Aug 222014
 

Adam Smith in his seminal book, Wealth of Nations, outlined how all great empires rest upon an educated, productive and prosperous citizenry. The United States is no exception as its schools over the centuries from grade school to colleges provided the teachings of history, reading and writing, logic, self-reliance, independence and the principles of the constitutional republic brought to us by our founding fathers and God. The United States was founded by people seeking shelter from Despots, authoritarian governments and dictators. Independent souls who were not afraid of providing for themselves, who wanted freedom of religion, and who were willing to strike out into the wilderness to flourish or die. And flourish they did, as did their children and grandchildren. They created the greatest empire in history, the most freedom, the least government, the greatest wealth and middle classes as never seen in history.

Now, this is coming to an end. The assault on the wealth (citizens) and freedoms of the United States began with Teddy Roosevelt and Woodrow Wilson (created the Federal Reserve) a century ago. With a BIG BOOST from progressive liberal Franklin Delano Roosevelt and the creation of the Second Bill of Rights. The progressive movement goal of transforming the United States from a Capitalist constitutional republic to a progressive socialist democracy has been underway for over 100 years and its realization spells the demise of the greatest country ever known. We are near the final denouement of economic collapse and destruction of our monetary and financial system caused by their policies. Ultimately, these PROGRESSIVE men and their supporters transform their societies from the production of great wealth, also known as CAPITALISM, to the consumption of it, known as SOCIALISM (the Orwellian name they use is DEMOCRACY). This final conversion of capitalist economies in the developed world to SOCIALIST economies was set in motion in the developed world at Bretton Woods II.

Continue reading »

Share Button
Aug 202014
 

Today, capitalism is blamed for our current disastrous economic and financial situation and a history of incessant booms and busts. Support for capitalism is eroding worldwide. In a recent global poll, 25 percent (up 2 percent from 2009) of respondents viewed free enterprise as “fatally flawed and needs to be replaced.” The number of Spaniards who hold this view increased from 29 percent in 2009 to 42 percent, the highest amongst those polled. In Indonesia, the percentage went from 17 percent to 32 percent.

Most, if not all, booms and busts originate with excess credit creation from the financial sector. These respondents, incorrectly, assume that this financial system structured on fractural reserve banking is an integral part of capitalism. It isn’t. It is fraud and a violation of property rights, and should be treated as such.

In the past, we had deposit banks and loan banks. If you put your money in a deposit bank, the money was there to pay your rent and food expenses. It was safe. Loan banking was risky. You provided money to a loan bank knowing funds would be tied up for a period of time and that you were taking a risk of never seeing this money again. For this, you received interest to compensate for the risk taken and the value of time preference. Back then, bankers who took a deposit and turned it into a loan took the risk of shortly hanging from the town’s large oak tree.

Continue reading »

Share Button
Aug 182014
 

Most longtime readers know that I have often warned that our government has evolved into benevolent totalitarianism.

This is a gentle term for fascism. No, we don’t have the jack boots and the swastika. Our system is far advanced from that. Our fascism today is so advanced over Nazi Germany and fascist Italy of World War II that our system actually appears benevolent.

How could this happen? The answer is: reverse semantics. Every writer and every talking head in America refer to the U.S. as a democracy of free market capitalism and individual privacy and property rights. This is a big laugh to any sober, thinking person.

Well, the system and its paid politicians still repeat those high-sounding terms. They use the terms like “privacy” and “free market” as sedatives to the crowd. The terms “private” and “freedom” no longer mean what they once did. They are cruel deceptions that fool the mind yearning for human freedom.

Continue reading »

Share Button
Jun 302014
 

Almost six years after the financial crisis, JPMorgan, Citigroup, and Bank of America face fines of around $12 billion each for their role in mortgage malfeasance. In the context of the damage done and the bailout money poured into banks; the fines are miniscule and won’t even cover reparations in one or two blighted areas.

This is after a series of post-crisis banking scandals revealing the fragility of the banking system and after JPMorgan Chase was the only bank to receive an SEC fine combined with an admission of wrongdoing for its well-publicized London Whale incident. Officers of JPMorgan Chase have not been held accountable. Moreover, banks harbor massive balance sheet risk against which they hold insufficient capital.

Timothy Geithner’s Ministry of Truth Tour

Timothy Geithner, former president of the Federal Reserve Bank of New York, a bank regulator during the run up to the financial crises, and later the Secretary of the Treasury, claims that no one knew housing prices could fall. He sounded like a very silly man when he said over and over on his recent book tour that sophisticated financiers didn’t understand the dynamics of a housing bubble. I never once heard him mention well-documented fraud, despite the massive fraud uncovered by Congressional investigations.

Continue reading »

Share Button
Jun 092014
 

The production of money in a free society is a matter of free association. Everybody from the miners to the owners of the mines, to the minters, and up to the customers who buy the minted coins — all benefit from the production of money. None of them violates the property rights of anybody else, because everybody is free to enter the mining and minting business, and nobody is obliged to buy the product.

Things are completely different once we turn to money production in interventionist regimes, which have prevailed in the West for the better part of the past 150 years. Here we need to mention in particular two institutional forms of monetary interventionism: (fraudulent) fractional reserve banking and fiat money. The common characteristic of both these institutions is that they violate the principle of free association. They enable the producers of paper money and of money titles to expand their production through the violation of other people’s property rights.

Continue reading »

Share Button
May 232014
 

Fiat money is at base a form of indirect wealth transfer from those forced to hold the money to those issuing the money.

I describe the pernicious servitude created by debt as debt serfdom, as serfdom implies a neofeudal arrangement that requires serfs’ acceptance of this financial yoke of servitude. In other words, debt is freely accepted as the line of least resistance in a system that incentivizes debt and places high barriers to debt-free independence from a Status Quo operated to benefit the owners and issuers of debt, not the debtors.

Correspondent Jeff W. has identified an even more insidious form of monetary servitude that he calls fiat slavery, as the servitude is enforced by fiat (unbacked government-issued) money.

In other words, being forced to use state-issued fiat currency is a form of servitude, as fiat money is at base a form of indirect wealth transfer from those forced to hold the money to those issuing the money.

Continue reading »

Share Button
May 052014
 

The monster in America’s closet

We’ve been hearing a lot about the so-called Deep State lately. What to make of this shadowy monster? Some observers link it to the paranoid fantasy called the New World Order, a staple of political talk radio (and a hobgoblin I don’t believe in). In popular movies such as the Jason Bourne epics and Mission Impossible, the Deep State launches hyper-complex schemes that work flawlessly and never fail. That is exactly why they have such high entertainment appeal. Viewers are thrilled by the precision, by the conceit of seeming infallibility. The Deep State definitely exists; it just doesn’t work the way it is depicted in the movies. 

I like to say that I’m allergic to conspiracy theories because human beings are generally too inept to carry out schemes at the grand scale, as well as being poor secret-keepers. Insider knowledge is almost always swapped around, even in secretive organizations, often recklessly so, because doling it out confers status, tactical advantage, and sometimes money for the doler-outer. But the Deep State isn’t a secret. It operates in plain sight.

Continue reading »

Share Button
Apr 142014
 

The headline in the print edition of the Denver Post of an associated press story on the nomination of Janet Yellen highlights a quote from President Obama, “She understands the human cost when people can’t find a job.” This statement about then-new Fed Chair Yellen, which emphasizes Yellen’s Keynesian-based commitment to the unemployment prong of the Fed’s dual mandate, underlies why some economists feared that no matter how bad policy might have been during Bernanke’s tenure, policy is likely to get worse rather than get better from a sound money perspective during a Yellen reign. Her empathy for the unemployed was clearly present in her remarks following her first official policy meeting which as reported by the Wall Street Journal “were a notable affirmation of her commitment to low rates until the economy is much stronger.” She emphasized, “The recovery still feels like a recession to many Americans, and it also looks that way in some economic statistics.” She then chose to support her remarks not with usual econ jargon and statistics, but “Ms. Yellen instead exhibited a personal touch … by coloring her comments with experiences of three people who had struggled to gain full-time work.”

Continue reading »

Share Button
Mar 122014
 

Over the decades various administrations, seeking to improve their economic record, monkeyed with economic statistics to the point that the statistics are no longer meaningful.

According to Friday’s (March 7) payroll jobs report, the US economy created 175,000 new jobs in February. If you believe that, I have a bridge in Brooklyn that I’ll let you have at a good price.

Even if 175,000 jobs were created in February–remember now, February was a cold month whose low temperatures are used to explain poor housing and retail sales performance, yet somehow created 40,000 more jobs than needed to keep up with population growth–that is an insufficient amount to drop the unemployment rate.

To see how screwed up US economic statistics are, consider the reported unemployment rate (U.3) of 6.7 percent in comparison with the fact that there are about 6 million Americans who have been unable to find a job and are no longer counted as unemployed. These millions of unemployed are not included in the reported rate of unemployment.

Continue reading »

Share Button
Feb 212014
 

The Devil pens a motivational letter to his minions in America.

Through means I am unable to disclose, I have obtained a copy of the Devil’s New Year’s missive to his minions in America. Though it appears He delivered his letter on January 1, it has taken me until after Lunar New Year to obtain a copy. The Devil’s gleeful anticipation of America’s ruination by 2015 should give us pause.

To my fallen angels Beelzebub, Lucifer and Leviathan, princes of Hell’s demons, and to my minions, lackeys, toadies and sycophants in America:

As you know, the new year usually finds me quite despondent, as the Prince of Peace’s influence waxes most atrociously around his birthday. But this year I am in fine spirits, nay, let me even declare myself absolutely giddy, for the destruction of the United States of America draws ever nearer.

Continue reading »

Share Button