Inflation Our Number one Problem

Inflation Our Number One Problem

By John Irvine

When I was a young man I became a Goldwater Conservative. They say that if you are not a Liberal at 20 there is something wrong with your heart and if you are still a liberal at 40 there is something wrong with your brain.

I was never a Liberal so I guess there was something wrong with my heart. Two years ago, I had open heart surgery for a birth defect that doctors said should have killed me 40 years ago.

My initial attraction to Barry Goldwater was his opposition to the war in Vietnam. Goldwater has a high ranking military officer. It was his belief to send in ground troops would be a disaster. Sadly, Goldwater lost the election to Lyndon Johnson. 55,000 young Americans lost their lives and we managed to kill over a million Vietnamese. The American culture was torn to shreds over this war and the country was never the same again.

My second attraction to Barry Goldwater was his belief in sound money. Goldwater said “If Americans understood the monetary system there would be rioting in the streets”.

Cyber FOA has been openly predicting a high rate of inflation ever since SEI gave franchisees the 1.5¢ for gas and a graduated split franchise agreement. It was our contention that if these policies were not adjusted for inflation yearly then the entire franchise system would be unviable over time. Well that’s a pretty big claim to make! And just how do you know we are facing a high rate of inflation? As one Franchisee put it in the Chat Room “Do you have a crystal ball?”

To understand what is going to happen in the future we must simply look to the past. In economics there is always a cause and effect. If government takes a certain course of action the result will almost always be the same. And this is true from the beginning of recorded history. For our explanation of inflation, we will begin in 1944 and the Bretton Woods Convention.

In the post war world there was a perceived problem of the convertability of the various currencies around the world. This was causing trade problems between the nations. It was decided that since the dollar was still convertible to gold at $35 dollars per ounce that the dollar would become the reserve currency of the world. And, all other currencies would be pegged to the dollar for the purpose of determining there value. With reserve currency status this allowed the United States to run huge trade deficits as the other countries of the world could use those excess dollars to make purchases from other countries. Oil for example is strictly traded in dollars.

In the 60’s, I was shocked at what I saw was happening to my country. Rioting in the streets…. A total break down of any kind of traditional value system. I was determined that I would work