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Posts Tagged ‘The Fed’

Angry Voter

The angry voter.

The angry 2016 voter. Anyone who’s followed presidential politics even a little this year has heard all about it. The establishment seems puzzled by it. Jeb Bush, the early odds on favorite to win the Republican nomination, never connected with voters. His campaign is over, an object lesson that all the money in the world cannot buy public support. Hillary Clinton began the campaign with an aura of inevitability about her. Everyone knew the White House was hers for the taking. Instead she finds herself in a political dogfight with an elderly socialist Vermont. And with a possible FBI indictment hanging over her head, her problems on the campaign trail may be the least of her worries.

 

When it comes to voter anger, my first reaction is wonder what took them so long. Theft, lies and double standards have infected the whole of society, and it is amazing to this author just how much nonsense people have been willing to tolerate from the so-called masters of the universe who rule us. But on second thought, is voter anger really a positive development? The apostle Paul tells us it’s good to be zealous in a good thing always. And anger, if it’s focused on the proper object and seeks redress in the proper way, can be good. But anger can easily be channeled in the wrong direction, scapegoating the wrong party or going about things in such a way as to actually make a bad situation worse.

Ever since Soren Kierkegaard famously praised the pagan for worshipping his false god with infinite passion, men have carried about in their minds the false notion that sincerity is more important than truth. But the Bible knows nothing of this notion. Truth is everything. How one feels about it makes no difference. It was the same apostle Paul who praised zeal when focused on good ends, who rebuked the Jews, his countrymen, for having a zeal for God, but not according to knowledge. Zeal without knowledge is not a good thing. In fact, it is downright dangerous.

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Creature from JekyllThe Creature from Jekyll Island: A Second Look at the Federal Reserve, 5th Edition by G. Edward Griffin (Westlake Village, California, 608 pages, 2010), $19.44.

“The most boring question in the world,” announced the accounting professor to my B-School class, “is whether the government should have bailed out the financial system in 2008.” In his eyes, the answer was an obvious yes. End of story. But that struck me as a rather odd stance. For the question, to bailout, or not to bailout? seemed to me to be among the most fascinating topics imaginable in the field of finance and accounting. And in truth, any answer one could give would have to go well beyond finance and accounting, touching upon the basic philosophical disciplines of politics, ethics, and ultimately epistemology. Further, any answer given would go a long way to telling you something about the man himself. So no, it was not a boring question at all. That is, unless you’re interest is in perpetuating the status quo, in which case you would prefer that it not be asked at all.

I have elected to introduce my review of G. Edward Griffin’s The Creature from Jekyll Island [hereafter, the Creature] by way of this personal account, because it illustrates perfectly the sort of close-minded contempt that emanates from the financial mainstream toward anyone who dares question its reigning orthodoxies. Examples of these nostrums are: Central bank issued fiat currency is good, but the gold standard is a barbarous relic, the money supply cannot be left to the free market, it must be a function of a government appointed central bank; banks are not like other businesses, they must be chartered, regulated, and, if needed, bailed out by the government using taxpayer funds. None of these orthodoxies is true, for none can be supported from Scripture. Yet they are accepted by politicians, academics and ordinary folks alike almost without question.

G. Edward Griffin, on the other hand, is a man who does question these orthodoxies, concluding at the very beginning of his book that the Federal Reserve must be abolished. He provides seven reasons for this, namely:

  • It is incapable of accomplishing its stated objectives.
  • It is a cartel operating against the public interest.
  • It is the supreme instrument of usury.
  • It generates our most unfair tax.
  • It encourages war.
  • It destabilizes the economy.
  • It is an instrument of totalitarianism.

The remainder of the book is used to flesh out why these things are so. In Griffin’s words, the book is a who-dunit, which, in the words of USA Daily, “documents an organized and successful attempt to seize control over the U.S. monetary system by powerful American and European families.”

Eccles Building

The Eccles Building, the Washington D.C. headquarters of the Federal Reserve.

 

At this point one may by asking himself, why is it that Christians should care about the obscure workings of the Federal Reserve System [hereafter, the Fed]? Why not just leave banking to the bankers and get on with more important matters? After all, talking about money doesn’t seem very spiritual. And doesn’t the Bible say that money is the root of all evil? Wouldn’t it be best simply to leave the whole matter alone and focus on the Great Commission instead?

Taking these objections in reverse order, let us consider what Christ commanded in the Great Commission. What did Jesus say to his followers? Go into all the world and teach the five fundamentals? No. Christ called his disciples to go into all the nations and to teach, “them to observe all things that I have commanded you.” The Great Commission includes all of Christ’s teachings. And since there is no field of endeavor not covered by Christ’s teachings,, all statements of all men in all areas of study, including banking, finance, and accounting, must be brought back to Scripture and judged by it. Therefore banking is a proper field of Christian study.

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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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Obama_2016 SOTU

President Barak Obama delivers his State of the Union address to Congress, January 12, 2016.

“Anyone claiming that America’s economy is in decline is peddling fiction,” or at least that’s what President Obama would have Americans believe based on his remarks in his State of the Union address last week. Yes, according to the president, everything is awesome. And anyone who thinks otherwise is simply, to quote a Vice President from a few decades back, a nattering nabob of negativism.

 

But is everything as rosy as Obama would have us believe? The following points would suggest otherwise:

  • The New York Stock Exchange (NYSE) just experienced the worst opening week in its history. During the first two weeks of trading in 2016, the market has declined by 4%.
  • The Labor Force Participation Rate – this the total number of people who are either employed or actively looking for work divided by the total working age population – is at lows not seen in nearly 40 years, going back to a time when women were just entering the workforce in large numbers.
  • The Baltic Dry Index – a shipping and trade index measuring the changes in the cost to transport raw materials by – is at record low levels and continuing to sink rapidly. These low and rapidly declining readings – the index has dropped 19% just since the first of the year – indicate a sharp drop in international shipping, implying a significant drop in international trade and a global economic slow-down. According to this article, the index has hit new record lows for the past nine days straight.
  • According to FactCheck.org, the number of Food Stamp recipients grew by 45% for the period from 1/9/2009 – 1/9/2015.
  • Breitbart reports that, “American’s middle class has shrunk by almost 20% since the 1970s and is now a minority of the population in the United States.”
  • In connection with a shrinking middle class, income distribution has become significantly skewed toward the top of society. This video give a good breakdown of just how unequal incomes have become in the US. Among its findings: 40% of the wealth of the country is held by 1% of the population, those in the top 1% own 50% of value of the stock and bonds markets. Taken together with a shrinking middle class, it appears that the US is coming to resemble more a feudal society than the healthy middle class nation most of us grew up in.
  • US federal government debt has exploded in recent years. When Obama entered office in January 2009, the debt stood at a frightening $10.6 trillion. According to estimates by the Congressional Budget Office, the debt was $18.1 trillion in January 2015 and is projected to grow to $19.1 trillion a year from now when Obama leaves office. To put it another way, it took the US 236 years to amass $10.6 trillion of debt, but by the time he leaves office next year, Obama will have presided over a near doubling of this amount. According to Boston University economist Laurence Kotlikoff, “Our country is broke. It’s not broke in 75 years of 50 years or 25 years or 10 years. It’s broke today.”

Considering only the bullet points above, it would appear that precarious is about the kindest word one could use to describe the economic condition of the US. To say we’re headed off an economic cliff likely would be closer to the mark.

So how did we get here? How did a nation founded by the Puritans and committed to the principles of civil and economic liberty end up a bloated, socialist over extended empire suffocating under the largest debt edifice in the history of mankind? Although a full answer to that question is beyond the scope of a single blog post, the short answer is that the American people have, to borrow what Isaiah said about the people of Judah, turned away backwards from God and from his law. We have rejected the truth and embraced the lie, and now the chickens are coming how to roost.

In this post, I would like to look specifically at three economic lies that are held by nearly all academic economists, politicians and their enablers in the media: central banking, fiat currency and Keynesian economics. Any one of these by itself is dangerous to the health of a nation. Taken together, they are a sort of perfect storm, guaranteed to bring economic destruction to any nation whose leaders embrace them.

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Yellen_2

Federal Reserve Chairman Janet Yellen

Reading the comments of Janet Yellen and other Federal Reserve officials this past week brought to mind the words Jesus used to rebuke his disciples when they argued about who was t he greatest, The kings of the Gentiles exercise lordship over them, and those who exercise authority over them are called ‘benefactors” (Luke 22:25). “Benefactors” translates the Greek word “euergetes,” a title adopted by many kings in the ancient Greek speaking world. To be known as a Euergetes was a way for the king to boast, letting all the world know what a charitable fellow he truly was.

 

But Christ did not leave it at that. In addition to telling his disciples what not to do, he also provided positive instruction about how those in positions of authority ought to behave, telling them, “he who is greatest among you, let him be as the younger, and he who governs as he who serves” (Luke 22:26). It is this passage that serves as the basis for the idea of government as a servant of the people.

I bring up Janet Yellen and the Federal Reserve, because by their comments this week in opposition to a bill (H. R. 3189) before Congress, they once again they showed they think of themselves as “Benefactors” and lords rather than servants of the people. Established in 1913, the Federal Reserve is the central bank of the United States, and as the issuer of the US dollar, world’s reserve currency, it is among the most powerful institutions in the world. But despite the fact that its decisions affect the lives of every single American citizen, not to mention pretty much every person on the planet, the Federal Reserve conducts its business behind a veil of secrecy. H. R. 3189 would pull back the curtain on the Fed, allowing Congress and the American people better information on how the Fed goes about its business. Naturally, Yellen and others are appalled at the thought.

When asked to comment on the bill, Richmond Fed President Jeffrey Lacker huffed that its provision to audit the Fed amounted a, “mechanism for high-frequency harassment.” In a letter to House Speaker Paul Ryan and Democratic Leader Nancy Peolsi, Federal Reserve Chairman Janet Yellen complained that the legislation requiring greater transparency from the Fed, “would severely damage the U.S. economy were it to become law.” In what amounts to something like comic relief, Yellen continued in the same letter by commenting that, had the bill’s provisions been law in 2008 during the financial crisis, “inflation would be even further below the FOMC’s [Federal Open Market Committee, the body of Federal Reserve governors tasked with setting interest rates] 2 percent objective. Indeed, a recent study by Federal Reserve economists suggests that…inflation would now be running somewhat below zero, if the FOMC had not taken the actins it did.” In other words, Yellen is complaining that had the Fed been held accountable by the provisions in H. R. 3189, she and her colleagues would be unable to destroy the value of your hard earned dollars as fast as what they are now doing. In fact, were this bill to become law, your money may well gain in value, as this is what Yellen means when she says, “inflation would now be running somewhat below zero.” Horrors! H. R. 3189 would stop the crony capitalists at the Fed from ripping off the rubes in fly over country. At all costs such madness must be stopped!

The Eccles Building, main office of the Federal Reserve located in Washington D.C.

 

In evaluating these comments it is worth noting what the Fed actually is, a private cartel of the bankers, by the bankers and for the bankers. The Fed does not have and never has had the best interests of the American people in mind. It’s overriding purpose is and always has been doing what is right by the private member banks that own it. The fact that it was given its charter in 1913 by an act of Congress means that it represents the merger of state and corporate powers, which is the very definition of fascism. Simply put, the Fed, far from being and exemplar of constitutional capitalism, represents instead monetary fascism. In light of this, it is not surprising that then Fed Chairman Ben Bernanke moved heaven and earth to bail out the banks-too-big-to-fail [n.b. in capitalism there is no such thing as too-big-to-fail; individuals and institutions reap what they sow] during the 2008 financial crisis.

The behavior of the Federal Reserve over the past 100 years – its secrecy, favoritism and cronyism – is a perfect example of the sort of unaccountable power and arrogance that is characteristic of the “rulers of the Gentiles” Christ spoke about. The Fed has lorded it over the people of the United States for over one hundred years and impoverished all of us in the process. It’s high time to audit the Fed. Then end it.


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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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Bail ins.  Bail outs.  Financial repression.  NIRP,  ZIRP, and QE.  These are just a few of the puzzling terms one is confronted with in the course of reading financial journalism.  And all of them, though intellectually defended by prestigious academics and widely practiced by powerful central bankers, are the unbiblical, unchristian, immoral fruit of economic thought divorced from the authority of God’s Word.  Describing the current world monetary system,  Ronald L. Cooper put it this way,

“[T]he monetary system is a Satanic monetary system.  It’s under the kingdom of Satan. There’s no place in the bible for a central bank” (The Failure of Secular Economic Policy, Trinity Foundation Conference on Christianity and Economics, Lecture 5).

Many Christians would recognize that there are problems with our economy.  Some would even own that, yes, central banking as practiced by the US Federal Reserve (hereafter, the Fed) is the source of much misery in this nation.  But to call the current economic and monetary system of the US satanic would very likely shock even most Evangelicals.  Surely that cannot be so.

And yet there is a great deal of evidence that central banking is indeed the satanic monstrosity Cooper made it out to be.  The aim of the following essay is to make manifest the reason why this is so.

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