, they can engage in projects that will not produce goods for a longer time. These factors create an amazing natural coordination. As the more people save, the more investment we get to produce the goods people are saving for. When people save for longer terms, we get investment in longer term projects.

The second coordination in a healthy economy has to due with the labor force. As people save, they obviously spend less. When spending goes down, this frees up labor that was engaged in sales type activities. However, the simultaneous increase in investment in long term projects, creates a need for labor in areas such as mining, trucking, and construction. This is essentially how healthy economies shift needs in labor without causing unemployment problems.

Now lets see how a boom/bust cycle can be created. Instead of having free market interest rates, a central bank may dictate a lower than would be natural interest rate. In this case, the lower interest rate does not accompany real savings. People are not saving for future purchases, and may even be going into debt. Meanwhile, the low interest rates lures businesses to invest in long term projects anyway. This creates a strain in the economy requiring labor in both service and sales sectors, as well as mining, trucking and construction. The result is that labor will be pulled in from outside, and immigration exceeds normal levels. This situation is often viewed as a “boom”, but should be viewed as an unsustainable “over heating” of the economy.

Eventually, businesses start to finish their long term projects and roll out big fancy products that only a consumer base that had been saving could afford. In our case here, the consumers were not saving, may even be sunk in debt, and cannot afford the new products. The businesses do not get the sales they expected, and cannot pay their loans. Businesses begin to fail, banks start to fail, and the larger than normal labor force exacerbates the impending unemployment problem. This is the “bust”.

This is far from all the reasons our economy is in the shape it is in now. Unfortunately, it is not the only reason things will get worse before they get even worse, but I hope this post will help someone gain new insights into the problems we have.

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Another Major Collapse Brewing

ALERT! We are months away from another major economic meltdown! How do I know? Because we’re already in it, and the media lies. Let me explain.

The economy has been turning downward for more than a decade. Back in 2006, 07 the media ignored this contraction, while many like me were screaming about it. Then in 2008, we had the financial disaster. This was not an economic downturn. Banks had been failing at in increasing rate long before. The only thing that changed was Henry Paulson said they needed $700 billion to rescue his “not allowed to fail” banker fiends, and this freaked out the markets. Suddenly the media shifted their focus on the economy and called it a “recession” which again affected the markets. But there was no sudden economic event, and it was not caused just by crap lending practices… the economic decline had accelerated BEFORE this event.

Now we are to see another media manipulation of the same type. While the economy has gotten progressively worse, the media has consistently talked about the “recovery”. There is no recovery. While the media focuses on fake, misleading statistics like GDP, they ignore real data that suggests it is harder for the average american to feed, house, and cloth themselves. They even announced the recession has ended, but the numbers are worse today than ever.

Today, Bernanke said he does not anticipate a “double dip”, indicating that the media is about to turn. How do these words help the manipulation? Because so many people trust Bernanke, what he says gives them a feeling of hope, and confidence. That emotion is the deception. Later, the media will pick another scapegoat event to blame the economy on. Whatever that event is, when it occurs, the media will shift their focus toward the negative economic realities, giving people a sense of doom. The shift in feeling makes the deception real. The facts don’t matter. All people will remember is that they FELT optimistic, then suddenly, they felt bleak after some contrived event.

The deception hides that the economic downturn has a 1 to 1 correlation with massive growth of government and spending. Suppose they intend on blaming the economy on a solar eclipse… People will remember feeling optimistic, then the solar eclipse happens and suddenly the market crashes and media goes negative. They stop talking about the 9% unemployment rate and start quoting the more realistic 17 or 24% rates. Then people feel pessimistic and discouraged, the markets correct to mirror these feelings, and people around the world believe a solar eclipse caused an economic collapse.

I beg people. Stop letting the media run your emotions. The facts are, the economy has been going steadily south for decades.

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Food Prices (and, “I Told Ya So!”)

I am SO CREEPED OUT! I just heard last night’s ABC piece on rising food prices and they blamed it on the weather, population, and speculators!

I told everyone when TARP, and all the government spending occurred, food and energy prices would rise because of inflation. I was right.

Weather? Every year has weather! Just saw a study showing this year’s weather is no different from any others. But the values of the dollar is going down.. IT’S INFLATION!

Population? More people means there’s more people FARMING! Population didn’t explode in the last two years, government spending did! The value of the dollar is going down. IT’S INFLATION!

Speculators keep prices LOW when a crisis occurs. They SELL when the price gets high, lowering the overall price in the market. And speculators are just as likely to speculate that prices are going to fall. Why aren’t they? Probably because like me, the see IT’S INFLATION!

When you print money, the supply goes up, so the value goes down (supply and demand). Then dollars are less valuable, it takes more of them to buy the same product (prices rise). If you play poker and everyone get’s 10 chips, how will everyone bet? If everyone get’s 1000 chips, now how will they bet? Increased supply of currency causes prices to rise. Simple.

And the reason we are seeing this overseas so much first, is because Americans buy so much stuff overseas with Dollars.  We are exporting our inflation.  But other countries are getting sick of our weakening dollar and are in the process of changing the currency they trade in to something else. That means the balance will shift. Not only will the dollar be going down because we are printing so much (supply) but it will also go down because the rest of the world doesn’t want it anymore (demand).

The problem stems from a currency that is not backed by a commodity. When a currency is backed by a commodity, governments and Fed chiefs can’t print money. Such money is very stable and actually helps an economy.

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Egyptians Kick Facade Off Military Dictatorship

What the Egyptians have done, is  kick the facade off another US funded military dictatorship. Ron Paul is correct that the chances of Egypt actually obtaining true independence is slim, unless the US changes it’s foreign policy in regard to Egypt.  Plus, that would save some taxpayer money… which would help stimulate REAL, non-aggression (voluntary), and sustainable based economic growth.

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Pushing and Shoving

Cycle of Violence

Cycle of Violence

As a member of a tribe, if you looked around and saw that things were occurring more and more by pushing and shoving, rather than voluntary interactions, you would know that the tribe is headed for trouble. Especially because we depend on each other for even simple things, like to eat.

Government is pushing and shoving. Nothing the government does occurs without force or the threat of force. If people would do something voluntarily, then you wouldn’t need government. I heard that some economics actually define government as “A firm with a competitive advantage in the use of violence within a given geographic region.” Government is coercion. People should substitute the word ‘government’ with ‘coercion’. “I don’t wan to pay for healthcare, I want the Coercion to provide it for me.” That’s a better depiction.

So when I look at our country, and I see government swelling, soaking up more and more of our resources, I see Americans spending more and more time, and energy pushing and shoving people around. And I know, we are headed for big trouble.

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S.510 Limits Safety Options

Controls choke supply, increasing costs, and prevent competition for established suppliers. Reduced availability and affordability reduces safety.

You can’t achieve safety by giving your decisions to those who use force and coercion to increase their profits. If they use force to remove your autonomy and take your money, they don’t care about your safety.

Outbreaks caused by negligence of a supplier ends that persons business. As such there are more than enough incentives for safety, and economic growth brings new technologies that increase safety.

This bill takes businesses that have failed, and ensures new competitors cannot get into the market. This will make the established companies “too big to fail” – as what would we do without them since they are the only ones providing food? And when they kill millions because of negligence, they will get a bailout instead of being put out of business.  Question this?  Just look at the financial industry, the most heavily regulated industry in the world!

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