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November 2, 2015 | Money Is Also Perishable – Debasement & Devaluation Easier Than Taxing or Defaulting

Martin Armstrong

Martin Arthur Armstrong is the former chairman of Princeton Economics International Ltd. He is best known for his economic predictions based on the Economic Confidence Model, which he developed.

SAY-JB

QUESTION: Martin; Why in the world anyone would invest in government debt when they all default in the end?

GH

ANSWER: Honestly, most people are oblivious to the fact that governments always default in modern times. Jean Baptiste Say took the position that a rational businessman will never hoard money because of inflation and he will promptly spend any money he gets “for the value of money is also perishable.” (“A Treatise on Political Economy”, Book I Chapter XV, 1803 id/138–9). Before modern times, money was ALWAYS debased or devalued as a means of paying expenses. It was easier to do this, even when using metal for coins, than to tax or borrow.

EDWARD1

In the modern era, the princes of Europe began to borrow money and quickly learned to imprison and default on their bankers. Edward I of England borrowed from the Jews, and when he could not repay, he suddenly discovered that they were Jewish and banned them from England while not allowing them to take property.

Honestly, it is just insane. They do not do their research and governments are always responsible for creating wars and destroying the savings of the people. Adam Smith in his 1776 “Wealth of Nations” expressed it best.

Smith-Impertinence-of-Kings

We are just fools. We insanely believe that we can create change by replacing one politician with another. The ONLY possible way to achieve change is to change the very system of how government functions. Until we are prepared to do that, suck it up, for your future belongs to the madness and corruption of politicians

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November 2nd, 2015

Posted In: Armstrong Economics

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