It has begun

The collection of crony capitalists and statist socialists that are currently in control of our government have issued more debt than people are interested in buying. This is not surprising to me because I know that if a certain number of people are interested in a product at a certain price it doesn't always mean that many more people will be interested in the same deal.

Most businesses know that if they want to increase volume they will have to lower the price accordingly, or provide more value etc. The really smart businessman knows that at a certain point demand is met and no offering of more value or lower price will bring in more customers. A businessman grounded in Godly principals only wants what will provide for his obligations to his family, his Church, certain needs of his community, and charity.

It is interesting to note that Godly principals will keep you from learning this lesson the hard way. If we had a God fearing government they wouldn't have to learn the lesson they are about to learn; if they facilitated personal giving and charity by confiscating less of our wealth, then we would only need a safety net instead of the Lilliputian strings that bind us to their small-hearted ways.

So what can they do if their bonds won't sell, if not enough people will loan them money? Other than cutting the budget, the only thing that they can do is to monetize the debt. In other words they will print money to buy the debt with; this will lead to massive inflation because it will devalue the dollar.

Some economists speculate that the economy will remain so bad and demand therefore remain so low that inflation will not happen except in terms of our currency dropping in relation to other currencies. They further speculate that "when the U.S. gets a cold the world gets a fever" and therefore other currencies will also drop (in relation to things like gold, and oil)and so it will be a wash.

In other words currencies have become a "whose the ugliest contest" and they are only valued in relation to one another. Rather than in traditional objective measurements, they have a value that is relative to how bad other countries are running up debt or not producing. This may work in the short term but eventually people who produce real products will be looking to trade their product for things they can use, things they can be sure to exchange for future needs.

It cannot and will not work for the simple reason that many people will not work harder than is necessary to provide for their needs; if you provide for their needs without making them produce a useful product or service then they will not produce. At a certain point there are more people in the wagon than there are people pulling the wagon.

Nobody minds pulling the wagon for grandma, the cripple, the widow, or the orphan, but everybody hates pulling the slacker along. People will find a way not to do it, and if they can't beat them they will join them. When the wagon stops, then what? In the past the barbarians were always waiting for a sign of weakness, now our weakness is allowing signs of barbarianism to show.

Will this mean that some will be voted off the lifeboat; or will it mean that special interests, or groups, band together to get what they want at the expense of others? One thing is for sure, what they have started cannot end well. The more we are able to provide for our own needs in-house the better off we will be; if we aren't providing for our own needs we will have to accept whatever terms such things are offered at or go without.