A lengthy article focuses on the problems ahead. It appeared in the February American Spectator.
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The wisdom of the crowd once again seems to be ahead of the professional economists. Rasmussen reports: Just 25% of U.S. voters now say the country is heading in the right direction, the lowest level of voter confidence since early January 2009. Can We Have Another Banking Holiday? One of the most painful and important aspects of the Great Depression was the failure of banks. It has been estimated that before the Depression there were more than 25,000 banks in this country. At the end of 1933, 14,207 were left. Depositors lost all or much of their money when their bank failed. Most banks were small, not unlike the one depicted in Jimmy Stewart’s classic movie “It’s a Wonderful Life.” When a bank failed in a town, fear spread. A contagion developed that caused depositors to remove money from other banks and “hoard” it. This reaction put pressure on otherwise sound banks and the banking system. A self-reinforcing spiral reduced the availability of money resulting in additional closings. One of the first New Deal legislative acts was the closing of the banks, known as a national banking holiday. Banks were closed for about a week. Neither deposits nor withdrawals were allowed.
The Federal Deposit Insurance Corporation was formed in 1934. Its intent was to prevent future runs on the banking system that had occurred in the early years of the Depression. Sheila Bair, current Chair of the FDIC, referenced Milton Friedman who “once called Continue reading Can We Have Another Banking Holiday There is no greater scam than that being perpetuated by fiat money. It is plausible that the gold market might be manipulated because of its critical importance to the current economic crisis. Gold is to Central Bankers and governments as The Cross was to Dracula. It threatens their existence. Before governments got into the state of bankruptcy, gold hindered them from spending money they did not have. To truly increase spending and power, it was necessary for governments to remove the constraints gold imposed. Once that was accomplished the welfare/warfare state was off to the races. Now, after almost forty years or nothing but fiat money, many governments are so bloated that they are no longer sustainable. Their key to survival (at least for some period) depends upon maintenance of the myth that fiat money is real. Gold is a huge threat to this scam. Gold has been an alternate currency for thousands of years. It is the only currency that is not someone’s liability. It is not dependent upon the performance of some government. It stands on its own and always has. Governments do not go bankrupt in the manner that businesses or individuals do. They do so by dishonoring their debts and obligations. The default can come as an outright refusal to honor claims or it can come via inflation. Most governments prefer the latter. The soundest government in the world, until recently, was the United States. In spite of its enormous wealth and economic growth, its Continue reading Dracula Government Meets Its Nemesis |
 Friedrich von Hayek founded the Mont Pelerin Society. “Monty Pelerin” is a pseudonym chosen by this blogger to convey general agreement with the philosophy, goals and spirit of the Mont Pelerin Society. No other connection exists between the blogger and the Society. |
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