Fed's QE policiy threatens the dollar's future as a reserve currency

See my comments throughout this four and a half minute report by the Australian Broadcasting Corporation about the dollar's future as a reserve currency.

 

http://www.abc.net.au/news/2013-10-16/the-debt-deadlock-in-washington-is-proving-costly/5027350

China and Gold

China and Gold, by Alasdair Macleod

Rather than some conspiracy to destroy America via the dollar, one should see China's actions as an act of rational self-interest. China was very happy to accumulate over a trillion US dollar reserves, but now it rightly sees that Quantitative Easing to Infinity means the ultimate destruction of the dollar. Alasdair Macleod explains China's actions in the link above.

There is still time for the US and the West to regain financial supremacy by tying their currencies to their still huge gold reserves. The West's advantage is the rule of law; i.e., that one may actually demand specie for a gold-backed dollar or deutschemark (should Germany wake up and act rationally to protect itself from the European inflationists). One would never be certain that such a demand to the Bank of China or the Russian central bank would be honored. Without confidence in its redeemability, any gold-backed currency is little better than a fiat currency.

My letter to National Review re: Structural flaws doom the EU and the euro

Dear Sirs:
I read with delight Daniel Hannan's review of Luuk van Middelar's The Passage to Europe: How a Continent Became a Union. However, I disagree with Mr. Hannan's statement that "the EU is in the mess it's in" because "as time passes, government agencies tend to be taken over by dullards and mediocrities." On the contrary, government does NOT go astray due to dullards and mediocrities but by men of ambition who wish to distinguish themselves by ruling over their fellow men. Abraham Lincoln very clearly addressed this issue in his speech to the Young Men's Lyceum of Springfield, Illinois on January 27, 1838. As Mr. Hannan explained, the goals of the EU had been achieved over twenty years ago. A new European war among the Western European nations was unthinkable by the early 1960's and the threat of war with a monolith communist empire was removed when the Soviet Union collapsed in 1989. By the early 1990's the EU had achieved its main goal of economic integration via free trade. But that is not enough for men of ambition. From the beginning those like De Gaulle who favored economic integration and the maintenance of the traditional nation state were challenged by men who foolishly desired political integration. They have insinuated themselves into positions of power and now run roughshod over the supposedly free citizens of Europe, who now find that there is no rule of law or consent of the governed. As for the euro, it was doomed from the very beginning, as explained by Dr. Philipp Bagus of King Juan Carlos University in Madrid in his book The Tragedy of the Euro. , which I reviewed for the Ludwig von Mises Institute. The economic law of the "tragedy of the commons", thus the book's title, explains what Dr. Bagus calls the euro's "misconstruction". It is a commonly held resource that will be plundered to extinction. There is no power on earth that can prevent the euro from collapsing, because its construction violates economic law.

The EU itself is now unnecessary. There is nothing that a nation can gain from the EU that it cannot attain by simply declaring itself to be a free trade nation. Statesmen must explain to their constituents that unilateral free trade is a benefit to all, EVEN IF IT IS NOT RECIPROCATED. All such a nation needs to do is mind its own business and set a good example. Its freedom and prosperity will win the day. The EU's immediate post war goals of peace and prosperity will be achieved by such sovereign nations without the need of treaties, men of ambition, or bureaucrats.

Greek government refuses to economize

Re: New cuts not possible, Greek prime minister tells euro area official

Here's another example of why Europe will NOT resolve its debt crisis. There is no enforcement mechanism that would require deficit countries to economize. The Greek government is more concerned about its own electoral success than solving the nation's financial problems. This simple fact will always prevail. When faced with the choice of remaining in office or actually doing something constructive that might threaten the party at the polls, the governments of the deficit nations will always choose remaining in office and thumbing their noses at their creditors. This article also clearly states that the European Central Bank holds sovereign debt, which was explicitly prohibited by the Maastricht Treaty. It is time for responsible countries like Germany to recognize that the EU they thought they were joining does not exist. Germany would not be leaving the EU, because there is no EU, just a group of debtors trying to convince Germans and others to put them on international welfare forever.

How to get an EU bailout

From today's Open Europe news summary:

In an interview with the FT, Finnish Prime Minister Jyrki Katainen refused to rule out supporting further eurozone bailouts if the situation was “hopeless” and insisted he remained “pragmatic” on the issue.
FT

So, all a member of the EU needs in order to secure a bailout is to make itself hopelessly insolvent. NO PROBLEM! This is the fatal flaw in all welfare programs, whether they apply to individuals or entire nations; i.e., the welfare recipient himself has complete control over the process. He can easily place himself in a hopeless position or, as is the case for both individuals and nations, falsely claim that he is hopeless.

Putting welfare for farmers in perspective

The USDA budget for 2012 was $145 billion. That's $500 for every man, woman, and child in America.

This is a quote from the Environmental Protection Agency's website:

"There are over 313,000,000 people living in the United States. Of that population, less than 1% claim farming as an occupation (and about 2% actually live on farms). In 2007, only 45% of farmers claimed farming as their principal occupation and a similar number of farmers claiming some other principal occupation. The number of farms in the U.S. stands at about 2.2 million."

So, assuming that 1% of the US population claims farming as an occupation, but only 45% claim farming as their principal occupation, means that the US has 700,000 full time farmers. Dividing the USDA budget by that number means that the average annual taxpayer cost per full time farmer in the US is over $200,000.

Dividing the USDA's budget by 2.2 million farms means that the average farm costs the taxpayer $66,000 per year. This means that the average farm cost to the taxpayer is 44% higher than the average US household income of $46,000.

Costly "ersatz" technologies

UKIP's Roger Helmer on costly "playground technologies". The German word for a costly but less efficient product is "ersatz". It's primary use is during wartime, during which the nation is forced to use less suitable products. Today politicians everywhere are forcing peaceful citizens to adopt wartime measures. The standard of living of all the world's citizens will fall due to this fallacious and politically driven ideology. Free trade and unhampered capitalism will reveal the most efficient use of all resources. Rather than save resources, these market interventions force us to consume resources unnecessarily.