Saturday, November 22, 2014

The Consequences of Imposing 
Negative Interest Rates
Ludwig von Mises Says It Will Impoverish Society
& He's Been Right About An Awful Lot
Pater Tenebrarum essay on the adverse unintended consequences of banks imposing negative interest rates on deposits, all a result of financial repression .. he points out how banks have recently started to charge interest on bank deposits in Germany, & now banks elsewhere are doing the same: "Other banks were presumably watching to see if depositors would flee, and when that didn’t happen, Commerzbank decided to go down the same road." .. the essay quotes Austrian School Economist Ludwig von Mises on what happens when interest payments are abolished or go negative - owners of capital will begin to consume their capital & society will become impoverished: ".. there cannot be any question of abolishing interest by any institutions, laws, and devices of bank manipulation. What can be abolished by laws and decrees is merely the right of the capitalists to receive interest. But such laws would bring about capital consumption and would very soon throw mankind back into the original state of natural poverty."
LINK HERE to the essay
The Crash Course - Chapter 22
Energy & the Economy
Peak Prosperity's Chris Martenson* has produced another 5* lesson. Don't miss any of them. We would summarize this one as: exponential growth reaches limitations and can't continue when those limits are reached. 11 minutes
Swiss Gold Vote Is The Key 
For The Future Of Fiat Money
Essay considers the implications of the November 30 vote in Switzerland .. the Swiss Gold Initiative .. Swiss voters will be asked whether they want 20% of their currency, the Swiss franc, backed by physical gold .. "There’s a better-than-good chance that Swiss voters shock the monetary world this weekend with a vote that signals the beginning of the end for modern fiat currencies. That will ripple through our world .. Western governments have done a moron’s job of managing the world’s largest, most important currencies — the dollar, the euro, the yen, the pound … and others. Politicians have spent unimaginable sums of money that their economies don’t have in order to give voters undeserved benefits and payoffs. They’ve issued gargantuan sums of debt to do so, and then relied on their central bankers to manipulate the monetary system to delay the reckonings that must happen in order to clear the monetary system of imbalances that the politicians and bankers have fostered. They’ve been able to do this because the currencies they’re issuing have no tangible value. The currencies are literally just paper that each government says is worth something … just because the government says so. The Swiss initiative questions the foundation of that belief."
LINK HERE to the essay
Tim Price on
Financial Repression
Article & interview on perspective by Tim Price on financial repression insight on UK Tip TV .. Rather than saving the global economy, very low interest rates are a ’coiled spring’ for trouble ahead .. very low interest rates are implementing financial repression, which involves deliberately holding down interest rates below inflation & keeping government borrowing costs low .. "People are piling into stocks because they’ve frankly got no other choice, but I think we’ve seen how this film ends." .. Price thinks that investing in Asia is the best bet to deal in this environment.
LINK HERE or above to the article & video
JFK Assassination
It was 51 years ago today .. this podcast was done on the 50th anniversary. Jesse Ventura makes a very common sense point to Lew Rockwell on why this should not be ignored as ancient history. Finding the truth about the past is important for understanding the truth about today.. 18 minutes
LINK HERE to the podcast
"Those who make peaceful revolution impossible will make violent revolution inevitable."
John F. Kennedy (May 29, 1917 – November 22, 1963), In a speech at the White House, 1962

Jim Rickards*:
Why a U.S. Rate Hike 
in 2015 is Unlikely
Jim Rickards* says the U.S. economy is still seeing below-trend growth & remains too weak to support an interest rate increase .. 4 minutes

Friday, November 21, 2014

Japan Is A Warning
To The World
"Japan provides a salutary caution because of its fiscal and monetary activism, not because its elites have done too little or have not done the right things .. Most Western economies are so chock full of regulations, taxes and uncirculated currency that expecting 'real' economies to assert themselves is wishful thinking .. There is a solution to what ails the West – and the world. It involves some simple but radical surgery. Remove central banks, lower or eliminate taxes and minimize the modern disease of regulatory democracy. Unchain the Invisible Hand of competition and watch prosperity soar .. A radical rethinking of regulatory democracy is surely necessary as global economic dysfunction drags .. But the mainstream media itself uses rhetoric that clearly indicates such a rethinking is not being contemplated by those with significant power. And thus, the West's and the world's economies will continue their slow unwinding, much as Japan's is doing. There is no salvation in government action. Only individual human action is truly effective, as Austrians have long suggested."
- The Daily Bell
LINK HERE to the essay

James Grant*:
Federal Reserve Concerned
About World Economy & Currencies
James Grant* says he is seeing indications in the media & his research that the Federal Reserve is increasingly getting concerned about what's happening in the global economy & with global currencies relative to the U.S. economy & U.S.$, & how this all affects its monetary policies & consequences .. Grant sees an unfolding drama taking place in a world rife with currency & interest rate manipulation .. 3 minutes

Charles Schwab To 
The Federal Reserve:
Raise Interest Rates Now
For Senior Citizens 
Charles Schwab points out how senior citizens rely on fixed income in their retirement years .. rails against the Federal Reserve for keeping interest rates so low for so many years, all to the detriment of senior citizens' savings .. "Retirees depend on income from their savings for basic living expenses. Without that income, many seniors have taken on greater risk to increase the potential yield on their savings, or simply spent down their nest eggs. After decades of playing by the rules, putting off spending and socking away money, seniors have taken it on the chin. This strikes a blow at the core American principles of self-reliance, individual responsibility and fairness."
[Cliff Note: While this note acknowledges the consequences of financial repression on retirees & savers, it presumes central planning control of interest rates, rather than relying on the free market determination of such interest rates .. moreover, be careful what you wish for as you may just get it: if interest rates rise to historically comparable levels, indebted governments will likely go bankrupt as they find it impossible to maintain debt servicing & also the trillions of interest rate swap derivatives would begin a chain-reaction of counterparty failures in a global derivatives meltdown (approximately 80% of all derivatives worldwide are interest rate related).]
LINK HERE to the article
LINK HERE to an alternate source
Mises Institute Presentation
Freedom Doesn't Come
From Government
Weekend Video Special
Dr. Ron Paul* explains how state intervention destroys civil society, how free markets offer a better solution. Recorded at the Mises Circle in Costa Mesa, California, 8 November 2014 .. 38 minutes
Negative 'Real' Rates Are 
Becoming The Norm
Article highlights how a number of banks are charging institutional clients for depositing their funds, meaning the interest rates are negative .. Several banks, including Bank of New York Mellon Corp, Credit Suisse Group AG, Goldman Sachs Group Inc & JP Morgan Chase & Co., have applied this practice .. "Investors and corporations, along with investment funds and asset managers, are becoming the biggest victims of this practice. They view this change as revolutionary. Multinational organizations that manage large-scale operations in the continent are witnessing a spike in their expenses as a result of this practice. Fear of a doomed European financial system is one of the driving forces behind such drastic measures. Currently, the economy is at a halt and in desperate need for households and businesses to add money in the system and revive confidence in investors .. This might lead to abandoned clients looking for more secure options to place their misplaced money or force them to opt for high-risk instruments such as debt-based funds or repurchase agreements." .. [Cliff Note: They call it 'financial repression'. We call it 'financial exploitation'. Central banks & governments intentionally keeping 'real interest rates' negative to help governments pay their massive debt & try to create some inflation to help them even more.]
LINK HERE to the article
U.S. Cities Are Now Budgeting For
'Civil Asset Forfeiture' 
As Part Of Their Income
Civil Asset Forfeiture is a Euphemism = Taking Things From People
Local & Municipal Debt Crisis Ahead
In the past few years, Washington DC police officers have made more than 12000 civil asset seizures under city & federal laws .. Martin Armstrong: "Worse yet, cities need money desperately. They are now including civil asset forfeitures as part of their budget. In other words, police are under orders to confiscate your money for any excuse possible. This was the end phase of the Roman Empire. The army began sacking Roman cities on the pretense they stood against whoever the proclaimed to be emperor. Rome weakened itself and cannibalized its own civilization. This is what government is doing now in the USA. Where are our real representatives of the people on Congress?"
link here to the commentary
LINK HERE to the article
LINK HERE to another article
Everything You Need To Know
About the Swiss Gold Initiative
Courtesy of The Visual Capitalist
Courtesy of: Visual Capitalist
The U.S. Economy 
Cannot Survive Without QE
Doug Casey's Protégé Nick Giambruno at the Grand Cayman Liberty Forum discusses gold, fiat currencies & how investors can look at diversifying political risk in their portfolios .. "If you’re looking to reduce your political risk .. probably the easiest thing you can do is take your fiat money, which is obviously in the control of government, and put it in something that’s recognized universally, all around the world, like gold." .. thinks it’s a great buying opportunity for mining stocks now .. 6 minutes 
This one is not for our traditional 'middle of the road readers'. It introduces you to an unusual website. OFF THE GRID with Jesse Ventura has an unusually 'loud mouthed' approach. In this episode, the former Governor of Minnesota encourages you, his vigilant viewers, to take a closer look at the inner workings of America's largest private employer, Walmart .. As much as we don't take the Jesse Ventura approach, there is a valid point to be made about how the 'System' works. The owners of Walmart have the taxpayers paying to cover some of Walmart's costs. A system that works this way will enrich those who are IN the 'System' & bankrupt those who are OUT (in this case the OUTs are the great silent majority .. U.S. taxpayers). This Walmart example is one that helps to make our theme point that we call 'THE GREAT COUNTER INTUITIVE ENIGMA'. Please see the post from our archives below this one. 10 minutes

From Our Archives:
October 13, 2013
that the founding fathers of the U.S. understood,
but it sure seems like it isn't understood today
click to enlarge
Cliff Comment: The graphic above is a 5* explanation of a reality that is counter intuitive. We hope every American eventually understands the GREAT COUNTER INTUITIVE ENIGMA. We are trying to help. Here is today's attempt: 
It has been more than 100 years since President Grover Cleveland tried to get Americans to understand that getting the government to look after people was a 'very slippery slope'. Granting the power to choose who to help is a power that is certain to end up corrupted (because power corrupts). President Cleveland tried to get the people to understand that the U.S. Constitution was designed to prevent government from exercising power over the people ..& that included granting favors. It required that the people not give government the power to pick 'favorites' .. because, in time, that power would be corrupted. A couple presidents later, the lesson was forgotten. Woodrow Wilson helped arrange a favor for those who paid for his election campaign. The favor was to award them control of the monetary system. From that point in time, the government (& the group of bankers that control its money) had the power to choose those that would get 'favors' from government. The people? THEY GET STUCK PAYING THE BILL (watch the National Debt Clock spin higher & think about this system. Re-read Article I of the Constitution & understand that the founders of the United States tried to prevent this system. This monetary 'System' is identical to the one the American Revolution fought against). We have been sliding down the long slippery slope away from freedom & free markets since the money monopoly was granted to a private syndicate in 1913.
[Quiz Question: Can you name the medical obstetrician & long time U.S. Congressman (now retired from government) who refused to be corrupted by this monetary system that violates the U.S. Constitution? Some Hints: 1- He voted against every bill that took money from the people to award favors to 'friends' of the government. 2- He fought for decades for free markets & a monetary system that would abide by the Constitution. 3- He considered Grover Cleveland to be the greatest U.S. President.