Illusion: Capitalism Causes Recessions & Depressions

Reality 1: Laissez faire capitalism does not cause recessions and depressions.

Reality 2: Government interventionism completely disrupts the smooth functioning of the marketplace resulting in permanent economic decline.

Reality 3: Federal Reserve policy of artificially lowering interest rates and increasing the money supply to “stimulate” the economy causes boom and bust cycles resulting in economic recessions and depressions.

The dishonesty of politicians knows no bounds as lie, cheat and steal reigns supreme as the rule of the political game. By blaming capitalism for causing economic crisis, they engage in what I call the “BIG LIE.” Unless our “beloved” leaders are intellectually dishonest or just plain ignorant, they know damn well their own destructive policies cause our economic woes.

Now it’s time to expose their incredibly weak and fallacious economic theories.

The war of many illusions continues and one of the illusions concerns an erroneous belief about the ravaging, but unacknowledged corrective force of deflation. “Economists” declare that our political and financial leaders make an all-out effort to eradicate that demon known as deflation. These pseudo-economists tell us that falling prices are the equivalent of a depression that will make the 30’s look innocuous in comparison. On the advice of these so-called experts of economic analysis, the government along with Federal Reserve System embarked on humongous bailout maneuvers to save us from this deadly enemy of prosperity and well-being.

It’s amazing that only a few people questioned and analyzed the economic “wisdom” of our political and financial leaders. For it is certainly flawed. In order to understand deflation, it is necessary that we define the term.

Classical Definition of Deflation

Deflation is a decrease in the quantity of money (money supply) which results in a rise in the purchasing power of the monetary unit. In other words, each dollar, euro, yen, etc. possesses more purchasing power. An unfortunate consequence of deflation is that it falsifies economic calculation and impairs the ability of capitalists and entrepreneurs to appraise profits and losses. The larger the decrease in the quantity of money, the more it disarranges consumption, investment and production. It benefits some at the expense of others. Deflation is seldom a policy governments purposely embark upon. Inflation remains their favorite method of manipulating the currency for the benefit of special interests.

Classical Definition of Inflation

Inflation is an increase in the quantity of money (money supply) which results in a drop in the purchasing power of the monetary unit. You receive less for your money. As with deflation, economic calculation is impaired, which diminishes the ability of entrepreneurs and capitalists to appraise profits and losses. The larger the increase in the quantity of money, the more it disturbs consumption, investment and production patterns. Inflationary money often tricks entrepreneurs and capitalists into embarking on ventures that the marketplace eventually exposes as mal-investments.

What makes inflation so insidious, is that it benefits the people who first receive the inflationary money. They gain the advantage of purchasing what they need at current prices. As the money, moves through the economic system, it causes overall prices to rise, although it doesn’t affect the various goods and services the same. Some prices rise faster than others do. A few may not rise at all due to declining demand.

Now here’s where inflation victimizes innocent people. Unfortunate individuals at the end of the line end up paying higher prices. The thrifty individual who attempts to accumulate capital by saving his money soon discovers his purchasing power has decreased. The hapless citizen living on a fixed income suffers a lower standard of living.

Let’s put it like this. Unless you and I have political connections, we end up holding the short end of the stick. Think about it. Has the Fed sent you a letter notifying you about all the great benefits you will receive from the newly created money?

Current Definition of Deflation and Inflation – Tricks of the Political and Financial Establishment

The ascendancy of faulty economics resulted in establishment economists reversing cause and effect. They now define deflation as falling prices and inflation as prices rising. These are effects—the results of deflation and inflation. Remember deflation is a decrease in the quantity of money. Inflation is an increase in the quantity of money. Of course, these days most people accept the faulty definitions.

You may be wondering why they would reverse cause and effect. If you ask the following questions, you’ll know why the establishment prefers that you believe in illusions.

Here are the questions—and answers that will probably annoy you. Who controls our money? The Federal Reserve System. Who directs the flow of the newly created money? The government and the Federal Reserve System. Our government and the onerous Federal Reserve System work together to make sure the “right people” receive the inflationary money. I probably don’t have to tell you that the political and financial establishment doesn’t consider us as the “right people.”

By the way, a social system of unhampered capitalism with its monetary system of 100% gold-backing guarantees continually declining prices—benefiting both consumers and producers. The consumers’ standard of living soars and producers earn greater profits by offering more goods and services.

How perverted! Consumers and taxpayers reap earned benefits instead of the political and financial establishment extorting unearned benefits. Heaven forbid! Anyway, you now know why the political and financial establishment hates the Gold Standard and why it despises laissez faire capitalism.

Real Money

The Cause of Our Economic Woes

You probably never imagined how far the treachery of the establishment could go. The reason why its members want you to believe the faulty definitions of deflation and inflation is so they can divert blame from the creators of our economic woes to some imagined “culprits. Who do our perpetrators of economic mayhem place the blame on? Well the scapegoats are “greedy” capitalists, speculators, short-sellers, consumers spending too little, consumers spending too much, people saving too much money, people not saving enough money, ad infinitum.

Here’s another question you can ask. Since the Federal Reserve System controls our currency and along with the government determines where the newly created money goes, who is responsible for our current economic woes? Certainly, I don’t have to answer that question. A social system of real capitalism rejects the inflationary efforts of a Central Bank.

The Boom Cycle

As I explained in the section on the classical definition of inflation, increases in the quantity of money cause economic distortions. During the past 25 years, we’ve been “blessed” with considerable increases that resulted in the tech boom, the stock market boom and the housing boom. When Alan Greenspan lowered the Federal Funds rate to practically nothing (to counterbalance the effects of the tech collapse), he guaranteed there would be an unsustainable boom somewhere in the economy. Conditions dictated that much of the inflationary money found its way into the housing market. Illusions are just that—illusions. Right now, it appears that economic illusions are in abundance. Let’s face it. All artificial booms end in busts. Federal Reserve attempts to stimulate the economy is not capitalism, but anti-capitalism.

Mises Tells It Like It Is!

The Bust Cycle

Allow yourself to imagine a scene of total disarray where the wild party of excess has come to a crashing end. The partygoers wantonly consumed all the booze and drugs of false prosperity. Now comes the time of hangovers and drug withdrawals. The addicts of inflationary money must go into rehab. The recovery will prove to be long and painful, that is if the government allows a recovery.

Unfortunately, our government and the Federal Reserve System continues their futile attempt to keep the party going with massive injections of inflationary money. It is all in vain because lenders won’t lend money to people who can’t and won’t pay them back. Many debtors borrowed themselves into a deep hole. Of course, it is possible that the newly created money could cause a hyperinflationary boom with the tragic result of goods and services disappearing from the marketplace. It definitely won’t stimulate the production of needed goods and services.

Trillions of dollars “vanished” from the world economy because the money didn’t exist in the first place. It was phony Federal Reserve money which meant individuals were relying on paper money and bank credits that didn’t actually exist.

Bill Bonner of “The Daily Reckoning” calls the marketplace “Mr. Market.” Well, Mr. Market has exposed it all as a fraud. Now he is attempting to restore wealth to its rightful owners, those productive individuals who produce value and those thrifty people who save money. That is precisely what a recession or depression accomplishes; it restores wealth to the producers of wealth. The marketplace runs much more smoothly with a system of unhampered capitalism.

What should you do about all of this? You need to place yourself in the position of one of the rightful owners of wealth.

Now that you know what’s happening, let’s determine what the government should do about our continuing economic woes, using the wisdom of one of the greatest thinkers of the 20th century.

When someone asked the great economist Ludwig von Mises what the government should do about the depression (the depression of the 30’s) he said “nothing—a lot sooner.”

I’m sure you realize governments never follow sound economic principles. Instead, they tamper with the marketplace, hampering its efficiency and destroying its smooth functioning. The massive bailouts (QQE—Quack Quantitative Easing) proved deadly to our economy and the future of the dollar. Here’s a scary scenario. It is possible the inflationary money could transform the continuing economic decline into a hyperinflationary collapse, turning the dollar into “toilet paper” currency and destroying our economy. Of course, it is possible we suffer a slow, painful decline.

Ludwig von Mises also observed “Government is the only entity that can take a perfectly useful commodity like paper, and turn it into something that is completely worthless.”


As you can see the only honest and just system is laissez faire (unhampered) capitalism.

Robert Meyer – Master the Social Maze

The Integrated Mind and Life of the Individualist

The individualist lives by his highest values and would never purposely trade a higher value for a lower value. In addition, he integrates the hemispheres of his brain in a way that allows him to tap the powers of his mind. That means his reasoning and intuitive abilities blend together rather nicely. When it comes to his life purpose, he takes charge of his thoughts, feelings and actions.

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The Integrated Individual Unleashes the Power 7

The Integrated Individual takes charge of his thoughts, feelings and actions. He tunes himself to survive and thrive whether social and economic conditions are good or bad. He understands that his mind is his most powerful weapon in understanding reality and he meditates to gain spiritual understanding. Reaching a state of heightened awareness in his meditations allows him to experience certain aspects of the world that the unenlightened never see.

Let’s allow the him to reveal The Power 7.

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The Integrated Individual Discovers Definite Purpose

Morning time sets the course for the rest of the day. Do you feel a burst of energy when you wake up? Maybe, maybe not. I admit that some mornings I wobble out of bed wondering if the Sandman stole my energy as I drifted off to sleep. You may wonder how I retrieve it. Fortunately, I possess something that pumps up my energy almost every single day…a definite purpose in life.

Here’s what Napoleon Hill says about definite purpose.

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Discover How to Overcome Hopelessness

When you look at our social and economic woes, you wonder if you can find any hope for the future. Sure, it appears that the economy could be recovering, but you realize what you see may be an illusion. After all, government spending is out of control and it seems as if we’ve suffered a moral decline. On top of that, you may be suffering from personal difficulties.

During moments of weakness, you feel that life slams you with hopelessness. After all, how else could you possibly feel? If your personal life continually deals you pain and sorrow, you cry in despair “Oh God, why must I suffer? Why does life treat me so cruelly? I don’t think I can’t take it anymore.”

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Dealing with the Difficult Person – 3 Effective Strategies

One of the challenges of everyday life remains dealing with a difficult person. For the sake of clarity, we must distinguish him from the impossible person, the emotional terrorist. In a recent video, I came to the conclusion that there’s no way you can deal with this type of person because it’s a no-win situation. The impossible person thrives on opposition and handles all the issues in his life in an adversarial way. He or she never achieves success in relationships.

My main goal in writing about the impossible person was to discourage you from dealing with him or her. I know I may have disappointed some of you when I revealed that there aren’t any effective strategies in interacting with this type of person except to get away as fast as possible. Fortunately, it’s different with a person who is just difficult.

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Revealing the Reality of Selfishness

Ayn Rand often received the question “Why do you use the word selfishness to denote virtuous qualities of character, when that word antagonizes so many people to whom it does not mean the things you mean?”

She said “For the reason that makes you afraid of it.” I always liked that answer, but unfortunately it doesn’t do anything about the confusion that pervades selfishness, especially with men and women who have a negative view of it or who have never read her books.

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Zen and the Integrated Individual

For many years, I hopelessly languished in a world of anger and frustration. The insane world, to put it bluntly, pissed me off. Despite my belief in rational thought and loving ways, I allowed the insanity and irrationality of the world to cause me to indulge in some irrational selfishness. For instance, I remember losing my temper and viciously punching the living room wall which resulted in my fist going all the way through to the bedroom. My reward was feeling ashamed of myself and the cost of fixing the wall.  Fortunately, I moved forward on my quest to become an Integrated Individual, discovering the Zen state of mind along the way.

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The Integrated Individual– Evolution of a Reluctant Objectivist

Seasons come and seasons go, often at an accelerated pace. Does it seem that each day of your life disappears at a rapid pace? The somewhat disheartening realization that your life relentlessly moves towards eternity makes it more difficult to anticipate change. Much of the new circumstances you face, cause you to wish for the “good ole’ days” which amounts to living in the past. I’ve concluded there’s only one way to handle life. You must evolve into an Integrated Individual.

Following is the first article on how I attempt to evolve from a Reluctant Objectivist into an Integrated Individual. You should know that the process is never complete because each day offers you something valuable in your quest to improve mentally, emotionally, spiritually and physically.

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Wicca Captures the Reluctant Objectivist

We waited with growing anticipation of experiencing our first Wiccan circle. Since I knew nothing about Wicca, I didn’t know what to expect, although the coming ritual seemed to generate a glow that surrounded some of the participants. Finally, the moment arrived and I followed a gorgeous lady (Deandra) and the coven members into a spiritual room lit by candles. As I entered, the Priestess asked what name I went by. The only one I could come up with was Praxis.

The first thing I noticed was the alter, decorated with the tools of the trade. Included was the:

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