The Creature from Jekyll Island

The Creature from Jekyll Island is a book that, for me, a wonderful gift from my brother Kye. Written by G. Edward Griffin, the book was published in 1994.

As said the book was a gift, a couple of years ago. At roughly 700 pages and being somewhat technical in nature, it took me a couple of months to read, amongst other books.

The author is not loved by academia or media types, but it does present a reasonable theory as the way banking works in the world.

Basically, the process is this banks love for governments, and not just the United States to spend more than they bring in. This motivates governments to generate revenue by increasing the money supply, aka inflating the currency. The revenue is supplied by, in the US, issuing notes to the Federal Reserve, who intern lend that money to commercial banks, who in turn can lend the money out to whomever why maintaining, theoretically 10% in reserve. The commercial banks can now leverage that remaining 90% into multiple or the original amount. Essentially creating money that is never printed. 

The book in depth discusses fiat money and how the true value of money should be tied to gold or similar. Anchored currencies are the safest, but the politicians hate being tied to a commodity and the bankers can't profit on reserves not in play. So, we are likely doomed to a future of more of the same.

I might add that most financial systems are subject to dynamic forces, no system is perfect, all have had booms and failures.

Loved the book, recommend it highly. Don't be too public with it, you might be judged a right wing not rather than a financial scholar.

Enjoy

Cafe Hayek on the Minimum Wage

I believe that the last sentence of this quotation is accurate. We as an American people have lived for 100 years with a government that wrote for itself, the Sixteenth Amendment,  a means to take whatever share of our income that it chooses. That coupled with SCOTUS that waves the white flag at any legislation that infringes on personal rights; assigning the government rights to such things as the "Commerce Clause". True individual economic freedom only exists outside of the law.

The pet Democrat cause of the minimum wage, is in reality, a manner taxing businesses, with the proceeds benefiting low income people. It is evident that some of the new new minimum wage rates have outstripped the value of unskilled labor in relation to the value of the product. When this proportional inversion occurs, businesses search for cost reduction, alternative means of service delivery, to minimize the number of wage hours required.

One thing that frightens me in this scenario is the government, in seeing the business adjust to the illegitimate labor rate, will seek to regulate business staff sizes.

When that happens we will all work for the government.

Cafe Hayek — where orders emerge: where orders emerge

If we are not physically overrun by barbarians, what will destroy us?  Not learned quibbles on the nuances of what the Founding Fathers really meant.  Rather, we will ruin ourselves with minimum wage and comparable worth laws; with controls on prices of goods, apartments, and loans; with erratic changes in the price level; with government domination through the budget, environmental regulation, and antitrust intrusions; with progressive attenuation of property rights; with subsidization of inefficiency and sloth and divisiveness….

Free men require free markets.  If we lose the battle of economic freedom, we lose the entire war.

 William Allen

Economist

The Midnight Economist