Friday, February 18, 2011

Richard Maybury: The Good

First, for the good. I will use as an outline my initial comments on this interview:

1) As mentioned before, ethics is the key. As Maybury suggests "Thou shalt not steal." Private property must be inviolate from government taking just as much as from private.

Once it is deemed appropriate that private property can be taken against the rightful owner's will, where can the line be drawn. By what moral or logical argument can one say "this far, but no more"? I can only conclude that private property must remain so, else there is no such thing.

At what of the stealing? This starts at the top...and the bottom. The theft begins when people use government to take from others. That there is a middleman sanitizes nothing. When such actions are considered normal, no Constitution, no legal system can protect the individual. This immoral action must be recognized as such, and brought to an end.

2) I appreciate his comments about the previous role of competing currencies in Europe. Also, I agree that we will see a break-up in Europe and elsewhere into much smaller political and social units. We will not get one-world government. The turmoil we are now enduring will ensure this.

Competing currencies, especially within a given jurisdiction, may be the easiest way to get through this mess of the world economy. It is the one hope for a relatively smooth transition away from the dollar in the US and worldwide, and away from the Euro in Europe.

As to the breakup into smaller units, this has been happening already and will continue to be so. The Soviet Union broke up into a dozen or more smaller parts. Yugoslavia broke up into a half-dozen or so. Czechoslovakia broke up into two.

As to one-world government, it seems that there is nothing to replace the global warming / carbon credit tax scheme that was to help usher this along. The economic system collapsed in 2008, and the global warming scam that was supposed to replace it collapsed shortly thereafter. In any case, even this would not have succeeded, or not for long.

3) He also suggests eventually we will insist on and utilize a commodity backed currency. This is certainly so, it must happen if civilization is to survive.

The game of worldwide fiat has gone in far longer than many imagined possible - since 1971. For economy to thrive, money must be trusted as a store of wealth and currency must retain some anchor of value. This has been avoided with terrible consequence, as seen by the tremendous imbalances built-up throughout the world. Savings is the key to investment. Investment is the key to productivity. Productivity is the key to life as we have come to know it. Absent a sound money, none of this is possible. Civilization cannot survive, and the destruction will be widespread and not necessarily limited to the common folks.

4) His point on real estate seems to be it is better than the dollar. This may be true, and certainly will be to the extent we are headed to a crack-up boom.

I have struggled with this myself. It is easy to make an argument that real estate has room to fall further. But what if the dollar falls faster? The best suggestion I have heard is that if one finds a property that cash flows well, buy it and don't wait. No one is perfect, or even much above-average when it comes to timing, at least not on a consistent basis.

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