Inflation is not a good thing

I am compelled to post another quote from the same article as the last post. It is talking about how things are handled once the government has created high or hyper-inflation. Our brilliant leaders already have, we just don't feel it yet. It is like a bullet that has left the gun but not pierced your skin yet.

"A second lesson is that governments resort to predictable measures after they have debased their currencies and caused rampant price inflation. Price controls and wage controls invariably follow. Currency controls are also imposed. Shortages and rationing follow. The government ALWAYS blames its citizens for problems which the government caused.

Younger Americans do not remember the problems we had because of the inflationary policies which the Johnson and Nixon administrations used in order to finance the Great Society and the Vietnam War. In 1971, President Nixon imposed wage and price controls in order to "control inflation." These policies created shortages. They were a dismal failure. I remember sitting in gas lines in the hope of being able to fill up my gas tank. Nixon finally ended his wage and price controls in 1973. I also remember President Ford exhorting Americans to "whip inflation now," as if we, the sheeple, had anything to do with the problem. Mark my words, if we get hyperinflation, our government will blame the American people.

There is another important lesson to be learned from Rome, France, North Korea, Venezuela, and all other historical episodes involving currency devaluation. The lesson is that gold and silver are the antidotes for inflation. Ancient Rome and revolutionary France did not resolve their hyperinflations until they returned to using gold as the basis for their monetary systems. Using gold as the basis for its currency stabilized the Roman/Byzantine Empire for a thousand years. France and the other western european nations had stable currencies until they decided to abandon the restraint of the gold standard in order to inflate and fight World War One. The gold standard imposes monetary restraint on governments.

The most important lesson to be learned from what has happened in ancient Rome, revolutionary France, North Korea, and Venezuela is that a stable currency promotes a stable society. My belief in this principle is one of the reasons why I began writing this newsletter several years ago. There is a reason why I chose to post the motto "Honest Money For Personal Freedom" at the top of my website's homepage. When a nation has honest money, the nation has more freedom. Jefferson, Madison, and Jackson knew this. They wanted honest money so that future generations of Americans would be able to enjoy the freedom for which they had fought. They would be very upset to see what is happening in America these days.

Just look at the social turmoil which has arisen in nations which have utilized inflationary monetary policies. In this article, I limited my focus to four examples. However, I could have included may others, including Weimar Germany, Argentina, Zimbabwe, and Yugoslavia. Hitler and Napoleon were, in large part, products of hyperinflationary crises where the social order had broken down. If it can happen in the nations which produced Bach, Goethe, Voltaire, and Pascal, do you honestly think that it can't happen here? There is a reason why Keynes also said that debauching the currency "...engages all the hidden forces of economic law on the side of destruction."

It can happen here if we do not change our monetary policies. Let us hope that we can elect sensible leaders who will return us to a stable monetary system. However, time is growing short. If we continue on our current path, we know where we are headed as a society."