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An Open Challenge to Paul Krugman: Were America’s Founding Fathers Wrong for Advocating Death for QE Measures?
In light of the US Central Bank’s (I refuse to use their
misleading self-anointed US Federal Reserve moniker) most recent grandstanding
policy decision that has been referred to as "QE light" that precedes the inevitable
QE2 launch sometime in the not so distant future, I present an open challenge
to Paul Krugman and all like minded economists, Nobel prize winning or not,
that support the monetary policy of dollar debasement. This will be a
straightforward challenge issued by our Founding Fathers, in particular the
first US Treasury Secretary, Alexander Hamilton, who scripted the US Coinage
Act of 1792. The one question I want to see Mr. Krugman and his supporters
answer is this:
“If monetary debasement can truly create economic recovery,
why did our Founding Fathers establish, in the US Coinage Act of 1792, that any
persons discovered to be deliberately debasing US money ‘shall be guilty of
felony and shall be punished by death’?”
Note that the punishment was not imprisonment, not even hard
labor, but death. Why did our Founding Fathers, who had just gained freedom
from the draconian monetary policies of the British monarch King George through
the American Revolution and the Treaty of Paris in 1783 deem that monetary
stability could not be separated from the conditions of freedom? Why did they
deem the act of monetary debasement so insidious that anyone found guilty of
deliberately debasing US money would not be imprisoned but should be punished
by death? And why is monetary debasement today accepted as the “right thing to
do” and “normalized” by prominent economists like Paul Krugman?
So this is all I ask of you Mr. Krugman - to repudiate
Alexander Hamilton and explain why he was wrong. I don’t want the employment of
deft politician-utilized “block and bridge” techniques that fail to ever address the question, or responses that entail long-winded dissertations on the
relationships between monetary base, monetary supply and monetary velocity that fail to answer the question. Please merely be so kind as to answer the one question inspired by Alexander Hamilton and posed to you above and explain your position.
On August 3, 2010, I posted a 3-part video series in regard
to the Central Banks’ use of ideological subversion to mislead the masses. Step
two of the process of ideological subversion requires the participation of
academics to disseminate deceit if the deceit is to not only be widespread but successful
in taking root in the consciousness of society. The role of academics in
shaping the discourse about the rationality of monetary debasement is critical
to the belief system embraced by young impressionable minds for decades into
the future as once a false belief takes root it is spread from one generation
to the next. In other words, the widespread adoption of the erroneous belief
that monetary debasement is beneficial to the economic health of nations would be
impossible without you, Mr. Krugman. The Bank of Japan is another Central Bank
guilty of executing the act of monetary debasement for decades. And again,
academics that reside both within and outside of Japan ensure that the Japanese
do not understand how monetary stability is inextricably linked to their most sacrosanct
right of freedom.
For those of you reading this that understand why the
enforcement of monetary stability is central to your freedom, and I’m sure
there are many of you, you must realize that you are among the very small
minority of the world’s population that understands this. I have posed this challenge
to Paul Krugman because he has the extremely powerful bully pulpit of the New
York Times, Princeton University and mass media distribution channels to disseminate his opinion, to hundreds of millions, that monetary debasement is of great benefit to recovering
economies.
Today, academics have drawn the focus away from the
immorality of the monetary debasement component of quantitative easing by
refocusing discussions on the useless debate of whether or not QE assists
economic recovery. This type of useless debate only serves as a distraction
tactic to draw attention away from the more paramount issue of whether QE
destroys the wealth of citizens and therefore is an enemy of freedom. So with this in mind, let us look at the
exact language of the US Coinage Act of 1792, scripted by the first US Treasury
Secretary and one of the Republic of America’s founding fathers, Alexander
Hamilton.
Section 12. And be it further enacted, That the
standard for all gold coins of the United States shall be eleven parts
fine to one part alloy; and accordingly that eleven parts fine to one part
alloy; and accordingly that eleven parts in twelve of the entire weight of each
of the said coins shall consist of pure gold, and the remaining one twelfth
part of alloy; and the said alloy shall be composed of silver and copper, in
such proportions not exceeding one half silver as shall be found convenient; to
be regulated by the director of the mint, for the time being, with the
approbation of the President of the United States, until further provision
shall be made by law.
Section 13. And be it further enacted, That the standard for
all silver coins of the United States, shall be one thousand four hundred and
eighty-five parts fine to one hundred and seventy-nine parts alloy; and
accordingly that one thousand four hundred and eighty-five parts in one
thousand six hundred and sixty-four parts of the entire weight of each of the
said coins shall consist of pure silver, and the remaining one hundred and
seventy-nine parts of alloy; which alloy shall be wholly of copper.
Section 14. And be it further enacted, that it shall be
lawful for any person or persons to bring to the said mint gold and silver
bullion in order to their being coined; and that the bullion so brought shall
be there assayed and coined as speedily as may be after the receipt thereof,
and free of expense to the person or persons by whom the same shall have been
brought.
Section 19. And be it further enacted, That if any of the
gold or silver coins which shall be struck or coined at the said mint shall be
debased or made worse as to the proportion of the fine gold or fine silver
therein contained, or shall be of less weight or value than the same out to be
pursuant to the directions of this act, through the default or with the
connivance of any of the officers or persons who shall be employed at the said
mint, for the purpose of profit or gain, or otherwise with a fraudulent intent,
and if any of the said officers or persons shall embezzle any of the metals
which shall at any time be committed to their charge for the purpose of being
coined, or any of the coins which shall be struck or coined at the said mint,
every such officer or person who shall commit any or either of the said
offenses, shall be deemed guilty of felony, and shall suffer death.
On March 20, 2009, in the article “Fiscal Aspects of
Quantitative Easing”, Mr. Paul Krugman wrote:
“The big policy news this week has been the Fed’s decision
to buy $1 trillion of long-term bonds, going beyond the normal policy of buying
only short-term debt. Good move…”
“The Fed is, however, creating a new liability: the monetary
base it creates to buy these bonds. In effect, it’s printing $1 trillion of
money, and using those funds to buy bonds. Is this inflationary? We hope so!
The whole reason for quantitative easing is that normal monetary expansion,
printing money to buy short-term debt, has no traction thanks to near-zero
rates. Gaining some traction — in effect, having some inflationary effect — is
what the policy is all about.”
“I’m not complaining; I think quantitative easing (it’s
really qualitative easing, but I give up on trying to fix the terminology) is
the right way to go.”
One thing is clear, Mr. Krugman. Either those men that are universally accepted to be among the greatest
American patriots of all time were terrorists for desiring the sentence of death for anyone that
destabilized money, OR you are massively wrong. Both of you cannot be right.
Your defense of your position needs to repudiate the very founding fathers of
the REPUBLIC (not the democracy) of America and needs to explain why you are
spreading a diametrically opposing viewpoint to the wishes of America’s
founding fathers.
When prominent academics such as yourself, Mr.Krugman,
support monetary policies that our Founding Fathers believed to be tyrannical,
this supports a misguided and delusional belief system, the mistakes of which
are exponentially multiplied by financial journalists that ensure that
misinformation becomes not myth but part of a new reality that bankers desire. I
cannot recall the hundreds of times have I seen misleading headlines like “Japanese
markets fall sharply in the last month on the back of a strengthening Yen” (or replace "Japanese" with another nationality and "Yen" with another nation's currency).
Such headlines, by nature, imply that a rising Yen is undesirable when in
reality, such policy is enormously beneficial to a nation of savers. Monetary
debasement punishes anyone that saves their money instead of spending it right
away. Financial journalists, unable to comprehend monetary policy accurately
because of academics that spread deceit instead of truth, continuously script
headlines that fall victim to the con game of ideological subversion.
Quantitative easing is a banker-created euphemism for
monetary debasement. Please explain to Alexander Hamilton, Mr. Krugman, why he was so wrong (Author's Update, August 23, 2010: This statement has been amended
here. This statement originally referred to Hamilton as a patriot, but I
have since been rightfully and astutely reminded by many that Hamilton was an agent of the
European Rothschild banking cabal that helped the Rothschilds establish
the First Bank of the United States and the Second Bank of the United
States, both Central Banks - a fact of which I was aware but escaped my
memory momentarily when I wrote this article. However, the argument against monetary debasement and the intricate link between sound money
and a nation's freedom still stands). Billions that have been subjected to and
that have suffered a much lower standard of living as a result of monetary debasement
policies enforced by Central Banks
around the world await your answer. If we are going to emerge from this global
monetary crisis with a sustainable solution that benefits all citizens of the
world as we all desire, you must not remain silent in responding to this
question.
About the author: JS Kim is the Chief Investment Strategist
and Managing Director of SmartKnowledgeU, a fiercely independent
wealth consultancy company that guides investors in the best ways to invest in
gold and silver as well as other strategies to profit from the progression of
this global financial crisis. His Crisis Investment Opportunities newsletter
has significantly beat all major developed stock market indexes since the first
day of its launch, outperforming the Australian ASX 200, the UK FTSE 100 &
the US S&P 500 each by more than 140% to 150%* during the period of June
15, 2007 to August 26, 2010 (*in a tax-deferred account).
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while I think you are on to something with the "printing money is a bad idea" thing, this article appears that it is an emotional appeal to authority. not really an argument.
Emotional appeal to authority, I dont know. It is not the matter. This article is lacking on a simple ground: it is built on proclaiming a fact.
USD is being debased. Where are the facts supporting this claim?
People take the road of a supposed theory (as a proven framework to explain facts) that 'printing money' leads to debasement of currency.
The US is 'printing money' (actually emitting credits) therefore the money should be debased.
Yet in this crisis, only the most hard headed people fail to admit that stuff does not work as people have claimed it works.
The US keeps emitting money and the USD is not debased.
But people, who want to cling to their "theories", prefer to ignore that fact to keep thinking that 'printing money' forcefully leads to money debasement.
Krugmann wont answer because probably he is one who prefers to let people believe that the USD is being debased. Because this preserves the key rule of responsibility. The US has a policy and will pay directly for it through debasement of currency. Of course, the reality is that the US has shifted the poor consequences of their policy on others, on part of the rest of the world.
It is easier to come and say that "look, we are playing with fire and might be burned with fire" than "we are playing with fire and others will get burned"
Duplicity.
The US wont endure the responsibility of their acts. The USD is not debased as any USD put into circulation is some non US interests' (concrete) wealth being forced into circulation.
Anyone coming with a debasement story must find provide evidences that USD is being debased. The article doesnt.
@aldousd
F&ck You
Brilliant.
Audit End (why is the strikethrough not showing?)
Execute the Fed!
While the writing might be more passionate then a NYT article and by definition it is a challenge rather than a news article, it has at its core an argument - that our country was built on stable money and that our founders recognized the folly and thievery of monetary debasement. And then quotes the specific sections of the laws. Seems like an argument to me.
quoting the laws I can understand. talking about what the founding fathers 'were thinking of' is rather what I was getting to. but I see your point too. I react similarly when people refer to adam smith's opinion as if it meant something in particular to me and my way of thinking 'if adam smith thought so, how can you argue with that?' same with einstein.. etc. I'm a fan of the founding fathers, but their opinion does not a fact make.
Re "emotional appeal to authority. not really an argument."
The Assayer, Chief Coiner and Treasurer were required to post whopping $10,000 personal performance bonds back then ($1 million equivalent now?) with the Secretary of the Treasury and embezzlement or fraud were punishable by hanging.
Proverbs 20:10:
False weights and unequal measures--the LORD detests double standards of every kind.
http://en.wikipedia.org/wiki/Coinage_Act_of_1792
"embezzlement or fraud were punishable by hanging"
My have times changed
Yeah, well if lordy hates double standards so much, how come his book is so full of 'em?