The cyclical nature of life is reassuring. We are less afraid of the privations of winter because we’re assured the spring will come again.
Similarly, those who claim expertise in such matters — those currently encouraging us to buy stocks and government bonds, for example — insist that the market always comes back. Given a little time, everything will be the same as it was.
Because this is reassuring, we cross our fingers and hope they’re right. But they’re wrong. Not the assertion that some specific companies and stock issues will again prosper and that some people will again grow rich. Of course there will always be “winners” — especially when government bestows on itself the power to choose who shall (their rich friends) and who shall not (you) be “bailed out.” No: I refer to the part about “things being the same.”
A cartel of private bankers was given control over our money in 1913, in defiance of the wisdom of Andy Jackson and Martin Van Buren. Frank “Pal of Stalin” Roosevelt ended the convertibility — heck, the private ownership — of gold in 1933. But everything was fine again in the 1950s and ‘60s, right? Then, after the ongoing devaluation of the dollar by the Federal Reserve forced Lyndon Johnson to also end the convertibility of paper dollars into silver in 1964, we had some tough times in the 1970s, but everything came roaring back in the ’80s and ’90s … right?
Actually, we were lucky that the adoption of new technologies like the cell phone and the personal computer generated new industries and new jobs, helping to replace (and disguise the eclipse of) the old industrial giants: coal, steel, railroads and automobiles. (Note that the declining industries were systematically crippled by the innovation-suppression teams known as “unions”; the fast-rising replacements were not.)
Still, everything was not the same. The vastly greater looting of our paychecks through taxation and regulation after 1964 meant that, where prior to 1960 a single blue-collar wage could support an American middle-class family in a free-standing house, after 1970 it took two incomes — husband and wife — to do that. The hidden but vast social cost of this new arrangement was that the schooling and nurturing of children was now turned over almost entirely to unionized government propaganda officers. The arrogance, the illiteracy and innumeracy, the knee-jerk collectivism and presumption that government can and must step in to solve every problem exhibited by the resulting generation-and-a-half has set the stage for the final decline not just of America, but of virtually all the remaining mighty nation states of the 19th and 20th centuries.
The ruling elite in Washington is going to try to inflate its way out of its debt conundrum, attempting to pay off the government’s foreign creditors with greenbacks which lose value right before your eyes, like an ice cream cone melting on a hot summer day. The process is already well underway. If gasoline used to cost 28 cents a gallon and now costs $2.80, then a dollar is now worth a dime. If you could once buy a silver dollar for one greenback but it now costs 15 greenbacks, then the paper dollar is now worth seven 1960 cents. If gold once cost $35 an ounce and it now costs $1,100 an ounce, than the greenback is now worth about three 1940 pennies.
Americans are told we have too low a savings rate. What are we supposed to save: greenbacks, matchbooks, or Wheaties boxtops? It’s a toss-up which will be worth less in five years.
What are the new technologies that will spark the next American economic renaissance? Not those subsidized by government — they’re losers by definition. Rather, look precisely to those that can escape the crushing mailed fist of the tax man and the regulator.
It’s already happening. In Las Vegas, it’s rarely necessary to call someone to haul away old furniture, old computers, anything else you want to be rid of. You simply set it out on the sidewalk. Long before the monopoly, government-franchised garbagemen come around, the stuff is gone. Groups of men — often illegal Mexican immigrants — prowl the city in pickup trucks, snatching this stuff up. They have to know where to haul it to make a quick sale. Do you think anyone involved in this trade applies for city and state business licenses, does business with traceable checks, collects and remits state sales taxes, gets a paycheck with “withholdings” taken out?
The unemployed and the underemployed sell stuff Online or at yard sales. The prices realized and the ratio of profit to labor may not be huge, but what do all these endeavors have in common? They avoid the “brick-and-mortar” store, which draws job-killing government taxmen and “code enforcement officers” like a dead horse draws flies and maggots.
If “employment” means W-4s and withholding taxes, if it means the “employer” becoming an unwilling, unpaid, subject-to-prison-if-they-do-it-wrong weekly tax collection agent for Uncle Sam, such endeavors will never create any “employment.” The goal of all sane but desperate Americans today is to raise the “unemployment rate” as near as possible to 100 percent, so that any IRS agents whose offices have not yet been bombed or flown into by desperate suicide pilots will be left to entertain themselves perusing confiscated dirty magazines and sending each other photocopies of their naked butts through the interoffice mail.
How you gonna keep paying their skyrocketing taxes and fees? Send a third member of the family out to bring in a third income? Doing what? Selling cars for Government Motors? Getting their legs blown off in Afghanistan, a “war” in which they’re not allowed to shoot back unless the enemy wears a “shoot me” sign, and for which the “surrender and withdraw” date has already been set?
It’s bad enough we’re still funding a huge overseas empire. At least the Romans knew how to make the proposition pay.
Historians can now look back and pick a specific week in the fifth century when the Roman empire can be said to have fallen. But it must not have seemed nearly so clear-cut to those watching the caesars debase the currency and raise the tax rates till farmers were better off just picking up and abandoning their fertile lands than trying to grow enough to pay taxes that were essentially over 100 percent. For very piece of bad news, someone would doubtless bring up a “hopeful sign of recovery.”
If you ever get to talk to your congresscritter, ask her if there is a maximum tax rate. Ask her to agree that 90 percent is as high as any tax should be allowed to go — that any congresscritter who ever proposes or votes for a tax rate of 91 percent on anything should be hanged. I’ve tried. They won’t do it. They’ll tell you “We can’t foresee every circumstance. There might be some emergency under which we might have to enact such a tax …” How about 98 percent? Agree they should all be hanged if they ever enact a 98 percent tax? “We can’t foresee every circumstance …”
We’re now living in a system hardly to be distinguished from the greed, corruption, and arrogance of ancient Rome. A government of “limited powers, specifically designated”? Yes! I saw that one! Almost as funny as the one where Lucy ends up stomping the grapes in the vat at the Italian winery! Ha ha!
The great benefit of the election of Barack Obama is that he is such a pathetic, unqualified, teleprompter-bound clown. Not only has he left our foundering economy in the hands of greedy, crooked bankers, he’s left it in the hands of the SAME GANG of greedy, crooked bankers, from Goldman Sachs and the New York Federal Reserve Bank. This guy is “in charge”? He speaks of the need for austerity and submits plans for the biggest spend-fest and deficit in history, for all the world like a little kid preaching the benefits of bean sprouts while barfing in the corner after eating his entire bag of Halloween candy.
Before we can regain our freedom, we must learn to laugh at the pompous manner, the thoroughly undeserved demands for “respect” of the corrupt courts who dare to instruct juries “You must enforce the law as I give it to you”; the police who aim to take away our firearms and spend most of their time collecting additional road tolls disguised as “traffic enforcement,” and most of all our greedy, corrupt politicians, accustomed to their lives of deference and privilege, who — asked what part of Article One, Section 8 of the Constitution authorizes their latest regulatory scheme, demand in outraged tones, “Are you serious? Are you serious?”
They are ridiculous, as is the notion that a big procession and mourning weepfest need be staged whenever another one of them gets offed by one of their thousands of desperate victims. Boo hoo.
Develop a second business or avocation — under the radar — even if you start small and part-time. Get used to buying and selling in non-regulated environments.
Hold greenbacks or securities denominated in greenbacks only for short-term commerce. Buy guns, gold, and particularly 90 percent “junk” silver coins. Holding a yard sale? Post a sign offering to accept pre-1965 silver coin at 10 or 12 times face value. Measure how things are going by counting how many seem to “get it.”
As for which other assets may hold their value over time: ammunition, primers, incandescent light bulbs, and Freon refrigerant remain viable. What’s the shelf life of tobacco or tobacco seeds? What’s most important is to deal in something you know and love — I wouldn’t attempt stockpiling and subsequent commerce in any collectible heavily dependent for its value on “grade” or “condition” unless you care enough about rare coins or collectible comic books to become an expert grader. Besides, collectibles are subject to bubbles: Take a warning from the current depressions in stamp collections and sports memorabilia.
In future weeks: some tales from the front.