Mises Wire

On Friday, Twitter CEO Jack Dorsey tweeted a link to Rothbard's essay "Anatomy of the State."

In 1971, David Rockefeller favored a “new international monetary system with greater flexibility” and “less reliance on gold.” Seeing an opportunity to expand his own power, Richard Nixon enthusiastically embraced the scheme. 

“We crossed the Rubicon in 2008. We crossed a different Rubicon in 2020. And we're never going back. And so, recessions are not allowed." The money mandarins will do everything they can to prop up asset values. Forever.

In 1971, Nixon used a fiscal crisis to justify severing the dollar's last connection to gold. It was the same old story: "we must vastly expand government power because of a 'crisis.'" The government never gives up these new powers. 

Modern economies produce a seemingly endless supply of goods. But without the "subsistence fund," built on saving and investment, the mountain of goods we take for granted would be impossible. 

Rising employment is certainly good news for the economy and living standards, but there is much more to this story that is concerning for the economy.

Nixon's decision to end the gold redeemability of the greenback was probably the most comprehensive act of monetary expropriation of modern times.

States with long-lasting lockdowns, covid restrictions, and even mounting vaccine “incentives” have still been hit harder than more laissez-faire states in many cases, even after the virus has had eighteen months to spread well beyond the borders of the initial hot spots.

China is a lesson for those in the West that see China’s rising interventionism as a good idea. Political interventionism means bad capital allocation, worse job creation, and the worst type of inequality, the one that is politically driven.

In the era of global lockdowns, we've seen increasing supplies of money, decreasing supplies of goods, and governments financing their citizens to forgo work and stay home. The resulting price inflation should surprise no one.