When’s the best time to invest in something? When everyone else is trying to get their money out of it. It might go against conventional thinking, but following the crowd usually makes you miss the real opportunities. At one monetary metal conference recently, the smartest guys in the industry sat down to discuss where these real hidden gems lay.
In a 2009 article, the Huffington Post went into considerable detail about the number of people with PhD degrees in economics employed by the Board of Governors of the Federal Reserve System. This is the government’s branch of the Federal Reserve. It is not one of the 12 regional Federal Reserve banks, all of which […]
Greetings from Maine! Right now, I’m writing from within foghorn distance of the sea. And this gives me an opportunity to tell you a down east tale that should serve as a warning to every investor: Maine’s Great Gold Swindle.I’m not talking about central banks, or manipulation of today’s markets. I’m talking about something from […]
The U.S. dollar is the dominant global reserve currency. All markets, including stocks, bonds, commodities, and foreign exchange are affected by the value of the dollar.The value of the dollar, in effect, its “price” is determined by interest rates. When the Federal Reserve manipulates interest rates, it is manipulating, and therefore distorting, every market in […]
Let’s head back in time…In 2004, a mere decade ago, the US national debt rang the register at $7.4 trillion. That represents “debt per citizen” of over $25,000. You, me, your neighbor, your 4-yr old grandson, you name it and they’re portion of the U.S. debt is $25k.But flash forward to today and you’ll see […]
Alexander Hamilton was America’s first Secretary of Treasury under President George Washington. When he first entered office in 1789, America was an agricultural nation of just 4 million still broke from its financially costly victory over the British Empire in the Revolutionary War.The states had accumulated relatively massive debts to finance that war, which mostly […]
Remember that correction we’ve been quietly talking about over the past couple of months?Well, it might be right around the corner. Stocks waited until the last day of the month to nose-dive. The S&P 500 posted its first 2% down day since April — and the Dow wasn’t far behind. Early this morning, futures continue […]
A great technology solves a problem that we didn’t know we had. It makes us aware of deprivations we didn’t know existed until we discover the new thing. Once discovered, we can’t go back.People in the 1950s, for example, never missed the smart phone. They were pleased to have a phone at all. But today, […]
In early July 1944, delegates from 44 countries gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire. A three-week summit took place, at which a new system was agreed to regulate the international monetary and financial order after the Second World War.The U.S. was already the world’s commercial powerhouse, having eclipsed the British […]
When you type a website address into a browser, you might have noticed that the letters “http” appear at the front. “HTTP” stands for Hypertext Transfer Protocol. In typing a Web address, you are actually sending an HTTP command to transmit that website to you. Hypertext Transfer Protocol is the means by which information is […]
In 2012, money mandarins running the European Union chose stagnation over restructuring. Here’s a consequence of that choice: expectations for a self-sustaining economic recovery keep getting crushed.Two years ago, European Central Bank (ECB) chief Mario Draghi promised to do “whatever it takes” to hold the eurozone together. He bluffed nervous investors into believing in a […]
Here’s a fun fact: Although we all hate the U.S. dollar, as it continues to hemorrhage wealth, its foothold as the world’s reserve currency isn’t going to disappear overnight.A Russian gas deal with China won’t change that — as we’ll highlight below.But before we get to the nitty-gritty, let’s dive into a story that’s right […]
Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]
“As the nation’s central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding […]
The Keynesian disaster recovery plan has been to lower rates, force people to take more risk in search of yield, and entice others to borrow and spend and, magically, more jobs will be created. If people won’t buy stocks, central banks will.Back in 2011, Ben Bernanke, when asked if QE2 was driving up stock prices, […]
According to the Bureau of Labor Statistics, consumer prices are rising at a 2.1% annual rate. This suggests to us that the current stock market boom will die with a bang, rather than a whimper.Fed economists say they don’t think inflation rates are rising. They think the most recent reading is a fluke. But why […]
Real progress happens through real people, ideas, and innovations. Not by legislation argued and debated in Congress. Right now, one of the most influential technologies is changing the way people do business. And reinventing the future in the process.
As the world gets more digital, people forget about the benefits of transacting in cash. And government officials know that.
The experts will tell you the recession is over, but they’re only torturing the data to hide the truth. The economy never recovered from the downturn it experienced. But the downturn happened in 2000, not 2008. The country’s been in the middle of a 14 year recession and hardly anyone knows the truth.
Every time Bitcoin crashes, it winds up at a price greater than it’s previous high. Yet the experts still call it a currency fad that will fade away. But a little over a year since it really took up, the digital currency is still going strong, and is once again seeing its price rise. But is there another reason why people are buying Bitcoins.
All paper currency has a shelf life. It could be 5 years or 500 years, but at some point, the value of any paper currency eventually reaches zero. That's why, for centuries, people have turned to one shiny metal to safeguard their personal store of wealth. And, as Jim Rickards explains, you still have that option. Read on...
Edward Snowden’s one year visa in Russia expires at the end of next month. With only a few weeks left before he finds himself without a safe country to live in, he sat down to give an exclusive interview. Here are the most important things he wants you to remember from his recent sacrifice.
It’s a destructive cycle that comes around everytime your politicians ask you to take to the polls. The government’s meddling creates unexpected problems that eventually overshadow the planners’ original intentions. But that only leads the way for even more interventions.
Politicians love inflation. It’s a way to pay for the government’s debts without upsetting the public by raising taxes, or their special interests by cutting government. So they’ll flood the economy with easy money and eat away at your savings. But that’s only part of the story...
Obama recently claimed this was the “Decade of the Brain”. But it not the first time the government made that promise. The last time they did it, they wasted millions of your tax dollars. Now they’re back for round two. But this time, their failure could mean more than squandered money. It could mean making Alzheimer’s even worse for those who suffer from it.
“So we have, indeed, had a disappointingly slow recovery, and our consistent expectations for a pickup in growth have been dashed over a number of years… And the labor market is behaving in some perplexing ways and showing patterns that are novel.”–Federal Reserve Chairperson Janet Yellen in a speech to the Economic Club of New […]
Politicians who love Big Government love talking about the minimum wage. It’s one of the few policy where they don’t have to ask their constituents to pony up the extra tax dollars to pay the higher costs. Instead, they pass the buck to business owners. They can’t print money, nor can they can force you to pay more. So they cut back hours and fire the very workers politicians tried to help. But that’s how things go when you mess with the economy.
One of the key pillars to returning money to the people, as Ron Paul mentions in a new edition of The Case for Gold which will be released this week for free to Laissez Faire members, is to undo government’s monopoly on money creation. None of us can imagine what that would be like because the government has held such a monopoly in modern times.
But money is no different than anything else. It benefits from the spirit of enterprise. Competition is good. Competition leads to product innovation. It ensures product quality. In contrast, as with any monopoly provider, the government’s money product has denigrated over time. Since 1971 the U.S. dollar has no backing. The coinage has gone from gold to silver to an alloy of copper and zinc.
The quarter, for instance, was minted in 100% silver on and before 1965. Now the quarter is 91.67 percent copper and 8.33 percent nickel. Pennies are 97.5% zinc and 2.5% copper. Could plastic coins be in our future?
As evidence that the market is seeking a sounder currency, the digital world has developed a currency that is getting attention and use, Bitcoin. Bitcoins have no central issuer but are administered through a decentralized peer-to-peer network that began in 2009. There are somewhere around 10 million bitcoin in existence and more will be released until a total of 21 million have been created by the year 2140.
Bitcoins is the currency of the online black market. For instance, The Silk Road (Amazon of the illegal drug trade) only accepts payments in Bitcoin. The European Central Bank observes in a new report that “It operates at a global level and can be used as a currency for all kinds of transactions (for both virtual and real goods and services), thereby competing with official currencies like the euro or US dollar.”
It is not the best or final answer to the monetary problem but it does serve as evidence that market desires something better than what governments are giving us. And yet even adherents to laissez faire recoil at the idea of private money providers.
In his book Good Money, as published by the Independent Institute, George Selgin points out that Herbert Spencer was one of the few classical liberals to question the state’s control of money.
Spencer said that Gresham’s Law (bad money drives out good) only applies when government’s force people to use debased or inferior coins. Spencer believed, “the opposite tendency–a tendency for good money to drive out bad–would prevail if coinage were left to private enterprise,” writes Selgin.
But what would it be like to have private coinage? That’s what Selgin’s very engaging book is all about. Indeed, the University of Georgia economics professor has written the definitive story of the private coinage market of 1775 to 1821 England. The historical episode had been known by specialists but this is the first general, in-depth treatment of a very exciting real-life example of private coinage.
Gresham’s law did drive all good silver coins out of the country. While the market was 13 pounds of silver to a pound of gold, Britain’s great recoinage set the ratio higher. Master of the mint Isaac Newton attempted to stem the tide, lowering the ratio to 15 ¼ to 1, but that was still too high. “So silver kept right on flowing east…,” Selgin writes, to, quoting Thomas Southcliffe Ashton, “grace the bodies of women in India, to provide votive offerings in the temples of China, or simply to swell hoards in these far-off places.”
While the royal mint ran out of silver, people still needed small change. The government couldn’t supply the demand and private business stepped in, making for a compelling “story of the initiative of local authorities, companies and individuals in the face of state ineptitude,” according to Roger Scott Whiting, whom Slegin quotes.
This is not a story of the government granting a protected minting contract to a single crony. From 1787 to 1797 there were 20 coin manufacturers serving 200 known clients. Nearly all the mints were located in the bustling industrial city of Birmingham, described by Edmund Burke as the “great toyshop of Europe.”
These entrepreneurs didn’t even need to devote most of their businesses to creating good money. A handful were button makers, a couple were metal rollers, a few were die sinkers, there was a copper miner and a toy maker. Selgin explains that Birmingham manufacturers had the reputations of being “Jacks of all trades.”
The commercial coining story played out in three acts. Initially, leading industrialists dominated the market. Then new competition appeared. Finally a craze in token collecting took off. This led manufacturers to make even more attractive tokens. And the upshot was that the private coinage became of such high quality it was nearly impossible to counterfeit.
“In short,” writes Selgin, “counterfeiters played less havoc with the commercial coin regime than they played with the regal coinage.”
Far from a disaster, the commercial coin market was like any other. Inferior coins weren’t accepted and their manufacturers were forced out the business. And while copper coins became lighter over time, this compensated for rising copper prices. Commercial coinage did not fall prey to Gresham’s law like state monopoly coins.
Good history is as important as good money. It provides a firm foundation for understanding the world. George Selgin has done us a tremendous service enlightening us with a little-known story that has so many important lessons. Lessons that provide the answers to solve so many of today’s monetary problems.
Like public schools, the post office, and so many other government monopolies, it’s time to consider alternatives to the state’s money monopoly. Good Money is a good read to relieve the anxiety of wondering what a state-free monetary system would be like.
Laissez Faire has the last remaining copies of the hardback. It includes an eye-popping gallery of some of the most beautiful coins I’ve seen — entirely the product of private enterprise. This is probably the last chance to buy this classic in this form.