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The End of the World - What, Me Worry?

The end of the world

The world will not end on December 21, 2012 or anytime soon. I think the Mayan calendar indicates the end of a very long-term cycle that has a gradual impact upon the world, just as other long-term cycles make significant but gradual changes. Increases and decreases in solar output (a long-term cycle) may create ice ages or droughts that slowly and gradually change the world.

I'm also not worried about the other "end of the world" that we continuously hear about - The Fiscal Cliff. That topic has been worked to death. But the important information is simple:

  • Politicians brought the United States into our current fiscal mess, with the help of The Federal Reserve and bankers.

  • We have entrusted politicians to solve the problem. Really? The same political elite who created the problems will solve them? And what is your current belief structure regarding the Easter Bunny and the Tooth Fairy?

  • We have way too much debt and far too much government spending. The supposed plan is to increase debt forever and without end (sounds like a prayer) and to marginally decrease the rate of increase in spending - and call it a spending cut. If I call a donkey a mosquito, is it really a mosquito, or just a renamed donkey? If I have a debt and spending problem and my plan is to continue spending excessively, should I expect my problem to persist or disappear? If I have a serious drinking problem, should I expect to cure it with vodka?

  • So, the world is not going to end on December 21 or January 1. More of the same will beget more of the same.

But what does worry me are the actions that we, the supposedly most intelligent species on the planet, have made over the past several hundred years. Actions have consequences. Consider these actions:

Creation of Fractional Reserve Banking: This allows bankers to create money "from thin air" and loan it to businesses, individuals, and governments and collect the interest on that created money. The result is that debt increases, additional interest must be paid, and the financial services portion of the economy increases at the expense of the manufacturing economy. The paper shufflers won, and the manufacturers of useful and valuable products lost.

Creation of Central Banks: Central banks, not the free market, currently control the money supply and interest rates, enable politicians to spend excessively and government to expand more rapidly than the productive economy. Consequently, the economy becomes overburdened with debt, interest payments, and government regulations. What could go wrong?

Corporate control over the government and regulatory process: If a business owns many politicians, it can purchase the legislation and regulation it desires. The US tax code is an estimated 70,000 pages of legislation and regulations, as purchased by wealthy and powerful special interests. Intelligent action or payoff action?

Demonetization of gold and the use of unbacked paper money: When paper money is not backed by gold (silver, oil, etc.), then the total quantity of money in circulation can increase almost without limit. Hence, the purchasing value of the money decreases and prices rise. Consumer price inflation is guaranteed.

Politicians, bureaucrats, and bankers control markets and make decisions that should be left to free markets. Another writer likened that process to handing a Stradivarius to a gorilla. Freer markets do a better job of managing the economy, money supply, interest rates, prices, and production. How do we know? Ask the survivors of the hyperinflations in the last century.

 


Actions have consequences. What are the consequences to the above actions? Read We Have Been Warned!

 

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