(NOTE: Don't forget guys to join my Liberty Minded Social Network, Liberty Independence Alliance, and help organize the movement and enjoy Liberty Minded Media)
Hey Guys,
I've bought 6 copies so far of Ron Pauls new book "Revolution: A Manifesto" 4 of them I had signed one which went to myself, two of which went to my strongest co-paul supporters, my Mom and Brother. The 4th copy I'm giving to a former teacher, who's a constant source and wisdom and wit, and overall probably one of my favorite people, EVER. I gave one unsigned copy to my other brother, I came across another copy leaving me with two unsigned copies I'm arranging for people to borrow and read. The book itself is now #1 on Amazon.com's best sellers and #7 on the New York times best seller list.
Food Shortage Scares, increasing numbers in unemployment claims, and more signs that the economy is in bad shape, and as the multi-billion dollar cash injections trickle down inflation will only get worse. I listen to the PBS nightly business report everyday which has a variety of analyst and guests covering a lot of what's going on. Today I hear him dismiss inflation scares as too much credit being given to the US in price setting... here are some things to think about.
- The Dollar is the reserve currency of many countries, meaning the value of their currency has a DIRECT relation to US dollars in that countries reserve so when the US dilutes the dollar it dilutes the currency of many typically third world nations that already can't afford many things we take forgranted.
- US GDP dwarfs it's closest competitors cause it consumes a very large percentage of goods produced globally... so yes, the demand coming from the us is a force powerful enough to set prices.
- Inflation creates perceived food shortages, if your poor and you see the price of rice go up every week, be sure you will buy a lot this week to hedge yourself against next weeks price increase. This phantom demand created by government manipulation of prices creates such shortages.
As I always emphasize the reality of Liberties relation to Economics. So why we can all agree that theoretically what Liberty is, in a practical sense Liberty can only be exercised equal to your ability to meet fixed costs, (same logic as to why a factory would stay open despite making less than variable costs but more than fixed). Now this idea isn't new or is different, people on both sides understand this issue.
The left feels government is responsible for guaranteeing this level economic stability which we see now and have seen in the past over and over again it can't do. While traditionally conservative principles will say if you don't interfere people will develop in a more self-sufficient way, and isn't freedom the ability to depend on yourself, not the government.
Essentially the point I'm trying to make, not in my most eloquent is that the governments manipulation of the markets have only undermined liberty and the average persons ability to survive. The government has become to big that the only way to dismantle it is from within which is why we must all get involved in any we can to break the clutter wherever it may exist.
Saturday, May 3, 2008
Sunday, April 27, 2008
#118 - Revolution: A Manifesto
Hey,
I've bought three copies of Revolution: A Manifesto, one for me and two for gifts. I recommend buying as many copies as you can and giving them away, this book really does nail on the head all the issues and the logic behind them all.
I'm about 3/4 through this book and am amazed how Ron Paul succinctly tears apart the status quo with ease with common sense and a rugged regard for individualism. I'm not sure how else to really drive the point home other than, just read this book. Tell other to read this book,don't argue about who they should vote for just have them read the book.
- Alex Merced
Friday, April 11, 2008
#117 - Beating the Inflation Monster
I think Jubak explains really well some of the inflation issues in this segment. What I love about Austrian Economics is that aside from trying to come up with the most efficient and stable economic theory like any economic school, it also factors Liberty and it's relation economic policy.
What it ends up boiling down to
- Liberty is intrinsically tied to the citizens ability maintain a standard of life in which they can exercise their Liberty
- Economics is intrinsically tied to Liberty in the sense that freedom to enter the market create the competition that creates the innovation that enable the market to expand and see Economics growth
So if one falls the other does to, and if one is improved so does the other as well. So when inflation is beating away at your purchasing power whether it be cause of increased foreign demand (which is a natural effect of a free market) or cause of artificially increased money supply (an unnatural source of inflation)
Some products will go up in price do to free market forces of supply and demand, which is natural and also naturally the market will adjust to it. Although, when other factors cause purchasing power to decrease faster the market can naturally adjust you'll see adverse reactions which is the current state of the US economy so wonderfully exhibits.
Despite what's going on in the nation economically and politically you can still protect your own personal liberty and standard of life through investments that can beat real inflation numbers. As Jubak pointed out, taking Food and Energy prices into account in current CPI methodology you see a current inflation of 4%.
So basically, by the end of the year that $20 bill in your pocket will have purchasing power of 19.20. If your rich you probably have enough foreign investments that your wealth can stealthily maneuver current US dollar declines but if...
- If you live paycheck to paycheck unless you get a 4% raise a year, your actually see purchasing power decrease in wages which will effect you ability to save maintain the same standard of life you have.
- If your near retirement and your nest egg is seeing anything less than 4% increase each year, your retirement is shrinking.
As Jubak pointed out, due to the focus on the Core rate of inflation by most institution which don't consider Food and Energy prices Treasuries, savings accounts, are guaranteed loss of your money. You'd actually realize more yield from spending you money right now.
So this leaves the equity market (stocks) despite what you hear int he news as the best place to beat inflation. Whether you have a Stock Broker (which I will be in a week :)) guide you in buying growth stocks to see value grow or into dividend yielding stocks to gain income, Equities is your best bet of preserving your liberty and fighting the inflation beast.
Protect your liberty now, it'll help you fight for it tomrrow.
#116 - Ron Paul Schools General Petreus
Hey Everybody,
It's been a long while since I've been aggressively posting, and next Thursday I finally take my series 7 and once that's over I'll have the time to throw my hat back in. Despite my post-graduation struggle has temporarily sidelined me, the revolution has continued strong and I thought I'd quickly go over a few things. First off as far as what I've always done some reminders:
- LibertyWarChest.com is still throwing fundraisers on the 14th of every month for Ron Paul LibertyPAC join the list and keep informed on these fund raisers!
- MercedForFreedom.com will see some updates soon
- Liberty Independence Alliance still seems to be currently the only active social network for those with the libertarian/paleo-conservative views so please do join and participate in the featured discussions.
- Of course this blog will continue to discuss the philosophy and issues surrounding our liberty :)
-Alex Merced
Saturday, March 15, 2008
#115 - Some Currency Thoughts
In perspective, do I feel a FIAT currency is completely unethical and bad for the economy, not entirely. We live in a free world which is why I think a Hayekian attempt at establishing competing domestic currencies would be a good thing. Thought I think it's unethical to have a FIAT currency backed by a government, cause then the effects of liquidity and most economic crisis's fall much harder on taxpayers than back in the pre-Depression gold standard days.
If I were to shape US monetary policy the US dollar would have some solid tie to gold (read A) for value and would have fairly constant level of supply instead of printing or removing dollars from circulation through government policy. There would be no federal reserve, although since there would be competing currencies if the Banks wanted to band together and form a third-party Fed like bank with their own FIAT currency, they'd be free to do so. Many other currencies would pop up and many of them will fall similar to when Paypal was competing many other similar internet payment methods and currencies. Eventually the consumer will choose the currency with the most purchasing power and the banks will choose the currency that offers the most on demand liquidity.
At this point I think we'd see banks dealing in two currencies which gives them the ability to deal with a strong US dollar but be the backers of their own FIAT money supply for their liquidity crisis's without footing the bill of minting and inflation to the US taxpayer. Plus this helps many of the other global currencies which are backed by US dollars.
It's true that there would probably be a lot of failed currencies that hurt a lot of people on the way to the market finding it's way to this point, but that's what always happens when new is in effect.
(A) One way you can tie the dollar to gold without having an all out gold standard would be to set target values, like keeping gold between 500-600. Then manipulating liquidity of the US dollarto that target but then this would essentially be the same kinda manipulation with a different goal that the Fed is doing now, but the dollar would remain fairly stable.
Probably just going back to silver/gold standard would be best for the US dollar AFTER competing currencies has established their third party FIAT currency of choice.
If I were to shape US monetary policy the US dollar would have some solid tie to gold (read A) for value and would have fairly constant level of supply instead of printing or removing dollars from circulation through government policy. There would be no federal reserve, although since there would be competing currencies if the Banks wanted to band together and form a third-party Fed like bank with their own FIAT currency, they'd be free to do so. Many other currencies would pop up and many of them will fall similar to when Paypal was competing many other similar internet payment methods and currencies. Eventually the consumer will choose the currency with the most purchasing power and the banks will choose the currency that offers the most on demand liquidity.
At this point I think we'd see banks dealing in two currencies which gives them the ability to deal with a strong US dollar but be the backers of their own FIAT money supply for their liquidity crisis's without footing the bill of minting and inflation to the US taxpayer. Plus this helps many of the other global currencies which are backed by US dollars.
It's true that there would probably be a lot of failed currencies that hurt a lot of people on the way to the market finding it's way to this point, but that's what always happens when new is in effect.
(A) One way you can tie the dollar to gold without having an all out gold standard would be to set target values, like keeping gold between 500-600. Then manipulating liquidity of the US dollarto that target but then this would essentially be the same kinda manipulation with a different goal that the Fed is doing now, but the dollar would remain fairly stable.
Probably just going back to silver/gold standard would be best for the US dollar AFTER competing currencies has established their third party FIAT currency of choice.
Sunday, March 2, 2008
#114 - Beautiful Thoughts
If you haven't already, go listen to some of my audio broadcasts
My newest one is about Beautiful Thoughts, basically an expansion on Platos ideas beauty, truth, and knowledge. The reason I did this topic despite being a political blog is because of what Ron Paul is constantly trying to say. That we can't view all these issues in a box separate from other issues, cause they are all inter-related and in takes a world view with a large breadth to truly appreciate and understand the complexities of these issues. Also I go to basically say the larger the world view the more your ability to appreciate everything in general, knowledge will increase your ability to see beauty.
My newest one is about Beautiful Thoughts, basically an expansion on Platos ideas beauty, truth, and knowledge. The reason I did this topic despite being a political blog is because of what Ron Paul is constantly trying to say. That we can't view all these issues in a box separate from other issues, cause they are all inter-related and in takes a world view with a large breadth to truly appreciate and understand the complexities of these issues. Also I go to basically say the larger the world view the more your ability to appreciate everything in general, knowledge will increase your ability to see beauty.
Friday, February 29, 2008
#113 - Old issues in New Eyes
I always understood the general economic concepts that cements the Free Market/Liberty relationship. Now training to be a stock broker @ E1 Asset Management it's pretty good to have a teacher who's a fan of Ron Paul, and seems to be on the same page with me as far as economic principles and studying for the S7 has put things more into perspective than ever before.
Having a much clearer grasp on how the markets work and their relation to true economic activity and health has given me a crisp perspective when watching people talk about what's going on in the global and local economy. Now, more than ever do I believe a lot of these pro-fed talkers on CNBC are either brain dead or are in denial of economic realities.
On Kudlow and Company today I saw someone try to argue inflation as good for the economy cause it keeps prices from rising due to loss of purchasing power. My jaw hit the floor when I heard this, afterwards another commentator said America will be able to afford luxury items as long as the Fed keeps lower interesting rates and printing dollars to meet the demand... at this point my jaw dropped to the floor ripped off my skull.
So first let's explore the first statement and break it down:
"Inflation is good for the economy"
First off a weaker dollar hurts everyone. Here's How:
-Prices on food, gas another necessities go up while wages lose purchasing power faster than they rise.
- This decreases the labor supply for many small companies that can't afford to increase their wages to keep up with increase need for higher wages to keep the same standard of living, in the meanwhile their purchasing power is dropping with their productivity.
- imports increase in cost, increasing the cost of a lot of electronics, and the cost of materials used to make domestic goods in effect increasing domestic prices further.
- The increased purchasing power of other nations creates higher levels of ownership of the US economy by foreign nations, which will in the long term effect US sovereignty.
etc. etc. etc.
But the statement in question has another section that deserves scrutiny.
"the decreased purchasing power pushes luxury prices down"
To Be fair, this statement is partly correct but the implication of this reality isn't something to be optimistic about. The way this happens is that since a persons ability to afford necessities becomes so tight that many have to forgo luxury items, so things like IPODs and Guitars would have either drop prices to even out demand or increase the prices and charge a premium to the elite few who have the discretionary funds to buy these items.
So what does this mean?
- Gas and Good prices have gone up so they have to cut spending on leisure, this is not a good economic indicator for anyone unless your planning to sell Apple. Luckily, there is the Chinese market.
- With less demand for these kind of items you'll see less variety, which will result in less innovation from competitive pressure which slows the progress of society.
Now to go on to the second statement...
"The economy will be fine if the Federal Reserve continues to print money and lower interest rates"
No and No
Against Printing Cash:
When you have more of something, it becomes worth less thus the law of supply and demand. More money means it'll be worth less, and you have the economic effects above. This primarily effects the middle class and below who's economic world is primarily domestic. More wealthy people are suffering losses in their investments in the housing sector and many luxury items may hurt in the long term if this continues but at least these people usually have safety nets of foreign investments that are in some places less volatile than the US currently.
Against Lower Interest Rates:
I'm not against interest rates going down or up, but the federal reserve does this by manipulating the money supply which is essentially shifting the value of peoples assets in an indirect re-distribution of the nations wealth which is ridiculously immoral no matter which way you shift the interest rate.
Like if you and I both had a glass but yours was filled with water so I poured half of your water in my glass, while I didn't take your glass I did steal half the value from your glass. This is the effect of lower interest rates artificially.
Or if 10 people had glasses 1/10th full so I took all their water and put it in one cup. This would simulate the effect of artificially raising interest rates.
either way this manipulation of the value of the dollar shifts wealth. The answer is to let the market decide interest rates by ending the borrowing of money from the discount window so Banks must practice smart and safe banking.
Having a much clearer grasp on how the markets work and their relation to true economic activity and health has given me a crisp perspective when watching people talk about what's going on in the global and local economy. Now, more than ever do I believe a lot of these pro-fed talkers on CNBC are either brain dead or are in denial of economic realities.
On Kudlow and Company today I saw someone try to argue inflation as good for the economy cause it keeps prices from rising due to loss of purchasing power. My jaw hit the floor when I heard this, afterwards another commentator said America will be able to afford luxury items as long as the Fed keeps lower interesting rates and printing dollars to meet the demand... at this point my jaw dropped to the floor ripped off my skull.
So first let's explore the first statement and break it down:
"Inflation is good for the economy"
First off a weaker dollar hurts everyone. Here's How:
-Prices on food, gas another necessities go up while wages lose purchasing power faster than they rise.
- This decreases the labor supply for many small companies that can't afford to increase their wages to keep up with increase need for higher wages to keep the same standard of living, in the meanwhile their purchasing power is dropping with their productivity.
- imports increase in cost, increasing the cost of a lot of electronics, and the cost of materials used to make domestic goods in effect increasing domestic prices further.
- The increased purchasing power of other nations creates higher levels of ownership of the US economy by foreign nations, which will in the long term effect US sovereignty.
etc. etc. etc.
But the statement in question has another section that deserves scrutiny.
"the decreased purchasing power pushes luxury prices down"
To Be fair, this statement is partly correct but the implication of this reality isn't something to be optimistic about. The way this happens is that since a persons ability to afford necessities becomes so tight that many have to forgo luxury items, so things like IPODs and Guitars would have either drop prices to even out demand or increase the prices and charge a premium to the elite few who have the discretionary funds to buy these items.
So what does this mean?
- Gas and Good prices have gone up so they have to cut spending on leisure, this is not a good economic indicator for anyone unless your planning to sell Apple. Luckily, there is the Chinese market.
- With less demand for these kind of items you'll see less variety, which will result in less innovation from competitive pressure which slows the progress of society.
Now to go on to the second statement...
"The economy will be fine if the Federal Reserve continues to print money and lower interest rates"
No and No
Against Printing Cash:
When you have more of something, it becomes worth less thus the law of supply and demand. More money means it'll be worth less, and you have the economic effects above. This primarily effects the middle class and below who's economic world is primarily domestic. More wealthy people are suffering losses in their investments in the housing sector and many luxury items may hurt in the long term if this continues but at least these people usually have safety nets of foreign investments that are in some places less volatile than the US currently.
Against Lower Interest Rates:
I'm not against interest rates going down or up, but the federal reserve does this by manipulating the money supply which is essentially shifting the value of peoples assets in an indirect re-distribution of the nations wealth which is ridiculously immoral no matter which way you shift the interest rate.
Like if you and I both had a glass but yours was filled with water so I poured half of your water in my glass, while I didn't take your glass I did steal half the value from your glass. This is the effect of lower interest rates artificially.
Or if 10 people had glasses 1/10th full so I took all their water and put it in one cup. This would simulate the effect of artificially raising interest rates.
either way this manipulation of the value of the dollar shifts wealth. The answer is to let the market decide interest rates by ending the borrowing of money from the discount window so Banks must practice smart and safe banking.
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