Wednesday, August 24, 2011

Right Rick

Was Texas Governor Rick Perry out of line to suggest that bald, bearded Ben Bernanke would be almost treasonous to print more dollars? No. I don’t think so. His remarks got a rise out of President Obama right away. Even former President Bush’s advisor, Karl Rove, criticized him. Bush, after all, was first to appoint Bernanke as Chairman of the Federal Reserve, perhaps on the advice of Rove. Obama re-appointed him when he took office and it looks like Bernanke has been doing his bidding ever since.

Speaking in Iowa, apparently in response to an inquiry about the Federal Reserve, Perry said, “If this guy [Bernanke] prints more money between now and the election, I don’t know what y’all would do to him in Iowa, but we would treat him pretty ugly down in Texas. I mean, printing more money to play politics at this particular time in American history, is almost treacherous, er, or treasonous in my opinion.”Perry at CPAC 2011

When I was born, pennies were made of copper. Dimes, quarters, and half-dollars were made of silver. Even if people were to lose faith in the government that minted their coins and whose images they bear, citizens could still depend on the copper and silver being worth something. Paper dollars could be redeemed for a certain amount of silver or gold back then too. The paper dollar was understood to be the same as the personal check, and they’re about the same size as checks too. When I write a check to someone, he or she must have confidence that there’s enough cash in my account to back it up. I’m instructing my bank to “pay to the order of” whomever, a certain amount of cash. Paper dollars back then were called “silver certificates” which were instructions for government to turn over a certain amount of silver maintained by the federal government for such purposes. People didn’t cash them in for silver as a rule, but were confident they could if they wanted because they trusted their government.None of that applies anymore. Pennies are made of zinc with copper paint. Dimes and quarters are made of copper with silver paint. The paper dollar cannot be redeemed for precious metal anymore either - in any amount - unless you choose to buy gold with it from a private dealer. Not too long ago, you could buy an ounce of gold for about $40. At this writing, it would cost over $1800 and by the time you read this in a newspaper in a few more days, an ounce of gold might cost over $2000. Why? Several reasons, but mostly it’s because people don’t trust the US Government as much as they used to. Why not? Because Ben Bernanke has been printing trillions more dollars without putting any more gold or silver in Fort Knox to back it up. Why is he doing that? Because he can. Why can he? Because President Nixon took us off the gold standard in 1973. The amount of dollars isn’t tied to the amount of gold in Fort Knox anymore. It “floats,” say the economists.

A February, 2011 article in the newsletter Imprimis compared “floating” the value of the dollar with “floating” the weight of a kilogram. Seth Lipsky wrote that “a global scramble is under way to define this most basic unit after it was discovered that the standard kilogram—a cylinder of platinum and iridium that is maintained by the International Bureau of Weights and Measures—has been losing mass.”

Then he asked why not just let the kilogram float like the dollar? “After all,” he wrote, “when you go into the grocery to buy a pound of hamburger, why should you worry about how much hamburger you get—so long as it’s a pound’s worth? A pound is supposed to be .45359237 of a kilogram. But if Congress can permit Mr. Bernanke to use his judgment in deciding what a dollar is worth, why shouldn’t he—or some other Ph.D. from M.I.T.—be able to decide from day to day what a kilogram is worth?”Lipsky described how the Second Congress “established the value of the dollar at 371 ¼ grains of pure silver. . . . [and] did not expect the value of the dollar to be changed any more than the persons who locked away that kilogram of platinum and iridium expected the cylinder to start losing mass. In fact, in this same 1792 law, they established the death penalty for debasing the dollar.”We should demand a rubber glove and KY jelly at least

The death penalty? Hmm. That was the punishment they established for anyone committing treason as well. That's how seriously the Founding Fathers (many of whom were in Congress at the time) took their constitutional power to coin money.

Tea Party conservatives know the US dollar isn’t floating. It’s sinking, because Bernanke is printing them wildly. Those of us who have saved up dollars are losing wealth with every dollar he prints - and all that hard-earned wealth is going down the black hole of the federal government. It’s a hidden tax. Bernanke calls his money-printing “quantitative easing,” but it could also be called counterfeiting. It’s linguistic legerdemain for theft by a federal government which is driving America into bankruptcy.Maybe Bernanke and the president who appointed him think printing money is good for the economy and will save America. If they do, they’re both fools. If they don’t believe it, they’re intentionally sinking our ship of state along with our dollars. Tea Party conservatives like Perry see the practice as foolish at best and treasonous at worst.

Governor Perry is entitled to his opinion that it’s the latter.


Anonymous said...

Mr. McLaughlin - again you cut through the pseudo-economics of the "experts" and described in detail the theft of our individual wealth.
Thank you for the insight about what the value of the dollar was intended to be and the severe penalty for debasing our money.

Irregardless NH said...

Anyone with a scintilla of knowledge of the economic policy of America realizes that Bernanke and the 'Fed' do NOT print money...this is done at the behest of the US Treasury.

It's a sorry (but oh, so predictable) commentary that Educator McLaughlin would lend credence to the violent rhetoric of Rick "Texas Miracle" Perry.

One wonders how Gov. Perry's threats coincide with his professed 'Christianity'.

Who would Jesus 'get ugly' with?

Anonymous said...

And Gov. Perry seems to believe that the Constitution is a toy to be changed and played with at his pleasure. Its like a reality show on TV, where do they get these guys.

Anonymous said...

Irregardless needs a course in Money and Banking. The Fed and commercial banks create money. The Treasury prints paper dollars. Paper dollars in circulation do not come close to representing the liabilities of the country. Stop picking the fly specks out of the pepper.

Irregardless NH said...

Anonymous: try a little on-line research and a little less sloganeering and you'll quickly discover that while Bernancke might have some say when it comes to determining monetary policy he does not - repeat - does not determine the volume of dollars printed, nor its relationship with inflation, etc.

Google it.

Anonymous said...

Commercial banks create money; the treasury prints currency. Not really related. Sorry.

Anonymous said...

I feel like I'm being stubborn, not helpful. Try this. The FED makes money. Period.

James said...

My god, you have to be kidding me. Rick perrys stance on the fed comes right from Ron Paul!!!! He's ripping off ron Paul, as is every other GOP candidate, because they see that pauls message is the right one. The media has done everything they can to ignore Paul. Everything. Fox was caught editing one of his speeches. Rick perry is nothing less than another corporate shill. All his talk about the fed is akin to any one of Obama's as campaign promises. A lie.

Ron Paul is the real deal and it sickens me that you Buy the corporate media picture of him. Again, after Iowa they all saw the reaction to ron Paul and they are merely copying him. No substance from perry at all!!! He ran gores campaign for christs sake!!!

The fed is evil and needs to go. Why do you think we are attacking Libya? Quaddafi was abut to go on the gold standard. Global banksts don't like that.

And IRREGARDLESS, you have no idea what you are talking about. The fed runs the show. Period. Wake up!!
It ain't baseball and apple pie

Winston Smith said...




This is the most informative half hour you will spend this year.

James said...

Rick perrys campaign strategy? Become Ron Paul.

Pease read.

Anonymous said...

"Why not? Because Ben Bernanke has been printing trillions more dollars without putting any more gold or silver in Fort Knox to back it up."

Tom, You do realize we are not on the gold standard anymore right?

Anonymous said...

Gov. Perry would forget about Bernanke's treason as soon as he got into office. We can compare it to Obama's "change." There is no difference between a George Bush Jr., or Barack Obama, or Rick Perry. Ron Paul's the only person who will give us any real hope and change, and he's the only one who has the guts to stick up to Bernanke and the rest of the bureaucrats who are killing out dollar. We much take people like Bernanke out of their position, but better yet, we must move forward the end of the PRIVATE Federal Reserve.

Anonymous said...


The only time Jesus "got ugly" was when someone messed with his Household. Read up on the facts it might make you a more tolerant lib.

who runs the Treasury? The Secretary of the Treasury who happens to work for Obama.

when you mess with somebody elses household you make them "get ugly". In this case though, following the teachings of Saul Alinsky and George Soros, and how communists take over countries, you destablize the top (government), You make the bottom revolt (poor), and you watch the middle collapse. What quicker way to do this than to print money...

Irregardless of the facts I see you offer no solutions but only add to the pissing and moaning about the problem