Category Archives: banking

The Socialism of the Federal Reserve, by Jacob G. Hornberger

The Federal Reserve is the government’s main monetary super-planner. Whatever such an arrangement is called, it is not capitalism. From Jacob G. Hornberger at fff.org:

The Federal Reserve is the federal entity charged with determining the quantity of money in the American economy. To boost the economy, it expands the money supply. If the economy gets too “overheated,” it slows the rate of increase.

In other words, the Fed is the government’s monetary central planner. It plans the monetary affairs of hundreds of millions of people through monetary manipulation.

Central planning is a core principle of socialism. Central planning rejects the concept of economic liberty and free markets, which rely on the absence of government interference. Instead, it relies on a board of government officials who make economic decisions for hundreds of thousands or millions of people in a top-down, command-and-control manner.

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Globalist-Endorsed War on Cash May Be China’s Next Terrifying Weapon, by Tho Bishop

The Chinese government will resort to every measure available in the repressive bag of tricks, including the war on cash. From Tho Bishop at mises.org:

Recent protests in Hong Kong, along with the resulting fall out from international corporations questioned for their relationships with mainland China, has placed a renewed focus on the authoritarianism of the Chinese Communist Party. This has led to several articles identifying ways in which Western countries have learned from the CCP, including Europe’s growing embrace of web censorship and growing interest in the social credit system rolled out in 2018. Given that it wasn’t that long ago that it was common to see Western leaders and neoliberal commentators openly envy aspects of the Chinese political system, these concerns are certainly worth exploring. What should be of equal interest, however, is the ways China may be learning from the West.

The next arm weapon the CCP may plan to wield against its citizens is a War on Cash.

As Joseph Salerno, among others, has noted for years now, a successful War on Cash would represent a new escalation in government’s long history of weaponizing currency against the population. Moving far beyond the clipping of coins as a means of stealth tax collection, the purpose of a War on Cash is not simply to strengthen a government’s grasp on the wealth of its citizens — but the move becomes a highly effective means of tracking any who find themselves in the crosshairs of the state.

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Political and Social Conflict Is Accelerating: Here’s Why, by Charles Hugh Smith

The old fiat-debt black magic isn’t working too well anymore. From Charles Hugh Smith at oftwominds.com:

All the status quo “fixes” only hasten the collapse of the status quo.

That economic, social and political conflict is accelerating is self-evident.What’s open to debate are the core drivers of conflict / disorder /unraveling.

Here’s the core self-reinforcing dynamic in my view:

1. The status quo elites can no longer mask soaring costs of essentials nor soaring wealth / income inequality between the top .01% (Oligarchs), the top 9.99% who enrich the Oligarchs with their discretionary spending and technocratic/managerial labor, and the bottom 90% who are rapidly losing ground on all fronts: economic, social and political.

2. The elites’ “fixes” to the social / political conflicts unleashed by the rigged financial system and winner take most economic order are politically expedient, meaning they don’t actually address the sources of conflict, they merely paper them over with PR as a means of preserving the elites’ wealth and power.

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The Feds Keep Inflating, But Someone Has to Pay America’s Debts, by Bill Bonner

The tooth fairy is going to pay the US government’s $23 trillion and counting debt. From Bill Bonner at bonnerandpartners.com:

YOUGHAL, IRELAND – Today, amid all the noise and distractions of Donald J. Trump’s impeachment, we return to the slo-mo financial calamity inching towards the U.S.

First, some context. Here’s what is happening:

The two main factions of the Deep State – Republicans and Democrats – are fighting for control of the government. The headlines tell us about every bomb thrown and missile launched in the impeachment proceedings.

Government is essentially a win-lose enterprise. Its internal battles – even when disguised as solemn rituals – are mostly to determine who gets ripped off by whom.

Most likely, the present drama will end in a draw. Mr. Trump will be impeached by the Democratic-controlled House… but not heaved over the side by the Republican-controlled Senate. And after the impeachment battle is over, the war will go on; it will simply shift to a new front – the 2020 elections.

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Is the Fed Secretly Bailing Out a Major Bank? by MN Gordon

So far there hasn’t been a good explanation for the Federal Reserve’s massive injections of liquidity. Bailing out a major bank is certainly a plausible hypothesis. From MN Gordon at acting-man.com:

Prettifying Toxic Waste

The promise of something for nothing is always an enticing proposition. Who doesn’t want roses without thorns, rainbows without rain, and salvation without repentance?  So, too, who doesn’t want a few extra basis points of yield above the 10-year Treasury note at no added risk?

The yield-chasing hamster wheel… [PT]

Thus, smart fellows go after it; pursuing financial innovation with unyielding devotion.  The underlying philosophy, as we understand it, is that if risk is spread thin enough it magically disappears. In other words, the solution to pollution is dilution.

With this objective, new financial products are fabricated into existence. The risk free rewards of several extra basis points are then packaged up into debt instruments and sold off to pension funds and institutional investors. The search for yield demands it.

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The Builders, by Robert Gore

Where liberty is, there is my country.

Benjamin Franklin

The builders will be in the driver’s seat.

Debt is any enemy of government’s perfect ally. The more a government borrows the more it’s weakened. The consequences of debt, required repayment of principal, and compounding interest are inexorable, forestalled by central bank and government machinations but never prevented. The longer they forestall the more severe the consequences. Central banks and governments have fostered the world’s greatest debt bubble and promoted negative interest rates to facilitate it. An unprecedented tsunami of debt has creditors paying borrowers to lend them money. This weird and anomalous combination, impossible in a world without central banking, portends global disaster.

The enemies of government have only to wait. When the reckoning arrives, governments will find they no longer have the means to wage war or control their populations (see “The Illusion of Control,” Part 1 and Part 2, Robert Gore, SLL ). Their demands on their nations’ productive taxpayers and their depreciation of currencies have stripped their countries of their wealth and ability to produce. Be it by creditors, revolutionaries, or invaders, or some combination of the three, these governments will be toppled and replaced by something new. It’s a story as old as human history.

Amazon Paperback

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Global Debt To Hit All Time High $255 Trillion, 330% Of World GDP, by Tyler Durden

$255 trillion is just the stated, nominal debt, and doesn’t include unfunded liabilities, contingent liabilities, or derivatives. From Tyler Durden at zerohedge.com:

There are three certainties in life: death, taxes and that global debt will keep rising in perpetuity.

Addressing the third, yesterday the Institute of International Finance reported that global debt has now hit $250 trillion and is expected to hit a record $255 trillion at the end of 2019, up $12 trillion from $243 trillion at the end of 2018, and nearly $32,500 for each of the 7.7 billion people on planet.

“With few signs of slowdown in the pace of debt accumulation, we estimate that global debt will surpass $255 trillion this year,” the IIF said in the report.

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