Tuesday, October 4, 2022

On Fiscal Mismanagement | Martin A. Armstrong

Martin A. Armstrong (Sep 13, 2022) - Don’t mix the problem of the quantity of money with what is actually money. They are two separate issues. The theory that inflation is tied to the quantity of money truly extends back to when metal was the money supply. The sudden discovery of America led to a huge wave of inflation in Europe. The FISCAL MISMANAGEMENT of Spain led to its total collapse. They were borrowing against the next shipload of gold coming in from the New World. They would not wait even to get it in, and they were so excited to spend it before it arrived.

[...] The amazing Decline and Fall of Spain is perhaps the greatest lesson if someone wishes to write “How NOT to Manage Government For Dummies.” The Spanish became both the richest nation and the greatest debtor, not that dissimilar from the United States, and succeeded in ending up as the poorest. Spain became a serial defaulter beginning in 1557, followed by 1570, 1575, 1596, 1607, and 1647 ending in a 3rd world status without hyperinflation. Their economic model was one of conquest and plunder rather than developing domestic industry and a viable economy.

[...] The endless increase in the supply of dollars is not the problem [...] Our problem is NOT that money is paper. The problem is those in charge of the government [...] No matter what is money, it CAN NOT be fixed in value. It must be allowed to float, for there are always trends that shift back and forth. Therefore, the relentless creation of money is not because they are paper dollars. As I said, you are blaming the gun rather than the shooter. This is fiscal mismanagement created by Marxism, where the politicians no longer know how to run for office without bribing the people for their votes. This is the system that is completely doomed.