by Marc Gallagher
hat tip: Liberty Maven
February 27th, 2010
Editor’s Note: Sometimes it’s good to listen to the other side with an open mind because perhaps they know better. This article about Ron Paul was sent to us by our neo-conservative friend, Richard Deekbag, founder of the following website (we apologize for the length of the URL):
I mean just look at the guy. Ron Paul is all skinny, old, and wrinkly. His speeches are rambling diatribes supporting the long debunked conspiracy theory known as the U.S. Constitution. Everyone knows the Constitution expired more than 100 years ago and has no place in our Conservative-Progressive-Democratic-Socialist-Liberal-Republican (ConProDemSocLibRep) society.
After all it was Ru Paul’s isolationist ideas that lead America into its darkest period following the Revolutionary War after his idiotic idols, the Founding Fathers, defeated the British occupiers. Well, they were more like friendly visitors than occupiers. Visitors that honored the American colonies by taxing them heavily and treating them like peasants.
Everyone knows by now that Ron Paul’s efforts to abolish the massively successful Federal Reserve bank is kookier than cookies. The Fed has been our savior over and over and over and over and over again over the years. If it weren’t for the Fed the so-called “Great Depression” would have been much shorter. That’s a gigantic problem because we needed it to last much longer just to prove that government regulation is the lifeblood of the economy!
The phrase “war on terror” has been used to justify trillions of dollars in spending, hundreds of thousands of new government positions, and thousands of new government contracts. At the same time, the “war on terror” has produced very little in terms of new technology or enhanced security, has vastly increased the degree of national centralization, and has created many new permanent trees and branches in the gnarled world of federal and state institutions.
The Congressional Research Service reported in September 2009 the cost of the “War on Terror” since 9/11 at almost one trillion dollars. But they looked only at the cost of the three military operations launched in response to 9/11. They counted only the war in Afghanistan (9 years running), the war in Iraq (7 years running), and the overall effort to secure US military installations around the world — not our borders at home, but our forward deployed empire.
Over the past three or four years a strange phenomenon has developed in the global investment markets. With some exceptions, many asset classes, in particular domestic and foreign equities, commodities, and foreign currencies have tended to move in the same direction on a day to day basis. The mega-correlation has lasted so long that most now take it for granted. This leaves investors with relatively simple choices: when to get in to the market in general and when to park assets in cash and U.S. Treasuries.
However, few recall that this pattern is relatively new in the annals of financial history. Fewer still realize the reason for the current anomaly. From my perspective the most logical explanation is fear, which has become global, pervasive, and persistent. Traditionally, when investors fear inflation they buy stocks, commodities, gold, and foreign currencies, and sell dollars and U.S. treasuries. When they fear deflation they sell stocks, commodities, gold, and foreign currencies, and buy dollars and U.S. treasuries. The problem is that right now, no one knows which one to fear. Depending on the news the pendulum swings from one extreme to another on a daily basis.
The natural consequence of an inflationary boom should be a deflationary bust. We’ve had the boom, but so far we have avoided the lion’s share of the bust, or at least the deflationary part. If the government were pursuing a sounder monetary policy, one that allowed markets to function properly, the deflationary scenario would be playing out. While in the long-run this is the correct approach, such a scenario would be very bearish for stocks, commodities and many foreign currencies. If on the other hand, the government fights the recession by putting the inflation pedal to the metal (which is the course they have chosen) investors should look to real assets and certain foreign currencies to protect their purchasing power. But for the most part, that is not happening.
Last week, the House approved another increase in the national debt ceiling. This means the government can borrow $1.9 trillion more to stay afloat and avoid default. It has been little more than a year since the last debt limit increase, and graphs showing the debt limit over time show a steep, almost vertical trend. It is not likely to be very long before this new ceiling is met and the government is back on the brink between default and borrowing us further into oblivion. Congressional leaders and the administration acknowledge that the debt limit will need to be increased again next year. They are crossing their fingers that the forecasts are correct and they will not need another increase sooner, even before the 2010 midterm elections.
Continually increasing the debt is one of the logical outcomes of Keynesianism, since more government spending is always their answer. It is claimed that government must not stop spending when the economy is so fragile. Government must act. Yet, when times are good, government also increases in size and scope, because we can afford it, it is claimed. There is never a good time to rein in government spending according to Keynesian economists and the proponents of big government.
Shortly after the start of Campaign for Liberty, Congressman Paul gave a special order speech on the House floor in July 2008 entitled “Something Big is Going On,” where he laid out how our country had gone off a sound economic path, and he again predicted what would turn out to be the greatest economic crisis since the Great Depression.
In this follow-up to that momentous speech, entitled, “Is That All There is to a Recession?”, Dr. Paul argues that, contrary to establishment thinking, we are by no means out of the woods. Urging a return to common sense and sound money, Congressman Paul looks at what lies ahead for our country if we continue to spend beyond our means and rely on a fraudulent money system. Prosperity is waiting for our nation, but its return hinges on our ability to change our way of thinking in order to pursue liberty.
(Thanks to Minnesota Chris for the full playlist!)
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