Loose Change

If you purchased an item for $20.00 in 1913, the same product would cost you $459.93 today. That represents a 2199.6% rate of inflation. Is the product worth more than two-thousand times its original value? Probably not…. because the worth of the product has not varied, but the value of the money used to acquire it has gone down.  In other words….the (formerly) high prices for real estate and homes and nearly every other purchase in our market baskets are a result of our money becoming worth less…..and closer to becoming worthless. The decreasing value of our currency means that most people are constantly scurrying to earn enough so as not to lose too much ground.

Though conventional wisdom states that inflation or weakening currency is good for borrowers because they repay with cheaper dollars than those they borrowed, every other aspect of life for the typical individual buyer increases in price thus rendering the payback gains as negligible.  Besides, borrowing money should be a thoughtful process that weighs the probability that the use and value of the product outperforms the capital cost and carrying charges. If one borrows money merely to benefit from a cheaper-dollar payback, the underlying reason for the initial purchase is probably of questionable value. The scrambling that is necessary just to outrun the inflationary cycle could consume more energy than the minimal gains that are realized.

The economic uncertainty that results from an accelerating inflation cycle lures investors and business owners into unwise decisions. If the “chickens come home to roost” the faulty decisions will be exposed, and various sectors of the economy could be negatively impacted. Inflated money demonstrates the unreality of a currency or coinage that is based on nothing. There are no precious deposits that insure the stability of the money, and there is no underlying basis for valuing it. The value of an inflationary currency must ALWAYS be relative to other currencies and their purchasing powers. As nations and their economies ebb and flow the relative positions of their monies will change based on the underlying strength of each nation. It is an unstable system that allows for nefarious manipulation (see Soros, George). A sound money supply must be backed by a stable valuable commodity in order to assure a predictable and consistent value for the money in good times and bad.

There is another factor regarding devalued money that is rarely addressed in the mainstream. A nation whose currency undergoes a long-term pattern of devaluation must be, to some degree, a nation in decline. Currency manipulation, purchasing decisions and business plans become hurried “under the gun” activities rather than thoughtful and systematic. Long range planning becomes difficult because of the unreliable nature of the money supply and value. Consequently, the short view takes precedence in the offices and boardrooms of the nation, and most gains are ephemeral. Living for the short term can be costly, and especially so for nations and businesses. One misstep….one miscalculation can have a devastating economic outcome. Long term vision allows for tweaking, nudging and redirecting the plan, but the short duration reactionary action plan is similar to rolling the dice for the big payoff…. or bust.

When our medium of exchange (money, gold, barter) is volatile, people become either overly cautious or dangerously risky. The uncertainty that follows a widely fluctuating currency undermines citizens’ confidence in their government, their economies and their futures. The impact on the national psyche could conceivably be more damaging than the harm that is done to the economic well-being of the nation. Imagine for a moment if you were a citizen in Greece. Greece….the birthplace of democracy ( a very limited version) is functioning like an economic bungee cord. The citizens have lost faith in the government and justifiably so. The Greeks, however, have been major contributors in their government’s fragility because of their vociferous resistance to necessary austerity measures. The angst arising from the failure of the Greek economy, the turmoil among the people and the fragility of the Euro have combined to create a nation that seems to have lost hope and expectations for a better future. Unfortunately the United States is traveling a similar path.

Our inflated dollars have distorted the true value of goods and services produced in the U.S.A. Our profligate spenders in governments at all levels have contributed to the inflation by over spending and over borrowing. Although our local governments are forbidden from running deficits, they are too eager to issue bonds for underwriting large chunks of spending…..especially capital expenditures. Debt is deadly whether it’s in the household the business or the statehouse. As debt increases and inflation takes hold, more funds are required to finance the continuation of the enterprise…..whether public or private. Thus begins the cycle for the issuance of more money. If our currency were based on a solid measurable standard, the excessive indebtedness in the public and private sectors would not be possible. Borrowers would have to compete for loans and stand in line to wait their turns. Our money, our economy and our sleep would all be more stable.

cearlwriting@hotmail.com

www.littlestuff-minoosha.blogspot.com

FED Up

At a basic level the idea of a central bank and clearinghouse for the United States of America makes sense. It seems apparent that big banks, medium-sized banks and small banks will from time to time need a ready supply of cash to offset short-term or momentary needs. Just as many retailers rely on wholesalers to stock and supply their products, a bank accepts deposits and loans money at a profitable rate of interest. Their cash reserves rarely equal their deposit totals, so they may find themselves short of cash even with an outstanding portfolio of performing loans. It should be apparent, however, that the Federal Reserve Bank has abused its charter and its purpose. It has become a tool of the government and global banking interests.

The elementary problem with the FED as it has been designed is that Congress has subordinated its constitutional responsibility for the coining (printing) and valuing our money to a consortium of private bankers. Odd isn’t it that despite all the overreaching by government into the private sector, it is a constitutionally mandated role or obligation that Congress chose to privatize? Why banking? Why money? The entire FED revolves around debt. As money is loaned out by individual banks, they go to the FED to restore their reserves. The FED must print the money and LOAN it to the banks. Without debt the FED would not have a real function other than the constitutional coinage one that Congress gave to it. So the bottom line is that the powers for printing money and creating debt reside with a cabal of private mega-bankers. Cheery thought, huh? You might ask “how do they create debt?” When a bank seeks additional funds for loaning, the FED creates it digitally. In other words if the local banks didn’t have the funds for additional lending, borrowers would have to go elsewhere for funds but the money supply would be more stable.

The unceasing printing (digitizing) of money expands our indebtedness and our money supply…thus generating de facto inflation. Without a corresponding surge in production of goods and services every dollar created increases the number of dollars ‘chasing” a finite supply of products or labor. More dollars chasing fewer things means higher costs. Increasing debt and inflated/lower-valued money are not recipes for a prosperous nation. In the short-term inflation may lull the unsuspecting into assuming that prosperity is flourishing, but will have the opposite effect after a time as goods and property become more difficult to purchase because of escalated prices and higher interest rates.

The FED because it is private uses the resources and wealth of the United States as its own “net worth” as it props up other national currencies and governments. The value of the dollar is directly related to the productivity of the United States, the number of dollars in circulation and the confidence that the indebtedness will be repaid. If any of those three factors experience some slippage, the corresponding effect will negatively impact the U. S. economy. If any of the three major factors underperforms, the government must collect additional revenue to maintain some level of equilibrium to avoid massive runaway inflation, excessive interest costs or severe reductions in productivity. Thus, the FED with full compliance from the government through its policies practically insures higher levels of taxation for American taxpayers. Taxes collected through force are theft. Taxes that stifle economies and intrude on individual freedom are tyrannical. Because of its power over our productivity, our indebtedness and our money supply, the FED, in effect, controls our economy. Our government increasingly controls our lives, and the Federal Reserve manipulates our livelihoods.

It should be dawning on you that as debt problems increase, taxes go up. When interest rates begin to ratchet upward due to inflated money driving the cost of borrowing higher, the governments’ needs for debt service will grow astronomically, the resultant tax increases will stifle the economy and higher taxes plus lower economic productivity joined with massive debt leads to catastrophe. It is an inescapable cycle that can at the best be postponed for a while but becomes worse during the delay. In their efforts to manipulate the market, the currency and debt, the FED will create economic bubbles that will enlarge and eventually burst. As the FED scheme and rig the system, shrewd investors will seek other avenues for avoiding the FED action….thus the bubbles will be created.

Compounding the problem of the FED’s unhealthy and unconstitutional control of the basics of our fiscal and economic systems is the fact that they operate with impunity. We the people have no standing to audit the Federal Reserve or to insist on transparent accountability. In 1913 Congress handed the keys and the car to the Wall Street manipulators and self-serving big bankers. Now Congress lacks the courage to reclaim its constitutional duty yet continues to meddle in a plethora of other unconstitutional arenas. We are now on the precipice of economic collapse. Although the nation and its people will suffer, you can wager your home and all your worldly goods that the Fed governors, their favored bankers and career politicians will emerge unscathed. Obviously….I’m FED Up.

cearlwriting@hotmail.com

www.littlestuff-minoosha.blogspot.com

  

Littlestuff Weekender-2-25-2012

So was the CNN-Mesa debate the final one of the primary/caucus season? Are more than 20 enough to inform the voters? Apparently not because the polling suggests that support is broadly diffused among the four remaining candidates with no one solidifying a solid majority or even a significant plurality. With Michigan and Arizona scheduled to decide on Tuesday their results may have an impact on Super Tuesday, March 6^th. However….each of the candidates has selected their most favorable Super Tuesday states for concentrated campaigning suggesting that the outcome may be even more fractured than it is today. The race is on……

http://youtu.be/H9b2zB3HwOM

Following the 9-11 murders, I enthusiastically supported the military action in Afghanistan to seek and destroy Al Qaeda. Our Special Forces, air power and the coalition with the Northern Alliance dislodged the terrorists and forced them to run for cover to the badlands of the Pakistani-Afghan border region. Then…..things began to go sour as our bureaucracy, political leaders and political correctness seized control of the mission. For the past several years our troops have been fighting the locals (Taliban) rather than the foreign fighters, our “Rules of Engagement” have hamstrung our men and women, our mission has become blurred and indistinct, and our allies in the region, particularly Pakistan, have undermined our efforts. Afghanistan is a 13^th century tribal society with 21^st Century technology….think of Fred Flintstone with a laptop and laser-guided munitions. Their society is corrupt and bigoted. Our efforts at nation building are resented and thwarted by tradition, mullahs and a tribal culture. Bring our people home.

http://youtu.be/nZ8sQfzuZnE

Here at my Little Pat-Ch of Paradise in Northwest Ohio it has been an amazingly mild winter…..so far. The good news is that we haven’t had to shovel or move much snow, and our utility service has not been interrupted. On the other hand the lack of sustained freezing and the standing water suggests that we may have some pest issues with the gardens this season. We’ll deal with it. Our “skeeters” will probably be the size of crows when they finally hatch, but there will be plenty for the birds to consume. It’s difficult to believe that March will be upon us come Thursday.

Gasoline prices are rocketing upward as the value of the dollar declines. We could all switch to those high-cost electric cars except for that fact that a number of power-generating plants are going off-line because of environmental concerns and inefficiencies. Even the most elemental form of transportation may be difficult to acquire because the USDA has resumed inspecting horse butchering facilities. You will now be competing with foreign food markets and dog food companies for a one-horsepower people mover. Every candidate talks about the need for an energy policy, but the bureaucratic briar patch created by our big government politicians has severely limited our capacity for exploiting known reserves of fossil fuels. Meanwhile….the green agenda funnels more and more of our borrowed dwindling resources into crony businesses that are unable to compete in the open energy market. We’d better pray that global warming is a reality because our current energy policies will doom many to freezing to death if our winters become too severe. Government will never learn the law of unintended consequences because it has no brain.

Sometimes I feel like picking up my toys and going home. Trying to get politicians to face reality and act courageously is similar to butting my head against a wall. It seems for most of them that if you’re vain enough to attempt to sway people to like you, you are too self-centered to be a true representative for your constituents. Maybe we should consider changing eligibility standards for political office….cloistered nuns, friars or mystics couldn’t be any more out of touch than our current crop of “servants,” and they would be much more thoughtful. Perhaps we should empower and elect recluses and hermits while providing them with wi-fi and laptops. They wouldn’t be tainted by the glamour or seduced by the power. Their payroll needs would be much lower, their staff requirements would be non-existent, and their commuting costs would be minimal. Yes…I can see it now ……… Homeboys for Hermits.

Elizabethtown, Kentucky is the site of the annual Libertarian Party of Kentucky (LPKY) annual convention, and I’m honored to be the keynote speaker on Saturday afternoon (the 25^th). The topic is “Why Liberty, Why Now?” Yes even hard core Libertarians should be reminded that The Issue is Liberty. Fiscal and economic problems arise when government overspends. Big government consumes our liberties. If we restore our inalienable rights, government will be constrained in its constitutional box. When dealing with an oppressive community or a government, The Issue is always Liberty. Re-read the “Lord of the Flies.” Even the extreme of liberty, anarchy, can be oppressive (see the French Revolution). The essence of freedom is personal sovereignty granted by God. For any person, group or government to undermine that relationship is immoral.

Have a great weekend. We’ll be back on the air Tuesday night from 6:00-7:00pm on the Talk of Toledo 1370 WSPD. www.wspd.com

cearlwriting@hotmail.com

www.littlestuff-minoosha.blogspot.com

  

Littlestuff Weekender-2-18-2012

Thursday night I had the pleasure of visiting with my dear friends and fellow patriots of the North Central Ohio Conservatives. My topic was the Fed and the Economy, and I approached it primarily from a micro-economic perspective. Because so many members of the NCOC read these columns, I would like to add a brief macro-economic point of view. But first, I wish to extend many thanks to Jim and Jan Green, Marsha and Keith Rexroth for a great dinner and superb companionship.

With our artificially low interest rates mandated by the Fed, we are facing a national economic Armageddon in the near future. Our $16 trillion debt and our more than $100 trillion in unfunded liabilities added to the profligate spending by our governments at all levels means that our debt service (interest payments) are at astronomical levels and in grave danger of becoming impossible to maintain. Right now the federal government is paying less than 1% interest on the national debt because of the heavy-handed intervention by the Federal Reserve in the free market. If the situation in Europe disintegrates to the point that upward pressure on interest rates is unavoidable, the cost of servicing our U.S. debt will double, triple or perhaps soar out of sight. Social Security, Medicare, Medicaid and all other entitlement programs will be severely affected as will national defense and every other government program….constitutional and unconstitutional. Our government’s emphasis will pivot from a buying-votes mentality to a taxing-for-survival oppressive approach. It won’t be pretty. It will be painful. We must prepare.

On a lighter note…..oh, there is no lighter note.

Next weekend…the 25^th and 26^th, I’ll be in Elizabethtown, Kentucky for the annual convention of the Libertarian Party of Kentucky (LPKY). I am honored to be their main speaker with the “Why Liberty, Why Now” message scheduled for 3:30pm on Saturday the 26^th. Thanks to Chairman Ken Moellman and his fellow Bluegrass defenders of liberty for inviting me.

Have you ever found yourself so engrossed in a task that you were unaware of what was happening around you? As I become more and more disturbed by the circumstances of our nation and the congressional failures to challenge the President and stop the bleeding, I suspect that those in Washington whom we expect to stop this mess are clueless. They are so engaged in the political aspects of their offices that they must be ignorant of our dire situation. We know that congress persons rarely read the legislation they pass, and that most of their time is devoted to fundraising and managing their public personas. Indeed, their failures to carefully monitor and understand the ramifications of their legislative activity are profound indictments of the untenable and unconstitutional massiveness of the federal government. It is far too large to be managed by 535 venal people. If the reach of the federal monstrosity were confined to the enumerated powers as listed in The Constitution of the United States of America, the 435 House members and the 100 senators could spread themselves broadly enough with fewer committees to effectively oversee the federal functions. Big is not necessarily better. Big is much worse, more dangerous and totally ineffective. The word that comes to mind that describes the precarious state of the nation is …….delegation. Too much delegation leads to entrenched bureaucratic fiefdoms and unaccountable career politicians.

It’s about time to start my garden seeds, but I’m somewhat hesitant. The winter has been so mild so far that it’s quite possible we will have a vengeful early spring thus delaying the transfer of the little plants to the outdoors. Decisions, decisions….I think I’ll start half of each species/variety now and the remainder in early March.

I read last week that North Korea had employed American-made drones that they purchased from Syria who had bought them as used surplus material from us with foreign aid money and credits we provided them. And some of you believe that Ron Paul’s foreign policy is “wacky.” Perhaps his is, but no one in his right mind and with a straight face can convince me that the one we have now and we have followed for years is working all that well.

Three Afghan nationals were intercepted in Texas after crossing into the U.S. over the southern border. I wonder how many we’ve missed so far. Meanwhile Granny continues to get fondled at the Charleston, W.V. airport and every other interior landing spot that features nothing but domestic air traffic. More government wisdom and efficiency is on display to calm the fears of the citizens. They have semantically disemboweled “protect and defend” until it has become “harass and annoy.” These are the baby steps of a tyranny quickly growing to raging adolescence. It seems that the time has passed for correcting the child in the way that he should go. The only logical response is to sentence the culprits to a juvenile detention center.

Greg Ruffner, candidate for Wood County Commissioner, will be my guest on Tuesday’s show. My little audio battle for liberty begins at 6:00pm and ends at 7:00pm on the Talk of Toledo, 1370 WSPD.

www.wspd.com

Have a great remainder of the weekend. Enjoy President’s Day on Monday by celebrating the few who were constitutionally faithful….shouldn’t take too long. We’ve only had 44 of them and the way things are going, we may not have many more…..if any.

cearlwriting@hotmail.com

www.littlestuff-minoosha.blogspot.com