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Posts Tagged ‘Central Banking’

Financial Crisis

“In his book…A Christian View of Men and Things [Gordon] Clark comments that the growth of government is the greatest tragedy of the twentieth century.”

    – John W. Robbins, “The Growth of Government in the United States

The thesis underlying this series of posts and reflected in the series’ titles, is that the 2008 financial crisis never really went away. Yes, the stock market has recovered and gone on to hit new highs. Yes, we don’t see massive layoffs taking place or people standing in bread lines. So the visual cues that we expect in a financial crisis are not present.

Further, we see announcements in the press stating how strong the American economy is, and various statistics are brought forth to prove this, perhaps most notably a low unemployment rate.

Donald Trump has been very aggressive at touting the strength of the American economy. The day after the worst stock market plunge of 2019, the President tweeted, “The United States is now, by far, the Biggest, Strongest and Most Powerful Economy in the World, it is not even close! As other falter, we will only get stronger. Consumers are in the best shape ever, plenty of cash. Business Optimism is at an All Time High!”

Now at least some of this is likely true. Objectively speaking, America has the world’s largest economy as measured by Gross Domestic Product (GDP). But there are reasons to doubt some of the President’s other claims.

For example, while the President says that consumers are in the best shape ever, the very next day CNBC ran a story announcing that Americans are more indebted than ever before. This hardly supports the President’s claim that consumers are in the best shape ever.

And if the economy is doing so well, why, according to the Bureau of Labor Statistics, has the labor force participation rate never recovered to the pre-crisis level?

If everything is so great, why has President Trump publicly called for more Quantitative Easing (QE) and interest rate cuts? QE is a radical money printing scheme which was used by the Federal Reserve as an emergency measure to save the financial system in the 2008 crisis. Since QE is an emergency measure that was used to stave off financial collapse, why is it that, on the one hand, President Trump is telling us that the economy is doing great under his leadership, but, on the other hand, is calling for emergency QE as if the financial system were collapsing again?

Another item contradicting the official narrative that everything is awesome with the economy is the calls for interest rate cuts. In the link above, Trump was calling for the Fed to lower interest rates. In a strong economy, demand for money is reflected in rising, not falling, interest rates. If the President is calling for the Fed to lower interest rates, by implication, he is saying the economy is stalling out, not charging ahead.

In the opinion of this writer, the struggles of ordinary Americans to find work and to make ends meet are reflective of a financial system in disarray, not one experiencing rapid growth.

Further, it is my view that the economic problems roiling America stem from the fact the American government and financial elite have refused for more than a decade now to deal honestly with the serious financial crisis facing the United States. At the root of the problem is the Fed, America’s central bank. Central banking is inherently immoral, unchristian, and destructive of the legitimate interests of the great bulk of the American people.

One of the great evils that flows from central banking is another great plague of modern society: Big Government.

In the quote at the top of this page, John Robbins noted that Gordon Clark thought that the growth of government in the United States was the greatest tragedy of the twentieth century. Considering all the evils of that century, Clark’s statement is remarkable indeed.

It is the contention of this author that America is going bankrupt as a result of big government, a great evil which itself is the child of the prior great evil of central banking. Yet there is no serious attempt on the part of elected officials of either party to address this situation.

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Financial Crisis

A prudent man foresees evil and hides himself; The simple pass on and are punished.

    – Proverbs 27:12

In light of the recent upheavals in the financial markets, it seemed good to me to take this occasion to update my comments on ongoing financial crisis. I say ongoing, because it is my contention that the crisis that first manifested itself in 2008 has never really gone away.

In Ezekiel we read God’s complaint against the prophets of Israel. At one point he says, “Because, indeed, because they [the prophets] have seduced My people, saying, ‘Peace!’ when there is no peace – and one builds a wall, and they plaster it with untempered mortar – say to those who plaster it with untempered mortar, that it will fall. There will be flooding rain, and you, O great hailstones, shall fall; and a stormy wind shall tear it down. Surely, when the wall has fallen, will it not be said to you, ‘Where is the mortar with which you plastered it?’ ”

Such a wall, one built with untempered mortar, may appear sound. But when faced with the elements, it’s shoddy construction becomes evident to all.

In his Sermon on the Mount, Jesus expressed a similar idea when he compared the man who built his house on sand with the man who built upon the rock. For all we know, the house built on sand may have been beautiful in appearance, but it lacked a firm foundation and it fell. The house built on the rock took the beating and stood strong.

It is the contention of this author that the relative prosperity that the West has enjoyed since 2008 is rapidly coming to an end for the same reason that both Ezekiel and Jesus described: The real causes of the 2008 crisis have never been addressed, only papered over with fake solutions. Fakery, it would appear, is coming to an end.

In the following post, and perhaps posts, I’d like to explore at least some of the factors that are driving the West to bankruptcy. I’d also like to discuss what Christians can do to prepare themselves for the difficult financial times that lie ahead. Finally, I’d like to discuss what Christians can do once the collapse occurs to begin to rebuild our civilization on a sounder footing than we have today.

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.Youre-FiredThe big story this past week? Pretty obviously it was Donald Trump’s decision to reprise his role on the Apprentice, issuing a “Comey, you’re fired” to the now former FBI Director.

As with any decision of this sort, the was a sharp divide along party lines. Some Republicans cheered the news. Democrats, on the other hand, railed against the decision.

Writing in The New Yorker, John Cassidy opined, “At a time like this, it is important to express things plainly. On Tuesday evening, Donald Trump acted like a despot.”

Oh, spare me. The republic will survive.

Generally speaking, the hiring and firing of federal bureaucrats is not a terribly interesting topic. But in Comey’s case, a few words are in order.

For my part, I lost all respect for the man last summer when he failed to recommend charges against a clearly guilty Hillary Clinton in the Servergate scandal.

Then, just a week before the November vote, Comey claimed he was reopening the investigation, only to shut it down just a few days later. This made Comey appear indecisive.

A third failure of judgment on Comey’s part was his decision to launch an investigation into Trump’s dealings with Russia, based, as it was, in part on the debunked “Golden Shower” dossier.

So we have an FBI Director who wouldn’t recommend charges against Hillary Clinton, against whom there was a mountain of evidence suggesting serious wrongdoing during her term as Secretary of State, but who continued to doggedly pursue the case against Donald Trump, a case notable for its complete lack of actual evidence.

So, should Comey have been fired? Yes.He failed the biggest test of his career when he refused to recommend charges against a clearly guilty Hillary Clinton. Thankfully, the American people showed better judgment than he did by refusing to put her in office.

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Obama_This is going to hurtI know. I know. I’m late with my Week In Review. I could tell you the dog ate my homework, but I don’t think that that would fly.

Actually, I blame it on the IRS.

You see, as is the case with most folks who work in finance and accounting, during the first quarter of every year I get monkey hammered at work all for the purpose of meeting some arbitrary government deadline. Oh well. At least the over time’s good money.

And not only am I late this week, but I’m also going be short owing to another government program, Daylight savings time. I have to admit I do like the late sunsets, but that whole spring forward thing? It just kills me.

So without further ado and so I can get to bed at a decent hour, let’s look at some of this week’s top stories.

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rinkeby-riots

A policeman inspects a burned out vehicle following the riots in Rinkeby, Stockholm.

Some things seem to naturally go together. Peanut butter and jelly come to mind as a natural pairing. Baseball and summertime? I’m in. Even the terms “blowhard” and “politician” evoke a certain warmth of familiarity within me.

 

But riots and Sweden??!! Surely, you jest! Nevertheless, as they say, truth is stranger than fiction…

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