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A Prudent Man and the Financial Crisis

Posted in Economics, Financial Markets, Financial News, tagged , , , on March 12, 2023| Leave a Comment »

“Blue line generates income to pay interest on red line. See the problem? It’s just math.” Financial Advisor Lawrence Lepard

A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished.

  • Proverbs 22:3

Last week saw the second-largest banking collapse in American history with the implosion of Silicon Valley Bank (SVB).  The failure of SVB followed closely on the heels of another bank failure, Silvergate Bank.  As of this writing, there are rumors of more bank failures to come.

Do these bank failures and rumored bank failures signal an imminent collapse of the financial system?  I don’t know.  I’ve learned to be careful about predicting such things.  The Wall Street/Washington/Central Banker establishment has thus far shown itself both dedicated to and capable of kicking the can down the road to a degree that many financial observers, myself included, did not think possible. 

In my opinion, these bank failures and possible future bank failures stem from the 2008 financial crisis, which itself was never properly dealt with.  The problems in the financial system that cause the Great Recession were never faced squarely and were only papered over with the “untampered mortar” of money printing, bailouts, and accounts tricks.  Instead of dealing with our problems honestly, we tried to cheat our way out of the financial crisis.  So it should come as no surprise that it appears to be coming back. 

So what is a Christian to make of all this?  How are we to respond?  The Bible has a lot to say about ideas such as prudence, wisdom, and discernment.  These traits were highly prized at the time of the Reformation and in the following centuries by the heirs of the Reformation. 

Those with a financial or business background may be familiar with the prudent man rule.  According to one definition I found, the prudent man rule is, “a rule giving discretion to a fiduciary and especially a trustee to manage another’s affairs and invest another’s money with such skill and care as a person of ordinary prudence and intelligence would use in managing his or her own affairs or investments.”  According to this, not only are fiduciaries to manage the financial affairs of others in a prudent fashion but the notion of prudence is also tied to how they would manage their own affairs.  That is, the prudent man standard encompasses the golden rule, whereby we are to treat others as we ourselves would like to be treated. 

Prudence in financial and other matters served our Protestant forebears well, as it enabled them to build the greatest civilization in history.  But as Christianity faded from the scene in America and other nations formerly under the influence of the Reformation, a new ethic took hold.  No longer did prudence govern the thinking of men, but a sense of entitlement and instant gratification.

John Maynard Keynes, the most influential economist in the past 100 years, hated the Christian ethic of financial prudence demonstrated in the 19th century and railed against it.  In his 1920 book The Economic Consequences of the Peace, Keynes wrote,

And on the other hand the capitalist classes were allowed to all the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very little of it in practice.  The duty of ‘saving’ became nine-tenths of virtue and the growth of the cake the object of true religion.  There grew round the non-consumption of the cake all those instincts of puritanism [n.b. the Puritans are universally despised by unbelievers such as Keynes] which in other ages has withdrawn itself from the world and has neglected the arts of production as well as those of enjoyment.  And so the cake increased; but to what end was not clearly contemplated.  Individuals would be exhorted not so much to abstain as to defer, and to cultivate the pleasures of security and anticipation.  Saving was for old age or for your children; but this was only in theory, – the virtue of the cake was that it was never to be consumed, neither by you nor by your children after you.

Keynes, The Economic Consequences of the Peace, pp. 19-20.

With a mindset like this, it should come as no surprise that Keynes was an apostle of deficit spending and government debt, both of which he mistakenly saw as necessary for ending the 1930s Great Depression, which itself was caused and prolonged by the interventions of central bankers and governments.  Asking central bankers and politicians to fix a depression or a banking crisis is like inviting an arsonist to put out your house fire.   

How widespread is the influence of Keynesian economics?  A famous 1971 quote from then-President Richard Nixon is a clue.  “We are all Keynesians now,” said the President.  It was true then, and it remains true today.  All, or nearly all, economists working in academia, on Wall Street, in corporate America, and in Washington are Keynesians of some sort or another.  The baleful influence of Keynesian economic thought is substantially responsible for the sorry economic predicament of America and other western nations.  What is Keynesian economics?  Without delving into a lot of technical details, it’s the idea that you can deficit spend yourself rich.  The “puritanical” prudence demonstrated in more Christian centuries said that hard work, savings, and investment were how you built wealth and financial security in the long run.  But Keynes famously said, “In the long run we are all dead.”  Various apologists for Keynes have tried to rehabilitate this statement by arguing that Keynes really wasn’t saying he had no regard for the future.  But when you consider Keynes’s “in the long run we are all dead” comment in the context of his other statements such as the extended quote above, it seems entirely fair to see it as a Keynes’s dismissing the future for gratification in the now.

So back to our earlier question, how is a Christian to respond to the ongoing financial crisis?  Proverbs 22:3 quoted at the top of this post provides good guidance.   Notice that the prudent man does two things, he foresees trouble coming and then hides himself. 

The first thing you and I need to do is to recognize that there is trouble coming.  Many people, even many Christian people, do not realize the serious economic danger America and other western nations are in.  The United States is over $30 trillion in debt.  And that’s just federal debt.  It doesn’t include state, municipal, corporate, or individual debt.  And the debt keeps growing.  In fact, given that our financial system is based on debt, the debt must keep growing to sustain the system.  Obviously, debt cannot expand infinitely and forever.  God has so constructed the universe that all debts must be paid.  Just look at the chart at the top of this post. Do you think debt can continue to grow faster than income? If not, the current financial system must come to an end.  It’s a matter of when, not if, we have a system-down event.  The timing of the collapse is uncertain.  But in my opinion, it’s probably sooner rather than later.

Second, as Christians, we must hide ourselves.  What does this mean in the context of a financial crisis?  A lot of those old-fashioned “puritanical” ideas, the sorts of things that Keynes and others of his ilk hated and made war on a century ago, are a good place to start.  Eliminating debt and building savings is wise counsel.  And when I say savings, I mean at least some of that savings should be held outside the financial system.  That means having some ready physical cash at home.  It also means holding some savings in dollar alternatives.  The best dollar alternatives are physical gold and silver, but there are other options as well.    

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Is the Dollar About to Plunge in Value?

Posted in Economics, tagged , , , , on March 20, 2022| 1 Comment »

The prudent man foresees evil and hides himself, but the simple pass on and are punished.

  • Proverbs 22:3

In a well-known scene from The Wizard of Oz, Dorothy and her companions finally get their audience with the Wizard himself.  It turns out to be a terrifying affair, with thundering, lightning, and smoke all around. 

That is until Dorothy’s little dog Toto runs over and pulls back the curtain on the control booth, revealing the Wizard to be a not-so-imposing fellow, one whose frightening image is the product of special effects controlled from an electronic panel. 

Whether the intention of the filmmakers was for this scene to serve as an illustration of the workings of modern society, I don’t know.  Perhaps it was.  But whatever their intention, it certainly is a glimpse into how things so often do work in our media-driven society.  It’s “look over here, look over here” while at the same time we’re told, “pay no attention to the man behind the curtain!”

Put another way, we’re taught to focus on the effect rather than on the cause of the effect.

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The Biden Regime’s War on the First Amendment

Posted in Economics, Politics, tagged , , , , , , , , on July 18, 2021| Leave a Comment »

White House Press Secretary Jen Psaki on July 16, 2021 (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)

Wherefore putting away lying, speak every man truth with his neighbour:  for we are members of one another.

  • Ephesians 4:25

“There has to be, I think, some sort of way  in which we can sort through information that passes some basic truthiness tests and those that we have to discard, because they just don’t have any basis in anything that’s actually happening in the world.” 

These words are from a speech by Barak Obama in October 2016, just a few weeks before Donald Trump shocked the world by winning his presidential campaign over the establishment endorsed Hillary Clinton.

In the same speech, Obama went on to deny that he was calling for censorship, noting, “The answer is obviously not censorship, but it’s creating places where people can say ‘this is reliable’ and I’m still able to argue safely abut facts and what we should do about it.” 

Nearly five years later, it’s fair to say that quite obviously Obama and others of his political persuasion were talking about censorship, and this became clear enough last week that even the most ardent deniers of the big government/big tech censorship complex have not excuse for missing the Biden regime’s full-bore attack on the First Amendment. 

Just last week, Biden regime official propagandist Jen Psaki stunned many observers with her admission that the administration is flagging posts for Facebook that are “problematic” because they contain “misinformation” on Covid-19.    

In the same press conference, Psaki voiced her displeasure that Facebook was not deplatforming spreaders of “misinformation” fast enough for her, and presumably, for her boss’s tastes.  She said, “there’s about 12 people who are producing 65 percent of the anti-vaccine misinformation on social media platforms.  All of them remain active on Facebook, despite some even being banned on other platforms, including Facebook – ones that Facebook owns.”

If all that wasn’t enough, Psaki was at it again the next day.  In a Friday 7/17 press conference she offered that, “You shouldn’t be banned from one platform and not other if you – for providing misinformation out there.” 

As the saying goes, I need new conspiracy theories, because all my old ones are coming true.

Seriously, people have speculated for years that the Deep State has been behind much, if not all, of the social media censorship.  But this is right in your face government censorship.  We have what is, in my opinion, an illegitimate government installed through election fraud stomping on the right of American’s to freely access information on a matter that affects all our lives.   

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America’s Rapidly Sinking Ship of State

Posted in Collapse of the West, Economics, Politics, tagged , , on February 21, 2021| Leave a Comment »

The Titanic sinks, April 15,1912.

For it was so, when Solomon was old, that his wives turned his heart after other gods; and his heart was not loyal to the LORD his God, as was the heart of his father David.

  • 1 Kings 11:4

Just yesterday, I watched a video – confession, I binge watched several videos – about the sinking of the Titanic.  It’s remarkable after well over a century – this April will mark the 109th anniversary of the sinking of the great ocean liner – the fame of the ship and of its disastrous end show no sign of abating.  Doubtless, it’s the most famous maritime disaster ever. 

Some years ago, I listened to a classroom lecture by Gordon Clark, dating, if I recall correctly, from sometime in the 1950’s.  Clark, remarking on the youth of his students, commented that they hadn’t even been born at the time the Titanic sank. Clark himself was a few months shy of his 10th birthday when Titanic went down in the icy waters of the north Atlantic on that fateful morning of April 15, 1912.       

Shipwrecks have always had a certain fascination for me.  Were you to press me for why that is, I suppose I would have to answer that it’s not so much the shipwreck itself that I find fascinating, but the reaction of the people involved in it.  Life and death situations have a way of revealing the true character of those on board.  And shipwrecks, because they tend to play out over longer periods of time than some other types of disasters, give greater opportunity for the faith, bravery, good judgment, foolishness, and cowardice of people to show themselves.

One of the Titanic videos I watched was titled “Titanic History/What caused the Titanic to Break Up?” Years ago, when I first heard about the Titanic, no one talked about the ship splitting in two.  Maybe this was something known to those who studied the disaster closely, I don’t know.  But for decades, it was not generally known to the public that, before sinking, the ship split in two. . 

One of the points that the presenter made in the video was that, although the breakup came suddenly and visibly, there was a lot happening to the structure of the ship on the inside as it went down.  It was these unseen stresses on the ship’s structure ultimately resulted in the breakup, even if the forces at work were not obvious to onlookers before it happened. 

In reflecting on this idea – the notion that powerful, unseen forces can be at work for some time before producing very visible results – it’s easy to see how it can have a wider application.  In this case, I’m thinking how unseen, yet powerful forces can put stresses on the structure of a nation for years, decades, maybe even longer, prior to their resulting in a major and visible catastrophe of some sort.

Take the nation of Israel, for example.  The kingdom hit its peak under the Solomon.  But even while Israel was at the height of its wealth and power, forces were at work which would split the nation shortly after Solomon’s death. 

Solomon’s policy of forced labor and heavy taxation to pay for his public works projects was very much resented by the people.  He also split the nation into administrative districts that paid little heed to traditional tribal boundaries.  There was the longstanding north-south rivalry that, while remaining subdued during the reigns of David and Solomon, nevertheless was present and which would reassert itself under Solomon’s successor Rehoboam.

There was a fourth, and most important, factor in the breakup of Israel after the reign of Solomon: idolatry.  In 1 Kings 11 we read,

But King Solomon loved many foreign women, as well as the daughter of Pharaoh: women of the Moabites, Ammonites, Edomites, Sidonians, and Hittites – from the nations of whom the LORD had said to the children of Israel, “You shall not intermarry with them, nor they with you.  Surely they will turn away your hearts after their gods.”  Solomon clung to these in love.  And he had seven hundred wives, princesses, and three hundred concubines; and his wives turned away his heart.  For it was so, when Solomon was old, that his wives turned his heart after other gods; and his heart was not loyal to the LORD his God, as was the heart of his father David.

As a result of Solomon’s sin, his lack of faith in the Lord and his turning to idols, God told him that he would tear the kingdom from him.   

Scripture doesn’t record for us what the Israelite public thought of Solomon’s idolatry.  If I were forced to conjecture what the public’s attitude was toward Solomon as his idolatry become more and more obvious, it seems to me that most people probably paid it little heed.  There was no public outcry against it that I am aware of noted in Scripture.  This is not surprising.  After all, Israel’s prospects had never looked brighter in the 500 or so years since Joshua had led them into the promised land.  The nation was numerous, economically prosperous, and militarily powerful.  It must has looked to most Israelites as if the future was even brighter.  And if there was a little idolatry going on in high places, well, no one is perfect. 

Let’s fast forward to our own time.  Do any of the lessons from Titanic or Israel – hidden forces at work for a period of time which result in big, visible breakups – apply to America? The answer, I think, is yes.

Our nation traces its roots to Puritan settlers from England in the 17th century.  Although at the time of the American Revolution, the colonists were remarkably homogenous – 98% of the population was Protestant – there were still significant divisions present.  The most obvious of these was – in an interesting recapitulation of the fault lines found in ancient Israel – the north/south split over slavery. 

In the 19th century, the homogeneity of the nation began to change as waves of Roman Catholic, Eastern European and Jewish immigrants brought large numbers of people to America that did not share the history, religion or political and economic beliefs with the old-stock American’s descended from the nation’s founders.  The 20th and 21st century have seen the growth in the Muslim population in America.  As was the case with the Catholic and Jewish immigration in the 19th century, Muslim immigrants brought with them a religion with a philosophy of politics and economics that was at odds with a free constitutional republic.  It’s not that Roman Catholics, Jews Muslims – and, to be fair, one must add Orthodoxists – are inferior people, but their ideas are inferior and incompatible with republican government.  

In today’s world where diversity is become the pearl of great price and more to be prized that all other virtues, any suggestion that diversity may not automatically be a strength, but can, in fact, prove to be a weakness, is dismissed as unacceptable.  But look at Solomon’s wives.  They were a diverse lot, but they were not a source of strength, but rather one of weakness.  His Moabite, Hittite, Edomite and Egyptian wives “turned his heart after other gods,” the major factor in the breakup of the United Kingdom.    

At the same time waves of non-Protestant immigration was taking place, American Protestantism itself was succumbing to the forces of irrationalism, liberalism and feminism.  Had American Protestants remained true to the faith of their forefathers, perhaps they could have served as counterbalance to the increasing religious and ethnic diversity in American and kept the nation on an even keel. 

But just as Solomon’s unfaithfulness allowed once hidden divisions within Israel to rise to the surface after his death, so too has the faithlessness of American Protestants led the collapse of any basis for national unity in the United States. We’re no longer so much a nation with a shared history and set of beliefs as we are a warring mob of people that happen to live in the same geographical vicinity to one another.  In the Year of Our Lord 2021, it appears to this observer that the rule of law in America is, if not fully dead, very nearly so and that there is nothing to stop its ultimate demise. If and when that day comes, can America be long for this world?  Jesus said that a kingdom divided against itself will not stand.  If true, and it is, how can America survive?

Earlier I mentioned that what I find most compelling about shipwrecks is that they provide opportunity for people to reveal their true character.  On Titanic there were heroes and cowards.  Not often mentioned were the brave stokers and engineers who stayed at their posts in the bowels of the ship long after it was obvious that Titanic was going down.  Their actions helped keep the ship’s power on and wireless going to the very end. There were cowards, too.  One man dressed as a woman to secure a place on lifeboat he otherwise would not have been able to board.       

Faith was found among Titanic’s passengers as well. Well known is the account of the ship’s orchestra playing “Nearer My God to Thee.”  Then there’s the less well-known but very compelling account of Scottish evangelist John Harper, who preached the Gospel to his final convert just before drowning in the Atlantic’s icy waters.   

The metaphor “ship of state” dates all the way back to Plato’s Republic, and is certainly an apt turn of phrase for this post. Just as ships are large and powerful objects that require a steady hand to steer them, so to do states.  After a large disaster in either case, there can be a lot of second guessing of the people in charge.  You can play the “what if” game with Titanic just as you can with America. 

What if Titanic’s designers had extended the watertight compartments a deck or two higher?, what if the ship wasn’t traveling at top speed?, what if the lookouts had spotted the iceberg 30 seconds sooner?, what if the iceberg hadn’t just nicked the six and final compartment? 

What if slavery had never been established in the colonies?, what if American Protestants had not abandoned the Calvinism of their colonial forefathers?, what if America had a wiser immigration policy in the 19th and 20th centuries?

We can play “what if” all we want, but obviously none of that is going to change either the fate of the Titanic or the present reality of our nation. 

As did Titanic, America is taking on water, and fast.  As Christians, how do we respond?  Do we ignore what’s going on around us and seek to rearrange the deck chairs?  Do we panic?  Do we play the coward hoping to survive through dishonest means?  No to all that.  What we do is what we’re called to do, to walk in our present circumstances in a manner worthy of the Lord.  And what does that look like?  Read what the Apostle Paul wrote to the Corinthians, “Watch ye, stand fast in the faith, quit you like men, be strong.”

That’s our job. Yours and mine.      

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This is Going to Hurt, Part 3: Fed Money Printing Made Easy

Posted in Economics, Financial Markets, Financial News, tagged , , , on May 24, 2020| Leave a Comment »

Jerome Powell, Federal Reserve Chairman.

“We print it [money] digitally.  So as a central bank, we have the ability to create money digitally. And we do that by buying Treasury Bills or bonds or other government securities.  And that actually increases the money supply.”

I probably shouldn’t be, but I often am, amazed an God’s providential timing in providing illustrations of points I plan to talk about.  As I’ve been thinking about this series of posts, I planned this week to write about the Fed and the process of money, more properly currency, creation. 

In one respect, the process the Fed uses to bring currency into being is fairly easy to grasp.  On the other hand, it is so obviously fraudulent that it shocks people when they hear about it. “That simply can’t be.” is, I think, a fairly common reaction. 

In the Lord’s providence, and quite apart from any planning by me, it so happened that Jerome Powell, the Chairman of the Federal Reserve, was interviewed on 60 Minutes last Sunday by correspondent Scott Pelley of CBS News.  You can watch the full interview and ready the transcript here.  In my opinion, Pelley did a good job asking important questions of Powell, especially concerning the process by which the Fed prints money.  At one point, Pelley asked Powell about the Fed’s response to the coronavirus (CV) crisis, and Powell ticked off a list of the Fed’s market interventions.  Here’s what was said next,

PELLEY: Fair to say you simply flooded the system with money?

POWELL: Yes. We did. That’s another way to think about it. We did.

PELLEY: Where does it come from? Do you just print it?

POWELL: We print it digitally. So as a central bank, we have the ability to create money digitally. And we do that by buying Treasury Bills or bonds or other government guaranteed securities. And that actually increases the money supply. We also print actual currency and we distribute that through the Federal Reserve banks.

There you have it.  The Fed chairman admitting on national television that the Fed creates money and uses it to buy, “Treasury Bills or bonds or other government guaranteed securities.”  He also noted that this activity, “actually increases the money supply.” 

What I would like to do in today’s post is to examine these statements – Powell’s saying that the Fed “creates money” and that this act “actually increases the money supply” – in greater detail.  Just how does the Fed create money and what are the effects of “increasing the money supply” on our daily lives? 

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This is Going to Hurt, Part 1: Honestly Facing our National Bankruptcy

Posted in Economics, Financial News, tagged , , , on May 10, 2020| 3 Comments »

Mnuchin.Unemployment
U.S. Treasury Secretary Steve Mnuchin warns that unemployment could reach 25%, a level equal to that of the Great Depression.  But according to economist John Williams, not only are we already at 25% unemployment, we’re well  past it.

Assuredly, I say to you, you will by no means get out of there till you have paid the last penny.

  • Matthew 5:26

“Trump administration is ‘willing to spend whatever it takes’ to mitigate coronavirus crisis says Steven Mnuchin as he continue to facilitate bipartisan negotiations – but admits unemployment could hit 25%.”

That somewhat longish headline leads a story from today, May 10, 2020, in the Daily Mail.  A few things are worth noting here.  First, the current economic crisis is called, inaccurately, the “coronavirus crisis.”  The massive unemployment and terrifying declines in industrial production that have hit the U.S. and other Western nations has not been caused by the coronavirus.  It is the government’s response to the coronavirus that is the immediate cause of the 20 + million private sector jobs lost in month of April.  To put that number is some perspective, the previous record monthly job loss number was 800,000 + which occurred during the height of the 2008 financial crisis in March 2009.  The virus did not shut down the economy and cause record job losses; the politicians and bureaucrats did.  By calling it the “coronavirus crisis,” politicians are attempting to shift the blame from themselves to a virus.

Second, the negotiations in which U.S. Treasury Secretary Steve Mnuchin is immersed involved more money printing by the Federal Reserve and more deficit spending by Congress.  The truth, that Fed money printing and prodigal spending by Congress are the root cause of our current economic crisis, is nowhere to be seen.  Treasury Secretary Mnuchin wants you to believe that the cure for our financial woes us is doing more of the same things that put us in this mess in the first place.

Third, note well that Steve Mnuchin is facilitating “bipartisan negotiations.” As a lifelong Republican – I’m from the Tea Party/Ron Paul wing of the Republican party, not the mainstream, but nevertheless I am a Republican – I hate to admit that the my own party is in part responsible for the incompetent and immoral response to the coronavirus, a response that has included doling out literally trillions of dollars, dollars all which had to be borrowed into existence by the combined efforts of Congress and the Fed.  I would like to blame all of this on the Democrats, but that simply would not be honest.  It is Democrats and Republicans conspiring together to spend money we don’t have in ways that were never authorized by the Constitution.  With a few exceptions, nary a peep of protest is heard from either party concerning the shockingly large spending programs already put in place, programs which Rep. Thomas Massie (R-KY) called, “the largest wealth transfer in history.”  And now Congress is colluding with the Trump administration on even more deficit spending.

Fourth, Steve Mnuchin admits that unemployment could hit 25%.  Here’s some news for Mr. Mnuchin, most likely unemployment is already well north of that figure.  Actually, it’s probably not news to him at all.  One suspects he already knows this.  What a lot of people don’t know is that the government changed the way it calculates unemployment.  In 1994, the Bureau of Labor Statistics (BLS) stopped counting long-term discouraged workers – a long term discouraged worker is someone who has not attempted to find work in the last four weeks – as unemployed.  Previous to that, such persons were included in the unemployment calculations released by the BLS.  John Williams is an economist who runs his own website called Shadow Stats.  Among the services he provides is a monthly calculation of the unemployment rate using the government’s old method.  Want to take a guess at where he puts current unemployment?  Try 35%!  If Williams’ numbers are anywhere near accurate, we already have a far worse employment situation than what occurred during the Great Depression, which is usually estimated at 25%.  Presumably, that’s the reason Mnuchin picked the number that he did.

So much for the Daily Mail’s headline.

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Thirteen Reasons to Doubt the Official COVID-19 Narrative

Posted in Economics, Politics, Uncategorized, tagged , , , , , , , , , on May 3, 2020| 2 Comments »

Fauci

Dr. Anthony Fauci speaks at a White House press briefing.

The so-called corona virus (CV) pandemic has taken the world by storm.  Like many people, this author had never so much as heard the term “corona virus” until about three or four months ago.  But writing now in early May 2020, it seems as if it’s been with us forever.

One of the barriers to thinking clearly about the CV pandemic and resulting lock down of the economy was the remarkable speed at which it all occurred.  It seemed that one day all was well, and the next that governors across the country were ordering their citizens to “shelter in place.”  It was almost as if the entire nation were sucker punched at once.  One day we were going about our business, working our jobs as we always had, and the next we were working from home or not working at all.  Who could ever have imagined such a thing as recently as the beginning of this year?

The official narrative is that the virus is an unexpected event, originating in China.  Despite the Chinese leadership’s heroic efforts to contain it, the virus managed to spread throughout all the world.  Here in the US, Anthony Fauci is officially hailed as a hero and governors who locked down their states are thought to have taken bold action to save the nation from an even higher death count than has been reported.  They are heroes.  And the more severely they locked down their states, the more heroic they are.

Although the rapidity at which the crisis emerged and my unfamiliarity with pandemics made analysis difficult at first, the whole CV pandemic always seemed more than a bit suspect to me.  And the longer it has gone on and the more information that has come out, the more my original suspicions have been confirmed.  Below are thirteen reasons why I doubt CV narrative.

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Coronavirus and Economic Collapse, Part 4: It’s Time to Get Back to Work

Posted in Economics, Politics, Uncategorized, tagged , , on April 5, 2020| 4 Comments »

Closed

“[W]hen it goes down to essentially no new cases, no new deaths at a period of time.  I think it makes sense that you will have to relax social distancing.”

  • Anthony S. Fauci, Director of National Institute of Allergy and Infections Diseases

“I want to be able to say to the people of New York – I did everything we could do, and if everything we do saves just one life, I’ll be happy.”

  • Andrew Cuomo, Governor of New York

 

Here in Ohio, we’ll soon be entering the third week of Governor Mike DeWine’s Stay At Home order, which requires Ohio residents remain in the homes unless out on essential business.  Only business deemed “essential” are permitted to remain open, meaning a significant portion of the state’s economy has been shut down by government order.

Nationally, the situation is much the same.  Perhaps no statistic better illustrates the severity of the economic impact of the government led economic shutdown than last weeks unemployment claim numbers which reached the truly staggering total of 6.6 million.  Taken together with the previous week’s total of 3.34 million new jobless claims, the second half of March saw a total of 10 million new jobless claims.  To put this is some perspective, the previous weekly record for new jobless claims was 650,000, which total occurred at the height of the 2008 global financial crisis.  The employment crisis taking place now is an order of magnitude greater

Is there any end in sight to the economic decimation going on in America?  If we take Dr. Anthony Fauci and New York Governor Andrew Cuomo at their word, no there is not.  Dr. Fauci wants to see new cases and deaths attributed to Coronavirus go “to essentially” zero before relaxing social distancing rules. Since social distancing is the driving factor behind shuttering businesses, this means that if Dr. Fauci gets his way, there will be no return to normal business until the China coronavirus is eliminated.

So how long will it take to get to the point where Anthony Fauci allows Americans to get back to something like normal levels of activity.  According to this article in ScienceNews, “probably not any time soon.”  The article goes on to state that social distancing measures will need to be in place, “for one to three months, at minimum.”  Based on this assessment, early May is the soonest we can expect a return to normalcy, and it could well be much later than that.

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Book Review: Gold, Peace, And Prosperity, The Birth Of A New Currency by Congressman Ron Paul

Posted in Book Review, Economics, Financial Markets, Uncategorized, tagged , , , , , , , on October 27, 2019| 1 Comment »

“The greatest threat facing middle and working class Americans is our depreciating paper currency.”

    – Ron Paul

Gold, Peace, And Prosperity, The Birth Of A New Currency
by Congressman Ron Paul (Auburn, Alabama: Ludwig Von Mises Institute, 2011, 91 pages with index).

There is, perhaps, no more critical subject facing our nation at the moment than the activities of the Federal Reserve, the central bank of the United States of America. But while the Fed’s actions over the past 100 years have had a profoundly negative effect on the lives of nearly all Americans, very few people are aware of the ways in which they are robbed by Fed policy. Even more frustrating from the standpoint of those who believe in sound money is that that there appears to be little desire on the part of Americans to cure their ignorance by studying the machinations of these masters of the universe who run the Fed.

Gold_Peace_Prosperity

One of the principle reasons people remain in the chains of ignorance concerning the Fed is the reporting of mainstream financial journalists. The stories one sees in the mainstream press about financial matters – whether in print or on television, it matters not – seem designed more to steer people away from the truth about the workings of the Fed rather than lead them to understanding.

In stark contrast to the long-winded flim-flam one hears on most news outlets about the Fed, Ron Paul’s Gold, Peace, An Prosperity, The Birth Of A New Currency (hereafter Gold, Peace And Prosperity) is a breath of fresh air. In his typical fashion, Paul manages to be both profound and concise in his comments. This book, a short 91 pages including introductions by Henry Hazlitt and Murray Rothbard plus an index, equips the reader with more sound teaching about the problems with our current Federal Reserve system as well as how to fix it than entire shelves full of books by most authors.

Did I mention that this is a short book? Just to give you a sense of what I mean, it can be read in one sitting. When I re-read it for this review, it took me a little over two hours reading at a leisurely pace and taking notes. As John Robbins noted in his exposition of Philemon, many scholars make the assumption that nothing short can be profound. But this is a mistake. Gold, Peace, An Prosperity stands as proof of this.

Worth noting is that this book was first published in 1981. That is significant for the reason that Ron Paul was part of the Gold Commission convened by President Reagan at the time to study the possibility of returning the United States to the gold standard, an option that ultimately was voted down by the Commission. The next year, the Minority Report of the Gold Commission was published under the title The Case for Gold (see here for free pdf and epub downloads), which is considered something of a modern day classic by advocates of sound money. I would by all means recommend reading The Case for Gold, but I think Gold, Peace, An Prosperity is an even better place to start. While The Case for Gold provides more detail than Gold, Peace, And Prosperity, the latter is less technical in its language and much shorter, making it an ideal read for those just starting to learn about sound money, or, for that matter, those who would like a refresher course from one of the few statesmen of recent times who actually understands the monetary problems we face as a nation as well as what is needed to fix them.

In the first chapter of the book titled “Impending Social Strife?,” Paul writes, “We probably will see widespread civil disorder in the 1980s.” Looking back 38 years, some may be tempted to discount Paul’s argument for sound money by accusing him of being an alarmist. “You see,” they will say, “we didn’t have widespread civil unrest in the 1980s, so all this talk about economic collapse in 2019 is just so much conspiracy theory nonsense.”

What shall we say to this? Does the fact that widespread civil unrest did not occur in America in the 1980s refute Paul’s argument against the Fed and for sound money? No, it does not. While it may seem odd to many today that there was serious consideration of a return to the gold standard in the early 1980s, one has to remember the context. America had just gone through the terrible stagflation – stagflation was a term coined in the 1970s to describe a situation where there was simultaneous inflation and little or no economic growth, a state of affairs that the standard Keynesian economics of that time could not account for – of the 1970s that followed hard on the heels of President Nixon’s decision to take America off the Bretton Woods gold exchange standard in 1971. Just to give you a sense of the inflation of the 1970s, gold went from $35 dollars and ounce in 1971 to around $800 an ounce at its peak in 1980, a surge of roughly 2000%.

Second, all the problems that Paul identified in 1981 with the Fed are still with us today and are far larger than what they were when he first wrote. On October 22, 1981, 38 years ago almost to the day, the federal debt first topped $1 trillion. Today in 2019, it stands at over $22 trillion. According to this CCN article, the 2019 federal deficit – the deficit is the yearly amount by which federal spending outstrips tax revenue; the debt the total of all previous budgetary shortfalls – was $984 billion. Stop and think about that for a moment. It took the federal government over 200 years to accumulate $1 trillion debt, an amount it’s now adding on a yearly basis.

What Ron Paul did not foresee in 1981 was the cunning ruthlessness of the central bankers and the politicians to not only maintain the corrupt system, but also to expand it. In 1981, there was no Plunge Protection Team. No one had ever heard of Quantitative Easing and if anyone had spoken of negative interest rates, he would have been laughed to scorn. Yet the bankers, politicians and news media have managed not only to sell the public on all this financial flim-flam, but they make it seem downright normal. This was possible largely because the American people did not take to heart Paul’s warnings from 1981.

Ron Paul was right on target when he wrote, “The greatest threat facing middle and working class Americans is our depreciating paper currency.” This was true in 1981, and it’s true today in 2019.

I highly recommend Gold, Peace, An Prosperity. Not only is it a great primer on the dangers of the central banking, paper money and the importance of sound money, reading it makes me want to shout the title of a more recent book by Paul, End the Fed!

Chapters include: Foreword by Henry Hazlitt; Preface by Murray Rothbard; Impending Social Strife?; The People are Demanding an End to Inflation; Depreciation is Nothing New; “Not Worth a Continental”; The Best Medium of Exchange; Cross of Paper; How Our Money was Ruined; The Stage is Set; Is Business to Blame?; Are Banks to Blame?; Are Unions to Blame?; Inflation and the Business Cycle; The Guilt of the Economists; The Alternative to Inflation; Money and the Constitution; Morality and Transfer Payments; Citizen Control of Money; Day of Reckoning; Free Market Money?; Legal Tender Laws; An Historical Precedent; The End – or the Beginning; Index.

 

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