Just Remember that it’s an Illusion

Catch hold of this reflationary bounce here, but don’t be surprised when it all starts falling apart again.  It may be this summer and it may be next, but the bear will be back, no question.   Right now, the soporific falling dollar keeps him at bay. 

I’ve got a great paper for you all to take in at your leisure, written by economist and author Antal Fekete, professor at the San Francisco School of Economics.   Below is an excerpt from his lecture, Fiat Money in Death Throes.  (click link for whole paper).  

This particular segment shows why we have no choice but to arm ourselves with sound money alternates, as the “drug addicts” will brook no change until they are forced into withdrawl.

A government can take total control of the people either by the use of military force, or by

the use of irredeemable currency. The former is readily understood, while the latter is a subtle

national drug that is not generally recognized as such. Rather, it is readily embraced by its

victims. For these and similar reasons irredeemable currency is the favorite device of modern

governments that want to bring people under total control. Indeed, it enables the government to

succeed in controlling the masses while, at the same time, earning their approval and even their

enthusiastic support. Irredeemable currency must be seen as the habit-forming drug that the

government uses to intoxicate people. Under this intoxication people will want more and more

national spending, more and more government control, and more and more debt.

 

This intoxication obscures the sad end that arrives when the merry-go-round is coming to a

jerky halt, when credit is exhausted or withdrawn, and the kitty is found empty. The nation is

facing a most serious economic disaster followed by prolonged economic pain. Unfortunately

government economists, university professors, and financial journalists have taken their share

of the fun and they failed miserably in their duty to forewarn people of the coming disaster.

 

It is useless to expect a mass movement on behalf of a sound currency. The daily

experiences of people provide them with a warped outlook. They confirm in their minds the

alleged virtues and benefits of an infinitely inflatable currency. People lack sufficient

understanding of monetary science to see that no currency can be made infinitely inflatable

without inviting disaster. Like a drug addict, people exposed to irredeemable currency do not

regard it as a dangerous and undermining narcotic agent. Even the loss of purchasing power

does not disturb them to any great extent. Their response is to demand more money, and they

take pride in the fact that the government listens sympathetically to their demand. They

welcome the soaring stock indexes and real estate prices, and put great stores on them. Heavy

taxes and burgeoning debt are not regarded with anxiety. A frequent and common agitation is

for ever more government spending.

Sound familiar yet?   Welcome next, “Obamacare”…. My best to you all.

 

 

 

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