By John Galt
February 6, 2008
Once upon a time there were three little pigs. Each of the little pigs had their own ideas but two of them went to public schools where they were trained in Keynesian idealism while the third little pig won a scholarship to Hillsdale and learned the Austrian economic theory. The first little pig took one look at the other two and walked off muttering “you two are so ignorant! I’m taking advantage of my agricultural subsidies to build my house.” And with that he elected to cut the wheat down he spent all season growing and make it into a firm strong house, much better than hay as he could grind into flour if he got hungry. Then suddenly, one day, the inflationwolf knocked on his door screaming “Hey little piggy, I know you’re in there! Open the door or I’ll huff and I’ll puff and I’ll blow your house in!” The little piggy just laughed and yelled back at the inflationwolf, “Kudlow and Cramer said you are just a figment of my imagination. Now leave me alone as I buy more stocks while the market crashes because my television told me too!” The inflationwolf, puzzled and now angry yelled back “I am the ultimate tax and in a second you shall see!” With that utterance the inflationwolf inhaled, and inhaled, and inhaled until he blew so hard wheat was flying everywhere. Much to the inflationwolf’s surprise the door still stood but there was a fat little piggy screaming at his locked up E*Trade screen as the market continued to plummet. And just like that the first little piggy was devoured in a pig roast and the inflationwolf became the talk of the town as Emril’s barbecue sauce was still affordable and quite tasty on that first little piggy for the town’s first ever Inflationary Pig Roast.
The second little piggy was quite horrified at this turn of events. He was more resolved than ever to follow the Keynesian ideals of his education and decided to build his house out of fiat dollars. He made the trip down the street to the local Federal Reserve branch where the second little piggy claimed hardship and dumped a bucketful of derivatives as a long term TAF deposit, enabling the little piggy to obtain billions of fiat dollars so his house would be insulated, thick and secure as the dollar was always the strongest currency to build on. After finishing his home, the happy little piggy stood in amazement, smiling back at Jefferson and Franklin, Lincoln and Washington, and just how huge the house was he was able to build. Then one afternoon as the second little piggy was watching Maria ask “It’s 4 o’clock, do you know where your money is?”, there was a loud knock at the door. A slightly fatter but much bigger looking inflationwolf was standing at his door screaming “Alright piggy, I know you are in there! Open the door now or I’ll huff and I’ll puff and blow your house in!” The second little piggy laughed and yelled back “hey Maria’s talking to Dillon now. Shut up or I’ll whack you upside the head with one of my bags of bonds I use for self-defense you pesky wolf!” The inflationwolf took one wheeze, put his cigarette out and huffed, and puffed and whoooooooooooossssshhhhhhhhh the dollars flew all over town and it rained money for days. And in the middle of a concrete slab there was a little piggy, holding his remote and hiding behind a bag of bonds. The inflationwolf just chuckled “guess who’s coming to dinner” and with that snatched the little piggy from his perceived place of safety. The second piggy was the surprise pig roast but due to the inflationwolf being very busy, they had to use the store brand barbecue sauce that was on sale as everything else was getting pretty darned pricey. The second little piggy was a wee bit tougher but the town’s pig roast was excellent as the monetary rain storm the day before had everyone drunk and delirious shopping on eBay for useless widgets as they chowed down on ham hocks.
The third little piggy was the wisest one of them all. He thought “that inflationwolf is clever, but there is a way to defeat him.” The third little piggy took his fortunes from working hard and saving and bought hundreds upon hundreds of gold bars and mortar. He painted the bars to look like bricks and built a solid house with a cast iron door which would handle almost any storm that mother nature or the Fed could unleash. As expected, the inflationwolf showed up smoking his food stamp purchased smokes and getting fatter than ever. He wheezed at the top of his voice “Alrighty then! This is your worst nightmare! I’m the inflationwolf here to take you away from your slovenly life of excess in this house of yours! Now open this door piggy or I’ll huff and I’ll puff and I’ll blow your house in!” The third little piggy yelled back “go for it fatso” and with that the inflationwolf huffed and puffed and blew and blew. But the house stood firm. The inflationwolf, ready to pass out and wheezing from air tried one more time. He inhaled and huffed, and puffed, and huffed, and puffed and blew it as hard as he could. Yet the house of gold stood firm. The little piggy yelled out to the inflationwolf “had enough yet fatso?” To which the inflationwolf yelled back “no fair, no fair, you have to have had government help!” The piggy yelled back “nope and just some advice if you try to break in, I’m a 2nd Amendment piggy and will blow you away!”
The dejected inflationwolf went whimpering down the driveway crying as he had failed again, as all his ancestors have, to defeat the house of gold. And with that he thought “I wonder if Little Red Riding Hood tastes good with the garlic onion grilling sauce.”
The moral of the story:
If you live in a house built on a fiat foundation it’s not indestructible. And Austrian educated golden piggies live longer, happier lives…..