I am still reading F.A. Hayek's The Road to Serfdom and the following paragraph was really well written. The argument being debated was that in a truly Free Market, the end result is that monopolies will eventually be able to provide the best products at the lowest costs, and will eliminate competition; which we all know is a very valuable thing. The claim continues to say that technology will help monopolies cut costs and extend their control.

The superior efficiency of large establishments has not been demonstrated; the advantages that are supposed to destroy competition have failed to manifest themselves in many fields. Nor do the economies of size, where they exist, invariably necessitate monopoly...The size of the sizes of the optimum efficiency may be reached long before the major part of a supply is subjected to such control. The conclusions that the advantage of large-scale production must lead inevitably to the abolition of competition cannot be accepted. It should be noted, moreover, that monopoly is frequently the product of factors other than the lower costs of greater size. It is attained through collusive agreement and promoted by public policies. When these agreements are invalidated and when these policies are reversed, competitive conditions can be restored.

F.A. Hayek - The Road to Serfdom pg 92-93

quoted from:

Clair Wilcox, Competition and Monopoly in American Industry, Temporary National Economic Committee Monograph, No. 21 (Washington, DC: U.S. Government Printing Office, 1940), pg. 314.

I haven't posted a new video of Ron Paul in a while...

Does this cartoon seem to fit the economic situation today?

From Drop Box

I'm still amazed that every dollar added to our economy is created from debt. That's right, when our Government, and it's private, super-secret partner in crime the Federal Reserve, want to create more money to "bailout" or "stimulate the economy", it creates bonds (out of thin air) and sells that debt to either interests in the US or in foreign markets (China/Japan). China is currently the largest holder of US debt at over 1 Trillion dollars. Yes, we owe China over 1 Trillion dollars and borrow 3 Billion from them a day just to fund our deficit spending. Think about that for a minute. What would happen to you if you even had to borrow $300/day to keep living your current lifestyle? What you borrow more to get yourself out of trouble? No.

I'm not sure what the future holds, but it can't be pretty. If China suddenly decided that it wanted to collect on all these debts it has been buying from the US, a MASSIVE sell-off of the U$D would happen and the value would drop tremendously. What does that mean exactly? It means that the US would have to print a lot of new money (turn on the printing presses) to pay off all of this debt. We obviously don't have this money (otherwise we wouldn't need to borrow it in the first place). The US wouldn't be on the line to purchase all of this debt back, as other foreign entities would auction for it with the Chinese. The Chinese may not get 100% of the debt back, but they would sell off the US Bonds to the highest bidder. It looks like supply > demand for the USD. Can anyone tell me what happens when supply > demand? That's right Econ101 students; the price/value of the item being sold decreases. The dollar's value would decrease causing massive inflation. Of course, SOME of the bonds would be bought back by the US and we would have to print money to pay for them. So let's see:

1. ebay style betting for US bonds and treasury bills
2. drives down the value of the dollar (supply > demand)
3. US prints more money to pay for the bonds
4. again, drives down the value of the dollar (inflation)
5. your money = worth less

Looks like that's the 5 easy steps to hinder the good American saver....YOU and ME! What have we done to deserve this you may ask? I tell you NOTHING. I haven't done anything. I've saved, payed off my credit cards, paid off my car, worked hard, saved, didn't buy a house that I can't afford, didn't over extend myself and have always lived within my means. Oh yeah, I've paid ALL of my taxes on time even though I despise them. What have I gotten in return? I've lost 50% in my 401k and will be hit with MASSIVE INFLATION in the future.

Remember, the Government is BROKE. They have NO money. The only money that they can spend must be created 1 of 2 ways:

1. Create more out of debt (see paragraph 1)
2. Increase taxes

I don't know about you, but it seems that the Federal Government got caught with it's hand in the cookie jar with a mouth full of cookies. They are in a mess, and they know it. Spend Spend Spend can only prolong things. It's the small hit of crack to get you through the day. What happened to savings, personal responsibility and living within our means? President Obama recently said that American families are doing the right thing by cutting back, saving more and tightening their belts, yet the Fed Gov spends more than ever. Does this sound hypercritical to you? Is the only way for us to get out of this recession really for our Fed Gov to spend more?

The only reason that the US is still the super power of the world is because we own the bombs. In 2008, 68% of our Federal Budget was spent on the Military. Now, ask yourself, why was so much spent on the Military? What's going on here? Don't believe me?? Check this out!! Has anyone warned us about the Military Industrial Complex before?

We are bullies, and there's no denying it. I welcome the new era of US history, where we don't have the means to push people around to get what we want. Welcome to the reality that all other countries live in, America.

-Desh

PS: Please contact your representatives to support Ron Paul's bill HR1207. This is very short, and they should be able to read the whole thing (unlike the 1000 page bailout bill). This would give Congress the right to audit the Federal Reserve. You know, the private, super-secret organization that creates and controls all of our money. Yeah, we don't have the authority to actually audit them, and see what they are doing....

WHAT IF...?

Up until now the US budget deficit has been financed by the (mainly)
Asian export countries recycling their trade surplus dollars into US
treasuries. This worked out nicely for the US, however there is a
problem now. The trade surpluses of those countries never even
approached the amount that the US government now needs to borrow, even
during the good times. Now, with trade surpluses dropping, those
countries will be able to afford even less US treasuries. The
government will be forced to print the money it needs, thereby
destroying the value of the dollar.

Make no mistake though, this is what the government wants. Paying back
colossal debts in worthless currency is not a difficult task. The US
government wants to spend as much as possible now, and thereby control
the devaluation of the dollar themselves...before others come to the
realization that America can never pay back it's current debts and
liabilities in the current circumstances. By the time America's
creditors come to this realization, they will be sitting with
mountains of worthless paper; their hard-earned money having gone to
bail out banks, invade foreign countries and propping up the American
consumer.

They will have been victims of the greatest fraud and the largest
bubble in history - The U.S. Treasury Bond Bubble.

P.S. If you think treasuries AREN'T a bubble, ask yourself why people
would buy them at negative interest rates. This kind of thing only
happens during bubble-based booms. Prepare yourselves.