Ogre’s Politics and Views

I have been trying to explain why the US government is completely and totally wrong and well-beyond it’s Constitutional boundaries regarding the recent economic news. I have been trying to explain that most of the current problems are because of government interference in freedom. I just read a news release from Chris Cole, running for the US Senate on the Libertarian Party ticket in North Carolina (against Liddy Dole (RINO)):

From Christopher Cole, Libertarian for US Senate

I am a collector of antique American currency. Included in my collection - and my personal favorites- are several gold certificates. Most Americans aren’t even aware that we once had bills that bore legends like “20 Dollars in Gold Coin Payable to the Bearer on Demand”. They are especially surprised by their orange back, intended to emphasize their value in gold. (The twenty bears the image of George Washington familiar from our modern one-dollar Federal Reserve Note.)

Why do I mention my collection? Because that twenty-dollar gold certificate was pegged at an exchange value of one ounce of gold. It was worth that ounce the first year, the second year, even ten years after it was printed. What is the price of an ounce of gold now? Over $800. In other words, the value of our currency has fallen more than fortyfold! No wonder the government no longer issues gold certificates, and no wonder our savings rate has fallen to about one-half of one percent. It is against self-interest to hold money that is worth less, the longer you hold on to it.

Thus, we have the setup for our current credit and foreclosure crisis.

When money is saved, its owner intends its use in the future, and the bank uses it to make loans, such as for the creation of new businesses. More savings mean lower interest rates, which in turn send a market signal for businesses and individuals to invest for future demand. The real interest rates based on savings have been replaced by artificial signals from Federal Reserve-set interest rates, along with home- and land-ownership incentives by government. The result has been a market expectation of future increases in demand for homes and land, and thus, a real-estate price bubble. All of which was fine, as long as there was an ACTUAL demand in the future. What has happened is that demand no longer matches the fake interest signal, and the housing bubble has burst.

The solution offered by politicians, such as Republican Senator Elizabeth Dole, is to pump Federal Reserve loans into Fannie Mae and Freddie Mac, to finance MORE loans for folks who couldn’t otherwise
qualify for them, setting up ANOTHER housing bubble and MORE foreclosures, not fewer. Quick fixes can always be expected to result in longterm problems.

The longterm solutions are harder. Here are the ones I would institute as Senator:

First, restore the gold standard, so Americans can know that they will not lose their savings to inflation.

Second, phase out government programs that subsidize home ownership. This must include setting a date for the revocation of the charters of Fannie Mae and Freddie Mac (I suggest four years), so that they will cease sending false market signals, without stranding current buyers and sellers.

And third, abolish the Federal Reserve System, enabling interest rates to float in response to real savings, rather than to government social engineering.

For additional information, I recommend this article from the Ludwig von Mises Institute, an economic think tank based at Auburn University.

–
Christopher Cole
Libertarian nominee, US Senate
Huntersville, NC

Popularity: 31% [?]

Tags: Government, News, North Carolina Government //