“Hundreds of thousands of rouble notes are being issued daily by our treasury. This is done, not in order to fill the coffers of the State with practically worthless paper, but with the deliberate intention of destroying the value of money as a means of payment. There is no justification for the existence of money in the Bolshevik state, where the necessities of life shall be paid for by work alone. Experience has taught us it is impossible to root out the evils of capitalism merely by confiscation and expropriation, for however ruthlessly such measures may be applied, astute speculators and obstinate survivors of the capitalist classes will always manage to evade them and continue to corrupt the life of the community. The simplest way to exterminate the very spirit of capitalism is therefore to flood the country with notes of a high face-value without financial guarantees of any sort. Already even a hundred-rouble note is almost worthless in Russia. Soon even the simplest peasant will realize that it is only a scrap of paper, not worth more than the rags from which it is manufactured. Men will cease to covet and hoard it so soon as they discover it will not buy anything, and the great illusion of the value and power of money, on which the capitalist state is based will have been definitely destroyed. This is the real reason why our presses are printing rouble bills day and night, without rest.” Vladimir Ilvich Ulianoff Lenin, ‘Interview’, Daily Chronicle (London) and New York Times, April 23, 1919.
“Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they can not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers’, who are the object of hatred by the bourgeoisie, whom the inflation has impoverished, not less than of the proletariat. As the inflation proceeds and the value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery. Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does so in a manner which not one man in a million is able to diagnose.” John Maynard Keynes, The Economic Consequences of the Peace, London: Macmillan, 1919.
“President Barack Obama plans to nominate Janet Yellen as vice chairman of the Federal Reserve Board, a person familiar with the matter said. Ms. Yellen, president of the Federal Reserve Bank of San Francisco since 2004, has been a strong supporter of Fed Chairman Ben Bernanke’s policies to fight the deep economic downturn. One of the more dovish policy makers among the fed’s 12 regional bank presidents, Ms. Yellen has been a key advocate of the Fed’s policy of near-zero interest rates and a massive expansion of the central bank’s balance sheet, even as some regional Fed officials advocate for pulling back the monetary stimulus more quickly….Ms. Yellen has been especially concerned about high unemployment and sees little risk of inflation.” D. Paletta, S. Reddy and J. Hilsenrath, ‘Obama to Tap Yellen for Fed Vice Chair’, The Wall Street Journal, March 12, 2010.
These quotations speak pretty much for themselves. As readers of this column are aware, President Obama has the opportunity to fill two additional vacancies on the Fed’s Board of Governors. A judicious choice of nominees will provide him with a clear majority on the Board. Janet Yellen is a progressive socialist, Ben Bernanke has sold out to that cause in return for a coveted second term in the Chair. President Obama is a progressive socialist, Speaker Nancy Pelosi is a progressive socialist, and Senate Majority Leader, Harry Reid is a progressive socialist. A large majority of Democratic members of both the House and the Senate vote as progressive socialists. A majority of the electorate is not progressive socialist, at this time.
However, once their hard-earned wealth has been wiped out by high and volatile rates of price inflation, where do you think that an electoral majority may stand in November 2012, Dear Readers? More important, where do you think that Obama, Pelosi and Reid (if he is still in office) think that such a financially ruined electoral majority will stand?
Whatever else they may have been, Lenin and Keynes were not fools. Like Professor Moriarty and Sherlock Holmes, they were endowed with intellectual genius, just like those characters in the novels by Conan Doyle, plotting on opposite sides of the spectrum. The Republican Party minorities in the House and the Senate, unfortunately, score much closer to Lenin’s evaluation of the brain-power of the Russian peasant, than to the genius of Lenin and Keynes. So, we must continue to enjoy life in dangerous times.