October 28, 2012

Price Stability - Just a thought of mine.....

Mayer Amschel Rothschild
"Give me control of a nation's money supply, and I care not who makes the laws" - Mayer Amschel Rothschild

Price fluctuations are a normal symptom of a failing currency.  Ever notice how gas prices go up, then go down?  Then go back up again?  Think about how fast college tuition has been increasing lately and the student protests that are happening as a result?  At one point the price of a home was rising ever so quickly, just to see the price come crashing down and a lot of people's wealth wiped out.

The role of the Federal Reserve is to focus on price stability in order to keep our economy "going strong".  But so far, the Federal Reserve has not been doing a good job.  There hasn't been much price stability in the last 10 years.  I have a one-ounce silver dollar that would've purchase 3 gallons of gasoline about 7 years ago, today it will buy about 10 gallons of gasoline.  As Ron Paul would say, "that's wealth preservation".  Should we keep putting dollars in our bank account?  Or should we add something our government can't devalue - like Silver and Gold? (Although FDR did make it illegal for Americans to own gold at one point in our nation's history.)

As a global economy emerges, how long will the dollar remain as the currency of trade?  Given our country's deficit, pending fiscal cliffs, and debts owed to other nations?  And the global economy is starting to take action against the dollar:  Russia and China conduct trade with each other in a currency besides the dollar.  The IMF suggests another currency or "basket of currencies" is needed as the dollar becomes worthless.

Given all the bad news and warnings about our currency and debt levels - should we prepare for the worse?  It's as if you're driving an old car and all of the warning lights begin to flash and beep - yet instead of pulling off the road and fixing the problem...we keep driving.  Do we really believe our government is telling us the truth about our money supply and its true value?  Is that 401K plan really a retirement plan when 60% of the people that have one, can't retire and live comfortably with the money saved/invested?

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