Talk Of Liberty

The single most important issue facing America is the devaluation of our money.  I have written posts on this topic before, but it is crucial that this message we continue driving this message home, as it is the only way to get America’s Middle Class back.  I apologize in advance for a lengthy analogy, but hey if it helps one person realize we are being ripped off, and it shows this in a different light, then what the hey.

Liberals and Progressives that follow Monetarist / Keynesian economic belief systems think that the money supply needs to grow with the economy, or there will not be enough liquidity to keep up with growing demand.  This is a dangerous view on money, and opens the door to the middle class robbery taking place.

First, let’s consider what is money.

Money is the general medium of exchange, the thing that all other goods and services are traded for, the final payment for such goods and services on the market.

Got it, so it is not dollars, it is not gold, it is not credit cards, it is ANY medium of exchange. It could be goats, radishes, or a gold coin. It is simply a store of value that is used for exchange. The problem with a radish is simply that it loses its value once it begins to rot. This is why Gold is considered a great store of value, it will never rot, and it is not easy to create more ( watch Gold Rush on Discovery and you will see just how tough it is).

Now let’s visit the Poker Game analogy of money again. The scenario is simple, you and another person buy into a 2 way poker game. You both agree to put in $100 dollars cash, and get 100 white chips in return each. The pot now holds $200 dollars total, and there are 200 white chips. The game is set to begin, and your opponent makes a suggestion, lets double the white chip count to 200 white chips each, for a total of 400 white chips, he suggests that by doing so, you will both have a chance at winning more, the problem is no extra money was added to the pot. Adding more chips without adding more dollars to the pot does not increase wealth, it simply devalues the value of one chip by half.

In the above example, it is the same as life, whether the pot has dollars in it, or diamonds, the value of the chips is only based on what it is backed by. If instead of adding chips, the two players added $100 each more into the pot, then the value those chips represent just doubled. The point is to show that the supply of money does not matter, it is merely what backs it.

So what is the problem with printing money then, it should have no effect? It is true, in the game it had no effect because both players are each given an equal amount to compensate for the difference in chips, and all is fair. Now enter the government and its monopoly doing the same to an entire nation. The problem is that distribution is not fair, nor is it equal.

When the government (The Fed) prints money, they do not send every American an check equal to the amount that was printed, so that every citizen benefits equally, instead it goes to those who are favored, and connected. Particularly banks, and government workers, and contractors for the government, at the expense of all others.

Let’s go back to the poker analogy. If we have 2 players, and each has paid $100 dollars in, and were each given 100 white chips, the value of those chips equal $1 dollar each. Now introduce the evil government dealer, who will not take a chip from you on each hand, instead they simply add 1 white chip into their pocket each hand that is dealt. After 100 hands, the evil government dealer, now has 100 white chips, while player 1 and 2 have 50 each. At best the players can now only get back their first investment, while the evil government banker has half the money. Go another 100 hands and both players have zero and the evil government banker has all the chips, and now all the money. The players are left with nothing, and the evil government banker wins. All that is left now that the parasite has killed its host, is the parasite.

That example may seem a little dramatic, but regardless of who the dealer is, whether it is government or someone else who is connected, they benefit from this game, at the expense of everyone else. When inflation exists, someone is getting the difference in value, and it is never the middle class.

I will close this post with a simple thought, why do we Americans accept the idea that our money is the worst investment, if we put it under the mattress for 10 years, we know it will have lost value. This is slowly killing our middle class the same way the frog boils away slowly. Our dollar should be considered a good investment, and we should be able to bury it in the yard, dig it up, and have it purchase more not less in the future. Wake up America.