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.
Economists aren’t physicists. But they sure do like to act like they are sometimes. When scientists reach a consensus about something, it usually means they’re breaking new ground on a theory based on hard facts and proven evidence. When economists agree on something, it shows the limitations of a field that tries to model how humans are supposed to behave. And that’s where the danger lies. Especially when it comes to things like U.S. Treasurys.
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.
I’ve just left the Liberty Forum in New Hampshire, a three-day gathering of hundreds of people who are trying to find ways of living freer lives in times of despotic control. Among many things, this might be the world center for exhibiting monies of the future.
I leave as the proud owner of three types of nonpaper, nongovernmental monies. They operate in competition with the government’s dollar. Yes, these include Bitcoin, the mind-blowing digital currency that has techno-geeks, edgy global traders, and even the World Bank buzzing about its potential to finally separate money from the state.
Why are people working on alternative forms of money? It’s all about escaping a 100-year-old trend. Back in the day, the dollar was a name for gold, not just a paper ticket manufactured by a government-chartered central bank.
Depression, war, and deliberate debasement have left us with a dollar that is a mere shadow of its former self. It keeps losing value, of course, rather than gaining value as it would in a free market.
Just as critically, the dollar today serves as the enabler of all regulatory control over our economic lives. Using the dollar means dragging a gigantic and burdensome machinery along with you. It means tens of thousands of regulatory controls, government spying, confiscatory taxation, and endless burdens that are bad for businesses and individuals.
Ideally, the dollar would be totally reformed, made good as gold, and restored to its former integrity. How likely is that to happen? The whole idea depends on the wisdom, good will, and public beneficence of the political and elite class of banking moguls.
Is there any wonder that there is a clamor for the private sector to come up with something new? It’s been going on for several decades now, this discovery process we might call “monetary entrepreneurship.”
People in ancient days had to discover the best commodities to get progress beyond mere barter. What would best serve as money: something to acquire not to consume, but to trade for other things to consume? Is it salt? Shells? Silver and gold? Many options are available, and only the best money can win the market competition over time.
Something like this is taking place again today. Government money is risky, carries too much cost, and has an uncertain future to it. People put up with it for convenience and because nothing better seems to present itself.
There is a real opportunity here for monetary entrepreneurs to get to work coming up with something new and letting the markets try it out. Over the last 10 years, governments have shot down a number of experiments in private money that used digital networks to monetize gold and silver. It’s been a brutal job to retain the government’s money monopoly.
Entrepreneurs have learned. New monetary instruments have to protect themselves against government attempts to shoot them down in obvious ways. There are three general ways to do this: back to the basics with precious metals, onward to the future with purely digital money, and some combination of both of these.
My first acquisition is an innovative way to save and spend smaller units of silver. The tiny bars are pretty and clearly mark their weight. Today, each one is worth about $1. In the future they could be worth much more. For daily spending needs for cabs, food, and water, these would work quite well.
It’s true that they are pretty small and might get lost in your pocket. You have to have some pretty nimble fingers to handle them in a hurry. And even young eyes might need reading glasses to discern the weight.
A solution to this problem comes from Shire Silver and entrepreneur Ron Helwig. It’s a simple, but ingenious idea, one he is very anxious to share with others. He takes various strands of gold and silver of many weights and laminates them in a credit-card size monetary instrument.
The result is convenient and easy to carry and spend. He is not the only maker of these cards. Many others are picking up the idea — a fact that makes Mr. Helwig very pleased (he is the last one to attempt to gain a government monopoly through a copyright, patent, or trademark).
Shire Silver cards are commonly accepted all over New Hampshire. But they are in use all over the world. Helwig gets orders from New Zealand, Brazil, and even Japan. Some orders are valued as low as $6, but he receives orders valued at $5,000 too. At the Liberty Forum, he couldn’t keep up with the demand, so he brought his machine to the booth. He even let me make a 1-gram card myself!
Jeffrey Tucker making a Shire Silver card with help from the company’s founder, Ron Helwig.
While I sat at the Shire Silver booth, people were also purchasing cards with Bitcoins. This is the first time I had seen Bitcoins in operation as real money. In fact, most things were available in Bitcoins. Here we have a currency created only in 2009, and already it is making possible global transactions every one or two seconds with someone somewhere in the world.
I downloaded a smartphone application called Blockchain that gave me a wallet of Bitcoins. I’ve been curious about this whole phenomenon, but there is nothing like owning the currency yourself to underscore the point.
I was able to sit and talk with some of the major players in this emergent industry and gain a clearer understanding of what it is and what it is about. As a result, I’m pretty confident that this is the real the thing and has a spectacular future.
I went over to the Bitcoin ATM machine and loaded up while I could. Of course, you can also buy them online (there are many options, but try bitstamp.net or buy them locally from localbitcoins.com), but in person, you can get digits for cash, which is especially nice. The trading relationships between Bitcoin and government currency are always in operation, so there is never a doubt about the value of your portfolio.
A year ago, there were more skeptics than there are today. And this is because the market is expanding. There are websites that accept only Bitcoins, such as Silk Road. I also met many people who are paid their normal salaries almost exclusively in Bitcoins. There are companies planning to go public in Bitcoins, which thereby means completely bypassing the SEC and the whole regulatory apparatus.
As you can see, we are really talking about the emergence of a countereconomy, a free-market universe that runs parallel to the dollar-based economy.
Skeptics say: “But I can’t use any of these monetary instruments to pay rent, buy a car, or get groceries.” Well, that’s because these ideas are all ventures that take time to develop. Money is like any other good: It begins with speculation and goes through a period of gradual adoption until it is universal.
Phones were not universally useful until many people had them. It was the same with email. When I first saw an email address, I thought: That’s the silliest thing ever, because who will even write this guy? Eventually, the network grew and reached the critical mass and the government’s system of mail delivery took a massive hit for the first time ever.
Why wait for monetary reform to come from the top? If the market wants a better-quality money, one that frees markets and makes economic exchange more beneficial, markets will create it out of existing resources and realities. This can even happen when government objects. Government can only defy human desires for so long before people decide that the costs of compliance outweigh the benefits.
The government’s money monopoly is crucial to its control over society. What happens when that comes to an end? Imagine the future.
P.S. If you’re interested in learning more about alternative currencies in history, be sure to check out Good Money by George Selgin. Selgin’s book is a lively tale about how monetary entrepreneurs took it upon themselves to solve the problems caused by the Royal Mint, which failed to meet the needs of a growing economy. Click here to learn more about the book and instantly access an exclusive 20% discount, normally reserved for new members of the Laissez Faire Club. This discount is just one of the benefits Club members enjoy. Members also have instant access to a growing library of e-books covering a wide variety of engaging topics, with a new book being added every other week. New members also receive Laissez Faire Books’ exclusive Economics in One Library, a complete (yet concise) collection of economic ideas that help define the economic reality we find ourselves in… and offer insights into how to protect what you have. To find out more about the Club and whether it’s right for you, click here. ]