The printing of money used to replenish the financial system may cause inflation — whether or not this series of radical measures is adopted. It will monetize public and private debt, and the key to not letting the surge in inflation become embedded permanently will be the taking of a credible stance to redraw our system with reduced liability going forward. While we are printing money, our government should quietly (if possible) buy gold with which it would promise to redeem dollars beginning at some point when our economic recovery is certain. No doubt this would be at a price that might shock the world today: perhaps $5,000, $10,000, or higher. Let the market bracket the possibilities; perhaps gold ETFs or digital gold accounts such as those at goldmoney.com would be our new private currency, and we could get out of the money-printing business once and for all.
[Read more...]Solving Debt and Moral Hazard With More Debt and Bailouts
June 4, 2010 By Leave a Comment
The Fed’s response has been adolescent in the sense that it has permitted major damage by allowing the credit boom to happen. Right under its nose, the broad money supply (M3) doubled in the last eight years, from $7 trillion to $14 trillion, but it is trying to fool the market into thinking this statistic is irrelevant because it was vigilant and never allowed inflation to surface.
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Policy Solutions, Part Four of Four
The elites who are above the grip of the gluttonous taxes on ordinary income and estates in the United States have a huge vested interest in continuance of the fiat money system operated at the hands of a central bank, for it enables profit to uniquely accrue through appreciation rather than through income.
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