In addition to big government, debt, and war, let us add one more item to the list of wicked legacies that the Bush administration has given to this country: inflation. The newest price data raise serious concerns that we are being robbed (that is what inflation is) by this government more than we know. [Full Article]
Source link: http://blog.mises.org/2170/your-right-to-deflation/
Your Right to Deflation
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Lew writes:
“In some ways, the return of constant upward price pressures on a level exceeding economic growth is a telling act of destruction,”
I don’t understand the relevance to economic growth. If prices simply remained stable during a period of economic growth, that would be an indication that the money supply was increasing. That’s what Uncle Milty Friedman advocates; keeping some arbitrary market basket of commodities at a constant price level via manipulation of the money supply, regardless of what else is happening in the economy.
So I would say that the lack of generally falling prices is the telling act of destruction, since we know that people are still becoming more efficient, (against all odds) and more numerous.
And of course the problem is even worse than commonly believed, since the regime’s published “inflation” statistics grossly distorts the true general rise in prices, by not properly incorporating real estate values into the mix.
Placing a ban on an increase in the money supply in the charter of the Federal Reserve would be another solution.
No doubt this would be strongly resisted by the Fed and various Keynesian administrations because it would greatly limit their power and influence.
If the Fed couldn’t increase the money supply, what purpose would it have? That’s like saying you can have an oven, but you can’t raise the temperature inside.
I wouldn’t mind enjoying my share of deflation. The government has already stolen at least $50 from me in the past 6 months. That could buy me a new CD-RW, not including the 15% sales theft that we have in Ontario. It’s the ideal weak point of a general public that doesn’t realize how the value of money should change in an honest system.
The Fed will continue to exercise its power to inflate. This power will never be wrested from the Fed, the only thing that can be done is to remove its ability to inflate.
There are only two ways that I know of to do this:
1. Reject fiat currency for business transactions.
2. Use fiat currency but keep it invested in an inflation hedge until the time of a transaction.
At this point #1 is going to be very difficult. #2 is more plausible and there are advances in the stock market underway to make #2 even more plausible. One major step towards #2 is gold ETFs. You can open an account on an online brokerage site now and buy and sell ETFs for only $4 a trade. So as the Fed inflates your spending power increases.
I think that it is only a matter of time before method #2 becomes widespread, and I believe that this will lead to an outright rejection of fiat currency. People will simple exchange claims to commodities instead of converting them to fiat. The bottom line is the fiat currency regime will eventually fall. Technology is going to swoop in and make it obsolete, it is only a question of when. I predict that within 1 decade we will either see the fiat currency regime be wiped out, or in tatters (there are already forces at work just starting to nip at its heels), because once it can’t inflate it will die. The day this happens will be a day to celebrate for sure.
With respect to point #1, wouldn’t the existence of legal tender laws make ilegal the rejection of the government imposed currency? Let’s say for instance that I only accept liberty dollars as payment medium, in that case somebody could force me to accept his/her FED notes because the “legal” money.
What about the NORFED liberty dollar? They say they have more than 5 millions in circulation rigth now. Any comments about that?
The regime demands payment of tribute in its dollars. And the regime pays its minions with its dollars. The billions of dollars paid to huge corporations, welfare queens, farmers, universities and all the government pensioneers assures that the dollar will remain the only currency in circulation. So what if you carry on a few transactions in some other currency? On April 15, you must convert to dollars and pay the massa in DC.
The only way to end our persistent inflation is to return to a commodity monetary standard, which would most likely mean a gold standard. Legal tender laws should also be abolished. In addition, bank issuance of fiduciary media would have to be legally prohibited, or at least severely curtailed. And of course, all of this would involve abolishing the Fed. In short, government and money need to be completely separated. The imposition of a fiat paper money standard and granting the government monopoly control over this system was one of the most imbecilic economic policy decisions of the last 100 years. To paraphrase Mises, only a commodity (gold) standard removes government influence over the determination of the purchasing power of money.
To shred up damaged bills and replace them with new ones.
Of course, we would also have to require 100% reserve banking and punish as fraud anything less.
“To shred up damaged bills and replace them with new ones.”
Don’t be silly. Any counterfeiter could do that.
“With respect to point #1, wouldn’t the existence of legal tender laws make ilegal the rejection of the government imposed currency? Let’s say for instance that I only accept liberty dollars as payment medium, in that case somebody could force me to accept his/her FED notes because the “legal” money.
What about the NORFED liberty dollar? They say they have more than 5 millions in circulation rigth now. Any comments about that?”
Larry: that is a rampant misconception about legal tender laws. Legal tender laws only pertain to debts, taxes and public dues. For instance, the IRS can force you to pay your taxes in FRTs(federal reserve tokens). If you are in debt to someone they can force you to pay them in FRTs as well.
However, if you set up a business and put up a sign that says: “NO FRNs (sic) ACCEPTED HERE”, this is perfectly legal. When you sell goods and services this is not a debt, it is an exchange.
But, like I said no one is going to do this today because they wouldn’t get any business.
The NORFED Liberty Dollar is just the beginning of the end of fiat currency. Right now it is totally off the radar screen because it is a relatively small movement, but 20 years ago there wasn’t ANY anti-fiat movement(at least not on the scale of NORFED). Furthermore, there are small but growing movements on other fronts that will cause fiat to become obsolete. Unfortunately, it is going to be a slow process.
I found your blog when I was researching the Liberty Dollar. There are pragmatic problems with using private currency with a Main Street USA merchant. But what if I used it for all charitable donations? What are they going to do, reject my support? I am hoping that once the charity receives the Liberty Dollar, in the course of researching “what this funny looking money is”, that a certain percentage of people will learn of the dangers of the Fed and the greenback. This would sort of be a grassroots way to spread the word to main stream folks.
Thoughts? Are any of you actually using the Liberty Dollar or similar alternative?
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