nixon

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The Mother Of All Financial Bubbles

Will be unimaginably destructive when it bursts
Wednesday, February 22, 2017, 11:45 PM

The main lesson from Oroville -- or Fukushima, or Katrina --  is that governments do a poor job of relating accurate information to their citizens when big threats are involved. Part of that is likely due to a desire to avoid stoking fear. Part probably due to politics and bureaucracy. And part probably due to plain old incompetence.

Regardless of the cause, it means that the public -- even the vigilant ones -- suffer information deficits when it matters most. Simply put, the authorities do not share all the facts necessary for making informed decisions.

Which brings us to one of the truly great risks we're facing today. One with much more destructive potential than a single failed dam but, like Oroville, one the authorities are desperate to keep us in the dark about. » Read more

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Inflation - Crash Course Chapter 11

Our devaluing dollars are a historically recent phenomenon
Friday, August 29, 2014, 6:36 PM

For close to 300 years, inflation in the US remained very subdued. Small spurts occurred around major wars (Revolutionary, Civil, WW1, etc), but after each, inflation quickly trended back down to its long-term baseline. If you lived during this stretch of time, your money had roughly the same purchasing power your great-grandfather's did. » Read more

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Peak Prosperity

A Brief History of US Money - Crash Course Chapter 9

The rules get changed (a lot)
Friday, August 15, 2014, 6:29 PM

Looking at the past 100 years of the US dollar's history, one theme becomes abundantly clear: in times of crisis, the US government has no issue with changing its own rules or breaking its own laws. And those "temporary" emergency measures have a nasty habit of quickly becoming permanent. » Read more

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This chapter of the new Crash Course series has not yet been made available to the public.

Each week over the rest of 2014, in sequential order, a new chapter will be made publicly available (we've currently published up to Chapter 10)

If you don't want to wait, you can:

 

 

 

 

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The Disenchantment of American Politics

And the coming uproar
Wednesday, January 8, 2014, 12:34 PM

Considering the problems we face as a nation, the torpor and lassitude of current politics in America seems like a kind of offense against history. What other people have allowed circumstances to run over them like so many ‘possums sleeping on the highway?

And, since human affairs don’t remain static indefinitely, in what direction might things go when the political mood finally heaves and shifts? The possibilities are unsettling. » Read more

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There Is Too Little Gold in the West

The history of gold's flight to the developing world
Friday, December 6, 2013, 1:53 AM

Western central banks have tried to shake off the constraints of gold for a long time, which has created enormous difficulties for them. They have generally succeeded in managing opinion in the developed nations but been demonstrably unsuccessful in the lesser-developed world, particularly in Asia. It is the growing wealth earned by these nations that has fuelled demand for gold since the late 1960s. There is precious little bullion left in the West today to supply rapidly increasing Asian demand. It is important to understand how little there is and the dangers this poses for financial stability. » Read more

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Happy 40th Birthday, Fiat Dollar!

You've come (down) a long way, baby
Monday, August 15, 2011, 2:49 PM

Exactly 40 years ago today, on August 15th 1971, the US dollar was released from the cruel tethers of an international gold standard. Today, we find notable monetary authorities seeking its return.

In the middle of a lengthy ~2,500 word speech in which Nixon sought to stabilize prices by implementing price controls and stabilize foreign trade by imposing tariffs, he slipped in these 100 words that sought to stabilize the dollar by going off the gold standard:

In recent weeks, the speculators have been waging an all-out war on the American dollar. The strength of a nation’s currency is based on the strength of that nation’s economy – and the American economy is by far the strongest in the world. Accordingly, I have directed the Secretary of the Treasury to take the action necessary to defend the dollar against the speculators.

I have directed Secretary Connally to suspend temporarily the convertibility of the American dollar except in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States.

It turns out that such intervention was actually counterproductive to the stated aims, so we are tempted to suspect that a different set of aims was met instead.  » Read more