We have a lot of respect for our many American readers because many of them are long-time readers, friends, and family. We were born and raised in Colorado, lived on the East Coast (Baltimore and Washington DC) for ten years before moving to Europe (Paris and London) for three years, and now Australia for the last three years. It's not Americans we're upset with. It's American politicians.
We can't tell you how many times in the last five years people asked us if we were Canadian, as if we'd be embarrassed to admit we were from America. Far from it! We love the idea of America, where people live and let live, where you can say what you'd like, work as hard as you'd like (and keep your money), and where all the virtues of a liberal society are brought to life.
But today's America-largely thanks to the worst generation of political leadership in the country's history and an inherently flawed money system that forces people into debt-is nothing like the idea of America. Not even close.
So if we're critical of the current monetary regime and political leadership, it's not because we're being un-American. It's because America doesn't practice American ideals any longer-especially the political class, which looks out for its own interests and treats people like tax animals to be farmed and, when need be, slaughtered for some ill-conceived policy mess of their own making. And in terms of economic ideals, America's gradual move toward socialised risks and everyone living at each other's expense makes people both less free and less wealthy.
Keep in mind Karl Marx never expected communist revolutions in pre-industrial states. He declared that communism was the natural evolution of a capitalist industrial economy after workers grew sufficiently alienated from their production. Marx would probably look at modern day America and nod knowingly.
The U.S. dollar is the symbol of all America's monetary and political corruption. It's the tool used by American policy makers to steal away the purchasing power of ordinary people through inflation. We are forced to use it, even as its worth less and less each year.
Meanwhile, American policy makers rack up enormous debts to make promises they know they can't keep. These debts must be paid by future generations either through higher taxes or more borrowing from foreign lenders, both of which will inevitably result in more money printing and further declines in American purchasing power. Lower standards of living are the inevitable result.
If you mess with value of a currency, you also mess with the durability of other values. There's a direct link between sound money and civil society. The debasement of our money has lead, in many different, aspects, to the debasement of our culture, politics, entertainment, sport, and business ethics.
So that's why we're so nasty about the people who have a monopoly on money printing in the United States. They've abused that function to the great detriment of the American people. There should be more outrage and more contempt and a lot less respect for the institution of central banking. It will be the ruin of all of us.
Hopefully not this weekend, though. We don't want to end the week on too dreadful a note. The upside? Throughout human history, people have tended to use one commodity more than any other as a medium of exchange: gold. It's a lot cheaper now than it was a month ago.
Dan Denning
The Daily Reckoning Australia
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About the Author
Dan Denning is the author of 2005's best-selling The Bull Hunter (John Wiley & Sons). He began his financial publishing career in 1997 and has covered financial markets form Baltimore, Paris, London and, beginning in 2005 Melbourne. He’s the editor of The Daily Reckoning Australia and the Publisher of Port Phillip Publishing.
Comment by justin on 15 August 2008:
As Frank Zappa sang way back in 1981
Cause what they do, in Washing-tun
They just take care of number one
And number one ain't youuuuu
You ain't even number twooooo (You are what you is, 1981)
Comment by Stuart Davies on 16 August 2008:
Wow, Dan, you hit the proverbial nail smack on the head. It is all so clear now.... don't know why I never saw it before. when the risks of the owners are covered by us little folks, or SOCIALIZED as you correctly point out, this cleary adheres to the precepts of SOCIALISM, right? So then it is an easy leap of logic to your image of Karl Marx nodding sagely at the revelation of our capitalist industrial society having following it's natural mutation into communism.
My god, how can i have been so blind? The Fed has been a hotbed of commies all along! It isn't a cabal of absolutely ruthless, utterly unscrupulous, power mad, control freak, money grubbing capitalist swine who have staged a coup, debased our currency, taken over the mainstream media, and stolen Democracy from the American people... it's the bloody commies!
Guess they were way more devious than any of us ever gave them credit for, eh? Who would have ever thought they'd be clever enough to disguise themselves as central bankers?
Comment by bruce on 16 August 2008:
Interesting thoughts but whats the alternative.American goverments spend less, unwind the credit debacle that capitalism has created for the average american-australian-briton etc.Big recession-depression,jobless rates soar buissiness collapse much pain for everyone.Nobody wants that and nobody would accept that from politicians,so yeah blame them all for their short sightedness and lack of real leadership on all the issues you mention but the people, either through stupidity or ignorence or maybe even through blind faith wouldn"t have it any other way
Comment by Fast Ben on 17 August 2008:
An economy built on debt is a false economy.
Comment by Me on 18 August 2008:
Well Stu, you do have to admit, something that is common amongst Central bankers is a deep distrust of free markets (if not capitalism) and free independent self ruling people (if not democracy). Dan never suggested a simple polarisation between Commies and Capitalists in the problem with Central banking, and it really is very unhelpful to reduce things to that dichotomy.
Comment by Smack MacDougal on 21 August 2008:
Thanks Dan.
You make reading the DR.AU worth it. You express all that needs to be said or written on this topic -- the worst political leadership ever.
When House membership became frozen at 435 in 1913, Americans lost Popular Representation in the House in the face of ever growing head count.
Without Popular Representation, a key design of the founders, the U.S. Congress devoles into a de facto Senate of the Political Class.
From this design change, all problems come forth for Americans.
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