Category Archives: Money

War on Cash: The Next Phase, by James Rickards

Posted on April 8, 2021 | 1 comment

Central bank-issued digital currencies will have only one of the advantages of private cryptocurrencies (ease of transactions), all of the disadvantages of government issued currencies (e.g. debasement), and an additional disadvantage that cash doesn’t have (government tracking of your transactions. From James Rickards at dailyreckoning.com:

With so much news about an economic reopening, a border crisis, massive government spending and exploding deficits, it’s easy to overlook the ongoing war on cash.

That’s a mistake because it has serious implications not only for your money, but for your privacy and personal freedom, as you’ll see today.

Cash prevents central banks from imposing negative interest rates because if they did, people would withdraw their cash from the banking system.

If they stuff their cash in a mattress, they don’t earn anything on it; that’s true. But at least they’re not losing anything on it.

Once all money is digital, you won’t have the option of withdrawing your cash and avoiding negative rates. You will be trapped in a digital pen with no way out.

What about moving your money into cryptocurrencies like Bitcoin?

Governments Won’t Surrender Their Monopoly Over Money

Let’s first understand that governments enjoy a monopoly on money creation, and they’re not about to surrender that monopoly to digital currencies like Bitcoin.

Libertarian supporters of cryptos celebrate their decentralized nature and lack of government control. Yet, their belief in the sustainability of powerful systems outside government control is naïve.

Blockchain does not exist in the ether (despite the name of one cryptocurrency), and it does not reside on Mars.

Blockchain depends on critical infrastructure, including servers, telecommunications networks, the banking system, and the power grid, all of which are subject to government control.

But governments know they cannot stop the technology platforms on which cryptocurrencies are based. The technology has come too far to turn back now.

Continue reading→

1 Comment

Posted in Banking, Business, Civil Liberties, Collapse, Currencies, Debt, Economics, Economy, Governments, Money

Tagged ,

MMT Is a Disaster Waiting to Happen, by James Rickards

Posted on April 7, 2021 | Leave a comment

There is no economic theory so stupid that it won’t have its adherents in academia. From James Rickards at dailyreckoning.com:

MMT Is a Disaster Waiting to Happen

MMT is the most potentially damaging economic doctrine I have ever encountered, with the exception of communism.

Let’s begin with the idea that the Fed and Treasury should be merged in practice so that the Fed will monetize any amount of spending or borrowing the Treasury wants.

The reason markets have any confidence at all in the Fed is precisely because they are perceived as independent of congressional spending plans. MMT takes this confidence for granted and assumes the Fed can just crank up the printing press whenever the Treasury likes.

But, as soon as this kind of coordinated effort appears, markets will lose confidence, inflation expectations will soar and interest rates will skyrocket. The plan would collapse before it really began. This is exactly the type of adaptive behavior by investors and markets that MMT academics do not understand.

MMT says that a currency issuer such as the U.S. can never go broke because it can simply print money to pay off the debt (provided the borrowings are in the same currency as the printed money). This may be true in some narrow, literal sense, but it does not mean investors have to wait around for the trainwreck.

IMG 1

The evidence is strong that debt-to-GDP ratios above 90% are a major headwind for growth. Today that ratio is 130% and heading higher. More borrowing does not produce growth; it simply makes the debt problem worse.

Continue reading→

Leave a comment

Posted in Academia, Banking, Business, Currencies, Debt, Economics, Economy, Governments, Money

Tagged

88 Years Ago, FDR Banned Gold. Will A Bitcoin Ban Be Next? by Tho Bishop

Posted on April 6, 2021 | Leave a comment

Governments always want a monopoly on money, although they invariably mismanage said monopolies. From Tho Bishop of mises.org:

Today is the eighty-eighth anniversary of Executive Order 6102, signed by President Franklin Delano Roosevelt, “forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States.” The order was one of the several disastrous responses to the Great Depression that succeeded in escalating the financial crisis. Later in the year, the US Congress would pass a resolution retroactively supporting the legislation; however, it was the determined autocratic leadership of FDR that made way for these unprecedented measures. It would be a crime for Americans to hold gold for over forty years, until President Gerald Ford reversed the order in 1974.

This episode has several lessons for the current financial environment, particularly given the acceleration of tyranny-by-expert rule that has taken over much of the worst this past year.

The underlying legislation that evoked by FDR’s executive order was the Trading with the Enemy Act of 1917—a by-product of World War I—despite the fact that the US was in no way in a period of war in 1932. Similarly, we have seen war on terror–inspired financial legislation increasingly used against American citizens. For example, in the name of “fighting terrorism” the US PATRIOT Act significantly increased know-your-customer laws, empowering federal regulators to use the traditional banking system to better track the economic behavior of American citizens.

In the eyes of the federal government, “antiterrorism” legislation was quickly expanded to include additional missions—such as stopping money laundering and drug crimes. Increasingly, these bogeymen have been used by policymakers around the world to erode financial privacy assets—such as cash and secret Swiss bank accounts.

Continue reading→

Leave a comment

Posted in Currencies, Debt, Governments, Money

Tagged

Did Hunter Biden Incriminate Himself In A Federal Crime? by Jonathan Turley

Posted on April 6, 2021 | Leave a comment

The questions mainstream media ask Hunter Biden are almost as softball as those they ask his father. From Jonathan Turley at jonathanturley.org:

Below is my column in The Hill on recent interviews by Hunter Biden, which appear to incriminate him in a possible federal felony. What is most striking from a journalistic perspective is that Biden’s book is a target rich environment for reporters with references to his alleged influence peddling, abandoned laptop, and drug abuses. Yet every major network and newspaper that interviewed Biden skillfully avoided any damaging questions.  It was no small feat to delicately avoid obvious problems in his account while seemingly interviewing him on those subjects. Reporters would raise the laptop of Burisma contract and then just shrug and move on without any serious followup. The glaring contradictions were left unaddressed like admitting that he was a crack addict during the time he was receiving massive contracts from foreign companies due to his unestablished “expertise” on energy issues. The conflicts with his own father’s accounts were entirely ignored. The protective press cocoon around Hunter and his father remained intact.

In the end, it is not the possible crime by Biden but the demonstrable collusion by the media that is more of the story from these interviews.

Here is the column:

News anchor Lester Holt recently declared that “it has become clearer that fairness is overrated,” adding that “the idea that we should always give two sides equal weight and merit does not reflect the world we find ourselves in.” Fortunately for Hunter Biden, that world is the one in which he lives and thrives. In interviews about his memoir “Beautiful Things,” some reporters either misstate the facts of his prior scandals or ignore certain leads, including potential evidence of a federal crime.

Facts, like fairness, appear overrated to much of the media today.

Continue reading→

Leave a comment

Posted in Crime, Cronyism, Government, Intelligence, Media, Money, Politics

Tagged ,

UBI and the Road to Serfdom, by David Gordon

Posted on April 5, 2021 | 1 comment

Nothing is ever “free” from the government, especially “free” money. From David Gordon at mises.org:

Many people think that a universal basic income (UBI) would be a good substitute for the welfare state. Under this proposal, each person resident in a country would receive a guaranteed income, sufficient to live at a modest level. People would get the money unconditionally. Unlike welfare payments, the UBI would not be lessened if people earned money in addition to the amount it provided, and, because it is not means tested—absolutely everyone gets it, even billionaires—it requires no complex bureaucracy to administer.

The UBI would cost a great deal of money, but its defenders claim that since it is a substitute for the welfare state, we would also save the vast amounts of money now required for financing welfare programs. Further, if our economy continues to grow, at some point the UBI will become affordable. Charles Murray, for example, in a short book published a number of years ago, says of his version of the UBI, “I began this thought experiment by asking you to ignore that the Plan was politically impossible today. I end proposing that something like the Plan is politically inevitable—not next year, but sometime…. Real per capita GNP has grown with remarkable fidelity to an exponential growth equation for more than a century” (In Our Hands, AEI Press, 2006, p. 125).

The critics of the UBI aren’t convinced and still claim the program would be too costly to implement. In a recent book, Universal Basic Income – For and Against (Rational Rise Press, 2019). Antony Sammeroff offers a very able account of this controversy and many other issues connected with the UBI. He gives an especially good analysis of the argument that automation is liable to make so many people unemployable that a UBI will be needed to provide for them. But what I’d like to discuss this week is another argument that Sammeroff deploys to great effect against the UBI.

Continue reading→

1 Comment

Posted in Civil Liberties, Government, Money, Morality, Politics, Propaganda

Tagged

How To Fight Price Inflation At Home, by Samantha Biggers

Posted on March 21, 2021 | 1 comment

This may the most nuts-and-bolts helpful article SLL posts all year. From Samantha Biggers at peakprosperity.com:

Inflation is a big topic right now.

The $trillions in fresh worldwide stimulus are causing the price of nearly everything we depend on to rise sharply in price, as this chart from February shows:

price inflation table

(Note how both Bitcoin and Ethereum have increased a further ~50% since this chart was made just a month ago.)

Adam has had a number of excellent interviews recently with highly experienced economists, analysts and investors — like Ed Butowsky, Grant Williams, Jim Rogers, Jim Bianco, Luke Gromen, Steen Jakobsen and others — who are extremely concerned of the secular era of rising inflation they see us headed into. And these interviews contain a lot of valuable guidance about how to position your portfolio accordingly.

But I’d like to offer some guidance that everyone, regardless of net worth, can follow to help insulate their home budget against the threat of rising prices.

I offer 29 steps below — some big, some small — that my husband and I are implementing in our own life. And while these steps save money, they don’t sacrifice quality of life. No one (including me!) wants to lower their living conditions if they don’t have to.

Start by looking for hidden inflation at the grocery store

Remember when sugar came in 5 lb bags? Now that same sugar comes in a 4 lb bag but costs the same. Orange juice containers have had ounces shaved off, too.

This is an easy way for manufacturers to make up for rising costs without raising the actual sticker price at the grocery store. People don’t notice as quickly or protest as much as they would if their grocery bill suddenly shot 20% higher.

Continue reading→

1 Comment

Posted in Banking, Business, Currencies, Debt, Economics, Economy, Energy, Money

Tagged ,

Federal workers scoring massive perks in COVID relief bill, by Jazz Shaw

Posted on March 8, 2021 | Leave a comment

There are sweetheart deals for federal government workers tucked in the bowels of the recently passed stimulus bill. From Jazz Shaw at hotair.com:

Last month, union boss Everett Kelley, the president of the American Federation of Government Employees, sent out a self-congratulatory memo to all of his members celebrating the election of Joe Biden and the return of Democratic majorities in both the House and Senate. But rather than just taking a victory lap, he cautioned union members to not “pat ourselves on the back” because “windows of opportunity rarely stay open for long.” He warned them that there may be only two years to undo the “damage” (translation: ‘progress’) that Donald Trump made in curbing abusive union practices in the federal government.

See Also: A state-mandated lockdown of high schools and sports had a tragic impact on one student

It looks like the AFGE has gotten their message through to the White House and Democrats in Congress. Tucked into the COVID relief bill currently being jammed through the legislative process are some huge perks for federal workers. One of the more eye-popping ones is a provision mandating fifteen weeks (!) of automatic paid leave above and beyond the normal, generous amounts of paid time off workers receive, for anyone “affected” by the pandemic. For those without a napkin and a pencil handy to do the math, that works out to nearly a third of the entire working year. (Government Executive)

Continue reading→

Leave a comment

Posted in Government, Money, Politics

Tagged ,

Money and statistical delusions, by Alasdair Macleod

Posted on March 5, 2021 | Leave a comment

Much of this article will be tough sledding for noneconomists. For the short version and the upshot of the article, skip to the last section, GDP Fallacies. From Alasdair Macleod at goldmoney.com:

I can prove anything with statistics, except the truth

— Lord Canning, c. 1819

Does Canning’s aphorism still hold true, given that data collection and statistical analysis have progressed beyond all recognition in the last two hundred years? This article tests that proposition.

It is still true, because of the interests for which statistics are deployed. We know, or should know, that CPI indexation of prices fails to reflect the true rate of decline in the purchasing power of fiat currencies. That is at least a simple case of governments saving money on indexation. But being economical with the statistical truth is a far wider practice encompassing input suppression, misleading deployment, and their use to support beliefs and preferred outcomes instead of backing up properly reasoned economic and monetary a priori theory.

This article finds that the application of all these methods corrupt monetary statistics, including the three principal components of the equation of exchange. This analysis is sparked by recent changes to the definition of M1 money supply in the US.

Continue reading→

Leave a comment

Posted in Banking, Business, Currencies, Debt, Economics, Economy, Governments, Money

Tagged , ,

Bill Gates Wants to Realize Global Vision in His Lifetime, by Joseph Mercola

Posted on March 4, 2021 | Leave a comment

Few people know how many pies in which Bill Gates has his greedy fingers. From Joseph Mercola at lewrockwell.com:

“Bill Gates — What You Were Not Told,” a segment of the Plandemic documentary,1 reviews the personal and professional background of the Microsoft mogul, Bill Gates. Contrary to popular myth, many see Gates as more of an opportunist than a genius inventor, and the video touches on several of the less honorable moments of his career.

After years of building a reputation as a “ruthless tech monopolizer,” Bill Gates 2.0 was launched with the creation of the Bill & Melinda Gates Foundation. With this foundation, he reinvented and rebranded himself as one of the world’s most generous philanthropists.

Gates’ Charity Is Not What It Seems

Alas, as noted by AGRA Watch,2 Shiva Vandana, Ph.D., and others, Gates’ brand of philanthropy creates several new problems for each one it solves and can best be described as “philanthrocapitalism.” As noted in the AGRA Watch article, “Philanthrocapitalism: The Gates Foundation’s African Programs Are Not Charity,” published in December 2017, advocates of philanthrocapitalism:3

“… often expect financial returns or secondary benefits over the long term from their investments in social programs. Philanthropy becomes another part of the engine of profit and corporate control. The Gates Foundation’s strategy for ‘development’ actually promotes neoliberal economic policies and corporate globalization.”

Continue reading→

Leave a comment

Posted in Business, Civil Liberties, Economy, Environment, Governments, Money, Politics, Propaganda

Tagged ,

The Dangers Lurking behind a Digital Euro, by Thorsten Polleit

Posted on March 2, 2021 | Leave a comment

A digital fiat currency is still a fiat currency, with all the drawbacks of a fiat currency without a fiat currency’s one virtue: cash. From Thorsten Polleit at mises.org:

Neosocialist China does it, Sweden does it, and many other states want to do it, too: to issue digitized central bank money for everyone. The European Central Bank (ECB) is also working on such a scheme. It wants to launch “digital euro central bank money” as soon as possible. Many economists praise the project as an “innovation,” as an important and indispensable step in an increasingly digitized world.

The ECB is also keen to make its intentions known, declaring that a digital euro will be accessible for everyone, robust, secure, efficient, and compliant with applicable law. However, it should be clear that the path to becoming a surveillance state regime will accelerate considerably if and when a digital euro is issued. But let’s not get ahead of ourselves.

A digital euro is not “better money” than the euro that is already in circulation today. The planned digital euro is fiat money, just as much as euro cash and euro bank balances represent fiat money: they are all created “out of nothing” by the ECB, which has the monopoly of euro production. Just as is the case with the existing euro, the quantity of digital euros can be increased at any time, it is backed by nothing, and the digital euro carries a 100 percent risk of devaluation. As noted earlier, a digital euro would be a fiat euro.

The digital euro can either be “account based”—you keep it in an account held with the ECB—or it can be “token based”—money users receive a “token” that can be transferred from smartphone to smartphone via an app. Hoping for “anonymity” in payment transactions would be futile in both cases, one has to fear.

Continue reading→

Leave a comment

Posted in Civil Liberties, Currencies, Governments, Money

Tagged