The Humble Libertarian

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Friday, March 18, 2011

Japan's Worst Aftershock: Central Bank Antics

Last week a series of natural disasters enveloped Japan. Its earthquakes and aftershocks caused a massive tsunami killing thousands and damaging key nuclear facilities. Many worry that the reactors may explode, but a nuclear blast has already hit Japan. Yes you know what that means, the central bank decided to “help”. The Japanese central bank has attempted to ease the crisis and ease the fears of investors and stock holders by releasing a second tsunami of money and credit to the tune of $183 billion dollars. That's 15 Trillion in yen.

The rational is that by extending money to banks during this time of crisis loans will stay easy to get and this will help the recovery. But it is difficult to see how sapping the value out of the existing stock of money will help the surviving people of Japan as they rebuild and heal the wounded.

This is like having your legs broken by falling down the stares and having a nearby person shout, “I’ll get the leaches!” and proceeding to cover your body with leaches. This medical procedure was thought to help in times of olde but only worsened existing problems- much like Keynesian “solutions”.

The Japanese economy may well recover in spite of the central bank’s meddling and the bank will undoubtedly tout loudly that the crisis would have been much worse if not for their heroic tweakings of the magic money machine. But don't be fooled by this bankster sophistry, inflation is not the medicine that Japan needs- it is generous and plentiful private donations of real wealth.

This is where you can help, but be careful. Don't be scammed by chain emails or fake websites, make sure that you look up the official website and/or call organizations by phone instead of wiring money to any Nigerian princesses. Additionally your money will go further if you donate to organizations already on the ground instead of middle-men that pass on funds. Also be sure to make your donation un-earmarked so that the funds can also be used to help other areas that need it when the Japan emergency is under control.

There are lots of legitimate organizations to choose from. Here is a list of 10 of them. As advocates for voluntary mutual choices it is all the more important that we help out others in need because force-free giving to those who truly need it is part of the fundamental fabric of a free society.

So please be sure to give your time or money to a charitable cause.

Eric Sharp,
Regular Columnist, THL
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