Category Archives: Economy

The Sisyphean Folly of Printing Press Money, by MN Gordon

Central bankers believe that every economic ill can be cured with their fiat debt instruments, and if the ill isn’t cured, throw more fiat debt at it. From MN Gordon at economicprism.com:

Something remarkable happened on Tuesday.  The Dow Jones Industrial Average (DJIA) broke the 30,000 point barrier for the first time ever.  President Trump commemorated the feat by calling the number “sacred.”

Some Americans were especially grateful as they said their Thanksgiving Day grace.  These generally include wealthy owners of stocks and other financial assets.  Forty years of inflationary monetary policies have elevated their prosperity to holiness.

The remaining Americans, through no fault of their own, missed out on these sanctified blessings.  Perhaps they’ll get some leftover table scraps for Christmas.  These, indeed, are the questions being asked.

Will Washington make this a Merry Christmas for cash strapped Americans?  Will the Treasury send out a second round of $1,200 stimulus checks for the yuletide?  Will Congress be Ebenezer Scrooge or Mr. Fezziwig?

These are important questions as 2020 approaches its twilight.  And this is the season of giving.  After months of rolling lockdowns ordered by state and local governments Americans need relief.  Moreover, they must first receive from Uncle Sam so they can give to their fellow kindreds.

This was a recent finding of a Franklin Templeton-Gallup survey.  Specifically, the survey found that 16 percent of Americans plan to spend more on holiday gifts this year.  But with another $1,200 stimulus check, 22 percent of Americans say they will spend more this holiday season.

Somehow, Christmas spending has become dependent on government stimulus checks.  But, remember, government stimulus is dependent on printing press money.  And printing press money is dependent on the dollar retaining some semblance of value.

Thus, herein lies the sacred folly.  The more that printing press money’s emitted, the more value the dollar loses.  We’ll have more on what this means for you and your wealth in just a moment.  But first some context…

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Global Inflation watch, by Alasdair Macleod

Currency debasement is inflation, and governments and central banks are debasing their currencies with abandon. From Alasdair Macleod at goldmoney.com:

his article posits that fiat currencies are on the path to hyperinflation and looks at the evidence in the prices of financial assets and commodities. So far, gold has notably underperformed, which indicates that the early signals of hyperinflation are confined to the cryptocurrencies, whose participants broadly understand fiat debasement, to equities reflecting the desire not to maintain cash and deposit balances, and in international trade, where commodity prices of all stripes have risen in price.

Given that the early warnings of hyperinflation of money supply are here, the article then looks at the qualities required of a sound money to replace fiat currencies.

Introduction

Figure 1 shows how prices have moved from the Friday before the Fed’s announcement on 23 March that it would go all-in on its support for the US economy with unlimited quantitative easing. It amounted to a commitment to hyperinflate the money supply if needed. Before the Fed cut its funds rate to zero on 16 March nearly all these prices were falling.


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Since late-March every category has seen increases in prices. Sector and specialist analysts will always claim that there are identifiable reasons why prices for an individual category or commodity have risen. But the fact is that with the exception of the dollar and the other fiat currencies listed in the table all prices have risen. This cannot happen without the dollar and these currencies losing purchasing power.

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Saudi Aramco’s Landmark IPO Is Costing The Kingdom Billions, by Simon Watkins

An IPO is supposed to leave you flush with cash, not put you deeper in the hole. From Simon Watkins at oilprice.com:

The initial public offering (IPO) of Saudi Aramco that was heralded by Crown Prince Mohammed bin Salman (MbS) as being a showcase flotation for raising massive new capital for the Kingdom and anchoring a major expansion of its international equities market presence has proven only to put Aramco into a debt spiral and highlighted a myriad of problems in Saudi Arabia to international investors. Now, Aramco is digging itself further into serious debt through bond issuances simply to pay for the huge dividend payments promised by MbS that were absolutely required to persuade anyone to buy into the omni-toxic IPO. At this rate, the debt taken on by Aramco and other Saudi bond offerings to pay for the dividends will be far more than the amount of money raised in the IPO. As a direct result of MbS deciding to go ahead with yet another oil price war at the same time as the COVID-19 pandemic was gathering pace and destroying demand for oil, Aramco’s finances have suffered a massive hit. For the first half of this year, the company saw a 50 percent plunge in net profit and at the beginning of this month, it reported another massive drop in profits of 44.6 percent for the third quarter, falling to SAR44.21 billion (US$11.79 billion) from SAR79.84 billion in the same period last year. On the other side of the balance sheet, though, is the stark fact that because the company’s IPO was so toxic on so many levels that it was shunned by Western investors and had to be off-loaded to buyers who were either bullied or bribed into buying the stock Aramco is left having to pay massive guaranteed dividend payments for the foreseeable future to those shareholders.

This huge guaranteed dividend payment of US$18.75 billion per quarter – US$75 billion for a full year – will have to be paid for through budget cuts over and above the US$15 billion in Aramco’s annual capital spending alluded to by Aramco’s chief executive officer, Amin Nasser, just after the first half profits figures were unveiled. This will take the total down from around US$40 billion to around US$25 billion. Further reports have stated that even this US$25 billion figure is set to be reduced by another US$5 billion, taking the total capital spending in this year from US$25 billion to US$20 billion.

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World Coming Soon From Joe and Kamala: Hooray for the Revolution! by Philip Giraldi

A Biden/Harris presidency will further constrict freedom in the US and around the world. From Philip Giraldi at strategic-culture.org:

There is something quite scary about the way leading Democrats have persistently wrapped their attempts to control the American people in platitudes and self-righteous drivel. Joe Biden and Kamala Harris, who are currently pulling their team together, are no different than the Clintons and Obamas who preceded them and are already on course to establish conformity by diminishing the fundamental rights that have been hitherto enjoyed by the American people.

The current war being waged against the United States and its constitution hinges on the expressed desire to extirpate “white supremacy” aka “white privilege” aka “systemic racism.” It is a convenient campaign slogan as it immediately creates guilt and apprehension in those white people who are foolish enough to believe it. It also is a vague enough term that it becomes possible to wrap a lot of other issues into it, like gun control, destruction of traditional education, reparations and affirmative action, and even de-policing urban areas. As minorities allegedly suffer disproportionately from coronavirus it might even be expanded to include mandatory national lockdowns every time a pandemic appears, as Biden has suggested in the past.

We are already seeing how some crimes are no longer crimes if they are committed by sanctimonious social justice warriors. Prosecutors in a number of states are dismissing charges against rioters because they have “concluded the protesters were exercising their basic civil rights.” It is generally being claimed that prosecutions continue for the “real” crimes of arson, looting and destruction of public property, but at least one liberal California District Attorney will not charge anyone who maintains that he or she was doing what they did to combat racism or feed their families. She calls it considering the “needs” of the looters. The looted shops that will as a result go out of business and whose employees become unemployed evidently have no “needs.”

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Here Comes the New Recession, by James Rickard

The second round of lockdowns will kill the economy. From James Rickard at dailyreckoning.com:

Let’s start with the basics. There’s no evidence that lockdowns work to stop the spread of coronavirus. None. This is not guesswork.

After ten months of the pandemic, we have data from more than twenty major countries around the world that have tried lockdowns in various forms. The lockdowns range from extreme (as happened in Victoria in Australia) to moderate (Sweden) to non-existent (South Dakota).

The results are striking. There was no material difference in caseloads or fatality rates regardless of what kind of lockdown was used. In some cases, an extreme lockdown reduced the spread for a short period of time. But, sooner than later, the virus returned. Lockdowns may briefly shift the caseload from one time period to another, but they do not change the total caseload over time.

Meanwhile, lockdowns kill. The lack of socialization during a lockdown leads to drastically increased rates of suicide, drug abuse, alcohol abuse, domestic violence and other deadly behaviors. Families are being separated (at best) or torn apart (at worst) due to the separation and stress of lockdowns.

Many people with other diseases such as cancer and heart disease avoid treatment for fear of contagion in hospitals and end up dying as a result. There’s nothing wrong with simple precautions such as hand-washing, social distancing and mask-wearing, although there’s good evidence that masks don’t work either. But, those steps are low cost, and people easily adapt to them.

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The Post Covid World, The WEF’s Diabolical Project: “Resetting the Future of Work Agenda” – After “The Great Reset”. A Horrifying Future, by Peter Koenig

The great resetters are going to reset things back, way back. From Peter Koenig at globalresearch.ca:

The World Economic Forum (WEF) has just published (October 2020) a so-called White Paper, entitled “Resetting the Future of Work Agenda – in a Post-Covid World”.

This 31-page document reads like a blueprint on how to “execute” – because an execution (or implementation) would be – “Covid-19 – The Great Reset” (July 2020), by Klaus Schwab, founder and CEO (since the foundation of the WEF in 1974) and his associate Thierry Malleret.

They call “Resetting the Future” a White Paper, meaning it’s not quite a final version. It is a draft of sorts, a trial balloon, to measure people’s reactions. It reads indeed like an executioner’s tale. Many people may not read it – have no awareness of its existence. If they did, they would go up in arms and fight this latest totalitarian blueprint, offered to the world by the WEF.

It promises a horrifying future to some 80%-plus of the (surviving) population. George Orwell’s “1984” reads like a benign fantasy, as compared to what the WEF has in mind for humanity.

The time frame is ten years – by 2030 – the UN agenda 2021 – 2030 should be implemented.

Planned business measures in response to COVID-19:

  • An acceleration of digitized work processes, leading to 84% of all work processes as digital, or virtual / video conferences.
  • Some 83% of people are planned to work remotely – i.e. no more interaction between colleagues – absolute social distancing, separation of humanity from the human contact.
  • About 50% of all tasks are planned to be automated – in other words, human input will be drastically diminished, even while remote working.
  • Accelerate the digitization of upskilling / reskilling (e.g. education technology providers) – 42% of skill upgrading or training for new skills will be digitized, in other words, no human contact – all on computer, Artificial Intelligence (AI), algorithms.

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Doug Casey on the COVID Thanksgiving Restrictions and the “Great Reset”

It’s pretty clear that we’re heading toward a totalitarianism that’s even more total than what we have now. From Doug Casey at internationalman.com:

COVID Thanksgiving

International Man: Thanksgiving and the holiday season are here. The COVID hysteria has justified a new wave of government restrictions.

Many governors and mayors are ordering citizens to “stay at home” and cancel their traditional plans.

Is this a “new normal” in which local officials feel emboldened to dictate more and more of what people can do in their own homes?

Doug Casey: There’s not much question about it. First, let me draw your attention to an important fundamental: the type of people who go into government. It doesn’t matter if it’s national, state, county, or city government.

They’re the kind of people who think they know what’s best for others and like bossing them around. They see the virus as a great opportunity to make themselves important and to cement themselves in power. They want to deconstruct America. The phrase “build back better” is being used not just by people in the new Biden regime but by people all over the world.

These people see the COVID hysteria as an excuse for a “Great Reset.” They don’t describe exactly what the elements of the Great Reset might be, but they’re hitting the same notes sung by the people that go to the World Economic Forum in Davos. They’re promoting a great change in the world at large and America in particular.

It appears the world is ready for it; however, it’s for the same reasons that Biden won the election. I listed six factors why I thought Biden would win in our interview a couple of months ago: the virus hysteria, a pending economic collapse, negative demographics, the moral collapse of the old order, and the Deep State, and, of course, cheating—which was critical in the short term. There’s no question that stormy times are ahead.

We’re headed for a great leap forward—to borrow a phrase from Mao—in State power. Much higher taxes, much higher inflation, much more regulation, a big drop in the general standard of living, and a fair measure of social chaos.

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Will the Technocratic Coup Succeed? by Alastair Crooke

The global elites have been planning their creeping coup towards global governance for quite some time. From Alastair Crooke at strategic-culture.org:

“We’re not going back to the same economy”, Fed Chair Powell said recently: “We’re recovering, but to a different economy, and it will be one that is more leveraged to technology – and I worry that it’s going to make it even more difficult than it was, for many workers.” Klaus Schwab, the Davos Chair, was more blunt: “Nothing will ever return to the ‘broken’ sense of normalcy that prevailed [earlier]. We … will be surprised by both the rapidity and unexpected nature of these changes – as they conflate with each other, they will provoke cascading effects and unforeseen outcomes”. Schwab makes it clear that the western élite will not allow life to return to normal, suggesting that rolling lockdowns and other restrictions may become permanent.

‘Recovering to a different economy’? Well, actually the creeping ‘coup’ has been residing in plain view for quite a while. The changes have been less noticed – partly because western élites have stuck fast to the free market narrative, whilst incrementally shifting over the decades to an oligarchical economy blossoming alongside the free market economy. Yet it has been an important metamorphose, for it has laid the ground-work for a more fundamental fusion of interests of business oligarchy and government. This fusion used to be called the ‘administrative state’, and was widely practiced in 19th Century Europe.

If we want to understand the roots to this ‘quiet coup’, we need to return to the ethos that emerged from WW2. It was ‘never again’ in terms of that terrible wartime bloodshed, and it encapsulated the notion that the spilt blood should be somehow ‘redeemed’ by moving to fairer, more equitable societies. These latter sentiments turned activist, culminating in the 1960s – an occurrence that frightened U.S. business élites.

The élites moved their ‘counter-revolution’. They lobbied; they lobbied hard, evolving their lobbying enterprise into an ‘industrial scale’ enterprise, employing ‘brigades’ of lawyers and encompassing big money. And now, trillions of dollars are at stake: K Street (the lobbying HQ in Washington) is where the legislative ‘sausage’ is actually assembled, and not the U.S. Congress. It is external to Congress, to whom it is ‘sold’ in a mutually beneficial exchange.

Gradually, one segment of the erstwhile radical Boomers quietly folded themselves into the new Big Corporate ethos, whilst another part entered into politics, eventually going on to become the nation’s political leaders. It is not hard to see how a common zeitgeist might emerge. It is half-heartedly woke, big corporate in outlook, and committed to the notion of élite ‘scientifically administered’ rule.

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People going hungry = Record high stock prices, by Simon Black

How can the stock market be at record high when the economy sucks? Hint: think about central banks and fiat debt instruments. From Simon Black at sovereignman.com:

New York City is up 33% this year. St. Louis is up 66%. In Oregon it’s up 100%.

I’m not talking about real estate prices, local budget gaps, or even property tax rates.

These are the startling increases in the number of people across the country, and the world, who are in need of food.

Food banks across the Land of the Free are experiencing an enormous surge in demand from people looking to feed their families, many of whom are experiencing such economic hardship for the first time.

The director of a local food bank in western Massachusetts, for example, recently said, “I thought I had seen the worst during the Great Recession [of 2008-2009]. But what we have experienced since March due to COVID-19 has really overwhelmed us.”

I saw a video last week showing thousands of cars “stretching as far as the eye can see” in line to receive free food from a local food bank in my hometown of Dallas, Texas.

Similarly, Miami had a “massive food bank line stretched for two miles.”

You can see the same thing in big cities like New York and LA, to quieter towns like Erie, Pennsylvania, and across the world.

In the small county of Dorset in southwestern England, food banks have handed out an astonishing 1.2 million meals over the past few months, shattering all previous records. And local officials say that was just the tip of the iceberg.

It’s obvious there are millions upon millions of people who are suffering immeasurably because of Covid lockdowns.

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Money Is A Weapon of Mass Destruction, by Paul Rosenberg

Fiat money may be the most destructive instrumentality on the planet. From Paul Rosenberg at freemansperspective.com:

Money wasn’t always our enemy, of course; I’m old enough that I knew people who were alive before it was weaponized. But modern money – dollars, euros and so on – are so destructive that they’re threatening not just individuals, but Western civilization itself.

If that sounds a bit over the top, please read on. Before we’re done I think I’ll convince you otherwise.

I call fiat currency a weapon of mass destruction because it has caused far more widespread damage than chemical weapons ever have, and has assuredly destroyed more human potential than nuclear weapons. The nuke destroys horrifyingly but rarely; fiat money destroys minute by minute, day by day, over multiple decades and in shocking proportions.

How Money Destroys

How money destroys is not immediately obvious. We grow up learning to count it and spend it, then to make it, but few of us ever learn anything more about it, even in university-level programs.

Fundamentally, fiat currencies destroy because they hijack human will on a massive scale. Here’s how it happens:

  1. Money (currency) is one half of every commercial transaction, and those transactions involve nearly every aspect of every life in the Western world, from birth to death. That’s immense scope.
  2. Fiat currency is created at roughly zero cost, by governments and the friends of governments.
  3. Money is used to buy all the necessities of life. Thus it is deeply and inherently motivating, and to more or less every human on the planet.
  4. Because of the above, anyone creating new currency units can motivate millions of human beings: powerfully, on demand, and at almost no cost.

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