"Bedazzlement fixes nothing" - Granite Grok

“Bedazzlement fixes nothing”

Like no one else can, ‘Ol Remus sums it up.  In it’s entirety.

Almost beyond recognition...
Almost beyond recognition…

‘The Wreck of the Old 1792

We don’t have an economy, we have the wreckage of an economy. It’s studied  as a coroner studies a corpse, to determine when and how it died. And because we believe in equal opportunity idiocy,   medicine men dance around the deceased shaking their rattles and chanting their chants even as the indelicate aroma argues for a  distant venue.   Politicians take the modern view, they understand the bad news is off the charts, so they draw new charts. Economists busy themselves with describing how it came to be and what may be next. As with any fatality, the decisive event is long over and what comes next is as ugly as it is certain.   

The wreckage has been piling up for a very long time. Cities for one. They’re sunk costs peopled with net consumers, an unjustifiable burden, as are their inhabitants, largely.  There are no convincing arguments for the cities we have today. Even  aside from wartime targeting,  residents are less safe  inside the cities than outside of them.  When considering catastrophic collapse, who plans to bug out to Chicago? There’s a reason cities are  deteriorating, they cost far more to maintain than they’re worth.    Were they not liabilities already on hand, there would be no cause or justification to create New York or Detroit or Los Angeles as they are today.

The wreckage of our former economy goes deeper than  moldering  cities.  There was a time when economics was a forward-looking discipline with the goal of improving an already good outcome, but the moral and  optimistic concerns of  former eras are now an exercise in forensics and unwarranted hope. When insane and unproductive economies lie in ruins, realistic  resurrection involves last rites and a  reset to one degree or another, yet Name Brand practitioners say keeping up morale in the morgue will turn the trick, and so the wealth of the populace is squandered on Name Brand  antics. Our current “recovery” has cost us more than than an outright  Depression.

The populace must live however, and so the ever-present parallel economy is approaching Mediterranean proportions. As they were in the rubble-heaps of World War II, large parts of what was once free trade have been shunted into this underground economy, or as it was once called, the black market. Predatory  mismanagement and costly social engineering are now major factors which, together with ill-considered prohibitions, makes the black market attractive if not inevitable. It ranges from ordinary consumer items to banned goods such as pirated music and movies, drugs and narcotics,  untaxed cigarettes, unprocessed milk, newly illegal weapons and sometimes even garden produce. The shift to peer-to-peer is often not obvious. For instance, Angie’s List is more reliable, entirely legal, and  less burdensome to society than  government licensing. And so it grows.

Common estimates for the underground economy put it at as much as one third of the total economy. In all instances—legal, questionable and outright illegal—privacy is among its chief attractions. Privacy,  even aside from evading prohibitions and taxes, requires  that ordinary transactions not involve a third party, certainly not one with revenue or police powers. Cash is popular—fungibility is the reason for its existence after all—but  significant cash is not only suspect,  an assumption of guilt has been attached to it.

An economy is truly wrecked when mere possession of  cash is sufficient cause for extrajudicial confiscation, perhaps formal prosecution, when no actual crime has been committed. The excuse is easy to understand,  less easy to justify. Together with recently revealed prison-like surveillance from sea to shining sea,  it’s plain that privacy itself is being all but criminalized. The increasing popularity of silver and gold express, at least in part,  an effort to reestablish privacy. There’s a “back to the future” aspect to all this.

The Constitution says no state shall “coin money; emit bills of credit; make any thing but gold and silver coin a tender in payment of debts.” Under the 1792 Coinage Act, the US Mint was obligated supply those coins, and to ensure circulating coinage  fell within their defined weight, and to cull and replace those which didn’t. This was the whole meaning of “legal tender”. Government could skim the economy by way of taxes and bonds, but the economy itself existed separately from the state. There’s no mystery as to why. Money was physically in the hands of the people. Our success, the envy of the world, was apparently not good enough. As the financial forensics lab named Economics tells us, real money—monetized silver and gold—was replaced with  worthless “legal tenders” to serve politically motivated but mathematically doomed schemes.

The current scheme asks us to believe debt is money, and that it can be fully redeemed with the same debt. Such “money” amounts to a  claim on  a theoretical  third party, or said another way, it’s a derivative, a share of an abstract and uncollectible obligation. Real money involves no such third party. A seller, a buyer,   and the exchange of tangible wealth comprise an entire transaction. The principle emerges clearly and unavoidably,  silver or gold can extinguish debt because they have no counterparty. It follows that a sound economy   rests  on monetized precious metals. This was the reason for the Article in the Constitution and for the 1792 Coinage Act.

Arguments to the contrary take on the best 170-plus years of our national experience. And lose. Nothing makes it more plain the economy is absorbing more wealth than it generates when the productive populace is effectively entitled to only half their earnings. In case it needs saying, what can’t work, won’t work. And it doesn’t work. It doesn’t work because all debt will be repaid, if not by the borrower, then by the lender. Debt service alone will annihilate such “money”, in fact, given reliable figures, its demise can be  determined with a four-function calculator to the day and hour.

Sister schemes    merely trade one ice floe for another. Reality—that which remains when our notions  are subtracted—will be served. Bedazzlement fixes nothing. Our economy once worked well for almost everybody. That economy is well and truly wrecked.  We can fix it the hard way or the  harder way. Those are our choices.’

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