Thursday, November 27, 2008

What else have we lost?

Today is Thanksgiving Day and I have the great privilege and pleasure of being in South Georgia with family. I am thankful for many things that are easy to be thankful for. I try to be thankful in all things, in accordance with the teaching of my Christian faith.

During the critical coffee cup selection process this morning I found a cup decorated with a Norman Rockwell image. The scene is of a father and son with fishing gear standing in front of the door to a business. Dad is hanging a sign that says "GONE on BUSINESS"; and one can cipher "will return tomorrow". Dad is happy to hang the sign and go, while the son peeks around a corner in delight as they "sneak off" to fish.

Andy Griffeth comes to mind. And then I remember talk of the days when neighbors would regularly, commonly, often visit on Sunday or raise a barn together. People had time for other things in life than work and a "schedule".

But today, one of my dearest young friends, barely in her twenties, tells me she would be lost without her Blackberry calendar.

What changed?

As I recall from memory, in 1910 about 70% of all business expansion was self-funded. In those days the monetary system allowed a business to save for its own expansion.

After 1913 this steadily became impossible. A business could not compete without debt funded expansion. Cheap credit made debt cheaper than savings for expansion. In fact, if one saved, inflation would destroy one's wealth faster than any interest that was earned and your competitor would use debt to encroach on your market share while you saved...

Someone will say; "so invest in the stock market for better returns..."

But the stock market is a scam, unless one takes the view that having "wealth on paper" is the same as having real property. As we have seen clearly (once again) in the past few weeks, "wealth on paper" can disappear in a flash.

Even if the economy were healthy, what would happen if everyone decided to "cash out" on the same day? The whole system would collapse and most people would get pennies on their dollar (which is only worth about two pennies to begin with) if they were lucky.

Meaning in this context

Because business and individuals have been put in a position in which spending is believed to be cheaper than saving, and because saving provides negligible returns, we have become a debtor society. Remember Bernanke stated plainly that a determined government could, in effect, force people to spend rather than save by forcing higher inflation through government deficit spending:

We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

Ben Bernanke, “Deflation: Making Sure ‘It’ Doesn’t Happen Here” Remarks before the National Economists Club, Washington, D.C., 21 November 2002

To the point

Not only does our monetary system cause a literal and actual wealth transfer through the process of inflation, it also reconfigures the use and application of factors of production. In other words, what is "valuable" in a system which relies on ever increasing levels of debt, is different than what is "valuable" in a sound money system.

We will leave illustrating the cause and effect for another day and go straight to the claim.

In our false prosperity economy there is no time for the typical US citizen to slow down and enjoy friends, family and fishing.

Someone may think of golf or video games or our entertainment flooded society. Perhaps even leisure time and vacations.

However, the picture is not complete unless we think about how burned out we feel when we vacate. Who is paying for the leisure and the entertainment? What is not paid for in its place? What about the tenuous (at best) condition of our "savings" and "investments" and "retirement"?

As a nation, is our leisure usually cash or credit?

In other words what is the real cost of the "leisure" we consume?

How leisurely is what we do for entertainment? Is our entertainment typically edifying or destructive? Do kids go and consume entertainment when they would be better off and more healthy to have productive chores to do? Or to spend time with friends and a fishing pole?

We have lost our quality time. We have lost simple things, simple times, time for family, fishing, and growing old within a community. We have lost the opportunity to really enjoy each other and the world around us. We have lost relationships and friendships.

As a nation, we have debt instead of savings. Our "retirement" and "wealth" are at the mercy of a system that will fail.

We have little real wealth. What we seem to own requires our continuing participation in the system or we lose "our" property; for example, we must pay property taxes or the government will confiscate our property. Based on law and regulation, the government is the senior controlling partner in anything we own.

If we rest, we lose.

What else have we lost?

The Federal Reserve System and our complicit government has stolen our property and has stolen our quality time with family and friends.

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