Tag Archives: inflation

What the Rising Gold Price Signals

The recent run-up in the gold price has not garnered the attention among the mainstream financial media outlets as it should. Gold has, in part, been overshadowed by the rise in the price of bitcoin and other cryptocurrencies.

Naturally, the financial press, which is really an arm of the government and its central bank, wants to ignore, as much as possible, references to gold as protection against the continuing increase in the price level which itself has been deliberately understated by monetary officials. The media and government understand that precious metals are the ultimate security against runaway inflation and economic collapse.

While the increase in the gold price has reached nominal highs, it and the price of silver have not passed their all-time 1980 highs in real terms. Adjusted for inflation, gold would have to rise to about $3590 an ounce while silver would have to surpass $50 an ounce. Both are poised to exceed these watermarks in the not-too-distant future.

Precious metals will continue to escalate unless the Federal Reserve radically changes its interest rate policy to combat inflation as former Fed Chairman Paul Volcker once did. Volcker raised interest rates to double-digit levels which caused gold prices to fall. While Volcker could get away with such actions (because, at the time, the U.S. was still a creditor nation), current Chair Jerome Powell cannot because of the enormity of public and private debt. Double-digit interest rates would collapse the economy and plunge millions of Americans into bankruptcy.

The rising price of gold is anticipating some of the promised policy actions of the Fed. Since the end of last year, the central bank has indicated that it would be cutting interest rates. In addition, Powell is considering ending the Fed’s “Quantitative Tightening” (QT) program. Both are highly inflationary.

While commentators have focused on gold’s spectacular price rise, there is an underlying issue that is also taking place. The record setting gold price is signaling that the present fiat monetary order, which is based on the dollar as the world’s reserve currency, is coming to a financially unpleasant end.

Ever since 1971, when the Nixon Administration closed the “gold window,” refusing to redeem gold for dollars held by foreign central banks, the world has been on a “dollar standard” where bank reserves are held in Greenbacks. If the Fed continues to print dollars to sustain government spending at this rate, the dollar will continue to lose purchasing power and foreigners will no longer want to hold them. Foreign central banks will then turn to gold. In fact, central banks are already increasing their positions in gold which has been a catalyst that has fueled the latest rally.

Not surprisingly, the Fed has not purchased much gold (or is not admitting publicly that it has) since it would be a bad look for the issuer of the world’s reserve currency to be abandoning its own currency for gold.

Besides the severe financial implications if the dollar is dethroned, there will be dramatic geopolitical repercussions from the loss of its hegemony. Just like the British pound was replaced as the dominant world currency after England insanely exhausted itself in fighting WWII and ending its empire, America will face a similar future when the dollar becomes just another money. Many will see it as a “blessing” if and when the U.S. Empire comes to an end.

While it would appear logical and morally sound to replace the present crumbling monetary order with one based on gold and silver, a far worse paradigm than even the present one is, no doubt, being planned. The new system will be one of central bank digital currency (CBDC) which would give governments and bankers the power to monitor and control all aspects of economic and social life.

Some states have passed legislation to counter CBDC, such as Florida in 2023 under Governor Ron DeSantis who said: “The Biden administration’s efforts to inject a Centralized Bank Digital Currency is about surveillance and control. Today’s announcement will protect Florida consumers and businesses from the reckless adoption of a ‘centralized digital dollar’ which will stifle and promote government-sanctioned surveillance. . . .”*

While the press and policy makers have ignored the surge in precious metal prices, it should be a warning to everyone that difficult economic times are still yet to come with the potential of a new draconian monetary order to be installed on the horizon. Observant individuals should heed gold’s signals and take appropriate measures to safeguard their futures.

*https://www.flgov.com/2023/03/20/governor-ron-desantis-announces-legislation-to-protect-floridians-from-a-federally-controlled-central-bank-digital-currency-and-surveillance-state/

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

The U.S. Is Spending $1 Trillion Every 100 Days On The Deficit

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While it made some headlines in the financial press, neither policy makers nor the two presumptive presidential nominees have paid much attention to the fact that the U.S. is adding a mind-boggling $1 trillion to the national debt every 100 days. This amounts to around $3.6 trillion annually.

As law makers remain willfully ignorant of the financial elephant in the room, it is most likely that the only way that the debt will be addressed is through a monetary crisis which will involve the status of the dollar as the world’s reserve currency. Such a scenario would then force authorities to take action.

As if there needed to be more evidence of how impervious Congress and the Biden Administration are to the burgeoning debt spiral, the House and Senate passed two stop-gap funding packages to avoid a government shut down on March 22, 2024. One Senator called it “a pork fest of epic proportions.”*

Despite the ominous prognostications of a dollar collapse by financial doomsayers, the Greenback has remained the best of all competing currencies. Yet, this time could be different, since interest rates – which have been artificially suppressed by the Federal Reserve (Fed) – have risen, making servicing of the national debt more expensive as Moody’s Investors Service noted: “In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues Moody’s expects that the US’ fiscal deficits will remain very large, significantly weakening debt affordability.”**

While “King Dollar” has continued its financial hegemony, the running of a staggering national debt – which now stands at over $34 trillion – has had baneful repercussions for the average American. The funding of the debt has led to a resurgence in 1970s-style stagflation with a decline in productive job growth such as manufacturing and near double-digit price inflation. This, of course, has had a deleterious effect on the middle and lower classes’ standards of living since rising prices disproportionately effect these groups harder than the more affluent.

Of course, the simplest approach (although politically unpalatable) to the problem would be to dramatically cut government spending by eliminating agencies and programs. With the Uniparty in charge, however, there is virtually no chance of budget cuts, especially in an election year. Whatever happened to the “deficit hawks” and those calling for a balance budget amendment to the Constitution?

The funding of the debt is the primary factor for the rise in consumer and producer prices. Since federal spending is beyond what the government receives in revenues, it must borrow through the issuance of debt/bonds to make up for the shortfall.

The principal buyer of government debt has been the Fed, which pays for the bonds by the creation of money, “out of thin air.” The printing of money (now done through the stroke of a computer key) bids up prices in the market. Federal Reserve officials have innocuously called this scam “Quantitative Easing” (QE), which is in realty a monetization of the debt.

Since the Fed has begun hiking interest rates, it has been doing “Quantitative Tightening” (QT) where it ostensibly has not been buying U.S. debt, but selling it. This would lead to a contraction of the money supply and a fall in prices. The central bank has not been aggressive enough in its tightening nor has it raised interest rates enough to have any real effect on soaring prices.

It is highly doubtful that the U.S. will escape the fate of other republics who have pursued reckless fiscal and monetary policies. It is almost a mathematical certainty that the nation will default on its debt by either hyperinflating the currency or discounting bonds with massive haircuts to their premiums.

The most likely path is hyperinflation; then the dollar will once again fulfill Voltaire’s dictum that all “paper money eventually returns to its intrinsic value – zero.” While there will be massive social misery from a dollar collapse, the one bright spot from its demise is that it will mean an end of the murderous U.S. Empire.

*Tyler Durden, “’A Pork Fest of Epic Proportions:’ Congress Passes Spending Package to Avert Shutdown.” Zero Hedge 8 March 2024. https://www.zerohedge.com/markets/pork-fest-epic-proportions-congress-passes-spending-package-avert-shutdown

**Quoted in Michelle Fox, “The U.S. national debt is rising by $1 trillion about every 100 days,” cnbc.com https://www.cnbc.com/2024/03/01/the-us-national-debt-is-rising-by-1-trillion-about-every-100-days.html   Updated, 4 March 2024.

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

The Hypocrisy of the Sam Bankman-Fried Conviction

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Sam Bankman-Fried (SBF), the founder of FTX and Alameda Research hedge fund has been found guilty on all seven counts related to financial fraud and money laundering in a lower Manhattan court room. The trial took a lot less time than expected as did the jury’s deliberation of the case which speaks to the overwhelming evidence against the onetime financial guru of entertainers, crypto enthusiasts, and politicians. SBF could face up to 100 years behind bars.

Gary Gensler, chairman of the Securities and Exchange Commission, said that “Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto.”* Manhattan U.S. Attorney Damian Williams concurred, calling Bankman-Fried’s actions “one of the biggest financial frauds in American history.”**

SBF’s conviction is particularly fitting since he had marketed himself as a new-style capitalist who was more interested in philanthropy and giving away his wealth, instead of enriching himself. That so many were taken in by this charlatan, especially a number of supposedly savvy investors, demonstrates again that greed remains a significant part of the human condition.

While SBF will hopefully receive his just rewards for his wrongdoings, there is another fraud that has been taking place in the financial world for quite some time which dwarfs exponentially the scam of the one-time “crypto-king.” Unlike SBF, however, this entity continues to exist and faces no prosecution, but instead is often praised for its operations.

The institution, of course, is the Federal Reserve and, for that matter, all central banks. Central banks do what FTX did but on a colossal scale. While SBF’s crimes were limited to those who foolishly invested with him, the Fed’s customers are all those who hold dollars and have little option to not use them unless they want to revert to barter and become desperately poor. Like what SBF did to his investors, the Fed has defrauded (although surreptitiously) its “customers” by robbing them of their purchasing power through monetary debasement. The loss of purchasing power by the public has been redistributed to the Fed, the political class, and financial elites.

The Federal Reserve

While Fed officials, the government, academia, and the sycophantic financial press may try and obfuscate the matter, the fact remains that the Federal Reserve has the ability to create money out of thin air and without limit. It is counterfeiting writ large. No criminal, be it SBF, Bernie Madoff, or the Mafia could ever dream of such a scenario!

The Fed’s creation of money through credit expansion is certainly more subtler than the swindling which SBF engaged in or what took place in earlier times from “coin clipping,” but the criminality of the action is the same. Under Western jurisprudence, however, central banking is now enshrined in law as a legitimate part of financial life.

As SBF wrapped himself in an aura of a benevolent and charitable new-age businessman, the Fed hides behind its criminality by presenting itself as a necessary and indispensable factor for the nation’s economic well-being. Without the Fed and its dual mandate of “price stability” and full employment, the economy would collapse.

Yet, this is a ruse. Before the advent of central banking, economic life went about quite nicely. It was only when central banks appeared that the dreaded boom and bust cycle became more frequent and severe. Moreover, in the pre-central bank era, the world was on a metallic monetary standard which protected peoples’ purchasing power.

The Fed was created by the major U.S. banks and top politicos at the time to allow banks to counterfeit without facing the consequences of their actions. Stable prices and low unemployment are secondary functions of the Fed and mostly spoken about for public relations. Protection of the system, especially the solvency of the Big Banks and now funding the national government through debt monetization, remains the prime responsibility of the Fed.

This, of course, is not to exonerate SBF. Why is it though that the laws which convicted the rogue crypto financier are not applied to America’s central bank? When sovereigns of the past debased the money supply most acknowledged its immorality and pointed out who benefited. In this supposed enlightened age where “equal justice before the law” is a ruling mandate of the legal system, its application apparently does not apply to the monetary authorities of the world.

Capitalism, at its core, is a moral argument where respect for property rights, the freedom to exchange, honest money, and the liberty to become an entrepreneur are the foundations which the system rests. Those who legitimately satisfy consumer tastes and demand are rightly rewarded. Naturally, in doing so, entrepreneurs enrich themselves but they do so by providing for the needs of their customers and in the process create jobs and incomes for those they employ, all of which is done on a voluntary basis.

Central banking is the essential instrument of “crony capitalism” which is the antithesis of free enterprise. Crony capitalism is a new version of mercantilism which was condemned by the likes of Adam Smith and was one of the factors why the American Revolution was fought. It has since come back with a vengeance.

Besides the immorality of central banking, the Fed’s manipulation of the money supply has deleterious effects on economic life. Inflation hurts the poor and the working class disproportionately while the Fed’s control of interest rates and credit is the reason for the dreaded business cycle.

The present age has prided itself in its efforts to attain justice in regard to race relations, the environment, economic equality, and now gender recognition. Yet, the immorality of central banking remains and while Sam Bankman-Fried may be incarcerated, social justice warriors (as well as conservatives) willfully ignore the counterfeiting elephant in the room. Until central banking is outlawed, a truly just social order is an impossibility.

*https://www.zerohedge.com/political/sam-bankman-fried-found

**https://nymag.com/intelligencer/2022/12/sam-bankman-fried-has-been-arrested.html

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

Trump’s Inflation

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Former President Donald Trump attends a rally in support of Arizona GOP candidates, Prescott, Ariz., on July 22, 2022. (Mario Tama/Getty Images)

Once again, former president Donald Trump criticized the Biden Administration for the record consumer price increases that Americans are now paying. His remarks followed up on his July 4^th speech in Wyoming where he lamented about the state of the nation: “I know it’s not looking good for our Country right now, with a major War raging out of control in Europe, the Highest Inflation in memory, the worst 6 month Stock Market in History, the highest energy prices ever.”*

In his most recent campaign rally for GOP hopeful Kari Lake, Trump lambasted President Biden for creating the “worst inflation in 47 years”** and for his “war on American energy” which Trump believes has contributed to the record hike in fuel prices.

The former president boasted that had he been re-elected “none of these terrible events would have happened.” He reassured his audience “not to worry” and that “we will make America great again.”

As with all of his post-presidential rallies, Trump’s criticism of the Biden regime comes with touting his own accomplishments as chief executive. Most of these claims are so outrageous they damage or totally negate his critique of Biden’s policies and make Trump sound like a fool.

Take, for instance, his rally in Arizona for Kari Lake, where he had the audacity to say that under his watch the country “had the greatest economy in the history of the world with no inflation.” [!] Such nonsense needs no comment.

Like his boasts about the economy, the former president deftly left out his Administration’s role in the drastic rise in prices which Americans are currently suffering from.

First, however, the meaning of “inflation” should be explained.

Inflation, properly defined, as it was understood until the present era, meant an expansion of the money supply. “Deflation,” its opposite is a decrease in the money supply. The rise or fall in prices – usually a rise in producer and consumer prices – is a consequence of the expansion or contraction of the money supply. Once understood, the rampant rise in prices in America and throughout the world has been the result of the increase in the money supply not only by the Federal Reserve, but all central banks.

Another important tenet of monetary theory long since forgotten has been the notion of a “lagging indicator.” Between the expansion of the money supply – inflation – and the resultant increase in prices, there is often a lag which could take months or years to appear.

The increase in consumer and producer prices is due to the dramatic explosion of money and credit which took place during the Trump Administration not only in response to the scamdemic, but in the years leading up to it. In fact, the plandemic was a convenient excuse to inject massive liquidity into a system that began to hemorrhage in September, 2019. In the early months of 2020, the markets began to implode before the unnecessary lockdowns as the air began to come out of the financial bubble. This has been ignored by the financial press and Trump himself.

Prior to the covid hysteria, Trump had repeatedly lobbied for “cheap” money, calling for a renewal of quantitative easing, reduction in interest rates, and he even spoke about “negative” rates. The former president threatened to fire Jerome Powell, whom he had picked to head the Federal Reserve, for not reducing interest rates far enough. Trump complained that President Obama benefited from the Fed’s accommodative monetary policy and wanted similar treatment so as to keep the financial bubble going.

Trump’s fiscal policy was also highly inflationary as he ran record deficits long before covid. His tax cuts and failure to cut government spending led to greater government borrowing which the Fed was forced to monetize. Trump was on pace, well before the 2020 lockdowns, to spend more money in four years than Obama spent in his two terms. By 2019, the deficit had grown to $1 trillion dollars, up $205 billion, 26 percent from 2018.*** Again, all before covid had begun.

It was the Trump Administration’s wrongheaded response to the corona virus which is largely responsible for the rising prices of today. If the lockdowns were necessary (which a growing number of officials now admit they were not), the proper policy would have been to reduce the money supply (and government spending in general) since the lockdowns reduced production meaning less goods and employment. The massive increase in the Fed’s balance sheet from $4 trillion to some $9 trillion meant more money “chasing fewer goods” causing the prices of the available goods to increase – some dramatically.

What was needed was a reduction in consumer spending since there was less goods being produced with the lockdowns. Less demand would have offset the reduction in supply and would have kept prices from spiraling.

Instead, Trump – as did his successor – following the doctrines of Lord Keynes, attempted to maintain aggregate demand at pre-covid levels and sent out stimulus checks even to those still employed. While the money given out to American workers pales in comparison to the massive transfer of wealth to politically-favorite corporations, big business, and the expansion of the government itself, the propping up of aggregate demand led to supply chain shortages.

Trump is not alone in his ignorance of economics. His handlers, economic advisors, and the vast majority of his loyal supporters do not understand what took place under his administration. The current financial mess can be laid at his – and the Federal Reserve’s – feet. To be fair, his predecessor, Barrack Obama, is also liable.

The “inflation,” and now recession, which the country is suffering through cannot be fully attributed to the Biden Administration although it too has added to the crisis with more profligate spending.

The remedy for the current mess is not the re-election of a very flawed former president who does not understand the problem at hand and throughout his term was constantly outfoxed by the Swap which he was elected to drain. The solution is a return to sound money, the abolition of central banking, and the allowance for the necessary cleansing of the financial bubble. Until a presidential contender speaks in these terms, America’s financial woes will continue.

*https://www.zerohedge.com/political/heres-what-trump-says-inflation-would-be-if-he-were-still-president

**https://www.zerohedge.com/political/trump-blasts-biden-over-soaring-prices-says-true-inflation-rate-much-much-higher-91

***https://www.washingtonpost.com/business/2019/10/25/us-deficit-hit-billion-marking-nearly-percent-increase-during-trump-era/

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

“Inflation,” Properly Defined

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What Is Inflation in Economics? Definition, Causes ...

The use or rather misuse of language has always been an effective tool of politicians to enact their agendas. George Orwell’s “Politics and the English Language” brilliantly showed, in his day, how language was being manipulated for all sorts of totalitarian measures:

Political language — and with variations this is true of all political parties, from Conservatives to Anarchists — is designed to make lies sound truthful
and murder respectable, and to give an appearance of solidity to pure wind. One cannot change this all in a moment, but one can at least change one’s own habits, and from time to time one can even, if one jeers loudly enough, send some worn-out and useless phrase — some jackboot, Achilles’ heel, hotbed, melting pot, acid test, veritable inferno, or other lump of verbal refuse — into the dustbin, where it belongs.*

Since its publication in 1946, matters have only gotten worse. For example, in today’s parlance words such as “racism,” “discrimination,” “fascism” have lost all meaning and are usually used by the Left to smear its political opponents.

In the sphere of economics, examples abound of the misuse of terms and concepts all of which advance the interests of the politically-connected elites, technocrats, governments, and the banking establishment at the expense of everyone else. One of the most glaring examples which, after the financial collapse in 2020, has now become more prominent in daily life, has been the meaning of the word “inflation.”

Inflation, at one time, and properly understood meant an increase in the money supply; it did not mean an increase in prices. A rise in prices was and still is, the result of inflation.

The meaning of inflation, however, has been deftly misused by the world’s monetary lords to cover their own nefarious machinations. By deliberately changing the term it deflects the focus of their activities which can thus be blamed on others – greedy businessmen, oil cartels, workers demanding higher wages, etc.

Since central banks have complete control of the money supplies of the world, when inflation is properly understood its cause can be directly traced to them, which may lead to some inconvenient – for the banksters at least– inquires such as: “How did they attain such power and privilege?”

Redefining inflation has been done to disguise and shift focus away from the actual cause of what America and many economies of the Western world are now experiencing in the startling rise in both producer and consumer prices. This is the result of the central banks’ expansion of the money supply to mind-boggling proportions purportedly to fight the corona plandemic, but in reality it has been done to offset the financial implosion which began in late February/March of 2020 before the unnecessary and destructive lockdowns began. The lockdowns and closing of the economies gave cover for the Federal Reserve and central banks to create vast amounts of money and credit to salvage, and then re-inflate a bubble in the stock and asset markets.

An accurate account of the matter will show that the financial collapse of the system really began in the fall of 2019 as the “repo” market began to meltdown, causing the Fed to intervene with injections of “liquidity” to keep interest rates from spiking. However, just like the meaning of inflation has been corrupted, so has the narrative of the financial collapse of 2020 been purposely skewed.

As a separate discipline, economics developed in large part in reaction to British Mercantilism of the 18^th century. Economic theory was used by authors such as Adam Smith in his Wealth of Nations to debunk the system of regulations, taxes and subsidies that the British government imposed. Such economists, as did later schools of thought, most notably the Austrians, used economic thinking and its terms to expose the baneful effects of government intervention, fiat money, and the benefits of free trade.

Over time, however, most economists became corrupted and instead of acting as a check on state power, became champions of regulation, central banking, and all sorts of social engineering schemes. Economists were paid for their sell out with cushy positions and jobs in the state apparatus to manipulate language and doctrines.

Today, an inflation rate of 2% is regarded by Fed officials as good for the economy and something monetary policy should try to achieve. Previously, a rise in prices of 2% was seen for what it was – a loss of purchasing power hurting the middle and lower classes the worst while benefiting the wealthy.

For those who seek to rid economics or, for that matter, all the social sciences of deliberately misleading language and terms, George Orwell’s works are indispensable. It is, therefore, incumbent for truth seekers of all persuasions to do so not only for their own benefit, but to maintain the sage author’s legacy.

*https://libcom.org/files/Politics%20and%20the%20English%20Language%20-%20George%20Orwell.pdf

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com

Is Bitcoin A Diversion from the Natural Monetary Order?

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As modern man continues to wantonly deviate, flaunt, and reject the natural law and the Divinely-created order from which it derives, it is not surprising that illusions like Bitcoin and other crypto currencies have captured the imagination of many and have provided a vehicle for scammers to rip off their fellow man.

Crypto currencies are a more complex, yet still devious derivative of the immoral, economic destructive, and social debilitating system of central banking. In response, Bitcoin pumpers have craftily tried to portray digital currencies as a “decentralized” alternative to the present fiat, paper-money standard.

While this has attracted many libertines and “fast buck” speculators, Bitcoin is more similar to the present fractional-reserve monetary order than a real honest-to-goodness money and banking system based on 100% redeemable currency. Moreover, crypto currencies’ initial allure was that they could be used as a general medium of exchange, but as time has gone on, their sycophants have had to concede that none of these Ponzi schemes can act as money.

Unlike a metallic monetary order where gold and silver have to be mined and brought into use through land, labor and capital, Bitcoin, like paper money, is created out of thin air. In this sense, however, paper money is superior to Bitcoin because it can be used for other purposes albeit severely limited – wall paper. Bitcoin, instead, has NO intrinsic, or “use” value, as precious metals did prior to their use as general medium of exchanges.

Crypto currencies also fit nicely in the on-going efforts by the Establishment and monetary authorities to eliminate cash in transactions. Despite the talk of “decentralization” and privacy that crypto currencies’ supposedly provide, all transactions on the computer and across the Internet can be recorded and traced which governments will use to spy on their tax slaves. In direct contrast, gold and silver carried on one’s person or stored for safe keeping is the most private and secure means of wealth preservation ever known.

The banksters have been pushing a cashless world to reduce their operating costs as Bank of America’s CEO Brian Moynihan recently called for:

We want a cashless society. We have more to gain than anybody from a pure operating cost (perspective).*

If anyone believes that the only reason banksters like Moynihan want a cashless society is to reduce costs, they are incredibly näive. Banks and other credit institutions have, from orders of the surveillance arms of the national security states across the globe, de-platformed and tried to silence all sorts of alternative and politically incorrect websites and groups by shutting down their bank and credit card accounts. If cash is outlawed, it will have a devastating effect on dissonant outlets and true free speech in general.

The efforts to get rid of cash has been a long held goal by the ruling class that began with the introduction of paper notes which were granted legal tender status. Irredeemable notes for specie followed and outright confiscation and prohibition of gold ownership took place in America and other jurisdictions in the 20^th century. Internationally, gold was finally severed from monetary use with President Nixon’s insane decision to no longer redeem US dollars for gold in 1971.

More importantly, and what infuriates Left-Libertarians of the crypto movement is that the precious metals were created by Divine Providence to be used by His creatures to augment their lives and eventually create sophisticated societies. The qualities and quantity of gold and silver were designed in their optimal amounts to serve as a medium of exchange. There are ample historical episodes of the social and economic disasters which have occurred when “natural money” was replaced by a man-made substitute. The powers-that-be are certainly aware of this historical “law” and have long understood that to maintain their hegemony gold and silver must not be a part of a monetary order.

The contemporary world is in a state of perpetual crisis because it has persistently violated the natural law. The creation of more illusions such as Bitcoin and other crypto currencies is not a solution, but are diversions which prevent mankind from returning to a natural monetary order.

*Rey Mashayelchi, “Bank of America CEO: ‘We Want a Cashless Society.'” MSN.com, 19 June 2019.

Antonius Aquinas@antoniusaquinas

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The Cost of a Trump Presidency

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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 and the “Maestro”

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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/

“A Date Which Will Live in Infamy:” President Nixon’s Decision to Abandon the Gold Standard

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Nixon-Gold

Franklin Delano Roosevelt called the Japanese “surprise” attack on the U.S. occupied territory of Hawaii and its naval base Pearl Harbor, “A Date Which Will Live in Infamy.” Similar words should be used for President Nixon’s draconian decision 45 years ago this month that removed America from the last vestiges of the gold standard.

On August 15, 1971 in a televised address to the nation outlining a new economic policy entitled, “The Challenge of Peace,” Nixon instructed the Treasury Department “to take the action necessary to defend the dollar against the speculators.”*

Nixon continued:

I have directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold or other reserve assets, except in amounts and conditions determined to be in the interests of monetary stability and in the best interests of the United States.**

Of course, any objective student of history knows that this was a lie and that it was not “speculators” which were causing monetary instability, but the U.S.’s own crazed inflationary policy which attempted to fund its imperialistic endeavor in Vietnam while expanding the welfare state at home. This resulted in the Treasury losing an alarmingly amount of gold reserves to other central banks who rightly sought real value in exchange for depreciated American greenbacks.

In essence, Nixon’s decision ended gold redemption and placed the U.S. and the rest of the world on a purely fiat paper standard for the first time in recorded time. By doing so, the U.S., in effect, became a deadbeat nation which no longer honored its obligations and was set on the road to its current banana republic status.

Instead of impeachment proceedings and his ultimate resignation for the juvenile break in at the headquarters of the nation’s other ruling crime syndicate, Nixon should have been imprisoned for this deliberate and destructive act which has led, in large measure, to the nation’s crushing and insurmountable debt burden, reoccurring booms and busts, and now economic stagnation.

Nixon’s disastrous decision had precedent. FDR had his own day of monetary infamy in 1933 when, by Executive Order 6102, he outlawed the private ownership of the precious metal while eliminating gold redemption by banks for dollars. Ostensibly, the order was instituted as an emergency measure to combat the Depression, but in reality, it was done to allow the Federal Reserve greater “flexibility” in inflating the money supply.

While Roosevelt and Nixon’s decisions would backfire economically, their actions highlighted the totalitarian direction that the federal government and its executive branch were heading throughout the 20^th century. Moreover, the lack of opposition or protest to blatant executive dictatorial decrees by either the legislative or judicial wings of the federal government demonstrates again the flawed and frankly naive argument put forth by Constitutionalists of every ideological persuasion on how the celebrated “separation of powers” theory checks tyranny.

Nixon’s final abandonment of the gold standard had far greater ramifications than simply bad economics. Without the discipline of hard money, central banks could, and did, create massive quantities of paper money and credit, which enriched the politically connected financial elites and the governments which they were aligned. Such power was used, in time, to control, spy on, and regulate the subject populations to a degree never seen before. The power of the state has swelled mostly through bank credit expansion without worry of gold redemption.

Despite what is taught in social science courses, a true gold standard is a greater protector of individuals’ economic well being and, ultimately, their political liberty than any legislation or “rights” document ever penned. Hard money limits state power!

While it is painful to quote from an ardent opponent of sound money, the international bankster Baron Rothschild said it best when he described the relationship of money and power: “Permit me to issue and control the money of a nation, and I care not who makes its laws.”

Richard Nixon’s elimination of the last remnant of the gold standard over four decades ago combined with FDR’s earlier decree has fulfilled to the detriment of the American and world economies Baron Rothschild’s adage to a tee. The return of prosperity and individual liberty will only come about when these two heinous acts are eradicated.

*Richard M. Nixon. “Address to the Nation Outlining a New Economic Policy: ‘The Challenge of Peace.’” The American Presidency Project. 15 August 1971. http://www.presidency.ucsb.edu/ws/?pid=3115

**Ibid.

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com/

Don’t Expect a Return to a Gold Standard Any Time Soon

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goldstandard

Despite trillions of paper currency units poured into the world economies since the start of the financial crisis, there has been no recovery, in fact, all legitimate indicators have shown worsening conditions except, of course, for the pocketbooks of the politically -connected financial elites. Yet, despite the utter failure of the current money and banking paradigm to resolve the situation, the chance of a return to a commodity based monetary order is highly unlikely especially when one looks at the anti-gold bias found in typical college economics textbooks.

Macroeconomics: Principles, Problems and Policies by McConnell, Brue and Flynn is a leading introductory level college text which has been through, to date, some 20 editions. Until the financial crisis of 2008, the subject of a commodity- backed money was not discussed, however, after the crisis and the popularity of gold standard enthusiasts like former Congressman and Presidential candidate Ron Paul, the authors of Macroeconomics obviously felt the need to address the resurgence in the interest of metallic money.

McConnell and company’s critique of the gold standard is full of fallacious reasoning that monetary cranks have employed for generations, all of which have been easily refuted by eminent economists. Yet, the lies and distortions about commodity money continues in academia.

The authors admit that:

To many people, the fact that the government does

not back the currency with anything tangible seems

implausible and insecure.

This logical sentiment and realization of the fraudulent nature of unbacked currency by those outside the economics profession is brushed aside by the esteemed trio:

But the decision not to back the currency with anything tangible was made for a very good reason.

Yes, and we know what that reason was: so that the state and central banksters could have a ready and unlimited access to the creation of money to solidify and expand their power. The gold standard was always an impediment to this cherished dream of the political elites – the establishment of an irredeemable, paper monetary order.

The authors, not surprisingly, see things differently:

If the government backed the currency with something

tangible like gold, then the supply of money would

vary with how much gold was available. By not backing

the currency, the government avoids this constraint and

indeed receives a key freedom – the ability to provide

as much or as little money as needed to maintain the

value of money and to best suit the economic needs of

the country.

By all means, the state and central banksters should be given as much “freedom” as possible for we all know that governments would never abuse such license and would always act in the best interests of their citizens. Certainly, the authors are not aware of any cases in history where such “freedom” was ever abused.

Nearly all today’s economists agree that managing the

money supply is more sensible than linking it to gold or

to some other commodity whose supply might change

arbitrary and capriciously. . . . if we used gold to back the

money supply so that gold was redeemable for money . . .

then a large increase in the nation’s gold stock as the

result of a new gold discovery might increase the money

supply too rapidly and thereby trigger rapid inflation. Or

a long-lasting decline in gold production might reduce the

money supply to the point where recession and

unemployment resulted.

Volumes have been written debunking such stupidity. The point, however, is that millions of minds have been exposed to such thinking and while most will not become economists (thank goodness!), what is taught in college and university classrooms about the gold standard is negative, to say the least. Moreover, those who continue in a career in finance or economics will unlikely ever be presented with an accurate assessment of the gold standard.

A return to a sound and just monetary order will only take place after the ideological groundwork has been first laid, just as fiat money and central banking came about after years of proselytizing by inflationists. It is also not enough to show the economic efficacy and moral soundness of commodity money, the ideas of crackpots like McConnell, Brue and Flynn need to be exposed for what they are.

Under the current academic environment, as generations have been misinformed, deceived, and lied to, it is unlikely that a return to a gold standard will take place. Until the intellectual battle is won, paper money and the central banksters that manage it will continue their reign of financial terror.

Antonius Aquinas@AntoniusAquinas

https://antoniusaquinas.com/