Washington, D.C. — “I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop,” Austrian economist F.A. Hayek said in 1984.
America’s debt currently sits at $28.6 trillion, according to usdebtclock.org. Of course, that’s as of the time of this writing. The debt is rising so rapidly, it could be higher by the time this gets published. It could be higher by the time you read this.
How did we get here?
Well, one of the events that got us to this point just “celebrated,” for lack of a better word, a milestone. On Aug. 15 of 1971, President Richard Nixon officially took our currency fully off the gold standard.
In a speech, Nixon said “the strength of a nation’s currency is based on the strength of that nation’s economy,” so off course, the proper thing to do was put politicians, bankers and bureaucrats in charge of our money, according to President Dick who took the executive action “to suspend temporarily the convertibility of the dollar into gold or other reserve assets.”
That “temporary” action is now going on 50 years. And by the way, did you know Nixon interrupted an episode of the popular Western television show Bonanza to make that speech. That alone should have led to impeachment.
Why does the government so fear a gold standard? Well, Zero Hedge summed it up pretty well: “Gold to paper currency conversion once exacted limits upon the public purse.”
That right there is why the American people have been saddled with funny money printed, or added digitally, out of this air. Just take a look at the numbers from wtfhappenedin1971.com. After Nixon’s decision, Americans have been working harder and harder each year but being compensated less. And just go to the cost of living numbers from 1971. Americans could still save up to buy a new house, go to college, buy a new car and more without taking on debt.
Today, the politicians, left and right, just love to spend, spend, spend and the American people vote for it because they don’t want the personal responsibility to run their lives. Now, every once in a while, the Republicans chime in about their opposition to government spending, which only comes when Democrats are in charge. Then, the GOP does the same thing as the Dems when they take the
Let’s just take a look at the record of the four most recent presidents. Each one, a massive spender clamoring for more powers to spend.
Remember this gem from President George W. Bush with his massive bailout in 2008 when he said he “abandoned free-market principles to save the free-market system.” What a disgrace. Oh, and remember his actions were also “temporary” as he called it “an essential, short-term effort,” which we continue to live with.
Then there’s the “quantitative easing” of the Obama era, which of course in nothing less than propaganda, as written by retired professor of finance Michael Rozeff: “The implied proposition is that ‘something’ is being eased that is currently ‘tight’ or ‘restricted.’ This makes it sound as if something positive and good is being accomplished. What is actually going on, however, is a form of seizure or taxation. It is also called inflation, when the focus is on the additional means of spending that has been created.”
Then there’s the Trump administration, big spenders for all four years, but oh boy, it was “huge” over his final year magnified by the $6 trillion, between spending and monetary gimmicks, noose on the American economy called the CARES Act. Steven Mnuchin, Trump’s treasury secretary, stated it all when he said “interest rates are incredibly low, so there’s very little cost of borrowing this money.” So, debt is now strength according to Mnuchin.
Now, there’s the Biden administration keeping the big spending ways going, as pointed out by former director of the Office of Management and Budget under Reagan, David Stockman.
Stockman points out the words of good Alan Greenspan, before he sold his soul to the Federal Reserve or the Devil; they are interchangeable.
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation There is no safe store of value … … The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves,” Greenspan said in 1966. “This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
Americans are starting to pay the piper for our dependence on government spending. It’s hitting us hard in the form of the inflation tax. Remember, every dollar of government spending is a tax that must be paid for by us through direct taxation, devaluation of our purchasing power or debt.
Economist Peter Schiff explains the problems and offers the solution, massive cuts in government spending, which he acknowledged there is no political will to do.
“Prices are just starting to go up,” Schiff told Matt Walsh. “So, they’re going to go a lot higher. And I think even the acceleration is going to pick up, so, you’re going to see bigger gains.”
Schiff added: “The Federal Reserve has been creating a lot of inflation. That’s been their monetary policy. That’s how they responded to the busting of the dot-com bubble, and then the housing bubble, and then COVID — they just printed a lot of money. The more money there is, the more expensive everything is, because each unit of money is diminished as the quantity of money is increased. So, as you have more dollars, each dollar is worth less and now you need more of them to buy stuff.”
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