How Mervyn the Magician and Helicopter Ben are Destroying Your Dollar
Apr 24th, 2008 | By John Pugsley | Category: Politics & EconomicsBack in the Good Old Days – Before the Fed
The tie between the dollar and gold governed inflation in the first century of this nation’s existence. But that restraint fell away in the 20th century – and within just two short decades of when the Fed began.
Even the idea that the dollar is backed by the government’s IOUs (aka “Treasury bonds”) has evaporated. We now move into the final phase: The backing of the U.S. dollar with the IOUs of sub-prime auto loans and sub-prime mortgages.
In other words, your dollars are backed by the full faith and credit of that guy who couldn’t handle his mortgage or car payments on the other side of town.
Decades of relentless credit expansion have given birth to the same speculative monster that characterized the Roaring Twenties. Today is just like every credit crunch of the past. Still the pundits fail to identify or simply ignore the original cause of the boom that led to failure.
As always, they blame the free market itself. The inevitable result? We are in store for fresh, new layers of government regulation, and those, in turn, will lead to even deeper long-term problems. What form will those problems take? If history is our guide, inflation is in our future.
What Can You Do to Avoid this Mess?
What can an individual do to survive financially in a world of constantly depreciating currency? Doing battle to change the system, and abolish the Federal Reserve System’s ability to debase the currency, is a noble cause, and is one possible action.
Congressman Ron Paul has argued for abolishing the Fed during his campaign for the Republican nomination for President. Unfortunately, the odds of overthrowing the current system through the democratic process is negligible to none.
The only practical solution for the average individual is self defense.
Real values are in the tangible things we all need and use, and in the companies that create those things. Defense requires searching for assets that will retain value-those include better managed foreign currencies, commodities that will rise in value as money falls in value and ownership of profit-making companies that are fundamentally sound.
These are the solutions that have been consistently advocated by The Sovereign Society. For a decade we have presented them in our flagship publication ” The Sovereign Individual,” and through our seminars and books.
The ultimate fallout from this latest round of monetary expansion is inevitable, and it’s heading our way. Take refuge now.
JOHN PUGSLEY, Chairman
P.S. Take your financial fate out of the Fed’s irresponsible hands. Consider joining us this May 14-17 in Panama for literally dozens of ways to save your purchasing power and protect your assets from “that guy who couldn’t handle his mortgage or car payments on the other side of town.” Click here for details.
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John Pugsley is chairman of The Sovereign Society, author of numerous books and reports on economics, investment and politics. He's also former editor of John Pugsley's Journal. John's first book, Common Sense Economics (1974), sold over 150,000 hardcover copies. In that book he accurately predicted the inflationary explosion that followed the final U.S. abandonment of the gold standard in the early 1970s.
