Murray Rothbard 1926-1995

Here is the short version…

First with modern credit cards and electronic banking we would not go back to the days of carrying around dirty gold and silver. What would happen is banks would issue ATM cards backed by physical gold or silver. Transactions would occur much as they do today with the swipe of a card. No need to carry cash or coins around if that is not desired.

Dollars would be issued by the bank and redeemed at clearing houses like in the first half of the 19th century. This is a simple process, bank ABC issues $100 of currency to John. John spends the $100 at Wal-Mart in the from of bank notes or his ATM card. Wal-Mart takes the $100 and deposits it at their clearing house, similar to clearing a check, and gets credit for the gold or silver that can be physically secured and removed from bank ABC to Wal-Mart XYZ bank. Its that simple.

The advantage of this is the government does not issue money. The government is financially treated like everyone else. They have an account. They have a budget. If they do not balance the budget they can go broke or are forced to plead for help. This happened in 1907 when treasury Secretary Chase issued federal notes not backed up by gold. J.P. Morgan and friends had to bail out the federal government. A gold standard would force government to balance their budgets or go to voters demanding more gold and silver. Not a pleasant proposition in 1907 or today.

Company A builds a better mouse trap and lowers its price from $15 to $10

So what’s in it for the average person?

Why is printing more money bad?

The gold standard helps the average consumer by keeping inflation at zero and prices declining.
Now for the boring, but essential example of a zero inflation economy.

This example is from the late economist Murray Rothbard.

If the USA has $200 in the economy and there are only three companies producing goods they will compete directly for that $200. This was referred to as “messy competition” by the capital owners of the 19th century.

Company A initially produces 2 units of mouse traps at $15 for total revenues of $30. 2 x $15=$30.

Company B initially produces 10 units of gas at a price of $5 for total revenues of $50. 10 x $5 = $50

Company B is forced to lower its price from $5 to $4.50

Company C initially produces 20 units of silk at a price of $2 for total revenues of $40. 20 x $2 = $40.

This leaves $80 in savings. The demand for money would put the interest rate at say 5% for this example.

The total money in the economy is $200. $120 spent on consumption and $80 on savings.

Now what happens if company A builds a better mouse trap?

You knew that one was coming. Company A is able to reduce the production cost dramatically through new technology and can now sell their mouse trap for $10 instead of $15. Everyone is ecstatic about the new mousetrap and sales climb to 4 units.

But when that occurs total revenue climbs from $30 to $40. 4 x $10 = $40.

What happens to the other two competitors and savings?

Company C is forced to lower prices from $2 to $1.90

Company B and C must hope the demand for money is such that they can maintain their price levels. More likely this will not be the case and then they will be faced with the choice of lowering their price to maintain sales or losing market share and maintaining their current price.

Understand what that means.

Industrialist hate having to constantly lowering prices and finding ways to save money whenever a competitor improves their productivity. Lower prices are good for consumers and a headache for capital owners. Competition is indeed messy under a gold standard.

Company B must choose to lower its price to $4.50 to maintain its market share of 10 units, total revenue now equals 10 x $4.50 = $45, or keep their product priced at $5 and lose 1 unit of market share, $5 x 9 = $45.

Company B did nothing wrong, they simply have to keep pace with the changing economy, which benefits the consumer, not company B.

Under a gold standard when people demand more savings the interest rate increased and decline when savings increase

Deflation allows consumers and retires who do not get regular pay raises to benefit in the increased productivity of society by allowing them to purchase more goods on their fixed income. Inflation robs them of purchasing power and transfers this wealth to capital users and the creators of new money.

Company C must lower prices from $2 to $1.9 losing revenue on sales of 20 units lowering revenues from $40 to $38. The alternative would be to keep prices at $2 and lose one unit of sales, $2 x 19 = $38.

The total revenue was $30+$50+40 = $120 but is now $40+$45+$38 = $123.

There has been an increased demand for money, $3 more, to be able to purchase the better mousetrap and take advantage of the lower prices offered by company B and C.

So what happens to savings?

The pool of loadable funds decreased from $80 to $77.

When this happens bankers will have less capital to lend and must then charge a higher interest rate for the remaining capital. These higher savings rates will eventually attract more savers wishing to take advantage of the high rates on their certificates of deposit, more deposits will be made, and the interest rates will decline again.

Gold has been the medium of exchange for thousands of years and it will be again sooner than people think

This cycle is critical to understand.

Under a gold standard when the economy is “hot” consumers feel good and demand money. Savings are depleted and interest rates go up.

When interest rates go up this is a signal to capital users to NOT invest.

The cost of money is too high and capital users will postpone high order capital projects to a later date when the interest rate is lower.

When the economy “cools” down and consumers become fearful they will choose to put their money into the bank, interest rates will fall, and capital users will want to take advantage of the lower rates to build higher order capital projects like new factories and natural gas plants.

There is a constant interaction between consumers and capital users, the majority of both are not consuming and building projects at the same time.

Why is this so important?

Because this is EXACTALLY what happened with the housing boom.

When the 2001 recession was over consumers started making purchases again and the Federal Reserve artificially LOWERED the Federal Funds rate to 1%! The opposite of what would have happened with a gold standard.

The Federal Reserve set the Federal Funds rate artificially low to 1% in 2003-04 creating the money supply for the housing boom and bust. This is opposite of what would have happened under a gold standard.

Both groups were given the green light to spend, spend, spend, and the inevitable result was the boom followed by the bust. Eliminating the Federal Reserve would prevent much, but not all, of the boom-bust business cycle.

Simply put the gold standard rewards savers, consumers, thrifty corporations, and distributes money in a just and efficient manner. Foolish spend thrifts and inefficient corporations are punished severely with a gold standard. This would include federal, state, and local governments, banks, and Fortune 500 corporations.

Would society have raised billions needed in gold or silver to bail out the banks in 2008?

Printing cash is cheap and painless for central banks and governments, the real cost are passed on in the form of invisible inflation to the 310 million uninformed economically illiterate Americans. A despicable dirty act by the Federal Reserve and Washington politicians.

Our central bank prints billions of counterfeit money every year that rewards special interest and robs the people of their earnings through inflation. Instead of deflation consumers get a constant barrage of inflation that very few are educated about and overwhelmingly are victimized by it in their most vulnerable retirement years. Economic illiteracy cost Americans billions.

What about the real world?

Is this for real?

The Consumer Price Index tells the history of the Federal Reserve

Under a return to the gold standard from 1879 to 1897 prices fell 1% per year. GDP growth averaged 3.7% per year. From 1879 to 1889 the CPI declined 4.2% and wages rose an astonishing 23%. An increase in earning power for the average American of 27%!

Imagine if in this decade the average purchasing power parity for the average American went from $48,100 to $61,000. $13,000 more to save, spend, invest, for every man, woman, and child. This is what the reality was for the average American under the gold standard and why the Democratic Party fought for decades for “hard money.”

Interest rates declined from 5.98% in 1879 to 4.43% in 1889. Per capital income rose an astonishing 46% from the previous decade where greenback paper dollars were used for money. GDP rose 84% from the previous greenback decade.

Compare that decade to the increase in prices of 2,241% since 1913 when the Federal Reserve was created. $1 dollar today would be worth 4 cents in 1914.

Printing money is theft. The theft benefits the elites on Wall Street and the federal government. It is nothing more than stealing from the American people by deception to support a selected few. In the coming decade Americans will have a chance to put out of business our third central bank, hopefully with a constitutional amendment. Nothing good comes out of legalized plunder.

What do we really know about Barack Obama other than what he says about himself.

I don’t know at least Obama has a severely jaded perception of himself. At worst he registers about a -1 on the truth meter.

Either way do we actually want more of his “FORWARD”?

After reading this you will know more about Mitt Romney than you do about the current occupant of the White House, and it’s only one paragraph long.

Mitt Romney

From his Mitt Romney 2012 Site: After going to both Harvard Business School and Harvard Law School simultaneously, he passed the Michigan bar, but never worked as an attorney.

As a venture-capitalist, Romney’s first major business deal involved investing in a start-up office supply company with one store in Massachusetts that sold office supplies. That company, called Staples, now has over 2,000 stores and employs over 90,000 people. Romney, or his company Bain Capital (using what became known as the “Bain Way”) would go on to perform the same kinds of business miracles again and again, with companies like Domino’s, Sealy, Brookstone, The Weather Channel, Burger King, Warner Music Group, Dollarama, Home Depot Supply, and many others.

Got your calculators handy? Let’s recap.

Volunteer campaign worker for his dad’s gubernatorial campaign 1 year. Unpaid intern in Governor’s office 8 years. Mormon missionary in Paris 2 years. Unpaid bishop and stake president for his church 10 years. No salary as president of the Olympics 3 years. No salary as MA governor 4 years.

That’s a grand total of 28 years of unpaid service to his country, his community and his church.

Now, what can we say about the current person in the White House?

This Mitt Romney and Barack Obama thing about DOGS has been going on now for a couple of weeks.

Finally O’Reilly featured it on this “Stupid for the Week” segment.

Honestly TO STUPID TO RECOGNIZE STUPID?
What does this say about those who are promoting this foolishness when as a nation we are trillions in debt?.

An administration who is DOING NOTHING to cut spending?
This included CONGRESS folks!

April 26, 2012 by Sam Rolley

An Analysis

American citizen, you are grotesquely ignorant.

On the whole, your society exemplifies Webster’s definition of the word “oblivious”: 1) lacking remembrance, memory, or mindful attention 2) lacking active conscious knowledge or awareness.

Perhaps you aren’t completely to blame for your disgusting inability to think for yourself, act in your own self-interest and attain feelings of emotional stability or good health without the guidance of a lifelong Nanny. Your devolution has been engineered by a parasitic State that understands the need to numb and stupefy your most basic human instincts and desires. You have been helped to the point of incompetence and made an idiot by a society of simplicity and convenience.

Your food is not food, and it is served to you through a window while you sit in your automobile.

If you do not attempt to provide for yourself and those who depend on you, it is done for you.

Your friends are not friends, but faces on a screen. You likely have thousands of them but few meaningful relationships.

Sex is exploited to divert your attention. Even political news sites often include more sex stories than news.

Your political views are molded by politicians’ and media’s exploitation of emotionally-charged social issues — abortion, women’s rights, race relations, etc. — so you do not realize that you are losing rights daily.

You idolize idiots for their physical attributes or charm. When given the opportunity to obsess over their lives so you can forget that your own is unfulfilling, you are grateful.

Politicians use phrases like “right wing” or “left wing,” to make you believe in freedom of political choice, democracy and liberty. There is no such thing in this collapsing society. There is only the slavery of consumption. If you are a person who recognizes this and attempts to live a lifestyle that diminishes the State’s involvement in your affairs, you are branded a terrorist, conspiracy nut or simply crazy.
The whole story …

Thank you George!

By George Rusling

After reading an article written by David Limbaugh, I sat down and pondered our current Federal Executive branch and what I believe the truth to be. Recently, Environmental Protection Agency Region 6 Administrator, Al Armendariz was caught on video articulating his view of the agency’s role in enforcing its regulations.

Armendariz said: “It was kind of like how the Romans used to, you know, conquer villages in the Mediterranean. They’d go into a little Turkish town somewhere; they’d find the first five guys they saw, and they’d crucify them. Then, you know, that town was really easy to manage for the next few years. … It’s a deterrent factor.”

As Limbaugh noted, this man should be fired — yesterday! The White House press secretary says Armendariz wasn’t expressing the attitude of the administration but sadly, that’s precisely what he was doing, and it shows in almost every Obama agency.

The Obama administration’s recurring abuses are simply the logical extension of liberal, self-righteous certainty of the superiority of its ideas, which invariably leads to dictatorial usurpation’s and lawlessness from the ruling class. To a point, the same could be said of many conservatives, but there are major differences, only one of which we’ll examine here.

Liberals are sure, not only that their ideas and policies are more effective but also that they are morally imperative — and that conservative ideas and policies are not just ineffective but also woefully immoral. The view that our Constitution is a “living document” is totally Progressive-Liberal from its inception. Case in point, the recent HHS pronouncement that religious liberty no longer extends to the arena of healthcare insurance, despite the clear demands of the 1st Amendment to the contrary.

Real conservatives (as opposed to the in-name-only type) do not subscribe to the maxim that the end justifies the means. Their first allegiance, in terms of politics and statecraft, is to the Constitution and the rule of law. They don’t believe they have the right to thwart or circumvent the Constitution or rewrite it judicially to advance their ideas and policies, no matter how important they think they are.

This is not simply because we are better adherents of the rule of law, but also because of the high value we place on the Constitution. Our reverence for the Constitution is not a matter of idolatry or some romantic abstraction; it flows from our conviction that it is the indispensable foundation of our political and economic liberty, such that safeguarding its integrity is paramount.

Leftists — not fully appreciating the essential link between our Constitution and our liberty, or maybe, just not valuing either to the extent conservatives do — are much more willing to subordinate and undermine the Constitution when it serves their purpose, all the while paying lip service to their allegiance to it. Further, the left, not comprehending conservatives’ commitment to these principles, tends to believe, through projection, that conservatives operate the same way — that we, too, would casually throw the Constitution under the bus to achieve our own ends.

For most, that simply isn’t true. We don’t advocate using the courts to make policies that are the constitutional prerogative of the legislative and executive branches, nor do we condone abuses of executive authority by the president himself, his unaccountable czars or his rogue administrative agencies to achieve our political ends. We understand that for a court to judicially legislate conservative policy is just as dangerous to the Constitution — and thus, ultimately, to our liberties — as it is for it to legislate liberalism. We realize that for a conservative administration to do end runs around the legislative branch or the Constitution is as damaging to our liberties as similar abuses by a liberal administration. This is why most conservatives (like Glenn Beck) condemned many of the activities of the recent Bush administration.

Please understand that when liberals abuse their power in these ways, it won’t work for them to throw out cynical claims of moral equivalence, as in “conservatives are every bit as guilty of these abuses as we are.” That might fool their fellow cynics and the uninformed, but it’s fantasy. This is not because we are morally superior but because a vital component of our commitment to the bilateral social contract is that we protect and defend the Constitution, and thus the right of Liberals to also advocate for what they feel is good and proper.

So every time the Obama administration abuses its power in furtherance of its political ends, true conservatives are not just upset that the destructive liberal agenda is being advanced by fiat. We aren’t just outraged at its lawlessness. More importantly, we are horrified that it is thereby removing more and more bricks from our nation’s constitutional foundation, our republic and our liberties, to the point where we go out, demonstrate at “Tea Parties” then buy more guns and stockpile more ammunition against what we see as that inevitable day … !

Mónica Novoa is coordinator of the Drop the I-Word public education campaign, a platform for people nationwide to drop the dehumanizing, racist slur “illegals,” and to ask that the media do the same.

Ms. Novoa is touted as a seasoned communications strategist and organizer.

Unfortunately for her and the organization she represents she hardly came off as a seasoned anything but foolish young woman.

Entering the No Spin Zone with Bill O’Reilly did one thing for Ms. Novoa and Drop the I-Word … it gave the public another example of how over the top looney toons some of these left wing radicals actually are.

O’Reilly asked her if she came here legally and she at first said no … then recanted and said yes.

In another interview HERE she states this:

Her family left El Salvador in 1982, when federal troops were targeting teachers and other intellectuals for intimidation and slaughter. Novoa said her father was a teacher and a leftist. When she was 3, coyotes–guides for undocumented immigrants–took the family through Guatemala, Mexico and a torn border fence into California.

I don’t know perhaps something is being lost in the translation from where these people hail and their US education on the verbiage we use here in the states.

ILLEGAL ALIEN means someone who has crossed into the USA ILLEGALLY (a felony I might add).
WOP = with out papers.
Dehumanizing?
GET REGISTERED or go back whence you came.
Or keep quiet!
Problem solved!

Washington and the various data collection agencies have for years now been telling the American public that the economy has been improving. It’s a lie. They know it and thinking Americans know it. Here are six graphs that bring home the state of the economy today as seen by the average American.

The first one is the most damming, Social Security tax collections are down 6.6% from the peak of $973.1 billion in January 2008. Even with the payroll tax cut of 2011 (12.4% to 10.4%) this is a good proxy for the wages of Americans because everyone pays this tax.

Would it be safe to conclude workers taxed wages are down 6.6%?

Social Security tax collections down 6.6%

The second graph is real disposable personal income that is down 5.9% from May 2008. Since Obama was inaugurated there has been a slight drop from $32,814 to $32,600. In return people are getting EBT cards and dependence.

The third graph is the employment level. Since November2007 the US economy has lost 5,706,000 jobs that have not returned and increased the debt $5.993768 trillion.

Real Disposable Personal Income down 5.9%

With record profits there should be a recovery?

Hiring should resume and happy days are here again?

No.

As pointed out above what is happening is a transfer of wealth from the middle and lower classes to the elites in Washington and Wall Street. The transmission mechanism is the Federal Reserve and printing money. When new money is created the institutions in line first get to spend the money for goods and services at old prices. Consumers pay for the counterfeiting operation in the form of inflation tax.

Employment is down 5,706,000 jobs

If a corporation sells its goods for $1,000 and the previous sale made $800 the corporation could be deluded into a false sense of prosperity. If the staff falls for the central bankers’ trick they will hire more staff than is needed and make investments that will prove to be not needed sowing the seeds of bankruptcy. If it cost $1,200 to produce the same batch of goods today due to inflation they have lost money and they will soon go bankrupt if they choose to expand. Economist Peter Schiff refers to the current profits as “fake” profits that will disappear like the wind in the future.

When corporate profits are at record highs and real disposable income is negative it can only mean one thing, the central bank is pumping billions into the economy

Inflation is the largest single contributing factor in the increasing income equality between the rich capital owners, government and the rest of society. Simply put governments can raise taxes, issue bonds, and keep pace with inflation. Corporations can raise their prices to keep pace with inflation. When the job market is saturated with millions of unemployed workers looking for a job wages will decline.

The final two graphs, the money creation. The first is the monetary base up 200% since the TARP bail outs.

Monetary base up 200% since TARP

The direction the country and economy will go is limited at this late stage. There are four options on the table.

1. War. When Hoover’s, Roosevelt’s, Hitler’s, and Stalin’s central planning policies failed WWII erupted.

2. Austerity. The citizens of a country get taxed at exorbitantly high rates so the elites who own the debt can be paid back. The current economic policy of the Greek government. To hell with the peasants, the elites must maintain the standard of living they have become accustomed to.

Monetizing the debt up 238% since Obama was inagurated

4. Default. The best option for the people. Hit the reset button and start society over again. No Social Security, Medicaid, or government hand outs. The death of the age of legalized theft aka the welfare state.

When will the default come?

When inflation cannot be ignored and the Federal Reserve is forced to raise interest rates. That day will come.

Of course Attorney General Holder is not shocked at this hole in voting practice security.

Why do you think Holder and this administration are doing their best to block voter ID?
If we have a fair vote Barack Obama loses by a landslide!

Rep. Trent Franks, Rep. Steve King and Cleta Mitchell speak about Project Veritas Voter Fraud video before House Judiciary Committee. There were reports that Nadler and Rep. Conyers were stunned and surprised by the Holder video and asked their staffers what it was about.

“It hardly inspires the public confidence that a white 20-something can obtain the ballot of the first black Attorney General.” – Rep. Trent Franks (R-AZ)

“I’m shocked that the Attorney General isn’t shocked. I’m shocked that the Attorney General hasn’t offered a response to this in a meaningful way… It took James O’Keefe to get this ACORN issue brought before America.” – Rep. Steve King (R-IA)

It is not enough that the government chooses not to cut its spending, fraud, corruption and graft. Now they are considering tapping into your retirement funds to pad their books.

They have thought about it before but it never took off.
Treasury Secretary Tim Geithner threatened to tap the Federal Workers Retirement funds if the Debt Ceiling was not raised in May of 2011. The ceiling was raised.

Well now they are thinking about it again.
Only this time it is your 401K or IRA money.

Perhaps it pays to be older with a little experience and maturity under your belt. I suppose that gives you a head start on simply observing behavior of others.

It did not take long before I noticed and wrote about the immature behavior of Barack Obama and his wife Michelle on this blog.

It did not take them long to lap up (take the utmost advantage) the White House lifestyle.

Nuevo Reich (the newly rich) who normally are classless as well as clueless fit this couple to a tee.

Unfortunately a certain segment of society is equally as doltish and does not have a clue there is a problem with the picture.

This lavish Obama lifestyle is finally getting noticed and discussed by the main stream media.

Like everything else with THE MAIN STREAM MEDIA … they are a day late and a dollar short.

No wonder they are fast going broke and losing credibility

All in all I suppose we must be grateful all that golf and vacationing on our dime keeps him out of the White House screwing more things up.