Scarcely more than a year since it was signed, the Smithsonian Agreement, the “greatest monetary agreement in the history of the world” (in the words of President Nixon) lay in shambles. And so the world vibrates, with increasing intensity, between fixed and fluctuating exchange rates, with each system providing only a different set of ills. We apparently live in a world of perpetual international monetary crises.
It may seem unusual that an economist would talk about culture. Usually, we talk about prices and production, quantities produced, employment, the structure of production, scarce resources, and entrepreneurship.
France’s new president can’t keep the European Union together.
In early May, France elected globalist darling Emmanuel Macron. His victory gave the EU a short-term boost. However, it did not change the fundamental problems with Europe’s artificial mega-state.
Doug Casey agrees:
We’ve been playing two games to mask insolvency: one is to pay the costs of rampant debt today by borrowing even more from future earnings, and the second is to create wealth out of thin air via asset bubbles.
The two games are connected: asset bubbles require leverage and credit. Prices for homes, stocks, bonds, bat guano futures, etc. can only be pushed to the stratosphere if buyers have access to credit and can borrow to buy more of the bubbling assets.
If credit dries up, asset bubbles pop: no expansion of debt, no asset bubble.
Socialists have attempted many times to put their ideology into action. Socialism has been applied in the Soviet Union, Cuba, China (before Deng), North Korea, and by many other less-famous regimes.
In each case, the result has been economic impoverishment and political authoritarianism.
But the die-hard socialists refuse to give up. “Don’t judge communism based on these results, “ we’re told. “Socialism has simply never really been tried.”
The Fed’s economists are always coming up with deranged new ideas and when they fail to reach their goals the first time, they double down. In the recent decade they picked the completely arbitrary inflation growth rate of 2% (as calculated by the misleading PCE) and stated that for the economy to be on a strong trajectory, 2% inflation was a necessity. And of course, they directed all their stimulus toward Wall Street and capital markets (including housing) which has seen substantial gains since the crisis, but neither are calculated in the PCE.
By 1989, it had become apparent to all — everyone except the CIA, of course — that the Soviet economy, and thus the Soviet state was in very deep trouble.
Last week in Arizona, Governor Ducey signed into law HB 2014, which removes state-level taxation of gold and silver coins, and moves the state further toward treating gold and silver as simply another form of legal tender. By removing taxation, the legislation facilitates the more widespread purchasing and selling of gold and silver both an a hedge against inflation and as a medium of exchange.
Last month, Brink Lindsey of the Cato Institute wrote an article arguing that libertarians should abandon any arguments regarding natural rights. As Lindsey sees it, the concept of natural rights is an “intellectual dead end” and that adherence to natural rights arguments should be abandoned.
