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Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

 
Best of Jim Cook
August 6, 2014
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THE EVE OF DESTRUCTION

Since World War II the U.S. government has used newly created money to paper over emergencies. You could argue that it’s worked. Or you could argue that it has only postponed an even greater financial crisis. We know that each round of money creation or inflating needs to be greater than the last in order to stave off problems. We know that this process cannot go on indefinitely because it ultimately destroys the purchasing power of the currency. The great Austrian economist Ludwig Von Mises (1881-1973) stated, “Inflationism cannot last; if not radically stopped in time, it must lead inexorably to a complete breakdown.”

In other words, our monetary policy assures the destruction of the dollar. If we stop inflating the economy will collapse and so we will continue paying our bills with new money until the bitter end. Mises said, “Continued inflation inevitably leads to catastrophe.” The laws of economics insist on a hyperinflationary conclusion. Such eruptions often come unannounced. The people have little warning, they believe the government assurances and, consequently, they are decimated. The government’s awkward attempts at price controls only lead to black markets and higher prices. 

When the consumers begin to buy things today because it will be too expensive tomorrow it’s the beginning of the end.  Mises wrote, “Everybody becomes aware of the fact that to hold cash and deposit balances with banks involves loss, and that he does better to buy and store goods. Everybody is anxious to get rid of money and to exchange it for some other commodities, no matter how much he must pay for them. Prices are running away, and the purchasing power of the monetary unit drops to zero. The national currency system cracks up.”

Nobody knows when this will happen. However, it may be much sooner than expected because of the massive onslaught of new money created to pay the government’s bills. Already certain assets are soaring in value. Once the big inflation unfolds it may be too late to acquire liquid, tangible assets. Runaway inflation has been in the cards for fifty years. Remember that inflation does not occur by accident or chance of fate. It is a deliberate government policy made necessary by runaway social spending, a slow economy and huge deficits. No effort is being made in America to control the insane levels of wasteful government spending. Mises stipulated the reason why: “Progressives need inflation in order to finance their policy of reckless spending and of lavishly subsidizing and bribing the voters.”

Inflation and socialism are bedfellows. They are agents of destruction and they are the dominant error of our time. If they persist and continue to grow the America you have known will disappear and chaos will prevail. The time grows short.