Death of the Dollar

China, Russia quit dollar

By Su Qiang and Li Xiaokun (China Daily)
Updated: 2010-11-24 08:02

Lucky them. They have a choice. Here the Federal Reserve notes are legal tender.

"United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

-Coinage Act of 1965, specifically Section 31 U.S.C. 5103

However, you can stipulate whatever payment you want in private transactions.

Maybe we could start a private money movement to create our own escape hatch from the increasingly devalued Federal Reserve notes.

Gold and silver coins, anyone?

(HT Boaz Arad, OActivist google group.)

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Natural Economic Experiments

In trying to make the case that economic freedom is the best way to end poverty while centralized planning of the economy by government fiat is a cause of poverty, the following "natural experiments" are frequently refereed to:

East vs. West Germany

North Vs. South Korea

China Vs. Taiwan and Hong Kong

Now there is a new one:

California vs. Texas

"California has become a cautionary tale of mismanagement of what by all rights should be the country’s most prosperous big state. Its poverty rate is at least two points above the national average; its unemployment rate nearly three points above the national average...Texas’ trajectory, however, looks quite the opposite. California was recently ranked by Chief Executive magazine as having the worst business climate in the nation, while Texas’ was considered the best. Both Democrats and Republicans in the Lone State State generally embrace the gospel of economic growth and limited public sector expenditure...Since 1998, California’s economy has not produced a single new net job, notes economist John Husing. Public employment has swelled, but private jobs have declined. Critically, as Texas grew its middle-income jobs by 16%, one of the highest rates in the nation, California, at 2.1% growth, ranked near the bottom. In the year ending September, Texas accounted for roughly half of all the new jobs created in the country."

Read more here.

Dear Congressmen: Let the Economy Grow

The following is a letter I sent to my congressmen in Washignton adn Sacremento:

Dear _________

The solution to the rising national [state] debt and the obscene budget deficits is NOT to increase taxes but to cut spending.

We will not be able to tax our way out of this mess. We must grow the economy--and taxes get in the way of economic growth.

Government must be gradually reduced back to its proper limits of the courts, police and the armed forces. Steps must be made to eliminate government subsidies of business and non-profits, and work toward ending the massive welfare entitlement programs of government education, Medicare, Medicaid and Social Security.

NO MORE TAXES.

SPEND LESS.

I urge you to vote to repeal the tax increases scheduled to go into effect on January 1st, 2011.

Please vote to make permanent all the tax reductions enacted in 2001 and 2003--and abolish the inheritance tax as well.

It is not your money. It is mine.

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The Story of Business

Another great find by Ideas Matter.



How to get the economy going?

Any laws should "Make it simple. Make it understandable and predictable."

Read the rest of Max Border's post here.

Debt Control and Health Care Freedom Go Hand-in-Hand

Last night, the Senate has passed a temporary postponement of the scheduled 23% cut in Medicare payments to health care providers (known as the Medicare SGR). If passed by the House when congress reconvenes after Thanksgiving, this bill would move the starting date of the cuts from December 1st to January 1st.

According to the CBO (quoted in an article on Medscape), this delay will cost $1 billion over 10 years. If the "doc-fix" is extended for a full year, the AMA estimates it will add $15 billion to government spending.

With the national debt rising to dangerous levels, serious cuts to government spending are paramount. President Obama's debt commission has made some interesting recommendations--but even better is the proposal by Jeffery Anderson:

Repeal the PPACA (ObamaCAre) and save $747 billion by not subsidizing insurance through the exchanges, and save another $540 billion of spending by not expanding Medicaid and CHIP.

So, repeal ObamaCare and save at least $1.287 trillion through 2020.

Here's another idea:

Let the Medicare cuts go into effect---but end government price-fixing in health care and allow balance billing. This simple act alone will not only save trillions in government spending but will be a large step toward getting the rise in health care costs under control, ending the physician shortage and reestablishing the proper balance between specialists and primary care.

To get the economy back on track, we need to get serious about cutting back the burden of government spending.

To get health care costs under control, we need to end government support of the third-party payment system, and let the market work.

And as a bonus, we will regain important personal freedoms and reverse the trend toward unlimited government power.

Defund. Repeal. Replace.

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What to do about the Fed

One of the biggest, if not THE biggest, issues facing us today is getting the budget and deficit under control and th economy growing again.

The Fed is trying to jump start spending through quantitative easing---but that's going to have the same effect as an alcoholic dealing with his problem by having another drink.

So what would be a better solution?

The best solution would be to End the Fed--but a more realistic solution may be to end the Fed's "dual mandate" of price stability and full employment and make its job simply the preservation of the value of the dollar.

Read more here and here.

What do you think?

(HT TIADaily.com.)

The Real Danger of Deflation

The only genuine danger from deflation is that faced by over-indebted, would-be deadbeats. When money gains value over time (as under deflation), the over-indebted face a larger repayment burden. They must repay their debt with ever more valuable money, compared with the (lesser) value of money initially borrowed. In a deflation, the prices (and incomes) one receives necessarily decline, but the face amount of the debt owed does not decline. This is the “pinch” that deflation ultimately exposes and makes transparent.

And guess who is the most over-indebted? None other than the US Government who is rapidly making money out of thin air which will devalue your savings and allow politicians to pay off the national debt with cheaper dollars.

You lose. They win.

Read more: "The Deflation Myth" by Richard Salsman

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Bastiat on ObamaCare

Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that er object to its being don at all. We disapprove of state education. The the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. we object to a state-enforced equality. Then they say we are against equality. An so on. It is as if the socialists were to accuse of of not wanting persons to eat because we do not wan the state to raise grain.

--Frederic Bastiat, The Law

We disapprove of the state providing medical care or health insurance ...and the socialists say that we are against helping the poor.

Defund. Repeal. Replace.

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2007-2010 Market failure--NOT

Another great post from Ideas Matter.



And from Max Broder-- "We should take away the lesson that long-term value creation cannot be achieved through short cuts. It's about a commitment to hard work and building a business - whether bank or bakery [or medical care]- one customer at a time."

Budget Cut No Brainer

Listening to the radio this week, I learned that the US is paying Brazil $147 million a year so we can continue subsidizing American cotton farmers $3 billion a year.

What do you say we take a swipe at that growing national debt and cancel both?

And then, let's look long and hard for any similar cases and end them too.

Be the calcium for their spines. Write your Congressmen.

Thank You Veterans and Citizens-at-Arms

(HT Milton on Wolf FB)

Change you can believe in

World Bank chief surprises with gold standard idea

He isn't talking about gold and silver coins, but that would be the best change for our change!

Significant inflation and deflation are caused by political manipulations of the money supply, which also lead to the booms-and-busts of the business cycle. Return to the gold standard would be a return to 'honest money" and would end the government's ability to erode our savings through its hidden "tax."

Bringing it up as something to seriously consider is the first step.

Making it happen will require a clear and thorough debunking of Keynesian economics and the belief in central planning.

It's an up hill battle, but one we can not ignore.

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Thank YOU, John Dennis

I am proud to have had the opportunity to work with John Dennis on his campaign for U.S. Congress against Nancy Pelosi. When you read his thank you letterbelow, you have a glimpse of why I feel that way.

By being a gentleman and a man high integrity, John bolstered my belief in the fundamental goodness of the people in this country---even those who run for office, and maybe a few of them who actually get voted in.

From John Dennis:

THANK YOU FOR YOUR SUPPORT

It is with regret that I confirm we did not succeed in our election for California's 8th congressional district seat. We did very well historically for the GOP in San Francisco, and we did well in relation to our party's current registration base. But we came up short in our ultimate goal of unseating Ms. Pelosi.

We did accomplish quite a bit along the way. We reversed a trend of declining votes for Republican congressional candidates in San Francisco. We also helped increase the San Francisco Republican party registration significantly, turning back a multi-decade slump. We helped give a new look to the local party and reached out across the political spectrum to build coalitions which will lead to future successes.

Our videos were viewed over 1 million times online, not to mention the millions who saw them on various television shows. We also had unprecedented national coverage for the campaign.

We leveraged cutting-edge online tools in ways which future campaigns will likely study. We deployed a ground game not seen in San Francisco Republican campaigns for some time.

Two accomplishments stand out: We addressed matters that Ms. Pelosi has avoided for years. And, more importantly, we unyieldingly identified and pounded the most significant issues facing our country.

Those issues are: 1) What is the appropriate role of the government in our lives? 2) Washington is a machine with its own interests, 3) The Left/Right fight is largely a diversion from the real battle between Washington and us, and 4) Your individual liberty is the highest political value.

That last point is most important to me personally. I fought, and will always fight, for your individual liberty, for your freedom. By securing your liberty, I secure liberty for my family and for all Americans.

Politics boils down to two truths. One, freedom works. Two, and more importantly, freedom is right.

As I said in my concession speech on the night of the election, always remember that, in spite of the mythologies they encourage and expound, Washington and all governments are just businesses. And they are businesses which use our sense of decency and patriotism to achieve their ends - at our expense. That's why we're in the mess we're in today.

The abolitionist Wendell Phillips reminded us that "eternal vigilance is the price of liberty." We will always be called to battle for freedom. I look forward to joining with you in those fights. I suspect other campaigns and issues will draw us together.

Thank you for everything you have done for me. Thank you to the amazing volunteers who were the heart and soul of the campaign. I am grateful for all of your support. It has been my pleasure, my honor, to fight for the values we share.

In Liberty,



John Dennis

The Fed and Quantitative Robbery

With all the hoopla over the election, Bernanke's quantitative easing announcement (a.k.a. theft of your savings) is getting insufficient attention.

Wrap it up in all the excuses you want (a weaker dollar will improve exports, we have to avoid deflation, it's really credit easing to boost business and spending....) it still comes down to the fact that whenever the government creates money out of thin air, the value of the money you have earned and saved goes down.

For every dollar you earned and saved in 1980, you only have 34 cents left. The other 66 cents has been inflated away by the Fed.

If you are old enough to have started working in 1973, when Nixon abandoned the gold standard, that dollar is now worth only 20 cents.

What happened to the value of our money 100 years ago, when we did not have the Fed and we were still on a commodity money standard?

From 1880 to 1910, a similar 30 year stretch, the value of the dollar fell 3 cents. That means you'd still have $0.97 in 1910 for every dollar you earned in 1880 instead of the $0.34 cents you have today from what you earned in 1980.

Here's a chart I have posted before which illustrates the destruction of the value of our money by the government. The dashed lines are periods in our history (including the present) when paper dollars are cut loose from a hard metal standard.

So are we better off with the Fed or with freedom? Does the government simply get to keep printing and borrowing money and then pay us back with less, all the while eroding away our ability to save and provide for our own future?

I think the answer is obvious.

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November 3 -- Now what?

Democrats lost control of the House --BIG time-- but retain a slight majority in the Senate. Republicans (hopefully) realize this was more of a reaction against President Obama's ambitious statist policies than any kind of mandate for Republicans.

This election was about what the country doesn't like--and what it doesn't like is heavy-handed politics, deals with big special interest groups, rising national debt, continued high unemployment, ever-increasing government spending, and the threat of rising taxes.

The problem is most people still want Medicare, Social Security, public education, strict environmental regulation and a whole slew of other government programs. Basically, our country wants to have its cake and eat it too. Since neither the Republicans nor the Democrats can pull that off, every two years the party in charge gets voted out.

So where do we go from here?

People have some homework to do.

As a country, we are going to have to relearn this important lesson of history: command and control, central planning does not --nay, can not--lead to prosperity. It leads instead to economic stagnation, environmental degradation and the erosion of liberty. Until that lesson is crystal clear, people will continue to look to government to solve problems which fall more appropriately on their own shoulders.

That doesn't mean we can't band together voluntarily to help the less fortunate. It does mean that in order to preserve the just and inalienable right to our own lives, we can't use the force of government to rule or rob our neighbor. It means that the solutions to the many difficult problems we face must be solved only by means which respect the individual rights of everyone, equally before for the law. No exceptions. No special interests.

The initiation of force must be totally banned from the realm of acceptable behavior...and not just between citizens. Government force must be strictly limited to protecting citizens from those who do initiate force. This county's motto need to be, not "Don't tread on me" but "Convince me, or leave me alone."

We desperately need effective statesmen who are capable of leading this country back to the ideals of self-ownership, self-reliance, and a compassion based on mutual respect.

Let's hope we voted a few of them in.