Ask a D.C. insider what’s the best way to solve the debt crisis. Nine times out of ten, they’ll recommend taking on more debt. That’s how things operate in the Potomac swamp. Up is down, right is left, digging yourself into more debt is the best way to get out of it. But it wasn’t always like this. In fact, there used to be common sense when it came to the economy. So where did it all go wrong?
Just because you’re retired doesn’t mean you have to stop working. Especially now that you have all the time in the world to do what you really want. Entrepreneurs don’t only come out of Silicon Valley. They come from all walks of life, from all different ages. If you’re retired and want to stay active while you relax, then find out the steps you need to take in order to start, manage, and grow your next small business.
Austrian economics does more than tell you what happens when the government disturbs market forces. In the hands of knowledgeable investors and entrepreneurs, it can tell you exactly what to expect from the market. Market behavior depends on how people behave. And how people behave is central to the Austrian perspective.
The U.S. dollar has been the world's reserve currency for almost a century, and already there are signs it may be in decline. But that doesn't mean it's not still valuable. On the contrary... As Chris Mayer explains, there are many reasons the U.S. dollar will remain relevant on the world stage for years to come. Read on...
The government will do whatever it takes to make sure it has enough of your money to fund itself. On the surface you might think that means enduring a grueling audit. But the IRS and the government is more than willing to ignore your privacy in the cold relentless pursuit of the money they think they deserve. As they get bigger and bigger every year, the smaller and smaller your paycheck becomes as they leach off it.
World War II might have dragged the country out of the Great Depression, but it did so at a great price. Central planning took center stage, and politicans and bureaucrats suddenly knew what was best for America, the economy, and your life. On top of that, they replaced the free market with a new economic system… Creditism.
Argentina is suffering the ravages of government debasement of the currency -- i.e., inflation, the process by which government pays for its ever-increasing debts and bills by simply printing more paper currency. The expanded money supply results in a lower value of everyone’s money, which is reflected in the rising prices of the things that money buys.
Its acceptance is as widespread as its justification is important, for it provides the rationale for the Federal Reserve’s unprecedented monetary expansion since 2008. While critics may dispute the wealth effect’s magnitude, few have challenged its conceptual soundness. Such is the purpose of this article. The wealth effect is but a mantra without merit.
Baron Rothschild, the famous French financier, was once heard to say that he knew of only two men who really understood money -- an obscure clerk in the Bank of France and one of the directors of the Bank of England. “Unfortunately,” he added, “they disagree.”
The saga of All Saints could soon be coming to a community near you. Thanks partly to the scandal surrounding the IRS’ targeting of conservative groups, the agency has proposed a new set of rules for a huge number of social-welfare groups that claim tax exemption under Section 501(c)4 of the tax code.
Nihilo ex nihilo fit. Out of nothing, nothing comes. First put forward by ancient Greek philosopher Parmenides in the fifth century B.C., Thomas Aquinas and St. Augustine later used this axiom to prove that the universe needed a “first mover” to get things going. Even if the whole thing began with some kind of “Big Bang” moment, it still needed a banger to bang it. Who? God, of course.
It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Given how poorly states like California and Illinois have funded the pension funds for their own employees, one would think that this would stop dead in its tracks any plan to have the government assist in managing private sector funds too. The spate of recent activity, however, suggests otherwise.
The financial world is plodding along like a drunken sailor avoiding debt collectors by keeping no cash in his wallet. It’s not the kind of calm that’s going to last or end well. But the storm will have to wait until after the Olympics.What a game! We’ve never watched ice hockey closely before. But watching […]
“When they come for my gun, they will have to pry it out of my cold, dead hands,” is a common refrain I often hear from the Neo-Cons when there is a threat, credible or otherwise, that the U.S. government is going to take their firearms.And, when I hear this crazy talk, I agree with […]
Last year was quite the year for Bitcoin. We’ve seen exponential growth in Bitcoin’s exchange rate and extensive coverage in the media. Another phenomenon we have witnessed is the proliferation of alternative cryptocurrencies, five of which we’ve provided below.What all of these cryptocurrencies have in common is that they rely on a decentralized network to […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Amidst all the revelations about how the American people, many of whom are absolutely convinced they live in a free society, have their telephone calls, emails, website visits, and who knows what else under surveillance by their own government, let’s not forget the massive infringements on financial privacy that have gone on for decades.Consider, for […]
Image: ShutterstockBitInstant CEO Charlie Shrem, along with alleged co-conspirator Robert Faiella, was arrested by federal authorities last week for allegedly laundering more than $1 million worth of Bitcoins. This is a tiny amount compared to the largest drug-and-terrorism money laundering case ever. Yet when British bank HSBC was found guilty in 2012 of laundering billions, […]
The exercise had an awesome name, inspired by the movies: “Quantum Dawn 2.”On July 18, scads of U.S. banks, stock exchanges and government agencies took part in a digital fire drill — a practice run in the event all of Wall Street came under massive cyberattack.This isn’t the first time banks have come under an […]
The faces of the Detroit bankruptcy are the thousands of pensioners whose promised benefits are suddenly part of the restructure negotiation. When Motown filed for Chapter 9 last July, the city had $11.5 billion in unsecured liabilities. The vast majority of this was pension and health care benefits owed to retired city employees.The images of […]
So you’ve maneuvered the Obamacare website, plugged in your top-secret information and found out how much you are forced to pay to avoid a fine.And for some of you, it turns out you qualify for a government subsidy — making the premium sound like a bargain. But signing on that line to accept the government’s […]
The Largest Company in History:“The United States Corporation of Government (USCOG)”I follow global social and commercial networks, looking for entrepreneurial opportunities.Innovation surges when industry and government models change. Buggy whips. Landline phones. Railroads. The Soviet Union. Apartheid South Africa. All marked social and commercial innovation, both bad and good.We are witnessing a new form of […]
We’d like to give the banks in Australia some credit. They’ve finally gone and done it. They have caught up with 1960s technology. They’ve figured out how to use PIN numbers.How to only use PIN numbers, that is. They’re considering scrapping signatures on credit cards to cut down on fraud. Apparently, having to verify your […]
We put in a good-citizen call to the SEC the other day.“There’s a massive scheme to manipulate stock prices,” we told the friendly agent.“I have to tell you that your call is being monitored so that we can better serve the public,” he replied.“Oh, don’t worry about that. The NSA is tapping our call anyway.”“Are […]
Bitcoins are largely considered digital currency (or “crypto currency”) so you’d expect it to be treated like currency on a retail web site. But the Internal Revenue Service might not think so.
Politicians — elected officials — are street smart rather than book smart.If you care about influencing government policy it helps to know how they think.Forbes contributor Nathan Lewis argues that:“Too much is done today on the oral tradition. That is, literally, what it is. In this post-Gutenberg age, we have some better alternatives.“Thus, we need […]
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.