The time worn explanation by the Fed, Hizzoner Greenspan, and other employees of government and various universities, is that it is consumer spending which makes the wheels of the economy go ’round. It matters not whether the buyers of all this glop have a dime in the bank or not, nor where the stuff comes from, according to those professors, economists, and other repeaters of the sludge dished out by DC and storehouses of higher learning. According to me, a nation which doesn’t produce what it consumes, is in big trouble, with a capital T, which rhymes with P and stands for pool. (Music Man).They’re wrong, and I am right.
A “Frontline” feature on PBS last night, showed explicitly, how Wal Mart, in collusion with China, deliberately destroyed Rubbermaid, plus a few other industries, and literally been responsible for tens of thousands of lost jobs in America. These unemployed are in deep trouble, and of course aren’t saving anything, but rather trying to survive.
Customarily, Americans saved to buy what they wanted. Their savings were loaned by banks to foster new industry, and consequent growth in the economy. Today, hardly anyone saves dollars. Pension funds, which are savings, are bankrupt, and the PFGC (Pension Fund Guarantee Corp.) is taking over, with the savings cut to half. The PFGC, is now $480 million in the red, and it will undoubtedly be made whole by printing press money, which reduces the value of the dollar to all of us. Savings, via pensions anyway, seems to be a poor method of saving, although it used to be excellent.
Today, thanks to this devalued dollar, plus astronomical taxes levied on every facet of our lives, it requires $10 per hour for a minimal existence for a single person. In China, where their renminbi is tied to the dollar, the hourly wage of a worker is 50 cents an hour, and they pour fourth merchandise by the millions of containers each year into America. America buys this Chinese made stuff, with what remains of their capital, since they have few savings. Our trade deficit approaches a trillion dollars per year. This means that close to a trillion dollars of America’s capital, is being transferred overseas each year. The reason is that we don’t make what we consume. Why? Because, the goal of the One-Worlders is about to be made whole. Our wages and taxes are so high, and currency so low, that in order to “equalize” everyone, we must be brought down, and others raised up, due to simple economics.
As I said before, the one main reason Americans don’t save, is because they have no dollars left after bills are paid, and if they aren’t paid, eventual bankruptcy occurs. The second reason Americans don’t save, is because it is pointless, although few realize it. Figure it for yourself. You save a hundred dollars, and earn 2% interest, if you are terribly lucky. The currency is devaluing by at least twice that amount, and besides that, you pay taxes on that 2%. What’s the point in saving? Might as well spend it. What’s there to spend it on? Chinese stuff in the main, no matter what your goal is. Clothes? Home improvements? New Furniture? Electronics? All made in China. There goes more American capital. New home? With the housing bubble, which is finally becoming more obvious to more people, that is a bad investment currently. Real estate in Washington DC is going up, at 3% a month, and in other cities similarly. Isn’t this a bubble, which must pop? New car? Drive it out of the showroom, and there goes $10,000. Lease? You’ll never own it, but that is currently the way most do it, since that is the cheapest.
The entire chain of events, portends eventual equalization of the entire world, and the powers that be, think this would be a wonderful outcome except for them. “The rich get richer, and the poor get children.” Just imagine a world of free trade, where the civilized wealthy, raise the life style of the poor uncivilized. Imagine a world where wages are equal, with perhaps a uniform currency, uniform wages, and uniform everything. We are well on the way to such a Utopia, and don’t let anyone say it isn’t so. We don’t save, because savings is stupid. We don’t save, so when banks loan, they create “money” out of thin air. When we buy an over-priced home, or refinance our current one at lower interest, our mortgages are sold instantly to Fanny Mae or Freddie Mac, a semi- arm of the government, which creates “money” out of thin air.
We go to war in Iraq, and pay for it with “money” created out of thin air. Our pensions are defaulting, and what we do get will undoubtedly be paid for with “money” created out of thin air. Our government’s balance sheet is hopelessly out of kilter, and the wise Congress always spends hundreds of billions more than it takes in through the hundreds of taxes. It pays its bills with “money” created out of thin air. The welfare schemes are paid for with “money” created out of thin air, and this fake “money” is used to buy goods made in China. The Chinese use the fake “money” to buy US government debt, denominated in fake valued dollars, which keeps their workers busy making stuff for us to buy. We are being bankrupted, in other words.
The entire chain of economics, has become so haywire and out of balance, than nothing really makes much sense. The basic cause is that all the “money” in the world if fiat, and backed by absolutely nothing. It is as if there were no sound measuring devices with which to make things. Suppose man had never invented the inch or meter? Suppose man had never invented the mile or kilometer? Suppose man had never invented the pound, ounce, ton, acre, foot, square foot, decibel, gallon, ampere, ohm, or volt? Can’t you see that with no means of measurement, man would be back in the stone age? If nothing could be measured, nothing could be built, fixed, designed, or even conceived. If the measurement values, weights, lengths, values, or capacities, changed daily, weekly, or monthly could we be civilized at all? Not hardly! Yet, every currency in the world changes constantly, and none are grounded in anything stable, unchanging, or of historic value. All are creations of governments, and stand for nothing, nor are redeemable in anything other than more of the same. Why save in them? Why save in something that can have its value removed at the whim of a government? Why save in a currency, which pays virtually nothing to the saver, is not needed by a bank to make a loan, and can be replicated by a trillion of them if government decided to do it? Why save in a currency, which goes down in value daily?
Saving in sound, backed by gold dollars, used to be the way America grew into a world power, which was unchallenged by any nation. We were kings. No one could touch us economically, and everyone bought from our inventive and manufacturing genius. America invented everything from the assembly line, to the airplane, telephone, electric motor, TV, Radio, and even revolving doors. Our kingship is gone, and our manufacturing genius has died. Know what Philco used to stand for? “The Philadelphia Corporation.” Remember Stetson hats, Disston Saws, Botany 500 Suits,, Philco radios and TV, plus a hundred other things? They were all made in Philadelphia. America made its own clothes, but no longer. America is a shadow of its past glory, and saving in its currency is nuts. The measurement of the world’s wealth, and especially dollars, is a changing, sinking, unreliable measurement. This has thrown us into the rubble heap, because if one’s money is sinking, how can one plan for one’s future? If the money is sinking in value, why should one save it for retirement? One shouldn’t.
Saving in gold and silver, makes the most sense of any savings device I can think of. It owes no one, and is dependent on no government. It still buys what it bought a hundred or a thousand years ago. They are true wealth, true money, and cannot be replicated by a million printing presses around the world. It is not seditious to save in gold or silver by denying the banks your dollars. They don’t need them any more to make loans! Why loan government your dollars to buy treasury notes or bonds, when they can be turned into refuse at the drop of a hat? The amount of dollars in savings accounts and government paper, is absolutely secure. The basic question is, How secure are dollars? Just remember nickel Cokes, popsicles, candy bars, and chewing gum, ten cent “Good Humors,” 20 cent gasoline, and 13 cent McDonald’s hamburgers. If you can remember those, you know saving in dollars is futile. If you can’t, because you are too young, believe those of us who can, and realize the folly of saving in dollars. Protect yourself.