Category Archives: Central Banking

Only Economic Collapse Will Bring Down the American Empire

trump syria

The Bomber-in-Chief announces air attacks on Syria

Despite the vehement pleas and letter-writing campaigns by a significant portion of his political base including notable media personalities such as Tucker Carlson against military action in Syria, President Trump committed what looks like political suicide by ordering air strikes on Friday evening.  The bombing, thankfully, appeared to have been thwarted by Syrian air defenses, nor, as of this date, has the insane American, British and French action led to a wider conflagration.

As of yet, no doubt due to Divine Intervention, WWIII has not erupted and although the ramifications of the attack will reverberate for weeks to come, what is clear is that President Trump is now firmly in the clutches of the neocons, Israel, and the American Deep State, all of who are the direct beneficiaries of the wanton attack on the Assad regime.

A good portion of Trump’s base is rightfully enraged by the action, which will dash any hope of it coming to his aid if future impeachment proceedings are commenced over the Mueller investigation.  Many of Trump’s supporters have been seething ever since he signed off on the $1.3 trillion omnibus spending package in March and his continued failure to start construction on a border wall.

Talk about shooting one’s self in the foot!

Whether President Trump survives until 2020 or is replaced in the interim by neocon Mike Pence, American foreign policy will, in all likelihood, continue its bellicose ways.  Ever since WWI, which the current Bomber-in-Chief mentioned in his address announcing the air strikes, America has been an interventionist, destructive, and murderous empire.

The reason for this is that the nation’s ideology had changed where it had once  trumpeted the ideas of non-intervention and peace (except, of course, for the people of the South during their heroic attempt at independence) to those that glorified empire and war, largely based on the British model which, ironically, was the system that America seceded from in 1776.  By the time of WWI (actually the disgraceful Spanish-American War), the ideals of non-intervention, peace, free trade, and hard money had been gradually replaced by those of empire, central banking, war, and debt.

Until there is a change in ideology, it is unlikely that the US will refrain from its interventionist foreign policy.  And, typically, social change comes after men’s minds have been convinced of a different paradigm which, of course, does not happen overnight.

Like the British Empire before it, the only way the US will stop its murderous ways will be from economic collapse or a severe financial panic which threatens or ends the US dollar’s status as the world reserve currency.

Candidate Trump may have been the last hope of an American Firster who had the wherewithal to attain the Presidency.  Although not an ideologue, Trump spoke of getting along with Russia, disengaging from the Middle East, and backing out of, or making NATO members pay for their own “defense.”  These qualities faded once elected and the ominous talk about scuttling the Iranian arms deal and spending more on the military were pushed ahead.

After WWII, Britain had simply exhausted itself with its insane participation in the world wars and could no longer maintain its empire.  Britain’s ideology did not change, but reality stepped in: it simply did not have the capacity (wealth) to fund a world-wide empire. It had squandered its resources and men on the battlefields of Europe.

  Winston Churchill destroyer of the British Empire

The US is headed in the same direction, which is what both Russia and China are counting on.  Its crushing debt burden, costly wars, and out-of-control spending are sapping its productive capacity, which the military industrial complex taps to sustain itself.

The US’ enemies have based their strategies on this.  In reference to the US’ involvement in the Afghanistan quagmire, Osama bin Laden reportedly said:

We, alongside the mujahideen, bled Russia for 10

years, until it went bankrupt and was forced to

withdraw in defeat . . . So we are continuing this

policy in bleeding America to the point of bankruptcy.*

  Osama Bin Laden

The question that remains is when will a collapse occur or at least another crisis like in 2008 take place?  The warning signs abound.  The most pressing is the exploding US deficit which has soared in March to $209 billion. In 2007, the entire deficit for the year was less than $200 billion!

The collapse of the US economy is unavoidable, however, it is not “if” but “when.”  For world peace, it had better be sooner than later.

*Brian Whitaker, “Al-Qaida is Bleeding US to Bankruptcy, Bin Laden Claims.”  The Guardian, 3 November 2004. https://www.theguardian.com/world/2004/nov/03/usa.alqaida

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

 

What President Trump and the West Can Learn from China

Trump Trip China

Instead of a demonstration of its overwhelming military might intended to intimidate tiny North Korea and pressure China to lean on its defiant communist neighbor, President Trump and the West should try to learn a few things from China.

The President’s trip to the Far East came on the heels of the completion of China’s 19th National Congress where the current president, Xi Jinping, has cunningly positioned himself as China’s unchallenged leader.  In an address at the opening of the Congress, Xi cautioned that the country faced “challenges” that are “extremely grim” yet, despite these, the nation’s future is “extremely bright.”*

While Western politicos and pundits bemoan the lack of political pluralism that exists within China and President Trump complained about bad trade “deals,” they miss an important factor as to why China has transformed itself from a socialist basket case some three decades ago into an economic powerhouse which now boasts over a third of the world’s billionaires!

China’s economic ascendancy can be attributed not only to the implementation of market reforms in the 1990s, but also its lack of “political competition.”  As a one-party state, resources, time, energy, and capital are not allowed to be channeled into wasteful political processes, but instead are used and “invested” in wealth-creation activities – construction, factories, plants, equipment, research, technology – all of which leads to more and cheaper consumer goods.

The US and the West spend too much on elections, campaigns, polling, political consultation, etc., which diverts scarce resources away from the private wealth sectors of society.  For example, in her last failed presidential campaign run, the Wicked Witch of Chappaqua alone spent over a half of billion dollars.

Under Western democratic pluralism, public debt and state spending have increased to unsustainable levels.  In the US alone – history’s greatest debtor nation – the national debt is in excess of $20 trillion, while its total debt officially is $68 billion with a federal deficit (GAAP) running yearly at $5 ½ trillion.

Such staggering numbers are the result, in part, from political parties seeking public office and once elected exploiting their position to enrich themselves, their constituents, and create dependent classes among the ever shrinking productive segments of society.

China’s foreign policy – an extension of politics – has also been conducive for wealth creation.  Instead of wasteful spending on military hardware, the maintenance of a far-flung global empire, and involvement in incessant wars, China has a rather meek military compared to its national income and has conducted a pretty much non-interventionist foreign policy – witness its diplomacy with North Korea.

The US is almost the polar opposite.  It spends more on “defense” than the next eight countries combined.** Instead of the production of useful consumer goods, billions are siphoned off into the military/security industrial complex.  Not only does this impoverish Americans at home, but it leads to never ending involvement in wars, conflicts, and disputes, most of which are created or exacerbated by US spy organizations.

Def spending

After meeting with Chinese leadership, President Trump tweeted:

I don’t blame China, I blame the incompetence

of past Admins for allowing China to take advantage

of the U.S. on trade leading up to a point where the

U.S. is losing $100’s of billions.  How can you blame

China for taking advantage of people that had no clue?

I would’ve done the same!

Making better trade deals will not revitalize the moribund US economy.  Instead, there should be less politicization of society and adoption of market reforms as China has done.  The most important plank of such a policy would be the encouragement of real savings – not the creation of bank credit – through the normalization of interest rates.  This would begin the arduous process of capital accumulation, the basis upon which any economy can be built.

Another sign of the divergence between the two is China’s continued push to make the yuan the world’s reserve currency with apparently some sort of gold backing to it.  Contrarily, the Trump Administration has continued the same disastrous policies of its predecessors and has chosen a Janet Yellen clone to head the Federal Reserve with a continuation, no doubt, of the suppression of interest rates.  On the other hand, China continues to import massive quantities of gold and encourages its citizens to own the yellow metal while the West is in the midst of a crypto currency mania, another fraudulent monetary scheme.

China’s economic miracle, while certainly impressive, would not look as astounding if Western economies had not been in a state of stagnation and decline over the past half century.  It was not political liberalization that led to China’s phenomenal growth, but economic freedom which used to be a staple of Western life.  The lesson that should be taken from President Trump’s trip is less politics domestically and more free markets.

*Chris Buckley, “Xi Jinping Opens China’s Party Congress, His Hold Tighter Than Ever.”  The New York Times, 17 October 2017.   https://www.nytimes.com/2017/10/17/world/asia/xi-jinping-communist-party-china.html

**Peter G. Peterson Foundation.  “US Defense Spending Compared to Other Countries.”  1 June 2017.  https://www.pgpf.org/chart-archive/0053_defense-comparison

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

Bitcoin: A Tower of Monetary Babel

Bitcoin Fiat Currency

The promoters of crypto currencies have gushingly touted them as the mechanism by which the present central banking cabal and the system of nation states which derive much of their power from will be brought down and replaced by digital money.  Despite their meteoric rise as speculative “assets,” there are fundamental economic reasons why they will never act as a general medium of exchange despite the wild enthusiasm for them by the crypto-currency cultists.

Money – a general medium of exchange – is the most marketable (exchangeable) commodity in an economy.  As a good, money is not sought after for its direct use – to satisfy individual wants – but to satisfy wants indirectly through exchange for other goods.  Over time, one good becomes money since it possesses qualities superior to all other goods as a money.  When gold became demanded not for its “use value,” but for its “exchange value,” it became a general medium of exchange – money.

As a consumer good, gold possessed a value or a “price” prior to it becoming a money, as the eminent monetary theorist Murray Rothbard explains:

. . . embedded in the demand for money is knowledge

of the money-prices of the immediate past; in contrast

to directly-used consumers’ or producers’ goods, money

must have pre-existing prices on which to ground a demand.

But the only way this can happen is by beginning with a useful

commodity under barter, and then adding demand for a

medium to the previous demand for direct use (e.g., for

ornaments in the case of gold.)*

Thus, Bitcoin’s “price” is not in terms of its original commodity price, but its price is in terms of dollars, Euros, yuan, etc.  In the dollar’s case, it was at one time linked to gold, but has since been severed from it while Bitcoin has had no such relationship.

Once money is established, then prices are expressed in terms of it and thus economic calculation can rationally take place and the division of labor and specialization can be expanded.  Rothbard continues:

       The establishment of money conveys another great

benefit.  Since all exchanges are made in money, all the

exchange-ratios are expressed in money, and so people

can now compare the market worth of each good to that

of every other good.**

Once gold became money, the price of goods became expressed in gold not in other elements – nickel, zinc, lead, etc.  With the proliferation of crypto currencies, there will be a myriad of different price ratios for each good.  There will be a Bitcoin price for a car, an Ethereum price for a car, a Dogecoin price of a car, and so on.  This is the antithesis of the purpose of money – one unit of account that reflect prices for all commodities as Rothbard shows:

 

Because gold is a general medium it is most marketable,

it can be stored to serve as a medium in the future as well

as the present, and all prices are expressed in its terms.

Because gold is a commodity medium for all exchanges,

it can serve as a unit of account for present, and expected

future, prices.  It is important to realize that money cannot

be an abstract unit of account or claim, except insofar as it

serves as a medium of exchange.***  [my emphasis]

Crypto currencies, therefore, directly violate one of the main principles of monetary theory.  The vast array of digital money, all with unique price ratios (to say the least of their volatility), would make economic calculation and rational planning next to impossible.  In this sense, the current world of fiat dollars would be preferable to a Tower of Monetary Babel that digital currencies would create.

Central banks and governments do not fear crypto currency challengers to their monetary hegemony.  They, of course, jealously monitor the crypto market worried that any gains accrued may not be subject to tax.  Central banksters do fear gold for it remains, despite being demonetized, the last check on profligate central bank monetary expansion.  And, because countries who wisely understand gold’s importance and seek to get out from under the yoke of King Dollar (most notably China and Russia), continue to voraciously accumulate the yellow metal.

The return of true prosperity will only come about when gold is once again at the center of the monetary order and fiat currencies such as the dollar, Euro, and now Bitcoin are forgettable memories of a misguided and corrupt age.

*Murray N. Rothard, What Has Government Done to Our Money?  Novato, CA.: Libertarian Publishers, 8th printing, January 1981.

**Ibid., 4-5.

***Ibid., 5.

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

A Constitutional Anniversary to Forget

constitutionstupid

While not a jubilee year, last week marked the 230th anniversary of the US Constitution.  Naturally, most of its devotees enthusiastically praised the document which by now is seen on a par with Holy Writ itself.  An editorial from Investor’s Business Daily provides an example of such hagiography:

The Constitution’s beauty is that it not only delineates our rights

as Americans, but expressly limits and defines government’s ability

to interfere in our private lives.   This equipoise between citizens’

duties, responsibilities and rights makes it the defining document

or our nation’s glorious freedom.

 

But America is wonderful largely because of the Constitution and

those who framed it . . . .

 

What we have is too precious to squander . . . .*

Most of the piece laments about the widespread ignorance of its sacred contents among the denizens in which it rules over and encourages the unlearned “to bone up a bit on your constitutional heritage . . . .”  The editorial fails, as do most others on the Right, to understand that it is not a lack of knowledge of the Constitution’s contents among the populace which lies at the heart of America’s social, economic, and political problems, but the very document itself.

One of the main reasons why the Constitution continues to be so widely venerated is due to the deliberate distortion of history that its “founders” promoted and that generations of its sycophants have continued to perpetuate to this very day.  The official narrative runs that the Constitution was enacted because of widespread popular support for a change to the supposed inadequacies and deficiencies of the Articles of Confederation.

This is a myth.  Instead, the Constitution was a coup deliberately schemed by the leading political and mercantile classes to set up a powerful central government where ultimate authority rested in the national state.  The use of the term “federal” to describe what was created in Philadelphia in those fateful days was a ruse much like the banksters and politicos used “Federal Reserve” to describe the central bank created in 1913.  It was neither “federal” – a decentralized monetary order – nor a “reserve” of gold, but a monetary institution which could create money out of thin air and eventually eliminate the gold standard.

It was a similar political maneuver 230 years ago as a new American national state was established and touted as a decentralized form of government where power was evenly divided between state and national levels and between the different branches of the government itself  – “separation of powers.”  In actuality, however, the “federal system” was the elevation of central power at the expense of local authority which had previously existed.  Section VI of the Constitution says it all:

The Constitution and the laws of the United States  . . .

shall be the supreme law of the land; and the

judges in every state shall be bound thereby, anything in the

Constitution or laws of any state to the contrary notwithstanding.

Elementary political science has shown and plain common sense knows that any person or institution given “supreme authority” will misuse and abuse such power.  Power tends to corrupt and absolute power corrupts absolutely is an undeniable dictum of human nature.  A truly decentralized system of governance would not contain a plank as “supreme law of the land” as part of its foundation.  Instead, real federalism would be dispersed, as it existed in the past in such political arrangements as confederacies, leagues, and, certainly, under the much maligned feudal social order.

Even the Constitution’s celebrated Bill of Rights is flawed and has proven to be ineffective in protecting basic human freedoms.  It is the federal government which enumerates and interprets what freedom individuals should possess.  Thus, the meaning and extent of individual liberties will be in the hands of federal jurists and courts who will invariably rule on cases in favor of the state.  The ensnaring of individual rights within the central government’s authority did away with the venerable common law which was a far greater defender of liberty than federal courts.

Just as important, the enactment of the Constitution, which brought all the individual states under it suzerainty, did away with one of the most significant checks on state power – “voting with one’s feet.”  When there are multiple governing authorities, if one jurisdiction becomes too oppressive, its subjects can move to freer domains.  This still happens on a local level as high tax and regulatory states such as California and New York have lost demographically to freer places like Nevada and Texas.  Yet, from the Federal Leviathan there is no escape, except expatriation.

Unless and until Americans and all the other peoples of the Western world who live under constitutional rule recognize that it is the type of government which is the cause of most of the political turmoil, social unrest, and economic malaise  which they face, there is no hope of turning things around.

*”Sturdy Constitution, ” Investor’s Business Daily, Week of September 18, 2017, A20.

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

Bitcoin in an Illusionary Age

Bitcoin III

It is altogether fitting that crypto currencies, in particular Bitcoin, have witnessed a meteoric rise in this illusionary age.  Not only has their monetary value gone to dizzying heights, but they are now being touted as the destroyer of the current, crumbling monetary order and the next paradigm upon which a new money and banking system will emerge.

In an era where sacrifice, hard work, loyalty, ingenuity, tradition, and independent thought are considered anathemas, while affirmative action, sloth, effeminacy, office seeking, and something-for-nothing schemes are endemic in every walk of life, it is not surprising that non-tangible, computer-generated currencies would become a “natural” feature of such a world.

While it has always been a haven for charlatans, traitors, cheats, thieves, liars, and serial adulterers, contemporary political life has become even more of a sham.  The most glaring example of politics’ utter corruption can be seen in the recent departed chief executive officer of the US.  Unless one abandons all critical thinking, Obummer was unqualified to be president because of the obvious fact that he was not born on American soil.  Not only did this disqualify him, but his educational and professional backgrounds have not been verified.  Neither his collegiate records nor his supposed teaching career at the University of Chicago Law School have ever been exposed to public scrutiny.  From the few utterances he has made about his supposed specialty – constitutional law – it appears that he has only a rudimentary knowledge of the subject.

Cultural life has descended to the basest of levels and has abandoned nearly all of Western Civilization’s glorious achievements.  Consider music.  The dominant form of what passes as music today is not the works of the great maestros of the past – Bach, Mozart, Beethoven – but instead, noise in the form of rock, hip hop, rap, grunge, or whatever the latest degenerate trend is in vogue.

Modern democracy is also a fallacy.  Being sold to the masses as a system where the people rule and personal liberties are guaranteed, democratic governance is anything but, and has instead been craftily used by the elites to amass state power to an unprecedented extent not witnessed in human history.  The much maligned monarchial age even during its “absolutist phase” could not come close to the scope and intrusiveness that democratic governments possess today.

Religion, too, is not immune from its share of hypocrisy.  Not only is the supposed head of the Catholic Church a manifest heretic who almost daily blasphemies the Divine Majesty, but he is not qualified to occupy the august chair in which he sits.  Jorge Bergoglio was neither ordained as a priest nor consecrated as a bishop in the traditional, Apostolic rite of Holy Orders.  He is, therefore, an imposter not a priest, nor the bishop of Rome, and scandalously not a true pope.

Now enter crypto currencies.  Not only will they never become money – a general medium of exchange – as gold and silver once were and will become once again, but cryptos lack the necessary requirements to be money.  Yet, their “development” is systematic of the times.  Cryptos are another variant of fiat currencies which digitally can be created by a stroke of a computer key or in cryptos’ case, a code.

Gold and silver – real money – must be mined from the ground, minted and “marketed” before they can be used to facilitate exchange.  This is an arduous, capital-intensive process which takes resources, labor, and time to accomplish.  Something as important as money should require an elaborate procedure not be created out of thin air as are all fiat currencies as well as cryptos.

Money must originate as a tangible, sought-after commodity – the great Misesian insight that crypto enthusiasts do not know or do not understand – then, over time, be recognized as having a “second feature” as a good sought after for “exchange value.”  Once a good is demanded for its use primarily to facilitate exchange, it then becomes a “money.”

In a fundamental sense, crypto currency cultists are rebelling against the natural order of things.  The precious metals were created in their quantity and quality by Divine Wisdom for a purpose – to act as money.  While governments have habitually corrupted the monetary order through coin clipping, fractional-reserve banking, and other nefarious schemes, it does not undo this primordial fact.  It is for the intellectually honest opponents of monetary chicanery to point this out and decry all governments and banksters’ attempts to eradicate gold and silver as money, not attempt to create another unnatural and false monetary order that mirrors the current fiat system.

Money, like all other institutions of society, will reflect its belief system.  Decaying cultures will most likely have debased monetary units.  A turnabout in the status of money will only happen when Western Civilization returns to what money is – gold and silver – and abstains from trying to create illusions of it through computer software schemes.

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

 

 

The Ultimate Regulatory Reform: Abolish Fractional Reserve Banking!

fractional reserve banking II

The Trump Administration has presented the first part of its plan to overhaul a number of Wall Street financial regulations, many of which were enacted in the wake of the 2008 financial crisis.  The report is in response to Executive Order 13772 in which the US Treasury Department is to provide findings “examining the United States’ financial regulatory system and detailing executive actions and regulatory changes that can be immediately undertaken to provide much-needed relief.”*

In release of the first phase of the report, Treasury Secretary Steven T. Mnuchin stated: “Properly structuring regulation of the U.S. financial system is critical to achieve the administration’s goal of sustained economic growth and to create opportunities for all Americans to benefit from a stronger economy.  We are focused on encouraging a market environment where consumers have more choices, access to capital and safe loan products – while ensuring taxpayer-funded bailouts are truly a thing of the past.”**

Some of its highlights include:

  • Community financial institutions – banks and credit unions – are critically important to serve many Americans
  • Capital, liquidity and leverage rules can be simplified to increase the flow of credit
  • We must ensure our banks are globally competitive
  • Improving market liquidity is critical for the U.S. economy
  • The Consumer Financial Protection Bureau must be reformed
  • Regulations need to be better tailored, more efficient and effective
  • Congress should review the organization and mandates of the independent banking regulators to improve accountability***

 

Not surprisingly, most of the banking industry expressed support for the report, critics (mostly Democrats) pointed out that it would lead to the type of practices that produced the 2008 panic in the first place.  Both opponents and those in favor as well as the clueless financial press fail to grasp the underlying cause of not only the recent crisis, but the majority of those which have occurred for the past century.

Quite simply: the fundamental cause of the 2008 financial crisis was fractional-reserve banking (FRB).  FRB is the practice whereby banks keep a “fraction” of the funds deposited by customers in their vaults lending out the rest at interest and “profit.”  Banks are thus inherently unstable since if all depositors came at once and demanded their money (a “bank run”), banks could not be able to redeem their deposits.  Moreover, FRB encourages banks to engage in exceedingly speculative and risky behavior which creates unsustainable bubbles throughout the economy.

The nation’s central bank, the Federal Reserve, was created by the banksters and politicos to enshrine this immoral and economically ruinous practice into the heart of the American financial landscape.  Any “reform” of Wall Street’s financial practices that does not address FRB by doing away with it and the institution (the Fed) which enables it to exist, is doomed.

The banks in collusion with the Fed are able to expand the money supply through this process while enriching the banksters’ balance sheet.  On the macro level, the creation of money through FRB is the genesis of the destructive boom-bust cycle.

This is why banks and the entire financial system are so prone to reoccurring crisis and no regulation, reform, or Treasury Department “findings,” can make such a system “stable.”  The only true reform is to abolish FRB and establish a monetary order that requires all financial institutions to keep 100% reserves of depositors’ assets.

The Treasury Department’s recommendations are mere window dressing by the very banksters whose opulent livelihoods are predicated on FRB.

The elimination of FRB would go beyond a beneficial financial revolution, but would affect the foreign policy of the USSA.  Without the ability to create money via FRB, the murderous American Empire could simply not exist, nor would the nation’s draconian domestic security state.

With his selection of crony capitalists and members of Goldman Sachs to his economic team, it is apparent that President Trump does not understand the true nature of the nation’s financial woes or what precipitated the last financial crisis and what will assuredly lead to a far bigger mess down the road.  If he did, his next Executive Order would be to implement steps and procedures to eliminate the scourge of fractional reserve banking forever.

*U.S. Department of the Treasury, “A Financial System That Creates Economic Opportunities.”  6 June 2017.  https://www.treasury.gov/press-center/press-releases/Pages/sm0106.aspx

**Ibid.

***Ibid.

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

The Cost of a Trump Presidency

Syrian Bombing

Last Thursday’s wanton attack on a Syrian air field by the US and its bellicose actions toward North Korea have brought to the forefront the real cost of candidate Trump’s landslide victory last November.

Unlike most laymen, accountants, and financial analysts, economists look at cost differently.  For economists, cost or more specifically, “opportunity cost,” means “a benefit that a person could have received, but gave up, to take another course of action.  Stated differently, opportunity cost represents an alternative given up when a decision is made.”

Such thinking can be roughly applied to the political realm.  In the case of last fall’s US Presidential election, the cost of Donald Trump’s unexpected victory was not the money spent on the campaign, but the diffusion (hopefully, only temporary) of the growing anti-Establishment groundswell that was percolating not only in America, but across the globe.

The Trump phenomenon, Brexit, Texas secession talk, anti-immigration gatherings, central bank scrutiny, the exposure and decline of the lying, dominant mass media, and other populist movements and causes were symptoms of the masses dissatisfaction with their exploitation by the ruling elites. Trump’s triumph has squashed and defused many of these populist uprisings since a number of his campaign themes empathized with these trends.

A similar situation occurred after Ronald Reagan’s victory in the 1980 election as the great anti-government wave, which swept him into power, dried up almost immediately since Ronnie was perceived as “one of us.”  Of course, Reagan was a disaster and fulfilled none of his anti-government campaign rhetoric, but instead went on to become, for a time, the biggest Presidential spender in US history.

A Clinton victory, although certainly tyrannical in the short run, would have, no doubt, furthered the anti-Establishment fires and inspired more.  For example, Texas may be now on the road to independence from the Federal Leviathan.

The ills that plague the US and, for that matter, the Western world, will not be solved through a Trump Presidency in “making America great again,” but will only come about through political decentralization and the abolition of central banking with a return to sound money.  Concomitant with political decentralization and secession is military contraction, as smaller political jurisdictions will have lesser pools of wealth to tap from while the absence of an inflationary central bank will make military adventurism extremely difficult to conduct.

Yet, before such a transformation can take place, an ideological foundation must first be established.  A Hillary Clinton Administration would have provided fertile ground for such change.

Since the groundwork for a depoliticized world has not been laid, a Trump Presidency made sense as long as he kept as close as possible to his campaign agenda, the most important of which was foreign policy.  His condemnation of the neocons’ policies which have bankrupted the nation, murdered thousands of innocents abroad, and heighten tensions everywhere was crucial in his shocking victory last November.  It is apparent that he did not understand how important this support was or he would have never undertaken such an utterly stupid decision.

With the strike on Syria and seemingly more military action in the offering, Trump’s Presidency is now the worst of all possible worlds, at least in the short run, for those opposed to the New World Order.  Most serious observers, however, understood, especially after the appointment of so many Goldman Sachs cretins, Israeli Firsters, and nutty warmongers to his administration, that Trump would eventually succumb to the pressure.  More importantly, Trump was never fully grounded in an America First mindset, probably not knowing where that term originated or its gallant founders.

All, however, is not lost.

Trump’s capitulation makes it abundantly clear that the system itself is beyond repair.  Getting the right individual to salvage the American welfare/warfare state cannot be done.  Trump had many advantages that no future candidate will likely possess which means that anybody that follows will be an “insider.”  Much of his base, therefore, will no longer support a future Republican candidate or will give him only lukewarm support .  With no independent personality to rally around, the millions of disappointed Trumpians will seek new governing paradigms which hopefully will lead to the growth of secession movements.

Ultimately, however, a permanent American foreign policy of non intervention, peace, and free trade will only come about when there is a change in the prevailing ideology of society where all contenders for political office espouse such a notion and today’s warmongers are seen for what they are: enemies of humanity and its Creator.

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com/

Donald & the Dollar

donald-dollar

John Connally, President Nixon’s Secretary of the Treasury, once remarked to the consternation of Europe’s financial elites over America’s inflationary monetary policy, that the dollar “is our currency, but your problem.”  Times have certainly changed and it now appears that the dollar has become an American problem.

In a recent interview with the Wall Street Journal, the soon to be 45th President of the United States believes that the greenback’s strength – up some 25% against a broad basket of currencies since 2014 – is now “too strong,” “killing us,” and has hurt companies trying to compete overseas.* A top Trump economics advisor, Anthony Scaramucci, reinforced his boss’ sentiment adding that “we must be careful of a rising dollar.”

Apparently, making America great again does not include the nation’s monetary standard.  Trump’s belief that the dollar is too strong also shows a distinct lack of historical understanding.  Every great nation and empire (which Trump promises to restore America to) had a sound monetary system.  It is no coincidence that the pound sterling was the world’s “reserve currency” at the time when the British Empire was at its height.  Debasement of it to finance Britain’s insane decision to enter World War I led, in large part, to the eventual loss of its empire.  If Trump truly seeks to restore American greatness at home and its prestige throughout the world, devaluating the currency is not the way to go.

Nor does a weakened dollar benefit the middle class whom the president elect throughout the campaign has pledged to help.  In fact, it has been the fall in the purchasing power of the dollar due to the inflationary policies of the Federal Reserve which have decimated the living standard of the middle class.  And, while the proposed Trumpian middle class tax cuts will help, just as important is a sound monetary system if Middle America is to become a creditor class once again.

Pensioners and retirees, another group that Trump has promised to help, would continue to see their financial condition decline under a policy to weaken the dollar. A fall in the purchasing power of money would devastate the income stream of pensions and social security payments.

While a weaker dollar policy would hurt the middle class, retirees, and savers, it would benefit the most responsible for the continued economic doldrums of America – banksters and the government.  A weaker dollar would allow the government to continue to borrow and maintain its profligate spending.  Financial houses and the banksters would receive credit at nearly zero cost which would allow them to continue to blow bubbles in the asset markets.  Export firms, too, would benefit at least for a while, but would more than likely face retribution from foreign governments and central banks which would retaliate with their own devaluations sparking potential currency wars.

Talk of “currency manipulation,” “weakening the dollar,” “trade deals,” and the like do not address what lies at the heart of not only America, but the Western world’s economic problem – too much debt.  The reason why the West has been able to incur its current gargantuan level of debt is not because of a “weak” or a “strong” dollar, but because the dollar is a fiat currency not backed by any commodity.  A true gold standard, where each currency unit represents either gold or silver, provides monetary discipline which prevents politicians and banksters from incurring ruinous levels of debt.

Since money is the lifeblood of an economy, any hope that one can be turned around without a stable monetary order is, to say the least, delusional.  If president-elect Trump and his policy makers do not realize this, they will be severely disappointed in the years to come.  Sound money allows for the accumulation of savings and capital formation, the essential elements of the market economy and the only basis upon which real economic growth can occur.  More savings and capital are needed to boost production and create employment, not supposedly wiser and more competent international trade negotiators.

Talk of currency devaluation is what is typically heard from banana republics, it should not be advocated by those who have aspirations of making their country great again.

*Tyler Durden, “Dollar Tumbles After Trump Calls Currency ‘Too Strong,’ Slams Border-Adjustment Tax.”  Zero Hedge.  17 January 2017.

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com/

Pope Francis Now International Monetary Guru

pope-francis-marx

Neo-Marxist Pope Francis

As the new year dawns, it seems the current occupant of St. Peter’s Chair will take on a new function which is outside the purview of the office that the Divine Founder of his institution had clearly mandated.  Besides being a self proclaimed expert on global warming and a vociferous advocate of societal-wrecking mass immigration, it looks as if “Pope” Francis has entered the realm of global economics specifically, international monetary policy.

In an 18-page document issued through the Vatican’s Office of Justice and Peace, Bergoglio has called for, among other repressive and wealth-destructive measures, the establishment of a “supranational [monetary] authority” to oversee international monetary affairs:

In fact, one can see an emerging requirement for

a body that will carry out the functions of a kind of

‘central world bank’ that regulates the flow and system of

monetary exchanges similar to the national central

banks.*

The paper, “Towards Reforming the International Financial and Monetary Systems in the Context of a Global Public Authority,” contends that a world central bank is needed because institutions such as the IMF have failed to “stabilize world finance” and have not effectively regulated “the amount of credit risk taken on by the system.”

Naturally, as one of the planet’s preeminent social justice warriors, Bergoglio claims that if a world central bank is not commissioned, than the gap between rich and poor will be exacerbated even further:

 

If no solutions are found to the various forms of injustice,

the negative effects that will follow on the social,

political and economic level will be destined to create a

climate of growing hostility and even violence, and

ultimately undermine the very foundations of democratic

institutions, even the ones considered most solid.

 

Bergoglio acknowledges that if a central monetary authority is established it will mean a loss of sovereignty and independence among nations, but such “costs” are well worth the overall societal and economic gains:

  Of course, this transformation will be made at the

cost of a gradual, balanced transfer of a part of each

nation’s powers to a world authority and to

regional authorities, but this is necessary at a time

when the dynamism of human society and the

economy and the progress of technology are transcending

borders, which are in fact already very eroded in a

globalized world.

While the document demonstrates that Bergoglio has not a clue of basic monetary theory, it shows again that the “pope” is a radical socialist who has more in common with the loony ideas of Karl Marx than he does with Roman Catholicism.

The ongoing and deepening financial crisis that Bergoglio seeks to address is not because there has been no global central bank to regulate more effectively the money and credit flow of the various nation states, but the crisis is because of the machinations of central banking.  Central banking, through the fraudulent practice of fractional-reserve banking, has been the culprit in almost every financial calamity that has beset the Western world since the institution was first created.

If “Pope” Francis was truly interested in solving the financial crisis and alleviating the income gap between rich and poor, he would call for the abolition of this evil institution and advocate the re-establishment of an honest international monetary order based on gold and silver as money.  But, as a good neo-Marxist, Francis is more concerned with the redistribution of wealth from rich to poor.

Yet, as sound economic theory has shown, this Leftist ideal is a scam.  Redistribution of income never enhances the conditions of the poor but instead enriches the politically-connected elites and impoverishes the middle class.

Unlike what Bergoglio believes and what is taught in nearly all college and university economics classes, wealth can only be created by real savings (the abstention from consumption) and the investment of those savings into the production of capital goods which, in time, creates consumer goods.  To foster such an environment, however, there must be a sound monetary order not open to manipulation via inflation and credit expansion by central banks.

As he has been accused by several of his cardinals for espousing heretical views on re-marriage and the reception of the Sacraments, “Pope” Francis’ position on international money and banking matters is equally erroneous.  Jorge Bergoglio’s “pontificate” has been an unmitigated disaster plagued by constant scandal so it would be wise of him before it is too late to remember the ominous words of the Founder of the institution he now heads about the grizzly consequences that are in store for those who bring about scandal.

*Baxter Dmitry, “Vatican Calls for ‘Central World Bank’ and ‘Global Authority.'”  Your News Wire.com  2 January 2017.

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com/

 

Donald and the “Maestro”

trump-ii            greenspan-ii

Former Federal Reserve Chairman Alan Greenspan, who was once laudably referred to as “Maestro” for his supposed astute stewardship of U.S. monetary policy, commented last week on the nation’s current political and economic climate:

We’re not in a stable equilibrium.  I hope

we can all find a way out because this too

great a country to be undermined, by how should

I say it, crazies.*

Well, if there is anyone who knows how to “undermine” an economy, it is the Maestro, since it was his “crazed” policies that brought about the 2008 financial crisis which ushered in the Great Recession that continues to this very day.

In a demonstration of how truly clueless Greenspan is about economic conditions, he cautioned that the U.S. is “headed toward stagflation – a combination of weak demand and elevated inflation.” Memo to the Maestro: stagflation is already here and has been for quite a while, especially when real economic gauges are used instead of the phony baloney numbers routinely lied about by the BLS and other corrupt state agencies.

The “crazies” that Greenspan refers to are, of course, the “deplorable” Trump supporters and The Donald himself, who the Maestro contends is responsible for “the worst economic and political environment that I’ve ever been remotely related to.” Oh, poor Alan has to suffer through an election where one of the candidates has not been approved by the ruling class.  Too bad.

Instead of carping about the current state of political affairs which, at least financially, he and his successor, Helicopter Ben Bernanke, largely contributed to, Greenspan should be grateful that he has had no reprisals for the financial crimes, chaos, and misery that he has afflicted upon the world.  Instead of significant jail time or worse, Greenspan is free to pontificate on current events, receiving hefty financial remuneration, and just as important for top members of the governing elite, ego-enhancing hosannas!

While Ben Bernanke has been a lifelong committed Keynesian and inflationist, Alan Greenspan, at least in his younger days as a member of Ayn Rand’s circle, was a free marketer who spoke positively about the efficacy and moral soundness of a gold standard.  That he abandoned these beliefs to go over to the Dark Side is further cause for retributive justice.

Greenspan’s betrayal was similar to those economists of the 1930s (Lionel Robbins most notable) who were followers of the teachings of Mises and Hayek, yet were swept away by the fanciful Keynesian deluge of the day and abandoned their economic senses and conscious for similar allurements which seduced the Maestro.  Had these economists as well as Greenspan stuck to their original principles, the world may not be in its current financial mess.

While Greenspan was lamenting the state of political affairs, the head “crazy,” Donald Trump, commented on the Maestro’s former place of employment.  Unlike the Maestro, the financial media, and just about every other politician, Trump had some perceptive things to say about the nation’s central bank, showing again that the billionaire businessman’s political acumen is quite good:

The Fed is being totally controlled politically because

Obama wants to go out with no stock market disruptions.**

The Republican Presidential hopeful could have easily added that the Fed’s policy is being deliberately carried out to ensure his Democratic opponent’s victory this fall.  A booming stock market is perceived by most as an indication of a vibrant economy.

Trump does not buy the supposed “independence” of the Fed from political influence and the conduct of monetary policy solely for the well being of the economy:

If it was a choice between the right decision and a political

decision… The Fed would choose the political decision.

Throughout the campaign, Trump’s instincts on political and economic matters have been quite good and hopefully if he does become chief executive those instincts will translate into positive change.

A Clinton Presidency would assuredly mean a continuation of the ruinous policies of Greenspan and his successors.  The election of Donald Trump could not only mean a new direction in monetary policy, but the public demotion of the likes of Alan Greenspan who will hopefully fade into the sunset never to be heard or seen from again.

*Rich Miller, “Greenspan Worries That ‘Crazies’ Will Undermine the U.S. System.”  Bloomberg.  14 September 2016.  http://www.bloomberg.com/news/articles/2016-09-14/greenspan-worries-that-crazies-will-undermine-the-u-s-system

**Tyler Durden, “Trump Slams ‘Totally Politically Controlled’ Fed, Sees No Rate Hike Until Obama Has Left.”  Zero Hedge. 15 September 2016.  http://www.zerohedge.com/news/2016-09-15/trumps-slams-totally-politically-controlled-fed-sees-no-rate-hike-until-obama-has-le

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com/