What Will You Do If Your Dollars Stop Being Accepted In America?

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What will you do when the dollar no longer spends? With Obama letting in the floodgates of new immigrants from our Southern border, expect welfare rolls to explode, with trillions more in taxpayer funding triggering possible runaway inflation.

And if that happens, do you know how much a cup of coffee might be? About $500 trillion dollars per cup–and that is for old, cold bitter Java. If you want Starbucks lattes, expect to pay 2 quadrillion dollars.

Don’t laugh and don’t say it’s impossible. Rhodesia used to be the Garden of Eden of Africa. Shortly after adopting socialist money schemes, and sporting the new name of Zimbabwe, their coffee cost more than that. So did their gasoline and milk and eggs. After a while, the money stopped spending altogether.

But the United States is actually deeper in debt than Zimbabwe was before their collapse. The United States of America used to be richest nation in modern history.

So I ask you again: what will you do if your paper dollars become worthless?

Here’s one solution: Buy a few thousand dollars in gold coins as a possible hedge against runaway inflation; and if the day comes that coffee costs a trillion dollars, never fear. For your gold would likely be worth well north of several quadrillion dollars. And no matter how much higher the dollar inflates, your gold, if it follows traditional patterns, would keep ahead of the curve into quintillions of dollars and so forth.

But without gold, your entire net worth, even if you are Bill Gates, could be worthless. Totally worthless.

To learn more about investing in gold coins, you may visit the web pages of any reputable gold coin dealers. One we like is: www.SwissAmerica.com.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

China Now The World’s Lender Of Last Resort – With Money Comes Power

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As the United States approaches $20 trillion in debt, on its way to $30 trillion in a few years, China has become the new lender of last resort for the global community.

The latest recipient of China’s lending largess is Petrobras, the state-owned Brazilian petroleum company. It goes without saying that Petrobras has vast oil reserves that China hopes to access.

Zero Hedge reports that China has lent Latin America over $100 billion dollars over the last ten years–and plans to ramp that number to $250 billion over the next few years. Most of these borrowers are in the backyard of the United States, putting to rest any remaining vestiges of the Monroe Doctrine.

At the risk of extrapolating too much, it appears as though Beijing isn’t opposed to throwing billions behind serving as a lender of last resort and we can’t help but wonder if the new round of Petrobras financing is indicative of where China will steer initial AIIB funding — that is, into oil and Latin America. What’s interesting (and very ironic given how we’ve characterized the AIIB), is that it appears Beijing may look to channel the bank’s lending straight into Washington’s backyard, effectively slighting the original Monroe Doctrine even as China tacitly implements its own take on an official policy of regional influence and control.

Meanwhile, US allies continue to fall in line with France, Italy, and Israel set to jump on the bandwagon.

Our profligate federal spending and ballooning debt are coming back to haunt us now in the geopolitical realm. Economic weakness leads to military weakness, and we are seeing this play out in our own backyard with China and Russia looking and paying for access, basing rights, and natural resources. The old World War II-based institutions are now facing strong competition from the Chinese.

Money equals power, and the power is shifting to China.

But hey, let’s offer free college to everyone! Someone will pay for it, right?

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

Repeal, Don’t Reform, The IMF!

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A responsible financial institution would not extend a new loan of between $17 and $40 billion to a borrower already struggling to pay back an existing multi-billion dollar loan. Yet that is just what the International Monetary Fund (IMF) did last month when it extended a new loan to the government of Ukraine. This new loan may not make much economic sense, but propping up the existing Ukrainian government serves the foreign policy agenda of the U.S. government.

Since the IMF receives most of its funding from the United States, it is hardly surprising that it would tailor its actions to advance the U.S. government’s foreign policy goals. The IMF also has a history of using the funds provided to it by the American taxpayer to prop up dictatorial regimes and support unsound economic policies.

Some may claim the IMF does promote free markets by requiring that countries receiving IMF loans implement some positive economic reforms, such as reducing government spending. However, other conditions imposed by the IMF, such as that the country receiving the loan deflate its currency and implement an industrial policy promoting exports, do not seem designed to promote a true free market, much less improve the people’s living standards by giving them greater economic opportunities.

The problem with the IMF cannot be fixed by changing the conditions attached to IMF loans. The fundamental problem with the IMF is that it is funded by resources taken forcibly from the private sector. By taking resources out of private hands and giving them to IMF bureaucrats, government distorts the marketplace, harming both American taxpayers and the citizens of the countries receiving the IMF loans. The idea that the IMF is somehow better able to allocate capital than are private investors is just as flawed as every other form of central planning. The IMF must be repealed, not reformed.

The IMF is not the only U.S. institution that manipulates the global economy. Over the past several years, a mysterious buyer, identified only as “Belgium,” so named because the buyer acts through a Belgian-domiciled account, has become the third-largest holder of Treasury securities. Belgium’s large purchases always occur at opportune times for the U.S. government, such as when a foreign country sells a large amount of Treasuries. “Belgium” also made large purchases in the months just after the Fed launched the quantitative easing program. While there is no evidence this buyer is working directly with the U.S. government, the timing of these purchases does raise suspicions.

It is not out of the realm of possibility that the Federal Reserve is involved in these purchases. The limited audit of the Federal Reserve’s actions during the financial crisis that was authorized by the Dodd-Frank Act revealed that the Fed actively intervenes in global markets.

What other deals with foreign governments is the Fed making? Is the Fed, like the IMF, working to bail out Greece and other EU countries? Is the Fed working secretly to aid U.S. foreign policy as it did in the early 1980s, when it financed loans to then-U.S. ally Saddam Hussein? The lack of transparency about the Fed’s dealings with overseas central banks and foreign governments is one more reason why Congress needs to pass the audit the fed bill.

By taking money from American taxpayers to support economically weak and oftentimes corrupt governments, the IMF distorts the market, enriches corrupt governments, and harms both the American taxpayer and the residents of the counties receiving IMF “aid.” It is past time to end the IMF along with all instruments of American interventionist foreign policy.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

GAO Report: United States Government Made $125 Billion In Improper Payments In Fiscal Year 2014

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Improper payments by the federal government totaled nearly $125 billion in fiscal year 2014, according to a newly released report by the Government Accountability Office (GAO).

The GAO said the waste was spread across 124 programs in 22 agencies. “This taxpayer money was not spent securing our borders, it was not spent on national defense, and it was not spent contributing to safety net (sic) for those in need,” said Sen. Ron Johnson, R-Wis., chairman of the Senate Committee on Government Affairs, in a hearing Monday.

This is a problem that is going to get worse year after year if we do not get a handle on it now. As the federal government becomes even more involved in our healthcare system, outlays will continue to grow, and so will improper payments.

One of the most startling examples of improper payments was Medicare’s payments to doctors and hospitals totaling $46 billion, along with Medicaid’s at $17.5 billion.

Other examples include:

  • Earned Income Tax Credit – $17.7 billion
  • Medicare Advantage (Part C) – $12.2 billion
  • Unemployment Insurance – $5.6 billion
  • Supplemental Security Income (SSI) – $5.1 billion
  • Supplemental Nutrition Assistance Program (SNAP) – $2.4 billion
  • School Lunch – $1.7 billion
Government Accountability Office

Government Accountability Office

Government Accountability Office

Government Accountability Office

You can read the full report here.

An article composed in The Associated Press Tuesday got to the heart of the matter:

Social Security has no death record for 6.5 million people who would be at least 112 years old, according to a report by the agency’s inspector general.

In reality, only a few could possibly be alive. As of last fall, there were only 42 people known to be that old in the entire world.

Only 13 of the people are still getting Social Security benefits, the report said. But for others, their Social Security numbers are still active, so a number could be used to report wages, open bank accounts, obtain credit cards or claim fraudulent tax refunds.

“There is one root cause that is easily identified, but for reasons that defy logic, has been incredibly difficult to solve,” Johnson contended. “The federal government has wasted billions of dollars over the last few decades giving money to dead people.” 

h/t: Fox News

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

What Did My Parents Ever Do To The Federal Reserve?

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In September 1993, President Bill Clinton reassured his radio audience that “if you work hard and play by the rules, you’ll be rewarded with a good life for yourself and a better chance for your children.” Picking up that theme over 18 years later, President Barack Obama affirmed that “Americans who work hard and play by the rules every day deserve a government and a financial system that does the same.” The trouble is neither the government nor the financial system backed by the Federal Reserve rewards people like my parents, who have worked hard and played by the rules their entire lives–only to have their savings wither away.

Instead, Federal Reserve officials and the intelligentsia who support them are continuously working to make their lives more difficult, frightening the masses of what shoppers look for every day—lower prices. Price deflation, the cry, is disastrous for the economy. They worry that lower prices will reduce profits, leading to shutdowns and lay-offs, and that lower prices make it harder for people to pay their debts. Sound economic theory and history, however, both indicate that price deflation is nothing the social economy needs to fear. If prices fall because the economy is more productive, this is unambiguously positive. However, if prices fall because people spend less, their desire is for larger real cash balances. Falling prices help them achieve their goal, which precisely is the purpose of economic activity.

Lower prices and wages can make it harder to pay fixed debt. This, however, serves as an excellent incentive to stay out of debt in the first place, as my parents have done as a result of significant sacrifice. Before creating even more money out of thin air to ward off lower overall prices, we should at least consider some of the ethical issues involved.

Many men from my father’s generation are not unlike John Adams, who wrote to his wife that he “must study politics and war, that our sons may have liberty to study mathematics and philosophy.” My father embarked on 20 years of hard labor in a meat packing plant providing for his family until he lost his job due to his union pricing him and his fellow workers out of a job. When his plant closed in the mid-1980s, he embarked on a second successful career with my mother, operating their own barbecue business for another 20-plus years. I saw firsthand the challenges they faced trying to keep quality up and costs down, while producing top-drawer barbecue meat and sandwiches for a demand that was always uncertain. I saw the stress on my mother’s face one week in the early days when they netted a mere $15 before taxes. My father indeed “studied” meat packing and barbecue, in part, so I could go to college and become an economist and college professor.

Additionally, mom and dad had the foresight and character to make the sacrifices necessary to stay out of debt. Indeed, they are Paul Krugman’s worst nightmare—a family determined not to live beyond their means. Now retired, like many in their generation, they are enjoying life the best they can on an almost fixed income. Because they have no debt, they have been able to live without tremendous economic hardship thus far. The Federal Reserve’s inflationism, however, increasingly makes life for them more difficult as steady price inflation daily chips away at their livelihood. Since 2009, for example, the Consumer Price Index has increased over nine percent. This masks, however, significantly larger price increases for important necessities. Prices of dairy products are up almost 17 percent since 2009. Gasoline prices are up almost 11 percent despite the recent decline. Prices for meat, poultry, fish, and eggs have increased a whopping 26 percent since 2009. Higher overall prices do not help people like my parents at all. They instead act as a thief, snatching wealth away from them in the form of diminished purchasing power. What they long for is to see the value of their savings increase. Far from creating economic hardship for them, lower overall prices would be a boon.

Both sound economics and ethics, therefore, demand that we give up the anti-deflation rhetoric and the inflation it fuels. Charity demands that we cease striking fear into the hearts of the masses, softening them up for ever higher prices. The Federal Reserve should stop punishing people like my parents who have worked hard and played by the rules their whole lives. After all, what did they ever do to Greenspan, Bernanke, and Yellen?

Dr. Shawn Ritenour is a professor of economics at Grove City College, contributor to The Center for Vision & Values, and author of “Foundations of Economics: A Christian View.”

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom