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John Connally, President Nixon’s Secretary of the Treasury, once remarked to the consternation of Europe’s financial elites over America’s inflationary monetary policy, that the dollar “is our currency, but your problem.” Times have certainly changed and it now appears that the dollar has become an American problem.
In a recent interview with the Wall Street Journal, the soon to be 45th President of the United States believes that the greenback’s strength – up some 25% against a broad basket of currencies since 2014 – is now “too strong,” “killing us,” and has hurt companies trying to compete overseas.* A top Trump economics advisor, Anthony Scaramucci, reinforced his boss’ sentiment adding that “we must be careful of a rising dollar.”
Apparently, making America great again does not include the nation’s monetary standard. Trump’s belief that the dollar is too strong also shows a distinct lack of historical understanding. Every great nation and empire (which Trump promises to restore America to) had a sound monetary system. It is no coincidence that the pound sterling was the world’s “reserve currency” at the time when the British Empire was at its height. Debasement of it to finance Britain’s insane decision to enter World War I led, in large part, to the eventual loss of its empire. If Trump truly seeks to restore American greatness at home and its prestige throughout the world, devaluating the currency is not the way to go.
Nor does a weakened dollar benefit the middle class whom the president elect throughout the campaign has pledged to help. In fact, it has been the fall in the purchasing power of the dollar due to the inflationary policies of the Federal Reserve which have decimated the living standard of the middle class. And, while the proposed Trumpian middle class tax cuts will help, just as important is a sound monetary system if Middle America is to become a creditor class once again.
While a weaker dollar policy would hurt the middle class, retirees, and savers, it would benefit the most responsible for the continued economic doldrums of America – banksters and the government. A weaker dollar would allow the government to continue to borrow and maintain its profligate spending. Financial houses and the banksters would receive credit at nearly zero cost which would allow them to continue to blow bubbles in the asset markets. Export firms, too, would benefit at least for a while, but would more than likely face retribution from foreign governments and central banks which would retaliate with their own devaluations sparking potential currency wars.
Talk of “currency manipulation,” “weakening the dollar,” “trade deals,” and the like do not address what lies at the heart of not only America, but the Western world’s economic problem – too much debt. The reason why the West has been able to incur its current gargantuan level of debt is not because of a “weak” or a “strong” dollar, but because the dollar is a fiat currency not backed by any commodity. A true gold standard, where each currency unit represents either gold or silver, provides monetary discipline which prevents politicians and banksters from incurring ruinous levels of debt.
Since money is the lifeblood of an economy, any hope that one can be turned around without a stable monetary order is, to say the least, delusional. If president-elect Trump and his policy makers do not realize this, they will be severely disappointed in the years to come. Sound money allows for the accumulation of savings and capital formation, the essential elements of the market economy and the only basis upon which real economic growth can occur. More savings and capital are needed to boost production and create employment, not supposedly wiser and more competent international trade negotiators.
Talk of currency devaluation is what is typically heard from banana republics, it should not be advocated by those who have aspirations of making their country great again.
*Tyler Durden, “Dollar Tumbles After Trump Calls Currency ‘Too Strong,’ Slams Border-Adjustment Tax.” Zero Hedge. 17 January 2017.
Antonius Aquinas@AntoniusAquinas
“While a weaker dollar policy would hurt the middle class, retirees, and savers, it would benefit the most responsible for the continued economic doldrums of America – banksters and the government.”
Perhaps benefiting the banks and govt. is the intent here.
“A true gold standard, where each currency unit represents either gold or silver, provides monetary discipline which prevents politicians and banksters from incurring ruinous levels of debt.”
I distrust the promotion of a gold standard, because we have no gold, and this puts control our our economy into the hands of someone who does. Fort Knox is full of tungsten. The Rothchilds, as well as China and Russia, have been stockpiling gold for years. Returning to a gold standard puts our nation into the hands of those who own the gold, and it’s no accident that there’s a propaganda push for a return to this gold standard when we don’t have any.
Now that people are finally realizing how the Federal Reserve works, they’re screaming “end the fed and return to a gold-backed currency”, and I believe the Zionists are behind this movement, which will allow them to appease the population, while remaining in control of them. “Monetary discipline” does not require putting our economy into the hands of the same people who just destroyed it (intentionally) just because they own yellow metal.
“Sound money allows for the accumulation of savings and capital formation, the essential elements of the market economy and the only basis upon which real economic growth can occur.”
“Sound money” does NOT have to be gold-backed money. All you have to do for fiat currency to be “sound money” is hang people who print unauthorized quantities of it. Fiat currencies have failed for the same reason, that being over-issuance by politicians who want to spend what they don’t have.
I understand the Constitution’s requirement that our money must be gold and silver, but there’s a big difference between the people trading in gold and silver among themselves, and trading in a currency that’s backed by gold and silver, and that difference is that in the former, the gold and silver is in the people’s possession.
Currency is only a tool to allow for the trade of goods and services; a form of grease for economic gears, and needn’t be backed by anything but an agreement that it will be used as such. Saved (or accumulated) wealth should be kept in gold or silver, and in the possession of its rightful owner.
Gold backed currencies LIMIT economic growth and create poverty by limiting the currency that’s available for the exchange of goods and services, and do not account for population growth, which always divides the available currency between more people.
“More savings and capital are needed to boost production and create employment,…”
Never happen.
The stinking jews will make sure of that by stealing anything & everything not nailed down.
http://www.webofdebt.com/ https://ellenbrown.com/2016/12/07/well-look-at-everything-more-thoughts-on-trumps-1-trillion-infrastructure-plan/