An Electronic Magazine for Thinkers
The End-of-everything Blues (April 13, 2006)
Chicken Little began his career of predicting doomsday by rushing around the neighborhood declaring, "The sky is falling! The sky is falling!" After a while he began writing letters to newspaper editors expanding on his message. Eventually, radio talk shows began to hear from Mr. Little on a regular basis.
Today, Little and an army of his followers are all over the Internet with a variety of commentaries about the awful things that are about to befall the world. The United States is going to get a particularly rough going over, they predict.
Judging by the titles of many commentaries some ominous monetary events await us. "Systemic Banking Crisis!" warns a writer. "Debt-driven Meltdown," howls another. Still others predict "Economic Armageddon," "Financial Apocalypse," and "Category 6 Fiscal Storm." Articles titled "Economic Pain" and "Major Upheaval" seemed very tame to me, but "Demographic Tsunami" and "Economic Earthquake" laid it right on the line. We're in for it!
Although I have personally warned of the long range negative consequence of monetary inflation for many years, I find myself halfway through a cold bottle of Maisel's Weisse on a lovely Spring day not particularly caring that life as we know it may be on the verge of dramatic disruption. So what if the economy goes through the inevitable spasm of re-balancing itself? I have done everything in my power to batten my personal economic hatches against the storm and I don't feel obliged to throw myself into a tizzy because so many Americans fell for the silly idea they could constantly borrow their way to wealth and happiness. They will either sweat their way out from under their debt or they will run away from it and let their creditors absorb the loss. The fact that many people are willing to do the latter is disturbing evidence that modern morals aren't what they should be.
Nearly thirty years ago I took to the civic club circuit to warn of the dangers of money inflation. "If something isn't done to stop it," I warned, "the dollar in your pocket right now will wither away and you'll have to pay much higher prices for goods and services." With an exception of one or two members the audiences snickered in their napkins. The dollars in their pockets have now declined to around 30¢. Although people are mildly disturbed they are still not interested in demanding the government stop inflating.
George W. Bush is setting records as the most fiscally reckless of all U.S. presidents. He has run up public debt by some $2.5 trillion in his term to date and seems genuinely unaware of the damage he's doing. And he has almost two more years in office.
I picture him as the helmsman aboard the Ship of State, which is not sailing well because it is burdened with far more cargo than the Constitution declared reasonable for this vessel. The ship is laboring along, sunk almost to the gunwales, and Captain Bush is steering it directly toward the shoals!
Doesn't anyone care? No. When you've spent your entire life being told that your homeland is the greatest on the face of the earth and is invincible, it blinds you to the record of other once mighty nations that spread themselves too thin trying to run the world and were forced to debauch their currency in order to try to pay the bills and keep the folks at home happy. Forgotten is the story of the once mighty British Empire. The saga of the great Roman Empire is also forgotten. Spain's glory days and those of the great Byzantine Republic have faded from memory. No one will wonder about the American Empire until an Asian Empire replaces it. Historians will write about the transition and possibly explain the role that rotting money played.
"Surely the politicians and bankers and economists will do something to turn the Ship of State away from the rocks," you say. We've been on this perilous course for a long time and they've not done a thing about it. There's no turning back. Better that we should just don the life jackets and swim through the economic correction we've been trying to avoid for several years.
When reality settles on the American psyche we can jettison the excess cargo the Ship of State has been carrying, patch up the hull, pump out the bilge, and set sail on a new course into the open ocean. In the process it will be necessary to set the dollar back on an honest footing and require the national government to operate under the U.S. Constitution. Not an impossible task, but one the American public is not yet ready to accept.
If history is a guide the Empire will eventually fizzle for lack of funds. Contrary to popular belief money cannot be created forever out of thin air. All episodes of money inflation end - - painfully. It's rather fun to witness history repeat itself - if you have your personal hatches securely battened.
April 13, 2006
My Immigrant Relative
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