By Gary A. McCollum
Anyone who is aware of anything going on today understands that this Pandemic is killing our economy. Congress has passed nearly 3 Trillion dollars to date and are negotiating for another relief package between 1 – 3 additional Trillion dollars.
Let us put this into perspective. If you were to count, nonstop, $1.00 each second without pause, it would take you 34,000 years to get to $1 Trillion dollars. The Fed can print 1-5 Trillion in 5 seconds on a keyboard. Another perspective, last year’s Federal income was $3.464 Trillion Dollars. The U.S. spent $4.448 Trillion. That left us with a deficit of a $984 billion (Loss). COVID 19 shut down a raging US economy. Minimal work, Minimal production, Minimal global sales. Our second quarter loss in GDP is at +/- 33% prorated for the year. That is worse than the great depression.
The stock market is still going great though! Is it? With the printing of all this money, where is it going? The Fed (independent of the Government) is propping up the stock market. You’re making money in your stocks because the stocks are soaring, just look at Amazon, Apple, etc. You would be correct. They are climbing, but why? No one is working or they’re working from home. Commercial buildings in all major cities are losing Millions of dollars each month in rents. Many folks are taking advantage of payment deferrals, in hopes that this will all soon be over, and we can get back to normal. What will normal look like? We have all seen it, in our small community stores that will not be re-opening, restaurants that have been a staple of our community for decades shutting their doors and the property sitting vacant in slow decay.
Our state is running out of funds for unemployment insurance and the Governor has stated that soon it may have to request a loan from the Federal Government to help. Our current national debt is fast approaching $27 Trillion dollars. That is basically $214,000 owed to the national government by each taxpayer. So where does the money for additional stimulus/bailouts come from? We just add more to the national debt. We hope this Pandemic goes away or gets cured so we can all get back to normal and get things back together, right? I do not like to bet on hope.
Currently the US Dollar is a first-class asset, but how long will we be able to maintain that status? It’s easy to blame congress, the President, etc. but that’s not really where the blame belongs.
A brief history lesson: On April 5, 1933, President Franklin Roosevelt ordered all gold coins and gold certificates in denominations of more than $100 to be turned in for other money (Dollars). It required all persons to deliver all gold coin, gold bullion and gold certificates owned by them to the Federal Reserve by May 1 for the set price of $20.67 per ounce. Effectively outlawing the owning of personal gold.
Here’s where things get a little sneaky. In 1934, the government price of gold was increased to $35 per ounce, passed by congress, effectively increasing the gold on the Federal Reserve’s balance sheets by 69 percent. Sounds good right, wrong. It effectively stole 69% of the wealth of the American public
The government held the $35 per ounce price until August 15, 1971, when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value. It’s at this point in history the USA completely abandoned the gold standard. This went largely uncovered in the media because of the Watergate scandal forcing his resignation. This resulted in increased inflation and societal unrest. $1.00 in 1971 is the equivalent to $6.37 in 2020, or a 536.54% percent inflation average.
We can go into deeper history regarding Thomas Paine who is famous for being quoted with the statement: “These are the times that try men’s souls,” and “Tyranny, like Hell, is not easily conquered.” (Pre-Revolutionary War) but also said in a little-known writing “Dissertations on government, the affairs of the bank, and paper money.”
He stated that “Gold and silver are the emissions of nature: paper is the emission of art. The value of gold and silver is ascertained by the quantity which nature has made in the earth. We cannot make that quantity more or less than it is, and therefore the value being dependent upon the quantity, depends not on man…Paper, considered as a material whereof to make money, has none of the requisite qualities in it. It is too plentiful, and too easily come at. It can be had anywhere, and for a trifle.”
It was not until 1974 that Americans could legally own gold again, signed into law by President Gerald Ford. At the time of this writing, Gold is Trading at all-time highs in comparative ratio to the US dollar ($1,994.00). If you remember back in 2011 gold briefly hit a high of $1,900 and began a pull back. The reason it did was the Fed told people that eventually interest rates would again become normalized and increase.
That never really happened. Briefly in 2018 the Fed started to increase rates but the stock market reacted so negatively that soon the Fed lowered the rate and is currently saying it is all in on supporting whatever it takes to keep our economy going.
Congress is meeting now with additional spending on the horizon. They’re just working out the kinks that each party wants. This means more money for unemployment, more incentives for pet projects, the list is endless. My question is what is this going to do to our fiat currency, and eventually our country?
First, I am not a financial guru. I am not a Millionaire. So, my predictions are from a lay person point of view and only that. My predictions are worth exactly what I am paid to write this. Nothing.
I predict the Prices of gold/silver to continue to reach all time highs. I predict inflation like we experienced in the 70’s or even much worse. We could see massive foreclosures, massive evictions, massive unemployment. The average American does not have significant savings for a long-term financial crisis.
To prevent another great depression, we need to find a way to open our country. This virus is devastating to the older people in our population. The average age of fatality is 74. We need to take care of the most at risk, people with comorbidity, but we need, no we must get back to work. If not, I fear we are doomed to see our Dollar collapse and our country devolve.
The only reason the Dollar has not collapsed yet is because it is basically the world’s standard. Unfortunately, that just means we have the cleanest shirt in the dirty laundry.
The views and opinions expressed are not necessarily those of the Natchitoches Parish Journal. If you have an article or story of interest for publishing consideration by the NPJ, please send it to NPJNatLa@gmail.com.
4 thoughts on “The Cleanest Shirt in the Dirty Laundry”
election day in November 2020 will determine the future of America for our children and future generations. PLEASE TAKE TIME AND VOTE. .
I appreciate your writing with a bit of history too!
I know that as a self employed company for
29+ yrs in natch. The government, along with the banks are controlling the spending and increasing our debt to Americans! The economy will collapse it’s just when!!! If you’ve never been introduced to God now is the time to call on his name; “JESUS CHRIST” the one man who hung on a cross and died for yours n my sins.
The same people who did this to him are running our country to the ground, they increase our debt to pad their own pockets n pander to the lobbyist. The buy and sell their stocks with inside trading made legal for them to do. They pass laws to thwart and undo the laws currently on the books! They give our tax revenue to illegal aliens all the while waiting to pass another law/spending bill to give them free health care,food,cell phone,education and finally the pathway to citizenship! If these people new where America was heading I bet they would choose to stay in their native country!
Our current government cannot control the people of this country, our government was put in place to protect our country/freedom! They were never to dictate/impose upon the American tax paying citizen! But as you clearly stated in your article, the government has been deceiving all of its life. God Bless You all, and may you find yourself calling upon his name.
Thanks to both of you. We are in serous trouble.
so true. I hope the USA citizens come to realize the importance of the November 2020 elections. —and vote.
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