I recently read an article by Tom Woods where he hit on a point that I have brought up in the past.  I think it deserves attention because it can really help in showing the contradictory beliefs of others.  It may help bring clarity to others.

In Woods’ article, he was discussing the Greenbackers.  Early in his piece, Woods points out their contradictory beliefs in regards to conspiracies.  He says the following:

“This naivete on the part of the Greenbackers is especially hard to believe since so many of them are 9/11 Truthers.  That means their position is this: we believe the U.S. government conspired to kill thousands of its own citizens in the interest of furthering its imperial ambitions, but we think they are the best people to trust with the creation of money.”

Of course, in the comments section, some guy says, “Did antiestablishmentarian Tom Woods just call the position of 911 truthers (the negation of the official establishment account) terminally naive?”  I don’t know if the person who made this comment was trying to be deceptive, just didn’t read carefully, or is truly dumb.

Woods was not at all arguing for or against a position of whether 9/11 was a conspiracy or an inside job.  He was simply pointing out the contradictory position of some Greenbackers.

While Woods’ article is specifically talking about Greenbackers, I think this contradiction holds with many, particularly on the radical left.  There are many on the left who just didn’t like George W. Bush and the way he did things.  They think the key is to have the “right” guy in office, such as Obama.  While this position is incomprehensible to me, it is not the group I am referring to in this discussion.

There are some on the more radical left who think the government was involved in 9/11.  There are others who just think that the government’s wars and drone bombings are immoral.  They consider this murder, and rightly so.  In this regard, many on the radical left find common ground with libertarians.

But there is a severe contradiction here, just as Woods pointed out with the Greenbackers.  Many on the left will accuse their own government of murdering innocent civilians, yet they want the very same people to provide free healthcare and better education.  Do you see a problem with this?

Can you imagine a Jewish person escaping a concentration camp in the early 1940’s in Germany and saying that he just wants Hitler to provide a social safety net with better healthcare for his citizens?

It doesn’t matter whether the leftist thinks that healthcare is a right.  It doesn’t matter if he thinks that the state should run the education system.  If he thinks that the politicians in charge are a bunch of murderers, why would he put them in charge of education and healthcare?  Does he think they all of a sudden turn into good people?

This is an absurd position and I believe it is important to point it out when you come across it.  While it may not teach a hardcore Democrat any economics, maybe it will at least let him see the major moral contradiction in his position.  Maybe it will show him that a little common sense needs to be followed.

The FOMC statement was released by the Federal Reserve today (May 1, 2013), drawing little attention from the media and the markets.

The Fed will keep buying $40 billion per month in mortgage-backed securities, which is nothing more than a bailout for the banks.  The Fed will also keep buying $45 billion per month in long-term treasuries.  This, coupled with reinvesting principal payments, will add about $85 billion per month to the monetary base.  If this stays on track, it will be about $1 trillion over the period of one year.

All of this debt buying by the Fed has kept interest rates down.  The 10-year yield continues to stay down, which has also kept mortgage rates low.  I expect this to hold for a while, either until the Fed changes its policy in a different direction or we start to see serious worries about future price inflation.

The votes for the current policy have not changed.  Just as what happened for the last statement, all FOMC voting members voted in favor of the statement, with the lone exception of Esther George.

It is interesting to compare the current FOMC statement with the prior FOMC statement.  They are very similar, with the main exception being one sentence in the fourth paragraph.  In the most current statement, there is the following addition:

“The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes.”

So while we will likely get more of the same, the Fed may adjust its so-called quantitative easing program.  The Fed could reduce its buying if it sees higher inflation or a better economy returning.  Or, scarily enough, if the Fed sees more weakness in the economy, it could actually decide to increase its already astounding pace of creating new money out of thin air.

So while we are already in unprecedented territory, the Fed has actually left open the door for even greater monetary “stimulus”.  I really don’t think Bernanke and company know what they are doing.  This is new to everyone.  The Fed is really boxing itself into a corner.  We will know that imminent danger is ahead when price inflation starts ticking up.  The Fed will eventually have to choose between a severe recession and saving the dollar.

While I expect the Fed to eventually save the dollar and stop the digital printing presses, we can never be absolutely certain.