From fiat money imposed upon us all by President Nixion we have, among other things, the following assessment.
“The US DOLLAR INDEX rallied today 31 basis points to close slightly over 72 at 72.042. Yaaawn. We’ve seen this act before. Does it mean anything? Who knows? Nobody has accused the dollar of sincerity recently.
Remember the scenes from the old Tarzan movies? Walking through the jungle, all the bearers suddenly grow quiet. They cock their heads. The safari leader, clutching his rifle, asks the lead bearer, “What is it, Mbwezi?” Dimly in the distance the throb of drums grows louder. The female star creeps closer to the safari leader, grabbing his arm and scooting behind him. The drums throb louder. The bearers drop their loads.
Now if you’ve seen one Tarzan movie, you know that the Ngali, the most bloodthirsty tribe in all of Africa who specialize in dicing their victims while still alive, are about to attack. You know that unless Tarzan shows up pretty soon, the entire safari will be salsa.
That scene is where the US dollar is right now, hiding behind safari leaders Bwana Ben and Bwana Paulson, while the wild tribes of bond & currency Ngali circle in the jungle, waiting for their chance to bring down the whole safari. Can’t you hear the drums throbbing in the distance? Bad juju.”
At times I wonder if monatary policy is actually a form of anarchisim these days.
Tags: currency, Dollar, Economics, monatary policy, News, Politics
Conservative Libertarian Outpost 
August 3, 2008 at 06:25
Is our “faith-based” Dollar doomed to fail?
*Texas Straight Talk, by Congressman Ron Paul, July 21, 2008:
“The Latin term ‘fiat’ roughly translates to ‘there shall be.’ When we refer to fiat money, we are referring to money that exists because the government declares it into existence. It is not based on production or earnings, and not backed by any commodity. It is solely based on trusting the government. Fiat money is exchanged in the economy as long as there is faith in the government that issues it.
Some are blaming the recent shakeup in the markets to ‘whining’ or financial fear-mongering, which misses the whole point. History has shown that fiat money, or ‘faith-based currency’ always fails, because when governments claim this power, they always behave irresponsibly.
When government has the ability to create and spend all the money it wants, priorities shift, and the concept of budgeting, as most Americans know it, loses all meaning. Hand a teenager a credit card, and tell him there is no limit and no accountability for what he spends, and the effect would be the same. You see, this problem is not unique to our government. It is a predictable outcome based on human nature, and we’ve seen variations of what we are experiencing now happen over and over throughout history. I didn’t have a crystal ball or a fortune teller when I predicted this 3, 7, or even 30 years ago. Actions have logical consequences. The government becomes the reckless teenager with the credit card, and in the end, the taxpaying citizens get the bill. What happens after that is never pretty.
This is why our founding fathers considered, but decidedly rejected the creation of a national central bank. They understood that governments, even the best of governments, cannot control spending. Even the current administration, which promised strict fiscal responsibility, has had to increase the national debt limit by 65 percent to keep up with its spending sprees. Every dollar created and spent by government makes the dollars in your pocket worth less and less.
Eventually any currency controlled by government will be debased to worthlessness, and will wipe out the savings of the citizens who put faith in that currency.
Hard currencies, on the other hand, force governments to remain in check, strictly limited to the revenues they can raise from the country’s economic health. This is also an incentive for government to stay out of the way of productivity. The hyper-regulation in today’s economy demonstrates that this is no longer the case. What does it matter if the economy is crippled and the tax-base eroded, if government can create whatever dollars they need to keep the special interests happy?
We have been building economic castles on the sand, and the tide is coming in. The answer is not to bring in more sand, but to move to more solid foundation.
So yes, it is true that many are complaining about our economic trouble, but our economic trouble is not caused by their complaining. Many are being forced to wake up to the predictable troubles associated with faith-based currency. As more people notice the hardships, more will lose faith.
We are long overdue for a course correction and I can only hope that this awakening translates to a solid approach to currency reform.”
source: http://www.monex.com/gvi?pageid=insightarticle&articleid=699&cat=1
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August 3, 2008 at 13:11
I’d give you more credit for your opinions if you spelled monetary appropriately.
You didn’t just do it once, you repeated yourself.
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August 4, 2008 at 09:08
oops, spell check didn’t catch it. :S
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