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Gold and Free Banking Versus Central Banks

gold bars

In spite of the officially declared “independence” of the Federal Reserve from the immediate political control of either Congress or the White House, America’s central bank is, nonetheless, a branch of the U.S. government that is responsible for setting monetary policy, overseeing a variety of banking regulations, and influencing market interest rates. As a result, politics is always present when it concerns the Federal Reserve, as witnessed in the nomination of Dr. Judy Shelton to serve on the central bank’s board of governors.

Dr. Shelton has become a lightning rod for angry opposition, not only due to Donald Trump, who as president of the United States nominated her to fill one of the seven slots on the Federal Reserve’s Board of Governors, but the fact that she has long been a public and vocal advocate for a return to some version of the gold standard as an “anchor” for limiting discretionary policies by the central bank.

Most academic and policy-oriented economists apparently are both flabbergasted and fearful that if she were to serve on the Fed board, she might actually attempt to limit the virtually unrestrained latitude the central bank currently has to seemingly create money and bank credit in practically any quantity, and, in the process, influence the level of interest rates at which banks make money available for borrowing purposes.

What is clearly horrifying to so many in the wide mainstream of the economics profession is the notion of a check on the powers and prerogatives of what amounts to America’s system of monetary central planning. But that is the very point of a commodity-based monetary system such as a gold standard, to limit abuse of the monetary printing press.

…click on the above link to read the rest of the article…

Stockman Warns “The Jig Is Up!” – Covid-19 And The Defenestration Of The Central Bankers

Stockman Warns “The Jig Is Up!” – Covid-19 And The Defenestration Of The Central Bankers

Let it be said that historians will surely marvel – and at some point soon – about the grand delusion of the present era. Namely, the near universal belief that central bankers could print, peg and palaver the main street economy into unfailing expansion and ever rising prosperity and that there were essentially no macro-risks to soaring stock prices that their toolkits couldn’t contain and counteract.

That misbegotten belief had huge untoward consequences. It made economies brittle with too much leverage, financialization and speculation; and fragile with too few shock absorbers and insurance mechanism such as just-in-case inventories, second suppliers and local sources for physical production and back-up liquidity lines and balance sheet reserves for financial operations.

Then came the Black Bat of 2020 (or whatever) with its toxic economic contagion. Racing with virtually lightening speed through an infinitely complex and deeply integrated global supply chain anchored in the Red Ponzi, the breakdown of economic activity is already proving that the central banks are not omnipotent after all.

Just as they cannot print antibodies to stop the coronavirus disease, they can’t print raw materials, intermediates, components and sub-assembly to restart broken supply chains. Super-QE wouldn’t do it; double digit subzero rates wouldn’t help; and openmouth forward guidance would only call to mind King Canute shouting at the incoming sea.

It is too early to tell, of course, as to whether the Covid-19 is the Big Bang or if it will be soon wrestled to ground by public health authorities around the planet, thereby eventually relieving the global supply chains of quarantined workers, grounded planes, ships and trains, depleted inventories and paralyzed business decision processes.

…click on the above link to read the rest of the article…

Understanding The Keys To Power

Understanding The Keys To Power

Will be a survival requirement for the coming decade

The past decade was undoubtedly shaped by the policy adopted by the global central banking cartel to flood the world with massive amounts of liquidity (over $15 trillion) to “rescue” markets following the Great Financial Crisis.

It’s becoming increasingly clear who benefitted most from this: the ultra-rich

US wealth gap

As $trillions flowed into financial assets pushing them higher every year throughout the twenty-teens, those who owned those assets — disproportionately the very rich — saw their wealth soar.

We’re now at the point where the richest 1% owns nearly half of the world’s assets, while the bottom 60% have (often much) less than $10,000 to their name:

Global Wealth Pyramid

How has the distribution of wealth become this distorted?

Distribution of family wealth

The harsh simple truth is that those who run the system manipulate it to their benefit.

This is true in both government and industry. Those in power do ‘whatever it takes’ to remain in power and enjoy the fruits of their advantage. Any sort of social ‘duty’ is secondary (at best), and will be sacrificed if necessary.

Perhaps one of the best analyses and explanations of this is put forth by the book The Dictator’s Handbook, by Bruce Bueno de Mesquita and Alastair Smith. For politicians and CEOs alike, maintaining control of the “keys to power” — those who support and enable your rule — is essential.

This is why we’ve ended up with the bastardized crony form of capitalism now in place. Those running the system work hard to reward/punish anyone who aids/threatens their power base.

Like it or not, this is the world in which we live. And it’s critical to understand its nature if we want to avoid becoming unwitting serfs to it.

The most important tenets to be aware of are laid out very effectively in this short video called The Rules For Rulers, created under the supervision of Bueno de Mesquita and Smith:

…click on the above link to read the rest of the article…

My Speech in the European Parliament on the Coming Economic Collapse

Zero percent interest rates have created the largest bubble in human history, when it bursts it will be worse than 1929.

How The Elite Dominate The World – Part 2: 99.9% Of The Global Population Lives In A Country With A Central Bank

How The Elite Dominate The World – Part 2: 99.9% Of The Global Population Lives In A Country With A Central Bank

Even though the nations of the world are very deeply divided on almost everything else, somehow virtually all of them have been convinced that central banking is the way to go.  Today, less than 0.1% of the population of the world lives in a country that does not have a central bank.  Do you think that there is any possible way that this is a coincidence?  And it is also not a coincidence that we are now facing the greatest debt bubble in the history of the world.  In Part I of this series, I discussed the fact that total global debt has reached 217 trillion dollars.  Once you understand that central banks are designed to create endless debt, and once you understand that 99.9% of the global population lives in a country that has a central bank, then it finally makes sense why we have accumulated so much debt.  The elite of the world use debt as a tool of enslavement, and central banking has allowed them to literally enslave the entire planet.

Some of you may not be familiar with how a “central bank” differs from a normal bank.  The following definition of a “central bank” comes from Wikipedia

A central bank, reserve bank, or monetary authority is an institution that manages a state’s currency, money supply, and interest rates. Central banks also usually oversee the commercial banking system of their respective countries. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base in the state, and usually also prints the national currency,[1] which usually serves as the state’s legal tender.

 

…click on the above link to read the rest of the article…

Great Causes, a Sea of Debt and the 2017 Recession

NORMANDY, FRANCE – We continue our work with the bomb squad. Myth disposal is dangerous work: People love their myths more than they love life itself. They may kill for money. But they die for their religions, their governments, their clans… and their ideas.

voltaireFamous French hippie and author Voltaire. He wears the same sardonic grin in every painting, whether he’s depicted at a young or an old age, doesn’t matter. His real name was François-Marie Arouet; he adopted the pen name Voltaire (one of 178 different ones he used) after spending 11 months incarcerated in a windowless cell in the Bastille, following the publication of a satirical verse in which he insinuated that the French regent practiced incest with his own daughter. Said regent was the infamous Duc d’Orleans, who shortly thereafter conspired with John Law to utterly ruin the country’s currency and economy in an early central banking experiment. Voltaire’s decision to insult him in advance reveals his excellent foresight and character judgment. The aristocracy was never sure whether it should fear Voltaire for his anti-authoritarian streak, or love him for his wit.

Some people think that even an idea as abstract as “freedom of speech” is worth dying for. It was Voltaire who said: “I disapprove of what you say, but I will defend to the death your right to say it.

Most people jump onboard the train of a Great Cause with enthusiasm and conviction. But many have the good sense to hop off quietly before their lives are in real danger. We suspect that Mr. Voltaire would have done the same.

That’s why the deadliest myths are those that you can ride along with at no personal risk. Foreign wars, for example, are always a favorite.

…click on the above link to read the rest of the article…

You Will Be Poor

You Will Be Poor

valuewalk.com

There has been a progression through each iteration of monetary theft. A trial balloon launches, usually from academia, which proposes an “innovation” contrary to reigning practice and orthodoxy. A curmudgeonly minority reject it; the majority, securing their places on the intellectual fashion forefront, excoriate the old and after a suitable time for faux consideration and discussion, embrace the new.

The public, insufficiently appreciative of the arcane language, abstruse reasoning, and self-evident erudition and brilliance of the experts, sometimes presents an obstacle. It was hostile towards the US’s first foray into monetary theft: central banking. The anti-central bank contingent won battles for 137 years, but lost the war in 1913. J.P. Morgan and cronies laid the intellectual groundwork: conferences, scholarly papers, legislative proposals, and a Greek chorus of the day’s one-percenters singing at the top of their lungs that America needed to join the civilized world and establish its own central bank.

If you understand the main purpose of central banks, then notwithstanding obfuscatory “Fedspeak,” endless media drivel, and academics’ Greek-letter-laden equations, you know all you need to know about these larcenous institutions. They exist to make it easier for governments to steal, and everything else is window dressing. Gold is finite and requires real resources to find, mine, and mint; central banks’ fiat debt can be produced in infinite quantities at virtually zero cost and exchanged for the government’s fiat debt.

Substitute central bank “notes” for gold and the resources available to the government expand dramatically. It can, in conjunction with the central bank, conjure its own money. Couple a central bank with 1913’s other “innovation”—the income tax—and lovers of government had the wherewithal for their fondest dreams, one of which was American empire. World War I, the US’s first involvement in Europe’s wars, followed close after 1913’s depredations, notwithstanding President Wilson’s vow to stay out in his 1916 reelection campaign.

…click on the above link to read the rest of the article…

It Won’t Be Long Now—-The End Game Of Central Banking Is Nigh

It Won’t Be Long Now—-The End Game Of Central Banking Is Nigh

My new book will be published next Tuesday. Preorders for the e-Book version will be available in this space beginning later this week.

As I previously indicated, the book is an exploration of how 30 years of Bubble Finance policies at the Fed, feckless interventions abroad and mushrooming Big government and debt at home have brought America to its current ruinous condition.

In this context, it delves into the good and bad of the Trump campaign and platform, while, to use a spoiler alert, praising it with faint damn!

As Contra Corner readers recognize the only consistent way forward for America at this late stage of the game is a return to free markets, fiscal rectitude, sound money, constitutional liberty, non-intervention abroad, minimalist government at home and decentralized political rule.

Unfortunately, that is not about to happen any time soon—–even if by some miracle Donald Trump is elected President.

But what the book does claim is that the tide is turning against the failed Wall Street/Washington bipartisan consensus. I call this insurrection the “revolt of the rubes” in Flyover America.

This uprising against the rule of the financial and political elites has counterparts abroad among those who voted for Brexit in the UK, against Merkel in the recent German elections in her home state, and among the growing tide of anti-Brussels sentiment reflected in polls throughout the EC.

Needless to say, the political upheaval now underway is largely an inchoate reaction to the policy failures and arrogant pretensions of the establishment rulers. Like Donald Trump himself, it does not reflect a coherent programmatic alternative.

But my contention is that liberation from our current ruinous policy regime has to start somewhere—and that’s why the Trump candidacy is so important. He represents a raw insurgency of attack, derision, impertinence and repudiation.

…click on the above link to read the rest of the article…

Rationalizing ‘Rational’

Walter W. Heller was said to have been an “educator of Presidents.” As an economist and Presidential advisor in the inner circles of DC, Heller worked with more candidates and officeholders than perhaps any other man. As he himself described, his influence went all the way back to Adlai Stevenson and kept on through Kennedy, Johnson, Carter, and Mondale. To his mind, he takes credit for turning Presidents into thorough Keynesians starting with JFK in January 1963 and the tax cut “stimulus” that Heller claims was “born on my desk.”

As an economist and advisor, Heller seems to have spent a lot of time about the 1960’s and almost none describing the 1970’s. Perhaps his greatest contribution to that decade was a quote attributed to him describing economics. “An economist is a man who, when he finds something works in practice, wonders if it works in theory.”

Among the most pernicious of these theories to have been backward applied in exactly that manner is “rational” expectations theory. This was developed in the 1980’s to try to explain the disaster of the 1970’s in terms that would save econometrics. Thus, it is applied in great detail and mathematics to “inflation” and is often discussed only in that context. Among the most influential to have used rational expectations theory was John Taylor as the basis for the Taylor “rule.”

In a 2007 speech, then-Federal Reserve Chairman Ben Bernanke described the updated expectations framework as it at that time related to inflation and gradualism in monetary policy (into the onrushing storm).

…click on the above link to read the rest of the article…

Donald Trump Is Right – Here Are 100 Reasons Why We Need To Audit The Federal Reserve

Donald Trump Is Right – Here Are 100 Reasons Why We Need To Audit The Federal Reserve

Donald Trump - Photo by Marc NozellWhen one of our major politicians gets something exactly right, we should applaud them for it.  In this case, Donald Trump’s call to audit the Federal Reserve is dead on correct.  Most Americans don’t realize this, but the Federal Reserve has far more power over the economy than anyone else does – including Barack Obama.  Financial markets all over the planet gyrate wildly at the smallest comment from Fed officials, and virtually every boom and bust cycle over the past 100 years can be traced directly back to specific decisions made by the Federal Reserve.  We get all excited about what various presidential candidates say that they “will do for the economy”, but in the end it is the Fed that is holding all of the cards.  The funny thing is that the Federal Reserve is not even part of the federal government.  It is an independent private central bank that was designed by very powerful Wall Street interests a little over 100 years ago.  It is at the heart of the debt-based financial system which is eating away at America like cancer, and it has no direct accountability to the American people whatsoever.

The Fed has been around for so long that most people assume that we need it.

But the truth is that we don’t actually need the Federal Reserve.  In fact, the greatest period of economic growth in United States history happened during the decades before the Federal Reserve was created.

A little over 100 years ago, very powerful forces on Wall Street successfully pushed for the creation of an immensely powerful central bank, and since that time the value of the U.S. dollar has fallen by about 98 percent and our national debt has gotten more than 5000 times larger.

…click on the above link to read the rest of the article…

Silver Linings: Keynesian Central Banking Is Heading For A Massive Repudiation

Silver Linings: Keynesian Central Banking Is Heading For A Massive Repudiation

This whole consumer inflation targeting gambit, of course, is an inherently preposterous notion because there is not a scrap of evidence that 2% consumer inflation is better for rising living standards and societal wealth gains than is 0.2%. And there is much history and economic logic that points in exactly the opposite direction.

Between 1870 and 1913 in the United States, for example, real national income grew at 3.5% per year——the highest gain for any 43 year period in history. Yet the average inflation rate during that long period of capitalist prosperity was less than 0.0%. That was real “lowflation”, and it was a blessing for the average worker, not a scourge.

But this week the BLS itself let out a screaming, never mind! The core CPI for the 12 months ended in January rose by 2.21% and that’s actually a tad higher than the 1.98% annual average since the year 2000.

Please forgive the spurious accuracy of reporting the BLS’ noise-ridden, dubiously constructed CPI to the second decimal point, but it’s meant to underscore a crucial truth.  Namely, there ain’t no inflation deficiency problem and never has been!

The whole 2% inflation mantra is just a smokescreen to justify the massive daily intrusion in financial markets by a power-obsessed claque of monetary central planners. They just made it up and then rode it to ever increasing dominance over the financial system—-even though as recently as 15 years ago the 2% inflation theory was unknown outside a small circle of neo-Keynesian academic scribblers led by Ben Bernanke.

…click on the above link to read the rest of the article…

Russell Napier Explains How The Decline Of The Yuan Destroys Belief In Central Banking

Russell Napier Explains How The Decline Of The Yuan Destroys Belief In Central Banking 

It’s Not a Pet, It’s a Falcon: How the decline of the RMB destroys belief in central banking and a successful reflation
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;

      – The Second Coming- W.B. Yeats

First catch your falcon, as the formidable Mrs Beeton might have said if she was in need of a method of catching her main course (see Mrs Beeton’s Book of Household Management 1861- ‘Recipe for Jugged Hare’).

Having caught your wild falcon, you can now begin the training process. You are attempting to impose your will upon a creature that, in its wild state, catches, kills and devours other birds. This is creative destruction in its rawest form as those acts of savagery provide the fuel to keep our falcon flying. Taming such wild forces is not easy, whether they be birds of prey or the desires, wishes, greed and fear of millions of people determining prices through their supply and also their demand.

Let’s get some advice from the field of falconry for our central bankers, and the other handmaidens of state control, as they seek to impose their wishes on the will and acts of millions-

‘Falconry is a great sport, but there is a lot of time involved. You will want to have enough time to train your bird. If you don’t have the time, or the willingness, then you might as well not do it at all. If you are one of those people who is not patient, falconry may not be for you. You should not take up falconry if you want the falcon as a pet, or something to show off.

…click on the above link to read the rest of the article…

Twenty-First-Century Fascism

Twenty-First-Century Fascism

Globalization of trade and central banking has propelled private corporations to positions of power and control never before seen in human history. Under advanced capitalism, the structural demands for a return on investment require an unending expansion of centralized capital in the hands of fewer and fewer people. The financial center of global capitalism is so highly concentrated that less than a few thousand people dominate and control $100 trillion of wealth.

The few thousand people controlling global capital amounts to less than 0.0001 percent of the world’s population. They are the transnational capitalist class (TCC), who, as the capitalist elite of the world, dominate nation-states through international trade agreements and transnational state organizations such as the World Bank, the Bank for International Settlements, and the International Monetary Fund.

The TCC communicates their policy requirements through global networks such as the G-7 and G-20, and various nongovernmental policy organizations such as the World Economic Forum, the Trilateral Commission, and the Bilderberger Group. The TCC represents the interests of hundreds of thousands of millionaires and billionaires who comprise the richest people in the top 1 percent of the world’s wealth hierarchy.

The TCC are keenly aware of both their elite status and their increasing vulnerabilities to democracy movements and to unrest from below. The military empire dominated by the US and the North Atlantic Treaty Organization (NATO) serves to protect TCC investments around the world. Wars, regime changes, and occupations performed in service of empire support investors’ access to natural resources and their speculative advantages in the market place.

When the empire is slow to perform or faced with political resistance, private security firms and private military companies (PMC) increasingly fulfill the TCC’s demands for the protections of their assets.

…click on the above link to read the rest of the article…

 

Guess How Many Nations In The World Do Not Have A Central Bank?

Guess How Many Nations In The World Do Not Have A Central Bank?

OctopusCentral banking has truly taken over the entire planet.  At this point, the only major nation on the globe that does not have a central bank is North Korea.  Yes, there are some small island countries such as the Federated States of Micronesia that do not have a central bank, but even if you count them, more than 99.9% of the population of the world still lives in a country that has a central bank.  So how has this happened?  How have we gotten the entire planet to agree that central banking is the best system?  Did the people of the world willingly choose this?  Of course not.  To my knowledge, there has never been a single vote where the people of a nation have willingly chosen to establish a central bank.  Instead, what has happened is that central banks have been imposed on all of us.  All over the world, people have been told that monetary issues are “too important” to be subject to politics, and that the only solution is to have a group of unelected, unaccountable bankers control those things for us.

So precisely what does a central bank do?

You would be surprised at how few people can actually answer that question accurately.  The following is how Wikipedia describes what a central bank does…

A central bank, reserve bank, or monetary authority is an institution that manages a state’s currency, money supply, and interest rates. Central banks also usually oversee the commercial banking system of their respective countries. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base in the state, and usually also prints the national currency, which usually serves as the state’s legal tender. Examples include the European Central Bank (ECB), the Bank of England, the Federal Reserve of the United States and the People’s Bank of China.

…click on the above link to read the rest of the article…

 

 

 

Understanding True Credit and False Credit

Understanding True Credit and False Credit

There are two kinds of credit: that which would be offered in a market economy with sound money and banking (true credit), and that which is made possible only through a system of central banking, artificially low interest rates, and fractional reserves (false credit).

Banks cannot expand true credit as such. All that they can do in reality is to facilitate the transfer of a given pool of savings from savers (i.e., those lending to the bank) to borrowers.

Consider the case of a baker who bakes ten loaves of bread. Out of his stock of real wealth (ten loaves of bread), the baker consumes two loaves and saves eight.

He lends his eight remaining loaves to the shoemaker in return for a pair of shoes in one-week’s time.

Note that credit here is the transfer of ”real stuff,” i.e., eight saved loaves of bread from the baker to the shoemaker in exchange for a future pair of shoes.

Also, observe that the amount of real savings determines the amount of available credit. If the baker had saved only four loaves of bread, the amount of credit would have only been four loaves instead of eight.

Note that the saved loaves of bread provide support to the shoemaker. That is, the bread sustains the shoemaker while he is busy making shoes.

This means that credit, by sustaining the shoemaker, gives rise to the production of shoes and therefore to the formation of more real wealth. This is the path to real economic growth.

– See more at: http://www.cobdencentre.org/2015/03/understanding-true-credit-and-false-credit/#sthash.cG5TkgeW.dpuf

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