Soros funds Bretton Woods II for April 8

The group Institute for New Economic Thinking, funded by George Soros, will host a monetary conference in Bretton Woods, New Hampshire, from April 8 to 11. The conference will assemble bankers, politicians, journalists, and activists.

Ed Griffin states:

George Soros is sponsoring a major international conference to reform the world’s currency systems, which means to create a one-world fiat money controlled by a world central bank. He claims that capitalism is the enemy of an open society. He hopes this will become as important for the future of money as the 1944 Bretton Woods conference that led to the creation of the IMF and World Bank.

Official Event Info

Related article

LA Times reports on purchasing power loss

It’s nice to see a major newspaper reporter writing about purchasing power. Most reporters talk about prices. When prices rise for all things, this is usually because the currency is losing value, and a loss in value is a loss in purchasing power.

The reporters explains that since Federal Reserve started issuing more dollars back in August, 2010, the dollar has lost about 10 percent of its purchasing power compared with other major currencies.

Here is my reply:

Comparing the Federal Reserve dollar to other currencies is like comparing one sinking ship to another. Other central banks have issued more of their own currency during the same time period, and that devalues those currencies as well It’s a race to the bottom.

I compare Federal Reserve dollars to the items I buy, such as bread made with wheat. I can’t use euros or Swedish krona to make bread.

In Aug, 2010, $10,000 dollars was worth 41 metric tons of wheat. Now, $10,000 dollars is worth 28 metric tons. In other words, the dollar now buys 32% less wheat. So things are even worse than the dollar’s average 10 percent loss compared to other currencies. Forget about traveling to Sweden, traveling to the nearby grocery is more expensive.

If you owned stock that lose 32% in six months, you’d likely sell it. You can sell your dollars as well. Simply convert most of your dollars into anything else, such as stock, gold, oil futures, comic books, etc. Then when you need to buy a big ticket item, convert your stock or gold back into dollars, and make your purchase. Note, you would pay some transaction costs ($9 per trade) and capital gains taxes.

If you had bought wheat futures back in August of 2010, your wealth would still buy the same amount of bread at the grocery store today. By holding dollars, you can buy one-third less, or you’ll have to shell out one-third more to buy the same amount of bread.

This is why prices have risen in dollars. Since dollars are worth one-third less, bread makers have raised their “dollar” prices by one-third.

See LA Times Article.

Hat tip to the Sound Money Project.

Paradox of Keynes’s Home

John Maynard Keynes' housenew booklet from the American Enterprise Institute echoes the famous belief of policy maker John Maynard Keynes who warned of a “paradox of thrift” by governments that should be spending in record amounts during recessions.

The article defines inflation as lower prices, which are bad if you’re selling and good if you’re buying. Why did Keynes side with the sellers? Why did he create catchy, bogus theories like the “paradox of thrift”? Possibly because he planned to sell his home or stocks, and if people didn’t keep spending, and bidding up prices, then his home value might fall.

Thrift or savings occurs when one has bought all needed items, such as a warm coat or food. Spending beyond that amount can jeopardize future purchases, such as education costs for one’s children, and retirement plans. No paradox here.

The same logic same to governments, which are just the combined financial plans of many individuals. Government spending in “record breaking amounts” can prevent accumulating funds for future purchases. No paradox here either.

There’s only a “paradox of Keynes’s home.” Spend, spend, spend, to bid up prices, including the price of Keynes’s home.

Event: Dollar, Euro, & More at Heritage Foundation

The Heritage Foundation in DC will hold a monetary policy event on Friday, April 16, called “The Dollar, The Euro, and the International Monetary Order: What is the U.S. to Do?“. The event will feature Robert Mundell, a leading advocate of the Euro, which may be a pixie dust currency but it at least made it unnecessary for people in Europe to pay fees to convert from one pixie dust currency to another. The event will also feature Steve Hanke who helped establish currency “regimes” (Heritage’s language) in Argentina, Estonia, Bulgaria, Bosnia-Herzegovina, Ecuador, Lithuania and Montenegro. Steve’s recent paper recommending solutions for Zimbabwe included a free banking option. Judy Shelton, who spoke at the Atlas Sound Money event in Philly, will also be on the discussion panel with Hanke.

The event description warns about threats to the dollar’s long-standing role in the global economy. Though bad for Federal Reserve and it’s partners-in-crime in the government, movement away from the dollar may mean people are becoming disillusioned with yet another fraudulent currency and more likely to consider honest, commodity monies.

More info on Heritage’s site.

More events.

Gold price rising, or dollar falling?

If only the price of gold was rising, then news headlines should say “Gold price rising.” And we would want to know if there was a sudden change in the supply or demand. We’d want to know what industries or consumer groups switched to buying gold instead of something else or if a group of gold mines suddenly stopped mining.

When the price of everything is going up, then the dollar is losing value. Consider the rise in these commodities, as reported by Bloomberg News:

The Standard & Poor’s 500 stock index gained 17 percent this year, and the Reuters/Jefferies CRB Index of 19 commodities gained 13 percent, including a 97 percent jump in copper, a 60 percent rally in crude oil and a doubling of sugar prices.

When the price of “everything” is rising, you can protect yourself by owning a “thing” meaning a product, not fiat paper money such as US dollars or Euros or even the Australian dollar, rising recently due to central bank interest rate changes, though still a paper currency.

The key quote from the Bloomberg article is this:

Gold has more than tripled in the past eight years as the dollar tumbled 67 percent versus the euro, according to data compiled by Bloomberg.

Rise in monetary baseIf we were reporting the euro price like many news organizations report the dollar price, then the headline would be the “Price of euro rises 67 percent,” just like headlines read “Price of gold has risen 18 percent this year.” The underlying story for both prices rises is the massive devaluation of the dollar due to a massive increase in the monetary base.

If you had owned bullion this past year instead of dollars, you would have beaten the 13 percent increase in the Reuters/Jefferies CRB Commodities Index noted above. If you chose to own dollars, instead of bullion or a “thing,” the purchasing power of your money can buy 13 percent less commodities, meaning 13 percent less of mostly everything.

IMF poised to print pixie-dust int’l money

Easy money. Liquidity. Sounds nice doesn’t it. That’s how the IMF is pitching the latest idea to create billions of dollars worth of “SDRs” or Special Drawing Rights. The SDRs are euphemistically called a super-currency. It’s only a super worthless currency that steals the purchasing of most if not all other fiat currencies on the planet. A former IMF official, Simon Johnson, said,

“The principle behind it is that everyone would get bonus dollars and instead of the Federal Reserve having to print them, everyone gets them. The objective is to create a windfall of cash. However if everybody goes out and spends the money it could be very inflationary.”

Let’s break that down. “Everyone” is not going to get bonus dollars, only people who work for or with national governments. You, dear reader, and I get nothing. The “windfall of cash” will only benefit said parties, and everyone else will experience their share of a windfall of theft.

The “economist” then adds this could be “inflationary” to further confuse the public since simply printing money is the act of inflation. What he should have said is the act “could” lead to price increases if the people who get the SDRs spend them.

SDRs: yet another reason to convert your fiat money into real products.

Ron Paul message about his book and progress

From Ron Paul:

Dear Friend of Liberty,

What unprecedented anti-Fed days these have been! We had our Audit the Fed Congressional hearing, in which the central bank – for the first time in 96 years – was put on the defensive. End the Fed was chosen as a Main Selection of the Conservative Book Club; this book, the first anti-central banking bestseller in American history, debuted at #2 on and #6 on the New York Times and Wall Street Journal bestseller lists.

End The Fed – which the Mises Institute’s Lew Rockwell calls “readable and persuasive beyond belief” – can climb up the NYT and WSJ lists week by week, eventually reaching #1, with your help. Please get a copy for yourself. Then encourage friends and family members to do the same. Spread the word. One businessman bought copies for all his 23 employees. Others have given them to students, a favorite use of mine. You can order the book right now at the link below:

Since 1913, the Fed has had it all its own way: booms and busts, dollar depreciation, redistribution to the government and the big banks from the middle and working classes. But just as Andrew Jackson abolished the predecessor of the Fed, we too can knock over this dangerous institution. End The Fed teaches all the fascinating history, and tells us what we can do for the future. I tried to make it easy for everyone to understand, and convincing for those who already do. It gives the constitutional, economic, moral, and libertarian arguments against what Jackson called “the Monster.”

Ever seen the Fed’s marble palace in Washington, DC, on Constitution Avenue (of all streets!)? That bunch sure knows how to live. I’ve long had a dream of being the auctioneer when the Fed is sold off for private offices, or maybe a Museum of Sound Money! Help me dull its scissors and then break them, so the Fed can’t cut down our dollar’s value. Indeed, I believe that people ought to be ashamed to work at such a place; an institution that has done so much damage to American prosperity and freedom, as well as to the freedom and prosperity of the whole world. For example, I want no more bowing and scraping to the Fed chairman when he goes to Capitol Hill to peddle his nonsense. He is just a bureaucrat, albeit a disastrous one.

And, if you are in New York City or nearby, I will be signing copies of End The Fed at the Borders right in the heart of the financial district (100 Broadway) at noon on Tuesday, Sept 29th. And if you can’t make that, I will be discussing the book on The Daily Show With Jon Stewart later that night

Together, you and I can change things. Indeed, we must. For all our futures, nothing is as important as cutting the Fed down to size. Join me: let’s End the Fed.

Congressman Ron Paul

Federal Reserve helps bankers for favors, says Ron Paul

In his weekly column, congressman Ron Paul addresses the real reasons for the Federal Reserve secrecy: the people at the Fed don’t want to expose their sweetheart deals to banks who return the favor with jobs and “who-knows-what favors” later on. Plenty of people leave central banks to take cushy jobs at the banks that receive central bank giveaways and low interest loans.

Ron Paul’s attacks on the Fed are getting more and more honest. The Fed is a corrupt institution created to provide unlimited money to politicians to spend on government programs and to bankers to spend on anything they want.

An audit would make people realize that, while Bernie Madoff defrauded a lot of investors for a lot of money, the Fed has defrauded every one of us by destroying the value of our money.

Read Ron Paul’s weekly address.

Chart explains decline of dollar’s value since 1800

You must check out this amazing chart chronicling the value of the dollar since 1800. Government inflation of the money supply during war destroyed the dollar. The War of 1812, the War for Southern Independence (the Civil War), the European War (WWI), and WWII all led the government to create money.  A dollar from 1800 is now only work 8 cents. Imagine if you had been left an inheritance of $10,000 by an ancestor who lived in 1800, and you had just put it into a bank.  That inheritance would only buy the equivalent of $800 today. Put another way, $800 today should really be worth $10,000. The missing $9,200 was stolen through money creation perpetrated by the U.S. federal government and the banks in the Federal Reserve Cartel.

Gold as a crisis “hedge” explains that gold is a good “crisis” hedge but not necessarily a good inflation hedge because people tend to buy more gold during times of turmoil. During some instances of inflation, gold lost purchasing power.

From the peak in1980 the inflation rate declined but cumulative inflation climbed steadily upward. But rather than keeping up with inflation the price of Gold fell from the peak of $850 per ounce down to under $300 in 2001.

But in inflation adjusted dollars the scene is even worse. The 1980 peak in 2007 inflation adjusted dollars was over $2100 and it fell to under $346 losing a whopping 84% of its value!

So even though inflation rose… gold fell… because the fear level was low (and possibly because governments worldwide manipulated the price).