Economics

We are Taxbucks. We say "we" because you never find one of us alone. Taxbucks always run in packs, usually in millions, often in billions, and ever more frequently in trillions. Many of us started life in a form known as "Money." Humans like to keep us tucked away somewhere until they want to swap us for something else. This swapping is called buying and selling. It's a trade that humans do voluntarily. If there's no swindling or other trickery going on, both sides are happy because both sides get what they want. We are happy when we are Money and we're being used by humans to make their lives better. We especially like working in a free libertarian society where coercion and intimidation and fraud are minimized to the fullest extent possible.

Did you hear about the dyslexic insomniac agnostic, who lay awake all night wondering if there was a DOG? Seriously, let us get a sense of reality back into what we talk about. Why do we regard a dollar as something of value? Why let central banks, who officially hold that their paper notes are legal tender, work to devalue the thing that will be our true money? Why do we continue acquiescing in government, let alone actually consenting to it?

These past few weeks have provided an unfortunate opportunity to discuss inflation. The dollar index has reached new all-time lows. The total money supply, M3, as calculated by private sources, is growing at a disturbing 17% rate. The Fed is pumping dollars into the economy at an alarming rate. Just recently the Fed announced new loan auctions totaling $100 billion. That is new money created from thin air. If these money auctions, combined with the bailout of Bear Stearns, continue to be the trend, we are in for some economic stormy weather. The explanation lies in understanding the basics of money, and why it is dangerous to give government and big banks control over it.

First, money is not wealth, in and of itself. You cannot create more wealth simply by creating more money. Wall Street bankers cry out for more liquidity, but what is really needed is more value behind the dollar. But the value, unfortunately, isn't there.

Regarding mortgages, the government has already done quite enough, intervening in the market. Act after act, pushing banks to lend in riskier areas, creating excess housing demand. Then another act, messing things up, then another act to fix that, only to find it made it worse, then yet another fix. Now there is talk of government buying all the bad loans. This has to stop!