The Keynesian Problem

In response to an email…

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Most Americans have economic myopia – they can’t see the big picture, instead they tend to aim at the present target (Bush) only (which is just one of the many targets we need to see).

Set aside partisan politics for a little bit – Democons and Republicrats are two sides of the same coin (they have proved this to me over the last 15 years). Both sides have perpetuated, sustained, and maintained our current problems. Here is a video from late 2004 as one example:

Also read this article.

I am just trying to warn you ahead of time – WE must see the root problem…

Our problem is a worldview problem per say. The dominant economic “paradigm” is that “debt and credit” are the “economic oil” that fuels our economy (we believe in a “credit” driven economy).  I generally am optimistic (especially about success of the Kingdom of God over the long haul) but our current economic problem is simply bigger than a “housing bubble” similar to the “Internet bubble” and its bigger than the last few years under this or past presidents – Its been a long time coming – The problem is a “system bubble”.

Austrian economists (like Ron Paul and Peter Schiff) have been warning of the downfall of the “central banking” and “Keynesian” economic house of cards for a long time and have been right all along .

The system itself “is the problem” and we are coming to an end of an era (where Keynesian ideological hegemony has reigned supreme). Inflation is built into this system and inevitably hyper inflation is at the end of the road that we are and have been traveling.  The government is in debt (and is addicted to spending) but even more importantly the American people them self are in debt “up to their eyeballs” because this is what “fuels the economy”.

The problem is essentially this: how can a monetary system that is dependent on debt and credit sustain itself? – How much “credit” can the debtors of this nation handle in order to fuel the economy???

Well basically we have seen the answer from our leaders – our government solution is basically print more money AKA the bailouts.

Listen to Ron Paul on the floor of the house recently:

l have a secret for you: inflation “is” the only way out of this debt/credit system – but this “solution” inevitably destroys and debases the currency, the savings, and the wages of the nation who gets into a debt spiral,

Our biggest problem in the near future is that we have absolutely no leadership – Obama and McCain (BTW my vote is for Baldwin who is an Austrian) will both perpetuate this current “print more money solution” as a way to try to plug the cracks in an ever increasing dam of debt burden (which is built in).  They are going to perpetuate the Keynesian system because it is all they know how to do (if a fish is in water does he know he is wet?) – until it eventually collapses under its own weight – and the longer these guys prop this Keynesian house of cards system the bigger will be its inevitable fall.

Just make sure you have a decent stash of Gold and Silver for the long run to protect yourself and your family from the inevitable coming hyper inflation (I don’t know exactly when it will be, but it is inevitable given our system) which we are just starting to feel.

There are certainly many more complexities to our current problems, and I could say more, but this matter is at the heart of the issues we face today…

Lar

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PS  You can buy “junk silver” from coin shops in your area (try not to pay more than 10% over current melt values) this “junk silver” is in Pre-1965 (1964 and before) US coins dimes, quarters, half-dollars, & dollars, I recommend having plenty of small coinage (dimes and quarters) so you won’t need to make change (that’s if you do have to trade these if paper currency gets so debased)

Stay away from numismatics buy bullion…

http://www.coinflation.com/coin_calculators.html

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