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FrexitYet another week has come and gone, and an interesting on at that. What is more, the week ahead has the potential to prove even more interesting, most and especially due to Sunday’s French elections. Let’s take a look at it.

To Frexit or Not to Frexit

For the past four years of so, every time there’s talk about such and such a country leaving the European Union (EU), the convention has been to tack the first letter or two of said country’s name to the word “exit” to describe the event.

As far as I’m aware, the first time this was done was with Greece back in 2012. At that time, it was common to hear talk about a Grexit (Greek exit) from the EU.

Brexit, British exit, was all the rage last year. An unlike the various and sundry other “-exits” threatened the past few years, it appears that this one actually will happen. The Brexit win in last June’s vote was a joyous occasion, almost enough to make this Yank break out into a chorus of Rule Britannia.

This brings me to the possibility of a Frexit, which as I’m sure you can guess by now is short for French exit from the EU.

The first round of the French elections will be held Sunday, with the top two vote getters moving on to the final round on May 7.

This year, the buzz is all about Marine Le Pen, representative of the National Front party, whose platform includes cracking down on Muslim immigration and removing France from the EU and the ending France’s use of the EU’s common currency, the Euro.

The polls are close, and not being much of an expert on French politics, I won’t venture to predict the outcome of Sunday’s vote. But I will say that if Le Pen succeeds in winning one of the top two spots Sunday, there is an excellent chance your 401(k) plan will take notice on Monday.

This is another way of saying that should Le Pen make it through to the final round of France’s presidential election, we’re probably looking at a period of significant market volatility over the next few weeks, by which is Wall Street code speak for “this sucker’s goin’ down.”

If Le Pen wins the final election on May 7, that likely will signal the end of the EU as we know it. Frexit will be on like Donkey Kong and the euro, the world’s second leading currency behind the dollar, may very well be a thing of the past.

Globalism in the sense of centralized world political authority, of which the EU is but one expression, is ultimately a doctrine of the Roman Church-State. That is to say, it is the product of the mind of the papal Antichrist, who hates self-governing, independent nation states, for they represent an affront to his majesty, power, and right to rule the world.

To the degree that globalism prospers, Rome rejoices. To the degree that it is rejected, the followers of Christ take heart.

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uncle_sam_supplying_federal_reserve_fiat_debt.jpg

Ever since the spring of 2009 when The-Powers-That-Be (TPTB) were out there claiming to see “green shoots” everywhere, the public has been treated to a non-stop propaganda campaign pushing the narrative of economic recovery.

President Obama himself proclaimed his belief in the strength of the American economy, stating for all the world to hear in his 2016 State of the Union Address that anyone who doubted everything was awesome in the main street economy was, to use his words, “peddling fiction.”

And surely Obama couldn’t be wrong. After all, good doctor Ben Bernanke spent several years injecting the US economy with his concoction of Zero Interest Rate Policy (ZIRP) and three rounds of Quantitative Easing (QE). How could anyone doubt but that the wise heads at the Fed have cured what ails us? The stock market just set a new record!

But if you dig down beneath the surface, you’ll find that everything is not awesome. Corporate earnings are down for the fifth quarter in a row. According to the report on Factset, “The second quarter [2016] marks the first time the index has recorded five consecutive quarters of year-over-year declines in earnings since Q3 2008 through Q3 2009.” In other words, corporate earnings haven’t had a losing streak this long since the height of the last financial crisis.

Or take worker productivity, a measure of hourly output per worker, which has declined now for three straight quarters. As the Reuters article pointed out, “U.S. nonfarm productivity unexpectedly fell in the second quarter, pointing to sustained weakness that could raise concerns about corporate profits and companies’ ability to maintain their recent robust pace of hiring.” No kidding.

But why is worker productivity in the US declining? The Reuters article fails to provide a reason. So let me suggest one possibility: businesses are no longer investing in property, plant and equipment, the very things that drive productivity. As Forbes reports, “Corporate executives now shy away from capital spending. Companies are spending money to cut costs – labor cost especially, and also electricity – but few companies are increasing productive capacity.”

So what have executive been spending on if not new productive capacity? Stock buybacks that serve to boost earnings per share and increase bonuses. “Stock buybacks by big American companies are near a historical peak [as of May 2014], but the practice appears to do little to improve their underlying operations and robs them of money for research and future growth. USA Today’s John Waggoner calls stock buybacks a ‘sugar high’,” as John Morgan reports.

Morgan goes on to cite a 1999 quote from Warren Buffett, who said, “Repurchases are all the rage, but are all too often made for an unstated and, in our view, an ignoble reason: to pump or support the stock price.”

Let’s see then, we have stock markets at near record levels, while at the same time corporate earnings are on the decline as worker productivity erodes, which very likely is a consequence of businesses showing greater interest in engineering stock buy-backs rather than in capital spending. Sure sounds like a plan for long-term economic success to me.

I’ve mentioned only a few data points to illustrate that the economy, far from being robust, is in reality quite weak. But for more of the same, consider the following nine ugly charts. Obama’s term in office is highlighted in red.


Things that should be going up in a healthy economy – Labor Force Participation Rate, Median Family Income, Home Ownership – are all going dramatically down. Those items that one would expect to see going down if the economy really were as good as The-Powers-That-Be tell us – Food Stamps, Federal Debt, Money Printing, Healthcare Costs – are going straight up.

These charts tell a very different story from what Obama’s putting out. Maybe he’s the one peddling fiction.

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Elisha Prophesies the End of Samaria's Siege

Elisha Prophesies the End of Samaria’s Siege by Nicolas Fontaine, 1625-1709.

 

When beginning the Siege of Samaria series on Biblical economics, I never intended it to go on for more than two or perhaps three posts. Due to an embarrassment of material and positive response from the readers of this blog, the series stretched into five posts.  In no small part the success of this series has been due to the generous support of Sean Gerety over at the God’s Hammer blog, who has been kind enough to republish my posts.

It’s certainly been an encouragement to me to see so many people interested in what the Bible has to teach us about economics. Most of the economic talk one hears in the mainstream media is misleading, and, I suspect, it’s designed to be that way. After all, if too many folks were to get wise to the economic evil troika of central banking, fiat currency and demand-side Keynesian economics, it would be a lot harder for the financial masters of the universe to loot the poor and middle class of the world for their benefit.

The lies of the statists enslave, but the truth of God’s Word makes men free. And it is to the end of furthering this truth that I have presented the series on Biblical economics.

And because Biblical economics is both a fascinating and worthwhile study, it seemed good to me to take this opportunity to share with others the intellectual ammunition I’ve found helpful in developing my understanding of the subject. Below is a list of resources along with my comments.

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meltdown-620Today we may apply the Apostle’s words first to those (rulers) who without cogent cause inflict exorbitant taxes upon the people, or by changing and devaluating the currency, rob them, while at the same time they accuse their subjects of being greedy and avaricious.

    – Martin Luther, Commentary on Romans 2:2, 3

Now, if the laws of buying and selling are corrupted, human society is in a manner dissolved; so that he who cheats by false weights and measures, differs little from him who utters false coin.

    – John Calvin, Commentary on Leviticus 19:35

But if life is an equal value to all, there is something strange, when war comes and large military expenditures are necessary, in requiring the person who has saved for a life insurance policy to lose half its buying power by inflation, while the spendthrift loses nothing and enjoys high wages to boot.

    – Gordon H. Clark, A Christian View of Men and Things, pp. 101-102

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ready for oligarchyWell, there were no gorilla shootings in Cincinnati this week. Or for that matter, giraffe, hippopotamus or hyena shootings either. And we can all be thankful for this. I know for my part I just really can’t take another week of listening to animal rights activists talking nonsense. Perhaps the most egregious offender in this regard was a gentleman from Cincinnati, who was quoted in the local paper referring to the departed gorilla as, “a fellow Cincinnatian” and a “400-pound person.”

Nope and nope. Animals are not people. People are not animals. See Genesis 1 for details.

Now then, let’s move onto the scintillating stories from this week.

Oligarchy and the American Jezebel

As the old saying goes, I was shocked but not surprised Monday night, a night when not a single Democratic primary vote was cast, to hear that Hillary Clinton had achieved the necessary delegates to seal the Democratic nomination for president.

It just so happened that scheduled the following day were primaries in California primary and New Jersey, and several other states. In the week leading up to the vote, polls in California indicated that Bernie Sanders and Hilary were neck and neck. And a loss there would have been a YUUUGE embarrassment both to Hillary and her supporters in the Deep State. In fact, a loss in California may very well have been the end of Clinton’s hopes to take the White House. And such things simply cannot be allowed to happen.

And they weren’t.

After Monday’s surprise announcement, Hillary went on to win California by a margin of 55% to 43% over Sanders.

No sooner had the polls closed but the MSM began its hagiography of Mrs. Clinton. And among the worst offenders in this regard, predictably, was CNBC. Their business and financial reporting, the networks raison d’être, is a pathetic mix of stock market cheerleading, Keynesian propaganda, and Federal Reserve worship. I stopped watching years ago. And given the networks ratings in recent years, so has nearly everyone else.

Nevertheless, I do admit to visiting CNBC online several times a day to check the markets. And what did I see there on Wednesday but the headline, “Trump’s going to get demolished by Clinton; Here’s why he needs to drop out now.” Yep. The Donald’s on the wrong side of history, according to the sages at CNBC. Just give up. Go home. It’s over.

I’m not here to flack for Trump, but the man just set a record for the highest vote total EVER in the Republican primaries. Somehow I doubt he’s going to listen to the advice of incompetent journalists at a dying cable network.

But back to Clinton. One thing that is almost never discussed regarding her campaign, even among Christians, is whether it would be Biblical to elect a woman as president. Questions of this sort are never asked by the MSM. Even a survey of blogs, podcasts and YouTube channels will show that almost no one, Christian or not, questions whether a woman could properly fill the role of Commander in Chief of the armed forces. The only question is whether she is qualified intellectually and ideologically to take the helm in the Oval Office.

But at least one Christian author has undertaken to answer that question. Paul Elliott wrote a piece a few years back titled Deborah & Esther: Are They Precedents for a Female President? And his answer to this question would likely shock and offend many, even many in the evangelical community. Elliott concludes,

The Bible tells us clearly that God has ordained male headship, and female submission to that headship, in the home, in the church, and in government…Because this is God’s ordained order, Christians must not seek to put a woman in the place of national rulership, no matter how much we may agree with her ideologically. To do so is, in fact, sin in the eyes of God.

Yes, Hillary is an appalling individual and will make a horrible president if elected. She was a disaster as Secretary of State. She’s an obvious felon. And she will continue Obama’s full-court press to further push the immoral LGBT agenda. In short, she will prove to be an American Jezebel.

But the answer is not for Christians to seek a better qualified woman to run against her. As with all areas of life, we must reason and act according to what Scripture teaches, and not according to the wisdom of this world.

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Crooked Hillary

Hillary Clinton

Eventful times these are. So much so that there’s far more to write about than I could ever hope to adequately address. But hey, there’s no harm in trying. So, let’s get started…

 

Crooked Hillary

I hardly know where to begin when it comes to Mrs. Clinton. She’s an obvious felon. And the best any normal person with her legal baggage could hope for would be a not-too-harsh plea bargain. But when it comes to the preternaturally impervious Hillary Clinton, well, that’s a different story.

One of the most offensive aspects of contemporary American society is the two-tiered justice system. Ordinary Americans can have their lives ruined by a single drug-related felony, while the masters of the universe – or perhaps in Hillary’s case I should say mistress of the universe – can commit all manner of crimes and be rewarded with the highest office in the land.

And almost as if she were going out of the way to rub people’s noses in it, we get a report this past week that four years worth of emails between Hillary and her chief of IT Bryan Pagliano have turned up…..drum roll please…missing! Oh, what a shock!

If you haven’t followed the Clinton email scandal closely, Bryan Pagliano, Clinton’s chief of IT while she was Secretary of State, was the guy who set up the unsecured server on which Hillary stored highly sensitive State Department emails, an act that she undoubtedly knew was illegal. And emails aside, just the act of setting up the server was a felony. As former CIA Officer Scott Uehlinger put it, “The fact that she set up a private server, in and of itself, means she is guilty of a felony right there.”

Nixon only had an 18 minute gap, and that was enough to bring him down. Hillary? She’s got a four year gap. But hardly anyone in the mainstream press cares. As Investors Business Daily reported, “This kind of behavior would normally light a fire under law enforcement – and the press – since these things usually smack of a cover-up. But the mainstream press is asleep at the switch…” Former Department of Justice official Dan Metcalfe commented, “The whole thing stinks to high heavens.”

It’s a good thing that I’m not one of those tinfoil hat wearing wackadoos. Because if I were, I might just begin to think that the Deep State was behind the push for our first woman president…and now that I mention it…

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100 dollar bills.jpgWhen Harvard Economics professor and wannbe Fed Chairman Lawrence Summers speaks, it’s usually a good idea to pay him heed. Mind you, not because pearls of wisdom fall from his lips as manna from heaven, but because what he says carries weight. He is among the very elite of the intellectual and financial elite. A true master of the universe, if you will. And if Summers writes in the Washington Post that he wants to grab your cash, you’d best be paying attention. Because if he’s saying it in the mainstream media, you can take it to the bank (bad pun intended) that the rest of the elite is thinking along those same lines.

Of course, he wasn’t so crude as to suggest he was just going to take your money. People of his ilk never do. They’re far too genteel for such talk. No, what they do is make the case for some small, seemingly innocuous move. The sort of thing that, not only seems downright reasonable, but actually appears to be the very essence of patriotism and upright thinking. I’m speaking here of Summers’ recent call to “kill the $100 bill.”

Now why would this economics professor think that killing a perfectly good Federal Reserve Note is so important that he would take the time to write a newspaper column on the subject? The better to fight crime and terrorism, he tells us. Besides, he adds, we don’t need that silly old $100 bill anyway.

Citing Peter Sands, a senior fellow at Harvard’s Mossavar Rahmani Center for Business and Government, whose recent paper on the subject of banning large denomination bills was the inspiration for his article, Summers writes,

The fact that – as Sands points out – in certain circles the 500 euro note is known as the “Bin Laden” confirms the arguments against it.

Cash, you see, means terrorism. But it’s not just terrorism that we can stop by banning large bills. Crime of the more ordinary sort can be reduced as well. Summers continues,

I confess to not being surprised that resistance within the ECB [European Central Bank, the issuer of the euro] is coming out of Luxembourg, with its long and unsavory tradition of giving comfort to tax evaders, money launderers, and other proponents of bank secrecy…

So, banning the big bills helps us catch crooks too. And on top of that, “technology is obviating whatever need there may ever have been for high denomination notes in legal commerce.”

If we take Summers’ at his word, there simply is no legitimate reason for large denomination notes to even exist at all. And if you think otherwise, you must be a terrorist or tax evader. And you wouldn’t want people to think that about you, now would you?

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ZambiaGod have mercy on the currency,” read the headline. Curious, I followed the link to an article about the president of Zambia calling for a national day of prayer and fasting to address country’s currency crisis. It turns out that Zambia’s national currency, the Kwacha, has fallen by 45% against the US dollar in 2015, causing Zambians a host of economic difficulty. It is eminently Christian and sensible to call on the Lord in times of trouble The Bible is filled with promises that God will deliver his people if they call upon his name. Typical is Ps. 50:15 which reads, “Call upon Me in the day of trouble; I will deliver you, and you shall glorify Me. And because it is eminently Christian and sensible to call on the Lord in times of trouble, no Western president or prime minister would ever think of doing it. “We’ve got this,” they say, “no divine help needed.”

Such was not always the case. During the American Civil War, Abraham Lincoln called for a national day of prayer and fasting. But that sort of thing doesn’t fly anymore. In the aftermath of the greatest national disaster of my lifetime – I’m speaking here about the 9/11/2001 terrorist attacks on New York and Washington D.C. – George Bush encouraged Americans to go to Disney World. What’s worse, he participated in a blasphemous ecumenical prayer service at the National Cathedral in Washington which featured, among others, a female Episcopal bishop, a Rabbi, a Muslim cleric and a Cardinal of the Roman Catholic Church-State. Far from being an example of turning to God, this service was a double-minded affront to the Lord Christ Jesus. And because it was double-minded, those who participated had no reason to think they would receive God’s blessing or assistance. The failure of the Global War on Terror stands as a stark testimony to this principle.

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"You shall not crucify mankind upon a cross of gold." - William Jennings Bryan, 1896

“You shall not crucify mankind upon a cross of gold.”
– William Jennings Bryan, 1896

Talk of the US returning to a gold standard, at least according to the anointed wise men of our time, is the province of weirdoes, wackadoos and wingnuts and ought never to be mentioned in polite company by any serious presidential candidate. At least that’s the sense one gets when reading Matt O’Brien’s Washington Post article “Dear Jeb: Gold won’t make America great again.” O’Brien is upset that, when given the opportunity to squash any notion that he might support a gold standard, Jeb Bush waffled in his comments, implying that he may in fact be prepared to crucify mankind upon that dreadful cross of gold.  The horrors.  According to O’Brien, “The right answer would have been that the gold standard was a “barbarous relic” even 80 years ago, and might be the world’s worst idea today.”

O’Brien goes on to chide both Ben Carson and Bush, the former for his positive support of the gold standard, the latter for his failure to live up to his duty as “the candidate of serious policy,” which in O’Brien’s mind means taking a stance of uncompromising devotion to the central bank driven, fiat money status quo. The reason O’Brien gives for this is simple, “We tried it [the gold standard], and it failed.”

But did the gold standard fail as O’Brien thinks it did? O’Brien’s chief beef with the gold standard is that the price of gold is controlled by the Federal Reserve’s [the central bank of the United States] interest rate policy.

[T]he gold standard says that the dollar will always be worth a certain amount of gold. But that alone isn’t enough to make it true. The Federal Reserve has to do that. So, for example, think about what would happen when the price of gold “wanted” to go up. That is, when supply and demand would make its price go up if it were allowed to do so – which it wouldn’t be under the gold standard. In that case, the Fed would have to make the dollar go up instead to keep the relationship between the two the same. And making the dollar go up is just another way of saying that it makes interest rates go higher, since more people will want to hold a currency that pays more interest.

There are at least two fallacies with this argument. First, the gold standard does not require that the Federal Reserve (the Fed) do anything. In fact, the gold standard does not even require the existence of the Fed, as can be seen from the fact that the US was on the gold standard long before the it came into being in 1913. In truth, it was the Fed’s activism that caused both the stock market and real estate boom during the 1920’s and the subsequent 1929 bust that contributed to the depression of the 1930’s. It is the Fed, not gold, that failed during the depression. But as a good statist, O’Brien puts the blame exactly where it does not belong, on gold, while exonerating the Fed which did so much to create the mess. This is an example of calling good evil and evil good.

“Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly” – Karl Marx and Frederich Engels – The Communist Manifesto

Karl Marx

Karl Marx

Worth noting too, is that central banking of the sort practiced by the Fed, and so admired by O’Brien and his counterparts in the media, academia and government, was actually advanced by Marx and Engles as one of the planks in their Communist Manifesto. It is unsurprising that the communists, favoring as they did government ownership of the means of production, would also insist on government control the monetary system. What is worth noting, however, is that so many in the West seem to be of the opinion that a modern economy cannot function in the absence of a central bank. But far from being a necessity, the central banks of the world are a positive hindrance to economic development. In the 100 years of its existence, the Fed has managed to destroy 96 percent of the dollar’s value, robbed savers with artificially low interest rates to bail out its billionaire banker buddies, and created unprecedented economic distortions, the worst of which have yet to play out. It is the Fed and its unseemly support of Wall Street investment banks that is to blame for the record income inequality in the US. Not, as is commonly assumed, laissez faire capitalism. It is the Fed that helped to bring on the depression of the 1930’s and caused the tech bubble of the 90’s, the real estate bubble of the 00’s and the current stock and bond market bubbles, both of which are set to pop and threaten to send the US and world economies into an economic tailspin such that the Great Depression will seem like a golden age of prosperity by comparison. When it comes to central banks, the best thing to do is to bury them in the same pit as the rubble from the Berlin Wall.

A second problem with O’Brien’s analysis is that he assumes that a gold standard requires the government fix the price of gold at a certain level. According to the Bible, governments have only two legitimate functions: to punish evil doers and praise those who do what is right. Nothing more. Though many people assume that they should, governments have no right to manufacture money. This means that for a gold standard – or any monetary standard – to work properly, it should be the free market, and not the government, that determines what is, and what is not money as well as the market price of money, that is, the free market should set interest rates, not some monetary politburo at the Fed as is currently the case.

Conclusion

Although the Bible does not require a gold standard or a silver standard, it does require that money, in whatever form it takes, be honest. Historically, gold and silver have done the best job in this role. Our current system, in which central banks conjure up capital out of thin air, crediting billions of dollars to the accounts of favored financial institutions with the click of a mouse, is about as far from honest as it can get. In any other context, the normal activities of the Fed would be called counterfeiting. Or to put in another way, lying at the heart of our current financial system is a consistent violation of the Eighth Commandment, Thou shalt not steal.

Contrary to O’Brien, there is nothing serious about advocating the continuance of the current broken, immoral, central bank dominated, debt based, fiat monetary system. But statists look for every excuse under the sun to defend the central banks and their fiat money ponzi schemes, one example of which is O’Brien’s claim that a gold standard cannot be trusted to regulate interest rates. This is simply false. Since the interest rate is simply the price of money, it is regulated in the free market by the laws of supply and demand, just like any other good or service. A gold standard set by the free market is honest money enabling honest commerce conducted apart from the interference of government. It is Biblical. And it works. Seriously.

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