US setbacks see dollar plunge to near 15-year low
By Ambrose Evans-Pritchard
Last Updated: 12:41pm GMT 29/11/2006
The dollar tumbled to a near 15-year low against sterling yesterday on fresh signs of economic trouble in the United States.
An 8.3pc crash in US industrial orders and an admission by the Federal Reserve chairman that Washington does not know how bad housing really is set off another day of wild gyrations on the currency markets.
Maybe if we had “honest money”, (i.e., backed by something other than the full faith and credit of a dishonest government) then we might not need to be overly concerned. When the printing press runs at the “Treasury Department”, (as if there was anything of value kept there), then everyone who holds a Federal Reserve banknote is taxed by inflation.
No vote in Congress. Nothing signed by the President. No politicians has to “do” anything. The politicians think the market is stupid.
No, even without the government’s M3 number being published any more, the market “knows” exactly how many extra green pieces of paper that the FRB prints. It takes a little time. But eventually there are more FRBies chasing the same amount of goods, so prices rise.
It’s like a great calculating engine; probably the Intelligent Designer’s greatest gift to us.
No election. No counting of “votes”. No so called “laws”.
Just the free exchange of things between people. Eventually everything in the marketplace satisfies everyone. The real economists have all sorts of labels for it. But eventually every need is satisfied. Prices evaluate how much you really need or want something. As something gets “bid up”, people decide that they don’t want it as bad as the next person.
It’s the universal calculating engine, called the marketplace, that decides where scarce resources are allocated.
But, when there is counterfeiting going on, when the money is unbacked, when the standard measure is no longer standard, then the arithmetic is skewed.
And, the people are impoverished.
How are you preparing for the problems that the Federal Reserve is brewing up?