Time To Get Real About Inflation

If you have ever wondered why the the government's CPI or Consumer Price Index doesn't seem to reflect the the rising costs of everything needed to survive it's because of the way CPI calculations are made. I won't go into that because it get's a little complicated. Luckily, there's a better inflation gauge called the EPI or Everyday Price Index published by the American Institute for Economic Research. A Better Inflation Gauge Shows Why Inflation's Much Worse - DailyFinance

The EPI places the real rate of inflation at 8% or more than double the government's figure of  3.1%. Wouldn't it be nice if interest paid on savings came a little closer to matching the EPI figure?  The frugal lose 5% or more per year on the purchasing power of their nest eggs.

Great Quotes

I ran across a couple of super quotes at  Monty Pelerin's World » Economics, Finance and Politics Through The Prism of Classical Liberalism


If you want government to intervene domestically, you're a liberal. If you want government to intervene internationally, you're a conservative. If you want government to intervene everywhere, you're a moderate. If  you don't want government to intervene anywhere, you're an extremest. Joseph Sobran

The best argument against democracy is a five minute conservation with the average voter. Winston Churchill

Freedom Of The Press?

The vital signs of America are alarmingly weak  Is this nation terminally ill and headed for the dustbin of history?
The parchment protections that I learned about in school once made me feel proud to be an American. I thought that we were unique, something special, a noble experiment that got it right. Today those words are all but ignored by our leaders. Perhaps they are only reflecting the hollowness of an electorate, a culture, concerned about professional sports, other forms of entertainment, and acquiring the latest consumer gadgets. Bread and circuses, get the picture?

Reporters Without Borders has recently ranked America 47th out of  179 countries in terms of freedom of the press. We are just ahead of  Argentina, Romania, and Latvia.

www.counterpunch.org/2012/01/27/we-are-the-champions-of-the-world/

Regarding Intrinsic Value

Issac made a good point. On the other hand, perhaps I was wrong to say that gold or any other commodity has intrinsic value. Gary North established that point some months ago. The marketplace with its ever changing supply and demand relationships may say that it a certain weight or volume of a substance can be purchased for a certain amount of a given currency at a given point in time. One also could say that some things have historically been worth more than others when compared on a weight or volume basis. Perhaps only the air we breath and those political conditions within society that are proper to our nature - conditions we refer to as natural or individual rights -  can be said to have intrinsic value. But even there I am sure some will disagree. Let it suffice to say that units of gold and silver of a known weight and purity have worked well as a medium of exchange over time for reasons that most who read this blog are familiar with. They are not perfect, few things are, but have been found preferable to most other things as mediums of exchange.

In Search Of A Windshield

I bought a new Bonneville toward the end of 2010 just before winter hit. I had four accessories installed at the dealer but held off on a windshield or fairing. I wanted to make sure that it had the right look for the bike and did a good job of deflecting wind too. I eventually found a roughly mid sized universal type at Dennis Kirk that fit snugly between the speedometer and fly screen. For added stability I drilled through both the fly screen and windshield and bolted the two together. Rubber washers were used to reduce vibration and the potential for of cracking.

Rocket Man And The Acabion

While America was busy turning foreign lands and its own economy into rubble, the Swiss gave us Rocket Man and the Acabion. The internal combustion model of the Acabion pictured here is apparently no longer being produced. They are now making pure electric vehicles of varying power. The top of the line 200 KW model has a top speed of 341 MPH. If they allow test drives I promise to keep it under 300 MPH, honest.

Coin Clipping Gone Wild!

At one time in history when money was made out of gold and silver, clipping or shaving small amounts of precious metal from coins was regarded as a serious crime. In England the practice was even viewed as treason and a capital offense. Those convicted of coin clipping met gruesome public executions.

Although states frowned on individuals who clipped their coins some governments occasionally did the same thing by alloying their precious metal coins with metals of less value. It was sneakier method of achieving virtually the same type of fraud but on a far more massive scale. Rome frequently resorted to the sordid practice and often ran into serious economic problems as a consequence when the debased coinage would not be accepted as payment.

Today, of course, there is no precious metal left to either clip or alloy with cheaper metals. Every last fractional ounce of precious metal has been clipped away, so to speak. Stealing the intrinsic value of our money was never the end game but only a prelude. It was like being being given the keys to the safe holding the nations entire wealth. Money and credit could now be created out of thin air.

We rely entirely on money substitutes or digital equivalents with no intrinsic value. Small time coin clippers have been put out of business. It might make more sense to remove metal from roofing nails than from government issued tokens. Unfortunately, when governments are not limited to circulating gold and silver units of known weight and purity or paper notes backed by the same, they gain unlimited power. Economies and lives are placed at the mercy of career politicians and central those who control the money substitute printing presses.

Inflation, or a large increase in the supply of money substitutes, obviously steals value from what we are forced to use for trade and savings. Making the evil scam appear wholesome requires routine blessings from exalted high priests called economists. Blackboards are regularly filled with complex equations that few can understand proving that some inflation is always good. My high school math teacher had a good way to describe impressive looking but bogus proofs handed in by students. He said that they were filled with fudge factors.

We now rely on faith based money. Economists tell us that money with intrinsic value (sound money) is archaic and unnecessary. Americans have an abundance of faith - perhaps a little too much for their own good. A little healthy skepticism would go a long way to getting this nation back on track.