Krugman Strikes Again by Peter Schiff Interesting article-
But here's my take on it:
I don't agree that we need "deflation" as the article suggests, but rather a stable monetary policy. If we had our money backed by something stable, like gold and silver as our founders set forth in the "Coinage Act of 1792" these issues would not even be in discussion. Fiat currencies, such as the Dollar and Euro are backed by nothing other than the "good word" of the Central Bank, in our case The Federal Reserve Bank.
Prices in the USA remained very stable for much of the history of the Republic, up until the creation of the Federal Reserve Bank in 1913. Through the Fed's policies and the creation of money out of thin air we have seen inflation skyrocket and the value of the dollar fall by 97% since 1913.
The value of the Dollar was set at 371-4/16 grains of pure silver. Period. End of Story. Our currency was then set in value. If the fiat currencies of other nations rose and fell at the will of the Central Banks, the Dollar was stable. It would still purchase the same 371-4/16 grains of pure silver. Prices for goods and services remained at about the same level from the inception of the Republic until the Executive Order of FDR in 1933 that confiscated all privately held gold coins and bullion.
Gold had been $21 per ounce since the creation of the $20 gold piece, which contained just slightly less than one ounce of pure gold, again as defined in the Coinage Act. Once FDR confiscated and melted down all of the gold, which the government did buy at $21/oz, he raised the price to $35/oz, thus he devalued the currency (or created instant inflation) by 40%, decreasing the purchasing power of the people of the USA. Essentially the largest sing theft ever committed in the USA. Makes Bernie Madoff look like an amatuer. Inflation has been on a steady climb ever since. Soon we will be burning dollars in our fireplaces to stay warm. Think it can't happen here? That's what they thought in Germany too.
So at the end of the day Krugman, with his Cracker Jack Box Nobel Prize, is nothing more than a statist tool for the propaganda branch of the Federal Reserve Banking system.
Re: “Inflation has been on a steady climb ever since.”
ReplyDeleteIf the stated value, of “Federal” Reserve notes, declines enough with respect to copper and nickel, the 1946-2009 U.S. Mint nickels, composed of cupronickel alloy, could become somewhat rare in mass circulation.
The April 13th metal value of these nickels is “$0.0614575” or 122.91% of face value, according to the “United States Circulating Coinage Intrinsic Value Table” available at Coinflation.com.