More descriptively: the dollar bubble (looming) dwarfs the housing bubble (in the midst of) and the Nasdaq bubble (late 1990's)!
Think of the process of boiling water. As things heat up small bubbles form and everything looks like it is in an excited state. As the intensity increases the bubbles are released and rise to the surface. At first the bubbles that come to the surface are the small ones because they can travel through the medium more quickly because of their size.
The large bubbles which begin to form at the interface with the source of heat travel slower to the surface than the small bubbles but they bring with them a much greater volume of inflation. Eventually all the bubbles are large and all the bubbles come to the surface quickly causing total disruption of the medium.
There have been small bubbles coming to the surface ever since the adoption of a fiat currency. These small bubbles represented certain segments of the economy that were affected in specific ways by the manner in which the artificial credit entered into the economy.
But the ego-driven interventionists changed the temperature from medium to medium-high. Consequently the bubbles became larger and more frequent. The Nasdaq bubble is an example of the seriousness of a medium-sized bubble. At that size of inflation the surface of the medium churns and there are widespread secondary effects as the bubbles pop and splash in unpredictable directions.
Helplessly ignorant and hopelessly addicted, the ego-driven interventionists changed the temperature to high. The last of the medium-sized bubbles then comes to the surface but at an accelerated rate. That bubble is the housing bubble that we are now seeing!
When the first large bubble inflated by the high heat (chosen by the interventionists) arrives it will pop and exclaim - 'I am the dollar bubble!!!!!' Know then that the full boil of the medium is about to occur!
There is only one solution. Turn off the heat and ride out the volatility until it subsides. Stop inflating!
There is only one statesman in America who understands the economy - because he is a scholar in the classical liberalism tradition - and that is Ron Paul.
There are two sources of the inflation and both are taken care of by the Constitution. 1. The ego-driven interventionists (also known as politicians) are under oath to uphold the Constitution and should be convicted of treason if they violate their oath. The Constitution outlaws intervention. 2. The Federal Reserve is unconstitutional. Whether prosecuted for its crimes or made irrelevant by allowing gold and silver to be monies (as specified in the Constitution) the source of the inflation and its vehicle (a central banking system) will be terminated.
Tranquility and peace will return and from that and the other freedoms granted by the Constitution prosperity will return as our American birthright. That example will inspire the rest of the world and America will begin fulfill its destiny as a beacon of hope and justice.
Sunday, October 28, 2007
Tuesday, October 16, 2007
The Ethics (or lack of) Of Inflation - Part Two.
This is the continuation of Part One. In this blog entry, Part Two, the intensity of the evil of inflation will be made evident.
Sure, counterfeiting is an evil thing just as is theft which is exactly what happens when counterfeiting occurs. Now consider the degree of evil attributable to being able to conceal the theft because of a central banking system and then the magnified degree of evil attained since the theft is concealed, thereby allowing the magnitude of the counterfeiting to become massive. Guess what, that does not even reveal a fraction of the totality of the evil of inflation!
How can that be, you say! 'Hold on to your horses!'
By way of inflation a system dependent on inflation is built. It is a power system. It starts by having the power to inflate but then it grows.
When newly printed money (generated by an act of counterfeiting) enters into the credit system it has to come out somewhere. The interventionist in power makes sure that those who are favored receive the money first. Before the flush of money begins to circulate the value of the money is still at pre-inflation levels and so goods and services are channeled to these favored ones (these are the same ones that become addicted to this privilege) before the purchasing power of the currency falls. These groups become enriched and become collusionists and become dependent like addicts.
Meanwhile those receiving the currency later in its circulation get the same 'pay' but by then it is worth less. Theft has occurred.
This entanglement and dependency within the power system takes on a life of its own. The beneficiaries of the system of inflation gain power and eventually use that power to take control of the power to inflate, and then, feeds itself to become even more pervasive and powerful!
These words describe the steps but in the political world the intensity of the evil is even more extreme. For example, at some point the education system is taken over and people are indoctrinated. Case in point, students are taught that the Federal Reserve fights inflation. At some point the media is taken over and the evils of inflation are not allowed to be aired. Case in point, the media ignores or distorts the Ron Paul campaign but the information still flows on the internet. Who do you think wants to regulate the internet?
To oppose and expose the system of inflation takes courage and righteousness and integrity. These are the qualities of the statesman Ron Paul. He is the only candidate for President that is knowledgeable about the economics rooted in classical liberalism. He is the only candidate that isn't an addict of inflation.
Sure, counterfeiting is an evil thing just as is theft which is exactly what happens when counterfeiting occurs. Now consider the degree of evil attributable to being able to conceal the theft because of a central banking system and then the magnified degree of evil attained since the theft is concealed, thereby allowing the magnitude of the counterfeiting to become massive. Guess what, that does not even reveal a fraction of the totality of the evil of inflation!
How can that be, you say! 'Hold on to your horses!'
By way of inflation a system dependent on inflation is built. It is a power system. It starts by having the power to inflate but then it grows.
When newly printed money (generated by an act of counterfeiting) enters into the credit system it has to come out somewhere. The interventionist in power makes sure that those who are favored receive the money first. Before the flush of money begins to circulate the value of the money is still at pre-inflation levels and so goods and services are channeled to these favored ones (these are the same ones that become addicted to this privilege) before the purchasing power of the currency falls. These groups become enriched and become collusionists and become dependent like addicts.
Meanwhile those receiving the currency later in its circulation get the same 'pay' but by then it is worth less. Theft has occurred.
This entanglement and dependency within the power system takes on a life of its own. The beneficiaries of the system of inflation gain power and eventually use that power to take control of the power to inflate, and then, feeds itself to become even more pervasive and powerful!
These words describe the steps but in the political world the intensity of the evil is even more extreme. For example, at some point the education system is taken over and people are indoctrinated. Case in point, students are taught that the Federal Reserve fights inflation. At some point the media is taken over and the evils of inflation are not allowed to be aired. Case in point, the media ignores or distorts the Ron Paul campaign but the information still flows on the internet. Who do you think wants to regulate the internet?
To oppose and expose the system of inflation takes courage and righteousness and integrity. These are the qualities of the statesman Ron Paul. He is the only candidate for President that is knowledgeable about the economics rooted in classical liberalism. He is the only candidate that isn't an addict of inflation.
Sunday, October 14, 2007
The Ethics (or lack of) Of Inflation - Part One.
As an overview I will mention that the end result of inflation is a decrease in the purchasing power of the currency. Part One will address the origin of inflation and the system, emphasizing whether these are ethical or not.
Inflation is a good word because it induces the thought of a balloon which induces the thought of floating away. Prices rise and in hyperinflation the sky is the limit!
Another good analogy is dilution. Imagine yourself ordering orange juice at a restaurant. It comes and it is thick and nutritious and fresh squeezed like it states on the menu. If those managing the restaurant add water to the juice and do not change the 'fresh squeezed' description on the menu then you will be cheated even if your palate is not fine enough to detect the sham.
This is where ethics enters in. To dilute (or inflate) surreptitiously is untrustworthy. It is clear that the inflator benefits from the theft of a portion of someone else's property or wealth. Inflation (dilution) is untrustworthy and it is theft. This is exactly the reason why counterfeiting is a crime!
We have made the transition now to money (our ballon and orange juice analogies served us well). The origin of the inflation is the existence of a fiat currency. Instead of the currency being defined as a portion of a measurable unit of a commodity, it is merely authorized by government decree. The government declares it as legal tender without tying it to anything that has real value. The origin of inflation is when the government prints more of this fiat money. Ethically it is criminal because it is nothing more than government sanctioning its own counterfeiting which is still theft and deceit.
When a counterfeiter prints money he or she directly benefits. But the government is a large entity so to who and how do the benefits flow? First of all the system requires compliance. There cannot be alternatives or renegade banks that are not part of the inflation scheme. The necessary requirement is the establishment of a central bank combined with legal tender laws. Once this central bank system is in place the inflation of a national currency is possible.
This is where I will pick up next time in a future blog entry.
P.S. There is only one statesman knowledgeable enough about classical liberalism and principled enough to speak honestly about these violations of civil rights and that is Ron Paul.
Inflation is a good word because it induces the thought of a balloon which induces the thought of floating away. Prices rise and in hyperinflation the sky is the limit!
Another good analogy is dilution. Imagine yourself ordering orange juice at a restaurant. It comes and it is thick and nutritious and fresh squeezed like it states on the menu. If those managing the restaurant add water to the juice and do not change the 'fresh squeezed' description on the menu then you will be cheated even if your palate is not fine enough to detect the sham.
This is where ethics enters in. To dilute (or inflate) surreptitiously is untrustworthy. It is clear that the inflator benefits from the theft of a portion of someone else's property or wealth. Inflation (dilution) is untrustworthy and it is theft. This is exactly the reason why counterfeiting is a crime!
We have made the transition now to money (our ballon and orange juice analogies served us well). The origin of the inflation is the existence of a fiat currency. Instead of the currency being defined as a portion of a measurable unit of a commodity, it is merely authorized by government decree. The government declares it as legal tender without tying it to anything that has real value. The origin of inflation is when the government prints more of this fiat money. Ethically it is criminal because it is nothing more than government sanctioning its own counterfeiting which is still theft and deceit.
When a counterfeiter prints money he or she directly benefits. But the government is a large entity so to who and how do the benefits flow? First of all the system requires compliance. There cannot be alternatives or renegade banks that are not part of the inflation scheme. The necessary requirement is the establishment of a central bank combined with legal tender laws. Once this central bank system is in place the inflation of a national currency is possible.
This is where I will pick up next time in a future blog entry.
P.S. There is only one statesman knowledgeable enough about classical liberalism and principled enough to speak honestly about these violations of civil rights and that is Ron Paul.
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