Partner Center Find a Broker


“Our freedom of choice in a competitive society rests on the fact that, if one person refuses to satisfy our wishes, we can turn to another. But if we face a monopolist we are at his absolute mercy. And an authority directing the whole economic system of the country would be the most powerful monopolist conceivable…it would have complete power to decide what we are to be given and on what terms. It would not only decide what commodities and services were to be available and in what quantities; it would be able to direct their distributions between persons to any degree it liked.”

Friedrich A. von Hayek, The Road to Serfdom

Commentary & Analysis

A Road to Serfdom – We are traveling quickly down that path.

Nick Ellis, one of the many intelligent and articulate readers of Currency Currents (and sincerely honored about that fact we are), recently sent us what I believe is a brilliant and succinct summary of our current economic/political morass. I have printed it in full below.  I think Nick’s analysis is dead on the money and his reference to von Hayek’s book, The Road to Serfdom, is particularly apt.

Hi Jack,

The only way to avoid a major hit is to let the system cleanse itself on a constant basis (which our system does for the small players (Bankruptcy) but not the big players (Bailout)).

Our Political Structure finds Big Money cleansing untenable and will continue to collude with Big Money to hit the average citizen with more taxation, redistribution and eventually inflation to solve a crisis.

During a crisis, even if the assets pass to stronger hands at a reduced cost we are still experiencing deflation in the debt based monetary supply.

Big Government = Big Money = Big Labor

It is a vacuum of consolidation moving to the top.  Road to Serfdom in a nut shell.  We are moving down a slippery slope.

The average citizen will be robbed of their labor earnings through a weaker dollar, asset inflation, increased debt burden (entitlements) and no safe store of value.

The Fed does not have a strong dollar policy.  What they have is a policy that attempts to devalue the dollar as slow as possible and a weak gold policy (attempts to keep it from gaining too fast).

Worst of all, gold is not money and never should be.  The Federal Govt. should not have the right create debt on behalf of the citizen.  The Treasury should simply print debt free money as this is truly a Sovereign power or we should have competitive money.

Hayek on Milton Friedman’s Monetary Policy:  Select the CC captions for subtitles as it is easier to understand Hayek when he is talking.

The FED and the Federal Govt. are so far away from the Will, Desires and Best Interest of the People…

Nick Ellis

Thank you Nick!  Great stuff!