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Economic Growth Slashed Global Poverty to Historically Unprecedented Level – Article by Marian L. Tupy

Economic Growth Slashed Global Poverty to Historically Unprecedented Level – Article by Marian L. Tupy

The New Renaissance HatMarian L. Tupy
October 6, 2015
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According to the World Bank, for the first time in human history, “less than 10 percent of the world’s population will be living in extreme poverty by the end of 2015.” The bank has “used a new income figure of $1.90 per day to define extreme poverty, up from $1.25. It forecasts that the proportion of the world’s population in this category will fall from 12.8 percent in 2012 to 9.6 percent.”
Global poverty rate, official and baseline scenario, percent

As scholars have noted, historically speaking, grinding poverty was the norm for most ordinary people. Even in the most economically advanced parts of the world, life used to be miserable. To give one example, at the end of the 18th century, ten million of France’s twenty-three million people relied on some sort of public or private charity to survive and three million were full-time beggars.

Thanks to industrial revolution and trade, economic growth in the West accelerated to historically unprecedented levels. Over the course of the 19th and 20th centuries, real incomes in the West increased fifteen-fold. But the chasm that opened up as a result of the Western take-off is now closing.

Life expectancy at birth, West and the Rest, years

The rise of the non-Western world is, unambiguously, a result of economic growth spurred by the abandonment of central-planning and integration of many non-Western countries into the global economy. After economic liberalization in China in 1978, to give one example, real incomes rose thirteen-fold.

As Princeton University Professor Angus Deaton notes in his book The Great Escape, “[T]he rapid growth of average incomes, particularly in China and India, and particularly after 1975, did much to reduce extreme poverty in the world. In China most of all, but also in India, the escape of hundreds of millions from traditional and long established poverty qualifies as the greatest escape of all.”

Marian L. Tupy is the editor of HumanProgress.org and a senior policy analyst at the Center for Global Liberty and Prosperity. He specializes in globalization and global wellbeing, and the political economy of Europe and sub-Saharan Africa. His articles have been published in the Financial Times, Washington Post, Los Angeles Times, Wall Street Journal, U.S. News and World Report, The Atlantic, Newsweek, The U.K. Spectator, Weekly Standard, Foreign Policy, Reason magazine, and various other outlets both in the United States and overseas. Tupy has appeared on The NewsHour with Jim Lehrer, CNN International, BBC World, CNBC, MSNBC, Al Jazeera, and other channels. He has worked on the Council on Foreign Relations’ Commission on Angola, testified before the U.S. Congress on the economic situation in Zimbabwe, and briefed the Central Intelligence Agency and the State Department on political developments in Central Europe. Tupy received his B.A. in international relations and classics from the University of the Witwatersrand in Johannesburg, South Africa, and his Ph.D. in international relations from the University of St. Andrews in Great Britain.

This work by Cato Institute is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.

Blame the Federal Reserve, Not China, for Stock-Market Crash – Article by Ron Paul

Blame the Federal Reserve, Not China, for Stock-Market Crash – Article by Ron Paul

The New Renaissance HatRon Paul
September 6, 2015
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Following the historic stock-market downturn two weeks ago, many politicians and so-called economic experts rushed to the microphones to explain why the market crashed and to propose “solutions” to our economic woes. Not surprisingly, most of those commenting not only failed to give the right answers, they failed to ask the right questions.

Many blamed the crash on China’s recent currency devaluation. It is true that the crash was caused by a flawed monetary policy. However, the fault lies not with China’s central bank but with the US Federal Reserve. The Federal Reserve’s inflationary policies distort the economy, creating bubbles, which in turn create a booming stock market and the illusion of widespread prosperity. Inevitably, the bubble bursts, the market crashes, and the economy sinks into a recession.

An increasing number of politicians have acknowledged the flaws in our monetary system. Unfortunately, some members of Congress think the solution is to force the Fed to follow a “rules-based” monetary policy. Forcing the Fed to “follow a rule” does not change the fact that giving a secretive central bank the power to set interest rates is a recipe for economic chaos. Interest rates are the price of money, and, like all prices, they should be set by the market, not by a central bank and certainly not by Congress.

Instead of trying to “fix” the Federal Reserve, Congress should start restoring a free-market monetary system. The first step is to pass the Audit the Fed legislation so the people can finally learn the full truth about the Fed. Congress should also pass legislation ensuring individuals can use alternative currencies free of federal-government harassment.

When bubbles burst and recessions hit, Congress and the Federal Reserve should refrain from trying to “stimulate” the economy via increased spending, corporate bailouts, and inflation. The only way the economy will ever fully recover is if Congress and the Fed allow the recession to run its course.

Of course, Congress and the Fed are unlikely to “just stand there” if the economy further deteriorates. There have already been reports that the Fed will use last week’s crash as an excuse to once again delay raising interest rates. Increased spending and money creation may temporally boost the economy, but eventually they will lead to a collapse in the dollar’s value and an economic crisis more severe than the Great Depression.

Ironically, considering how popular China-bashing has become, China’s large purchase of US Treasury notes has helped the US postpone the day of reckoning. The main reason countries like China are eager to help finance our debt is the dollar’s world reserve currency status. However, there are signs that concerns over the US government’s fiscal irresponsibility and resentment of our foreign policy will cause another currency (or currencies) to replace the dollar as the world reserve currency. If this occurs, the US will face a major dollar crisis.

Congress will not adopt sensible economic policies until the people demand it. Unfortunately, while an ever-increasing number of Americans are embracing Austrian economics, too many Americans still believe they must sacrifice their liberties in order to obtain economic and personal security. This is why many are embracing a charismatic crony capitalist who is peddling a snake oil composed of protectionism, nationalism, and authoritarianism.

Eventually the United States will have to abandon the warfare state, the welfare state, and the fiat money system that fuels leviathan’s growth. Hopefully the change will happen because the ideas of liberty have triumphed, not because a major economic crisis leaves the US government with no other choice.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Keeping the Bubble-Boom Going – Article by Thorsten Polleit

Keeping the Bubble-Boom Going – Article by Thorsten Polleit

The New Renaissance HatThorsten Polleit
August 19, 2015

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The US Federal Reserve is playing with the idea of raising interest rates, possibly as early as September this year. After a six-year period of virtually zero interest rates, a ramping up of borrowing costs will certainly have tremendous consequences. It will be like taking away the punch bowl on which all the party fun rests.

Low Central Bank Rates have been Fueling Asset Price Inflation

The current situation has, of course, a history to it. Around the middle of the 1990s, the Fed’s easy monetary policy — that of Chairman Alan Greenspan — ushered in the “New Economy” boom. Generous credit and money expansion resulted in a pumping up of asset prices, in particular stock prices and their valuations.

US Federal Funds Rate in Percent and the S&P 500 Stock Market Index

A Brief History of Low Interest Rates

When this boom-bubble burst, the Fed slashed rates from 6.5 percent in January 2001 to 1 percent in June 2003. It held borrowing costs at this level until June 2004. This easy Fed policy not only halted the slowdown in bank credit and money expansion, it sowed the seeds for an unprecedented credit boom which took off as early as the middle of 2002.

When the Fed had put on the brakes by having pushed rates back up to 5.25 percent in June 2006, the credit boom was pretty much doomed. The ensuing bust grew into the most severe financial and economic meltdown seen since the late 1920s and early 1930s. It affected not only in the US, but the world economy on a grand scale.

Thanks to Austrian-school insights, we can know the real source of all this trouble. The root cause is central banks’ producing fake money out of thin air. This induces, and necessarily so, a recurrence of boom and bust, bringing great misery for many people and businesses and eventually ruining the monetary and economic system.

Central banks — in cooperation with commercial banks — create additional money through credit expansion, thereby artificially lowering the market interest rates to below the level that would prevail if there was no credit and money expansion “out of thin air.”

Such a boom will end in a bust if and when credit and money expansion dries up and interest rates go up. In For A New Liberty (1973), Murray N. Rothbard put this insight succinctly:

Like the repeated doping of a horse, the boom is kept on its way and ahead of its inevitable comeuppance by repeated and accelerating doses of the stimulant of bank credit. It is only when bank credit expansion must finally stop or sharply slow down, either because the banks are getting shaky or because the public is getting restive at the continuing inflation, that retribution finally catches up with the boom. As soon as credit expansion stops, the piper must be paid, and the inevitable readjustments must liquidate the unsound over-investments of the boom and redirect the economy more toward consumer goods production. And, of course, the longer the boom is kept going, the greater the malinvestments that must be liquidated, and the more harrowing the readjustments that must be made.

To keep the credit-induced boom going, more credit and more money, provided at ever lower interest rates, are required. Somehow central bankers around the world seem to know this economic insight, as their policies have been desperately trying to encourage additional bank lending and money creation.

Why Raise Rates Now?

Why, then, do the decision makers at the Fed want to increase rates? Perhaps some think that a policy of de facto zero rates is no longer warranted, as the US economy is showing signs of returning to positive and sustainable growth, which the official statistics seem to suggest.

Others might fear that credit market investors will jump ship once they convince themselves that US interest rates will stay at rock bottom forever. Such an expectation could deal a heavy, if not deadly, blow to credit markets, making the unbacked paper money system come crashing down.

In any case, if Fed members follow up their words with deeds, they might soon learn that the ghosts they have been calling will indeed appear — and possibly won’t go away. For instance, higher US rates will suck in capital from around the word, pulling the rug out from under many emerging and developed markets.

What is more, credit and liquidity conditions around the world will tighten, giving credit-hungry governments, corporate banks, and consumers a painful awakening after having been surfing the wave of easy credit for quite some time.

China, which devalued the renminbi exchange rate against the US dollar by a total of 3.5 percent on August 11 and 12, seems to have sent the message that it doesn’t want to follow the Fed’s policy — and has by its devaluation made the Fed’s hiking plan appear as an extravagant undertaking.

A normalization of interest rates, after years of excessively low interest rates, is not possible without a likely crash in production and employment. If the Fed goes ahead with its plan to raise rates, times will get tough in the world’s economic and financial system.

To be on the safe side: It would be the right thing to do. The sooner the artificial boom comes to an end, the sooner the recession-depression sets in, which is the inevitable process of adjusting the economy and allowing an economically sound recovery to begin.

Dr. Thorsten Polleit is the Chief Economist of Degussa (www.degussa-goldhandel.de) and Honorary Professor at the University of Bayreuth. He is the winner of the O.P. Alford III Prize in Political Economy and has been published in the Austrian Journal of Economics. His personal website is www.thorsten-polleit.com.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Asset-Price Inflation Enters Its Dangerous Late Phase – Article by Brendan Brown

Asset-Price Inflation Enters Its Dangerous Late Phase – Article by Brendan Brown

The New Renaissance HatBrendan Brown
August 12, 2015
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Asset price inflation, a disease whose source always lies in monetary disorder, is not a new affliction. It was virtually inevitable that the present wild experimentation by the Federal Reserve — joined by the Bank of Japan and ECB — would produce a severe outbreak. And indications from the markets are that the disease is in a late phase, though still short of the final deadly stage characterized by pervasive falls in asset markets, sometimes financial panic, and the onset of recession.

Global Signs of Danger

A key sign of danger, recognizable from historical patterns of how the disease progresses, is the combination of steep speculative temperature falls in some markets, with still-high — and in some cases, soaring — temperatures in other markets. Another sign is some pull-back in the carry trade, featuring, in particular, the uncovered arbitrage between a low (or zero) interest rate, and higher rate currencies. For now, however, this is still booming in some areas of the global market-place. Specifically, we now observe steep falls in commodity markets (also in commodity currencies and mining equities) which were the original area of the global market-place where the QE-asset price inflation disease attacked (back in 2009–11). Previously hot real estate markets in emerging market economies (especially China and Brazil) have cooled at least to a moderate extent. Most emerging market currencies — with the key exception of the Chinese yuan — once the darling of the carry traders, are in ugly bear markets. The Shanghai equity market bubble has burst.Yet in large areas of the high-yield credit markets (including in particular the so-called covenant-lite paper issued by highly leveraged corporations) speculative temperatures remain at scorching levels. Meanwhile, Silicon Valley equities (both in the public and private markets), and private equity funds enjoy fantasy valuations. Ten-year Spanish and Italian government bond yields are hovering below 2 percent, and hot spots in global advanced-economy real estate — whether San Francisco, Sydney, or Vancouver — just seem to get hotter, even though we should qualify these last two observations by noting the slump in the Canadian and Australian dollars. Also, there is tentative evidence that London high-end real estate is weakening somewhat.

How to Identify Late Stages of Asset Inflation

We can identify similar late phases of asset price inflation characterized by highly divergent speculative temperatures across markets in past episodes of the disease. In 1927–28, steep drops of speculative temperature in Florida real estate, the Berlin stock market, and then more generally in US real estate, occurred at the same time as speculative temperatures continued to soar in the US equity market. In the late 1980s, a crash in Wall Street equities (October 1987) did not mark the end-stage of asset price inflation but a late phase of the disease which featured still-rising speculation in real estate and high-yield credits.In the next episode of asset price inflation (the mid-late 1990s), the Asian currency and debt crisis in 1997, and the bursting of the Russian debt bubble the following year, accompanied still rising speculation in equities culminating in the Nasdaq bubble. In the episode of the mid-2000s, the first quakes in the credit markets during summer 2007 did not prevent a further build-up of speculation in equity markets and a soaring of speculative temperatures in winter 2007–08 and spring 2008 in commodity markets, especially oil.What insights can we gain from the identification of the QE-asset price inflation disease as being in a late phase?The skeptics would say not much. Each episode is highly distinct and the disease can “progress” in very different ways. Any prediction as to the next stage and its severity has much more to do with intuition than scientific observation. Indeed some critics go as far as to suggest that diagnosis and prognosis of this disease is so difficult that we should not even list it as such. Historically, such critics have ranged from Milton Friedman and Anna Schwartz (who do not even mention the disease in their epic monetary history of the US), to Alan Greenspan and Ben Bernanke who claimed throughout their years in power — and these included three virulent attacks of asset price inflation originating in the Federal Reserve — that it was futile to try to diagnose bubbles.

We Can’t Ignore the Problem Just Because It’s Hard to Measure

Difficulties in diagnosis though do not mean that the disease is phantom or safely ignored as just a minor nuisance. That observation holds as much in the field of economics as medicine. And indeed there may be a reliable way in which to prevent the disease from emerging in the first place. The critics do not engage with those who argue that the free society’s best defense against the asset price inflation disease is to follow John Stuart Mill’s prescription of making sure that “the monkey wrench does not get into the machinery of money.”Instead, the practitioners of “positive economics” demonstrate an aversion to analyzing a disease which cannot be readily identified by scientific measurement. Yes, the disease corrupts market signals, but by how much, where, and in what time sequence? Some empiricists might acknowledge the defining characteristic of the disease as “where monetary disequilibrium empowers forces of irrationality in global markets.” They might agree that flawed mental processes as described by the behavioral finance theorists become apparent at such times. But they despair at the lack of testable propositions.

Mis-Measuring Increases in Asset Prices

The critics who reject the usefulness of studying asset price inflation have no such qualms with respect to its twin disease — goods and services inflation. After all, we can depend on the official statisticians! In the present monetary inflation, a cumulative large decline in equilibrium real wages across much of the labor market, together with state of the art “hedonic accounting” (adjusting prices downward to take account of quality improvements) has meant that the official CPI has climbed by “only” 11 percent since the peak of the last business cycle (December 2007). The severity of the asset price inflation disease makes it implausible that the official statisticians are measuring correctly the force of monetary inflation in goods and services markets.

What Is the Final Stage?

A progression of the asset price inflation disease into its final stage (general speculative bust and recession) would mean the end of monetary inflation and also inflation in goods and services markets. What could bring about this transition? Most plausibly it will be a splintering of rose-colored spectacles worn by investors in the still hot speculative markets rather than Janet Yellen’s much heralded “lift-off” (raising official short-term rates from zero). What could cause the splinter? Perhaps it will be a sudden rush for the exit in the high-yield credit markets, provoked by alarm at losses on energy-related and emerging market paper. Or financial system stress could jump in consequence of the steep falls of speculative temperature already occurring (including China and commodities). Perhaps there will be a run from those European banks and credit funds which are up to their neck in Spanish and Italian government bonds. Or the Chinese currency could tumble as Beijing pulls back its support and the one trillion US dollar carry trade into the People’s Republic implodes. Perhaps scandal and shock, accompanied by economic disappointment will break the fantasy spell regarding US corporate earnings, especially in Silicon Valley. As the late French President Mitterrand used to say, “give time to Time!”

Brendan Brown is an associated scholar of the Mises Institute and is author of Euro Crash: How Asset Price Inflation Destroys the Wealth of Nations and The Global Curse of the Federal Reserve: Manifesto for a Second Monetarist Revolution. See Brendan Brown’s article archives.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Will Seizure of Russian Assets Hasten Dollar Decline? – Article by Ron Paul

Will Seizure of Russian Assets Hasten Dollar Decline? – Article by Ron Paul

The New Renaissance HatRon Paul
June 23, 2015
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While much of the world focused last week on whether or not the Federal Reserve was going to raise interest rates, or whether the Greek debt crisis would bring Europe to a crisis, the Permanent Court of Arbitration in The Hague awarded a $50 billion judgment to shareholders of the former oil company Yukos in their case against the Russian government. The governments of Belgium and France moved immediately to freeze Russian state assets in their countries, naturally provoking the anger of the Russian government.

The timing of these actions is quite curious, coming as the Greek crisis in the EU seems to be reaching a tipping point and Greece, having perhaps abandoned the possibility of rapprochement with Europe, has been making overtures to Russia to help bail it out of its mess. And with the IMF’s recent statement pledging its full and unconditional support to Ukraine, it has become even more clear that the IMF and other major multilateral institutions are not blindly technical organizations, but rather are totally subservient lackeys to the foreign policy agenda emanating from Washington. Toe the DC party line and the internationalists will bail you out regardless of how badly you mess up, but if you even think about talking to Russia you will face serious consequences.

The United States government is desperately trying to cling to the notion of a unipolar world, with the United States at its center dictating foreign affairs and monetary policy while its client states dutifully carry out instructions. But the world order is not unipolar, and the existence of Russia and China is a stark reminder of that. For decades, the United States has benefited as the creator and defender of the world’s reserve currency, the dollar. This has enabled Americans to live beyond their means as foreign goods are imported to the US while increasingly worthless dollars are sent abroad. But is it any wonder after 70-plus years of a depreciating dollar that the rest of the world is rebelling against this massive transfer of wealth?

The Europeans tried to form their own competitor to the dollar, and the resulting euro is collapsing around them as you read this. But the European Union was never considered much of a threat by the United States, existing as it does within Washington’s orbit. Russia and China, on the other hand, pose a far more credible threat to the dollar, as they have both the means and the motivation to form a gold-backed alternative monetary system to compete against the dollar. That is what the US government fears, and that is why President Obama and his Western allies are risking a cataclysmic war by goading Russia with these politically motivated asset seizures. Having run out of carrots, the US is resorting to the stick.

The US government knows that Russia will not blithely accept Washington’s dictates, yet it still reacts like a petulant child flying into a tantrum whenever Russia dares to exert its sovereignty. The existence of a country that won’t kowtow to Washington’s demands is an unforgivable sin, to be punished with economic sanctions, attempting to freeze Russia out of world financial markets; veiled threats to strip Russia’s hosting of the 2018 World Cup; and now the seizure of Russian state assets.

Thus far the Russian response has been incredibly restrained, but that may not last forever. Continued economic pressure from the West may very well necessitate a Sino-Russian monetary arrangement that will eventually dethrone the dollar. The end result of this needless bullying by the United States will hasten the one thing Washington fears the most: a world monetary system in which the US has no say and the dollar is relegated to playing second fiddle.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Fact-Checking Paul Krugman’s Claim To Be “Right About Everything” – Article by Andrew Syrios

Fact-Checking Paul Krugman’s Claim To Be “Right About Everything” – Article by Andrew Syrios

The New Renaissance Hat
Andrew Syrios
June 10, 2015
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But can the debate really be as one-sided as I portray it? Well, look at the results: again and again, people on the opposite side prove to have used bad logic, bad data, the wrong historical analogies, or all of the above. I’m Krugtron the Invincible!

Thus wrote the great Paul Krugman. A man so modest as to proclaim that “I think I can say without false modesty, a huge win; I (and those of like mind) have been right about everything.”

Quite a claim. Indeed, predictions are extraordinarily difficult. Even to an expert in a subject who has dedicated his life to a field of study, predicting the future proves elusive. Daniel Kahneman referenced a study of 284 political and economic “experts” and their predictions and found that “The results were devastating. The experts performed worse than they would have if they had simply assigned equal probabilities to each of three potential outcomes.”

A whole book of such wildly inaccurate predictions by experts was compiled into the very humorous The Experts Speak with such prescient predictions as Dr. Alfred Velpeau’s “The abolishment of pain in surgery is a chimera. It is absurd to go on seeking it” and Arthur Reynolds belief that “This crash [of 1929] is not going to have much effect on business.” Indeed, a foundational block of Austrian economics (that some Austrians unfortunately forgot regarding premature predictions of hyperinflation) is that the sheer number of variables in the world at large makes accurate forecasting extraordinarily difficult.

So it must be a rare man indeed that can be right about everything. And this man, Paul Krugman is not.

Predicting a Bubble He Recommended

Paul Krugman likes to reference the fact that he predicted the housing bubble. Of course, he also sort of recommended it. From a 2002 column of his,

To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.

In 2009, when this came out, he denied its obvious implication and wrote, “It wasn’t a piece of policy advocacy, it was just economic analysis. What I said was that the only way the Fed could get traction would be if it could inflate a housing bubble. And that’s just what happened.” So that doesn’t count as a recommendation? It certainly sounded like he was agreeing with Paul McCulley on inflating a housing bubble. And he verified that that’s exactly what he meant in a 2006 interview where he said,

As Paul McCulley of PIMCO remarked when the tech boom crashed, Greenspan needed to create a housing bubble to replace the technology bubble. So within limits he may have done the right thing. But by late 2004 he should have seen the danger signs and warned against what was happening; such a warning could have taken the place of rising interest rates. He didn’t, and he left a terrible mess for Ben Bernanke.

The best Krugman can possibly say is that he thought Greenspan went too far with the housing bubble he recommended.

Deflation is Around the Corner

While running victory laps because the United States hasn’t seen massive price inflation, Krugman seems to have forgotten what his prediction actually was. In 2010 he wrote, “And what these measures show is an ongoing process of disinflation that could, in not too long, turn into outright deflation … Japan, here we come.”

Robert Murphy called him on this and noted Krugman’s response,

… Krugman himself … said of his 2010 analysis: “(In that post, I worried about deflation, which hasn’t happened; I’ve written a lot since about why).”

Note the parenthetical aside, and the timing: Krugman in April 2013 is mentioning in parentheses to his reader that oh yes, as of February 2010 he was “worried about deflation, which hasn’t happened.” In other words, Krugman entered this crisis with a model that predicted how prices would move in response to the economic situation, and chose his policies of government stimulus accordingly. He was wrong, and yet maintains the same policy recommendations.

But of course to Krugman, anyone who predicted price inflation can’t explain why that hasn’t happened. Such people are just those “… who take a position and refuse to alter that position no matter how strongly the evidence refutes it.” Krugman is different.

Europe Will Do Better Than the United States

In 2008, Krugman wrote:

… tales of a moribund Europe are greatly exaggerated. … The fact is that Europe’s economy looks a lot better now — both in absolute terms and compared with our economy.”

Later he noted that “Americans will face increasingly strong incentives to start living like Europeans” and that “he has seen the future and it works.” (I should probably note that that is a quote he borrowed from Lincoln Steffens about the Soviet Union.)

Then Greece went bankrupt and the international consensus is unquestionably that the crisis hit Europe harder.

The Euro Will Collapse

Niall Ferguson counted eleven different times between April of 2010 and July 2012 that Krugman wrote about the imminent breakup of the euro. For example, on May 17th, 2012, Krugman wrote,

Apocalypse Fairly Soon. … Suddenly, it has become easy to see how the euro — that grand, flawed experiment in monetary union without political union — could come apart at the seams. We’re not talking about a distant prospect, either. Things could fall apart with stunning speed, in a matter of months, not years. And the costs — both economic and, arguably even more important, political — could be huge.

Most of these predictions are laced with weasel words such as “might,” “probably,” and “could” (more on that shortly). Still, while I’m no fan of the euro, and it might still collapse, as of today, three years later, it has not. If the word “imminent” means anything at all, Krugman was wrong.

The Sequester Will Doom Us All

Paul Krugman at least admitted the sequester was “relatively small potatoes.” But for “relatively small potatoes” he makes a big deal about it, referring to it as “one of the worst policy ideas in our nation’s history.” And it “will probably cost ‘only’ around 700,000 jobs.” (Note the word “probably” again.)

Then later, he decided that these were actually quite large potatoes, stating,

And, somehow, both sides decided that the way to buy time was to create a fiscal doomsday machine that would inflict gratuitous damage on the nation through spending cuts unless a grand bargain was reached. Sure enough, there is no bargain, and the doomsday machine will go off at the end of next week.

The economy has done quite well since then actually. Indeed, how $85.4 billion dollars in “cuts” (from the next year’s budget not the previous year’s spending) could affect anything in a $17 trillion dollar economy is simply beyond me. And of course, it didn’t.

Interest Rates Can’t Go Below Zero

In March of this year, Krugman wrote in regard to some European bonds with negative nominal yields,

We now know that interest rates can, in fact, go negative; those of us who dismissed the possibility by saying that people could simply hold currency were clearly too casual about it.”

But as Robert Murphy points out, “The foundation for the Keynesian case for fiscal stimulus rests on an assumption that interest rates can’t go negative.” Murphy also points out that Krugman should admit he was wrong again because back in 2009, Krugman wrote,

And the reason we’re all turning to fiscal policy is that the standard rule, which is that monetary policy plus automatic stabilizers should do the work of smoothing the business cycle, can’t be applied when we’re hard up against the zero lower bound. [i.e. zero percent interest]

“Inflation Will be Back”

In 1998, Paul Krugman predicted “Inflation will be back.”

Nope.

“The Rate of Technological Change in Computing Slows”

Same article as the last one, “… the number of jobs for IT specialists will decelerate, then actually turn down.”

Aside from a short dip after the 2001 recession, the answer would be nope again.

Weasel Words and “Accurate Predictions”

Let’s take a look at Paul Krugman’s “accurate prediction” of the financial crisis. On March 2nd, 2007, he predicted the following explanation would be given a year from then for the financial crisis he was sort of predicting,

The great market meltdown of 2007 began exactly a year ago, with a 9 percent fall in the Shanghai market, followed by a 416-point slide in the Dow. But as in the previous global financial crisis, which began with the devaluation of Thailand’s currency in the summer of 1997, it took many months before people realized how far the damage would spread.

So the crisis would begin in China? Almost.

He concluded that column by saying, “I’m not saying that things will actually play out this way. But if we’re going to have a crisis, here’s how.”

That’s a good hedge, just like with the euro. He can say he got the financial crisis right (albeit happening in a different way than he expected), but then say he didn’t get the euro wrong because he added “probably” before any prediction about it.

Normally, there would be nothing wrong with these weasel words. Given the nature of predictions, any prediction that is made should have a qualifier in front of it. It’s simply an admission that you aren’t omniscient. But you can’t eat your cake and have it too. Either Krugman was right about the crisis (sort of) and wrong about the euro (and many other things) or neither should count at all.

Or course, this doesn’t refute Krugman’s theories. But then again, Krugman may want to slow down on his victory laps.

Andrew Syrios is a partner in the real estate investment firm Stewardship Properties. He graduated from the University of Oregon with a degree in Business Administration and a Minor in History.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Speaking Truth to Power: Jimmy Lai – Article by Lawrence W. Reed

Speaking Truth to Power: Jimmy Lai – Article by Lawrence W. Reed

The New Renaissance Hat
Lawrence W. Reed
May 4, 2015
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For years, a bust of John James Cowperthwaite sat prominently in the foyer of Jimmy Lai’s Next Media office in Hong Kong, along with others of economists F.A. Hayek and Milton Friedman. If that’s all you ever knew about Jimmy Lai, you could at least surmise that he loves liberty and free markets.

Cowperthwaite had been the architect of Hong Kong’s free-market miracle. He started with a destitute rock and turned it into one of the world’s freest and most prosperous economies. (Indeed, I’ve suggested that he deserves to be recognized annually and everywhere with a Cowperthwaite Day on the anniversary of his birthdate, April 25.) Jimmy Lai is precisely the sort of individual that Cowperthwaite had in mind when he decided that entrepreneurs, not central planners, should drive an economy. Because of what Cowperthwaite had done, Jimmy Lai found a hero himself. And Lai, too, would go on to do great things.

Of the characteristics most often identified with successful entrepreneurship, Jimmy Lai possesses them all in abundance. He is a self-starter who takes initiative (and risk) with enthusiasm. He’s creative and intuitive. He’s passionate and tenacious. Where others see problems, he sees opportunity. He’s a visionary, both in business endeavors and for society at large. He doesn’t hesitate to defy conventional wisdom when it points to a dead end. Whatever he undertakes, he musters the courage to act. He puts his all — money, time, and energy — where his mouth is (and where his convictions are).

On paper, Lai’s early life would seem unlikely to produce a “real hero.” He was born in China the year before it fell under Mao Zedong’s dictatorial rule. Lai was smuggled out of the country and into Hong Kong at age 12. In the absence of child-labor laws, which would have ensured his deprivation there, too, Lai went to work in a garment factory for $8 a month. Fifteen years later, he bought his own garment factory and built it into the giant known as Giordano, now a leading international retailer. Lai’s boundless entrepreneurial zeal, free to operate within Hong Kong’s laissez-faire business environment, yielded jobs for thousands and consumer goods for millions.

But in 1989, Beijing’s infamous Tiananmen Square massacre set Jimmy Lai on a new course. With Hong Kong scheduled to be transferred from British to Chinese rule in just eight years, Lai knew that maintaining traditional freedoms under Beijing’s rule would be a challenge. So he ventured into media, creating what soon became the territory’s largest-circulation magazines, Sudden Weekly and Next. In spite of Beijing’s coercion of advertisers, Jimmy Lai’s tabloid-style newspaper, Apple Daily, is still the premier voice in Asia for the freedoms of speech, press, and enterprise.

Jimmy Lai does not shrink from controversy. The Communist Party of China, he wrote in a 1994 column, is “a monopoly that charges a premium for a lousy service.” He defended the student demonstrators when they went into the streets by the hundreds of thousands in late 2014 in defense of democracy. He routinely exposed corruption in both government and business, including the especially toxic brand of corruption that arises when the two get in bed together. He sold Giordano, the apparel firm he founded, to save it from Beijing’s intense pressure, but he refuses to this day to renounce his principles.

In December 2014, he revealed that he was stepping down as publisher of Apple Daily and chairman of Next Media to devote more time to family and personal interests. A month later, and for the second time, unknown assailants firebombed his home. He remains under intense scrutiny from Beijing, which regularly employs ugly rumors, threats of litigation, and other nefarious means to undermine his influence.

Earlier this year, Lai told the New York Times that he never planned to make his media empire into a family dynasty. His six children (ages 8 to 37) are not in line as heirs to that business or its leadership positions. “I don’t think I should ask my kids to inherit my business, because they can’t start where I did,” he said. “I was from the street. I’m a very different make of person. I’ve been a fighter all my life.”

Whatever the future holds for Jimmy Lai, friends of liberty everywhere can count him as one very brave man.

For additional information:

In the Freeman:

Lawrence W. (“Larry”) Reed became president of the Foundation for Economic Education (FEE) in 2008. Prior to that, he was a founder and president for twenty years of the Mackinac Center for Public Policy in Midland, Michigan. He also taught Economics full-time and chaired the Department of Economics at Northwood University in Michigan from 1977 to 1984.

He holds a B.A. degree in Economics from Grove City College (1975) and an M.A. degree in History from Slippery Rock State University (1978), both in Pennsylvania. He holds two honorary doctorates, one from Central Michigan University (Public Administration—1993) and Northwood University (Laws—2008).

This article was originally published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.
Lessons on Dictatorship in Da Chen’s “Colors of the Mountain” (2003) – Essay by G. Stolyarov II

Lessons on Dictatorship in Da Chen’s “Colors of the Mountain” (2003) – Essay by G. Stolyarov II

The New Renaissance Hat
G. Stolyarov II
July 29, 2014
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Note from the Author: This essay was originally written in 2003 and published in two parts on Associated Content (subsequently, Yahoo! Voices) in 2007.  The essay received over 500 views on Associated Content / Yahoo! Voices, and I seek to preserve it as a valuable resource for readers, subsequent to the imminent closure of Yahoo! Voices. Therefore, this essay is being published directly on The Rational Argumentator for the first time.  
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~ G. Stolyarov II, July 29, 2014

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A Glimpse into the Mindset of a Dictator

 

In Colors of the Mountain, the autobiography of Da Chen, the author relates an interesting episode from his life as a student in the Chinese schools. As Chinese schools rapidly convert from anti-intellectualism to centers of educational encouragement, the quotes of Chairman Mao are used to uphold the new shift. Yet Chen comments on Mao’s incompatibility with genuine intellectual progress.

It was ironic to bring Mao into this drive for intellectual excellence. If Mao had known what his Little Red Guards were doing, he would have howled like a lonely wolf in his icy coffin and cried his smoke-ridden lungs out. Mao, the dictator, was the friend of the devils…” (256)

This passage directly and brilliantly unveils the essence of dictatorship and the means by which a dictatorial entity seeks to maintain its power. The philosophy of Mao the dictator had been to foster perpetual conflict among the Chinese and create the impression of an imminent crisis where none existed. In the words of the author, Mao “made fake smoke over fake fires.”

The mindset of the dictator suggests to him that his subjects will flock to his side at a time of urgency, while peace and prosperity will breed unrest, and, worse, an across-the-board desire for individual autonomy. Chen shows the consequences of this approach with a chillingly perceptual flair: “And strewn down his long path lay the bones of millions of angry ghosts.”

The soil in which autocracy springs its roots is chaos and suffering; this is required to drain resources from the general population for the alleviation of the imagined threat, as well as for the amassing of attitudinal support for the dictator’s initiatives. All the while, it is key to keep the masses ignorant and quell intelligent dissent, as Mao’s Red Guards had undertaken throughout China during the Cultural Revolution.

It is quite convenient for the dictator to brand as the source of the newest “crisis” those autonomous individuals with the greatest potential to establish social justice. This, in effect, kills two birds with one stone. Hence, extending Mao’s policy to its logical conclusion, it would come as no surprise that the man was categorically averse to any genuine, objective education.

Mao’s ruling style reminiscent of another masterful analysis of a totalitarian regime, George Orwell’s 1984, in which the collectivist ruling elites overtly claim that the purpose of their power is to inflict suffering and thereby secure their power, in brazen disregard for standard of living, while squandering the country’s resources on a perpetual world war.

Control from Beyond the Grave

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In Colors of the Mountain, the young Da Chen is declined the opportunity to attend Chairman Mao’s funeral ceremony and laments this, as he has developed a vague cultist devotion to him. Da recalls,”As though the rift between the Red families and the landlords’ families were widened by the death of Mao, I was told by the school authorities not to attend the ceremony…” (138).

Despite the horrendous harm inflicted by Mao’s policies upon his family, Da Chen continues to harbor a mentality of unquestioned devotion to authority, whoever may hold such a position. His social upbringing has inculcated him with a mindset of never seeking to analyze Mao’s actions, for “he was wiser, no, the wisest.”

The submission of Da is Mao’s even beyond the grave, even though the physical control of the dictator over the lives of the Chinese people has already crumbled and been replaced with a more benign regime. The general Communist Chinese sociocultural milieu preaches that the people exist to serve the government and scorns the individualist philosophies of the Enlightenment.

Despite his striving for individual success and his recognition of the colossal obstacles placed in his way by Mao’s regime, Da cannot help but absorb this perception, almost subconsciously. There are numerous references to this: “I had been told…,” “I was to follow him…,” “I didn’t know any better,” “A cult mentality had already been forged in me…”

This is the consequence whenever an individual rejects the laws of objective reality in favor of the arbitrary edicts of other people. Because the laws of reality can be grasped by reason and authoritarian whims cannot, the individual’s rational sovereignty is discarded and he comes to worship that which possesses the greatest potential of harming him.

Simultaneously, this devotion to authority will never ingratiate the outcast individual with the elites of his society. Just as Da’s former record of academic excellence had failed to advance his prospects for a successful future, so does his reverence for Mao fail to convince the elites of his community to permit him to attend the funeral ceremony. The intent of authoritarianism is not to reward those who espouse love for it, but to punish invented “enemies” by deprivation or outright assault.

In Colors of the Mountain, Da Chen powerfully demonstrates that a cultic devotion to another human being, especially a powerful and brutal one, is always a self-defeating proposition. Dictators such as Mao are always thirsty for the blood of the innocent; the devotion of the latter will merely fuel the destroyers’ appetites.

Ancient Chinese Inventions and Discoveries (2002) – Essay by G. Stolyarov II

Ancient Chinese Inventions and Discoveries (2002) – Essay by G. Stolyarov II

The New Renaissance Hat
G. Stolyarov II
July 18, 2014
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Note from the Author: This essay was originally written in 2002 and published in three parts on Associated Content (subsequently, Yahoo! Voices) in 2007.  The essay earned over 10,900 page views on Associated Content/Yahoo! Voices, and I seek to preserve it as a valuable resource for readers, subsequent to the imminent closure of Yahoo! Voices. Therefore, this essay is being published directly on The Rational Argumentator for the first time.  ***
***
~ G. Stolyarov II, July 18, 2014
***

The civilization of ancient China produced a wide array of innovations in science and technology which preceded the rest of the world by centuries and sometimes by millennia. This essay examines some of these remarkable inventions and discoveries.  Chinese inventors developed numerous mechanical implements, engineering advances, and new substances such as gunpowder, which took centuries to spread to or be replicated in other parts of the world. Furthermore, this essay explores the reasons for ancient China’s lack of systematic progress or an industrial revolution despite the presence there of numerous inventive thinkers.

Mathematics

Beginning in the 14th Century BC, the Chinese developed a decimal, or base ten system of recording numbers. This is one of the earliest such systems known.

In the first century AD, Chinese scholars compiled a volume of mathematics, Jin Zhang Suanshu,(Arithmetic in Nine Chapters). Mathematician Zu Chongzhi (429-500) calculated the first 12 digits of the value of pi, while his son, Zu Gengzhi, updated the Jin Zhang Suanshu and determined the correct formula for the volume of a sphere, V= (pi/4)d^3, where d is the diameter.

Paper

Paper was invented by Cai Lun, a scientist at the Imperial Court in 105 AD. It was produced from bamboo and hemp fibers dissolved in water situated in a mold. When the water was drained and the mixture dried, the first genuine design of paper appeared. The Chinese also developed a precursor to the first paper currency in the world, printed in the Ninth Century AD in order to lighten the load carried by tax collectors.

Cast Iron

The first methods for developing raw iron into workable material with the capacity to be crafted into weapons and ornaments were developed in the 4th Century BC, when the Chinese became able to lower iron’s melting temperature by adding phosphorus to the heated metal.

In the 2nd Century BC, this technology served to bring about the manufacture of steel by mixing wrought and cast iron at high temperatures or draining the carbon component from cast iron.

Chain Pump

Invented in China during the 1st Century BC, A chain pump consists of a chain attached to itself at the ends, which carries along it pallets of raw materials, such as water or sand, which are elevated to impressive heights up to about four meters.

Agricultural Technology

The Chinese were the first civilization in the world to plant crops in rows, beginning in the 6th Century BC, in order to obtain rapid crop growth without the crops’ mutual interference. Chinese farmers accomplished this 2200 years before any other culture.

Beginning in the 3rd Century BC, horses were utilized in China to haul loads on farms using an upgraded harness with a collar and chest strap (known a trace harness or horse collar) , which reduced the attachment’s burden on the animal and permitted a single horse to move a ton and a half of material.

The 3rd Century BC also saw the advent of the moldboard plow, or kuan, the design of which included a sharp center for digging into the ground and gradually-sloped wings at the side in order to discard excess soil and ease the friction on the plow.

The wheelbarrow was invented in the 1st Century BC and enabled Chinese farmers to transport massive loads over vast distances with ease.

Gunpowder

Gunpowder was invented in China during the 8th Century AD as a mixture of charcoal, sulfur, and saltpeter and used primarily for fireworks. The fireworks were launched from rockets made of hollowed bamboo tubes. These rockets were lighted through use of matches, invented in the 6th Century AD, carved of pinewood and coated with sulfur. Other civilizations borrowed this aspect and discovered its military utility.

In 1150, fireworks were elaborated as a result of the first multi-staged rockets, where several smaller tubes were attacked to main meter-tall stick, which were ignited in mid-air after the main rocket’s energy became depleted.

Natural-Gas Drilling

During the 1st Century BC, the Chinese discovered methods to drill some 1.5 kilometers into the Earth’s surface. A derrick was constructed, followed by a small shaft that extended until the Earth’s layer of hard rock was reached. Then a cast iron drill would be lowered with bamboo cables, after which the process would often consume years before any actual fuels were located.

Mechanical Clock

Invented in the 8th Century AD, the mechanical clock rapidly spread to other regions of the world. Chinese designs were crucial to inspiring European clock inventors such as Pope Sylvester II. The Chinese mechanical clock was powered by falling water or mercury, which then transmitted the energy to a chain-drive.

Segmental Arch Bridge

A segmental arch, invented by engineer Li Ch’un in the 7th Century AD, consists of only a small fragment of a circle instead of earlier semicircular arches. Ch’un constructed his first bridge over the Chiao Shui River in 610, which was notably lighter, more durable, and more material-efficient than earlier bridges. It is still in frequent use today.

Belt-Drive

A belt-drive (or driving belt) was attached around wheels to ensure smooth transition of mechanical energy between them. Invented in China during the 1st Century BC, the belt-drive was applied extensively to silk manufacture and spinning machines.

The belt-drive made possible the invention of the spinning wheel in 1270, since it provided sufficient cover and attachment for a rimless construction such as a spinning wheel, where a network of threads replaces the rim.

Printing Press

Movable character blocks were invented by Bi Sheng in 1045. A method for arranging and printing pages in mass quantities was devised. However, this was not efficient when applied to the Chinese language, which possesses over 5000 characters, and thus could not spur on the same printing revolution as that which occurred in Europe.

Magnetic Compass

The first magnetic compass was invented in China during the 3rd Century AD, utilizing a piece of magnetite (an ore of iron) which was heated and aligned in a North/South position, afterward being contained in a bowl of water where it floated on a piece of reed. This was integral to early 2nd millennium Chinese explorations in the Indian Ocean.

Other Noteworthy Advances

The Chinese were the first to develop a kite in the 4th Century BC. Craftsmen like Kungshu P’an possessed mastery to the extent of developing kites that stayed afloat for three days. These kites had military applications as well, carrying messages to isolated troop formations on the battlefield.

Commissioned by the imperial government in 132 AD, mathematician and cartographer Chang Heng devised the first seismograph, which allowed fairly accurate forecasts of earthquakes, leading to more efficient economic planning.

The Yellow Emperor’s Manual of Corporeal Medicine, composed in the 2nd Century BC, contains an advanced treatise on the circulation of blood. This was published fifteen centuries before William Harvey developed a work of comparable caliber in the West.

Why the Ancient Chinese Failed to Achieve Routine Technological Progress

Despite numerous ingenious technological innovations throughout its history, China failed to develop an industrial revolution and a routine theory like the Scientific Method to render inventions and discoveries systematic and not merely the spontaneous products of ingenious minds.

Ancient China was a generally stagnant society which, despite the presence of numerous brilliant thinkers, failed to achieve any regular technological progress until the late 19th century. So dramatic was this stagnation that it led Victor Hugo to compare China to “a fetus in a jar.” While it witnessed numerous promising technological developments in their embryonic stages, ancient China failed to harness these developments into a consistent advance.

The reason for this unfortunate lack of progress was above all institutional. Although the earlier Han and Tang dynasties among others were receptive to advancements and scientific practice, the Ming, following the defeat of the Mongols, isolated China from the remainder of the world and focused on civil stability to a greater extent than technological progress.

The heavily Confucian paradigm of the era from 1368 to 1911 focused more on adaptation to nature and the arts rather than the sciences. Scholars were trained in extensive law memorization rather than further studies of the external world. This caused China to lag behind the West, and contact with the Occident was required to re-establish its rich technological tradition.

Sources

1997 World Book Encyclopedia: Vol. 3 C-Ch. World Book Inc. Chicago. 1997.

Franklin Institute Online. “China: Ancient Arts and Sciences.” Available March 31, 2002: http://sln.fi.edu/tfi/info/current/china.html

Latourette, Kenneth S. A Short History of the Far East. The Macmillan Company. New York. 1964.

Reischauer, Edwin O. Fairbank, John K. East Asia: The Great Tradition. Houghton Mifflin Company. Boston. 1960.

Schurmann, Franz. Schell, Orville. Imperial China. Random House Inc. New York. 1967.

Think Quest Library of Entries. “Ancient Chinese Technology.” Available March 31, 2002: http://www.thinkquest.org/library/lib/site_sum_outside.html?tname=23062&url=23062/frameset.html.

Wagner, Donald B. “Liu Hui and Zu Gengzhi on the Volume of a Sphere.” Available March 31, 2002: http://www.staff.hum.ku.dk/dbwagner/SPHERE/SPHERE.html.

How Long Will the Dollar Remain the World’s Reserve Currency? – Article by Ron Paul

How Long Will the Dollar Remain the World’s Reserve Currency? – Article by Ron Paul

The New Renaissance Hat
Ron Paul
September 3, 2012
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We frequently hear the financial press refer to the U.S. dollar as the “world’s reserve currency,” implying that our dollar will always retain its value in an ever shifting world economy.  But this is a dangerous and mistaken assumption.

Since August 15, 1971, when President Nixon closed the gold window and refused to pay out any of our remaining 280 million ounces of gold, the U.S. dollar has operated as a pure fiat currency.  This means the dollar became an article of faith in the continued stability and might of the U.S. government

In essence, we declared our insolvency in 1971.   Everyone recognized some other monetary system had to be devised in order to bring stability to the markets.

Amazingly, a new system was devised which allowed the U.S. to operate the printing presses for the world reserve currency with no restraints placed on it– not even a pretense of gold convertibility! Realizing the world was embarking on something new and mind-boggling, elite money managers, with especially strong support from U.S. authorities, struck an agreement with OPEC in the 1970s to price oil in U.S. dollars exclusively for all worldwide transactions. This gave the dollar a special place among world currencies and in essence backed the dollar with oil.

In return, the U.S. promised to protect the various oil-rich kingdoms in the Persian Gulf against threat of invasion or domestic coup. This arrangement helped ignite radical Islamic movements among those who resented our influence in the region. The arrangement also gave the dollar artificial strength, with tremendous financial benefits for the United States. It allowed us to export our monetary inflation by buying oil and other goods at a great discount as the dollar flourished.

In 2003, however, Iran began pricing its oil exports in Euro for Asian and European buyers.  The Iranian government also opened an oil bourse in 2008 on the island of Kish in the Persian Gulf for the express purpose of trading oil in Euro and other currencies. In 2009 Iran completely ceased any oil transactions in U.S. dollars.  These actions by the second largest OPEC oil producer pose a direct threat to the continued status of our dollar as the world’s reserve currency, a threat which partially explains our ongoing hostility toward Tehran.

While the erosion of our petrodollar agreement with OPEC certainly threatens the dollar’s status in the Middle East, an even larger threat resides in the Far East.  Our greatest benefactors for the last twenty years– Asian central banks– have lost their appetite for holding U.S. dollars.  China, Japan, and Asia in general have been happy to hold U.S. debt instruments in recent decades, but they will not prop up our spending habits forever.  Foreign central banks understand that American leaders do not have the discipline to maintain a stable currency.

If we act now to replace the fiat system with a stable dollar backed by precious metals or commodities, the dollar can regain its status as the safest store of value among all government currencies.  If not, the rest of the world will abandon the dollar as the global reserve currency.

Both Congress and American consumers will then find borrowing a dramatically more expensive proposition. Remember, our entire consumption economy is based on the willingness of foreigners to hold U.S. debt.  We face a reordering of the entire world economy if the federal government cannot print, borrow, and spend money at a rate that satisfies its endless appetite for deficit spending.

Representative Ron Paul (R – TX), MD, was a three-time Republican candidate for U. S. President. See his Congressional webpage and his official campaign website

This article has been released by Dr. Paul into the public domain and may be republished by anyone in any manner.