America’s Counterfeiter

It was the singular achievement of Murray Rothbard’s America’s Great Depression to have demonstrated that the Great Depression was a crisis manufactured and prolonged by the attempts to stop an inevitable downturn. The policy response — creating more money, propping up prices, ginning up employment, and a host of other devices — took a stock-market price collapse and a banking liquidation and spread the mess throughout every sector of the economy. What might have lasted a year to 18 months instead lasted 16 years. –Lew Rockwell

There are libertarians who have a fixation with hemp products, and then there are serious ones. Do you want to know what is going on with our economy? Read Mises.org.

Financial analysts on the talk shows (like the one on in the background at the hotel now) blame our latest economic fiascos on irresponsible companies, failures of government oversight, greed, etc. Politicians want to “do something” (read: spend a lot of money) to appease the restless natives. However, no one blames the primary source of the problem: the Federal Reserve.

What is the source of the disease and why are investment banks so heavily infected by it? The root of the problem is the Fed’s very loose interest rate policy and strong monetary pumping from January 2001 to June 2004. The federal funds rate target was lowered from 6.5% to 1%. It is this that has given rise to various malinvestments, which we label here as bubble activities. … We define a bubble as the outcome of activities that have emerged on the back of loose monetary policy of the central bank. In the absence of monetary pumping, these activities would not have emerged. Since bubble activities are not self-funded, their emergence must come at the expense of various self-funded or productive activities. This means that less real saving is left for real wealth-generators, which in turn undermines real wealth formation. –-Frank Shostak, 3/18/08

The Fed is best thought of as a large counterfeiting operation. They will finance all these bailouts by creating debt and money out of thin air, thus decreasing the value of every dollar. Ron Paul’s book Revolution has a helpful chapter on the topic on the matter of our money supply. Whatever other schemes the politicians and bureaucrats are cooking up now will do nothing but prolong the agony because they are trying to prevent what the market is trying to do.

When you see a self-proclaimed “fiscal conservative” who isn’t focused on the money supply and the baneful impact of the Fed, then you can be certain of one thing: you’re not dealing with a serious fiscal conservative.

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