I have spent the past week or so doing research to write a blog on the dangers involved in the current government's spending policies and the effect they will have on each of us. Then I received this email from The Sovereign Man, aka Simon Black. I will still write that blog at a later date but Mr. Black has stated it so well and with a different approach than I am planning that I wanted to share his comments with you. The following is the Email I received in toto:
By 1789, a lot of French people were starving. Their economy had long since deteriorated into a weak, pitiful shell. Decades of unsustainable spending had left the French treasury depleted. The currency was being rapidly debased. Food was scarce, and expensive.
Perhaps most famously, though, the French monarchy was dangerously out of touch with reality, historically enshrined with the quip, "Let them eat cake."
The Bourbon monarchy paid the price for it, eventually losing their heads in a 1793 execution. But it took the French economy decades to finally recover.
Along the way, the government tried an experiment: issuing a form of paper money. It didn't matter to the French politicians that every previous experiment with paper money in history had been an absolute disaster.
As French Assemblyman M. Matrineau put it in 1790, "Paper money under a despotism is dangerous. It favors corruption. But in a nation constitutionally governed, which itself takes care in the emission of its notes [and] determines their number and use, that danger no longer exists."
Translation: This time is different. We're different. We're smarter. We won't suffer the same fate. TRUST US.
Within a few years, hyperinflation had taken hold in France. A measure of flour that sold for two francs in 1790 was selling for 225 francs by 1795. Everything soared. Carriage hires. Butter. Sugar. Everything.
Naturally, the French government decided to fix this problem by printing even more money, doubling the money supply from 7 to 14 billion units in a six-month period.
When these measures also failed, the French government imposed every control in the book-- price controls, capital controls, information controls, people controls. They confiscated lands, they filled the prisons, they waged genocide against their own people.
History shows there are always consequences to entrusting a paper money supply to a tiny handful of men. The French experiment is but one example. Our modern fiat experiment will be another.
Like the French, our politicians think this time is different. Our central bankers think they're smarter. And they want us to trust them. After all, what could go wrong?
Ben Bernanke, a man who has expanded the Federal Reserve balance sheet by nearly 300% during his tenure as central banker, just wrapped up Congressional testimony downplaying the risks of his own money printing:
"We do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery..."
It's also quite interesting that the Federal Reserve Chairman is discussing the 'stronger' economy, especially when by the government's own numbers, US GDP contracted in the 4th quarter of 2012. Meanwhile the price of everything from food to fuel keeps getting higher.
Simultaneously, politicians in the US are racing to avoid imminent 'sequestration' budget cuts. They've created a problem caused by excess spending, and their solution is to ensure they can keep spending.
The French were in the same boat in the 18th century. During the time of Louis XV, no one could imagine how French society could possibly function if they cut the welfare system or defense budget. So they kept spending... kept going into debt... and kept debasing the currency.
We know what happened next.
The US already must borrow money just to pay interest on the money they've already borrowed. The political elite is dangerously out of touch. This time is not different. Assuming otherwise is really dangerous.
Simon Black
Senior Editor, SovereignMan.com
Comments
Personally ? I can't wait until the American people get what is coming to them for their stupidity , whether I survive or not , it will be fun to know I stood against all this ignorance , stupidity , and immorality everyone is accepting . After all , I have lived my lifetime and everyone younger than me that I try to explain take me as a joke . All I have got to say is : Ha! Ha!
Well said Richard. The time is coming when soon the economy must boom or we hit the fiscal wall. It looks more like the wall than a boom.
WOW, does this mean heads are going to roll? WOW!!
The free lunch programs, the illegal never ending no-win wars, the ever expanding government agencies and regulations, the local elected officials writing for free grant money, never asking where that money is coming from, etc. all are leading to exploding prices and hyperinflation. If printing paper money leads to prosperity, why are not all nations prosperous?
Semper Fidelis
Well stated and this is what happens when there is nothing to back up the currency of the realm. It's only a matter of time until the house of cards falls. People have not changed in the last 2,000 years. We're exactly the same as we were then except now we are more technologically advanced. Emotionally, morally and spiritually we have not changed. Money still corrupts some people as does power. Those in power (read those who govern) tend toward evil because power tends to corrupt and absolute power corrupts absolutely. Those who control the purse of a nation feel entitled to more and more of it. And of course a certain number of any population or group are ignorant, apathetic and involved only in self interest and easily go along with the rhetoric from those who govern. This scene has played out many times throughout history. It's like the laws of physics. You can ignore them but in the end they will always function the same. May God be with us.
I believe he is totally correct and we are going to pay a terrible price for what our Govenment is doing to us. We are retired and having to cut back monthly due to the increases in fuel, food and mostly medical. God help us.....
Just a little off subject, but still talking about emperor Obama and his crew, take a look at this because it should blow your mind of just how our crooked our govenment is:
Obama's 2009 Tax Return Says Harrison J Bounel
This hits the nail on the head. I have heard the "it will work this time because I have a plan" so many times it is sickening yet we still find narcicists who think this way.
The sooner something is done the easier it will be to accomplish getting our nation on a firm financial footing the gov. has a BIG SPENDING PROBLEM that needs fixing drastically ,we know it they know it and they know we know it. So what seems to be the problem about getting something done .?
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