Deja vu, All Over Again

William Anderson gives an overview of what we can expect over the next decade in our economy by comparing it to what happened in the 70's. Read the whole thing here.

Numbers in Asia

Asian Markets 3-4 percent down in early trading and gold and silver hitting record highs as well.

I'm going to repeat: Get rid of the FED, allow gold and silver to be used as currency and get rid of the income tax. No matter what happens over the next few years (and I'm thinking there is going to be a LOT of pain), this can all be laid at the hands of Washington DC and the Federal Reserve. Too much spending, and too much regulation and too much of a war.

This thing is going to end very badly, but recovery can be had relatively quickly if we get back to an asset based currency, if we got rid of the income tax, and if we start severely shrinking the government (the easiest thing to do is start coming home).

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

Moneyweek: A Gold Standard One Way or Another

The idea of tying our money system to a commodity will gain ground as people begin to realize that inflation isn't the 2-3 percent that the government is claiming, the fact of the matter is, it's closer to 10-12 percent (shhh, don't let anyone know until I move my 3 leperchauns and their gold out from the basement). With people abandoning the dollar as the reserve currency of the world, China may be the logical choice for those with means to move their assets. Particularly if they tie their money to gold:

Asia has the "second mover advantage" of being privy to all the Western World's mistakes. They are able to see where profligacy and runaway entitlement programs have led. Their top-down orientation will enable them to rein in expensive entitlement programs or, better yet, curtail young ones before they grow bigger. Not being as mentally and emotionally tied to the workings of empire and the capitalist welfare mentality, Asia will successfully cut the cord faster. In doing so, Asia will also rely on its citizens' natural propensity to trust precious metals and hoard them as a store of value in the first place.

Last but not least, Asia's relative lack of capital market structure - its underdeveloped backbone of lending networks - will make a de facto gold standard that much more attractive. By going straight to gold, Asians get the "trust" that is already built into the metal...they can skip all the financial engineering, or get to working it in later.

While Keynesians see the rise of gold as temporary - and will continue to assert their naysayer views as gold rises further - it will soon come to light that the 'world reserve currency' idea was the temporary thing, an anachronism of the industrial age.

The whole thing is here.

Grandfather Inflation Report

How much inflation have we seen since the 50's?:


Inflation in my adult years increased average prices 1,000% or more:

example 1: a postage stamp in the 1950s cost 3 cents; today's cost is 41 cents - 1,266% inflation;

example 2: a gallon of 90 Octane full-service gasoline cost 18 cents
before; today it is $3.05 for self-service - 1,870 % inflation;

example 3: a house in 1959 cost $14,100; today's median price is $213,000 - 1,400% inflation;

example 4: a dental crown used to cost $40; today it's $1,100 - 2,750% inflation;

example 5: an ice cream cone in 1950 cost 5 cents; today its $2.50 - 4,900% inflation;

The chart below shows CPI since 1800:




It is only since we moved completely off of the gold standard in 1971 that the CPI rocketed upward. The curve is probably steeper since the methodologies in computing CPI have changed in recent times.

The day is fast approaching when people are going to be buying loaves of bread with wheelbarrows of cash.

Pilfered from dailypaul.com