Today, Venezuela’s Hugo Chavez announced it has devalued the bolivar against the dollar by 50%, despite recent highs of $84 in the oil market per Bloomberg. Chavez’s United Socialist Party is struggling to maintain its reckless spending. In 2009, Venezuela reported an inflation rate of 27%. Despite the historical angst between America and Venezuela, the country remains a key exporter of oil to the United States. (Photo courtesy Kevin Hotaling)
Americans should realize that our country is not immune to a massive currency devaluation. In fact, the last one took place during the middle of the Great Depression when FDR stole the people’s gold and devalued the dollar by almost 70% overnight. It is obvious that the central bank and Congress prefer reckless spending if it can be managed with a slow but accelerating depletion in purchasing power from 1980-2009 as I demonstrated in “The Real Interest Rate” so the populace does not notice the extent of the theft.
Members of Congress say they don’t have time to read the bills they pass, but my sample letter to Congress, below, shows otherwise. Please use what I wrote as guide to send your own letter to Congress asking them to pass DownsizeDC.org’s Read the Bills Act: https://secure.downsizedc.org/etp/campaigns/27
Here it is . . .
Members of Congress often say they don’t have time to read the bills you pass, but consider these facts . . .
* Over the past nine years an average of 215 bills became law per year, for a total of about 2,160 pages annually http://www.gpoaccess.gov/plaws/browse.html
* A random survey of Congressional Record Daily Digests suggests that the average legislative day is long — usually over nine hours
* The House was in session, on average, 133 days per year (the Senate’s average is more difficult to find, but it’s probably similar) http://thomas.loc.gov/home/ds/
* This means an average of 16 to 17 bill pages became law per session day.
The truth is that you could read three or four times that number of pages and still have plenty of time for debate, amendments, votes, and other business. Yet, few members of Congress ever read any bill that becomes law. This is just plain wrong. Consider . . . Read More »
by John Browne, Senior Market Strategist, Euro Pacific Capital
As fears of a dollar meltdown have loomed ever larger in recent years, major investors, including central banks, have moved significant portions of their cash reserves into the euro, the currency of the European Union (EU). And while it is true that the euro offers some shelter from the American economic catastrophe, the currency does come with baggage that investors should not ignore.
Introduced as an accounting medium in 1990, the euro became an actual currency in 1992. It is currently issued by 16 of the 27 EU member countries, representing some 329 million people. With almost $1 trillion in circulation, it is the world’s largest physical currency.
The birth of the euro was a stunning example of putting the cart before the horse. When it was first issued as a physical currency in 1999, the major states that participated were not yet united. Many believe that this premature introduction was done to hasten the political union. In hindsight, the strategy was successful. The single currency removed a key psychological barrier towards unification.
As soon as it made its debut, the euro quickly became the second largest currency held in the official foreign reserves of central banks. Major corporations and investors followed suit. By September 2007, former Fed chairman Alan Greenspan said it would be “absolutely conceivable that the euro will replace the dollar as the dominant foreign reserve currency, or will be traded as an equally important reserve currency.”
However, the structural problems that were so heavily debated at the birth of the EU remain unresolved. These uncertainties may undermine the euro as a viable dollar-alternative. Should recent economic strains continue unchecked, investors, institutions, and central banks may move heavily into gold as an ultimate “safe haven.”
Congressional leaders, and many in the media, would like you to believe that the cancerous health care bill is a done deal. Not so. In fact, the next three weeks will be critical as the House and Senate try to resolve the differences between their two bills. These differences are one reason we could still win. Here’s another . . .
By pushing so hard to pass this hated legislation the Democratic Congressional leadership is showing their disdain, not only for the American people, but also for Democratic members of Congress who may lose their jobs because of it. Our best bet is to show members of Congress that they need to be more loyal to voters and taxpayers than to their partisan leadership.
This is important now, for the Democrats, and in the future for the Republicans, who were just as guilty of blindly following their leaders when they controlled Congress. It’s important to tell members from both parties that they need to start representing us, NOT their party’s so-called leaders.
Even if you’ve sent several letters in the past on this issue, it’s important to keep doing it. Please do so now.
You can borrow from or copy the letter I sent to my Democratic House Rep., and my two Republican Senators . . . Read More »
There are several instances of people quoting Ron Paul over the years to show how right he as been on economic matters. Former Virginia Congressional candidate Vern McKinley, while doing research for a book he may be writing, has uncovered another hidden gem.
It is hidden because it cannot be found in many (if any) online sources since most of the publicly available online archives do not go back as far as 1982. McKinley writes:
The way I found it was I dug up a 600 page report on Continental Illinois which failed in 1984 and they used the same FDIC provision to bail it out. Buried in that report was an obscure Congressional Research Service report and it mentions this quote in that.
Here is Ron Paul, once again, showing his prescience on economic matters back in October of 1982:
“This conference report is an open-ended guarantee of hyperinflation. . . . Not only is the FDIC given unlimited power to act unilaterally, its actions may include loans, deposits, exchanges, and gifts to any of the 15,000 insured banks that the FDIC chooses. . . . This conference report makes clear exactly what “lender of last resort” means. It means that the Government stands ready to print any amount of paper money or create credit for anyone, at anytime, in order to keep a financial institution open…The FDIC has about $11 billion in reserves and insures deposits totaling over $1 trillion. But that is not really important any longer. Last March, the Congress passed House Concurrent Resolution 290, pledging the full faith and credit of the U.S. Government to deposits in insured institutions. It is not any longer simply a matter of using up $11 or $12 billion. The Government has made a moral obligation to bailout everyone, everywhere, to the tune of $1 trillion.”
Every time Ron Paul appears on Anderson Cooper’s show I’m reminded of Cooper’s promise to Paul during one of the GOP Presidential debates. Cooper interrupted one of Paul’s answers and promised he’d get back to him in just “2 minutes”. He never did. Last night Cooper let Paul speak at length about the state of political parties in America and the GOP in particular. Paul more or less dodges the question about Sarah Palin then gets on to his own thoughts, although he does get in a little dig at Palin saying that she gets paid for her appearances so her motivations may be different than his own.
Once again he doesn’t rule out running in 2012, saying it is too early to make a decision like that. I wish he would have answered Cooper’s first part of that question though: Are there any GOP candidates he could potentially support in 2012?
“It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.” – C.S. Lewis
“In questions of powers, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.” – Thomas Jefferson, from the Virginia Resolution of 1798
Last month both the House and Senate passed two very dissimilar bills with the same purpose – to tax the American people around $900 billion more, and intervene government bureaucrats into the private lives of each man, woman, and child.
As I painstakingly laid out in my health care plank last summer, its unintended consequences will worsen the quality of care and affordability of health care. I believe the TRUE issue at stake is affordability and cost - if an MRI cost $200 instead of $3,000, it would be a lot less imperative to suggest drastic changes like socialized medicine. The TRUE root cause is government-sponsored insurance cartels and quality-depleting, cost-increasing legislation such as the HMO Act of 1973. After all, President Nixon was told “all the incentives [of HMOs] are toward less medical care, because the less care they give them, the more money they make and all the incentives run the right way.”
It seems that the primary qualification needed by any chairman of the Federal Reserve is the ability to never admit error, no matter how damning the evidence. During his tenure on the job, Alan Greenspan set the standard for implausible deniability. But in a speech last weekend in Atlanta, current chairman Ben Bernanke did the Maestro one better. In a tortured academic dissertation, Bernanke explicitly denied any Fed culpability for inflating the housing bubble and for the financial crisis that began when it burst. Despite his best efforts, no one seemed particularly convinced. By taking such an absurd stand, he has destroyed any credibility he may have had left.
In his presentation to the National Economic Club, Bernanke claimed that ultra-low interest rates in the early in the Bush years were appropriate given the conditions at the time, and that they therefore did not a contribute to the housing bubble. Instead, he laid blame squarely at the feat of an “under-regulated” financial sector which had designed and sold unconventional and exotic mortgage products, such as adjustable-rate and interest-only mortgages. According to Ben, it was these irresponsible lenders (who he now hopes to regulate), not low interest rates, that caused the housing bubble.
There are two huge flaws in this line of reasoning. First, if these mortgages were such a problem, why didn’t the Fed do something to rein in their use? When given an opportunity to speak about the widespread use of ARMs in congressional testimony, former chairman Greenspan had nothing but praise for these products. He claimed these offerings allowed savvy homebuyers to save money and better manage their personal balance sheets. At the time that Greenspan made these statements, Bernanke was serving as a Fed governor. From neither that position nor his later role as chairman of President Bush’s Council of Economic Advisors did Bernanke ever utter a scornful phrase about the mortgages he now condemns in hindsight.
Jack Cafferty on CNN regularly wins praise for his candor. However when Obama was elected he seemed to lose his critical voice. It wasn’t often he would level true criticism at Obama. It could be said he was enamored with the O for a time. But now look out!
Yesterday he ripped Obama and the Democrats for their laughable claims of promoting and practicing transparency in the health reform debate. In the end Cafferty says it would be a good thing for them to lose in the 2010 elections. Check it out below.
There’s a famous cartoon of a bird trying to eat a frog. The bird has the frog by the head but can’t swallow it because the frog has the bird by the neck and is choking the life out of it.
Think of the bird as the Democrats, and the frog as either the cancerous healthcare bill, or the poor beleaguered American taxpayer.
We think the Democrats are going to choke on this healthcare bill, or, if they finally pass it, the voters will strangle them in the coming election. Meanwhile . . .
Liberty Maven
ecent articles from the campaign have included “Is the Dollar a Ponzi Scheme?” (Yes!) and federal “stimulus” spending practices have been soundly dismissed in “Why the Stimulus Plan Will Fail… And a Better Alternative.”
by John Browne, Senior Market Strategist, Euro Pacific Capital
Last month both the House and Senate passed two very dissimilar bills with the same purpose – to tax the American people around $900 billion more, and intervene government bureaucrats into the private lives of each man, woman, and child.
by Peter Schiff, president of Euro Pacific Capital and author of 
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