The author Lawrence Lepard is a professional investment manager.
"The book is a discussion of how America's monetary system has gone astray and caused enormous pain for millions through inflation. "
"Something is seriously wrong in America today. If you sense a deeper problem but can’t put your finger on it — as you work harder and harder to make ends meet — then keep reading. If inflation is causing your standard of living to decrease, then this book will help you understand the issue."
"The system is broken because the money is broken."
A money system that favors some people over others is the primary cause of our pain and problems today.
Our Current Monetary System
"The greatest issue of our time is the broken monetary system, which leads to enormous wealth inequality because it gives one group of citizens an unfair advantage. It also grants undue power to the government, which has led to a lot of bad policies, including perpetual wars."
"Inflation [created by the government by printing money] is the surest way to fertilize the rich man’s field with the sweat of the poor man’s brow."
The second issue is that governments changes the rules arbitarily. The author describes the the financial problems his family had to go through as a result of government changing rules.
"To save the dollar, then-Fed Chairman Paul Volcker raised the Fed Funds rate to 20%, which caused my father to come dangerously close to bankruptcy in 1980. The strains on our family and on his health were substantial."
"Then came my turn. In 2007 and 2008... They changed the rules. I was forced to cover my short positions as they quickly rallied higher, and I lost all those gains, ending the year down 6%. Had the rules not changed, I would have been up over 100%, perhaps a great deal more. The decision to protect the bankers cost my investment partnership millions of dollars and caused me significant financial losses. I received a message: “Play by the rules, and you still lose.” Millions of other Americans have received the same message."
The Golden Age
Moving away from Sound economics to unrelgulated money printing creates a short term false Golden Age. This happened in USA in 1980-95.
"From 1980 to 1995, the U.S. basked in a unique golden age for fiat currency... Also, the Soviet Union’s collapse (1989-1990) paid a peace dividend, easing global tensions and benefiting economic growth. The money supply expanded during this time, but the debt was channeled productively and productivity grew. Subtle shifts, however, began to appear in the late 1980s and mid-1990s."
End of Good Times
When governments control money supply, "History shows us that men and governments in control of fiat currency inevitably succumb to the temptation to print excessive money, allowing them to live beyond their means. It is nearly impossible to resist this temptation."
"every inflation, once begun, must become continuously worse" — Jens O. Parsson.
"Paper money eventually returns to its intrinsic value – zero" - Voltaire.
"Paper money, politicians, and central banks always fail the test of time." - Dr. Ron Paul
Sound money is the answer for long term prosperity
Sound money is a monetary policy where the Government does not control the money supply.
"Classical Economics argues that free markets and individual self-interest drive economic prosperity, with minimal government intervention needed."
Importance of Savings
"The well-fed villagers discovered what Adam Smith and his contemporaries would later formalize — that deferring consumption (saving) enables investment in productivity-enhancing capital, whether seeds for next year's harvest, breeding stock for future flocks, or tools that multiply our productive capacity."
"Living within your means and saving for a rainy day are more than just well-worn phrases. They are critical to the economic advancement of society. When savings occur, capital accumulates. The capital can then remain sterile or can be deployed in an effort to earn a return."
Deflation as natural consequence of sound economics
"As productivity and efficiency improve, deflation follows as a natural result of doing more with less."
* * *
The author talks of powerful forces which benefits from money printing and the current monetary system.
"You might be right, he said. But you're fighting forces much larger than you — forces that will always win."
"There is only one force that can put an end to the successes of the state, and that is an economically and morally informed public. Otherwise, the state can continue to spread its malicious and destructive policies." - Lew Rockwell.
ISBN: 979-8301510427
Published: November 27, 2024
Pages: 187
Available on: amazon
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