Wednesday, March 22, 2006

Empire of Debt

Lew Rockwell reviews Bill Bonner's recent book, Empire of Debt. I haven't read it yet, but after reading this review, it surely will be the next book I purchase. In addition to being an excellent economist, Bill Bonner seems to be quite the historian as well. The following are a few highlights from Lew's review:

“Remember,” Wilson had proclaimed, “that God ordained that I should be the next president of the United States.” How many Americans know that Wilson invaded Mexico before Europe, raising the federal war banner over Veracruz, and set off a reign of terror at home in which Germans, or those thought to be German, were lynched and those who dissented from his national socialism were jailed?

Wilson also established the Federal Reserve, the income-tax police, and the direct election of senators. The latter wiped out an original buttress to states’ rights and led to more and more centralization, as senators saw themselves as representatives of D.C. to their states rather than of the state legislatures to the central government. Frank Chodorov called it “The Revolution of 1913.”

After all, the long-term mean value of paper currency is zero. Is the dollar magic, so that it is permanently immune from the norm? For the last 100 years, it has lost value more quickly than the Roman denarius after Nero. No surprise, since it is much easier to create unlimited numbers of dollars than to mint coins with at least some silver or gold in them. On the other hand, by the time of the last emperor, the denarius—which started as pure silver—had .02 percent precious metal content. That is, the denarius had lost, over hundreds of years, 99.98 percent of its value. Since the founding of the Fed in 1913, the dollar has lost 95 percent.

Once upon a time France had a great empire. Frenchmen thought they had the best language, the best culture, the best government, the best economy, the best schools, the best builders, the best army. And it was their duty to civilize the globe. Now, after French imperial bankruptcy and the destruction of the franc, we have the mission civilisatrice to spread freedom and democracy. Or so the president informs us.


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