Read What I See

 

     Simple math and economics can tell us that our government elected and appointed officials have no clue or at least so appear on how to get us out of the economic mess.  We can look back at the historical price of gold for the last 150 years.  We can see that it was virtually unchanged until the depression of 1929.  For eighty years it was worth around 20 U.S. dollars an ounce.  This simply means that we had a respective amount of gold to back up every piece of fiat (or paper bill) that we had printed and therefore they had a consistent value.  During the 70’s paper money printed to finance the Vietnam virtually killed the golden value of our fiat and then President Nixon stopped the drainage of our gold reserves.

Follow up:

  As a result, the price of gold against the dollar was deeply affected.  Silver has not escaped the same fate.  Prior to 1965, every silver coin was worth its face value, unlike today where a 25 cent coin is only worth two cents in metal.  Many today are not old enough to know that when the silver quarter was replaced it was called the sandwich for by viewing the edge one could see two thin layers of silver and thick filler in the middle.

     Take the time and visit this link to see what the price of gold is today.  To think that the gold is worth that much is as much as an illusion as to believe that printing more money will save our economy.  The proper way to see it is not that the gold has gone up in value but instead we have printed so much worthless paper that now we need more of it to buy the same amount of gold.  If you would like to do the math go ahead but if not trust that the value of today’s dollar against an ounce of gold in 1929 has depreciated to 2.5 cents.  As we continue to print trillions of paper currency then it will obviously take more of it to buy an ounce of gold or silver.  It is only a matter of time before we will need a bag full of dollars to buy a loaf of bread.  It happened in Argentina just a few years ago.

     In the past sixty years, credit has accelerated the world’s economic growth for it allowed us to spend before we earn.  It gave us the ability to enjoy things today without having to wait until the day that we could save to purchase them.  The down side to it was that in order to continue growth the federal government and banks allowed and encouraged us to borrow beyond what we could pay.  And here we are; maxed out.  That is the simple reason why our economy expanded so quickly and now has come to a halt.  Not only we have lost the ability to buy on credit because we are maxed but we cannot reduce our debt because all that we can afford to pay is the interest.  Interest is not manufactured thus for it does not stimulate the economy.  So if we were to stop purchasing with credit we would indefinitely owe what we owe today and there would be a negative economic growth.  This of course as it has, would cause a recession and eventually bring about a depression.

     So taken into consideration that we can no longer borrow then there is no bailout money that the government can issue to change what is happening to our economy.  They just approved billions to help rescue the automakers.  How can that help them if people are not buying cars because no longer have the cash or the credit to purchase one?  Nations in the world are suffering for the same reason they can barely pay interest on the debt.  Recently Ecuador refused to pay interest on their debt.  This perhaps could be seen as a signal to the only solution. We have become prisoners of debt.

     China is one of the few nations that instead of owing are holding other nations debts, especially ours.  But China cannot afford a U.S. economic collapse because it would cause a worldwide economic depression and would also damage its economy which heavily consists of export.

     Universal debt forgiveness is the answer.  This meaning, no one will pay anyone what is owed.  This would free nations from all existing debt.  Basically the U.S. debt would be eradicated and issue a new currency that would exchange at whatever value to replace the already defunct dollar.  Universal debt forgiveness would also apply to the citizens.  This would mean the removal of all liens on property and declared debt free.  This would include homes, automobiles, boats, trailer, land, and cancellation of all credit cards and its debt.  By no means, this would solve all of our problems but it would be a good place to start.  The government by being debt free could help troubled business to resume operations.  Our citizens that find themselves with cash on hand from not having to pay mortgages, etc… would put our economy on high gear again.  Such would automatically reduce the unemployment and get us out of an upcoming catastrophe.

     None of this would come without a price. For starter our 401ks would be lost or severely diminished but they would be compensated by the elimination of debt.  Not everyone would be a winner but the vast majority would.  There comes a time in which we have to face no win situations and at that point, the only answer is to minimize our losses.  The young people in our country would be the biggest beneficiaries for they would no longer inherit a debt.  A Universal debt cancellation would not eliminate all of our problems but if it does not happen, we will go into a depression.  If we go in a depression because of our debt, it would take many years to get out of it.  We still would be bounded by debt and unable to spend in order to stimulate the economy.  Unforeseeable to many; misery, riots, death, famine and poverty will settle on our citizens and the world.

     There are some that as usual would accuse the U.S. of selfishness and arrogance.  We could also look at it from the point of view that if our nation would not have spread its blood and wealth throughout the world and really act selfishly we would not be in the predicament that we are today.  Would it be a gift? Of course not, our citizens have already pre-paid in taxes any forgiven debt.

     Unfortunately leadership and integrity is a rare commodity in our elected officials.  All we can do is hope they realize that at this moment in our history if they are ineffective they could destroy our country and cause unprecedented suffering.  As a country, there is no better time to default on our national debt than at a time in which we are strong militarily.  Right now we are so strong militarily that no nation in the world is going to challenge us and try to come collecting by force.  If we were to piddle around and wait ten or twenty years until we have weakened we could actually face and invasion from our creditors.  We cannot let the wealthy in the world selfishly push us into a depression.  Can our leaders who's elections are financed by them be able to default on the debt and regain our country?  Could the citizens force our government to take such action by commencing a debt default revolt?  Does anyone think that if no one paid their mortgage everyone could be evicted?  Or that every financed car or boat could be repossessed?

     If you agree with this concept, spread it by forwarding the link.