"Bad money chases out good money."  ~Paraphrase of Gresham's Law.

Curmudgeon's   Archive.

Cancel That Funeral
Who Supports Whom?
One Foot in the Grave
Magical Money  

Posterity's Debt To Me
The Battle for Honest Money
From Riches to Rags
Fiddler's Broken Wrist
Jack-lantern Wealth
Chance of Gold Confiscation

Poobahs of Positivism

Blood In the Streets
America Descending
Just Plain Stealing  ?
A thing to fear
Heavenly Sex
What Fools, We Mortals
Unvarnished Truth
Hucksterism Gone Wild
Religious Violence


January 22, 2018
   The U.S. Senate has voted to extend federal government funding to February 8th.  In the brief interval Congress must try to settle its partisan differences or face a government shutdown again. It must also face the need of officially raising the public debt ceiling.

    We're aware of the danger of perpetual budget deficits. Spending money one does not have inevitably leads to disaster. Politicians calling for balanced budgets are few and far between and are almost always ignored. After all, living within one's income has not been in fashion for a long time. It requires doing without certain wants. (Not NEEDS. Wants.)

   Economist Ludwig von Mises pointed out long ago that today's luxuries become tomorrow's necessities. The iPhone comes to mind.

    The bitcoin craze has been momentarily shoved out of the headlines.  But dozens and dozens of cryptocurrency platforms are in operation raking in dollars as fast as they can.

            It occurs to us the first bitcoin in America circulated prior to the adoption of the dollar as the currency unit in 1792.  It may have been the inspiration of the modern use of the term "bit".

            The dollar was a large coin made mostly of silver, modeled on the popular Spanish Milled Dollar which circulated among the colonies along with coins of gold and silver from other foreign nations.  The Spanish silver dollar was valued at 8 reales, commonly known as
bits.  A half-dollar was 4 bits.  A quarter-dollar 2 bits. (An echo remains in "Shave and a haircut, 2 bits!" ) 

             The 18th century Spanish dollar was made chiefly of precious metal.  So was the Constitutional U.S. dollar.  Both disappeared from circulation long ago.

               Except for base-metal coins and paper IOUs most monetary wealth exists only as digital memoranda in computers.  The U.S. dollar is fiat currency.  So is bitcoin and its numerous relatives.

                The ghost of Charles Ponzi comes to mind. . .
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   This is purported to be a small portion of Russia's gold stash.  Russia and China are said to have been buying physical gold in large quantities and rumors abound they are going to spring a gold-backed currency on the world. 

         It's curious to learn several nations, and the International Monetary Fund, have been hoarding gold, which is widely believed to be useless and out of fashion.  Why hold heavy bars of gold when all the world is rushing into cryptocurrency, such as bitcoin? 

          The United States is said to be holding the world's biggest hoard of gold, mostly at Fort Knox and the Federal Reserve Bank of New York.  Among the top ten gold holding countries, Russia was ranked #7 in 2015.  Updated data indicate it could now be #5 in ranking.

            If gold is the ancient "barbaric relic" economists have long claimed, why are so many nations buying and storing it?  We think it's a question worthy of further investigation.   RUSSIAN GOLD PHOTOS

Not so well off by today's.
   Those of us from the Silent Generation who did not make it into today's 1 percent of the very rich may feel a bit cheated.  Our net worth may be awesome by the measures of seventy or more years ago, but it seems like a drop in the bucket compared to the super-rich. 

    What happened?

     The measuring device. . .the once mighty dollar. . .has sunk to only a fraction of its former purchasing power.  We former Depression Era youth remember when bread set us back ten cents a loaf and one could buy 20 twelve-ounce bottles of Pepsi Cola for $1.00.  As the years rolled by prices rose.  So did incomes, but not nearly at the rate of price rises.  Classic evidence of monetary inflation. 

      The elite 1 percent, into whose pockets most new dollars flow, are fine. But what can the rest of us in the 99% do?

       A lost cause? Must we sink to the bottom of the money river, smothered by its high prices and low returns on our savings?

        "No," says Adam Taggart. "The good news here is that there’s a clear set of strategies for keeping yourself afloat while the system continues to pursue pernicious and deeply unfair policies. They take focus, effort and discipline — but anyone implementing them will have good chance to stay ahead of the rising cost curve, and have a real shot at financial prosperity."

Well, this certainly catches one's attention.  Drowning in a River of Money.





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