the dollar vigilante blog
Trillion Dollar Babies
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[Editor’s Note: The following post is by TDV Managing Editor, Redmond Weissenberger]
“Million dollar baby, Billion dollar baby, Zillion dollar baby, Trillion dollar baby.” — Alice Cooper, 1973
With the US Congress once again chomping at the bit to raise the limit on government borrowing, it has become exceedingly comical to watch as what was once the world’s leading economic power print, borrow, and spend its way down the path of failed states. For all their talk of scaling back Leviathan, Republicans in the House of Representatives tucked in their tails and voted to raise the debt ceiling to ensure Wall Street and welfare clingers will still get paid. If this sad display of dishonesty isn’t enough to convince you the dollar is on its way out, I don’t know what will.
At one point during the negotiations, there was a proposition for the US Treasury to mint a platinum coin and denominate it at one trillion dollars. That way, the coin could be deposited at the Federal Reserve and Washington’s account could be credited for a fresh trillion bucks. Then President Obama would be free to spend the dough to keep the welfare-warfare state running in tip-top condition.
Sounds crazy, right?
Many financial commentators agreed that the platinum coin scheme might work because of a legal loophole but it was a desperate ploy that might undermine confidence in the dollar. These supposedly intelligent pontificators, who happened to be blindsided by the financial crisis, were wrong on two counts. First, confidence in the dollar is already fading due to Ben Bernanke’s money printing orgy that has been going on since fall of 2008. And second, as ridiculous as the platinum coin proposal sounds, it’s hardly any different from what goes on right now between the Fed and the Treasury.
To feed its addiction to big spending, the US government currently sells bonds to Wall Street, who then in turn sells those bonds to the New York branch of the Federal Reserve. Instead of directly financing the ruling elite in Washington, the Fed does it through Goldman Sachs and friends. That way, Uncle Sam gets paid, the banksters get paid, and the average Joe gets screwed as the money in his wallet loses value. And don’t be fooled by the likes of Paul Krugman who say there is no inflation. Commodity and stock prices have been inflated to new highs. As economist Mark Thorton writes:
“The US stock and bond markets are at, or near, all-time highs. Agricultural land in the US is at all time highs. The Contemporary Art market in New York is booming with record sales and high prices. The real estate markets in Manhattan and Washington, DC, are both at all-time highs as the Austrians would predict. That is, after all, where the money is being created, and the place where much of it is injected into the economy.”
As we all know, the sugar rush economy fueled by cheap money will soon come to an end. What’s left will be a gigantic headache for those who don’t invest well.
The platinum coin scheme might seem like a pathetic gimmick but it hardly differs from what print-happy Bernanke and his banker cohorts have been unleashing upon the people. As long as central banks around the world keep printing money as if there is no tomorrow, the West will continue to deteriorate economically. A scheme like minting a coin worth $1 trillion will then seem trivial in comparison.
Are you tired of the Bernanke-insanity that governs our fiscal policies and further envelopes our economy in the path towards socialist ruin? For more of these columns and others from TDV on how to protect yourself from TEOTMSAWKI please subscribe here.
Redmond is the Managing Editor of the Dollar vigilante and the Founding Director of the Ludwig von Mises Institute of Canada, the centre for the study of the Austrian School of Economics within Canada
Redmond founded the LvMIC in 2010 to address the lack of knowledge about the true cause of our booms and busts of the last 100 years and the need for sound money and sound economics to be applied to the Canadian and global economy.
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