Category Archives: Money

Iran, And Other Notes From The Edge Of The Narrative Matrix, by Caitlin Johnstone

Pithy but perceptive comments from Caitlin Johnstone at medium.com:

The greatest asset of the propagandists is your belief that you haven’t been propagandized.

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Hi my name’s Maga McBootlick. I fight the establishment by cheerleading for the US President, I oppose war by supporting the same Middle East agendas as Dick Cheney, John Bolton and Bill Kristol, and I love the Iranian people so much I want to kill them with starvation sanctions.

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I can’t believe I’ve spent a week and a half arguing with Republicans who insist that assassinating a nation’s top general is perfectly sane and normal and fine. No, idiots. No.

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Trump supporters keep telling me how upset they are that I’m dedicating so much time and energy to criticizing his Iran warmongering. The mental irritation you experience when I criticize your president is called cognitive dissonance. It’s what being wrong feels like.

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How to return to sound money, by Alasdair Macleod

Alasdair Macleod outlines how the US could return to gold-backed money. From Macleod at goldmoney.com:

Given the current fiat money system is on a path towards its own destruction it is not surprising that there has been increasing talk of a monetary reset. Without a completely different approach and by retaining the same institutions and macroeconomic concepts, any such reset is bound to fail.

This article provides a template for an enduring sound money solution that will deliver economic progress while eliminating destructive credit cycles. It posits that a properly constructed gold and gold substitute monetary system, which also includes the removal of bank credit inflation as a means of providing investment capital, is the only way that lasting stability and prosperity can be achieved. As well as the establishment of an incorruptible monetary system, the state’s role in the economy must be curtailed, budgets always balanced, banking reformed, and the private sector allowed to accumulate the wealth necessary to provide the investment for producers to produce. 

Monetary reform involves a clear understanding of why free markets succeed and why socialism, together with neo-Keynesian macroeconomics, are responsible for the impending monetary and economic collapse. It will require a complete change of socio-political and economic cultures, but properly approached it can be done.

Introduction

There has been very little commentary in recent years about the benefits of sound money, being limited almost entirely to followers of the Austrian school of economics. Even less has been written about how to back out of inflationism, end unsound money and return to a monetary arrangement which cannot be corrupted by governments and the banking system.

The most notable attempt was by Ludwig von Mises who appended a chapter on the subject in his updated 1952 version of The Theory of Money and Credit[i] The circumstances were very different from that of today. At that time, the US had corrupted its gold exchange standard to progressively exclude the ability of individuals to demand gold for paper dollars. And both Keynesianism and socialism, in the West at least, were in their earlier days. Today, we face more of an end game where considerable damage has been done since to the status of circulating money, and we face the prospect not of reform but of a collapse of the entire fiat money system.

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Black America Before LBJ: How the Welfare State Inadvertently Helped Ruin Black Communities, from ammo.com

People get hooked on getting money they haven’t earned, and it ends up making victims of those from whom the money was taken and those to whom it was given. From ammo.com:

“We waged a war on poverty and poverty won.”

The dust has settled and the evidence is in: The 1960s Great Society and War on Poverty programs of President Lyndon Baines Johnson (LBJ) have been a colossal and giant failure. One might make the argument that social welfare programs are the moral path for a modern government. They cannot, however, make the argument that these are in any way effective at alleviating poverty.

In fact, there is evidence that such aggressive programs might make generational poverty worse. While the notion of a “culture of dependence” is a bit of a cliché in conservative circles, there is evidence that this is indeed the case – that, consciously or not, the welfare state creates a culture where people receive benefits rather than seeking gainful employment or business ownership.

This is not a moral or even a value judgment against the people engaged in such a culture. Again, the claim is not that people “choose to be on welfare,” but simply that social welfare programs incentivize poverty, which has an impact on communities that has nothing to do with individual intent.

We are now over 50 years into the development of the Great Society and the War on Poverty. It is time to take stock in these programs from an objective and evidence-based perspective. When one does that, it is not only clear that the programs have been a failure, but also that they have disproportionately impacted the black community in the United States. The current state of dysfunction in the black community (astronomically high crime rates, very low rates of home ownership and single motherhood as the norm) are not the natural state of the black community in the United States, but closely tied to the role that social welfare programs play. Or as Dr. Thomas Sowell stated:

“If we wanted to be serious about evidence, we might compare where blacks stood a hundred years after the end of slavery with where they stood after 30 years of the liberal welfare state. In other words, we could compare hard evidence on “the legacy of slavery” with hard evidence on the legacy of liberals.”

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Why Sweden Ended Its Negative Interest Rate Experiment, by Daniel Lacalle

To borrow from Orwell: there are some ideas that are so stupid on central bankers can believe them. From Daniel Lacalle at mises.org:

Negative rates are the destruction of money, an economic aberration based on the mistakes of many central banks and some of their economists, who start with a wrong diagnosis: the idea that economic agents do not take more credit or invest more because they choose to save too much and that therefore saving must be penalized to stimulate the economy. Excuse the bluntness, but it is a ludicrous idea.

Inflation and growth are not low due to excess savings, but because of excess debt, perpetuating overcapacity with low rates and high liquidity, and zombifying the economy by subsidizing the low-productivity and highly indebted sectors and penalizing high productivity with rising and confiscatory taxation.

Historical evidence of negative rates shows that they do not help reduce debt, they incentivize it. They do not strengthen the credit capacity of families, because the prices of nonreplicable assets (real estate, etc.) skyrockets because of monetary excess, and the lower cost of debt does not compensate for the greater risk.

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How the Fed Robs You of Your Life, by MN Gordon

Money is the tangible store of your time and effort. Depreciating money robs you of that time and effort, your life. From MN Gordon at economicprism.com:

Today, as we step into the New Year, we reach down to turn over a new leaf.  We want to make a fresh start.  We want to leave 2019’s bugaboos behind.

But, alas, lying beneath the fallen leaf, like rotting food waste, is last year’s fake money.  We can’t escape it.  But we refuse to believe in its permanence.

Victorian economist William Stanley Jevons, in his 1875 work, Money and the Mechanism of Exchange, stated that money has four functions.  It’s a medium of exchange, a common measure of value, a standard of value, and a store of value.

No doubt, today’s fake money, including the U.S. dollar, falls well short of Jevons’ four functions of money.  Certainly, it comes up short in its function as a store of value.

Hence, today’s money is not real money.  Rather, it’s fake money.  And this fake money has heinous implications on how people earn, save, invest, and pay their way in the world we live in.  Practically all aspects of everything have been distorted and disfigured by it.

Take the dollar, for instance.  Over the last 100-years, it has lost over 95-percent of its value.  Yet, even with this poor performance, the dollar has one of the better track records going.  In fact, many currencies that were around just a short century ago have vanished from the face of the earth.  They’ve been debased to bird cage liner.

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The Wealth Redistribution Scam that Is “Inflation”, by Thorstein Polleit

Thorstein Polleit gets off to a good start with the correct definition of inflation, and it gets better from there. From Polleit at mises.org:

The world over people are told that central banks pursue “price stability” by making sure that consumer goods prices do not rise by more than 2 percent per annum. This is, of course, a big sham. If the prices of goods rise over time, it does not take that much to understand that prices do not remain stable. And if the prices of goods increase over time, it necessarily means that the purchasing power of the money unit declines.

As money loses its purchasing power, income and wealth are stealthily redistributed. Some individuals and groups of people are enriched at the expense of others. Savers and workers are swindled out of their deserved income and retirement benefits, while those who own goods that rise in value or who borrow money typically reap a windfall profit. Clearly, the banking industry is a major beneficiary of monetary debasement.

“Inflation” Is a Rise in the Quantity of Money

Central banks are the very source of the phenomenon that all prices of goods tend to rise over time. They hold the money production monopoly and increase — in close cooperation with commercial banks — the outstanding quantity of money through credit expansion, an increase in the supply of credit that is not backed by real savings. It goes without saying that it is rather profitable to be active in the money-production business.

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Capital Flight: Money Leaving China at Record Rate, by Mike “Mish” Shedlock

It’s not usually a good sign when money is leaving a country. From Mike “Mish” Shedlock at moneymaven.io:

China is fighting “abnormal” cash flows. It’s not surprising in the least.

Record Capital Flight

Please consider Money has been leaving China at a record rate. Beijing is battling to stem the tide

Money was leaving the country at a record clip earlier this year through unauthorized channels, according to analysts. That’s bad news for China, which needs to keep financial reserves high to maintain confidence in its markets.

The State Administration of Foreign Exchange, a key government regulator, said Sunday that its most important job next year is to prevent major financial risks, avoid “abnormal” capital flows across its borders and crack down on illegal trading activities.

“We need to fight a critical battle” to defuse financial risks and maintain market stability, SAFE said in an statement. The pledge was an unusually strong one for the agency, which deployed the kind of military language more often used by top leaders in China.

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