Tuesday, April 28, 2009

Secession

Secession has been in the news recently after the Governor of Texas mentioned it during the Tea Party fervor of a couple of weeks ago. Many would be surprised to discover that it has been the subject of much discussion in certain quarters for many years.

The Mises Institute has published an article entitled, Secession Is In Our Future. It is an interesting article discussing how secession could take place, who would secede, and what would happen.

The writer, Clifford Thies, wonders about the states, "Would they want to bail out the corporations, the unionized public-school teachers, municipal workers, and the UAW, and the bankrupt states of California and New Jersey, among others, when the burden falls much more heavily onto them?"

It is easy to believe that things will always stay as they are, that a great nation like the United States will persevere into perpetuity. But the reality is that no nation is able to last long--nations rise and fall, and to believe that the United States is immune to this is sheer arrogance.

The reality is that the United States will face a currency and debt crisis in the magnitude of a third world nation in coming years. The level of debt and the political pressure toward hyperinflation is so great that it is all but inevitable. In this scenario it is not only conceivable, but likely, that some, perhaps many states, will secede from the Union rather than bear the burden hoisted upon them by the federal government.

Sure, secession may seem a bit crazy, but crazy things happen all the time. We're just not accustomed to them happening to us. There are a lot of really bad things going on now, and they're going to get worse before they get better.

Prepare yourself. As economist Robert Murphy says, " transfer your wealth out of assets denominated in fixed streams of U.S. dollars, and switch to something that responds to large price inflation. In short, sell your corporate and government bonds, and start stocking up on precious metals."

UPDATE: 5/1/09 Here is another excellent article on secession.

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