Fed inflating with no restraint – Hyperinflation?

A picture is worth a trillion words…

 

Money Supply 09/25/2008

Money Supply 09/25/2008

Frankly I’m not surprise to see what the Fed is doing and can only imagine what this is going to look like if this bailout goes through.  There is a precedent throughout time that inflating the monetary supply only prolongs the inevitable.  This is a sad state of affairs and I see only troubled times ahead for the once mighty dollar.  Like the Romans who clipped their gold and silver coins the United States is creating more and more money from nothing.  Why do we need a bailout package when we can just print money?  It isn’t actually printed anymore, but issued through treasuries between the Fed, the Treasury, and private banks.  

We are headed towards a recession if we aren’t already in one.  Inflating the money supply while in a recession presumably means higher prices.  The contraction in prices we recently saw was perhaps a byproduct of the Fed contracting the money supply, which it has now reversed course.  During the Great Depression of 1929 many banks tried using their depositor’s money to help keep the market afloat just as the Fed is now doing… The outcome?  You know what happened…  

Now we are taking the opposite position and inflating.  What happened to Rome… and thanks to Mike Hewitt at dollardaze.org he lists many countries plagued by hyperinflation. 

  • Angola (1991-1999)
  • Argentina (1975-1991)
  • Austria (1921-1922)
  • Belarus (1994-2002)
  • Bolivia (1984-1986)
  • Brazil (1986-1994)
  • Bosnia-Herzegovina (1993)
  • Bulgaria (1991-1997)
  • Chile (1971-1973)
  • China (1939-1950)
  • Free City of Danzig (1923)
  • Ecuador (2000)
  • England
  • Greece (1944-1953)
  • France (1789-1797)
  • Georgia (1995)
  • Germany (1923-1924, 1945-1948)
  • Greece (1944-1953)
  • Hungary (1922-1924, 1944-1946)
  • Israel (1979-1985)
  • Japan (1944-1948)
  • Krajina (1993)
  • Madagascar (2004)
  • Mexico (2004)
  • Nicaragua (1987-1990)
  • Persian Empire (1294)
  • Peru (1984-1990)
  • Poland (1922-1924, 1990-1993)
  • Romania (2000-2005)
  • Ancient Rome
  • Russia (1921-1922, 1992-1994)
  • Taiwan (late-1940′s)
  • Turkey (1990′s)
  • Ukraine (1993-1995)
  • United States (1812-1814, 1861-1865)
  • Yap (late 1800′s)
  • Yugoslavia (1989-1994)
  • Zaire (1989-1996)
  • Zimbabwe (1999 – present)

The fiat money system that we presently have, which in its present form has only been in existence since 1971 when we went off the gold standard.  To say that we have a precedent for what may or may not happen is incorrect.  We are now in uncharted territory, however history has its lessons.

Losing our freedoms…

Whenever there is panic and fear, which are growing rapidly day by day there is generally an accompanied amount of control and restriction by the state (the government).  Everyone’s focus at the moment is on the stock market and the bailout plan.  However, behind the scenes events are unraveling that once again as they have ever increasingly since September 11, 2001 are limiting and curtailing our freedoms.  We fought hard for these and to have them taken away as a byproduct of events that could have been avoided… 

During times of unrest and ill ease it is imperative that we stand by the constitution and not let it go by the wayside.  We expect the state to intervene and save us versus take care of ourselves.  The founders of this country who risked their lives to have freedom would be disgusted at how we roll over these days. 

Our borders are becoming increasingly difficult to cross with more information required.  Ellen Nakashima of the Washington Post wrote an interesting article about the extended search capabilities of the border guards…

The U.S. government has quietly recast policies that affect the way information is gathered from U.S. citizens and others crossing the border and what is done with it, including relaxing a two-decade-old policy that placed a high bar on federal agents copying travelers’ personal material, according to newly released documents.

The policy changes, civil liberties advocates say, also raise concerns about the guidelines under which border officers may share data copied from laptop computers and cellphones with other agencies and the types of questions they are allowed to ask American citizens.

The article continues 

But what DHS did not disclose was that since 1986 and until last year, the government generally required a higher standard: Federal agents needed probable cause that a law was being broken before they could copy material a traveler was bringing into the country.

If you or I go through the United States border we may be detained, our personal documents photocopied, our cell phones held onto, our computers searched, and the list goes on.  Previously, a customs agent would have to obtain permission from the courts or have a probable cause to commit such acts.  No longer is that necessary.  The rest of the article cites specific instances where people have been detained for 5.5 hours, been asked about their religious beliefs, who people in their cell phones are, and so one.  

Every time I travel internationally I dread going through United States customs.  I would rather go through customs in India, China, Egypt or any other country for that matter than the US (there are a few exceptions).  Prior to September 11, 2001 this wasn’t as big an issue.  However, these days you are automatically assumed to be somewhat guilty, and questioned as such.  As a foreigner I can’t imagine what customs is like.  

Once I was returning to the United States from Europe.  There are many stamps and visas in my passport as I have traveled all over the world.  The customs agent started to go through my passport page by page asking me about every country I had a stamp for.  The stamps were a couple years old and had no relevance to my present trip so I was becoming quite annoyed.  Finally I asked him if he had ever been to India and if not that he had to go because it is such an amazing country.  The people are friendly, the food is amazing, and so on.  He replied that he doesn’t travel outside the United States.  A border agent that doesn’t travel outside the United States seems quite ironic.

State powers seem to be growing within the United States as well.  Prior to the Republican National Convention there was a mass arrest in St. Paul Minnesota.  


 

The Glass Bead Collective released video on Thursday of the mass arrests of protesters, media and bystanders at Shepard Road on day one of the Republican National Convention. A number of those arrested were heading to or from the SEIU Labor Day concert on Harriet Island. (Three members of the Glass Bead Collective were among those arrested in the week before the RNC in St. Paul.)

The Glass Bead Collective said the video came from a cameraman who hid his video before being arrested. From the press release, “Video released today shows the indiscriminate arrest of a crowd of two hundred at the waterfront across from a concert on Harriet Island Regional Park during this month’s Republican National Convention in St. Paul. The video includes multiple angles of the event as well as an interview with the cameraman who buried his footage and was one of almost two hundred people arrested for rioting without probable cause.”