November 24, 2009 The Real Global Crisis

Last week I watched the final of a three part ABC (Australian Broadcasting Commission) documentary Addicted to Money. As the title suggests, the current economic crisis is apparently due to our addiction to easy credit coupled with the greed of bankers and Wall Street. An analogy to illicit drug use was laboured in an attempt to demonstrate the nature of our addiction and the methods of the money ‘pushers’.

Each player in the financial meltdown was identified and the massive corruption of the political system laid bare yet there was no focus on the elephant in the room – the money supply. I suppose it’s easier to blame the hapless consumer and frighten us toward a green utopia with more government (now globally united™) than address the real cause.

Government is the monopoly supplier of money. In the absence of a gold standard there is no limit to how much money a government can create to suit their political ends. Adding more money to the system without a corresponding increase in productivity reduces the overall value of the total money. Such monetary inflation is an insidious hidden tax that eats away at savings and our standard of living. Governments love it because we tend to see it as a fait accompli rather than the theft that it is.

Government sets interbank interest rates. In most countries those rates have been held down to artificially low levels for many years to promote economic activity and make governments look good. Unfortunately low interest rates encourage rampant borrowing and speculation whilst discouraging and penalising savers who are the real fuel of a sound economy.

Government oversees financial regulation. Banks have a commercial motive but politicians are sworn to serve the people and defend the constitution. So what do we get? Taxpayers are now forced to bail out failed banks therefore encouraging even more risk taking and dodgy banking practices.

Government uses taxation and regulation to direct business activity to suit their perpetual re-election agenda. The only bubble in the western world yet to pop, the Australian housing bubble, is the result of years of government meddling through grants, subsidies, tax breaks, slow land release and excessive building compliance costs, all on top of their easy money.

Still believe the GFC was our collective addictive fault? Might as well blame the sparrows for eating the bread you threw out the window.

In every western country government taxation, borrowing and money printing is on the rise to pay for the increasing number of people on the public teat and the massive wasteful government spendathons we have been duped into believing will save us. Those who produce the wealth are being bled dry and our money devalued faster than any honest market rate of interest can counter. Forget climate change, the crisis being visited upon us is SERFDOM.

From many years experience as an employer I know that most working people would rather not have to gamble for their retirement security or their daily bread. They would prefer to know their wages and savings were secure and the purchasing power of their money retained into retirement years so they can just get on with enjoying their lives.

But unfortunately the days of gold coins and trust in our money as a store of value are long gone. Such quaint concepts are the last thing on any political agenda when there are elections to be won, power to be wielded, bread and circuses to be provided and climate to be changed. Not to forget the new threats on the block such as Kevin Rudd’s ‘neo-liberalism’, ‘rampant capitalism’ and ‘market fundamentalism’ from which we must be saved.

The real truth is that the Global Financial Crisis is not a failure of capitalism or the fault of the general polulace. It is a failure of government to protect our inalienable rights to life, liberty and property. It is the result of politicians acting in self interest and ignoring their sworn duty to uphold the rule of law.

Reject government self-promotion, lies and economic claptrap. Demand minimal government, rule of law, sound money, open markets and inalienable property rights so that we may, as individuals acting in self interest, collectively build a better tomorrow for all.

Peter G.

Whoever controls the volume of money in our country is absolute master of all  industry and commerce…when you realize that the entire system is very easily  controlled, one way or another, by a few powerful men at the top, you will not  have to be told how periods of inflation and depression originate.
 ~James Garfield, 20th President  