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Opinion from a Libertarian ViewPoint

Posts Tagged ‘Federal Reserve Bank’

The Inflationary Attack on America’s Poor

Posted by M. C. on March 4, 2022

https://libertarianinstitute.org/articles/the-inflationary-attack-on-americas-poor/

by Thomas Eddlem

united states federal reserve system symbol.

The ramp-up of money-printing by the Federal Reserve Bank since the COVID pandemic began has meant, like clockwork, an increase in CPI price inflation exceeding a seven percent annual rate. Though price inflation as measured by the CPI was temporarily delayed by the crosswinds of the shutdown-induced recession, the Fed inflation of the currency had already enriched the financial sector and created a wider income divide between the top one percent and the rest of the people. And this has not gone unnoticed by the political left, even if they remain ignorant of the real economic causes.

Economist and financier Richard Cantillon explained the impact of inflation upon the poor in his posthumous Essai nearly four centuries ago, in what has become called the “Cantillon Effect.” Cantillon posited that “the abundance of money makes everything more expensive” and that the persons who create the money benefit from its first use, while those who are further down the circulation river are robbed of the value of the money they do possess:

If the increase of hard money comes from gold and silver mines within the state, the owner of these mines, the entrepreneurs, the smelters, refiners, and all the other workers will increase their expenses in proportion to their profits.

Today, the miners and smelters are the financial sector, followed by the real estate sector, which Cantillon noted was a refuge from the ravages of inflation, observing that “an abundance of money naturally increases consumption and contributes above everything else to a higher valuation of the land.”

What that means from a practical point-of-view is that the poorer a man is, the more inflation hurts him. Inflation always takes from the creditor and gives to the debtor by devaluing dollar-denominated assets.

But how, you many ask, can a poor man be a creditor and a rich man be a debtor? One first needs credit in order to qualify for debt, and the poorer a man is, the less he is able to become a debtor. The working poor are always forced by the social construct to be a creditor:

  1. Inflation always takes from the wage-earner and gives to the employer, to whom he has credited his labor while he awaits payday.
  2. Inflation always takes from the renter and gives to the landlord, to whom he has advanced his rent and security deposit. But inflation protects the landowner by increasing the valuation of his land and comparatively diminishing the payments for his mortgage.
  3. Inflation always takes from the wage-earner who deposits his wages and gives to the banker, whose very business is one of managing debt.
  4. Inflation takes from the pensioner on a fixed income and gives to the financial sector.

Collectively, this is a huge transfer of wealth: an inflation tax on every single worker, collected from several weeks wages, a couple of months rent, all the bank deposits of the poor—levied also upon the value of fixed-income retirees—is transferred to those “miners and refiners” in the financial industry. Inflation is a direct redistribution of wealth from the working poor to the financial sector, which explains the extraordinary enrichment of the financial sector in the US since the end of the gold standard and rise of the age of inflation in the 1970s.

The rich man’s assets may include some cash and non-inflation-indexed bonds, but the overwhelming majority of the rich people’s assets are denominated in real estate, stocks and other assets that are relatively safe from inflation. And most of them benefit from inflation indirectly by being further up the inflation pipeline.

The middle class may have a home where the value of the mortgage payment is decreased by inflation (though this is never more than 29% of his income by industry rule) and may see a proportionate increase in the valuation of his home. But the other 71%-plus of his income is robbed regularly from inflation, so the middle class too becomes poorer overall.

The poor man is especially attacked by inflation. The poor man pays the inflation tax on 100% of his assets (which, however small they may be, are inevitably cash-denominated), 100% of his income, and everything he expects to receive as income, including the labor of his own hands.

Even before the CPI recorded price inflation, the increase in income disparity was already widened. Establishment politicians and their crony house economists will reliably deploy deflation as their tired, old bogey-man, inevitably bringing up irrelevant references to the Great Depression as a counter to this point. But deflation actually makes necessary goods more affordable to poor people during tough economic times at the expense of depreciation of the assets of the rich. The currency inflation created by the Fed actually cheated the poor out of this meager and needed benefit.

Inflation is the most regressive tax, and the most cruel. This is why there is so often starvation in nations with hyper-inflation; inflation preys on the most vulnerable in society, and the greater the inflation, the greater the harm inflicted upon the poor. It’s clearly long past time—for the sake of the poor—to abolish the Fed and restore a stable, commodity-based currency.

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‘Making Sense of Current Political Idiocies’ – RPI 17 November Update

Posted by M. C. on November 18, 2021

https://mailchi.mp/ronpaulinstitute/rpbook?e=4e0de347c8

Ron Paul’s Amazing New Mini-Book! Dear Friends:

Ron Paul spent this year taking a hard look at some of the seemingly intractable issues of our time. Why are CEOs of major corporations, owners of major professional sports teams, and so on, embracing a Cultural Marxism and “Woke-ism” that is rejected by the majority of the US population and seems destined to have a seriously negative impact on the bottom line of the company? Why would a company manufacturing non-political goods and providing non-political services so enthusiastically embrace hyper-political agendas destined to divide and alienate? Who the heck is Larry Fink and why is he one of the greatest threats to our liberty??? The relationship of the Federal Reserve with the pro-Woke business community is crucial to understanding how the influence of Wokeism became such a powerful threat to our liberties and social order. Why is nihilism so much on the rise? How did Dostoevsky absolutely nail what we’re going through in a book written just as the Bolsheviks were preparing to spring their trap on the Russians? If nothing else, allegiance to the ‘nothingness’ of nihilism is a rather boring way to spend one’s life. How does the emergence of Wokeism, guided by Cultural Marxism, relate to the past nearly two years of Covid tyranny? Ron Paul ties it all together in a most convincing way.

As Dr. Paul makes it clear in this mini-book, we who believe in personal freedom and civil liberties are under assault from all sides. Even from places we would never expect. He wrote: “The Marxists and their philosophical allies are greatly influencing world affairs, but a resistance movement is rapidly developing.”

Yes there is a resistance growing and that is the great takeaway from this mini-book!

As you all know, we rarely hit you with traditional “fundraisers” like most organizations. We hope that our achievements speak for themselves and that people spontaneously support what we do rather than hit them over the head with financial demands all the time. That has worked very well for us to this point.

So this is not a traditional “fundraiser,” but an opportunity for us to thank you for your support of the Ron Paul Institute with a unique premium that you literally will NOT find anywhere else!

Ron Paul’s new mini-book is not currently commercially available anywhere: You can only get it from the Ron Paul Institute. We are offering you something special – a collector’s edition of Ron Paul’s latest work.

How to get this amazing new Ron Paul publication? Simply make a tax-deductible donation to his Ron Paul Institute for Peace and Prosperity! A donation of $50 will get you a “thank you” of a copy of the book. For $100 Dr. Paul will sign the book himself, making it a treasured addition to your personal collection.

The time is very limited and the supplies are very limited so act NOW! 

What to get your liberty lover for Christmas? How about a signed copy of Ron Paul’s latest – and in my view greatest – work?

What to get someone potentially interested in liberty but not yet on board to the cause? As Biden would say, “come on, man!” It’s a no-brainer: Make your contribution to the Ron Paul Institute for a “thank you” gift of Ron Paul’s TREMENDOUS new book!

And the beauty of it is you don’t have to click any buttons or send us any message: ALL donations of $50 or more will receive this gift and ALL donations of $100 or more will receive a signed copy of the book! It could not be easier.

Your donation is made on a secure page within RPI so you can donate with complete confidence.

Support Ron Paul, support his Institute for Peace and Prosperity, and own a piece of Liberty History!

Dear Ron Paul Institute and Ron Paul Liberty Report supporters: There is an illusion that the bad guys are winning, but it is a mere chimera. We are a team, we are a tribe, we are the future of liberty. And, together, our time has come! 

Thank you so very much for being a part of this growing movement!
Sincerely yours,

Daniel McAdams
Executive Director
Ron Paul Institute for Peace and Prosperity

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What the US protests reveal, by Thierry Meyssan

Posted by M. C. on June 11, 2020

As historian Kevin Phillips – Richard Nixon’s electoral adviser – has shown, Anglo-Saxon culture gave rise to three successive civil wars [3] :
- the first English Civil War, known as the “Great Rebellion” (which pitted Lord Cromwell against Charles I 1642-1651);
- the second English Civil War or “War of Independence from the United States” (1775-1783);
- and the Third Anglo-Saxon Civil War or “Civil War” in the United States (1861-1865).

What we are witnessing today could lead to the fourth. This seems to be the view of former Secretary of Defense General Jim Mattis, who recently told The Atlantic that he was concerned about President Trump’s divisive rather than unifying policies.

https://www.voltairenet.org/article210166.html

by Thierry Meyssan

Anti-racism protests in the United States have rapidly evolved into a promotion of the ideas championed by the Democratic Party. It was no longer a question of fighting for equality in law for all or challenging the prejudices of certain police officers, but of reopening a cultural conflict at the risk of a new Civil War.

Protests across the West against racism in the United States are masking the evolution of the conflict there. It has evolved from a questioning of the remnants of black slavery to a conflict that could challenge the integrity of the country.

Last week I pointed out that the United States should have disbanded after the break-up of the Soviet Union to which it was attached. However, the imperialist project (the “Endless War”) led by George W. Bush had made it possible to revive the country after the attacks of September 11, 2001. I also pointed out that in recent decades, the population had moved around a great deal in order to regroup by cultural affinity [1]. Inter-racial marriages were again becoming rare. I concluded that the integrity of the country would be threatened when non-black minorities entered the challenge [2].

This is precisely what we are witnessing today. The conflict is no longer between blacks and whites, since whites have become the majority in some anti-racist demonstrations, Hispanics and Asians have joined the processions, and the Democratic Party is now involved.

Since Bill Clinton’s term in office, the Democratic Party has identified with the process of financial globalization; a position that the Republican Party belatedly supported, without ever fully adopting it. Donald Trump represents a third path: that of the “American dream”, i.e. entrepreneurship as opposed to finance. He got elected by declaring America First! which did not refer to the pro-Nazi isolationist movement of the 1930s as claimed, but to the relocation of jobs as later verified. He was certainly supported by the Republican Party, but remains a “Jacksonian” and not a “conservative” at all.

As historian Kevin Phillips – Richard Nixon’s electoral adviser – has shown, Anglo-Saxon culture gave rise to three successive civil wars [3] :
- the first English Civil War, known as the “Great Rebellion” (which pitted Lord Cromwell against Charles I 1642-1651);
- the second English Civil War or “War of Independence from the United States” (1775-1783);
- and the Third Anglo-Saxon Civil War or “Civil War” in the United States (1861-1865).

What we are witnessing today could lead to the fourth. This seems to be the view of former Secretary of Defense General Jim Mattis, who recently told The Atlantic that he was concerned about President Trump’s divisive rather than unifying policies.

Let us go back to the history of the United States to see where the sides are. Populist President Andrew Jackson (1829-1837) vetoed the Federal Reserve Bank (Fed) established by Alexander Hamilton, one of the fathers of the Constitution, who favoured federalism because he was violently opposed to democracy. Just as Jackson’s disciple, Donald Trump, is today in opposition to the Fed.

Twenty years after Jackson, came the “Civil War” to which today’s protesters all refer. According to them, it pitted a slave South against a humanist North. The movement that began with a racist news item (the lynching of black George Flyod by a white policeman from Minneapolis) continues today with the destruction of statues of southern generals, including Robert Lee. Actions of this type had already taken place in 2017 [4], but this time they are gaining momentum and governors from the Democratic Party are participating.

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The Democratic Governor of Virginia, Ralph Northam, announced the removal of a famous statue of General Lee at the request of white protesters. It is no longer a question of fighting racism, but of destroying the symbols of the country’s unity.

However, this narrative does not correspond at all to reality: at the beginning of the Civil War, both sides were slavers, and at the end, both sides were anti-slavers. The end of slavery owes nothing to the abolitionists and everything to the need for both sides to enlist new soldiers.

The Civil War pitted a rich, Catholic, agricultural South against a Protestant, industrial North aspiring to make a fortune. It crystallized around the issue of customs duties which the South believed should be set by the federal states, but which the North intended to abolish between the federal states and have the federal government determine.

Therefore, in debunking the Southern symbols, the current demonstrators are not attacking the remnants of slavery, but denouncing the Southern vision of the Union. It was particularly unfair to attack General Lee, who had put an end to the Civil War by refusing to pursue it with guerrilla warfare from the mountains and by choosing national unity. In any case, these degradations effectively pave the way for a fourth Anglo-Saxon civil war.

Today the notions of South and North no longer correspond to geographical realities: it would rather be Dallas against New York and Los Angeles.

It is not possible to choose the aspects of a country’s history that one considers good and to destroy those that one considers bad without calling into question everything that has been built on it.

In referring to Richard Nixon’s 1968 election slogan, “Law and Order,” President Donald Trump is not trying to preach racist hatred as many commentators claim, but is returning to the thinking of the author of that slogan, Kevin Philipps (quoted above). He still intends to make Andrew Jackson’s thought triumph over Finance by relying on Southern culture and not to cause the disintegration of his country.

President Donald Trump finds himself in the situation Mikhail Gorbachev experienced at the end of the 1980s: his country’s economy – not finance – has been in sharp decline for decades, but his fellow citizens refuse to acknowledge the consequences [5]. The United States can only survive by setting new goals. Such change is particularly difficult in times of recession.

Paradoxically, Donald Trump is clinging to the “American dream” (i.e., the possibility of making a fortune) when US society is stuck, the middle classes are disappearing, and new immigrants are no longer European. At the same time only its opponents (the Fed, Wall Street and Silicon Valley) are proposing a new model, but at the expense of the masses.

The problem of the USSR was different, but the situation was the same. Gorbachev failed and it was dissolved. It would be surprising if the next US president, whoever he may be, succeeded.

Translation
Roger Lagassé

 

 

 

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EconomicPolicyJournal.com: U.S. Threatens Iraq That It Will Lose Access to Its Bank Account at the Federal Reserve

Posted by M. C. on January 12, 2020

You can be sure that every country in the world will take notice of the threat.

When the move away from the dollar as a reverse currency begins in earnest, the flight from the dollar on foreign exchange markets will be fierce.

https://www.economicpolicyjournal.com/2020/01/us-threatens-iraq-that-it-will-lose.html

This is stunning news.

The Trump administration warned Iraq this past week that it risks losing access to a critical government bank account if Baghdad kicks out American forces following the U.S. airstrike that killed a top Iranian general, according to Iraqi officials, reports The Wall Street Journal.

Here are the details via The Journal:

The State Department warned that the U.S. could shut down Iraq’s access to the country’s central bank account held at the Federal Reserve Bank of New York, a move that could jolt Iraq’s already shaky economy, the officials said.

Iraq, like other countries, maintains government accounts at the New York Fed as an important part of managing the country’s finances, including revenue from oil sales. Loss of access to the accounts could restrict Iraq’s use of that revenue, creating a cash crunch in Iraq’s financial system and constricting a critical lubricant for the economy.

Bottom line: The U.S. continues to use the global dominance of the US dollar to bully countries that don’t fall in line with its demands.

You can be sure that every country in the world will take notice of the threat.

When the move away from the dollar as a re(serve)verse currency begins in earnest, the flight from the dollar on foreign exchange markets will be fierce.

And that is what economic blowback will look like: The crash of the dollar.

RW

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