Category Archives: Capitalism

From American Dream to American Nightmare, by Jim Quinn

How did America go from the land of opportunity to the land of crybabies, grifters, rampant corruption, fake money, and UBI? From Jim Quinn at theburningplatform.com:

For most of the ninety years since James Truslow Adams coined the term American Dream, most Americans still believed the fairy tale of the American Dream, that no matter how humble your beginnings, everyone had a fair chance to become a success in America, based upon your individual talent, intelligence, work ethic and a society that rewarded those who exceled. Sadly, that dream is no longer achievable for most Americans. Our society has devolved into an oligarchy since The Epic of America was published in 1931, where a powerful few rule over a willfully ignorant many through propaganda, mistruth, fear, and an iron fist.

Amazon.com: The Epic of America eBook: Adams, James Truslow: Kindle Store

“But there has been also the American dream, that dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to his ability or achievement. It is a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it. It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position…

The American dream, that has lured tens of millions of all nations to our shores in the past century has not been a dream of merely material plenty, though that has doubtlessly counted heavily. It has been much more than that. It has been a dream of being able to grow to fullest development as man and woman, unhampered by the barriers which had slowly been erected in the older civilizations, unrepressed by social orders which had developed for the benefit of classes rather than for the simple human being of any and every class.” – James Truslow Adams – Epic of America – 1931

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Bus Driver Economics, by Jeff Thomas

To turn one job into two jobs, split it in half and have each worker work half-time. Welcome to socialist economics. From Jeff Thomas at internationalman.com:

Bus Driver Economics
 

Economics should not be an especially difficult subject to understand. In essence, it’s simply the study of how money functions. However, academics, theoreticians, politicians, and financial leaders all stand to benefit if they can manage to complicate the basic principles and muddy the waters of economic comprehension.

No individual has been manifestly more successful at this than the economist John Maynard Keynes. Educated at Cambridge, a bastion of Socialist thinking, Mister Keynes famously published The General Theory of Employment, Interest and Money in 1936, forever changing the world’s perception of economics.

This was quite an amazing feat, especially as Mister Keynes’s goal was not to explain economics, as had traditionally been the object of the subject; his goal was to distort the study of economics—to confuse economic principles in order to promote socialist concepts.

Socialism had, since its beginnings, been unpopular with many people, as it clearly did not work economically. So, in order to make socialism more broadly acceptable, Mister Keynes, in his book, suggested essentially that, although 2 + 2 = 4, with socialism, 2 + 2 could somehow equal 5.

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Bulls, Bears, and Beyond: In Depth with James Grant, by Kevin Duffy

Since 1983, James Grant has published an outstanding newsletter (Grant’s Interest Rate Observer), focused on economics and finance. Reflecting its value, an annual subscription of 24 issues will set you back $1295. This interview is a rare opportunity to hear what Grant has to say for free. From Kevin Duffy at mises.org:

James Grant is editor of Grant’s Interest Rate Observer, which he founded in 1983. He is the author of nine books, including Money of the Mind, The Trouble with Prosperity, John Adams: Party of One, The Forgotten Depression, and more recently Bagehot: The Life and Times of the Greatest Victorian. In 2015 Grant received the prestigious Gerald Loeb Lifetime Achievement Award for excellence in business journalism. James Grant is an associated scholar of the Mises Institute.

Kevin Duffy is principal of Bearing Asset Management, which he cofounded in 2002. The firm manages the Bearing Core Fund, a contrarian, macro-themed hedge fund with a flexible mandate. He earned a BS in civil engineering from Missouri University of Science and Technology and has a passion for financial history, Austrian economics, and pithy quotes. He also publishes a bimonthly investment letter called the Coffee Can Portfolio. Duffy attended Mises University in 1990 after seeing Lew Rockwell on CNN’s Crossfire in 1989.


Kevin Duffy interviewed James Grant for his newsletter Coffee Can Portfolio. It is reprinted with permission.

KEVIN DUFFY: 2020 has been part dystopian fiction, part tulip mania. How do we reconcile the two?

JAMES GRANT: I’m not sure there’s much distinction. To me, the current form of dystopia is the bubble form, so I think this is the year of the dystopian bubble.

KD: There has been a worship of authorities. For the past thirty-seven years you’ve focused mainly on the Fed, but this year we’ve seen a reverence for medical authorities. Who has done more damage?

JG: The medical authorities remind me of the economic authorities. Both pretend to draw a bead on the future. Let’s compare them both to the meteorological authorities. The National Weather Service spends over a billion dollars a year and takes tens of millions, if not billions, of discrete observations of wind, weather, tide, temperature, what have you. But notice the five- and ten-day forecasts on your trusty iPhone are ever changing. This is the weather. Temperature gradients don’t have feelings, they don’t get jealous of the millionaire next door, they don’t watch CNBC, yet our forecasting ability goes out, maximum, ten days. Even so, the economists think nothing of calling next year’s GDP.

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Making it “Easier” by Eric Peters

There’s a special class of people who feel that whatever they want for the rest of us is what the rest of us should get, at the point of a gun if necessary. From Eric Peters at ericpetersautos.com:

The best way to force something onto people who don’t want it is to force what they do want off the market.

Examples of this include the forced retirement of the best automotive refrigerant ever developed – Freon – which cools faster and deeper than the replacements that were forced onto the market by forcing Freon off the market – in the name of the “ozone hole” but in actuality because of expiring patents on Freon that meant it would be much cheaper to make it and so cheaper to buy it than the “ozone-friendly” replacements forced onto the market.

D’Lynda Fischer: Portrait of a political psychopath

Another example is gasoline – which has been largely forced off the market in favor of adulterated gasoline. What most Americans are forced to pump into their tanks is actually 10 percent ethanol (ethyl alcohol) and only 90 percent gasoline.

Soon, there may be no gasoline at all.

Not because people don’t want it but rather because they won’t be able to buy it. Because of new laws proliferating  forbidding the selling of it.

As in Petaluma, California – where the city council just voted to prohibit new gas stations from being built and also that existing gas stations may not install new pumps. “The goal here is to move away from fossil fuels and to make it as easy as possible to do that,” says one of the legislation’s main backers, D’Lynda Fischer.

She means her goal; the goal of those forcing their views upon the people of Petaluma. It will be made “easier” for them to not buy gas, in order to make it harder for them to not drive cars that burn gasoline.

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The future of money is gold, by Alasdair Macleod

If the future of money is gold, the future may be golden. From Alasdair Macleod at goldmoney.com:

This article explains why the successor money to failing fiat is gold, not cryptocurrencies. Cryptos can only act as stores of value so long as fiat exists. I describe how a world transacting with monetary gold and properly constituted gold substitutes works. It explains how and why unbacked bank credit expansion, which in natural Roman law was ruled to be fraudulent 1,800 years ago, can and should be eliminated in a post-fiat world, thereby ending destructive credit cycles.

Gold exchange standards, which are comprised of gold-backed money administered by the state, worked extremely well when properly implemented, and it is the siren songs of inflationism that are at the root of the current crisis. If the transition from worthless fiat back to gold standards is handled properly, an initial recovery to fully functioning economies need not take more than a year or so.

The pressure on future governments to reject inflationism in favour of free markets and sound money should not be underestimated. It is not rocket science. All we need are politicians in whose interests it is to see the light and have the determination to take their electorates with them. It will require them to hand back to individuals the responsibility for their own actions, enabling the requisite cuts in government responsibilities and expenditures to be made.

That child of fiat money, the welfare state and all the government actions to protect it will have to end, with the exception of the absolute basics.

The politicians to facilitate these changes do exist, though their voices are not heard. But the moment fiat collapses, we have good reason to believe they will re-emerge from under the misguided consensus they had been elected to deliver. It will be in their clear interest to do so, and monetary collapse giving birth to civil disruption can be avoided.

Introduction

While there is a growing consensus that the days of fiat currencies are finally drawing to a close, the debate about their successor is misinformed due to a lack of understanding about the qualities required of money. This growing consensus is still a minority view, triggered by cryptocurrencies and bitcoin in particular, with enthusiasts claiming bitcoin to be the money of tomorrow.

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Doug Casey on Robinhood, Hedge Funds, and Class Warfare

The Federal Reserve has turned financial markets into casinos so we’ll see more “all in” crazy action like we saw with GameStop and Robinhood. From Doug Casey at internationalman.com:

International Man: We seem to be entering a new paradigm in the financial markets. Social media has allowed a large number of small investors to band together and move markets in ways that were previously inconceivable.

What are your thoughts on this and what lies ahead?

Doug Casey: To start with, most of the people on Robinhood are ultra-unsophisticated—mostly unemployed kids living in their mothers’ basements. A lot of the money that the government sent them—the COVID checks—went into the market.

Of course, Robinhood itself is somewhat problematic with its commission-free trading and no minimum trade size. How can a company make money if it doesn’t charge its customers anything? It does so by having cozy arrangements with hedge funds. In essence, you get what you pay for, and if you don’t pay anything, you can expect to be treated like you’re a product, not a customer. I don’t have any problem per se with Robinhood’s business model, but Robinhood’s real customers are probably the hedge funds, not the public.

I don’t have any sympathy for anybody involved in this—hedge funds, the brokers, or the public. In the markets, eventually, everybody gets what they deserve. Still, the fact that some hedge funds have lost billions is front-page news. And the stock running from like $3 before collapsing from $450 to under $50 at the moment means plenty of late-arriving small fry will have been wiped out on the way down.

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Why the New Paradigm Was Inevitable, by Jeff Thomas

Great cultures and civilizations start down the path to ruinous downfall when their government’s start taking from the productive to buy the support of their populaces. From Jeff Thomas at internationalman.com:

the New Paradigm
 

Just as people go through a lifespan that consists of different stages, so empires tend to follow a pattern of stages.

They tend to start off slowly, making progress as a result of industriousness, understanding that progress is dependent upon hard work and an entrepreneurial spirit.

This is important to understand, as it’s the one essential in the growth of a nation. No nation becomes an empire through complacency or a lack of productivity. Welfare states do not become empires, although most empires end up as welfare states.

So, if that’s the case, what is the progression? And more importantly, what does this mean, considering the dramatic changes that are now unfolding in much of the world?

Prosperity

As stated, prosperity is created through a strong work ethic and an entrepreneurial spirit throughout a significant portion of the population. This is what brings about wealth creation – a condition in which people invest their time and money in a business enterprise that reaps profit. The profit is then re-invested to expand upon that success.

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The rapidly failing EU, by Alasdair Macleod

Any honest mark-to-market accounting and loan-loss provisions for Europe’s major banks would sink the EU. From Alasdair Macleod at goldmoney.com:

It is not widely realised that the EU concept is on its last legs. The bureaucratic inefficiencies and bad leadership were fully exposed last week over the inability of the EU to distribute vaccines and the attempts to blame everyone else. But a larger problem is hidden in the euro structure, comprised of banking and TARGET2 settlement systems.

This article discusses the precarious financial position of the commercial banks and the gaming of the TARGET2 system by national regulators to hide bad debts. The bad debt situation is now set to deteriorate at a faster pace thanks to the economic consequences of coronavirus lockdowns and is not helped by lack of vaccines, which defers the return to economic normality.

It is no exaggeration to conclude that the failure of its settlement system will bring down the ECB and the national central banks. The ECB will be gone, and NCBs will reform to administer new national currencies — there can be no other outcome.

With the euro failure the European Commission is likely to cede power to national interests, heralding a new era of immense political uncertainty as new currencies and government financing arrangements are devised.

Introduction

At a political level there appears to be frightening levels of ignorance about the economic consequences of punishing Britain for Brexit at a time when the EU’s own economy is teetering on the edge of a financial crisis.

Last week Britain’s remaining Remainers were revealed by the extraordinary behaviour of the European Union to have been little more than tilting at windmills. Without consulting the Irish or the British, the Commission triggered Article 16 of the Trade and Cooperation Agreement, in effect putting a customs border between Ireland and Northern Ireland. This was in direct contravention of earlier promises to respect the Good Friday agreement by not doing so. It was at the EU’s insistence that no border should exist onshore, separating Northern Ireland from the rest of the UK for customs’ purposes.  Despite this breach of an agreement upon which the ink was barely dry, the British government managed to keep its cool and persuade the EU to reconsider and back down.

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Historical lessons in prosperity vs. poverty, by Simon Black

The preconditions for prosperity are few and simple, but they are profound. From Simon Black at sovereignman.com:

As the grandson of Genghis Khan, Kublai Khan had a lot to prove.

So he set his eyes on the biggest prize in the known world at the time: southern China.

Kublai Khan completed his conquest of China in 1279, forging a new empire and creating the Yuan dynasty.

The Mongols were known for their expensive habits— they liked war and women especially. So when the money started to run out, administrators in the Yuan dynasty started printing paper money.

Yuan officials weren’t the first to come up with this idea; the government from the prior Song dynasty had also printed paper money. But there was a huge difference—

Paper currency from the Song dynasty, known as guanzi, was backed by copper, silver, and gold coins.

The Yuan currency, however, was backed by nothing. So whenever the government started to run out of money, they simply printed more.

By 1350, Kublai Khan had been dead for decades. But the Yuan dynasty’s economic overseers were still printing paper money like crazy. And it was causing severe hyperinflation across China.

People’s lives were turned upside down by the government’s fiscal irresponsibility, and rebellions broke out across the country.

By 1368, the Yuan dynasty had completely collapsed, and a destitute peasant farmer-turned-monk named Zhu Yuanzhang rose up to become Emperor and found the new Ming Dynasty.

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The Great Reset, Part IV: “Stakeholder Capitalism” Vs. “Neoliberalism”, by Michael Rectenwald (with links to Parts I-III)

This series is the most comprehensive and detailed analysis of the Great Reset. From Michael Rectenwald at zerohedge.com:

Authored by Michael Rectenwald via The Mises Institute,

Read Part I: Reduced Expectations And Bio-Techno-Feudalism here…

Read Part II: Corporate Socialism here…

Read Part III: Capitalism With Chinese Characteristics here…

Any discussion of “stakeholder capitalism” must begin by noting a paradox: like “neoliberalism,” its nemesis, “stakeholder capitalism” does not exist as such. There is no such economic system as “stakeholder capitalism,” just as there is no such economic system as “neoliberalism.” The two antipathetic twins are imaginary ghosts forever pitted against each other in a seemingly endless and frenzied tussle.

Instead of stakeholder capitalism and neoliberalism, there are authors who write about stakeholder capitalism and neoliberalism and companies that more or less subscribe to the view that companies have obligations to stakeholders in addition to shareholders. But if Klaus Schwab and the World Economic Forum (WEF) have their way, there will be governments that induce, by regulations and the threat of burdensome taxation, companies to subscribe to stakeholder redistribution.

Stakeholders consist of “customers, suppliers, employees, and local communities” in addition to shareholders. But for Klaus Schwab and the WEF, the framework of stakeholder capitalism must be globalized. A stakeholder is anyone or any group that stands to benefit or lose from any corporate behavior—other than competitors, we may presume. Since the primary pretext for the Great Reset is global climate change, anyone in the world can be considered a stakeholder in the corporate governance of any major corporation. And federal partnerships with corporations that do not “serve” their stakeholders, like the Keystone Pipeline project, for example, must be abandoned. Racial “equity,” the promotion of transgender agendas, and other such identity policies and politics, will also be injected into corporate sharing schemes.

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