Friday, December 18, 2009

Debasement of the Dollar

Ron Paul wrote the following on his website. Ron Paul is one of the few that "Get It", but is he strong enough to turn good ideas into laws?

''Because of legal tender laws that force acceptance of the dollar, the Fed has absolute power over the currency.  This absolute power is leading to the absolute corruption of our currency.  The money supply has doubled in the last year or so, which is extremely dangerous.  The banks seem to be hoarding liquidity now but once these dollars make their way into the economy, hyperinflation and economic chaos will be a real possibility.

Every time hyperinflation rips through an economy, the middle class gets completely wiped out.  It is very alarming to watch the purchasing power of an entire life savings reduced to that of a few pennies.  Those savings represent years of real labor, real time, effort and sacrifice exchanged for corruptible pieces of paper that politicians and bankers can destroy at whim. 

Legal tender laws force the people to become subject to this risk for the benefit of the rulers.  Artificial demand for currency allows the authorities to create arbitrary amounts of it to pay for wasteful projects, like frivolous wars and an ever-expanding public sector.  This saps the private economy of jobs and purchasing power, yet the temptation proves too great for politicians, time and time again.  Our government is no different.  Although our dollar has taken nearly a century to lose 98% of its purchasing power, the fact that we are all obliged to participate in this slow burn of the economy on pain of imprisonment is anathema to the principles of liberty.''

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Insightful and Useful Comment!