Wednesday, January 20, 2010

This is how governments steal from us

Here is an open and brazen example of how governments steal from the people.

Hugo Chavez is, of course, an open and unrepentant Marxist dictator. But at least he's honest and up front about it. All governments around the world that have replaced hard currency with paper money (and that would be all governments around the world...) are actually doing the same thing, only more gradually.

Chavez is devaluing the Venezuelan bolivar in one fell swoop. This is a way of literally stealing from the pockets of the people. The United States has been doing the same thing, albeit gradually, to the U.S. dollar since 1913 with the establishment of the Federal Reserve. The "Fed" enables reckless government spending by giving the federal government an endless source of "money" in the form of paper with numbers printed on it - a "money" monopoly of Monopoly "money"! The Fed itself is conveniently rewarded with exemption from any and all audits and Congressional oversight. It is the ultimate sweetheart deal in which Congress accepts dirty money (made legal tender by force of law) and asks no questions. The Fed gives Congress (and Wall Street bankers) access to the printing press, and, of course, gets a cut for itself and its executives - all with no danger of being audited, that is, until now.

The Fed also causes the boom-bust business cycle by artificially deflating the interest rate, encouraging banks, businesses, and private consumers to borrow excessively (based on false market signals), encouraging a culture of malinvestment, debt and impulsive consumer spending, while at the same time discouraging thrift and savings. We Americans often ride a crest of "prosperity" (which is nothing more than running up the national credit card to the max) only to fall into "unexpected" economic disasters - which the political parties blame on each other. It is a great game of hot potato, and whichever party is in office when the bubble randomly bursts is blamed for the mess - when both have always been to blame.

The result has been the devaluation of the dollar to the tune of some 95% (yes, 95%!) - although it has taken nearly a century to do it. The recent bailouts have even spurred further and faster dollar devaluation.

The "inflation rate" - which we have been conditioned to accept as normal - even in "good" years is 2 or 3 per cent (and this is the "official" number provided by the government). This is Marxist theft just as surely (though certainly more slowly and less brazenly) as it is when Chavez does it.

The Fed, which is actually a form of a central bank (which, by the way, is one of the ten planks of Marx's Communist Manifesto), will not be able to keep the pyramid scheme going indefinitely. All bubbles eventually burst, and what goes up must come down. The danger of this economic slight-of-hand was exposed by the late great Nobel prize-winning economist Ludwig von Mises.

The Ludwig von Mises Institute is dedicated to educating the public about economics from the perspective of sound principles of reality - not promises and spin shoveled at us by Marxists, both here and abroad.

It's time to hold our politicians' feet to the fire - of both parties. I do believe the current economic malaise is going to prove to be the endgame of the national prosperity of the U.S. - unless we act quickly to pull the plug on Washington's and Wall Street's theft and replace compulsory devaluation with sound money. We can only do that by educating ourselves.

Unfortunately, you will not learn this from talk radio and partisan entertainers on either side of the political spectrum, nor from bestselling books from people who make a living by being rude and crude. Somewhere along the line, conservatism has lost its reputation of being based on intelligence and sound reason, instead having taken on the air of a professional wrestling match or monster truck rally. The good news is that true conservatism is not dead, and there is a lot of thoughtful and serious economic resources available on the World Wide Web.

Lew Rockwell is a good place to check day to day to understand the nature of the current economic picture, how government steals from us, and what we should be doing about it down the road for the sake of future generations.


gnesio-lutheran said...

" I do believe the current economic malaise is going to prove to be the endgame of the national prosperity of the U.S."

Amen brother, but I fear it's already too late.

Jesu Juva!

calov said...

This is why I have given up on both parties. It is all a scam, a great big con that has been played out on the American population for over 100 years! The closest political figure I could support would be Rep. Ron Paul (R-Texas). He stands for abolishing the IRS, auditing and then closing the Fed and also finding out if there really is a gold reserve left in the U.S. Shame he is part of a party that would rather be part of the con than actually representing the public.

Mark Herpel said...

Excellent article Rev. as usual you focus right in on the important stuff. When is your area going to get a local currency?