tag:blogger.com,1999:blog-4117007394386177642012-12-12T14:37:45.338-05:00Free Market EconomicsFree Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.comBlogger181125tag:blogger.com,1999:blog-411700739438617764.post-36350811895083803792012-11-03T16:57:00.002-04:002012-11-03T16:57:40.041-04:00The "Evil" Price Gouger.William Beckett was an opportunist, so it came as no surprise to anyone who knew him that William would find a way to try to profit off the impending large Hurricane as it swirled in the Gulf of Mexico.<br /><br />William lived in Indiana, a 12 hour drive to any of the Gulf of Mexico states. He and his 2 sons rented the largest truck they could find. They took it to a warehouse store and bought as many case of bottled water as the store had. The truck was only half full so they went to several other stores and bought them all out as well. All in they were able to purchase 1100 cases of bottled water. William and his sons went back home and watched the TV to see where the hurricane would make landfall.<br /><br />The storm was headed for the panhandle of Florida. As the men headed south on the highway William remembered the last time he had taken a similar trip. That hurricane suddenly had weakened so William turned his truck around mid way on his trip and tried to cut his losses. Luckily he was able to return most of the water, but he still lost almost a thousand dollars on the truck rental and gas. Despite the financial risks, William still thought it was worth it for him to take a chance again on this hurricane. He calculated he could sell the water for 2 to 3 times what he paid and possibly make a quick $10,000.<br /><br />When the men were about half way through Alabama they checked into a motel to get some rest and wait out the worst of the storm. Throughout the night the motel was blasted by torrential rain and strong wind gusts. The hurricane had made land fall in Florida with winds of 130 miles per hour. According to news reports, it was still a moderate tropical storm as it passed over them during the night.<br /><br />Several coastal communities in Florida were badly damaged. In the morning William and his boys set off to make their much anticipated profits. To their dismay, a large tree branch had broken the windshield of the truck. William cringed as he wondered how much he was going to have to pay have that replaced when he returned to Indiana.<br /><br />When the men approached the storm ravaged areas they had to slow down and stop often. The damage was visible everywhere. Windows were broken. There was no power so the street lights were all out. Many of them had been blown down. Several times they had to back up and retrace their route when the road became impassable. They didn’t see many people outside so kept driving until they found a strip mall with a supermarket. By now it was early afternoon. The local residents had already cleaned out the store the day prior as news of the impending hurricane developed. The men parked their truck in the parking lot, pulled up the rear sliding door and waited.<br /><br />It wasn’t long before a middle aged man drove into the parking lot. He was clearly distressed that the grocery store was closed and empty. He saw the truck and made his way over. William sold the man 5 cases at $20 each. Things were beginning to look up for the men. As the day wore on and word spread a crowd gathered. William and his boys had sold almost all the water and there were still dozens of people remaining. When it became apparent they men were running out of water the remaining crowd became agitated. William wondered how long it would take him to make another trip out of the storm zone for a fresh load of water. The group of people became louder. Someone called the police. Two squad cars arrived and the police officers approached the crowd. People were screaming, calling the men price gougers. Within a few minutes the police had arrested the three men. They took them to the local jail which hadn’t been too badly damaged.<br /><br />There was no drinking water in the jail however, so after a long hot night the officers decided to let the men go. They would have to return for their court date and hefty fines the following month. If the men were lucky they would not have to spend any more time in jail. The men climbed into their damaged truck and made their way home. “Never again!!” William said as they drove off.<br /><br />When they arrived back in Indiana, they watched news reports of the affected areas. Apparently the people were still unable to find any supplies. The stores were not yet restocked and no relief agencies had arrived. The reporter showed a line of volunteers bringing food and water to local collection areas in the surrounding states. They hoped to have the first truckload delivered by the end of the week.Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-60342038140873415782012-10-27T11:13:00.001-04:002012-10-27T11:13:48.657-04:00Is the Chinese Government Less Secretive than the U.S. Government on Weather Science?Fifteen years ago the Chinese government made it snow by seeding the clouds. They have a Beijing Weather Modification Office. See here: <span style="font-family: inherit;"><a href="http://en.wikipedia.org/wiki/Beijing_Weather_Modification_Office">http://en.wikipedia.org/wiki/Beijing_Weather_Modification_Office</a></span><br /><span style="font-family: inherit;"><br /></span><span style="font-family: inherit;">The U.S. Government has been involved in some publicly released weather modification dating back as far as the 1950s. &nbsp;<a href="http://en.wikipedia.org/wiki/Weather_modification">http://en.wikipedia.org/wiki/Weather_modification</a>&nbsp; There has been some legislation proposed but not passed back in 2005 and 2007.</span><br /><br />Either we dropped the ball on the technology that could potentially weaken these deadly storms or the U.S. government is less forthright than red China. <br /><span style="font-family: inherit;"><br /></span>On a side note, it is certainly interesting that the climate change propagandists seem to revel in these monster storms.<br /><br />Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-14333794233866736242012-10-17T11:36:00.000-04:002012-10-17T11:36:04.217-04:00The Business Cycle is Caused by the Federal Reserve's Low Interest Rate Policy.In a free market, interest rates are set by supply and demand. &nbsp;Rates adjust up or down as the public changes its opinion on the premium one dollar in the future should have relative to a dollar today.<br /><br />The meeting point of&nbsp;the supply and demand is the natural interest rate. The banks don't care what the rate is. They make money on the spread between the lending and borrowing rates. Their real profit comes from lending more money then they take in through the magic of fraction reserve money creation. &nbsp;&nbsp;<a href="/2010/08/will_fractional_reserve_banking_create.html">See here for more.</a><br /><br />There is a major difference between a low rate caused by free market forces and one set there artificially by edict of the Federal Reserve. The first scenario is a healthy environment to embark on long term projects. The second scenario however is a disaster waiting to happen.&nbsp;<div><br /></div><div>In a free market where rates are low, that signals to an entrepreneur that there is a good deal of savings in the economy. &nbsp;Rates are low precisely because of the abundance of capital. &nbsp;That savings will be available to be spent upon the completion of the project. &nbsp;In a Fed induced low interest rate environment however, borrowers are&nbsp;tricked by a false signal. The savings indicated by the low rates do not actually exist. &nbsp;When the time comes to cash in on the investment the money was borrowed for, there will be limited power to purchase the goods than was anticipated on the outset.</div><div><br />Multiply the decision making process of one person by millions and you can clearly see how the Federal Reserve is behind the boom bust cycle. When the artificially low rates kick off the decision to build houses or other capital projects, the economy does in fact see increased activity. The Fed appears to have successfully ended a recession with its low interest rate policy. In fact all it has done has set the economy off on an unsustainable boom which will always be followed by a bust. &nbsp;If the interest cost was too high, people would have taken a pass on the building the house, until there was sufficient savings. If the interest rate is low however, they will decide to go ahead with the project.&nbsp;</div><div><br /></div><div>Typically there is no analysis made as to why rates are low. People simply calculate whether they can make a profit by borrowing the money at the available price. &nbsp;Even the savvy investors who know the situation is artificial often feel compelled to participate expecting they will be able to exit in time. &nbsp;To the market as a whole unfortunately there is no possible salvation. The necessary savings simply doesn't exist.<br /><br /><div>The process repeats with each round of the business cycle getting more and more dramatic. The last two rounds have ended in a mania as the price of internet companies and housing respectively were bid up to the astounding levels only to come crashing back down during the bust phase of the cycle. &nbsp;The real pain and suffering caused by the Fed fixing market prices for interest does exist however and like the severity of the cycle is only getting worse through time.</div></div>Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-84233067024892316602012-10-12T00:20:00.001-04:002012-10-12T00:28:36.674-04:00A US Government Default - The Fed will let it happen in order to save itself.The US government debt and unfunded liabilities are too large to ever be repaid. &nbsp;Any serious analyst knows this. &nbsp;The question is when do these debts become too large to service. <br /><br />There will be a point that the U.S. government not have enough dollars to fulfill its present obligations. &nbsp;That is when the US will default. &nbsp;The Fed will let it default in order to save itself.<br /><br />Remember there are only two ways the government can collect revenue. &nbsp;It can tax or it can borrow. &nbsp;The Federal reserve is the one with the printing press, not the government. &nbsp;The government must borrow the money by issuing bonds, notes and bills. &nbsp;The Fed then monetizes the debt by creating the dollars out of thin air to buy the bonds when it engages in quantitative easing.<br /><br />The debt is constantly being rolled over plus new debt is added to fund the current years deficit. &nbsp;All of this is possible now because the interest rates demanded by the market are so low. &nbsp;The Fed has been able to soak up supply without spooking the rest of the market into demanding higher rates.<br /><br />When the interest rates do rise, the additional nominal interest on the debt in dollars will increase. &nbsp;This only applies to new debt issuance, but since the government is constantly issuing new and rolled over debt it is a constant concern. <br /><br />There will come a point when the US will default. &nbsp;It is inevitable. <br /><br />That point is when the higher interest payments required by the market in dollar terms exceed the amount of new debt the government can issue. <br /><br />An example will clarify. &nbsp;Suppose someone has $100,000 in credit card debt at 1% interest. &nbsp;He has to pay $1,000 a year to cover the interest burden. &nbsp;Now suppose like the US government he also runs a deficit. &nbsp;It doesn't matter what his salary is. &nbsp;The point is he spends more than he earns. &nbsp;Say his personal deficit on present items is $5,000. &nbsp;That plus his interest on his debt is $6,000. &nbsp;This means in order to stay solvent he has to borrow an additional $6,000. &nbsp;His new debt is $106,000.<br /><br />This can continue forever if interest rates stay the same and he is able to borrow unlimited amounts with his line of credit.&nbsp;The problem occurs when rates rise. &nbsp;In the real world, the act of borrowing more money will in and of itself cause you to have to pay a higher interest rate. <br /><br />In this example if the credit card issuer were to realize the real default risk and suddenly adjusted his rate to a more realistic number of 6%, &nbsp;the interest payment on $106,000 would be $6,036. &nbsp;At that point he cannot continue the can kicking. &nbsp;The increased dollar cost of interest exceeds the $6,000 he needs make the payments on his already existing debt and yearly deficit.<br /><br />When will this point occur for the US government? &nbsp;It will occur when existing debt holders stop buying new debt in larger dollar amounts than the Fed is doing in QE. &nbsp;Technically the Fed could create the money to buy all the bonds needed to finance the debt and current deficit, but that would certainly be the death of the dollar as a currency.<br /><br />If one assumes the Fed would like to survive, it needs the dollar to not completely hyperinflate to worthlessness. &nbsp;The only way to do that would be to not buy the bonds when the market is panicking to unload them. &nbsp;Let interest rates rise and yes let the US default on its debt. Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-61440356855079957562012-10-06T23:34:00.000-04:002012-10-08T14:27:48.667-04:0068 Years in 68 WordsBretton Woods<br />Reserve Currency<br />American Empire<br />Guns and Butter<br />Gold window closed<br />Inflation rampant<br />Fed panics,&nbsp;money supply shrinks<br />Cold war ends<br />Debt boom<br />Money supply forever increases<br />Stocks crash 1987<br />Fed lowers rates<br />Boom resumes<br />Austrian business cycle<br />Nasdaq crashes<br />Perpetual war<br />Housing crashes<br />Banks bailed out<br />Rates to zero<br />No boom, money parked at Fed<br />Debt builds<br />Debt defaults or currency collapse<br />Waiting<br />Reckoning day awaitsFree Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-79174145715880343162012-10-02T05:50:00.000-04:002012-10-02T05:50:37.294-04:00Uh Oh, Big Pharma is Sending Out the Call to its Media Mouthpieces to Try to Trounce Parental Rights.<br />If ever we needed a reminder that the NJ Star Ledger is a mouthpiece for big government intruding on personal liberty this is it. &nbsp;In this case, big pharma sent out the call for some heavy lifting and this article was the result. &nbsp;Article linked here:&nbsp;<a href="http://www.nj.com/hudson/voices/index.ssf/2012/10/are_vaccinations_essential_or.html#incart_river_default">http://www.nj.com/hudson/voices/index.ssf/2012/10/are_vaccinations_essential_or.html#incart_river_default</a><br /><br />In a free society people have the right to choose how best to live their lives. &nbsp;NJ law currently requires that all kids in day care or nursery school have an annual flu shot unless they write letter claiming a religious exemption. &nbsp;As absurd is this requirement already is, they want even more compliance and are pushing for parents to jump through even more hoops. &nbsp;The poor will have to comply but the wealthy will pay for an attorney to take care of the process. &nbsp; <br /><br />As a parent, it is my choice to decide how best to weigh the risks and rewards of everything in life. &nbsp;I choose to have them vaccinated against the Pertussis, diptheria, tuberculosis, measles, mumps, rubella, chicken pox, hepitita A, hepititis B, polio, pneumococcal bacteria, and Haemophilus Influenzae. &nbsp; Most of these require multiple vaccinations. &nbsp;Some have to be given 5 times. &nbsp;In my view that is already a lot for their still developing immune systems to handle. &nbsp;I choose to space them out a bit more than the CDC posts as their recommendation. &nbsp;<br /><br />I choose to skip the annual flu shot and will also be passing in the cervical cancer vaccine. &nbsp;In my opinion the risks to not justify the rewards on the latter two. &nbsp;The flu shot is largely ineffective as it by necessity is using last years strains which have since mutated. &nbsp;Contrary to this article's statement, it often does contain thimerisol which contains toxic mercury. &nbsp;The cervical cancer vaccine has caused death and also paralysis. &nbsp;Google it yourself for more information. &nbsp;The odds are not great, perhaps one in 10,000 or larger have a serious reaction, but the decision for my child's health is mine not big government or big pharma.<br /><br />Governor Christie ran on a platform that included increase parental involvement in vaccine decisions. &nbsp;So far he has done nothing to try to repeal the draconian mandatory flu shot vaccine. &nbsp;At the very least he can veto this atrocious bill if it does pass the state senate.<br />Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-56162925827956996872012-09-27T23:42:00.002-04:002012-09-27T23:42:14.895-04:00Peter Schiff: The Real Fiscal Cliff - How to Spot the Ledge<div class="separator" style="clear: both; text-align: center;"><object width="320" height="266" class="BLOGGER-youtube-video" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0" data-thumbnail-src="http://0.gvt0.com/vi/ptMrAgWqRfg/0.jpg"><param name="movie" value="http://www.youtube.com/v/ptMrAgWqRfg&fs=1&source=uds" /><param name="bgcolor" value="#FFFFFF" /><param name="allowFullScreen" value="true" /><embed width="320" height="266" src="http://www.youtube.com/v/ptMrAgWqRfg&fs=1&source=uds" type="application/x-shockwave-flash" allowfullscreen="true"></embed></object></div><br />Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-87294184435438655052012-09-21T23:23:00.001-04:002012-09-21T23:23:58.787-04:00What will be the end game for the Federal Reserve?<div class="separator" style="clear: both; text-align: left;">The paper money dollar experiment of the last 41 years has reached an unsolvable impasse. &nbsp;Since 1971, when Nixon defaulted on the dollars convertibility into gold there has been no restraint whatsoever on the Federal Reserve's ability to finance the U.S. government's boondoggle spending programs both foreign and domestic. </div><div class="separator" style="clear: both; text-align: left;"><br /></div><div class="separator" style="clear: both; text-align: left;">The government doesn't have to rely on tax receipts any more. It simply issues bonds to borrow the money. The Federal Reserve ensures those bonds are always bought, buying them itself if necessary as it has done with QE1 and QE2, and now QE3. &nbsp;Here is a chart of the national debt since the dollar was taken off the gold standard.</div><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-S0vpWELj5Fs/UF0pBhR9hfI/AAAAAAAAAIw/1RajVr9qW7Y/s1600/GFDEBTN_Max_630_378.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="http://3.bp.blogspot.com/-S0vpWELj5Fs/UF0pBhR9hfI/AAAAAAAAAIw/1RajVr9qW7Y/s400/GFDEBTN_Max_630_378.png" width="400" /></a></div><div><br /></div><div>That is the macro 4 decade picture. During that time there have been recessions. These have been a direct result of the Fed policy of lowering of the interest rates below their natural free market rate during market downturns. Austrian business cycle theory explains this predictable boom bust cycle: <a href="http://www.freemarketfan.com/2010/06/busiesss-cycles-are-caused-by-federal_26.html"> For more see here:</a></div><div><ul><li>The Fed lowers interest rates below what they would be on a free market.</li><li>Businesses borrow money for long term projects that previously hadn’t seemed profitable.</li><li>People and money flow into the sectors most influenced by the apparent boom.</li><li>The Fed begins a process of incrementally increasing interest rates at regular intervals.</li><li>Prices rise, often ending in a mania phase (examples: dot-com bubble, housing bubble)</li><li>A realization occurs that there is not sufficient actual savings to make all the projects profitable in those sectors affected by the boom. The bust occurs as the market tries to reallocate resources to industries that better reflect true supply and demand.Prices fall. Unemployment rises.&nbsp;</li></ul><div><br /></div>The Fed repeats the cycle.<br /><ul><li>The Fed again lowers interest rates below what they would be on a free market.</li><li>As before when rates were lowered below the free market rate, long-term business projects are evaluated based on the artificially low rates.</li></ul><br />Resources and workers are encouraged to remain in the unprofitable post boom industries. Money losing businesses that should fail are kept alive. Servicing large debt loads becomes widespread, again made possible by the Fed's artificially low interest rates..The cycle repeats in progressive cycles with each bust getting progressively worse. Debt loads constantly increase and the malinvestments, never having a chance to liquidate, continuously drag on the economy more and more until we reach the dreaded point of no return.<br /><br />At some point the low interest rate policy of the Federal Reserve fails to kick start the boom bust cycle. The debt burden is just too large to overcome. We are at this point now.<br /><br />Below is a graph of the Fed funds rate for the last 10 years. You can see the Fed furiously lowered rates after the Nasdaq dot com crash. Instead of a much needed recession to realign resources with profitable investments, the Fed prevented the recession from liquidating the malinvestments. The artificially low rates instead ignited the housing bubble and its related derivative securitization bubbles. The bubble popped in 2008.<br /><br /><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-iJMpwrawyUc/UF0r5i-qxGI/AAAAAAAAAJA/PSpt7lcXS-M/s1600/fredgraph.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="http://4.bp.blogspot.com/-iJMpwrawyUc/UF0r5i-qxGI/AAAAAAAAAJA/PSpt7lcXS-M/s400/fredgraph.png" width="400" /></a></div><br />Predictably the Fed again lowered rates. This time it has taken them all the way to zero. The difference now is that this time it is not working. The Fed cannot ignite another bubble. The burden of the massive debt overhang is too much to overcome. There will be massive defaults at all levels of society including individuals, corporations, municipalities, states and finally the Federal government itself. They all have too much debt to pay back and it will be defaulted on.<br /><br />There are two ways they can default.<br /><br />They can default by not paying the loans back and we get a sharp and painful,&nbsp;but not endless period of deflationary debt collapse where all the bad decisions of the past Fed induced business cycles are finally accounted for.<br /><br />Alternatively, the U.S. Government can bail out everyone by borrowing tens of trillions more and turn to the Federal Reserve to magically print up the necessary dollars to finance it all. This would eviscerate the dollar on the foreign exchange market and send prices soaring to the moon in a hyperinflationary depression.<br /><br />There is no solution to the crisis, merely a choice of which of two roads to choose, a deflationary debt collapse, or a hyperinflationary dollar collapse. Pick your poison thanks to our masters at the Federal Reserve.<br /><br />One thing is certain, when the dust clears we need to point our fingers at the Fed as the real culprits enabling a welfare, warfare state where the majority of the populace is on the dole. Free market capitalism will allow us to return to prosperity after the crash if we let it.<br /><br />We need to listen to the Austrian school free market economists who who saw what was happening and warned about it. They understand the need for a sound commodity based money and can help ensure the special interest groups never again take control of our economy and our country. &nbsp;See <a href="http://www.mises.org/">www.mises.org</a> for a wealth of resources relating to the Austrian school of economics and <a href="http://www.lewrockwell.com/">www.lewrockwell.com</a> and <a href="http://www.economicpolicyjournal.com/">www.economicpolicyjournal.com</a> for a free market libertarian view of current events.</div>Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-32755423272042456392012-09-21T22:47:00.001-04:002012-09-21T22:47:04.846-04:00Defining Libertarianism and Austrian Economics with Walter Block<div class="separator" style="clear: both; text-align: center;"><object width="320" height="266" class="BLOGGER-youtube-video" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0" data-thumbnail-src="http://2.gvt0.com/vi/z4xf9NLuXCo/0.jpg"><param name="movie" value="http://www.youtube.com/v/z4xf9NLuXCo&fs=1&source=uds" /><param name="bgcolor" value="#FFFFFF" /><param name="allowFullScreen" value="true" /><embed width="320" height="266" src="http://www.youtube.com/v/z4xf9NLuXCo&fs=1&source=uds" type="application/x-shockwave-flash" allowfullscreen="true"></embed></object></div><br />Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-79263166024700584122012-09-01T22:59:00.001-04:002012-09-01T22:59:08.438-04:00The Gold Standard Will Return.Money is a medium of exchange. It needs to be a store of value or it cannot function. If you can print it(or in actuality borrow it and have the Fed print it,) you are diluting the value of the currency. <br /><br />This is inflationary and warps the ability of everyone to determine what makes sense to do with their capital. They end up chasing the latest bubble that has emerged where the new money has gone first.<br /><br />It is not a matter of politics. This is just the way human nature works.&nbsp;<div><br /></div><div>Having the dollar tied to gold will calm the speculation down and allow long term decision making to be based on true supply and demand, not false signals. &nbsp;The jobs created from these business decisions will be real and sustainable. This is the way to a true recovery.<br /><br />More here: <a href="/2011/06/big_time_trouble_dead_ahead_thanks_to.html">http://www.freemarketfan.com/2011/06/big-time-trouble-dead-ahead-thanks-to.html</a></div>Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-74286419325849384042012-08-19T10:46:00.001-04:002012-08-19T10:46:45.838-04:00Without a Face - The TSA Song<div class="separator" style="clear: both; text-align: center;"><object width="320" height="266" class="BLOGGER-youtube-video" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0" data-thumbnail-src="http://1.gvt0.com/vi/M_j6Z2gPX_U/0.jpg"><param name="movie" value="http://www.youtube.com/v/M_j6Z2gPX_U&fs=1&source=uds" /><param name="bgcolor" value="#FFFFFF" /><param name="allowFullScreen" value="true" /><embed width="320" height="266" src="http://www.youtube.com/v/M_j6Z2gPX_U&fs=1&source=uds" type="application/x-shockwave-flash" allowfullscreen="true"></embed></object></div><br />Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-47540994448682469092012-05-23T21:57:00.000-04:002012-05-23T21:58:34.056-04:00The Consent of the Governed.<div class="separator" style="clear: both; text-align: center;"></div><div class="separator" style="clear: both; text-align: center;"><a href="https://encrypted-tbn1.google.com/images?q=tbn:ANd9GcSGzdh_l1_SJx9xsBCQ5hEXHrmmCZZDI0j7II8RE6gUoMCIhYQa4A" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="398" src="https://encrypted-tbn1.google.com/images?q=tbn:ANd9GcSGzdh_l1_SJx9xsBCQ5hEXHrmmCZZDI0j7II8RE6gUoMCIhYQa4A" width="400" /></a></div><br />Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-49909455884252459872012-04-24T22:54:00.001-04:002012-04-24T22:54:36.583-04:00Ron Paul - Predictions in Due Time<div class="separator" style="clear: both; text-align: center;"><object width="320" height="266" class="BLOGGER-youtube-video" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0" data-thumbnail-src="http://3.gvt0.com/vi/zGDisyWkIBM/0.jpg"><param name="movie" value="http://www.youtube.com/v/zGDisyWkIBM&fs=1&source=uds" /><param name="bgcolor" value="#FFFFFF" /><embed width="320" height="266" src="http://www.youtube.com/v/zGDisyWkIBM&fs=1&source=uds" type="application/x-shockwave-flash"></embed></object></div><br />Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-5320620745226383112012-03-21T06:37:00.000-04:002012-03-21T06:37:16.723-04:00Ron Paul on The Tonight Show with Jay Leno - March 20, 2012<div class="separator" style="clear: both; text-align: center;"><object width="320" height="266" class="BLOGGER-youtube-video" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0" data-thumbnail-src="http://3.gvt0.com/vi/ga4cu7LAMl8/0.jpg"><param name="movie" value="http://www.youtube.com/v/ga4cu7LAMl8&fs=1&source=uds" /><param name="bgcolor" value="#FFFFFF" /><embed width="320" height="266" src="http://www.youtube.com/v/ga4cu7LAMl8&fs=1&source=uds" type="application/x-shockwave-flash"></embed></object></div><br />Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-56110375110969402982012-03-05T22:25:00.000-05:002012-03-05T22:35:32.965-05:00Will stock prices fall next to hide the monetary inflation?What's next on the inflation stage? The inflation vs.deflation debate has been going on by hard money enthusiasts for years, but especially since the Nasdaq dot-com bubble burst 10 years ago.<br /><br />It is an important question for wealth preservation because in a deflation you want to hold primarily cash or high grade bonds as their purchasing power is increasing relative to items you buy and in an inflation you want to hold real tangible items such as gold as they are increasing in value relative to the depreciating currency.<br /><br />Both sides of the debate make a good case.&nbsp;The deflationists contend that because what is important are the supply of both money and credit, and there is roughly 10 times as much credit as there is money in the U.S. that the defaulting debt will easily overwhelm any money creating efforts by the Federal Reserve. The presumption is that The Fed will be handcuffed in the amount of new base money they can create.<br /><div><br />The inflationists contend that the Federal Reserve has the ability to create as much money as they wish with the click of a button and no amount of debt defaults can ever be a problem for them as they can create an infinite amount of money if need be.<br /><br />When the Fed creates money, also known as monetization or quantitative easing, they exchange newly created dollars for assets, typically US bonds. It is the necessity of having to exchange the new money for assets that is key. There are already trillions of dollars of bonds in existence. The current owners of all those bonds may sell them en masse if they believe the Federal Reserve is determined to inflate at any cost. This would create a situation which could quickly lead to total and utter destruction of the currency through an uncontrollable hyperinflation as everything dollar denominated gets sold. It is this unacceptable situation which would lead to the demise of not only the dollar, but also the Fed itself that the deflationists contend will handcuff their money creation.<br /><br />The Federal Reserve realizes this predicament so it creates a situation where it can monetize bonds without the negative repercussions. To do this it needs a deflation scare. After the dot com bubble burst and again after the housing bubble burst, the spinmeisters set out to work. The Fed can create new money during times where people are fearful of deflation as it is precisely this fear that prevents the snowballing hyperinflationary scenario described above.<br /><br />There is another alternative to a deflation scare that will also allow massive quantitative easing, at least the first or second time around. That is a crashing stock market. Bonds typically rally sharply during stock crashes so the risk of a bond rout are slim<br /><br />It is a fine line indeed that the Federal Reserve must walk. Create too much money in the absence of a deflation scare or crashing stock market and risk hyperinflation. Do nothing and we actually have deflation as the bad debts are written off. This scenario is unacceptable to the Fed because all their banker friends who took unwise risks will be taken down as well.<br /><br />We had a meltdown in 2008 that required not only Fed schenanigans but also a few trillion dollars of money borrowed by the US Government to give to the powerful Wall Street banks. Not only was that borrowed money given aka "injected" into the banks, the Treasury bonds sold to finance this operation were then essentially swapped off the Fed's balance sheet for those same bank's toxic losing assets.<br /><br />Where do we stand now? The Fed has bought time. Their balance sheet and the monetary base have exploded. They are paying banks interest on deposits, so as not to have the fractional reserve lending aspect of our money system create hyperinflation. They know there will be more money creation ahead and cannot afford to let that snowball into credit creation as well. So for now they pay banks interest not to lend.<br /><br />Stocks have rallied sharply so the stage is set for another deflation scare. &nbsp;Perhaps it will hold off until we are closer to the election in November, but whether it starts now or in 6 months, caution is warranted. &nbsp;</div>Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-47991876410308826272012-02-29T23:17:00.000-05:002012-02-29T23:17:09.955-05:00Entertaining Song: "Afraid Of Firearms"<div class="separator" style="clear: both; text-align: center;"><object width="320" height="266" class="BLOGGER-youtube-video" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0" data-thumbnail-src="http://1.gvt0.com/vi/DlIeGSNvYuE/0.jpg"><param name="movie" value="http://www.youtube.com/v/DlIeGSNvYuE&fs=1&source=uds" /><param name="bgcolor" value="#FFFFFF" /><embed width="320" height="266" src="http://www.youtube.com/v/DlIeGSNvYuE&fs=1&source=uds" type="application/x-shockwave-flash"></embed></object></div><br />Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-36268384976990675752012-02-23T06:26:00.000-05:002012-02-23T06:26:54.651-05:00Ron Paul Highlights - CNN Mesa, AZ Debate.<div class="separator" style="clear: both; text-align: center;"><object width="320" height="266" class="BLOGGER-youtube-video" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0" data-thumbnail-src="http://2.gvt0.com/vi/AQ9a-G4Xuco/0.jpg"><param name="movie" value="http://www.youtube.com/v/AQ9a-G4Xuco&fs=1&source=uds" /><param name="bgcolor" value="#FFFFFF" /><embed width="320" height="266" src="http://www.youtube.com/v/AQ9a-G4Xuco&fs=1&source=uds" type="application/x-shockwave-flash"></embed></object></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"><object width="320" height="266" class="BLOGGER-youtube-video" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0" data-thumbnail-src="http://1.gvt0.com/vi/kFoOciL4Dv0/0.jpg"><param name="movie" value="http://www.youtube.com/v/kFoOciL4Dv0&fs=1&source=uds" /><param name="bgcolor" value="#FFFFFF" /><embed width="320" height="266" src="http://www.youtube.com/v/kFoOciL4Dv0&fs=1&source=uds" type="application/x-shockwave-flash"></embed></object></div><br />Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-20056944593300328582012-02-16T23:17:00.001-05:002012-02-16T23:17:50.113-05:00Ron Paul Local Fox Station Seattle, Washington campaign coverage 2/16/12<div class="separator" style="clear: both; text-align: center;"><object width="320" height="266" class="BLOGGER-youtube-video" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0" data-thumbnail-src="http://0.gvt0.com/vi/ue-UqFPEjyQ/0.jpg"><param name="movie" value="http://www.youtube.com/v/ue-UqFPEjyQ&fs=1&source=uds" /><param name="bgcolor" value="#FFFFFF" /><embed width="320" height="266" src="http://www.youtube.com/v/ue-UqFPEjyQ&fs=1&source=uds" type="application/x-shockwave-flash"></embed></object></div><br />Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-42199788212528061222012-02-15T06:54:00.001-05:002012-02-15T06:54:25.319-05:00Reality Check: GOP Scrambles Under Allegations of Rampant Voter Fraud In Maine Caucus.<div class="separator" style="clear: both; text-align: center;"><object width="320" height="266" class="BLOGGER-youtube-video" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0" data-thumbnail-src="http://0.gvt0.com/vi/pqsyzTrWS0g/0.jpg"><param name="movie" value="http://www.youtube.com/v/pqsyzTrWS0g&fs=1&source=uds" /><param name="bgcolor" value="#FFFFFF" /><embed width="320" height="266" src="http://www.youtube.com/v/pqsyzTrWS0g&fs=1&source=uds" type="application/x-shockwave-flash"></embed></object></div><br />Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-35949714417888977862012-02-08T23:35:00.000-05:002012-02-25T19:17:42.093-05:00Following the Constitution Is a Revolutionary Idea. (Ron Paul)<div><div class="separator" style="clear: both; text-align: center;"><a href="http://c3244172.r72.cf0.rackcdn.com/wp-content/uploads/2011/06/endthefed.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="212" src="http://c3244172.r72.cf0.rackcdn.com/wp-content/uploads/2011/06/endthefed.jpg" width="320" /></a></div>What is the proper role of a government in a civilized society? <br /><br />A court system should arbitrate disputes and punish destruction of property and life. &nbsp;A police force should enforce these decisions. &nbsp;Lastly, an army should protect life and liberty if necessary from nation state aggressors. &nbsp;Many of these things do not necessarily have to be done by employees of the state. &nbsp;Some of them could be performed by private industry, such as arbitrators and security companies, but if the role of government were limited to these few things this would be a much more free society.</div><div><br /></div><div>The founders of this country envisioned a world where these principles of a limited role for government could be maintained. &nbsp;They knew under these conditions personal liberty and freedom would be maximized. &nbsp; However they were concerned that eventually their government might grow so large that it would oppress its own citizens. &nbsp;They wrote the Constitution with this in mind, detailing the specific powers to be granted to the Federal government. &nbsp;The rest remained with the people and their respective state governments.&nbsp;</div><div><br /></div><div>Unfortunately over the years the Constitution has been so undermined that the original intent of the founders is barely recognizable.&nbsp;</div><div><br /></div>Congressman Ron Paul's presidential campaign is opening up the eyes of millions of people to just how far we have strayed from the path of limited government and personal liberty. &nbsp;When Ron Paul speaks of&nbsp;no wars without a declaration by congress, a sound money backed by gold and silver, and the protection of the rights spelled out in the Bill of Rights, these ideas seem to some to be revolutionary. &nbsp;In reality they are simply Constitutional ideas. <br /><br />It's the words of the Constitution itself that seem revolutionary because of just how far we have strayed.<br /><div><br /></div><div>For decades, both the Republican and Democratic parties have been dominated by big government interventionists. &nbsp;It didn't matter which of the two party nominees the public voted for because either one guaranteed a continuing ratcheting up of the power of the state, and by default a weakening of the liberties and freedoms of the individual.<br /><br />The message is desperately trying to be ignored and ridiculed by the kept media who benefit from the status quo, however it resonates immensely with the people who see through the propaganda. What people find &nbsp;in Ron Paul is a principled man who has always voted in line with the Constitution. &nbsp;Thinking people know all we have to do for a return to prosperity is to elect someone who will follow his oath to uphold the document. &nbsp; We know Ron Paul will do this. <br /><br />What is even greater reason for optimism however is that the message of liberty spelled out in the Constitution is larger than just one person. &nbsp;It is Ron Paul who personifies the fight right now, but the intellectual discussion for a return to a free society will continue no matter what happens in this election cycle. &nbsp;The message itself has reached a tipping point and the genie cannot be put back in its bottle.</div>Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-24618931234548724302012-02-08T22:15:00.003-05:002012-02-08T22:19:34.714-05:00Tom Woods on 26 Things Non-Paul Voters Are Basically Saying.Tom Woods on&nbsp;&nbsp;26 things non-Paul supporters appear to be saying.<br /><br />(1) The American political establishment has done a super job keeping our country prosperous and our liberties protected, so I’m sure whatever candidate they push on me is probably a good one.<br /><br />(2) Our country is basically bankrupt. Unfunded entitlement liabilities are in excess of twice world GDP. Therefore, it’s a good idea to vote for someone who offers no specific spending cuts of any kind.<br /><br />(3) Vague promises to cut spending are good enough for me, even though they have always resulted in higher spending in the past.<br /><br />(4) I prefer a candidate who plays to the crowd, instead of having the courage to tell his audience things they may not want to hear.<br /><br />(5) I am deeply concerned about spending. Therefore, I would like to vote for someone who supported Medicare Part D, thereby adding $7 trillion to Medicare’s unfunded liabilities.<br /><br />(6) I am opposed to bailouts. Therefore, I will vote for a candidate who supported TARP.<br /><br />(7) The federal government is much too involved in education, where it has no constitutional role. Therefore, I will vote for a candidate who supported expanding the Department of Education and favored the No Child Left Behind Act.<br /><br />(8) Even though practically everyone was caught by surprise in the 2008 financial crisis, which we are still reeling from, it’s a good idea not to vote for the one man in politics who&nbsp;<a href="http://www.youtube.com/watch?v=ohKz9OeiI0g">predicted</a> exactly what was bound to unfold, all the way back in 2001.<br /><br />(9) I am not impressed by a candidate who inspires people, especially young ones, to read the great economists and political philosophers.<br /><br />(10) I am concerned about taxes. Therefore, I will not vote for the one candidate who has never supported a tax increase.<br /><div><br /></div><div><a href="http://www.tomwoods.com/blog/26-things-non-paul-voters-are-basically-saying/#.TzKbJJFx_Jo.facebook">Continued here:&nbsp;</a></div>Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-89110109544401034172012-02-07T18:13:00.000-05:002012-02-07T18:14:48.735-05:00Ron Paul blows away the establishment choices in military donations. (graph)<img height="374" src="http://ed.agadak.net/q4.military1.png" width="400" /><br /><br /><br /><br /><img height="318" src="http://ed.agadak.net/q4.military2.png" width="400" />Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-68274385666420356522012-02-07T18:09:00.000-05:002012-02-07T18:09:05.080-05:00Ron Paul moves to second place in national poll.<a href="http://www.reuters.com/article/2012/02/07/us-usa-campaign-poll-idUSTRE81514720120207">http://www.reuters.com/article/2012/02/07/us-usa-campaign-poll-idUSTRE81514720120207</a> <br /><br />Romney: 29%<br />Paul: 21%<br />Gingrich: 19%<br />Santorum: 18%<br /><br />Ron Paul has reached the tipping point. <br />See here: <a href="/2011/08/ron_paul_has_pushed_ideal_of_liberty.html">http://www.freemarketfan.com/2011/08/ron-paul-has-pushed-ideal-of-liberty.html</a>Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-38636405820566590112012-02-07T00:52:00.000-05:002012-02-07T00:52:45.512-05:00Best one minute explanation of why the military supports Ron Paul.<div class="separator" style="clear: both; text-align: center;">Fast forward to 6:34 to hear Ron Paul's concise explanation. &nbsp;</div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;">"They are dying and they don't even know what they are dying for."</div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"><object width="320" height="266" class="BLOGGER-youtube-video" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0" data-thumbnail-src="http://2.gvt0.com/vi/zrUavLPgLqY/0.jpg"><param name="movie" value="http://www.youtube.com/v/zrUavLPgLqY&fs=1&source=uds" /><param name="bgcolor" value="#FFFFFF" /><embed width="320" height="266" src="http://www.youtube.com/v/zrUavLPgLqY&fs=1&source=uds" type="application/x-shockwave-flash"></embed></object></div><br />Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0tag:blogger.com,1999:blog-411700739438617764.post-18347523959386482012012-02-05T06:53:00.000-05:002012-02-05T06:53:14.293-05:00The Tireless Agorist on Ron Paul<i>"Anybody who's ever had a yard and ignored a single dandelion early in the spring can immediately grasp what's going on here. <br /><br />Ron Paul has stated repeatedly from the earliest days of the 2008 cycle that his campaign is about spreading a message, and a very specific message at that. He sums it up in three words: "Freedom is Popular." He's also a coalition builder, appealing to voters across the spectrum who are tired of the endlessly growing and increasingly incompetent government, endless warfare both foreign and domestic, the steady erosion of personal liberty, and gross fiscal irresponsibility championed by both parties. <br /><br />The more egregious the violations by the current Republicrat establishment, the more his message resonates with those exposed to it. From bailouts to NDAA, to SOPA and PIPA, the establishment is doing everything it can to advance the cause of liberty in a purely ham-fisted way. For those who understand the message, even his largest warts shrink in significance, because he's the only candidate of either party addressing the issues of most importance."</i><br /><div><i><br /></i></div><div><a href="http://tirelessagorist.blogspot.com/2012/01/hes-catchin-on-im-tellin-ya.html">Full article here:</a></div>Free Market Economics Fanhttp://www.blogger.com/profile/12426719890847999927noreply@blogger.com0