Tag Archives: Fiat debt

The Federal Reserve is a Barbarous Relic, by MN Gordon

Posted on November 3, 2019 | Leave a comment

In the coming better era, there will be no central banks. From MN Gordon at economicprism.com:

We believe monetary policy is in a good place.” – Federal Reserve Chairman Jerome Powell, October 30, 2019.

The Sky is Falling

Ptolemy I Soter, in his history of the wars of Alexander the Great, related an episode from Alexander’s 334 BC compact with the Celts ‘who dwelt by the Ionian Gulf.’  According to Ptolemy’s account, which survives via quote by Arrian of Nicomedia some 450 years later, when Alexander asked the Celtic envoys what they feared most, they answered:

“We fear no man: there is but one thing that we fear, namely, that the sky should fall on us.”

Today, at the risk of being called Chicken Little, we tug on a thread that weaves back to the ancient Celts.  Our message is grave: The sky is falling.  Though the implications are still unclear.

The sky, for our purposes, is the debt based dollar reserve standard that’s been in place for the past 48 years.  If you recall, on August 15, 1971, President Nixon “temporarily” suspended convertibility of the dollar into gold.  The dollar  became wholly the fiat money of the Treasury.

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Posted in Banking, Business, Capitalism, Currencies, Debt, Financial markets

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Fictitious Markets, False Economics, and the Reality of Fraud, by Gary D. Barnett

Posted on September 10, 2019 | Leave a comment

Fiat debt and central banking have created an artificial economy. The end result will be disastrous. From Gary D. Barnett at lewrockwell.com:

In the past, there was a belief in the logic of the market, but no science of reasoning concerning the stock market was ever fully legitimate, as logic requires a market free from outside interference. Fast forward to today, and the manipulation is so extreme that little if any honesty is evident, and only fraud remains.

This stark reality should alarm investors, but many if not most, continue to rely on black magic economics as espoused by the mainstream media, those like Paul Krugman and his ilk, and a cadre of other Keynesian followers. As a rule, Keynesian or not, when it comes to market conditions and predictions, economists are always wrong. This is so due to the manipulative and bogus aspects of the Federal Reserve driven market, but even those who have genuine knowledge and understanding of free market economics, best described as Catallactics, cannot forecast with certainty. In a corrupt and fabricated market system such as exists today, it is impossible to predict outcomes with any accuracy because no pure market economy actually exists.

Currently, most open discussions about economics are convoluted and rely on a mix of politics, managed and controlled trade, trade wars, Fed policies, and minute-by-minute tweets from a narcissistic president consumed by his false prowess as manipulator-in-chief. The entirety of the American financial system is simply asinine at this stage of the game.

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

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The Broken Clocks’ Minute, by Robert Gore

Posted on November 18, 2018 | 45 comments

Sometimes the reasons you’re wrong turn out to be the reasons you’re right.

Even a broken clock is right twice a day.

Old Wall Street adage

Anyone who has consistently sounded cautionary or outright bearish notes during the last nine years of relentlessly rising equity markets has been cast aside. Wall Street is bipolar. You’re either right or wrong, and wrong doesn’t buy mansions and Maseratis. Like that broken clock, the so-called permabears have had a couple of minutes when they were right, far outweighed by those 1438 minutes when they were wrong.

Or maybe it’s all a matter of perspective, and it’s the last nine years that amounts to two minutes. In geologic time nine years isn’t even a nanosecond. Perhaps even on time periods scaled to human lifetimes and history, the last nine years will come to be seen as an evanescent flash that came and ignominiously went.

Markets don’t listen to reasons. They’re exercises in crowd psychology and crowds are emotional and capricious. That doesn’t mean that reason is a useless virtue in market analysis, quite the opposite. It’s reason that allows the few who are consistently successful to separate themselves from the crowd and capitalize on its emotion and caprice.

Reason identifies rising stock markets as one symptom of a sugar high global economy. Since 2009, staring into the abyss of debt implosion, central banks acting in concert have promoted furious debt expansion as the finger-in-the-dike remedy. Governments expanded their fiat (aka out of thin air) debt, and central banks monetized that debt with their own fiat debt. Not only did that create loanable reserves within the banking system—private debt fodder—it drove interest rates so low that yield-deprived investors were herded into the stock market. Borrowers won, savers lost.

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Posted in Academia, Banking, Business, Capitalism, Collapse, Debt, Economics, Economy, Financial markets, Governments, History, Investing, Money, Politics, War

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