Tuesday, November 19, 2013

Federal Reserve Kool-Aid...Served Fresh Daily

By, Chris Rossini

James Pethokoukis, a loyal Fed believer, writes:
Someday the U.S. government’s currency monopoly might end. But probably not in my lifetime. I am willing to concede, though, that before our yellow sun goes red giant — the Republic will endure, my friends!
For all the new kids...fiat money has a crystal clean track record of a 100% failure rate.

Will we have to wait until the Sun burns out for the U.S. to add its contribution to the scrap heap? Of course not. In fact, it can happen faster than anyone can possibly predict.

Let's remember Lech Walesa's words on the fall of Communism:
“I had conversations with all the powerful people of the world: with presidents, with prime ministers, chancellors and kings, too. None of them believed that there was any chance of us toppling communism before the year 2000. I didn’t meet a single person among those people who would believe that was possible. Not a single one in the whole world.”
And yet...despite all the geniuses....Poof!

Pethokoukis leaves a little wiggle room before the Sun burns out:
America might find itself awash in a competitive, Hayekian market of private currencies, perhaps the digital descendants of Bitcoin. It could happen.

But until it does, we’re going to have a central bank. And the world’s reserve currency will always be fiat money unless we return to barter.

That's our choice? Fiat money or barter?

For thousands of years, gold and silver have acted as a medium of exchange. Bernanke's Fed still holds onto its gold because of "tradition" (wink, wink). And yet, when the U.S. dollar meets its destiny, we must return to trading chickens for t-shirts?

Talk about trying to push gold and silver down the memory hole!

You "End The Fed" people better stand down, Pethokoukis recommends:
So rather than entertaining fantasy notions of ending the Fed, it’s better to think about how to improve the Federal Reserve’s performance in the aftermath of the Great Recession and financial crisis.
Improving the impossibility of central planning? Talk about "fantasy notions".

Ironically, Pethokoukis blogs every day at The American Enterprise Institute, which bills itself as "a community of scholars and supporters committed to expanding liberty, increasing individual opportunity and strengthening free enterprise." (wink, wink).

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  1. Anybody catch the recent episode of "Raising Hope" titled "Burt Bucks?" It starts with barter and ends with a bunch of wheel barrels full of Burts Bucks. Good thing the people running our country are smarter than Burt. At least that is what Burt hopes as the show ends.

    1. I did see it ... kind of surprised it aired.

  2. I attended 2 days of digital money hearings, with much focus on BitCoin. Today, Sen. Mark Warner, more than once raised the question of impact of digital currency in terms of monetary policy (and central banking). What he likely understands is fiat currencies are no better than toilet paper anymore, and there are those out there looking for something as a store of value. So that is why alternatives like digital money are now in the crosshairs of the present establishment and their controlled (or really out of control) issued debt instruments(not money in reality).