dear john letter #6 -- read this book "The Folly of Elastic Money"

John,

Read this book and you will understand why all of the well intended government regulations and policies in the world can’t fix what ails our system.  First we have to come to grips with the fact that every problem we see isn’t fixable with government policy.  markets require division of labor, free exchange and protection of private property rights, which naturally leads to market features like wealth inequality and pollution and business cycles and creative destruction and unfair outcomes.  It is utopian to assume otherwise. 

When the government tries to fix what modern economics erroneously calls “market failures” it makes things worse.  The best example of this is central banking, which was invented ostensibly to protect the little guy against business cycles. In actual fact, the Fed was established in 1913 by a secret conspiracy (uncovered only decades latter) between a wealthy senator and his Wall Street buddies at a resort call Jekyll Island in North Carolina.  It is a classic case of big government and big finance getting in bed for mutual benefit while promising benefits for the little guy….  Sound familiar???  the rich Wall Street bankers wanted a bail out mechanism when the economy turned against them.  We’ve had a symbiotic relationship between big govt and big finance ever since.  The idea that government will police big Wall street finance is an absolute joke.  Wall Street gives more to Dems than GOP.  the foxes are guarding the hen house!!!! 

Yes, you guessed right: the fundamental disease causing systemic risk, systemic greed, excessive power and wealth concentration, historic financial boom and bust are all related to the underlying easy money disease promoted by the Federal Reserve.  Do yourself a favor and read this book.  It will help you get past all of the anger you have at the GOP for screwing everything up. 

Paper Money Collapse: The Folly of Elastic Money and the Coming Monetary Breakdown [Hardcover]

Detlev S. Schlichter

Detlev S. Schlichter (Author)

 

Editorial Reviews

From the Inside Flap

The recent financial crisis has exposed the instability of our financial system. While there is plenty of talk of reform, few commentators are yet willing to consider that the root cause could be the transition from commodity money to limitless paper money, although the track record of paper money systems is uniformly discouraging: Throughout human history, all paper money systems have either collapsed in chaos, or society has returned to commodity money (usually based on gold) before a total currency disaster occurred. This book shows why this was the case and why this is also the choice we are facing today.
Drawing upon ground breaking new research, Paper Money Collapse conclusively demonstrates why paper money systems—those based on an elastic and constantly expanding supply of money, as opposed to a system of commodity money of essentially fixed supply—are inherently unstable and why they must, by their very nature, lead to economic disorder.
These highly controversial findings clash with the general consensus that elastic state money is superior to inflexible commodity money, and that expanding money is harmless or even beneficial as long as inflation remains contained.
In an engaging style based on extensive study and analysis, this compelling new book exposes the fallacies of mainstream macroeconomics and debunks erroneous conventional wisdom. It explains why many people working in financial markets, in the media, and in policy establishment positions are unable (and often unwilling) to fully appreciate the underlying problems with elastic money and the danger it presents.
Paper Money Collapse shows in the starkest terms that the recent crisis is far from over and that the solutions presented by the advocates of paper money around the world are misguided and inherently flawed, in particular the current policy of accelerated paper money production to "stimulate" the economy. If these policies are continued, a complete currency catastrophe will be inevitable.
An absolute must-read for economists, individual investors, and anyone with an interest in finance, Paper Money Collapse will change the way you think about our financial system—and about how to take control of your own financial future.