Full Faith and Credit in Counterfeit Money
The Alley in LA – in places such as this, consumers are as a rule well served by applying a little bit of common sense when pondering purchases. In fact, common sense is a multi-purpose weapon that reportedly comes in handy in many situations and is widely considered a valuable addition to one’s personal armory. [PT]
Photo credit: Navymailman
A Useful Public Service
There are nooks and corners in every city where talk is cheap and scandal is honorable. The Alley, in Downtown Los Angeles, is a magical place where shrewd entrepreneurs, shameless salesmen, and downright hucksters coexist in symbiotic disharmony. Fakes, fugazis, and knock-offs galore, pack the roll-up storefronts with sparkle and shimmer.
Several weeks ago, the LAPD seized $700,000 worth of counterfeit cosmetics from 21 different Alley businesses. Apparently, some of the bogus makeup products – which were packaged to look like trendy brands MAC, NARS, Kyle Cosmetics, and more – were found to contain human and animal excrement.
“The best price is not always the best deal!” remarked Police Captain Marc Reina via Twitter. Did you hear that, General Electric shareholders?
Yet the Alley, for all its dubious bustle, offers a useful public service. It provides an efficient calibration for the greater world at large; a world that’s less upright and truthful than an honest man could ever self-prepare for. In 30-seconds or less, the Alley will impart several essential lessons:
The price you’re first quoted is the sucker’s price. To negotiate effectively, you must appear to care far less about buying than the merchant cares about selling. Don’t trust someone that says, “trust me.” And, most importantly, don’t believe what you see and read… or what you hear.
For everything worthwhile, there exists a counterfeit. This modest insight extends well beyond the boundaries of flea markets and tent bazaars. It extends outward to news, money, prescription drugs, wars, public schools, Congress, corn ethanol, medical insurance, public pensions – you name it. There’s plenty of fraud, phony, and fake going on.
For example, in the year 2018, the most reputable news outlets have been reduced to mere purveyors of propaganda. The stories they spread are stories of fiction.
Investigative reporting is defunct. Veracity is for bores and troublemakers. We don’t like it. We don’t agree with it. Alas, we can’t change it. So we embrace the deception with proper perspective. We drink from the fire-hose of deceit with unquenchable thirst. We smile at false prophets who sell salvation without repentance, benefits without taxes, and new programs and new deals that promise to sprinkle money around and make everyone rich.
Take this here gentlemen, depicted over various stages of his storied career – an immigrant from Italy, who lived the American dream by doing his very best to enrich not only himself, but thousands of people in the Boston area as quickly and thoroughly as possible, by engaging in a highly profitable stamp trading operation. It later turned out that he was not really a trader, but rather a teacher of valuable, albeit very expensive lessons. He achieved quasi-immortality by enriching the dictionary – and yet, as you will see further below, he was but an amateur. [PT]
According to the government’s statistics, the economy has never been better. By the official numbers, we’re living in the charmed days of full employment, less than 2 percent price inflation, and the second-longest growth period in the post-World War II era.
Agreeable reports like these are broadcast each month as news, without question. Yet anyone who stops to ask a question or two can quickly discern that these reports are fabrications. They’re tales of fiction, which are requisite to these fictitious times.
Ask the wage earner, the mortgage holder, the recent college graduate with six-figures in student loan debt. They’ll tell you: “Reality bites. The official economic accounts are a sham.”
Full Faith and Credit in Counterfeit Money
Is it an accident that the debasement of society has followed the debasement of money? We don’t know for certain, but we have a hunch they are somehow related.
What we do know is that fiction and deception helped usher in the dollar’s transformation to a phony currency. How else could the dollar have been debased from money coined of gold and silver and issued by Congress as specified by the Constitution, to paper legal tender notes that are borrowed into existence by the Federal Reserve?
When President Nixon closed the gold window at the U.S. Treasury on August 15, 1971, he told several whoppers. He said it was to, “defend the dollar against international speculators.” He also said the action would, “suspend temporarily, the convertibility of the dollar into gold.” Furthermore, he told Americans that, “your dollar will be worth just as much tomorrow as it is today.”
US Federal debt since 1970 (increase since 1970: ~+5,645%) vs. the official purchasing power of the US dollar since 1970 (loss since 1970: ~-85%). We will offer a wild guess here: there probably is a connection. [PT]
Nixon’s actions came on the heels of 60-years of gradual steps to remove gold’s backing of the dollar. In effect, $1 today has the same buying power that $0.16 had when Nixon took these “temporary” actions. Over this same period, the U.S. national debt has run up from about $398 billion to over $21 trillion, and the economy has been utterly warped.
The man who saved the common man from international speculators by helping him to spend 85 cents of every dollar in his possession in exchange for nothing plus a 5,645% increase in his share of the public debt. If for some reason you think the common man didn’t get the best possible deal here, don’t worry: it’s only temporary! [PT]
Today’s reality is the fantasy-land of full faith and credit in counterfeit money. Paper legal tender notes, derived from debt without limits.
What a fictitious world it has wrought. Do you buy the lie?
Charts by: St. Louis Fed
Chart and image captions by PT
MN Gordon is President and Founder of Direct Expressions LLC, an independent publishing company. He is the Editorial Director and Publisher of the Economic Prism – an E-Newsletter that tries to bring clarity to the muddy waters of economic policy and discusses interesting investment opportunities.
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