Sunday, January 20, 2008

The Handwriting is on the Wall

The press is starting to see realize what a central banking system actually does to money. It devalues it, encourages and enables government largess and malinvestment, it exaggerates business cycles:

So why have investors been abandoning conventional assets, such as government bonds and stakes in blue-chip businesses, in favour of a metal that appears to offer no reward for holding it? The answer, I'm afraid, is crumbling faith in the world's central banks, and in particular the US Federal Reserve, where the presses have been working overtime.

Some argue that the soaring gold price has been driven by temporary anxiety over global instability. The metal is a safe haven in troubled times. But answer me this: when was the last time the world felt like a cosy hideaway? Ever since mankind turned up, Planet Earth has never been a safe place.

Wars in Iraq and Afghanistan, a more muscular Iran and the unpredictability of Moscow are contributing to nervousness. But what's really upsetting investors is the speed at which money is being printed by governments, especially America's, that cannot face the problem of funding wild expenditure plans solely from reserves or taxation.
The whole article is here and is a great summary of why everyone should be pissed off that the government is stealing your nest egg at the rate of 10% per year and why England, after a 100 year absence, is going to surpass America in standard of living.

One thing that should not be forgotten is that up until 1913, this country didn't even have a Federal Reserve Bank. We didn't have an income tax either. In fact, if we got rid of the income tax, and replaced it with nothing, spending levels would drop to those of 10 years ago. Didn't we have enough government back in 1998?

Pilfered from Lew Rockwell

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