Tag Archives: federal reserve

Fed Chair: No Interest Rate Hike Any Time Soon

Janet Yellen

Federal Reserve Chair Janet Yellen set a cautionary tone on the economy saying that the FOMC will not make a move on interest rates for the next few meetings.

Ms. Yellen attributed her dovish stance to weak inflation and a slowly improving jobs situation.

“It continues to be the FOMC’s assessment that even after employment and inflation are near levels consistent with our dual mandate, economic conditions may, for some time, warrant keeping the federal funds rate below levels the committee views as normal in the longer run,” Yellen said.

More states making move to gold, silver as legal tender

gold as legal tender

gold as legal tenderArizona senators voted 18-10 on Tuesday to pass a measure that would make gold and silver legal for use as tender for payment.

Earlier this month the same legislation cleared the Arizona House which leaves only Governor Jan Brewer’s signature before it becomes law.

While U.S. currency will continue to be accepted in the Grand Canyon State, the new bill allows gold and silver coins and bullion to be used beginning mid-2014.

Utah passed a similar law in 2011. Kansas, South Carolina and several other states are advancing similar bills.

While Utah and Arizona’s legislation is little more than symbolic, other states are eyeing infrastructure projects key to allowing precious metals to be used as legal tender.

Texas legislators are considering a measure to create the Texas Bullion Depository that would store about $1 Billion in gold currently held in a New York facility. The new facility would also function as a place for public deposits which would create a realistic medium for trade similar to blacksmiths’ and bankers’ handling of the precious metal in earlier times. Money could be deposited for one or more “depository notes” which could be traded for goods and services. The person receiving the notes in trade could then turn it in to the depository for gold. The notes would likely be backed by the State government and its gold holdings.

While the U.S. Constitution prevents states from coining money, it also says that states may not “make anything but gold and silver coin a tender in payment of debts” a phrase likely opening the door for states to pass these precious metal currency bills.

The States’ moves are seen as a response to the Federal Reserve’s constant dumping of liquidity into the American economy thereby devaluing the dollar and, as many believe, leading to the collapse of the U.S. paper money.

While some states may be taking action as a symbolic nose-thumbing at the Fed, others are clearly planning for the potential downfall of the dollar.

Employment situation still dicey as more jobs lost than expected

Initial jobless claims come in than economists had forecast showing a still weak jobs climate.

The Labor Department said Thursday that initial jobless claims for the week ending April 13th came in at a seasonally adjusted 352,000 which was slightly higher than expectations of 350,000 and an increase of 4,000 over last week’s numbers.

The employment market has not yet rebounded even four years into the President’s economic recovery plan that included multiple rounds of stimulus, cash-for-clunkers, the auto bailout and more.

The latest reports will likely feed into Federal Reserve considerations of whether to continue massive liquidity dumps including an $85 billion per month bond-buying program intended to keep interest rates low. The Fed has indicated that it will continue stimulus activities until the labor market recovers to acceptable levels.

With labor participation rates at 40 year lows, a recovery is likely far off.

IRS Insider Exposes Federal Reserve Coup and IRS Fraud

joe_banister

YouTube Description:

Joe Banister is the first and thus far only IRS Criminal Investigation Division Special Agent ever to conduct, while serving as a special agent, an investigation into allegations that the IRS illegally administers and enforces the federal income tax. He respectfully reported the results of his investigation to his IRS superiors, up to and including the IRS Commissioner. Rather than address the legitimate concerns raised by one of their own distinguished investigators, his IRS superiors suspiciously refused to address the chilling evidence of IRS wrongdoing raised in his report and instead encouraged him to resign from his position. Observing that IRS management intended to cover up the deceit and illegal conduct alleged in his report, Banister chose to resign from his position so that he could report his findings to the American public. In effect, Banister had to resign from his position in order to abide by his oath to support and defend the U.S. Constitution.

Let “progressives” Own the Fiscal Cliff

Rand Paul

Ben-BernankeThe Federal Reserve plans to keep short-term interest rate near zero until unemployment drops below 6.5 percent and inflation reaches 2.5 percent.  This means given the current equations used to calculate those numbers, Fed interest rates will remain at current lows until mid-2015 or beyond.

The Fed will also continue spending $85 billion a month on bond purchases to keep long-term borrowing costs low and to stimulate the U.S. economy.  They will also spend $45 billion a month on long-term Treasury purchases and continue buying $40 billion a month in mortgage bonds.

Why are such moves deemed necessary by the Federal Reserve?

Why does the U.S. debt ceiling need to be raised every few years?

Why is America stressed about a “fiscal cliff?”

Because the United States of America spends entirely too much money.

To those who remember history, it is self-evident that politicians, elected or not, who subscribe to the “progressive” (read Marxist) philosophy have little to no interest in compromising with their political opposition.  History informs that “progressives” in America are more inclined to attempt eliminating their Conservative political opposition than reaching any compromise.  How else can it be overspendingexplained why “progressives” continue to cling to their uncompromising position?

The so-called fiscal cliff negotiations going on in Washington DC is a clear example of their motives and tactics.

The “progressives” are intentionally holding to a position untenable to Conservatives in hopes of creating divides within the GOP and causing them to lose credibility by caving on their principle of not raising taxes.

The best case scenario for “progressives” is for the GOP to stick to their principles and refuse to raise taxes.  Then “progressives” and their co-conspirators within the “mainstream media”, aka the “progressive” Party Pravda, can place the blame for the economic results of sequestration on Conservative Republicans while, solely for their own political aims, temporarily championing members of the GOP who appeared willing to “compromise.”

Trying to negotiate a “grand bargain” simply means Republicans are aiding and abetting “progressive” Democrats in their quest to commit the biggest swindle in American history.

Rand PaulSenator Rand Paul (R-KY) has a better idea that is good strategy for countering “progressive” actions:

“I think if we go halfway, or we split the difference with him, then both parties have their hands on it.  When we go into recession, it’ll be confusing.

I have yet another thought on how we can fix this. Why don’t we let the Democrats pass whatever they want?  If they are the party of higher taxes, all the Republicans vote present and let the Democrats raise taxes as high as they want to raise them, let Democrats in the Senate raise taxes, let the president sign it and then make them own the tax increase.  And when the economy stalls, when the economy sputters, when people lose their jobs, they know which party to blame, the party of high taxes.  Let’s don’t be the party of just almost as high taxes.

In the House, they have to because the Democrats don’t have the majority.  In the Senate, I’m happy not to filibuster it, and I will announce tonight on your show that I will work with Harry Reid to let him pass his big old tax hike with a simple majority if that’s what Harry Reid wants, because then they will become the party of high taxes and they can own it.”

Conservatives can keep bashing Speaker of the House John Boehner and House leadership, perhaps Senate Minority Leader, Mitch McConnell.  But that does absolutely nothing to advance the Conservative position.  Republicans made their bed a year and a half ago by agreeing to sequestration.

Give “progressive” Democrats what they want and let them own it.  When average everyday Americans who happen to be Democrats or Independents start feeling the economic pain, let “progressives” explain a failure that is covered with their fingerprints and nobody else’s.

http://mjfellright.wordpress.com/2012/12/12/let-progressives-own-the-fiscal-cliff/
Give the Gift of Courage

Dollar slides ahead of Fed meeting outcome

The Federal Open Market Committee (FOMC), the monetary policy-making body of the Federal Reserve, is meeting for the second time in so many days to determine what actions, if any, to take to help America’s flagging economy.

Ben Bernanke and the Federal Reserve are largely anticipated to institute another round of Quantitative Easing (QE3) as a means to stimulating the U.S. economy. The U.S. stock market is expecting that the Fed will act and the U.S. dollar indicates the same expectation.

The dollar is off ahead of the announcement as QE is the act of “printing money” and pumping it into the economy:

As the dollar suffered from expectations for QE – which would be equal to printing money and diluting the value of the currency – the euro stayed near four-month highs against the U.S. currency, helped by the signs the euro zone may be starting to get on top of its debt troubles.

Expected Fed actions include an estimated $500 billion in purchases of long term treasury notes. A move designed to lower interest rates in hopes of stimulating borrowing and investment.

91% of Chief Financial Officers polled said their firms would not change their spending if QE3 was able to lower interest rates by as much as a full point indicating that interest rates are not the economic inhibitor the Fed believes.

Campbell Harvey, a finance professor at Duke’s Fuqua School of Busines, said that “there is stark evidence that QE3 would be a wasted effort.”

The dilution of the dollar would likely have further impact to every-day Americans. Everything from gas to heating fuel and groceries would become more expensive. As the government’s CPI inflation index doesn’t measure these items, no official inflation would be shown. Consumers will likely see their budgets squeezed from items the government sees fit to ignore.

The FOMC will hold a press conference today at 12:30am Eastern. The FOMC members will announce their decision at 2pm and chairman Ben Bernanke will hold his own conference at 2:30pm Eastern this afternoon.

QE3: Seriously?

Growth of the money supply due to quantitative easing

Quantitative Easing is simply the introduction of money into the economy by a central bank. It has been done twice during the current recession with no positive effects and Ben Bernanke’s Federal Reserve seems ready to launch version three – often referred to as QE3.

QE1

QE1 launched on November 25th, 2008 with a Federal Reserve initiated purchase of $500 Billion in mortgage-backed securities with the hope of lowering borrowing costs in order to stimulate the drowning housing market. The fed later bought several hundred billion dollars of securities from troubled entities such as Fannie Mae, Freddie Mac and Federal Home Loan banks.

By buying up assets from private institutions, it lowered the risk those institutions possessed and would theoretically lower the cost of borrowing money.

Finding asset purchases to not be doing enough, the Federal Reserve lowered the key interest rate to .25%.

More troubled-asset buyouts occurred through 2009 and the Fed started to aggressively buy Treasury notes.

QE1 lasted until the end of March 2010 and resulted in 30-year mortgage rates dropping from 6.33% in late 2008 to 5.23% at the end of Q1 2010. $1.25 trillion was invested in asset purchases by the Federal Reserve during QE1.

QE2

QE2 went from November 3rd 2010 to June 30th of 2011.

Bought $600 billion of longer term treasuries by selling off short-term agency assets.

Although some economists had expected the move to keep interest rates low, 30-year fixed mortgage rates actually climbed .5%.

The Maturity Extension Program (aka “Operation Twist”)

By the end of 2012, the Federal Reserve hopes to put downward pressure on long term interest rates by selling a portion of its sizable inventory of long term Treasury bonds in trade for shorter term notes. By selling the longer term notes, it is expected that prices for those bonds will increase, thereby decreasing the yield or interest on them. Operation twist is not quantitative easing as it adds no net money supply due to the trading of one security for another.

Operation Twist started in the fall of 2011 and offers both good and bad news. The bad news is that it doesn’t seem to be doing very much to help the economy. Long term interest rates are at historic lows and the economy is not accelerating. This again points to the fact that borrowing costs are not the major issue holding the economy back.

One thing of note is that the sell-off of long-term Treasuries is exactly opposite of the Fed move in QE2. QE2 was about economic stimulus by lowering risk. Twist is focused on affecting interest rates in order to encourage borrowing. Neither addresses the fundamental issues of over-regulation, over-taxation and a White House opposed to free markets.

QE1 / QE2 Results

The effect on the economy from QE1 and QE2 are heavily-debated. Many experts discuss the inflationary effect that pumping so much money into the economy has while others state that banks actually never turned around and lent the money – it was used to shore up their own reserves so that the financial system did not fundamentally collapse.

While interest rates are at their lowest in recorded history, the housing and commercial real estate markets have yet to see a bounce to the upside. The real estate bubble was caused by banks being forced to loan to those that could not afford it – not by high interest rates. Lowering interest rates didn’t make those folks any more able to take on a mortgage than they were 5 years ago.

Lowering interest rates should also help corporations get funding – if only they wanted it. Large companies are sitting on their money out of distrust of the current administration and oppressive regulation. Making it a tiny bit less expensive to borrow doesn’t allay those concerns. In a recent World Economic Forum report, exactly those concerns were listed as a major reason for downgrading the U.S. economy’s competitive ranking to #7 (from #1 in 2008).

For the experts that claim that the money supply didn’t grow to higher levels during QE1 and QE2.. here’s some real chart data for you. According to the experts at Shadowstats.com (chart right) the supply of currency and coin grew substantially during the months that quantitative easing was occurring. M1 is the measure  of money in circulation and the chart says it all.

The effect of a constantly increasing money supply is inevitably inflation. Defined as “a greater number of dollars searching for a diminished number of goods” inflation occurs due to the declining buying power each dollar represents. Our dollar has its value pinned to our Gross Domestic Product which has been growing at a much slower rate than M1. Price inflation is the only possible outcome.

QE3

Ben Bernanke and his cohorts at the Federal Reserve began meeting again today. The markets are anticipating another round of Treasury buys, asset buyouts and short to long term asset roll-overs to come out of the meeting. All of which is intended to bring long term interest rates down.

Should another round of quantitative easing (QE3) occur, it will certainly continue to inflate the price of non-bond assets and long-term bonds as more investors will walk away from the anemic yields on long term notes. Stocks will continue to see price increases despite a flagging economy which may slow private investment in the economy.

The money pumped into the economy will further increase M1 and decrease buying power for the average consumer. The inflation that all grocery shoppers, electricity users and gasoline buyers have been seeing will continue – even though the government’s measure (which leaves out food and fuel) will continue to show the success of QE with no ill effects.

The real question is why it’s being done? So far, QE has neither bouyed the economy nor re-invigorated it. The housing market is still in shambles and employment is unimproved. With only two months until the election and his chairmanship on the line if President Obama loses, Bernanke may be playing politics with the American economy.

Inflation expectations are for as much as a 5% peak consumer prices in the very near future As Tyler Durden of Zerohedge.com wrote:

CPI remains below 2% but there is a clear lag between the rise in market-implied inflation and it showing up in the unicorn-laden CPI prints – what this means is that given the hubris of the Fed yesterday,market expectations of inflation are inferring CPI could rise to over 5% within the next 3 to 6 months.

Harry Reid in 1995: I Think We Should Audit the Fed

harry reid


Yesterday the House of Representatives  finally voted on, and passed, Ron Paul’s signature legislation the Audit the Fed bill, by a vote of 327-8. The bill had wide bi-partisan support; 89 Democrats joined all but 1 of the House Republicans in voting for the bill.

Despite the broad bi-partisan support the bill has, it will be dead upon arrival at the Senate, because Senate Majority Leader Harry Reid has vowed not to bring the bill to a vote.

But apparently, that’s not always how Harry Reid has felt about auditng the federal reserve.

Video from 1995 that has recently surfaced shows that at one time, Harry Reid felt very strongly that the Federal Reserve should be audited:

I have sponsored legislation every year that would call for an audit of the Federal Reserve system. I offer that amendment every year, every year it gets nowhere. I think it would be interesting to know about the Federal Reserve. I think we should audit the Federal Reserve — it‘s taxpayer’s money that’s being used there. But we don’t do that.

Watch Reid’s comments, in their entirety, below:

WashPost Front-Pager on Collapsing Net Worth Missing One Word: ‘Obama’

A new economic report from the Federal Reserve doesn’t offer much hope. On the front page of The Washington Post,  Ylan Q. Mui underlined “the Federal Reserve said the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010. That puts Americans roughly on par with where they were in 1992.”  

Furthermore, “the data represent[s] one of the most detailed looks at how the economic downturn altered the landscape of family finance. Over a span of three years, Americans watched progress that took almost a generation to accumulate evaporate. The promise of retirement built on the inevitable rise of the stock market proved illusory for most. Homeownership, once heralded as a pathway to wealth, became an albatross.”  What’s more interesting is that Mui’s article doesn’t mention Obama once  — in a front page piece during an election year — right after he told reporters the private sector is “doing fine.”

Mui quotes Mark Zandi, economist for Moody’s, saying “It’s hard to overstate how serious the collapse in the economy was…we were in free fall.” However, some have taken this to be another indictment of Bush administration policies.

Steve Kornacki at Salon.com noted that despite this terrible news, Obama may still succeed at blaming Bush.  He cites an Obama 50% approval rating andin  “an upcoming book, political scientists John Sides and Lynn Vavreck used data stretching back 60 years to create a model that predicts presidential approval based on economic conditions. As of the end of 2011, Obama was racking up scores significantly better than the model suggested he should be.”

Furthermore, “Sides and Vavreck suggest that, among other things, Obama may be benefitting from the public’s lingering memory of George W. Bush’s presidency and, more specifically, the imploding economy he passed off to Obama in January 2009. The new Fed figures may support this idea, in that they illustrate how steep, and pervasive and enduring the decline in family income has been since the final year of Bush’s tenure.”

After four years, a failed stimulus, high unemployment, three consecutive trillion dollar deficits, and an unconstitutional trillion dollar new health care entitlement program, it’s still somehow Bush’ s fault.

This default setting liberals have displaying their animosity towards Bush is both amusing and painfully insufferable.  When will they criticize the president for failing to take responsibility on the economy?

Kornacki states that “Obama won’t be able to run a Morning in America campaign, but he’s counting on context winning out, with a crucial chunk of voters remembering what he inherited (and, perhaps, understanding the obstruction he’s faced from Republicans in Congress) and giving him the benefit of the doubt, even if they’re not enthusiastic about it. For now, his poll numbers suggest Obama might actually pull this off. But the election is still five months away, and it’s an open question whether his support can withstand more discouraging unemployment reports and all of the Republican attacks to come.”

Ron Paul: Sage Grandfather or Crazy Uncle?

I find myself intrigued with Ron Paul on a regular basis. The man can get up and say some of the most patriotic and sensible things in one sentence and then in the next sentence sound like he just came out of an insane asylum. Paul has great ideas when it comes to fiscal responsibility, spending, freedom, and the Federal Reserve. On the other side of the coin, though, his ideas on foreign policy leave me wondering where he left his brain, or if he has one that is properly balanced. When he speaks of fiscal issues he sounds like Ronald Reagan. When he speaks of foreign policy he sounds like Hugo Chavez and even to the left of Barack Obama.

When I hear him speak of auditing or eliminating the FED I stand up and cheer. The Federal Reserve is a non-governmental entity that is destroying our economy by printing money that has essentially no value, thereby lowering the value of the dollar and guaranteeing severe inflation in the very near future. The FED also has virtually no oversight from anyone in Congress. Paul is also correct in his assessment of federal government spending. We cannot keep spending money borrowed from China for building IHOP restaurants, studying ants in New Zealand, teaching African men how to wash their genitals after sex, and certainly can’t keep borrowing to prop up European countries.

I also agree with much of his stand on Iraq and Afghanistan, not to mention Libya, Sudan, Yemen, and the other third world hell holes Obama is involving us in. Fighting a war against Islamic terrorists is one thing but this “nation building” farce is only a boon for the military industrial complex and is not helping any aspect of our national security interests. We are wasting money and lives in a venture that will fail because it isn’t about winning a war; it is about being politically correct and propping up a puppet government. As we are leaving Iraq we see the sectarian slaughter returning.

Sunni and Shiite Muslims have been butchering each other for centuries and we are not going to stop it. Until these stone-age animals decide to live like human beings nothing we do is going to change anything. All we do is put our soldiers in the line of fire with a no-win policy that puts their lives in danger with rules of engagement that are insane.

While closing military bases all across the United States we build and expand bases throughout the world. While we are “helping Afghan police and military close their borders to invaders” we leave our own borders wide open to drug cartels and the very Islamic terrorists we are fighting in far off lands.

Ron Paul makes quite a stir when he talks about “legalizing drugs”. I don’t remember everything he has said about drugs but I do know he has some valid points here also. The “war on drugs” has been going on for 50 years and has cost taxpayers billions in wasted money. Not only have we not solved the problem of illegal drugs; this “war” has made it worse. Most of Paul’s position has more to do with leaving this issue to the states, not legalizing drugs wholesale as the story is reported. Ron Paul is a strong states’ rights advocate, as am I. It only took the politicians 14 years to see the problems caused by Prohibition and repeal the 18th Amendment. The war on drugs has been going on for 50 years with the same results we saw during Prohibition. I don’t condone legalizing all drugs but I see a colossal failure that could be handled better at the state level.

Paul has the same ideas on abortion; let the states decide how they want to handle this issue. I agree with him on this matter. If it isn’t in the Constitution the federal government has no business sticking their nose into it. Every time a person or group doesn’t get their way at the state level they run to the federal government to override the states, the place where these issues should be decided. I see abortion as murder, and see murder as a state issue not a federal one.

I hear all of the things Paul writes and says about these issues and I jump up and cheer him on. Then he begins to talk about foreign policy and I scream out in pain. Paul is just as bad as Barack Obama when it comes to blaming America for every ill in the world. I have a cousin who worked in the building demolition business years ago and I had several opportunities to see the activities involved in blowing a building up, or rather imploding them. When I hear Ron Paul talk about 9/11 being an inside job I want to choke his scrawny little neck.

The idea that the World Trade Center was taken down by internally placed explosives is ludicrous to anyone who has even a scant knowledge of building implosions. The amount of work necessary to drill into pillars, place the explosives, wire them together, and tie everything to a detonator cannot be accomplished in a building with thousands of people walking in and out all day every day. A building that size isn’t brought down on itself with a satchel charge tossed into an elevator. The idea that the Bush Administration was involved in setting up the hijackings is equally ludicrous and statements by Ron Paul and his supporters on this issue shows they are well outside the realm of sane or intelligent thought.

While Ron Paul has some very good ideas about what is needed to restore The Republic of the United States of America, he has more than enough crazy ideas to make him a danger to every person in this country. I would love to see Ron Paul be the next Treasury Secretary or Chairman of the Federal Reserve but to put this man in the White House would endanger our nation almost as much as re-electing Barack Obama.

We need a very strong leader with strong conservative values. We need someone who will articulate the conservative message and have the courage of his/her convictions. Now is not the time for waffling or being concerned about “diversity” or “inclusiveness”. The only answer to our nation’s problems is a conservative approach that relies on the Constitution that our founding fathers fought the Revolutionary War to make possible. Anything less will result in the demise of a once great nation and the rise of another Third World banana republic with a dictator such as Adolph Hitler or Hugo Chavez. Ron Paul is not the man for the job.

I submit this in the name of the most Holy Trinity, in faith, with the responsibility given to me by Almighty God to honor His work and not let it die from neglect.

Bob Russell
Claremore, Oklahoma
January 23, 2012

End The Fed… And Replace it With What?

Audit the Fed - HR 459

Whenever the subject of eliminating the Federal Reserve is raised, there is an inevitable question posed: What would replace it? This question leads to one of the most common criticisms levelled against the “End the Fed” crowd: Eliminating the central bank and giving control of monetary policy to Congress would result a situation like Zimbabwe, where the national legislature printed insane quantities of worthless money. The Zimbabwean dollar was ultimately destroyed.

This argument is only valid if we assume that the government is allowed to issue fiat money. A government which can issue as much worthless currency as it likes, on a whim, is indeed the ‘nightmare scenario’.

On the other hand, if the money issued is sound money, directly exchangeable for a set value of a commodity (such as gold or silver), then the government can only issue currency equivalent to the amount of that commodity it holds. This is, in fact, the monetary system our Constitution created.

I think it’s safe to say that our government will never voluntarily return to a gold standard (or some other commodity standard). There is, however, another way to achieve this goal: Allow currencies to compete with the dollar.

I’ll use a hypothetical (my own) to illustrate the point:

Suppose a local hospital wants to create a way for local businesses- which are cash-strapped- to have health services coverage. The hospital (like most today) is also cash-strapped, and has difficulty paying salaries and purchasing supplies. Solution? An alternative currency, which I’ll call “HospitalBux”, which are redeemable for services at the local hospital.

The local grocer’s sales are down and he’s throwing away unsold product, and he has difficulty paying his employees because of the poor sales. The hospital needs to stock its kitchen with foodstuffs. So, the hospital offers to trade foodstuffs for HospitalBux with the grocer, who then pays his employees partially in dollars and partially in HospitalBux, since they have no health insurance (the grocer couldn’t afford to offer it). The local plumber, who is self-employed and has difficulty affording insurance, agrees to an exchange of plumbing services (as needed) for HospitalBux, offsetting another expense for the hospital and giving the plumber a way to save for health services when he eventually needs them.

HospitalBux can be accumulated and never lose value (unlike dollars) since they’re exchanged for services rather than money- an appendectomy, for instance, will always cost 200 HospitalBux; a person could accumulate quite alot of HospitalBux over a working lifetime, and be assured of meeting their medical needs in retirement. HospitalBux are also insured by a private insurance company, in the event the hospital goes out of business.

Other hospitals in the region set up similar HospitalBux arrangements, and these hospitals set up an exchange mechanism between themselves, allowing HospitalBux to be spent at a number of hospitals. This saves each individual hospital the expense of having to purchase and maintain equipment and hire specialists to cover every single medical need, since hospitals can now share both services supply and patient demand.

Other businesses in the area accept payment for goods and services in HospitalBux, either because they will save and use them themselves, or because other people accumulate and save them and will trade dollars for them.

As we can see, it’s actually a fairly straightforward proposition to set up a new currency. One can see the benefits of such a system; one can also see how such a currency could compete with the dollar, because it never loses value (in other words, there is no inflation).

Would “HospitalBux” be a viable currency? There’s no way to know, except to try it against other alternative currency models and see which functions best in the long run. As always, competition reveals which concepts work best and which fail.

There’s a problem we encounter, though: legal tender laws. Once a debt is accumulated, that debt can only be satisfied with legal tender. Taxes and government fees must be paid in legal tender, as well as wages and salaries of employees. This means that no other currency could genuinely compete with the dollar, since every business and every individual must have dollars, regardless of the faults of the dollar or the superiority of other currencies.

The subject of competition brings us to part of the explanation of why the United States Constitution mandates gold and silver: More than two thousand years of currency practices had shown that pure gold and silver coins, impressed with a government seal guaranteeing weight and purity, were the most viable form of money.

Even in 1789, competing currencies were a fact of life. Whiskey, for example, was more common than the dollar as a rural currency, which inspired the Whiskey Tax. Even at the turn of the 20th century (and after the passage of the first legal tender laws), competing currencies were still in use in some manner. One need only look at a Sears and Roebuck catalogue of that era (I have several in my collection) to see this: Paper, coin, bullion, and postage stamps were all accepted by Sears as payment.

As with anything else, competition can improve the dollar. If people prefer commodity-based money over a dollar which has no intrinsic value, and the federal government were barred from taking anti-competitive actions against other currencies (legal tender laws, for example), then the federal government would be left with only two options: Take actions to make the dollar more desirable, or let the dollar fail. On the other hand, if alternative currencies are a bad idea and the current management of the dollar is the best monetary policy, then competition would bear that out, too.

Ron Paul, the greatest champion of ending the Fed, favors currency competition to make the Fed irrelevant over ending the Fed immediately.

Fed's Bernanke Props Up EU With Loan-sharking Scheme

U.S. Federal Reserve Chairman Ben Bernanke has reached out to Europe in what is being mischaracterized across America as just another European bailout. Bernanke realizes the U.S. Congress would never allow the Federal Reserve to put the U.S. Economy at further risk by directly bailing out the European Socialists, in which we are already exposed to the tune of owning 20% of the IMF debt-fund, which is basically bankrupt. The EU announced that they would be increasing the cash flow to prevent several countries from going insolvent a short while back, in hinting that China and Japan would agree to buy up more European debt. The only problem there,  is that China refused to buy into that scheme without seeing solid austerity measures put into place, which the EU refused, or was incapable of doing.  Simply put,  Europe was a very bad credit risk, and China turned them down which was very embarrassing to the EU grand banking manipulators, who had already announced more cash was on the way.  

Understanding Bernanke’s Loan-Sharking Scheme

Bernanke then decided to play the role of loan-shark king, in lowering interest rates for dollar swap lines to the ECB (European Central Bank) along with cooperation from four other major central banks (Canada, England, Japan, and Switzerland). Bernanke is attaching the European debt crisis exposure to the banking systems of the other 4 country’s mentioned above in a move to cloud the fact that he is lending more money ( and collecting lower interest rates) to the European Socialists Union, which should actually have been declared bankrupt over a year ago. Does anyone believe for one minute that Canada, Japan, Switzerland, and England are going to put their economies at risk by buying into the debt-disaster of the EU, the IMF, the ECB and the EFSF? Of course not. The EFSF, or the European Financial Stability Fund ( boy is that an oxymoron if ever there was one) has yet to explain just what their role will play in all of this.

Yet globalists paint this scheme in a rosy hue by declaring that the European Central Bank, which has been reluctant to intervene to stop the growing crisis on its own continent, was joined in the decision by the Federal Reserve, the Bank of England and the central banks of Canada, Japan and Switzerland. Central banks will make it cheaper for commercial banks in their countries to borrow dollars, the dominant currency of trade. Just what effects will this have on the value of the U.S. dollar, long-term? But while it should ease borrowing for banks, it does little to solve the underlying problem of mountains of government debt in Europe, leaving markets still waiting for a permanent fix. What is that term Obama and Congress love to toss at the American public so often today? That’s right, they use the “We can’t continue to kick the can down the road” analogy constantly, yet this is exactly what the EU and Bernanke are condoning with this latest move.  Where do Germany and France stand on all of this?

The stock markets rallied upon Bernanke’s announcement of the Fed lowering its dollar-swap interest rate, and China’s easing of it’s monetary policy for the first time in several years by reducing bank reserve requirements by 50 basis points. This may be the first of several Chinese easing moves, and it certainly added to the stock surge. Again, take note that China is not willing to buy into the EU debt-disaster, but instead slightly lowers their bank reserve mandates. Also missing from this equation are the two biggest economic elephants in the middle of the EU, France and Germany. Simply put, after Deutshe Bank of Germany received massive bailout funds from the IMF, EFSF, and the ECB schemes that prevented them from suffering massive losses due to the previous buying of EU debt , and they now refuse to take the risks to provide any funding to bailout Greece, Italy or anyone else in the EU, including the newly exposed and problematic French debt-crisis.

The bottom line here is that this is all just another batch of phony solutions to a rapidly-expanding European debt-crisis that was created by the Euro-Zone Globalists, and which is heavily rooted in anti-capitalistic, utopian Socialism and the ever-present denial of the realities of their irresponsible actions.  Nothing has been solved here, much to the dismay of Ben Bernanke, who actually believes that this latest loan-sharking scheme will fool Congress into somehow thinking that Bernanke waved his magic wand and thus prevented the European insolvency that China now sees as inevitable. ( as is proven in their refusal to further buy into the European Socialists massive debt problem nightmare)  Are we to believe that the ECB can just write a trillion dollar check to further prop up the EU’s fast-growing number of bankrupt countries? On top of that, how can the IMF expect to be allowed to borrow another $800 billion from the ECB to give those same bankrupt countries even more money? The bottom line is that they can’t, simply because the money just isn’t there, especially with Germany and France now refusing to participate in any further bailouts without the creation of a New EU treaty. Merkel and Sarkozy have made Europe into a Communist collective that was built on the Socialistic catch-phrase of  denying protectionism, or the rights of European countries to control their own economies through implementing sound fiscal policies. Now they want out of the communist collectivism that they have created to protect their own countries from falling off of the debt-cliff that Italy, Greece, Spain, and other EU infected countries are now on the edge of.  For the proof of Merkel and Sarkozy’s stealth demand for German and French “protectionism” from the European debt-crisis they helped to create,  check out this article neatly titled,  EU Planning a New Treaty. Oh what a tangled web we weave, when first, we practice to deceive.  Sir Walter Scott, 1771 – 1832.

 

 

 

Dealing With the Occupations

I’ve heard a few libertarians who get a little bit defensive of how the Occupy Wall Street movement is treated, and for a while I wondered why that was. Every conservative I know has been very critical for obvious and good reasons. As a conservative libertarian, I usually reserve judgment, but as usual I fall somewhere in the middle of both ideologies. I’m personally disgusted by the overwhelming majority of the people at the “occupations”, their behavior, their political ideologies and solutions. The question I ponder is, “Is there a silver lining to the Occupy Wall Street movement? And what good can come from it?”

Before the Marxist elements became more obvious and widespread at the Occupy Wall Street movement, much of their disdain appeared to be aimed TARP and to a lesser extent, the Federal Reserve. Those are two areas of agreement conservatives have in common with them. This also means I have more in common with Occupy Wall Street radicals than I do with mainstream Democrats like Harry Reid and company. Occupy Wall Street seems to oppose the Wars in Iraq and Afghanistan, I too think its way past time for them to end. Democrats have only paid lip service in their supposed opposition to the wars, which is why they didn’t end them when they had total control from January 2009 to January 2011. To be clear, there’s many more areas we disagree on, like their desire to “eat the rich”, forgive all debt, and enact a $20.00 minimum wage. Those are all insanely awful ideas, and while I think most Democrats agree that those are bad ideas, they probably all sympathize with the proposals to varying degrees and would like to move in those policy directions. But even if Occupy Wall Street opposes bailouts because they don’t believe there should be a private sector, if they oppose the Federal Reserve because they’d rather use the barter system instead of using currency, and if they oppose the wars because that they believe that money could be better spent on running petting zoos; their reasoning doesn’t really matter to me. The important thing is that we’d both vote against bailouts, against the Federal Reserve, and to end the current wars.

I was reading a 2011 Heritage Foundation guide that ranked all members of the House and Senate in terms of their conservatism. In the Senate, most Democrats had anywhere from 5%-0%, but Bernie Sanders, the admitted socialist from Vermont had a 14% rating, the highest by far of anyone on the left! That is shocking to most, but not to me. Bernie Sanders is without a doubt an absolute crazy leftist. But, Bernie Sanders introduced the “Audit the Fed” Bill in 2009 that was co-sponsored by ultra conservative senator Jim Demint. Someone who is also like Bernie Sanders in that regard is Ohio Congressman Dennis Kucinich. Kucinich is another far leftist, but he actually voted against Cap N Trade (because it didn’t go far enough), wants to impeach Obama over his violation of the War Powers Act and assassination of an American citizen (be it a very bad one), and opposes the Patriot Act. Regardless of Kucinich’s reasons, I’m totally with him on those agendas. Policy wise and to a lesser extent, principle-wise, there may be more common ground between the far left and the right.

Establishment Democrats are the absolute worst. Joe Lieberman is many republicans’ favorite democrat. I admire that he has principles, which is unusual for politicians in general, but that’s as far as my admiration goes. Lieberman has a neoconservative foreign policy and is a socialist domestically. What that means is that he is as bad as Barack Obama in terms of spending, if not worse. Speaking of terrible things, Democrats usually say and do whatever they need to, to get re-elected. I’m sure some Democrats are unaware of the harmful effects of their policies and have benevolence in mind. But most are interested in buying votes from every group they can possibly get a hold of. Democrats usually run against things, namely republicans. They will oppose republicans virtually on every policy, not because they necessarily disagree, but as a political tactic. This is beyond obvious when Democrats are in power and their foreign policy is seen by the American people. The only difference between Bush and Obama on foreign policy is that Obama wants Israel to return to its 1967 borders and that he likes to travel to countries and apologize for things America did 50-75 years ago.

Occupy Wall Street could be dangerous in the future. As winter weather comes in for the long haul, it seems the movement would face 2 options, it either dies out or revs up by becoming violent and [even more] lawless. Obviously we should hope that its the former. The latter would bring about the chaos and destruction that we see taking place in crumbling nations like Greece. Most rational people probably look at Occupy Wall Street as disgusting and view it negatively. I don’t see how the Democrats channel the movement into electoral success (by attracting new voters, they have the Occupy Wall Street vote pretty well in hand). The truly sad part of it is that it had some limited potential.

Instead of just voting a straight democrat ticket, a democrat tea party would’ve brought about positive changes for the country. Voting out all the crony capitalist Democrats as well as the ones supporting destructive entities like the Federal Reserve would be fantastic (but painstaking, as that would require replacing most of the ones currently serving). However its likely that the individuals who are currently occupying places are too lazy to bring about such productive change and to do in depth research on the policies that are actually causing the problems they are facing. As Reason Magazine’s Matt Welch pointed out, one of the great aspects of the Tea Party is that they are principled enough to vote for a candidate who they agree with on most policies but who is also a crazy who only dresses in a bunny suit (who obviously has no chance of winning), instead of supporting a worthless establishment republican who could easily win in the general election. Unfortunately, with far left nuts such as Michael Moore, Van Jones, and Cornel West in their ranks and financial support coming from the labor unions, Occupy Wall Street has insured itself as a worthless group of nasty, unemployed, angst filled useful idiots willing to take direction from absolute crazies or the people who promote many of the policies they say they oppose. Instead of a good policy or personnel reform coming from the Occupy Wall Street movement, the only silver lining may be independent voters running even further away from the democrat party.

The New China Syndrome

When hearing a number of conservative (some real, some alleged) figures speak about China, the tone and rhetoric are usually a mix of concern, anger and fear. Donald Trump, one of the alleged conservatives, has spoken at length on the issue, which is probably a chief reason why he gained some traction while contemplating a run for president. Trump has lambasted China for manipulating their currency and “stealing our jobs”. To be clear, China has seen a number of American companies open up facilities there; but I hesitate to calling it “stealing” when we generally push our businesses their way. China, a partially communist country, has a lower corporate tax rate and much fewer regulations than the supposedly capitalist United States. In that sense, its our fault, not their's.

Does China manipulate their currency? Yes, they certainly do. Do we manipulate our currency? Yes, we certainly do. Is the federal reserve endlessly printing money economically beneficial or does it have a brief minor stimulative effect before damaging an economy long term? Most people would agree that its the latter. So if us doing it has negative effects on ourselves, how does China do it to their long term benefit?

China also gets talked up by President Obama as a nation that has invested in “green energy” and that if we don't also invest in green energy, we'll fall behind them. First, China does have a fair amount of factories producing green energy products; and not coincidentally GE has exported a large number of jobs there (yes, that’s correct, our President's chief economic adviser has outsourced thousands of jobs overseas). China also actively builds as many coal power plants as it possibly can. According to the BBC, China is the world's worst polluter; this is not a nation we should always take our cues from. In 2007, a study released by the World Bank has shown that 760,000 people die yearly from pollution related illnesses. But back to green energy briefly, I don't want to insinuate that I hate green energy, because I don't. What I hate is paying billions yearly to companies that produce products that don't work or people don't want. If green energy had such great potential, why do companies need the government to invest in it, wouldn't investors be lining up to make money in such a terrific venture? I am still curious what the realistic expectations from when solar/wind has been sufficiently explored; as far as I know, they aren't expected to be a main source of energy, just complimenting main energy sources. My next question is, why don't we let China dump tons of money into green energy, and if they come up with a product that works, our companies will begin improving on their methods and creating a better product. If not, and so far green energy has been a money sink, then the joke is on them; they've wasted billions of dollars in mal-investments.

Another fear is that China's military is growing stronger and has started to use advanced technology. China spent $100 billion last year on their military budget, the US by comparison is proposing a national defense expenditures of over $950 billion. In terms of money spent, they won't overtake us for a long while. At the moment, China has no bases outside of its borders and hasn't expressed plans to do so. If in the event this does happen, one can expect conservative talk radio to be paranoid and abuzz for weeks, but in my opinion this offers us an opportunity. China has been pressuring North Korea to quit threatening everyone with nuclear war, being as they are in the region, they have quite an interest in stability. If China is dumb enough to ever want to put military bases in locations that we currently police, we can give them the reins to the costly burden we currently carry. If they want to spend tens of billions to put bases in the Korea's and such, we should not only let them, we should encourage them. If needed we can pull the “rope a dope” and fund insurgents to bog them down, however we should be grateful we've found an idiot willing to pay the full cost of an expensive liability that yields no tangible benefits.

Lastly, another of Trump's main issues was the trade war with China. Trump proposed a 20% tariff on Chinese imports. Now, if our goal was to stick it to them, that would be one way of doing it. The problem though is that the goods purchased here by our lower income citizens would cost 20% more, a burden which they cannot afford. Worse, as was caused by the Smoot-Hawley tariff under Hoover, a trade war would likely ensue and China would put a 20%+ tariff on their imports; harming not only our companies but our diplomatic relations. So the best analogy I can think of to this whole 20% tariff on Chinese goods would be comparing it to the Middle Eastern punishment for thievery, which is cutting off the thief's hand. Except when the enforcer went to cut off the thief's hand, he accidentally cuts his hand off as well. Actually its a bit worse than that, because the Great Depression saw the harmful consequences of protectionism and trade wars, so really it'd be more like the enforcer seeing an instructional video of what to avoid doing when severing hands, and still screwing it up anyway.

Do not conclude from this writing that I am a fan of China. As a libertarian, I despise a collectivist state that crushes the individual and China assuredly is that. It is natural for Americans to resent China, as they see our nation's power and prominence transfer to China, in a tragic “changing of the guard” ceremony. But trade agreements only work if they are beneficial to both nations, and our trading with China is mutually beneficial. Spiting them will only cause diminished prosperity in both nations and besides, you don't really want to get on the bad side of your main creditor/a rising power. As Calvin Coolidge once said, “Don't expect to build up the weak by tearing down the strong”. China's rise doesn't have to be America's fall. Be skeptical of all governmental action, foreign and domestic, but don't let irrational fears cause irrational actions.

Mitchell & Ray September 22nd: GOP Debate, McCotter on Mitt, The Twist and More

When: Thursday, September 22nd, 10pm Eastern/7pm Pacific

Where: Streaming Internet Radio

What: We’ll discuss The Attack Waaaaatch video, Obama’s version of transparency, crony socialism and seeing recent democrat losses through blue-tinted glasses

Guests: Brandon Morse, CEO of Misfit Politics and Ezra Dulis the creator of the now viral video Ataaack Waaaatch!!

Show Recording: 9-22 Show Recording

« Older Entries