Friday, February 18, 2011

I love this quote about paper money

I would point out, too, that the U.S. dollar has lost 95% of its purchasing power since 1913. And the U.S. dollar is among the best currencies of the last hundred years. That says something about paper currencies, doesn’t it?

This points out why if we keep printing more paper money, we will have hyper inflation and our economy will be ruined. Inflation is already growing at an increasing rate.

Tuesday, February 15, 2011

What can we learn from the riots in Egypt?

What can we learn from the events in Egypt? We can learn 2 things from these riots.
One is that we are partly responsible for the riots. One of the main causes of the riots was the huge increase in the price of food which can be traced to the Fed's inflationary monetary policy. The CRB food index shows increases in food price in the past year of up to 36%. When people are hungry they riot.

The dollar is at the center of the international monetary system. When the value of the dollar drops, the price of food goes up. While our consumer price index isn't really effected by food prices, many people throughout the world suffer because of increased costs of food.

Our monetary policy is not only ineffective in the United States, but it is also causing resentment against the U.S. Radicals are taking advantage of this situation by promising food and shelter for all.

The Fed's inflationary monetary policy is failing here in the U.S. and puts America's influence in the world at risk.

The Fed has failed at doing the job that it was created to do. We have had too many recessions and 2 major depressions since the Fed was created. It is time to eliminate the Fed.

The second thing we can learn is that the people in government are not any better than the rest of us when they try to anticipate the future. No one was able to forecast what happened in Egypt. This just shows why socialism fails and capitalism succeeds. There isn't any federal government that can regulate the economy. When the government tries, it will eventually fail.

When you depend on the government to control everything, you are saying that the government knows more than the private section and can foresee and avoid financial crisis like the one we are in now.

Of course, the government will blame someone else, but it is only that the government cannot control the future. As a result, the government's promise that it can prevent future crises actually has the opposite effect. The government acts when it shouldn't and causes more problems.

The market may not be able to control problems, but the problems are not increased with bailouts which only postpones and increases the problem. The market allows bad decisions to fail and it corrects itself as quickly and painlessly as possible.

Thursday, February 3, 2011

Inflation, Food price, and the Federal Reserve

Many years ago, Federal Reserve Chairmen tried to protect the dollar's purchasing power. Many decades ago, they didn't even exist. America used silver and gold to protect our purchasing power.

Ben Bernanke, the current Federal Reserve Chairmen, seems to believe that a rising stock market will produce rising employment. However, by printing more money and increasing the United States debt, he is also increasing inflation.

When inflation causes prices to increase, especially food prices, civil unrest occurs. Fiat money loses its value and it becomes worthless. People will want food and tangible assets.

However, for a short period, Ben Bernanke will have achieved his objective of a rising stock market.

Then the economy and the stock market will collapse.

We must stop printing money and spending money that we do not have.

Why are people rioting in Eygpt?

The media says the the riots are political, but the real reason behind the riots is food price inflation.

It was no coincidence that the protests across North Africa were triggered by a Tunisian fruit vendor who was protesting against police confiscation of fruit and vegetables he was trying to sell on the street.

The United Nations reports the price of cereals rose 39% last year. The price of oils and fats, meanwhile, rose 55%.

All staples, like bread, beans and rice. for Egypt’s 80 million people are in critically short supply. When people are hungry, rioting is sure to follow.

When you consider that we are using more biofuels, that the world's population is increasing, that we are converting farmland into cities, and that we are printing more fiat money to put into circulation, food prices will continue to escalate.

It is not a surprise that there is unrest in the world.

The government must stop spending money that it doesn't have. It must balance the budget without raising taxes.

Nevada's liberals acknowledge that tax increases have negative consequences.

This post by the NPRI states that
We've finally achieved bi-partisan consensus — tax increases hurt people.

In trying to condemn Governor Sandoval, the liberals are saying that ending a subsidy
is a tax increase. However, ending a subsidy isn't a tax increase — ending a subsidy is ending a subsidy.

That is wby Senate Majority Leader Steven Horsford, D-Las Vegas, said that Sandoval’s suggestion that the university raise tuition "is shifting the problem to others, rather than owning it and dealing with it straight on.”

Every tax, subsidy, and bailout is money taken from others. on average, working men and women have to work 6 months out of the year to pay all their taxes. Can we really afford more taxes? Every tax increase forces more people to live below the poverty level. We have more people living below the poverty level then ever before.

Has welfare really helped?