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$1,000,000,000,000 Coins ?

01/18/2013

William Buckler is a brilliant libertarian from Australia.  Like most libertarians, he embraces Austrian economics and a return to the gold standard.  He is also required reading.  Fortunately, a good friend of mine is always kind enough to share his copy . . . Thank you!

The most recent issue discusses the heavy emphasis that politicians place on “laws.”  They think they can solve any problem by merely passing some new law or interpreting some old law differently.  As an example, he cites the idea of the U.S. minting a platinum coin which would be legal tender for $1 TRILLION.

A politician can also pass a law suspending the law of gravity, which is great until he steps off a cliff.  Buckler is correctly highlighting the fact that physical laws cannot be over-ridden by man-made laws.  Sure, we can issue $1 TRILLION coins to “dress-up” our national balance sheet . . . but just wait until we try to pay a foreign creditor with a coin worth only about $2 THOUSAND in platinum.

Sometimes, it is tiresome to read Buckler, as the sky-is-always-falling.  But, we are indeed watching a slow-motion train wreck in our fiscal policy, and there is plenty of time for the sky to fall.  I had hopes he suspected Obama would surprise the world and become a truly “transitional” President by curbing the growth in entitlements, but I see no evidence of that.

Separately, he takes the New York Times to task for a column suggesting we have outgrown the U.S. Constitution, calling it “flagrant contempt for the knowledge and reasoning power of the American people” or maybe the leaders of the American people anyway.  (The irony of an Australian lecturing the U.S. on the U.S. Constitution was not lost.)  And, I have often wondered in this space if we need Representative Democracy 2.0 and don’t feel bad about questioning our current operating model for governing.  If we can improve upon our version of government, then we should.  Isn’t that why the founding fathers permitted the Constitution to be amended?  Otherwise, we could end up like the impotent Japan.

While not recommended for the faint-of-heart, go to http://www.the-privateer.com/ for a chilling review of the world’s fiscal condition.

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