First let me explain what I expect to occur and why. Predatory lending, naivety and irresponsibility on the part of the home buyer have led us to our current situation. Many people who should not have received mortgages did. Being already squeezed by their mortgage, rising oil and food prices left no way to make ends meet. In combination, a bubble on housing prices burst, leaving many actual responsible homeowners upside-down in debt, with seemingly no hope to recover.

The current result is an overreaction in the other direction. Lenders have all but stopped giving out mortgages. While requirements and qualifications will eventually become reasonable again, it will take time for an average American to be able to get a mortgage. Most importantly, no one will ever give out another sub-prime mortgage. This will reduce demand on housing drastically. With reduced demand comes reduced value. With an estimated 50-65% reduced housing demand I expect to see a 20-40% overall reduced home value. This is on top of any bubble burst experience some have already had.

At the same time there will be an inverse increased demand for rental property. Currently rent prices are just below mortgages, but that relationship will reverse. I expect to see rent prices stabilize around 150% of a standard mortgage payment.

These increased rental revenues will prop up home values, and perhaps even return them to their original position. Investors will pick up massive amounts of real estate for the sole purpose of collecting rent. I expect to see large firms build entire neighborhoods with the intention of renting out 95% of the property.

We will see a massive reduction in the percentage of home owners in the United States. Instead of paying a mortgage and trying to make ends meet while building equity, we will instead see people simply unable to afford rent. This forms a cycle of debt, leaving no way to work up the 20-40% cash soon required to put down on a house. Anyone who doesn’t already have a mortgage is in for a world of hurt.

Somebody wins here, and it can be you. Be ready to buy property when the price drops. Do your best to become a landlord. The more private landlords out there the smaller the impact will be.

Looking back throughout history most people are aware that we used to have sound money. No one seems to know what that means though, and mentioning the gold standard results in virtually no intelligent conversation. Technically our country was never on the gold standard, but was on the silver standard. Here is an excerpt from the Coinage Act of 1792.

SEC. 9.
…
Dollars or Units—each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenths parts of a grain of pure, or four hundred and sixteen grains of standard silver.
…
Cents—each to be of the value of one hundredth part of a dollar, and to contain eleven penny-weights of copper.

What did the currency look like after the Coinage Act of 1792? It was pretty simple actually. The requirements for currency were set forth in that act and included a standard amount of copper, silver or gold to be in each coin, certain markings on the coins, and that it had to be coined in a United States Mint. You could bring your copper (for half cents and cents), silver (for half dismes, dismes, quarter dollars, half dollars and dollars) and gold (quarter eagles, half eagles and eagles) to a United States Mint and have it coined for you. This made precious metals very easy to use in trade, because every coin had a guaranteed standard value.

At this time the value of the currency was contained within the currency itself. Yes, the value of metals fluctuate on the market, but so does everything else. It just depends on what you view as your base. It’s hard to adjust your thinking because the dollar has become so ingrained in our lives, but try making a transition to look at gold (or worth) as the base and the dollar as fluctuating.

The truth is the dollar has had 7.5% devaluing from Jan 1st, 2008 through June 30th, 2008. Thinking of the dollar as the base means that’s your default holding. Your salary, bank account, and retirement fund just took a 7.5% loss! If you were paid in oil futures instead of dollars you’re salary would have doubled over that same period of time.

The removal of a commodity backing from our currency made the currency itself an independently tradeable item on the market. No longer was it tied to the supply and demand of gold or silver or copper, but only to the demand of itself. Given that paper has little to no intrinsic worth, that’s a pretty dangerous position to hold. If the IRS stopped accepting Federal Reserve Notes then they would become worthless overnight.

The four steps of currency in our country:
1) Currency is made (literally) of our wealth
2) Currency is a note exchangeable for wealth (but easier to carry with you)
3) Currency is a note exchangeable for wealth only if you are a foreign country
4) Currency is no longer a note and not directly exchangeable for wealth

The problem with our current position, (4), is that the Fed prints money, not wealth. They bail out Bear Sterns, Fannie and Freddy by printing money. There is now more supply and therefore less demand.

Imagine yourself in a simpler time. You have a bunch of gold. Would you rather hang on to the gold or trade it for a note? Many would put it in a bank vault and take a note in return (remember the note is for your original gold, not for dollars). A note is easier to store, easier to trade, etc. Maybe the bank comes out with a currency, and instead of giving you a note for your original gold, they will buy your gold from you in exchange for some of this currency. The problem is they control the currency, and have ability to flood the market at any time. All of a sudden your gold could cost twice as much to get back. Sound like a deal?

“When the Government Fears the People, There is Liberty; When the People Fear the Government, There is Tyranny”
– Thomas Jefferson

“Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.”
– Benjamin Franklin

Since September 11th, 2001, we have attempted to purchase safety with more liberty than ever before. Our freedom is spent but the seeming threat has only grown.

“If Tyranny and Oppression come to this land, it will be in the guise of fighting a foreign enemy.”
– James Madison

People, it’s already happening. Iraq, Iran, and the lineup will continue as long as any of our rights persist.

“The means of defense against foreign danger historically have become the instruments of tyranny at home.”
– James Madison

Still think torture in Guantanamo Bay is ok? It’s only a matter of time before it’s showing here too.

“Before a standing army can rule, the people must be disarmed; as they are in almost every kingdom of Europe. The supreme power in America cannot enforce unjust laws by the sword; because the whole body of the people are armed, and constitute a force superior to any band of regular troops that can be, on any pretense, raised in the United States.”
– Noah Webster

“But a Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever.”
– John Adams

Do you actually think they will stop the illegal wiretaps when the war ends? Think again.

“We should be unfaithful to ourselves if we should ever lose sight of the danger to our liberties if anything partial or extraneous should infect the purity of our free, fair, virtuous, and independent elections.”
– John Adams

“It is a common observation here that our cause is the cause of all mankind, and that we are fighting for their liberty in defending our own.”
– Benjamin Franklin

“And it proves, in the last place, that liberty can have nothing to fear from the judiciary alone, but would have everything to fear from its union with either of the other departments.”
– Alexander Hamilton

I am equally afraid of the Executive branch having the other’s beneath it’s thumb.

“The great leading objects of the federal government, in which revenue is concerned, are to maintain domestic peace, and provide for the common defense. In these are comprehended the regulation of commerce that is, the whole system of foreign intercourse; the support of armies and navies, and of the civil administration.”
– Alexander Hamilton

So the federal government isn’t supposed to run my life?

The loss of liberty during my lifetime alone has been astounding. Business is running to other countries to avoid SOX compliance, we’re told how we may and may not punish our children’s and police brutality is worse than ever. Above the freedoms we have lost individually, the country has lost it’s own sovereignty as well. The United States is subject to the authority of the WTO and is facing a $100 billion potential fine for banning internet gambling and sanctions of unspecified billions for cotton subsidies. We now live in a country where our government is limited by outside organizations. So much for being top dog.

If recent years are telling a tale of what is to come, then we are indeed entering troubled times. In societies throughout the world, once rights are revoked they are rarely restored. If they are returned then they are typically again removed through a different avenue. Our freedoms are an extremely limited natural resource and should be guarded with our lives. We have come to a point, however, where the average American citizen can do nothing within reason to protect individual liberties. With this conclusion, it is only a matter of time until we have none left, and our country will have traded the ways of Democracy for those of Socialism (or Fascism, depending on whether you believe government or business will take over). I estimate this to be within 50 to 150 years. Is that the country we want to live in and leave for our children?

This is the perspective I had of our nation’s future. It’s admittedly doomsdayish, but looking around I saw no other reasonable possibilities, at least I didn’t until a month or two ago. I have never really followed presidential campaigns or primary elections. I was a responsible enough citizen to vote, and to watch the election coverage on tv, but never to research the candidates in the primaries, or even consider looking into a smaller party candidate. I do, however, participate in the internet news phenomenon. I read interesting stories daily in all topics, including the occasional story on politics. I kept seeing the name Ron Paul on some of the sites I frequent, so I clicked on a link to see why people were so excited, not expecting anything of much substance. For hours I continued to read articles and watch videos of his views on what was wrong with America. Soon after I began researching other candidates, just to see what they were saying that was different, giving them a fair shot at responding. I have watched videos of several primary debates, interviews, speeches, straw polls and talk shows. My conclusion: Ron Paul is the candidate for me. Why?

He wants to give back the personal liberties that have been slowly taken away. It is through this, and only this, that America will deserve the reputation of “land of the free and the home of the brave.” People hear sound bites on the news and in conversation that steer them away from this radicalist, but I’m going to amalyze his plans, and determine what kind of country would result from seeing them through.

1. Reduce the size of the government to that defined in the Constitution. You mean the current one isn’t? Not by a long shot. Consider the 10th Amendment “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” Nowhere in the constitution does it speak of a federal educational system. You might respond, “But we have a state based educational system.” Then what is the Department of Education?
   
   The DoE has been around since 1867 under other names, but was established by Congress as a cabinet level agency in 1980. According to the majority of the historical Republican party, Congress never had the authority to create the department. Ronald Regan promised as part of his 1980 campaign to dismantle it. In his 1982 State of the Union he pledged to exclude it from the budget. Bob Dole promised to cut the department in his 1996 campaign. Ron Paul would also like to eliminate the department.
   
   The Department of Education provides an average of 9% primary and secondary educational funding to state and local schools. They operate off of 2.4% of the Federal Government budget, somewhere in the area of 67.2 billion dollars a year. Keep in mind that your taxes cover both the 91% from state and local sources, and the 9% from the federal source. [link] Eliminating the department means that your state and local school taxes could go up, but that your federal taxes would go down about 2.4%. It’s out of one hand and into another. With this arrangement however, your money is going to your schools, instead of across the country to someone else’s. Plus we save the overhead of running the department.
   
   The most important thing is that we follow our own rules. The only constitutional way to establish the Department of Education is through an amendment authorizing federal oversight of the educational system. It is the neglection of our rules that has put us in this state of compromised freedom. Without our constitution, and our laws in general, we are nothing but anarchists. We have a method of changing rules and it should be utilized when change is needed. Now this has much more reaching effects than it seems. We’ve been breaking our own rules for a while, so there are many agencies and departments that would no longer be considered legitimate. The FAA, FDA, EPA, DoHS, DoE would all be put the constitutionality test. Some of these would pass, but others would be dismantled. Effective oversight in these areas could be established through a number of means. State agencies can be instantiated, interest groups could be formed, multi-state agreements could be established, and so on.
2. Revert our foreign policy to that before Bush 41. It was under that administration that our foreign policy was largely rewritten to contain preemptive actions to defend our nation. We are going to war with people who have not harmed the United States in any way. We have neither the responsibility nor the authority to trample on other’s sovereign soil to instill our beliefs or governments. Imagine if China felt that a successful Democracy was a threat to their way of life, and came over here to instill their own government in the interest of national security. The very idea is preposterous. They would have no right, and neither do we. Nation Building seems generous when viewed from our arrogant perspective, but put on the other shoes and it’s a violation of our very own core values.
   
   On another note, the countries we are “freeing” are not prepared for the governments we are putting in place. It does not take time or money to make democracy stick to a society. It takes dedication from the citizens to uncompromisingly fight for their rights. America is a democracy because our forefathers took it for democracy. That was less that 250 years ago and already we have nearly given it away. How fast will the Iraqi people give up their freedoms if they did not fight and die for them?
   
   The preemptive war policy does not have historical precedent in our society. Just 60 years ago nearly all of Europe was conquered before we got involved. Beyond this, it was not the invading of other nations that brought us into the war, but the bombing of Pearl Harbor. Under Bush 41 all that provoked us was Kuwait being conquered. Not to belittle the horror of that event, but no attack was made on America. If we went to war for oil then that’s even worse. Do you honestly believe that if we ran out of oil that our lives would drastically change? Our capitalist economy and dynamics of supply and demand would sort out a complete and total oil drought in less than 5 years. Our dependence on foreign oil must be kept in perspective. We are only dependent on it because it’s there. If there was no more oil we would find other ways, but the abundance of it has stopped us from even trying. The government should not be involved in the stabilization or procurement of natural resources.
   
   Also to consider is the cost of our current foreign policy. Quite frankly, we can not afford the empire we are building. We have spent over a trillion dollars in Iraq. I know these big numbers don’t really hit home, so let me do some math for you. 1.9 trillion dollars / 300,000,000 people is $6,333 apiece. And Bush is asking for more. 1.9 trillion dollars spent within our borders could mean final solutions to massive current issues, such as Social security and a national defense. Or it could mean a massive tax refund.
3. Balance the budget and pay off the national debt. On paper we are by far the poorest country in the world. Our national debt is now 9 trillion dollars. According to Ron Paul we are currently borrowing 3 billion dollars a day from China to pay the interest. Ron Paul is the only candidate that has a chance of paying down debt. Given the cuts he would make to the federal government, the immediate surplus would be astounding. Shortly after that the budget would be balanced. Personally I wouldn’t be opposed to a surplus budget for a few years to get rid of the debt, but I don’t know Paul’s exact plans regarding that.
   
   With this newly cut and limited government we no longer need an income tax, or an IRS for that matter. The average American pays approximately 25% income tax. I hear other candidates talking about tax cuts that will make a difference of $50 to me, but Ron Paul is talking about giving me a 25% per year raise. This is the very core of the message, freedom. Instead of the government spending your money for you on war and foreign aid, you get to spend it on whatever you choose.
   
   Another tax he wants to cut is the inflation tax. Its not a direct tax, but comes as a result of the Federal Reserve printing money to subsidize various industries. Paul is a proponent of commodity-backed currency, or hard currency. Essentially this just means we shouldn’t be able to create money out of thin air, but that it has to be backed by something. This is the historical precedent, yet we began ignoring it in 1971, and continue to today. Every person in America takes a 5% pay cut annually due to inflation, and it’s about time we put a stop to it. If you are lucky enough to get an annual 3% cost of living raise, after five years you’ll be making 9% less, ten years will put you back 17%. Without taking into account the cost of living raise, which honestly most of us don’t have, the numbers are 22% and 39%. Think about that for a minute. Just ten years from now you’ll hardly be able to afford 60% of the things you buy now. Now that’s a tax. (All calculations performed by me)
4. Stop empowering corruption in Washington. We were established as a limited federal system with a capitalist market economy. The intent in this structure was to minimize the government’s involvement with private business. The lobbying, contributions, kickbacks and special favors have nearly ruined our legislative branch entirely. We need to separate the government from business now, and there is only one way I can see it happening. Take away the incentive of private business to lobby congress. It’s as simple as limiting the power of congress to that defined in the constitution. The whole idea of the free market economy is supply and demand. Congress should have nothing to do with the natural selection of the consumer.

There are many other issues surrounding presidential campaigns such as abortion, illegal immigration/amnesty, gun control, social security, war powers, and health care. These issues have become Litmus tests on candidates in years past, and as such most people have thought through the consequences of both sides of each argument. For the sake of completeness, let me sum up my/Paul’s positions on the issues…

• Abortion: The Declaration of Independence says Life is one of three unalienable rights. How can this even be argued? Of course I’m biased because I wasn’t aborted. [1] [2]
• Illegal Immigration: Secure the borders, stop compromising with people who don’t take the time to come into the country legally. [1] [2] [3]
• Gun Control: The 2nd Amendment was put in place so that we would always be equipped to defend our liberties and our Country. [1] [2]
• Social Security: It’s failed. Allow young people to get out of the system and stop borrowing money from it to negate new debt. [1] [2]
• War Powers: The Article 1 Section 8 of the Constitution says that Congress has the power to declare war, not the President. [1] [2]
• Health Care: A national health plan will go just as poorly as Social Security. This is a free market issue and none of the federal government’s business. [1]

Of the 18 Republican and Democratic presidential hopefuls, Ron Paul is promising more than the other 17 put together. Everyone else is running on one or two issue platforms, like health care or ending the war or 9/11. Ron Paul has the entire Country in perspective. He’s the only candidate to use history to his advantage because he’s the only one in line with what it says. You truly can not find historical precedent for most of the positions of the other candidates. Ron Paul has cured my political apathy. He truly is “Hope for America.”

Links

• http://www.ronpaul2008.com
• http://www.thisnovember5th.com – 4.3 million raised
• http://www.teaparty07.com – 6 million raised
• http://fiftyoneyears.com & http://www.libertytax08.com & http://www.fauxnewsmoneybomb.com – 1 million raised
• http://www.taxday08.com