The EXEGETIST: A Library Of Independent Political Thought. By: Jack H. Dawsey

Counterfeit Money, How Much Do You Have In Your Bank? 

By: Jack Dawsey

A government that prints money, (by fiat and at will), is morally wrong.  And; in the opinion of this writer, is as guilty as a counterfeiter.  In either case, the “people” have no way of protecting their savings because a gloat in money supply causes devaluation -the most hideous of taxation.

Devaluation is caused by bad government policies, such as; for example, creating new programs or taking the nation to war without paying for them.

It’s a fact that most people do not understand the principle of money supply in the federal budget; hence, our politicians deceive us by blaming the other party for our financial woes.  But when a government, (democrat and republican), get “in bed” with corporations; and counterfeit (i.e., devalue) money to give the “appearance” of policy success and bolster corporate foreign trade, they no longer deserve the respect of the voter.

Government creates money for a variety of reasons: (a) to temporarily boost the economy, or (b) to rig an approaching election, or (c) for other devious reasons.  But it’s wrong and here are some short term/long term consequences. 

When the nation’s currency declines in value, export products become more attractive in foreign markets, and corporations temporarily benefit.  And too, there is usually a corresponding temporary drop in unemployment which gives the false impression that government policy is correct. But, the downside is the dollar becomes permanently devalued and your personal wealth is reduced.   Corporations and politicians receive the gold while you get the shaft.  Consider the following.

Instead of taxing you to pay for the War in Iraq and Afghanistan, (a war the Bush Administration thought would be over in less than 90-days), they planned its cost, off-budget.  As a result, the process of devaluation commenced.

When a government floats its currency to repay borrowed money, it accepts an exchange rate less than the original.  If the interest rate is too small to an investor, the borrower is required to receive a lesser rate of return.  In short, that’s precisely what has happened to our currency.  Let’s take some examples.

In March 2003 when America invaded Iraq, an ounce of gold was selling for $335.  The dollar was worth @1/335^th per oz. of gold.  Today, gold sells for over $1,100 making that same dollar worth @1/1,100^th in value to gold.  Luckily, America is not on the gold standard.   

In 2003 sweet crude oil was selling for $35 a barrel.  Today it sells for @$70.  Therefore, in seven years the value of the dollar dropped from 1/35^th of a barrel in value to 1/70^th.   Thankfully, as in gold, the dollar is not predicated on the instability of oil.  Given oil’s instability, let’s hope the world’s major trading partners don’t adopt it as the center piece in trading currency.  

Oil is however the economic engine that drives the world’s economy and the dollar has been clobbered in its buying power.  Here’s another case in point and I bet every housewife knows its reality.

At the beginning of the war, a loaf of bread sold for 89-cents.  Today, that same loaf costs @$2.79.  In a word, when the political powers fail to secure the dollar, “We, the people…” pay an enormous hidden cost through devaluation. 

In the 20^th century, the world’s central banks adopted the dollar as the center piece of international trade, but that may change.  If republican and democrat administrations continue to flood the market with greenbacks, I suspect the central banks may change its world currency.  There is substantial talk about doing that from Russia, China, Iran, Pakistan, India and some European countries.

The by-product of government counterfeiting is devaluation.  It’s a hideous thief and poses a serious threat that I call: the acceptable depression.    If Bush or Obama had paid for the Iraq and Afghanistan wars with an equitable tax, your personal wealth would not have suffered so badly.

Will the world experience another 1930’s Great Depression?  I hope not.  But given the dollar’s weakness and seeing how it has hollowed-out the European economy, another Great Depression is possible.

In any event, a massive realignment of personal wealth is occurring as you read this article. [By the way, the redistribution of income, a standing accusation made against Obama by republicans actually started to occur during the Bush Administration].  The 33^rd President of the United States said that America’s liberty and prosperity is threatened, worse, when the nation’s wealth is concentrated in the hands of a few.  President Truman went on to say that the remedy to stop it was to tax the rich and powerful.

In this writer’s opinion, if the democrats and republicans don’t end this war, (or win it), or pay for it through taxation, then I say, woe the working poor, woe unto the unemployed. Woe unto the farmer, and the retiree living on a pension.   Move over Middle Class.  You’re a relic of the past.  www.theexegetist.com

Your World is Changing

By: Jack Dawsey