|Last Updated: Mar 25th, 2013 - 16:46:15
Thought for the Day
Imagine that our Reserve Bank only supplied REAL money in the form of gold and silver. This money holds its value compared to paper money which as we have seen loses 10% to 15% of its value each year. (Notice how gold, oil and land keep the same value relative to each other and get more expensive relative to paper money.)
Imagine further that our Weights and Measures Department was corrupt. They were in cahoots with big business and together they decided to "adjust" the standard weights by which we all buy produce. Each year they would make the standard Kilogram lighter by 10%. So when I buy 5 kilos of spuds this year I am getting 10% fewer than this time last year. And nobody notices.
But after a while people would start to think that somehow things were getting expensive and the weekly food bill was going up and there never seemed to be enough to feed the kids as there used to be.
Would we call the police and insist that they prosecute the Weights and Measures Department officials and their accomplicies in big business? They are obviously engaging in a corrupt practice and stealing value from the populace.
Why then, do we let the Bankers and Politicians get away with devaluing our money?
The articles this week may cause you to think about this question a bit more deeply. I hope so.
May 16, 2008, 14:48
The Global Slump Has Begun As Poison Spreads
We know that politicians, central & other bankers and the economists they employ will always try to talk the economy up when things are getting sticky.
On the other hand journalists are always after the major heading to sell their wares.
To understand the truth requires a fair degree of cynicism and an understanding of REAL economics as espoused by the Austrian school of economics.
If the USA, China and Europe are in trouble after years of printing too much money then we would be well advised to batten down the hatches. After every boom comes the bust. Can the Central Bank philosophy of providing much more money from thin air at the beginning of the bust soften the blow? What happens then? Oh, what fun!
May 16, 2008, 10:27
Libor Rate Faces Shakeup As Credibility Is Doubted
This money thing is so complicated.
May 15, 2008, 17:09
If You Believe Central Banks, Currency Market Management Is Just Rhetoric
So, is the value of our money just words now?
May 12, 2008, 11:32
Numbers Racket; Why The Economy Is Worse Than We Know.
In a report prepared during the war by the United States Office of Strategic Services in describing Hitler's psychological profile:
"His primary rules were: never allow the public to cool off; never admit a fault or wrong; never concede that there may be some good in your enemy; never leave room for alternatives; never accept blame; concentrate on one enemy at a time and blame him for everything that goes wrong; people will believe a big lie sooner than a little one; and if you repeat it frequently enough people will sooner or later believe it."
Michael Cullen says, "Tax cuts cause inflation". REAL economics says that inflation is caused by the government creating or allowing too much money to enter the economy. If you look at our statistics section you will find the latest information about the M3 money supply from the Reserve Bank. There you will see that our money has been increasing by 10% to 15% a year for a long time. This is inflation. If the government takes money from you and spends it, how can this be more inflationary than if you spend it yourself? There is no evidence to show the government is wiser at spending money it gets for free than you are at spending your hard earned cash. All the evidence points the other way.
Yet people believe the big lie. It may not be Michael's fault. He may just believe what someone else has told him, but he does have a responsibility to understand what is REALLY happening and to get it right.
One big problem we hve right now is that for many years politicians have been asking for slightly "adjusted" or "massaged" numbers for their statistics so that they will look good to the populace. A good example is unemployment statistics. They are so strange that they no longer convey any useful information. Other countries are doing it. This article is very revealing. We are really living in La-La land and nobody knows what the facts are any more.
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May 4, 2008, 18:15
Bankers Cast Doubt On Key Rate Amid Crisis
What a tangled web we weave, when first we set out to deceive!
May 3, 2008, 13:24