Libertarians Have to Cope With the Real World

Libertarians Have to Cope With the Real World

Imagine you’re starving to death in a desert and you happened across a man who has a loaf of bread. He takes pity on you and offers you a slice. But you refuse it and go on your way because he won’t give you the whole loaf.

That would be pretty dumb, wouldn’t it?

But this is exactly how a lot of libertarians approach political activism. They reject small steps forward that would make us a little bit freer because it’s not complete liberty.

I’ll give you an example.

Last week, the Kentucky House passed a bill that would legalize medical marijuana. Activists have been pushing toward this for years. But a big chunk of the Facebook comments I saw were libertarians crapping on the bill. Here’s just one of dozens of comments I read.

“So can I grow it? Can I smoke it? Do I need the state to grant me permission, on any level, to use it? Smells like more garbage legislation with built in victimless crime laws. Oh wait, the entire thing is victimless crime. Y’all see this as a win?”

Yes. Yes I do.

As somebody who used to live in Kentucky, used CBD capsules containing a small amount of THC, and worried about going to jail, I would definitely see legalized medical marijuana as a win . Even with the restrictions on growing and smoking. Even with the taxes. Even with the government regulation.

Why? Because I could have my little marijuana-derived CBD pills (that have zero psychotropic effect) without having to worry about armed government thugs locking me in a cage or taking my car.

I get it. Legalized marijuana in Kentucky would not be “liberty.” There would stlll be government control. Of course, it would be a lot better if the government stopped regulating marijuana completely. But call me crazy, I still view a change in the law that means fewer people getting locked in cages because of a plant “a win.”

Far too many libertarians let ideological purity get in the way of their common sense. As Murray Rothbard wrote:

“Libertarians must come to realize that parroting ultimate principles is not enough for coping with the real world.”

We live in a real world with real governments. Posting on Facebook isn’t going to change that. Your memes aren’t going to make you any more free. And turning down a slice of bread because you want a whole loaf will just leave you hungry.

As much as I wish it would happen, government isn’t going to disappear from the face of the earth any time soon. So, shouldn’t we push forward any measure will mitigate some of the intrusion of government in our lives?

William Lloyd Garrison was a prominent abolitionist when abolishing slavery was still a radical and unpopular position, even in the North. He believed slavery should end immediately, and he constantly said so. Garrison wasn’t concerned about winning a popularity contest or convincing people he was properly mainstream. He unapologetically wore a badge of radicalism. He unwaveringly pursued the ideal.

But Garrison was also a political pragmatist. He didn’t reject steps toward emancipation just because they didn’t bring about complete and immediate emancipation. Read carefully what he wrote.

“Urge immediate abolition as earnestly as we may, it will, alas! be gradual abolition in the end. We have never said that slavery would be overthrown by a single blow; that it ought to be, we shall always contend.”

I’m not suggesting we should jettison our radical philosophy of liberty. But I am suggesting that we should take a slice of bread when we can get one. And then another. And then another.

Eventually, we’ll have the whole loaf.

I’ve watched this play out in over 10 years of cannabis activism. Do you realize that every state that has legalized adult-use marijuana started with legalizing medical? And crappy medical program always expend over time. Just last year, five states loosened up restrictions on their existing medical marijuana programs. And several states with legal recreational marijuana passed laws that will encourage the cannabis market to expand in the future.

In other words, if Kentucky can get a medical marijuana program established – however limited – it will almost certainly expand over time.

So, you have a couple of choices. You can sit on the sidelines and throw rocks at the people actually doing the work. Or you can get out from behind your keyboard and do something that will bring about just a little more liberty.

Debilitating Pessimism

Why do so many libertarians spend so much time complaining and running down every effort to advance liberty? I think it oftentimes stems from a sense of hopelessness. I think a lot of people in the so-called liberty movement suffer from what Rothbard called “debilitating pessimism.”

That’s quite an indictment. But you know what? It’s true.

Pessimism is debilitating. It motivates us to do — well — nothing. It even leads some people to tear down the efforts of others. Here’s the thing; no matter how small the odds are of winning are even if you do something, I can guarantee you this — if you do nothing, you’ll get nothing.

My point is that if you believe in something – if you are convinced something is right and true – you have to fight for it. Even if the odds seem insurmountable. Even when you’re tired. Even when the crowd tells you you’re wasting your time. Because you never know when something is going to tip that scale and kick off an avalanche of change.

Rothbard was right. We have to cast off the needless pessimism and keep up the good fight for liberty.

Rothbard offers us some sage advice.

“For the libertarian, the main task of the present epoch is to cast off his needless and debilitating pessimism, to set his sights on long-run victory and to set about the road to its attainment.”

Another Massive Budget Deficit to Start 2020

Another Massive Budget Deficit to Start 2020

The Trump administration posted another massive budget deficit to start out calendar-year 2020.

According to the latest data released by the U.S. Treasury Department, Uncle Sam spent $32.6 billion more than it took in last month. That compares with an $8.7 billion surplus in January 2019. Analysts had projected an $11.5 billion shortfall in January.

That brings the total deficit in FY2020 to $389.2 billion. So far, the deficit in fiscal 2020 is about $79 billion bigger than it was at this point in FY2019, a 25 percent gain.

According to the Congressional Budget Office, the federal budget shortfall will hit $1.02 trillion in FY 2020 and rise into the foreseeable future.  The CBO warns that the ballooning national debt poses a “significant risk” to the economy and financial system.

Overspending continues to drive the ever-widening deficits. The federal government took in $372 billion in January. That was a 10 percent increase in revenue compared with January 2019. But spending was up $405 billion. That represents a 22 percent increase year-on-year.

Through just the first four months of FY2020, Trump and company have already spent nearly $1.5 trillion.

These are the kind of budget deficits one would expect to see during a major economic downturn. The federal government has only run deficits over $1 trillion in four fiscal years, all during the Great Recession. We’re approaching that number today, despite having what Trump keeps calling “the greatest economy in the history of America.”

Generally, during economic expansions, government spending on social programs shrinks and tax revenues climb with increased economic activity. Revenues have increased over the last year, even with the Republican tax cuts, but they haven’t kept pace with the increase in government spending.

President Trump didn’t even mention the growing national debt during his State of the Union address. As Peter Schiff noted in a tweet, “During his 90-minute #SOTU address President Trump did not urge Congress to cut one dime of government spending, or eliminate one government agency or department, even as the national debt is soaring by record amounts during an economy he claims is booming.”

Much has been made in cuts to social programs in Trump’s proposed 2021 budget. But there are spending increases in other areas and the overall spending plan comes in at $4.8 trillion compared to $4.4 trillion in actual outlays during FY2019.

Republicans argue that economic growth will ultimately fix the national debt. The Trump plan claims to balance the budget in 15 years. But this scenario depends on 3 percent GDP growth every year and no recession. Last year, GDP growth was 2.3 percent.

The CBO warns that the growing “debt would dampen economic output over time.”

In fact, studies have shown that GDP growth decreases by an average of about 30 percent when government debt exceeds 90% of an economy. Total U.S. debt already stands at around 106.9 percent of GDP. Ever since the US national debt exceeded 90 percent of GDP in 2010, inflation-adjusted average GDP growth has been 33 percent below the average from 1960–2009, a period that included eight recessions.

Europe’s spending binge serves as a prime example of the impact of debt on economic growth.

The reality is America’s fiscal condition is circling the drain. The bottom line is that the spending trajectory is unsustainable. If the U.S. government is running $1 trillion deficits now, what will the country’s financial situation look like when the next recession hits?

Reprinted from the Tenth Amendment Center.

Support Grows for West Virginia Bill to Block Unconstitutional National Guard Deployments

Support Grows for West Virginia Bill to Block Unconstitutional National Guard Deployments

Rep. Adam Schiff’s Constitutional Malfeasance

Rep. Adam Schiff’s Constitutional Malfeasance

I have to be honest. I haven’t paid a whole lot of attention to the kabuki theater better know as the Trump impeachment proceedings.

Mainly because I don’t care.

And it doesn’t really matter.

I mean seriously, there is virtually zero chance that the Senate will actually remove Donald Trump from office. We all know this. So, the Senate trial is really nothing more than a carefully orchestrated stage show.

And even if by some weird swirl in the political winds Trump gets removed from office, we end up with President Pence. I can’t quite picture this as an upgrade.

Pence is pretty much Trump minus the personality. Or any personality. We’d get the same foreign policy. We’d get the same domestic policy. But we wouldn’t get the amusing tweets.

So, anyway, I haven’t really been plugged into the whole impeachment thing. But I did accidentally catch part of Rep. Adam Schiff’s opening statement. And it was literally an accident. I was doing cardio at the gym and it was on every TV. Avoiding it was like trying to keep from getting the flu in the city health department waiting room. I had headphones on, but I kept getting sucked into the closed captioning. It was like a train wreck. I couldn’t look away.

Schiff’s monologue appeared to mostly consist of your typical political blah, blah, blah. Long on bluster, short on substance. Trump did bad stuff. He’s bad. Legal mumbo-jumbo. Ukraine. Rule of law. Trump’s bad. God bless America!

But one thing grabbed my attention simply because it annoyed the fire out of me. Schiff talked about the Constitution. I even saw him reference the Philadelphia Convention and the “intent of the framers.” He was apparently trying to justify the impeachment on constitutional grounds.

Here’s why this little part of his skit dug deep under my skin.

Adam Schiff doesn’t give two sh!ts about the Constitution.

In fact, he doesn’t even give one sh!t about the Constitution. He committed an atrocious act of constitutional malfeasance. He trotted it out to serve as a prop in his political theater. And when it was over, I’m 100 percent certain he crumpled it up and tossed his copy of America’s founding document in a heap in the back of his closet under his soiled underwear and sweaty socks.

That’s where he keeps it during most workdays. He sure as heck doesn’t drag it out and wave it around when he’s chairing the House Intelligence Committee and authorizing the NSA to peek at all the nudie photos on your computer.

While we’re on the subject, I’ll tell you another dirty little secret about Adam Schiff.

He doesn’t know anything about the Constitution.

I can say this with absolute certainty. How do I know? Because he’s a Harvard-educated lawyer. Lawyers by-and-large don’t know anything about the Constitution. And putting “Harvard-educated” in front of “lawyer” doesn’t change this fact.

But Mike, you ask. How can this be? If he went to law school, he must know a lot about constitutional law!

Well, that may well be. But go back and read what I wrote. I never said he doesn’t know constitutional law. I said he doesn’t know anything about the Constitution. There’s a big difference. Constitutional law is all about what a bunch of politically connected lawyers in black dresses employed by the Supreme Court said about the Constitution. That mostly has little to nothing to do with what the Constitution as ratified means.

Here’s a nickel’s worth of free advice. If you want to understand the Constitution, never talk to a lawyer.

Ever.

Talk to somebody who has actually studied the ratifying debates. (Or you could just read my book.)

Here’s the problem. The Constitution has been bastardized by a bunch of politicians with law degrees who throw some impressive-sounding credentials at you to convince you that they know more than you do. Then they trot out a bunch of dubious legal theories and judicial precedents to justify trampling your liberties and individual autonomy. These megalomaniacs could justify killing puppies and do it with a straight face. Sadder still, the half of the American population that identifies with the party proposing puppycide would enthusiastically cheer it on.

Believe me when I say this; this autocratic brood of sociopaths doesn’t care about “founding principles,” or “constitutional fidelity” or “the rule of law.”

One thing drives them — power.

So how do we stop them?

The first step is to stop gracing them with the mantel of legitimacy. Learn about the Constitution as ratified and when they drag it out on stage, call them on it. Reveal their hypocrisy. Unmask their ignorance.

When people start to realize that these people are no better than the ambulance-chasing lawyers on TV, maybe they’ll stop listening to them.

Schiff caricature by DonkeyHotey.

Trump Administration Runs Obamaesque Budget Deficit Over $1 Trillion in 2019

Trump Administration Runs Obamaesque Budget Deficit Over $1 Trillion in 2019

The Trump administration ran an Obamaesque budget deficit of over $1 trillion in the 2019 calendar year.

It was the first budget deficit over $1 trillion in any calendar year since 2012.

The budget shortfall from January through December totaled $1.02 trillion, according to the latest report issued by the Treasury Department. That was a 17.1 percent increase over the 2018 deficit, which was a 28.2 percent increase over 2017.

The budget deficit for fiscal 2019 (October 2018-September 2019) came in just under $1 trillion at $984 billion. That represented 4.7 percent of GDP, the highest percentage since 2012. It was the fourth consecutive year in which the deficit increased as a percentage of GDP. The debt-to-GDP ratio is estimated to have increased a hefty 26 percent over last year.

The CBO estimates the budget deficit for fiscal 2020 will eclipse $1 trillion.

These are the kind of budget deficits one would expect to see during a major economic downturn. The federal government has only run deficits over $1 trillion in four fiscal years, all during the Great Recession. We’re approaching that number today, despite having what Trump keeps calling “the greatest economy in the history of America.”

Generally, during economic expansions, government spending on social programs shrinks and tax revenues climb with increased economic activity. Revenues have increased over the last year, but they haven’t kept pace with the increase in government spending.

The spending didn’t slow in the first quarter of fiscal 2020. Through the first three months of the current fiscal year, the deficit ballooned to $356.6 billion. That’s an 11.8 percent increase from a year ago. In just three months, Uncle Sam blew through $1.16 trillion. Spending through the first three months of FY2020 is up 6.5 percent over the spending through the first three months of fiscal 2019.

Meanwhile, the national debt has climbed to $23.2 trillion.

To put that into perspective, last February, the national debt topped $22 trillion. When President Trump took office in January 2017, the debt was at $19.95 trillion. That represented a $2.06 trillion increase in the debt in just over two years. The borrowing pace continues to accelerate. The Treasury borrowed $800 billion in just two months late last summer. (If you’re wondering how the debt can grow by a larger number than the annual deficit, economist Mark Brandly explains here.)

During the presidential campaign, Trump promised to deal with the skyrocketing national debt. In fact, he said he could take care of it “fairly quickly.” But the president hasn’t even played lip-service to reining in spending, instead, calling for more outlays for the military and championing paid parental leave for government employees.

Trump supporters have mostly offered up excuses, shifting the blame for the ballooning national debt to “Democrats in Congress.” This ignores the fact that 2019 spending was approved the previous year when the Republicans controlled both houses of Congress. They also minimize the White House’s role in the budgeting process. In fact, the president has significant power and input in that process

While Congress does ultimately pass spending bills, the president must sign them before they become law. He doesn’t have to sign bills that have spending he doesn’t want. If reining in debt and deficits was a priority, Trump would have vetoed these bills and insisted on spending cuts. Instead, he called for more spending, particularly for the military.

Republicans will argue that increased defense spending is necessary for “national security.” But unsustainable budget deficits pose a significant threat to national security, especially considering China ranks as one of the biggest buyers of U.S. debt.

The executive branch also plays an integral role in the budgeting process. Executive branch departments submit spending requests that Congress uses to set spending levels. The president has complete control over how much money various departments request.

Finally, the president’s near-complete silence on deficits and debt indicates that it’s not a priority. Trump didn’t even mention the national debt during the last State of the Union address.

Congress does in fact bear a great deal of responsibility for Uncle Sam’s fiscal malfeasance, but so does the president. His supporters need to quit making excuses, hold his feet to the fire and insist that he deal with the debt.

The spending trajectory is unsustainable. If we are running $1 trillion deficits now, what will the country’s financial situation look like when the next recession hits? Congress and the president can continue to kick the can down the road, but they are about to run out of pavement.

Reprinted from the Tenth Amendment Center.

Michigan Bill Would Ban Unconstitutional National Guard Deployments

Michigan Bill Would Ban Unconstitutional National Guard Deployments

LANSING, Mich. (Jan. 11, 2019) – A bill introduced in the Michigan House would prohibit unconstitutional foreign combat deployments of the state’s national guard troops, an important step towards restoring the Founders’ framework for state-federal balance on the Guard.

Rep. Steven Johnson (R-Wayland), along with a bipartisan coalition of two Republicans and two Democrats, introduced House Bill 5320 (HB5320) on Jan. 9. Johnson joined the U.S. Air Force in 2009. He served for four years, leading a team working on nuclear missile electronics in Montana. He was recently named “most conservative house member” in Michigan by MIRS News.

The legislation would prohibit the deployment of Michigan Guard troops in “active duty combat” unless there is a declaration of war from Congress, as required by the Constitution. It reads, in part:

the Michigan National Guard and any member of the Michigan National Guard shall not be released from this state into active duty combat unless the United States Congress has passed an official declaration of war or has taken an official action under clause 15 of section 8 of article I of the Constitution of the United States

Cosponsors include Reps. David LaGrand (D-Grand Rapids), Brad Paquette (R-Berrien Springs), John Reilly (R-Oakland) and Jewell Jones (D-Inkster).

IN PRACTICE

Guard troops have played significant roles in all modern overseas conflicts, with over 650,000 deployed since 2001. Military.com reports that “Guard and Reserve units made up about 45 percent of the total force sent to Iraq and Afghanistan, and received about 18.4 percent of the casualties.” More specifically, West Virginia National Guard troops have participated in missions in Iraq, Afghanistan, Libya, Kosovo and elsewhere.

Since none of these missions have been accompanied by a Constitutional declaration of war, the Defend the Guard Act would have prohibited those deployments. Such declarations have only happened five times in U.S. history, with the last being at the onset of World War II.

BACKGROUND

Article I, Section 8, Clauses 15 and 16 make up the “militia clauses” of the Constitution. Clause 16 authorizes Congress to “provide for organizing, arming, and disciplining, the Militia.” In the Dick Act of 1903, Congress organized the militia into today’s National Guard, limiting the part of the militia that could be called into federal service rather than the “entire body of people,” which makes up the totality of the “militia.” Thus, today’s National Guard is governed by the “militia clauses” of the Constitution, and this view is confirmed by the National Guard itself.

Clause 15 delegates to the Congress the power to provide for “calling forth the militia” in three situations only: 1) to execute the laws of the union, 2) to suppress insurrections, and 3) to repel invasions.

During state ratifying conventions, proponents of the Constitution, including James Madison and Edmund Randolph, repeatedly assured the people that this power to call forth the militia into federal service would be limited to those very specific situations, and not for general purposes, like helping victims of a disease outbreak or engaging in “kinetic military actions.”

RETURNING TO THE CONSTITUTION

It is this limited Constitutional structure that advocates of the Defend the Guard Act seek to restore. That is, use of the Guard for the three expressly-delegated purposes in the Constitution, and at other times to remain where the Guard belongs, at home, supporting and protecting their home state.

While getting this bill passed isn’t going to be easy, it certainly is, as Daniel Webster once noted, one of the reasons state governments even exist.” In 1814 speech on the floor of Congress, Webster urged similar actions to the Michigan Defend the Guard Act. He said:

 “The operation of measures thus unconstitutional and illegal ought to be prevented by a resort to other measures which are both constitutional and legal. It will be the solemn duty of the State governments to protect their own authority over their own militia, and to interpose between their citizens and arbitrary power. These are among the objects for which the State governments exist.”

WHAT’S NEXT

HB5320 has been assigned to the House Committee On Government Operations. It will need to pass by a majority vote in each before moving forward in the legislative process.

Michigan residents who support the bill are strongly urged to contact each member of the Committee and firmly, but respectfully urge them to vote YES on HB5320 when it comes up for a hearing and vote. Contact info for committee members can be found at this link.

Is Your State Destroying Your Money?

Is Your State Destroying Your Money?

Is your state destroying your money?

Most states are, but several have taken action in the last few years to support sound money. You can find out how your state ranks in the 2019 Sound Money Index compiled and published by the Sound Money Defense League and Money Metals Exchange.

The Sound Money Index is the first of its kind, ranking all 50 states using 12 different criteria to determine which states maintain the most pro- and anti-sound money policies in the country.

Wyoming, Texas, and Utah emerged as the best states on sound money in the nation. with South Dakota, Alaska, Arizona, New Hampshire, and Washington not far behind. These states have implemented policies that repeal taxes on gold and silver, established gold and silver as legal tender and, make it easier to transact business with sound money. Texas has established a state Bullion Depository.

The Sound Money Index evaluates each state’s sales and income tax policies involving precious metals, whether a state recognizes the monetary role of gold and silver under the U.S. Constitution, whether a state holds pension, reserves, or debt denominated in gold or silver, whether a state has imposed precious metal dealer/investor harassment laws, and other criteria.

Maine, Tennessee, Ohio, and Kentucky joined Vermont, Arkansas, and New Jersey as the worst states on defending sound money.

Money Metals Exchange, a national precious metals dealer recently ranked “Best in the USA,” and the Sound Money Defense League, a national, non-partisan sound money advocacy group joined together to produce the authoritative ranking

“Federal policy and the privately-owned banking cartel known as the Federal Reserve System are the root causes of inflation, instability, and currency devaluation,”  Sound Money Defense League  Policy Director Jp Cortez said. “However, there are steps states can take to protect their citizens from the ill effects of America’s unbacked paper money system, and many of them are taking those steps.”

One of the most important steps to support sound money is repealing taxes on gold and silver.

Imagine if you asked a grocery clerk to break a $5 bill and he charged you a 35 cent tax. Silly, right? After all, you were only exchanging one form of money for another. But that’s essentially what Virginia’s sales tax on gold and silver did. By removing the sales tax on the exchange of gold and silver, Virginia will treat precious metal specie as money instead of a commodity. This represents a small step toward reestablishing gold and silver as legal tender, and breaking down the Fed’s monopoly on money.

“We ought not to tax money – and that’s a good idea. It makes no sense to tax money,” former U.S. Rep. Ron Paul said during testimony in support an Arizona bill that repealed capital gains taxes on gold and silver in that state. “Paper is not money, it’s fraud,” he continued.

Practically speaking, eliminating taxes on the sale of gold and silver cracks open the door for people to begin using precious metals in regular business transactions. This would mark an important small step toward currency competition. If sound money gains a foothold in the marketplace against Federal Reserve notes, people would be able to choose the time-tested stability of gold and silver over the central bank’s rapidly-depreciating paper currency.

During the 2020 legislative session, South Carolina could become the fourth state to recognize gold and silver as legal tender. Utah led the way, reestablishing constitutional money in 2011. Wyoming and Oklahoma have since joined.

The effect has been most dramatic in Utah where United Precious Metals Association (UMPA) was established after the passage of the Utah Specie Legal Tender Act and the elimination of all taxes on gold and silver. UPMA offers accounts denominated in U.S. minted gold and silver dollars. The company also recently released the “Utah Goldback.” UPMA describes it as “the first local, voluntary currency to be made of a spendable, beautiful, physical gold.”

The United States Constitution states in Article I, Section 10, “No State shall…make any Thing but gold and silver Coin a Tender in Payment of Debts.” Currently, all debts and taxes in South Carolina are either paid with Federal Reserve Notes (dollars) which were authorized as legal tender by Congress or with coins issued by the U.S. Treasury — very few of which have gold or silver in them.

Constitutional tender expert Professor William Greene said when people in multiple states actually start using gold and silver instead of Federal Reserve Notes, it would effectively nullify the Federal Reserve and end the federal government’s monopoly on money.

“Over time, as residents of the state use both Federal Reserve notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve notes do will lead to a “reverse Gresham’s Law” effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve notes). As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the state’s treasury, an influx of banking business from outside of the state – as people in other states carry out their desire to bank with sound money – and an eventual outcry against the use of Federal Reserve notes for any transactions.”

Once things get to that point, Federal Reserve notes would become largely unwanted and irrelevant for ordinary people. Nullifying the Fed on a state by state level is what will get us there.

Wyoming has also taken steps to encourage and facilitate the use of cryptocurrency and to support the development of blockchain businesses. Cryptocurrencies open up another pathway to this same goal of creating currency competition and undermining the Federal Reserve’s monopoly on money.

Reprinted from the Tenth Amendment Center.

A Trend Worth Considering – The Price of Gold Since 1971

A Trend Worth Considering – The Price of Gold Since 1971

As we approach the end of 2019, gold is on track for a healthy yearly gain. To date, the yellow metal is up over 16% on the year.

It’s always interesting talking about gains in the price of gold because when you get down to it, it all depends on when you got into the market. If you bought an ounce of gold on Jan. 1 of this year and sold it this morning, you’d have pocketed around $208 (less any taxes and fees). But if you bought your gold at the peak price this year and sold it this morning, you’d be out about $68.

So, when we say gold is up or down, you always have to ask a second question: since when? The price can be simultaneously up and down at the same moment depending on the answer to that question.

I occasionally get comments on articles posted on the SchiffGold Facebook page by people complaining that they’ve lost a lot of money in gold because they bought when the market was at its absolute peak in 2011 and the yellow metal nearly hit $1,900. I can certainly understand their frustration, but I don’t buy their argument that their experience proves gold is a bad investment. While eight years seems like a long time, it’s not in the big scheme of things.

As I said, where you begin when you talk about a trend is key. Plucking an arbitrary date out of thin air doesn’t necessarily tell us a whole lot. It’s important to begin at a key moment in history.

When it comes to gold, that key moment is August 15, 1971. That’s the day that Richard Nixon slammed shut the gold window and eliminated the last vestige of the gold standard. From that date, the US — and the world — has been on a pure fiat money system. Governments have taken advantage of it by inflating the money supply relentlessly. As a result, the price of gold has skyrocketed from that moment.

What Exactly Happened in 1971?

Nixon ordered Treasury Secretary John Connally to uncouple gold from its fixed $35 price and suspended the ability of foreign banks to directly exchange dollars for gold. During a national television address, Nixon promised the action would be temporary in order to “defend the dollar against the speculators,” but this turned out to be a lie. The president’s move permanently and completely severed the dollar from gold and turned it into a pure fiat currency.

Nixon’s order was the end of a path off the gold standard that started during President Franklin D. Roosevelt’s administration. June 5, 1933, marked the beginning of a slow death of the dollar when Congress enacted a joint resolution erasing the right of creditors in the United States to demand payment in gold. The move was the culmination of other actions taken by Roosevelt that year.

In March 1933, the president prohibited banks from paying out or exporting gold, and in April of that same year, Roosevelt signed Executive Order 6102. It was touted as a measure to stop hoarding, but was, in reality, a massive confiscation scheme. The order required private citizens, partnerships, associations and corporations to turn in all but small amounts of gold to the Federal Reserve at an exchange rate of $20.67 per ounce. In 1934, the government’s fixed price for gold was increased to $35 per ounce. This effectively increased the value of gold on the Federal Reserve’s balance sheet by 69%.

The reason behind Roosevelt’s executive order and the congressional joint resolution was to remove constraints on inflating the money supply. The Federal Reserve Act required all Federal Reserve notes have 40% gold backing. But the Fed was low on gold and up against the limit. By increasing its gold stores through the confiscation of private gold holdings, and declaring a higher exchange rate, the Fed could circulate more notes.

While American citizens were legally prohibited from redeeming dollars for gold, foreign governments maintained that privilege. In the 1960s, the Federal Reserve initiated an inflationary monetary policy to help monetize massive government spending for the Vietnam War and Pres. Lyndon Johnson’s “Great Society.” With the dollar losing value due to these inflationary policies, foreign governments began to redeem dollars for gold.

This is exactly how a gold standard is supposed to work. It puts limits on the amount the money supply can grow and constrains the government’s ability to spend. If the government “prints” too much money, other countries will begin to redeem the devaluing currency for gold. This is what was happening in the 1960s. As gold flowed out of the US Treasury, concern grew that the country’s gold holdings could be completely depleted.

Instead of insisting on fiscal and monetary discipline, Nixon simply severed the dollar from its last ties to gold, allowing the central bank to inflate the money supply without restraint.

So What About Gold?

When he announced the closing of the gold window, Nixon said, “Let me lay to rest the bugaboo of what is called devaluation,” and promised, “your dollar will be worth just as much as it is today.”

This was also a lie.

According to the Consumer Price Index data released by the Bureau Labor of Statistics, the dollar has lost more than 80 percent of its value since Nixon’s fateful decision. Meanwhile, the dollar value of gold has gone from $35 an ounce to nearly $1,500.

Looking at it another way, the purchasing power of gold has increased dramatically since Nixon closed the gold window. When Nixon made his announcement, gold was official $35 an ounce, but the actual market price was around $45 per ounce. If you take the recent price which has been hovering between $1,450 and $1,500 per ounce, the price has increased by 3122%.

That is not a typo.

This is much greater than the dollar prices of goods and services. The GDP deflator index has increased roughly five-fold since 1971. So, not only has gold served as an inflation hedge since the dawn of the pure fiat money era, it has actually outpaced prices.

As Nick Giambruno put it in an article published by the International Man, “This is all a predictable consequence of the U.S. abandoning sound money.”

By every measure—including stagnating wages and rising costs—things have been going downhill for the American middle class since the early 1970s. August 15, 1971, to be exact. This is the date President Nixon killed the last remnants of the gold standard. Since then, the dollar has been a pure fiat currency. This allows the Fed to print as many dollars as it pleases. And—without the discipline imposed by some form of a gold standard—it does precisely that. The U.S money supply has exploded 2,106 percent higher since 1971. The rejection of sound money is the primary reason inflation has eaten up wage growth since the early 1970s—and the primary reason the cost of living has exploded.”

Practically speaking, this means that if you stashed an ounce of gold worth $35 alongside thirty-five one-dollar bills under your bed in 1971. Today, you would be sitting on gold that would buy you an expensive tailored suit. The $35 in cash wouldn’t get you a pack of fancy boxer shorts.

This is a trend worth considering, given that there is zero chance that the fiat monetary regime is going to end any time soon.

Reprinted from Schiff Gold.

While You Were Watching the Impeachment Circus

While You Were Watching the Impeachment Circus

Well, they did it!

The House impeachment hearings were little more than political theater — a partisan fistfight with the majority party coming out the “winner.” In the process, it created the illusion of deep division and disagreement. Devoted Democrats and Republicans are both convinced that their team is fighting for their interests against a determined foe on the other side of the aisle.

But while everybody obsessed over the political theater playing out on CNN, Fox News and MSNBC, they completely missed the sideshow that could actually impact their lives. Even as Democrats and Republicans engaged in a contentious public spectacle in the media spotlight, they worked in concert behind the scenes to steal your liberty and siphon away your wealth.

While you argued over the gory details of impeachment with your friends on Facebook, Congress passed the 2020 National Defense Authorization Act. The nearly 3,500-page bill authorizes $738 billion in defense spending in Fiscal Year 2020. It creates a “Space Force,” so the U.S. can expand its empire into the cosmos. And Congress rejected a provision that would have made it just slightly harder for the president to unilaterally send American troops into combat. In other words, Congress agreed that it would not bother to do its job and declare war before sending the U.S. military to conduct offensive combat operations as required by the Constitution. It will continue to let the president make that call on his own. You know – the president the House just impeached.

Even worse, the current iteration of the NDAA extended provisions written into the 2012 National Defense Authorization Act that effectively authorize government kidnapping. The vaguely worded sections purport to authorize the arrest and “indefinite detention” of anybody the president decides might be associated with “terrorism” and subject them to the law of war. In effect, the government can deem you a terrorist and lock you away without due process. Government kidnapping may sound like hyperbole, but that’s exactly what the NDAA authorizes in effect.

Speaking of war, while all eyes were glued to the three-ring circus in D.C., the Washington Post released documents revealing that the U.S. government has been lying to us about the war in Afghanistan for decades.

“A confidential trove of government documents obtained by The Washington Post reveals that senior U.S. officials failed to tell the truth about the war in Afghanistan throughout the 18-year campaign, making rosy pronouncements they knew to be false and hiding unmistakable evidence the war had become unwinnable.”

As one three-star general put it, “What are we trying to do here? We didn’t have the foggiest notion of what we were undertaking. If the American people knew the magnitude of this dysfunction .?.?. 2,400 lives lost.”

This seems, maybe, just a tiny bit, significant. But most people just shrugged and turned back to the avalanche of impeachment reporting.

The sad truth is that these papers that have been mostly ignored by the general public provide legitimate grounds for impeachment – not just of Donald Trump, but Barack Obama and George W. Bush to boot. But when it comes to war, Congress maintains a bipartisan consensus supporting the endless, unconstitutional foreign interventions and the presidents who run them. And the media is complicit, focusing on the fake wrestling matches on Capitol Hill instead of reporting on real wars

And while we’re on the subject of bipartisan consensus, let me remind you that Congres reauthorized sections of the Patriot Act in the latest stopgap spending bill. This means the federal government will be able to continue to spy on you without a warrant and in complete disregard of the Fourth Amendment. Rep. Thomas Massie (R-Ky.) predicted it would happen.

Today, while everyone is distracted by the impeachment drama, Congress will vote to extend warrantless data collection provisions of the #PatriotAct, by hiding this language on page 25 of the Continuing Resolution (CR) that temporarily funds the government. To sneak this through, Congress will first vote to suspend the rule which otherwise gives us (and the people) 72 hours to consider a bill. The scam here is that Democrats are alleging abuse of Presidential power, while simultaneously reauthorizing warrantless power to spy on citizens that no President should have… in a bill that continues to fund EVERYTHING the President does… and waiving their own rules to do it. I predict Democrats will vote on a party line to suspend the 72 hour rule. But after the rule is suspended, I suspect many Republicans will join most Democrats to pass the CR with the Patriot Act extension embedded in it.

And indeed they did.

And finally, while Congress-critters battled it out on the House floor, behind the scenes, congressional leaders worked with the Trump administration to hammer out a $1.4 trillion spending agreement. According to an Associated Press report, the deal “fills in the details of a bipartisan framework from July that delivered about $100 billion in agency spending increases over the coming two years instead of automatic spending cuts that would have sharply slashed both the Pentagon and domestic agencies.”

The appropriations bill also raised the unconstitutional federal age to buy cigarettes to 21.

So, let’s review. While America was mesmerized by the pro-wrestling event on Capitol Hill, Congress agreed to maintain the government’s “authority” to kidnap you, to keep spying on you without a warrant, to continue unconstitutional wars, and to spend you deeper into debt.

Political theater makes for splashy headlines and heated debates, but it really has very little impact on your life. The political class, including the mainstream media, would prefer you pay attention to the fluff, not to the things that really matter. Perhaps instead of obsessing over impeachment or the latest debate over a Trump tweet, you would be better served to pay attention to what they don’t want you to pay attention to.

How About a Little Gun Violence to End Gun Violence?

How About a Little Gun Violence to End Gun Violence?

A Virginia Congress-Critter suggested that the governor could call up the National Guard to enforce gun control in counties where local officials have expressed reticence to carry out gun confiscation.

This should lay to rest once and for all the silly notion that gun control is about ending gun violence. (more…)

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