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Charlie Traffas
Charlie Traffas has been involved in marketing, media, publishing and insurance for more than 40 years. In addition to being a fully-licensed life, health, property and casualty agent, he is also President and Owner of Chart Marketing, Inc. (CMI). CMI operates and markets several different products and services that help B2B and B2C businesses throughout the country create customers...profitably. You may contact Charlie by phone at (316) 721-9200, by e-mail at ctraffas@chartmarketing.com, or you may visit at www.chartmarketing.com.
What's New
2011-10-24 12:03:00
Our borrowed existence - series
Question: What’s new?
Answer: Like I always say…I’m glad to be asked. For the past five issues, I have presented my case why the US Dollar (USD) is closer than it has ever been to losing its “borrowed existence” as the world’s reserve currency, and what this will mean to each of us. I have used research from a wide variety of places, such as Stansberry & Associates, Kiplinger, Weiss Research, the Wall Street Journal, the New York Times, the Congressional Budget Office, the National Inflation Association, the Center on Budget and Policy Priorities, several others…as well as my own analysis...for what it is worth. If you have read these, you know that I believe there are some very serious things that are happening in this country and in the world that are not being talked about by nearly enough people. I would have much preferred people with much more knowledge in these areas than myself to do so, but it wasn’t being done. I am not an economist. I am not a politician. I do not have an agenda…other than using this column to inform as many people as I can of the things I see and have researched, in the hope something can be done before it’s too late. Maybe it’s already too late. Last month, we talked about the history of our monetary system and closed with the statement, “To do what we have done with all of the indicators before us is a big sin. To fail to learn from history is the bigger sin.” Here are a couple of examples you may find some similarities with our present situation. One of many civilizations that did not learn from history was the Roman Empire. There was nothing like it in its day. Its people built libraries, amphitheatres, public baths, basilicas, theatres, circuses, aqueducts, fountains and more. Nothing could compare to it. Yet for all its grandeur, it fell in 476 A. D., more than 1,535 years ago. There were many reasons for the fall of the Roman Empire. Most were connected and intertwined with each other. Some of these interconnected reasons are as follows: •“Decline in Morals and Values: Those morals and values that kept the Roman legions – and thus the empire – together could not be maintained toward the end of the empire. Crimes of violence made the streets of the larger cities unsafe. Even during Pax Romana, the greatest period of prosperity, there were 32,000 prostitutes in Rome. Emperors like Nero and Caligula became infamous for wasting money on lavish parties where guests ate and drank until they became ill. The most popular amusement was watching the gladiatorial combats in the Coliseum, which were attended by the poor, the rich, and frequently the emperor himself. As gladiators fought, vicious cries and curses were heard from the audience. One contest after another was staged in the course of a single day. Should the ground become too soaked with blood, it was covered over with a fresh layer of sand and the performance went on.” •“Public Health: There were many public health and environmental problems. Many of the wealthy had water brought to their homes through lead pipes. Previously, the aqueducts had even purified the water but at the end, lead pipes were thought to be preferable. The death rate of the wealthy was very high. The continuous interaction of people at the Coliseum, the blood and death probably spread disease. Those who lived on the streets in continuous contact with each other allowed for an uninterrupted strain of disease, much as we see happening with the homeless in today’s more poorly run shelters. Alcohol use increased as well, adding to the incompetence of the general public.” •“Political Corruption: One of the most difficult problems was choosing a new emperor. Unlike Greece, where transition may not have been smooth but was at least consistent, the Romans never created an effective system to determine how new emperors would be selected. The choice was always open to debate between the old emperor, the Senate, the Praetorian Guard (the emperor’s private army), and the army itself. Gradually, the Praetorian Guard gained complete authority over choosing the new emperor, who rewarded the guard – which then became more influential, perpetuating the cycle. Then in 186 A.D., the army strangled the new emperor and the practice began of selling the throne to the highest bidder. During the next hundred years, Rome had 37 different emperors – 25 of whom were removed from office by assassination. This contributed to the overall weaknesses of the empire.” •“Unemployment: During the latter years of the empire, farming was done on large estates called latifundia, which were owned by wealthy men who used slave labor. A farmer who had to pay workmen could not produce goods as cheaply. Many farmers could not compete with these low prices and lost or sold their farms. This not only undermined the citizen farmer who passed his values to his family but also filled the cities with unemployed people. At one time, the emperor was importing grain to feed more than 100,000 people in Rome alone. These people were not only a burden but also had little to do but cause trouble and contribute to an ever-increasing crime rate.’ •“Inflation: The Roman economy suffered from inflation beginning after the reign of Marcus Aurelius. Once the Romans stopped conquering new lands, the flow of gold into the Roman economy decreased. Yet gold was being spent by the Romans to pay for luxury items. This meant that there was less gold to use in coins. As the amount of gold used in coins decreased, the coins became less valuable. To make up for this loss in value, merchants raised the prices on the goods they sold. Many people stopped using coins and began to barter to get what they needed. Eventually, salaries had to be paid in food and clothing, and taxes were collected in fruits and vegetables.” •“Urban decay: Wealthy Romans lived in a domus, or house, with marble walls, floors with intricate colored tiles, and windows made of small panes of glass. Most Romans, however, were not rich. They lived in small, smelly rooms in apartment houses with six or more stories, called islands. Each island covered an entire block. At one time there were 44,000 apartment houses within the city walls of Rome. First-floor apartments were not occupied by the poor. The more shaky wooden stairs a family had to climb, the cheaper the rent became. The upper apartments that the poor rented were hot, dirty, crowded and dangerous. Anyone who could not pay the rent was forced to move out and live on the crime-infested streets. Because of this, cities began to decay.” •“Inferior Technology: During the last 400 years of the empire, the scientific achievements of the Romans were limited almost entirely to engineering and the organization of public services. They built marvelous roads, bridges and aqueducts. They established the first system of medicine for the benefit of the poor. However, since the Romans relied so much on human and animal labor, they failed to invent many new machines or find new technology to produce goods more efficiently. They could not provide enough goods for their growing population. They were no longer conquering other civilizations and adapting their technology, they were actually losing territory they could no longer maintain with their legions.” •“Military Spending: Maintaining an army to defend the border of the empire from barbarian attacks was a constant drain on the government’s resources. Military spending left few resources for other vital activities, such as providing public housing and maintaining quality roads and aqueducts. Frustrated Romans lost their desire to defend the empire, which then had to begin hiring soldiers recruited from the unemployed city mobs – or, worse, from foreign countries. Such an army was not only unreliable, but also very expensive. The emperors were forced to raise taxes frequently, which in turn, led again to increased inflation.” •“The Final Blows: For years, the well-disciplined Roman army held the barbarians of Germany back. In the third century A.D., the Roman soldiers were pulled back from the Rhine-Danube frontier to fight a civil war in Italy, leaving the Roman border open to attack. Gradually Germanic hunters and herders from the north began to overtake Roman lands in Greece and Gaul (later France). Then in 476 A.D., the Germanic general Odacer (or Odovacar) overthrew the last of the Roman emperors, Augustus Romulus. From then on, the western part of the Empire was ruled by a Germanic chieftain. Roads and bridges were left in disrepair and fields left untilled. Pirates and bandits made travel unsafe. Cities could not be maintained without goods from the farms, trade and business began to disappear, and Rome was no more in the West.” In 1887 Alexander Tyler, a Scottish history professor at the University of Edinborough, had this to say about the fall of the Athenian Republic some 2,000 years prior: “A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy, (which is) always followed by a dictatorship.’ “The average age of the world’s greatest civilizations from the beginning of history, has been about 200 years. During those 200 years, these nations always progressed through the following sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to complacency; From complacency to apathy; From apathy to dependence; From dependence back into bondage.” What do you think? Do you see our country in either of these two examples? George Santayana, famed poet, essayist and philosopher of the 20th century said, “Those who do not learn from history are doomed to repeat it.” Was he right? Next month I will summarize what we have covered in this series…and offer three most candid solutions that I believe, based upon all I know and have researched…will work. In the final article in this series…the October issue…I will offer my last solution, which I can promise…is guaranteed to work.
 
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