The Price of Gas Is Only 10 Cents A Gallon, What’s The Problem?

April 27, 2011 by · 1 Comment
Filed under: Economic News 

Gas For Ten Cents A GallonYou may be shocked to find out that you can get a gallon of gas anywhere in the United States for only 10 cents a gallon. That’s right, just one thin dime. Unfortunately, you can’t use just any dime in your pocket or change purse, it has to be a pre-1965 silver dime that actually contains something of value (of course, you do have to sell the dime and get $5 for it because your local gas station probably won’t take a hand full of dimes for your next fill-up).

This is a good illustration of how the government at the hands of the Federal Reserve has devalued our money. Back in the early to mid 1960′s you could get a gallon of gas for 20 to 30 cents. Later, I remember some time in either 1967 or 1968 my dad pulling into a Zayre’s gas station in Melbourne Florida and the price on the sign in front of the station was 24 cents a gallon. So, for a little over a couple of dimes you could get yourself one gallon of gas back in the 1960′s in some places.

Obviously that is not the case today as gas is getting close to $4 a gallon in most locations around the country and in some places in California it is even over $5 a gallon. Gas is no longer 20 cents a gallon, but if you have a dime minted around that time before 1965, your dime contains about $5 worth of silver, just enough to get you about 1 gallon of gas. The dimes face value is worth about 2.5 liquid ounces of gas but, the precious metal in that silver dime in its coin form is worth about 1 gallon of gas today.

If you want to see the approximate value of a 1964 and before dime, head over to eBay and have a look at the number of silver Roosevelt dimes priced between $4 and $6 for sale. At the time of this post there were 884 auctions that fit those criteria. So, in 46 years a dime has gone from being able to buy you a half a gallon of gas to buying you 2.5 ounces of gas. This has all happened because of currency devaluation caused by inflation. Inflation is a scheme cooked up by the Fed to subtly take your money and spend wildly on social programs in an increasingly wasteful manner. Once we went off the gold standard in 1973 gold started to skyrocket in price, but so did government spending.

Our money used to be based on a tangible asset, gold, but when we went off the gold standard, that allowed unrestrained credit expansion by the government to pay for it’s social and welfare schemes. The payment for those schemes came from taxation only partially, the majority of the deficit spending came from the sale of government bonds, in effect borrowing the money from bond holders.

If you want to understand the way the scheme of deficit spending works, read a fascinating article written back in 1966 where the author states:

But the opposition to the gold standard in any form-from a growing number of welfare-state advocates-was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes.

It might interest you to know that the article was written by former Fed Charmian Alan Greenspan.

When money is based on a tangible asset it’s value remains nearly the same and inflation has a much harder time taking hold in an economy. Back in the early 1900′s when we used to use the $20 gold piece as legal tender, it would buy you a really nice suit and today as the price of gold hovers around $1,500 an ounce, that same gold piece with one ounce of gold in it will still buy you a really nice suit. And the same dime, or two of them, you used in 1965 that bought you a gallon of gas will still buy you a gallon of gas today.

And we’re supposed to trust that he government is doing right with our money today?

The 2011 Federal Budget Scam – There Are No Savings

April 10, 2011 by · 4 Comments
Filed under: Economic News 

2011 Federal Budget ScamWhile the President, the Democrats and the Republicans are all busy patting themselves on the back for what Harry Reid from the floor of the Senate has called the “an historic amount of cuts” on the agreed federal budget for the remainder of 2011 that avoided a government shutdown, the real story is an historic boondoggle and scam of epic proportions. When you look at the numbers and see what the cadre of elected criminals in Washington cooked up to feed to the public, there isn’t any cutting of the total amount of actual spending. It is simply smoke and mirrors and the supposed cuts are rendered meaningless by the unprecedented massive increases in spending over the last 2 years.

Let’s have a look at the real numbers:

The deal announced by Senator Harry Reid and House Speaker John Boehner is said to have cut some $38.5 billion from what had been budgeted for fiscal year 2010 but, the joint statement released by Boehner and Reid is claiming that the cuts are $78.5 billion below what President Obama originally proposed for 2011. The actual number of on paper (even these are not real as you will see in a moment) cuts are at $38.5 billion. To claim that $78 billion had been cut is simply delusional. You can’t cut $78.5 billion from a proposed budget and in any sense of the word call that a cut. A proposal is just that, a proposal. It is not what actually gets implemented and it would be like me telling my wife, I propose we spend $10,000 on vacation this year and go on an extravagant European holiday, and then she proposes we spend $3,000 and go to the Grand Canyon instead. We then cannot in reality tell people we cut $7,000 from our vacation budget this year because that would be a lie. Therefore, the joint statement released by Reid and Boehner on the so-called “historic budget cuts” is a lie.

Further analysis of the 2011 budget shows that the increase in spending over last year alone is $219.9 billion, already eclipsing the supposed savings by $181.4 billion. Looking another year back to 2009 we see that $443.6 billion more was spent in 2010 than in 2009 for a grand total of $662.7 billion more in expenditures by the federal government from 2009 to the recently agreed upon budget for 2011. And we are supposed to be happy about $38.5 billion in cuts? They are meaningless.

When you increase your spending by $662.7 billion over 2 years and then claim you have done something historic by cutting $38.5 billion you are doing little else than promoting propaganda. Call it what you want, but in reality, once again, our elected officials have lied to us in epic proportions. The President and both Democrats and Republicans have all claimed victory on this boondoggle, that should have been the first clue that in reality, there was no victory at all.

We Will All Work For The Government Soon

April 4, 2011 by · Leave a Comment
Filed under: Economic News, Uncategorized 

Government Pencil PusherAn alarming article came out in the Wall Street Journal a few days ago on the fact that we now have more people working for the government than we do in manufacturing, mining, forestry, farming, fishing and utilities combined. This is doubly alarming because since 1960 we have seen a complete reversal of manufacturing versus government jobs.

In 1960 there were 8.7 million government jobs in this country and 15 million manufacturing jobs. Today there are less manufacturing jobs than there were in 1960 equaling some 11.5 million, 3.5 million less than in 1960, but now there are 22.5 million government workers. While manufacturing jobs have decreased in this nation, the government work force has nearly tripled in size.

Basic math tells you that this trend cannot continue forever. Regardless of what you think about government workers be they teachers, firemen, police, social workers, military service personal or just plain government bureaucrats thinking up even more creative ways to separate us from our money, there has to be a base of tax money to pay this growing government workforce. What many people fail to understand, especially people who stand up for so-called teachers rights and union rights for federal workers, is that the base of people who actually pay into the system that funds all of these government workers are way past their limit of being able to afford to pay more in taxes and fees to the government monstrosity.

The pool of money that exists to pay teachers to educate your children, that pays firemen to keep your house from burning down, that pays for police to protect you from bad guys and that pays for expensive jets to fly policy wonks around the country amongst a huge list of those that endlessly clamor for more, more, more, has finally run dry. All around the nation in state after state, in city after city and at the highest levels of the federal government, accountants have finally had to tell their bosses who love to spend other people’s money, uh, we’re out of money, the pool has run dry, there isn’t any more.

Even though this is the case, that we are desperate and seriously over our heads in drowning debt, most of our elected officials simply refuse to do anything about it. And in fact, many will beat their drums and stand in front of TV cameras as they stir up their constituents and claim that those that want to take a serious look at the orgy of spending that is bankrupting us and do something about it, are doing nothing more than starving children, busting unions and somehow disrespecting seniors by stealing their Social Security and Medicare.

Despite the overwhelming evidence that we are broke as a nation and trillion dollar deficits are the norm these days, many continue to create more government programs and agencies, continue to hire more government workers at alarming rates such as increasing the funding for the IRS by nearly 10 percent and hiring 5,100 new IRS agents. All the while they continue to ignore the fact that the money does not exist to pay for any of this. Never mind any of that, let’s go ahead and give the IRS $1.13 billion more than they had last year that they didn’t spend responsibly. (Maybe one day I’ll tell the story of how the IRS probably spent $20,000 while auditing us and requiring us to pay an additional $1,700 0ne year in taxes. See how efficient they are.)

Obviously at some point this will all end and the longer our elected officials refuse to face up to the ever growing problem, the worse the eventual crash will be. Do you think any of them realize we can’t all work for the government? The crash will happen some time between now and when we all become government pencil pushers, I’m just not sure when.


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