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Of Course The Fed Is Crazy

Pieter Bruegel the Elder The Triumph of Death 1562

Finally financial ‘markets’ go through a substantial dip, which Steve Mnuchin claims is just temporary and Donald Trump says is caused by the fact that the Fed is ‘loco’. Mnuchin may well be right, but it won’t be because he knows something you don’t.

And Trump is certainly right, but in reality the Fed has been loco for many years, so why be surprised if it acts crazy now? The reason Mnuchin and a million other ‘experts’ may be right without realizing it is that the Fed has been crazy enough to kill the financial markets.

Or at least killed what made the markets functional, and beneficial to society. And that may well be exactly what Jay Powell is trying to repair, but he may well not be aware of that either. Looked at from a ‘benign’ angle, Powell is perhaps raising rates so people can regain insight into what they’re buying.

The pre-Powell Fed pushed up asset prices (don’t let’s say ‘values’) to such heights nobody has any insight anymore into what anything is truly worth. And in what was formerly known as the financial markets that was not important, because what were formerly known as investors were making heaps of money regardless.

Surely they must all have known that this wouldn’t continue?! That it’s just a matter of timing, of knowing when it would end? Oh, but that’s not really possible, is it, without the very price discovery process the Fed successfully strangulated?

Still, there must also be tons of people left thinking the Fed can kick that can six times to the moon and back, or sixty. If only because they’ve never bothered to think about price discovery, and what role it plays in the very ‘markets’ they volunteer to spend their money in.

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

The Deep History of Taxation May Surprise You

The Deep History of Taxation May Surprise You

For the majority of history, the idea of sustained taxation in peacetime was anathema. So what happened?

Two things in life are certain: death and taxes. So goes the saying. And yet despite that, the idea of the necessity of taxation is largely undisputed, “consent” to its use is, historically seen, new. How did it come about that tax evasion, first an act of protection against the abuse of government, is now frowned upon? Why is there such moral indignation, and why is tax avoidance such a big deal today when it was widespread centuries ago?

Think of the procedure of taxation and then imagine you’d have to explain it to a person who has never heard of it before. That is pretty much the history of taxation in a nutshell. Early taxes in Ancient Rome and Greece were not only very low and indirect (for instance, on goods), they were only levied when there was a time of crisis. European countries which were large traders, such as the Netherlands or England, gathered funds for the expenses of the state through tariffs. While these were protectionist and surely not good news for the farmers on each side, at least they did not claim ownership to a part of the people’s income, as they did in France.

Historically Speaking

The crown was confronted with such a large opposition to the tith, that King Henry suspended it and promised to never levy such a tax again.

During the Middle Ages, the King’s finances and those of private individuals were merged: there was no distinction between a public budget and private budget. Consecutive monarchs instituted taxes according to the expenses they deemed necessary at that moment in time.

…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…

Hate Taxes? You Certainly Are Not Alone…

Hate Taxes? You Certainly Are Not Alone…

Taxes - Public DomainAt this time of the year, millions of Americans are rushing to file their taxes at the last minute, and we are once again reminded just how nightmarish our system of taxation has become.  I studied tax law when I was in law school, and it is one of the most mind-numbing areas of study that you could possibly imagine.  At this point, the U.S. tax code is somewhere around 4 million words long, which is more than four times longer than all of William Shakespeare’s works put together.  And even if you could somehow read the entire tax code, it is constantly changing, and so those that prepare taxes for a living are constantly relearning the rules.  It has been said that Americans spend more than 6 billion hours preparing their taxes each year, and Politifact has rated this claim as true.  We have a system that is as ridiculous as it is absurd, and the truth is that we don’t even need it.  In fact, the greatest period of economic growth in all of U.S. history was when there was no income tax at all.  Why anyone would want to perpetuate this tortuous system is beyond me, and yet we keep sending politicians to Washington D.C. that just keep making this system even more complicated and even more burdensome.

If you hate taxes, you are far from alone.  According to NBC News, here are some of the things that Americans would rather do than pay taxes…

Six percent would rather sell a kidney, eight percent would rather name their first-born “Taxes,” and 11 percent would rather spend three years cleaning the bathrooms at noro-torious Chipotle.

Of course our system was never intended to be like this anyway.  Our founders hated taxes, and they fought a very bitter war to escape the yoke of oppressive taxation.  During his very first inaugural address, Thomas Jefferson clearly expressed what he thought about taxes…

A wise and frugal government… shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.

Why couldn’t we have listened to him?

When the federal income tax was originally introduced a little more than a century

States Consider Increasing Taxes for the Poor and Cutting Them for the Affluent

States Consider Increasing Taxes for the Poor and Cutting Them for the Affluent

A number of Republican-led states are considering tax changes that in many cases would have the effect of cutting taxes on the rich and raising them on the poor.

Conservatives are known for hating taxes but particularly hate income taxes, which they say have a greater dampening effect on growth. Of the 10 or so Republican governors who have proposed tax increases, nearly all have called for increases in consumption taxes, which hit the poor and middle class harder than the rich.

Favorite targets for the new taxes include gas, e-cigarettes, and goods and services in general. Gov. Paul R. LePage of Maine, who wants to start taxing movie tickets and haircuts, is also proposing a tax break for the lowest-income families to relieve some of the pressure.

At the same time, some of those governors — most notably Mr. LePage, Nikki R. Haley of South Carolina and John R. Kasich of Ohio — have proposed significant cuts to their state income tax. They say that tax policies that encourage business growth provide more jobs and economic benefits for everyone.

new report suggests that these states could be creating financial problems down the road. The strategy of shifting from income taxes to consumption taxes has caused huge budget shortfalls in Kansas and, more recently, North Carolina, which announced a budget shortfall of nearly half a billion dollars.

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

 

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