If inflation had affected feet and inches the way its affected pounds, shillings and pence ...

Between 1931 and now, I would have 'grown' to be 1,500 feet tall ...

which is up to the top of the antennae on the John Hancock Center, in Chicago
(which is twice the height of Canary Wharf in London).

The good, old days of the Gold Standard

"The gold standard was "sacrosanct" to the generations brought up on the Adam Smith ideals of free markets, free from arbitrary and discriminatory interventions by governmental powers. Indeed, it was an essential instrument of economic freedom. It protected the individual against arbitrary measures of the government by offering a convenient hedge against "confiscatory" taxation, as well as against the depreciation or devaluation of the currency. It was an instrument of "mobility" within and beyond national borders. Above all, it raised a mighty barrier against authoritarian interferences with the economic process. "That insidious and crafty animal, vulgarly called a statesman or politician, whose councils are directed by the momentary fluctuations of affairs" (Adam Smith), had to keep the national budget in good order. Authoritarians of all denominations had to keep their inflationary propensities under control and to refrain from excessive taxation in order to forestall the loss of people's confidence in the currency, the breakdown ofthe standard. The public purse had to be held tight. The business community had to learn to live with the salutary realization that illiquidity caused by short-sighted overinvestment and irrational speculation would be penalized by loss of gold and an "automatic" tightening of the money supply, as well as a rise in the price of money.

The gold standard in the classical sense was part and parcel of an economic order. It was a keystone of the system of public law, social customs and institutions, called "capitalism"-the term coined by Karl Marx-a system that rested on what appears in perspective as virtually unlimited freedom of consumer choice, business enterprise, and markets."

Melchior Palyi; Twilight of Gold, 1914 - 1936, pg 5

Sanitizing the monetary system

Here's George Reisman, eminent economist - not least because he studied under Ludwig von Mises, speaking in 2009 on the subject of "A Pro-Free-Market Program for Economic Recovery". For the first twenty minutes he discusses what the US government and the Fed have been up to with their printing presses, namely putting in place the potential for an enormous credit expansion.

Reisman then plots a path back toward sound money, i.e., a 100% reserve, gold-backed currency. The first stage of this would be to move to a 100% paper currency. This seems like the most plausible way of sanitizing the dollar, although another way forward would be to move towards private gold-backed currencies, which is discussed by Henry Hazlitt in the final part of 'The Inflation Crisis and How to Resolve it'. This would be preferable, due to it being a free market solution, but it does have one significant drawback; the high likelihood of bringing the full force of government aggression down on your head.

With thanks to Mises Institute Media

More Austrian Gold

Joseph T. Salerno on international monetary systems. Find out what 'dirty floating' means.

Fireman Ron hoses down Bernanke

Cometh the crisis, cometh the man. He's been saying the same things for decades, but now they're listening to Ron Paul.

Hat tip: Infowars

Something I missed: Jesus Huerta de Soto at the LSE

LSE Hayek Lecture 2010: Professor Jesús Huerta de Soto from Cobden Centre on Vimeo.

I was annoyed with myself for letting this slip past me, but happily the Cobden Centre have posted up the video. More stuff on money and banking.

Menger on money

Carl Menger, the great revolutionary, speaks. Here's an extract from Chapter 8; 'the theory of money' of his 'Principles of Economics', published, as you all I'm sure know, in 1871:

2. The Kinds of Money Appropriate to Particular Peoples and to Particular Historical Periods

Money is not the product of an agreement on the part of economizing men nor the product of legislative acts. No one invented it. As economizing individuals in social situations became increasingly aware of their economic interest, they everywhere attained the simple knowledge that surrendering less saleable commodities for others of greater saleability brings them substantially closer to the attainment of their specific economic purposes. Thus, with the progressive development of social economy, money came to exist in numerous centers of civilization independently. But precisely because money is a natural product of human economy, the specific forms in which it has appeared were everywhere and at all times the result of specific and changing economic situations. Among the same people at different times, and among different peoples at the same time, different goods have attained the special position in trade described above.

In the earliest periods of economic development, cattle seem to have been the most saleable commodity among most peoples of the ancient world. Domestic animals constituted the chief item of the wealth of every individual among nomads and peoples passing from a nomadic economy to agriculture. Their marketability extended literally to all economizing individuals, and the lack of artificial roads combined with the fact that cattle transported themselves (almost without cost in the primitive stages of civilization!) to make them saleable over a wider geographical area than most other commodities. A number of circumstances, moreover, favored broad quantitative and temporal limits to their marketability. A cow is a commodity of considerable durability. Its cost of maintenance is insignificant where pastures are available in abundance and where the animals are kept under the open sky. And in a culture in which everyone attempts to possess as large herds as possible, cattle are usually not brought to market in excessive quantities at any one time. In the period of which I am speaking, there was no similar juncture of circumstances establishing as broad a range of marketability for any other commodity. If we add to these circumstances the fact that trade in domestic animals was at least as well developed as trade in any other commodity, cattle appear to have been the most saleable of all available commodities and hence the natural money of the peoples of the ancient world.

(pic)

The tax blunder and what it tells you about our money system

Austrian economists have generally been outside the mainstream, because they don't tell the politicians what they want to hear, and stick resolutely to the concept of sound money. John Maynard Keynes on the contrary was clasped to the bepustuled bosom of big government ever since he came up with a pseudo-economic justification for running up massive debts and inflating the currency. Funnily enough, this was what governments loved to do, and people will always believe a lie if it's what they want to be true.

The alternative, which to the short-term view of a politician is unpalatable to say the least, is to raise the necessary money through taxation, but people are much more aware of what they pay in taxes than they are of the surreptitious devaluation of their money through inflation, and as Keynes pointed out, we're all dead in the long run, so fuck it.

The people are generally unhappy when government openly takes their money away by raising taxes, and may even resist. The last major revolt - if that's not overdoing it to call it so - was over the poll tax. As Murray Rothbard noted, Thatcher's mistake was failing to introduce the new tax at a minimal level. Once in place, it could be raised with much less opposition. But by bringing it in at the level her government did, it hit the pockets of a lot of people at the same time, causing the revolt.

The current government may be about to provide another illustration of why governments in general prefer inflation to raising taxation, by cocking up the tax codes of some millions of people, and then trying to 'make good' this mistake by clawing back the missed moolah in the current year. As the Mail notes, there is a legal case for resistance to such a measure, and with safety in numbers the peasants may soon be trying to locate their rusted and cobweb-strewn pitchforks to drive off the hated revenue men.

At this stage, no one's sure who will be affected. I don't know if I'll be leading the charge or cheering from the sidelines, but I sure as hell know what side I'm on.

May the spirit of Wat Tyler arise!

Goldman in the dock

The current court action against Goldman Sachs is the equivalent of going after Dr Mengele for an unpaid parking ticket. GS are at the heart of the syndicate running the financial crisis. Whatever stone you pick up, be it AIG, the Greek situation or any boom and bust bubble you will find a Goldman snake slithering off.

So maybe the top guys will let one of their underlings get burned, but there's a bigger game being played here.

Switzerland gives in to Anglo-American Establishment

(Switzerland's new flag)

A sad and shameful day; Switzerland, the once-sovereign state, capitulates to the global oligarchy and agrees to end its financial independence. Soon, if the criminals succeed, there will be no place to run, no place to hide your money from the avaricious tax collectors. and their bankster controllers. No doubt, a few 'rich tax evaders' will be paraded and plundered before us, as the small fish are gobbled up by the bigger.

According to The Guardian:

"In accepting the Organisation for Economic Co-operation and Development's (OECD) principles for the exchange of information on tax, the Swiss finally abandoned their insistence on a single, all-important legal point: that tax evasion is not a crime unless it involves active fraud, such as the forgery of paperwork"

The real "single, all-important point" is that Switzerland was once sovereign, able to administer its own law within its own borders, and it has given that up. Tax evasion is not the issue - it is whether we want a unified bankocracy ruling over us all.

Chorros - Banqueros y Gobienos

To understand the New World Order take-over plan it is useful to study events in Argentina, where the international banking cartel has systematically looted the country since independence with the connivance of successive governments. The economic collapse in recent years provides a microcosm of what the criminal oligarchy are pushing on a global scale.

According to the Google Video blurb:

"Documentary on the events that led to the economic collapse of Argentina in 2001 which wiped out the middle class and raised the level of poverty to 57.5%. Central to the collapse was the implementation of neo-liberal policies which enabled the swindle of billions of dollars by foreign banks and corporations. Many of Argentina's assets and resources were shamefully plundered. Its financial system was even used for money laundering by Citibank, Credit Suisse, and JP Morgan. The net result was massive wealth transfers and the impoverishment of society which culminated in many deaths due to oppression and malnutrition."

(Hat tip: Founding Father 1776)

Meet Mandrake the money master

From G. Edward Griffin's 'The Creature from Jekyll Island', a book which reveals the origin of the US Federal Reserve, here explaining 'The Mandrake Mechanism' - the method for creating money out of thin air:

"What is it? It is the method by which the Federal Reserve creates money out of nothing; the concept of usury as the payment of interest on pretended loans; the true cause of the hidden tax called inflation; the way in which the Fed creates boom-bust cycles.

In the 1940s, there was a comic strip character called Mandrake the Magician. His specialty was creating things out of nothing and, when appropriate, to make them disappear back into that same void. It is fitting, therefore, that the process to be described in this section should be named in his honor. "

Read the chapter - know thine enemy"

See G. Edward Griffin explain the Federal Reserve system:

It's the Fed, stupid!

Although I don't agree with Dr Paul's course of treatment ( a gold standard) , I certainly agree with his diagnosis. It's a shame that the good doctor will not be the next US president, but at least his campaign has woken up a lot of people to fundamental problems of a privately-run central bank and fractional reserve banking.

(Full speech)

(Hat tip: Infowars.net)

Know your enemy - Jefferson did

For something so central to our lives, it's a wonder we don't think more about what money is and how this money system we live under works. This documentary, The Money Masters, lifts the lid on how private banks create money and thereby control us all. Right now, with the financial storm clouds growing ever darker, it's even more important that people understand what Thomas Jefferson meant when he warned:

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

And what Mayer Amschel Rothschild meant when he said:

"Give me control of a nation's money and I care not who makes the laws."

One man's depression is another man's consolidation

The current turmoil on world markets, the collapse of Northern Rock, the slide in the dollar, the sub-prime mortgage market etc are not acts of nature. Just as in 1929, these things are driven by those in real power to consolidate their control. This is what happens when you have a privately-owned central bank and a system of fractional reserve banking (fraud). Whenever the market has fallen to wherever the big playas want it, they can stroll in and hoover everything up for pennies on the pound.

We need to change the monetary system.

Bankers: the bastards!

“Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money."

Sir Josiah Stamp
(1880-1941, one-time director of the Bank of England)