MONEY: You, the Fed, and Inflation

You, the Fed, and Inflation
By Llewellyn H. Rockwell Jr.
Published: 1998-11-23 06:00 Economics

***Begin Quote***

Wall Street remains constantly worried about two forces in American economic life: inflation and deflation. It seems Wall Street worries about inflation on Mondays, Wednesdays, and Fridays. On Tuesdays and Thursdays, it worries about deflation. Or perhaps it worries about both at the same time.

Of course, inflation is one of the most destructive forces in all of human history. In order for an economy to function properly, money must be sound and its value must be honestly gained. For most of human history, soundness and honesty were guaranteed because money was just another name for the most valuable commodity: gold. Gold was ideal as money because it was portable, durable, divisible, fungible, and scarce.

Gold has been money throughout most of our nation’s history, and until well into the 20th century government had little control over its supply and value. But with the establishment of the Federal Reserve in 1913, the foundation of money in gold began to be eroded. Over the decades, the link became progressively less secure, until in 1971 President Nixon did away with the last remnants of the gold standard. If you hid a dollar in a mattress in 1970, today it would be worth less than a quarter of its former value.

***End Quote***

Stunning simple observation of why we as a country are so royally weenied!

# # # # #

INTERESTING: Following “publik skoolz” to its logical conclusion

The Terrible Effects of Public Schooling
by Per Bylund

***Begin Quote***

There are many stories of Sweden being a Utopia: a high-tax, massively regulated and politicized, anti-capitalism, egalitarian socialist society that not only works – it thrives. Each and every one of them is nothing but a lie, even though there are many Swedes who will tell you how wonderful it is – they refuse to see the truth even though they live it everyday.

Recently yet another myth of the Swedish socialist supremacy was revealed to be completely untrue: the exquisite quality of Swedish public education. “Preliminary” statistics of the current state of Swedish public schooling made available by the Swedish National Agency for Education show the continuing degeneration of the so-called Swedish Model – and that it is ever increasing. After having spent nine mandatory years in school, 11.4% of Swedish children don’t meet the requirements to go to high school.

Of course, in other countries this might not be such a big deal. But it is in Sweden – a country where an education and a university degree is a human right. Also, the requirements to go to high school are set on such an absurdly low level that no one should be able to not make it.

***End Quote***

Interesting in the new Amerika that it’s politicians don’t send their kids to publik skoolz.

Why is that?

Could it be that the politicians know, in the deep dark recesses of their conscience that they can never expose to the public, that the publik skoolz are huge success?

They are!

The Prussians originally designed “publik skoolz” to create willing cannon fodder and compliant factory workers. The socialists and communists of the 1920’s brought the idea to America to allow them to reformulate America into a country where the proletariat could be led by the elite.

So while the sheep bask in American Idol and ever increasing amounts of “funny money” (i.e., dollars that have lost 95% of the purchasing power in 30 years), the elite send their kid to private schools.

What’s wrong with this picture?

# # # # #

INTERESTING: Wafa Sultan, an Arab-American woman and psychologist from Los Angeles.

Women in Combat, Women as Beasts:
Wafa Sultan and Alexis de Tocqueville
August 20, 2007 | By Jack Yoest

*** begin quote ***

Alexis de Tocqueville wrote about American exceptionalism; the American experiment,

If I am asked how we should account for the unusual prosperity and growing strength of this nation, I would reply that they must be attributed to the superiority of their women.


Following is Wafa Sultan, an Arab-American woman and psychologist from Los Angeles. She is debating the clash of civilizations. She reviews the fact that inferior civilizations use “women as beasts.” There might be some confusion on how Islam jihadists and the American armed forces use women in combat.

Watch the clip here.

***End Quote***

Wow, I don’t speak her language but if the subtitiles are right, all I can say is wow!

Don’t miss this clip.

She nails why we shouldn’t “use women”. They are too darned valuable. Like the Queen on the chessboard, this lady in a very impassioned plea to the Muslim community indicts, convicts, and sentences the Islam jidhadists to a special place in history — the misguided! The moderator and the opponent were taken to the woodshed. They couldn’t even mount a decent retort to her arguments.

Wow! Definitely don’t miss this one.

# # # # #

MONEY: a small loss is better than a big loss?

Business comment: Financial services should be there to serve
By Dan Roberts, Business Editor, Sunday Telegraph
Last Updated: 2:14am BST 19/08/2007

***Begin Quote***

First, the bad news. Don’t be fooled by Friday’s bounce. We are not out of the woods yet. If anything, the Fed’s decision to rescue markets by throwing money at the problem supports our view that this summer’s financial crisis threatens the wider economy.

A slowdown will be painful for everyone, especially here. Despite our Chancellor’s belated words of confidence, the UK is excessively dependent on the City. Even companies far away from the Square Mile will find it harder to borrow their way out of trouble or invest in new factories, shops and offices. It may not tip us into a recession, but the fall in confidence will trigger a big chill that brings some racier parts of the economy to a near standstill.

***End Quote***

Best assessment of Friday’s Fed action is that we are heading into a period of inflation (i.e., the Fed’s “helicopter” Ben dumping more counterfeit notes into circulation) and recession (i.e., consumer and business confidence will “de-invest”).

How does one save and invest going into this climate?

Clearly one has to “surf” the wave of inflation. Don’t even think about sticking money in your mattress. To surf in a falling market is a good trick. Riding indexes south will not only NOT keep up with inflation but may actually be a big loser if you guess wrong. The best strategy might be targeted investments in things that retain value. Defensive stocks, high quality stuff, commodities, essential businesses.

Tie in a recession, and you need to focus on where people have to spend money regardless of their “confidence”: basic food, medicine, healthcare, drugs, commodities.

Look to the era in the USA during Carter’s stagflation and Japan’s Decade of Zero Interest Zero Growth.

Where is growth “guaranteed” — India (where you might get an honest count) and China (where you definitely are at risk of a haircut).


Certificates of Depreciation — on the theory that a small loss is better than a big loss?

Tough times!

# # # # #