Sunday, December 21, 2008

Monetary Policy

Antal E. FeketeGold Standard UniversityE-mail:

Nor is it possible to argue that the American government continued to serve the interest of the American people after March, 1933, when Roosevelt confiscated gold belonging to the American people, only to write up its value from $20.67 $35 per ounce a few months later, allegedly "in the interest of the national economy". This great government of this great nation, stealing from its own citizens in the national interest? And selling the loot abroad at a high mark-up? Where will it all end? Never mind the Constitutional prohibition on confiscation without due process. Never mind that the Constitution does not recognize fiat money. Never mind that the only kind of money the Constitution recognizes is silver and gold. Just ask simple questions about basic morality. The moral standard of the U.S. government in its dealings with its own citizens has reached an all-time low, as shown by the new norms set in the monetary field.
This land of free men was turned into an Animal Farm where pigs have been running wild and making monetary policy for the past 75 years. It is small wonder that men of utter depravity, like Bernie Madoff, could operate Ponzi schemes unobserved and with impunity for as long as he did. Just how long could the legal system stand up to assaults of this width, this depth, and this magnitude? The name Bernie Madoff reads like the Biblical writing on the wall, suggesting that ours is a Madoff dollar; ours is a Madoff Social Security; and ours is a Madoff Medicare. What basis for optimism is there for the next 75 years? To find out, let's review the past 75 years.

The 'grapes of wrath' are ripening in Academia. Having exiled monetary science, agents of Madoff Economics (alias mainstream economists) have exposed society to untold dangers. All the people are going to be put through the wringer indiscriminately. No one will be spared.
What means Madoff Economics? It is the economics of "garbage in - garbage out". It features the central economic doctrine of Keynes that capital is for window-dressing purposes only. The smart guy does not need capital. The guy who is even smarter can milk previously accumulated capital for his own purposes.

For the first time we shall witness global destruction of capital in an advanced economy. The fabric of society is breaking down. Madoff Economics will continue to have a monopolistic influence in the councils of government. Adventurers will continue to be in charge, and will continue to display utter lack of responsibility for the damage they are causing to society. The script will be played out in full, to the bitter end. There will be no tabula rasa after Inauguration Day. Pigs will continue running Animal Farm, making monetary policy, until the fruit trees are picked bare of fruit, the barns are swept clean of grain, with nothing left in the cupboards or in the cookie jars.

Abridged for E.A. Read it all here=>>

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