Friday, September 23, 2005


Onward to Scotland!

My sister-in-law is enthusiastic about our planned trip to Scotland. "But don't, whatever you do," she advises, "talk to them about politics." Well, I'll do my best, but along with a bagpipe lesson for my wife, some obligatory castle inspecting, much-looked-forward-to landscape enjoyment and a pair of sweaters to take home, the remaining box to check off is going to be whisky drinking, indeed Scotch drinking, which is done in bars, or pubs, where an obviously not Scottish gentleman and his Asian-featured wife will not easily shrink into the woodwork.

"Where ye be from, matey?" I may be hailed.
"The United States of America," I will reply.
"Ay, that world-devouring anti-cultural maw, be it so?"
"Well, sir, our own perspective on our country is not quite that -"
"Honey," my wife here will interject, "you promised."

So we'll see. Already I see that our currency, like our relative cultural level, is a bit lower than theirs. The barriers to fortress Europe are high, and that disruptive thing called growth is held firmly in check by interest rates that, if they do not choke, certainly bind Euorpeans as tightly as the church collars they no longer wear. I know we Americans spend like drunken sailors, and that our money is looking a little down at heel as a result, but then we don't believe in money. We believe in growth.

True, this can mean that savers get punished and borrowers rewarded, as inflation melts away the real value of what those borrowers have to repay. But the solution isn't higher interest rates, certainly not now that we have such a mountain of debt, because higher rates would plunge us into deflation as debtors sell everything (and stop investing anything) in order to meet their payments.

Besides, lowering rates remains the democratic and American thing to do, letting everyone have money to invest or spend or just flash around as they like. Unfortunately it also reduces the value of our money for our vacationers to Scotland, not to mention our importers of foreign oil. By contrast, raising rates is the European and anti-democratic thing to do - it's what you do in order to preserve the value of the money that's already in the hands of the aristocratic finger-kissing elites, productivity and jobs be damned!

You'd think the side I'd be on would be clear. Shovel the coal in the engine room and full speed ahead! But no, I'm on the side of an approach that's not currently on the menu. The gold standard.

There still is a silent gold standard, sitting quietly alongside the world's overheating money economy. There's about 1.3 trillion dollars in gold sitting above ground. It used to be that dollar bills were actually gold certificates. You could trade the paper in for its face value in gold in America. Why? Because before that, any and many states and plenty of private banks issued currency that tended to rapidly devalue. In some prairie states people were reduced to using nails as money, and laws were passed to stop people who were planning on moving from burning down their barns for the nails.

So once things got a little unified and uniform we went to a gold standard. Prices were stable for over fifty years.

What happened to change all that? Europe (Yes! Back on track in my argument!) tried to commit suicide and we spent so much blood and treasure over two world wars in wresting the revolver away from its collective temple that once it was all over we could no longer afford to back our money with real money - precious metals. The rest is recent history.

And that all begins to explain why our money is weak and our "culture" is relatively low. That is, why aren't our people proficient in languages, chess and the piano, instead of merely software, business productivity and management. Three world wars (going on four) prosecuted at our expense has set back our language study and appreciation of the arts. Frankly, that's one more thing I blame Europe for, one more thing they cost us over the last 90 years.

Not that I plan sharing any of these sentiments ("Shsh! Honey, you promised") on my upcoming trip.


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