I would like to draw readers to the U.S. Constitution. Article I states that "Congress shall have Power...to coin money, regulate the value thereof..." Congress should to this day be in charge of coining our money. Once that important job was passed on to another entity, and that entity was given free reign as to the amount of money to put into circulation (with a minimal amount of Congressional oversight), then our dollar would be a giant, as opposed to a shadow of its former self. (A $5.00 bill from 1963 has the equivalent buying power of $34.00 in today's money!) That's just SCARY!
However, coining money was not too difficult because coins of the day carried a degree of precious metal. There were coins made of copper, silver, and yes even gold. Simply put, if the government did not have the silver or gold to put in a coin, then new money could not be placed into circulation. While coined money was bulky, and often cumbersome in which to do business, it always had value. All paper money at one time needed to be backed up by an equal amount of gold or silver. Without that reserve metal, the paper money was WORTHLESS.
That is part of the reason our Founding Fathers required that all states , if they were to coin money , must be done in silver or gold. The fact was that the Federal government would not allow a state to print paper money. Under the Articles of Confederation the United States faced a serious crisis because every state had the power to print money. This practically destroyed interstate commerce not to mention the credit of the United States in our nation's infancy.
I only bring up these two points because the United States government does not even report the amount of money it has put into circulation anymore. Those figures quit being reported by the Federal government well over a year ago. With an administration that doles out BILLIONS of dollars for Iraq, and a Congress that can't say no to entitlement programs...we should all consider our financial future...and hope to have a degree of precious metal in it.
Currently Congress is in the midst of debating how they should deal with the financial debacle facing the United States. The debates focus around two groups: financial institutions who "over-loaned" money and the consumers who "over-borrowed" money. Unfortunately, a number of our fellow countrymen fall into one of these two categories. It looks as though the American tax payer will be picking up the tab on this mess as well. My greater concern is that America is currently going through a cycle where people see themselves as victims as opposed to OWNING up to their bad financial decisions. This same mentality permeated the United States when thousands of people who had played the stock market on margins (money they borrowed) and lost. That ushered in a time period known as the Great Depression.
My parents always told be to "Think before you spend." "Money does not grow on trees." "If something is borrowed, then it should be returned to its owner in a timely fashion." These are simple lessons that everyone in their heart of hearts knows. However, the problem ownership does not bode well in election years. It is much easier to have government solve the problem nad make everyone happy...at least temporarily.
Sources Cited:
http://woodrow.mpls.frb.fed.us/Research/data/us/calc/
http://silverstockreport.com/2007/ron_dollar_collapse.html
http://www.latimes.com/news/printedition/front/la-fi-foreclose22mar22,1,5643343.story
Stock Ideas:
I believe NCC will be split into pieces parts. This will cause several bumps in the stock price as the vultures swoop in to feed off the vital organs which are profitable. However in the end, NCC and its mortgage business will be a carcass that is left for dead.
I am liking a put on CLF, Zeus, and a call of RKH. I will keep readers posted.
Question:
Will Cliff Lee replace Paul Byrd in the starting line-up?
Will the Tribe go back to a five man rotation?
Did Indians skipper Eric Wedge gain over 10 pounds of under 10 pounds in the off season?
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