"The dollar collapse has already begun and the need for a new monetary order is now emerging. I believe it will involve gold. The question is whether it will be an orderly process resulting from a new monetary conference, or a chaotic one.

         "Unfortunately, it’ll probably be chaotic."

~Jim Rickards

(Caveat Emptor)

News and opinion from all over the political universe. 

Much of it to be taken with several grains of salt.

MAIL:  The Editor                                                                                                                                                        October 25th, 2020

We and the Missus just mailed what probably are our last votes for U.S. president. 
We're not sure our absentee ballots will be counted - but we tried hard to get them right and our signatures witnessed. 
   If the so-called "legacy media" (also known as mainstream news) had their way Donald Trump would have already been thrown out of office and would not have a chance of ever again running for national political office. But despite his boorish non-traditional persona he strikes almost half the voters as a better choice than far left Democrats.  Huge sums are being spent to promote both camps. 

    Trump may have the energy to pull off another four years.  Doubts cloud Biden's future health.  But whoever wins faces a tough tenure owing to the phenomenally high level of federal debt, the slumping U.S. dollar, and  the bleak economic future framed by the present recession.  The chatter from political and banking sources suggests a new national digital currency is being explored.  The public deserves a thorough discussion of the pros and cons of switching to an all-electronic form of fiat currency.  Boning up on the history of fiat currency will occupy a great deail of the president-elect's time. 

       We wish a few minutes of campaign rhetoric  had been given to the subject of the battered, irredeemable U.S. dollar.   Nowhere in the Constitution is the dollar defined  as an IOU.

        Since World War 2 the Age of Inflation has taken its toll.  On the one hand the perpetually rising wages gave the illusion of increasing wealth while the persistent decrease in the dollar's purchasing power wiped out much of the apparent gaiin.  In fact, the Conaumer Price index has increased in all but 1949 and 1955 since the end of the war.   We think nothing, now, of paying $1.00 or more for a 10 cent cup of coffee.  

        But, as we have remarked many times in the past, there has never been a prolonged period of currency inflation that did not end, badly, in a deflationary correction.  Some worse than others. 

         Right now the world is waiting to see who takes the White House on November 3rd.  It seems to be too close to call.

          Longtime economist/advisor Doug Casey was recently asked who he thought would win.

          "I regret to say that I still think Joe Biden and Kamala Harris are going to win.  If they win, there’s no way out. But in fact, if Trump wins, there’s no way out either. He wants to print money as much as they do. He’s adamant about keeping interest rates at disastrously and destructively low levels. He’s quite happy to impose all kinds of duties and arbitrarily sign executive orders about anything and everything. The Greater Depression is going to be nasty either way.

           "It really is going to be a Harris regency, however. The worst—the most collectivist and statist—senator in the Senate will become the de facto president."

            Lets hope Mr. Casey's prediction is wrong.  However, at the moment we think the voting majority is poised to bite at the socialist bait the Democrats have long offered.  Maybe the subject of the substance of an honest U.S. dollar will become popular in the 2024 race for the Oval Office.  An IOU for a dollar just doesn't offer the value of the real dollar mandated by the U.S. Constitution. 

Neither of the two major political parties offer much hope by way of platform promises.  We used to believe we had a choice....either a party promising more largess from the public treasury or one pledging to trim waste and strive to eventually produce a balanced budget.  We played along knowing very well the hollowness of political promises.  (!) 
Did you know that plank #2 of the 1932 Democratic platform was: "Maintenance of the national credit by a Federal Budget annually balanced...." ?

  Did you know that plank #3 of tht published platform was:  "A sound currency to be maintained at all hazards...." ?

 And did you know the Democrats of the 1932 campaign promised in plank #1 to
immediately reduce government expenditures?

That's what the voting majority chose in 1932 but they got the New Deal instead. 

    Eighty-eight years later the major political candidates are still feeding the voters a line of baloney. We can't find anybody who can recite the first thee planks of the 2020 Democrat Party.  Nor Republicans whoe know anything of the GOP platform, either.

    So - who is informing the voters?  And which is the better choice?

             With breath abated the world awaits the results of the November 3rd election. For president we're personally voting for the lesser of two evils - but well aware of the fact  we're voting for evil.  We thought of writing in a name like Calvin Coolidge or Tom Jefferson but that would be wasting a vote. 

                 We're also aware that none of the presidential or vice presidential candidates have said anything about the seachange that the nation's financial affairs are facing.  Since the U.S. republic began to morph into its present-day democracy, and the voting majority began voting for a socialist form of governance, both major political parties have been steepening the downhill economic slope.  But we-the-people will straighten the whole mess out on November 3rd.  Won't we? 

                   Probably not.  We-the-people have been carefully taught to lean on the central government for hand-outs and most of us will vote for candidates who promise to take care of us.  Liberal economists insist we can fiddle with inflation rates and keep the economy expanding.  Conservative economists point out we've reached the end of our tether and must face a sharp economic correction.  But, we can't keep borrowing from the future production of our children without their living standards being damaged.  The young, however, having all the answers as the young tend to do, don't belive it and follow the Bernie Sanders/Joe Biden plan to plunge as far to the political left as possible. 

                   Senator Sanders, of course, is not on the Democrat ticket.  Senator Harris is, and more than a few pundits are certain that - if elected - a physical indisposition of some kind will interfere with Biden's Oval Office term and Ms. Harris will wind up in the job.  The same can be said of Donald Trump if he wins a second term.  He's no spring chicken, either.  But the idea of Mike Pence taking over the big chair sits well with many citizens while Harris's agenda, not well articulated and less well understood, lurks in the shadows.

                    If we're lucky we may know who the winners are by midnight November 3rd. 

                    Then, what?

"Depressions don't have to be depressing. Most of the real wealth in the world will still exist—it will just change ownership."  ~Doug Casey

    Doug Casey has been warning his readers about an upcoming economic depression for a long time.  The U.S. is presently in an inflationary phase (still) but most economists see happy days ahead when we beat the coronavirus and get back on a productive economic track. 

         We and the Missus were born in 1929 - just in time to experience childhood in the Great Depression of the 1930s.  It was not all miserable, despite the strain it put on working class families.  So, we agree with Casey that if the present economic confusion declines into an official depression it doesn't have to be emotionally depressing - particularly for people who kept their debt load low or non-existent and stashed away some "rainy days assets."  

       Can an economic depression be avoided?  With history as our guide the answer is "no."  There has never been a long period of currency debauchery, chiefly by the politicical trick of inflation, that did end badly. The writers of the U.S. Constitution thought they designed a money system that would prevent serious and lengthy bursts of inflation.  However,  without amending the constituion the people's elected politicians deftly led the voters astray with promises of social money guarantees.  Where the republic of 1789 was  to be a limited form of central government supported by citizens it evolved into a top-heavy mob of politicians and bureaucrats who ooperate a democracy pledged to support a hefty number of its citizens.  Critics have long held that "when the people discover they can vote themselves largess from the public treasury they will do so" even though it projects unpayable debt as burdens on future generations. 

       At some point, says Casey, the scheme falls apart.  One for the Record Books

Social Security checks to increase 1.3 percent in 2021.

Consumer prices, including rent, espected to rise at more than 2 percent.  The present annualized rate is 1.4 percent. 

Social Security benefits will rise by 1.3% next year, with the average monthly benefit increasing by $20 to $1,543 from $1523, according to the Social Security Administration.   

Well, there you have it - the 2021 Social Security COLA will be 1.3 percent....approximately twenty bucks a month for the average recipient.  Several economists are predicting a considerably higher price inflation rate (the Consumer Price Index) based on the enormous currency flood triggered by the Federal Reserve in response to the advent of the coronora virus. 


Why not fix it? 

   Before the value of the U.S. dollar reaches zero Americans should demand a national conversation about the debauchery of the once mighty U.S. dollar. Opiniion leaders must insist that Congress do the one thing that will restore confidence and trust in the nation's money unit - - replacing the present debt-money scheme with the honest money mandated by the Constitution.  

   Thomas Jefferson, who invented the U.S. money system, warned of the damage debt-money (paper) could cause.  In a letter to Albert Gallatin in 1818 he wrote, "The flood with which the bankers are deluging us of nominal money has placed us completely without any certain measure of value, and, by interpolating a false measure, is deceiving and ruining multitudes of our citizens."  

   In an earlier letter to Thomas Cooper, Jefferson wrote, " Our whole country is so fascinated by this Jack-lantern wealth [it] will not stop short of its total and fatal explosion."

   Franklin Roosevelt began removing the dollar from its constituional moorings in 1933.  Richard Nixon finished the job in 1971.   From a monetary unit based on something of intrinsic value, we're now doing business with "money" backed by little but debt. We're being punished for allowing it to happen.  

   Let's talk about restoring the United States to a system of honest money!  Surely there's still a market for honesty.  

              The above was written in the autumn of 2008 by our chief curmudgeon, Potiphar Gride.  He was convinced the long run of inflation since World War Two was about to morph into a deflationary depression. 

             This is still the likely scenario if the lengthy history of currency debauchery is a guide. Gride's expectations still hold true but his timing was off.  He forgot that the general population had forgotten the Constitution's definition of money and is happy to accept irredeemable paper Federal Reserve notes and bank computer records of such IOUs as "dollars."  No one seems to care that the constitutional mandate has never been changed. Only ignored! 

          But consider this:  The purchasing power of the 1914 dollar is now FOUR CENTS.  1914 was the first year of operation of the
Federal Reserve System.  That its methods of destroying the purchasing power of the dollar of 106 years ago by 96 percent clearly demonstrates that a nation's bankers and politicians can pull the wool over people's eyes if the propaganda is convincing. 

        A little more than a century ago a U.S. dollar was, by legal definition, a scarce commodity...gold.  People preferred to carry paper notes that could be redeemed in gold whenever they wished.  A $1.00 note was worth 1/20th of an ounce of gold.   President  Roosevelt  in 1933  required  the people to turn in their gold  coins  to the Treasury on short notice and reduced the legal backing of the dollar to 1/35th of a troy ounce of gold.  (The dollar was officially backed by gold but citizens could no longer redeem their paper notes in gold.  The final legal connection to gold was terminated in August, 1971.)

         Bottom line:  The FORM of the paper U.S. dollar currency has not much changed over the decades, but retained its position as the chief trading currency on the globe.  Trillions of these irredeemable fiat dollars exist in the coffers of government entities, corporate accounts, and privte hands.  The question is - will the abundance of dollars lead to hyperinflation?  Possibly.  The ease with which digital currency can be created may keep an inflationary hlowup at arm's length for a while longer, but if the dollar loses its grip as the world's prime currency - "Katie, bar the door!"

October is going by in a flash.  
   The robo caller political pollsters bug us. We don't participate in their inquiries although we plan to cast ballots in November.  So, what good is a poll of voters if many of them won't spill the beans about their present political views?  It does provide employment for pollsters. That's helpful to some extent.

   We had hoped a political statesperson or two would emerge as candidates for the top offices, but that has not happened.  Joe Biden is well past his prime and has chosen to climb aboard the leftist bandwagon which is bound for some socialist Nirvana.  Donald Trump  will ride atop the GOP wagon headed for something no one can clearly ascertain.  He appears to think if we'd let him run the U.S. as a dictator everything would fall into place.  Sadly, the platforms of both the Democrats and Republicans are not clearly evident and the hapless citizenry is split right down the middle on issues. 

    Unless a drastic change occurs we will go to the polls or our mailboxes in November to choose the less destrucive of two candidates for the office of U.S. president.  Will it be the election of 1932 all over again?  We've heard that, but when one reads the Democrat platform of that long ago election it's clear that the Democrats promised a more efficient government and candidate Franklin Roosevelt went on the record promising that the nation's money unit, the dollar, would be maintained at all costs.  The Democrats won handily and the opposite occurred.

    These are interesting times.  Shelves full of books are being written about  them.

     "This is the fiscal madness which today passes for conservative Republican government. It literally scrambles one’s brain to contemplate what depredations the Kamala Harris/Left Progressive Regency might unleash if,  and when it landslides into office. " ~David Stockman

        David Stockman, former  budget  director in the Reagan administration sounds a bit dour today as he remarks on Republican and Democrat strategy.  However, his explanation holds a clue as to why price inflation is still below the expectations of run-of-the- mill economists. We recommend  printing Stockman's  current analysis for table talk at supper tonight.   

             In this article Stockman alleges the airlines don’t deserve nor need a bailout, while the idea of handing out another $135 billion of walking around money to small businesses who might otherwise lay-off redundant employees is just plain ludicrous. 

            Can this be conservative thinking?   Addictus Stimulitis

   "The Constitution — when interpreted in accordance with the plain meaning of its words, and informed by history — does not permit the government to infringe upon personal freedoms, no matter the emergency or pandemic. For those who agree with me, worry not. We will persevere. For those who trust the government, worry a lot. You are not in good hands."  ~Judge Andrew Napolitano

At the risk of offending several friends we must agree with Judge Napolitano.  At least half the population appears to hold the notion that the U.S. Constitution is out of fashion and cannot be relied on any more for containing the outlandish expansion of the governing classes.  "Old fashioned," this founding ocument ls called.  

    Unpayable debt is really a misnomer.  All debt must be eventually resolved - either by the debtor or the creditor.  This historic truth promises a sorry standard of living for future generations whom we are saddling with financial debt they didn't ask for and will not be able to pay.  Small wonder today's youth are having a tough time coming to grips with the realities of life. 

A Nonagenerian's Lament
(More or less to the tune of "Don't Get Around Much Anymore" by Duke Ellington. )

Don't play Bingo no more.
Hardly  go out the door.
'Fraid the virus will get us.
Don't get around much anymore. 

We try to distance ourself.
But we've been put on the shelf.
Life has become crazy -
Don't get around much anymore.

          And you don't have to ask.  We are wearing our mask.
          This life of seclusion is total confusion. 

One day it will end. 
We'll go hug a friend.
Let's get rid of the virus.
Don't want it 'round here anymore. 

~John Wrisley  (August, 2020)


Wearing facial masks - a personal choice, governmental order, or suggestion?
    We went to Walgreens recently and spent  $48.83.  We handed the checkout clerk exactly $48.83 because the store conspicuously posted notices concerning a "coin shortage" and encouraged the use of credit/debit cards or exact change. We also wore our cumbersome facial mask and took care to stand at least six feet behind other customers. We inquired if customers comply with the  "exact change" request. She might have smiled - we couldn't tell - but with a chuckle she replied that it didn't happen often.

    It's true carrying loose change around can be a bother.In our youth we put up with it because coins carried a lot of value, making them worthwhile. We clearly recall the days when a twenty-five cent piece would buy five 12-ounce bottles of Pepsi Cola. It was promoted by a clever jingle: "Pepsi Cola hits the spot. Twelve full ounces, that's a lot! Twice as much for a nickel, too. Pepsi Cola is the drink for you."

    The quarter-dollar doesn't buy much these days. People use them to operate snack dispensers and commercial washing machines/dryers. Some parking meters still take them. In the early days of the USA a fellow could get a shave and a haircut for two bits. (Twenty five cents.) In the early 20th century some New York taverns would supply a mug of beer and a generous sandwich for five cents. A quarter-dollar would buy lunch for five days!

   But the government does not REQUIRE that people pay for purchases with exact change. However, a mask-wearing rule has been laid down in many communities. Many people hate masks and don't feel they should be forced to wear them. This has led to some interesting altercations.

   Pandemics of the coronavirus variety scare the hell out of people and they usually go along with whatever "experts" proclaim as useful behavior. Our apprehension comes from a growing doubt that government can pay the soaring costs involved with the virus and paper over the shocking effect of an economic slowdown.

   On the bright side...there are some light moments.  We, for one, love the idea of walking into a bank wearing a mask! Also, we don't feel an obligation to shave as oten as we used to.