Playing Economics: The Lender and the Borrower of Last Resort

If you have ever gone to Versailles and seen Marie Antoinette's "village", you can begin to appreciate what extreme delusions those in power entertain when engaging in "unlimited play" to justify their increasingly maladjusted and distorted view of the real world. So it is with the Fed ... which seems to have recently declared "let the games continue". The next phrase we will hear from them will almost certainly be something akin to "let them eat cake" ... so listen ... it is surely coming

Meanwhile, the financial establishment and its nearsighted media minions are warning that the Federal Reserve’s vital “independence” as the sole and omnipotent manipulator of our national currency [sorry for the political insensitivity] is being dangerously eroded by Congress robbing the Fed’s "earnings" [Peter] to pay the national Highway Fund [Paul] … and by Congress even thinking about passing Senator Rand Paul’s bill to “Audit the Fed” so that everyone can see in ugly detail just what the Fed is doing behind its opaque cloak of monetary secrecy. However, it is doubtful that Congress or the American people will EVER understand what the Fed has done and what a proper response to its actions would be for two reasons.

First and foremost, drug addicts NEVER take time to consider the sensibility or sustainability of their actions … they live in a “do whatever it takes” world that lurches from the agony of the next threatened withdrawal to the ecstasy of the next promised fix … and so it is with Americans in Washington and on Wallstreet as well as Mainstreet … they are all addicted to free [albeit completely counterfeit] money and credit. That some Americans still retain a vestigial financial conscience that is involuntarily offended by the lack of financial honesty and self-responsibility is an historical anachronism. And of those rare exceptions, only a very few can understand HOW they are being victimized by a monetary authority bent on eradicating every trace of individual responsibility in the name of social security.

But the second reason people will never understand the Fed is because the Fed has no method in its madness. The Fed has not merely broken but absolutely shattered the law contained in the Federal Reserve Act. Without civil law to inform and guide its actions, the Fed has resorted to serving large and powerful special interests … governments, banks and corporations … with the implicit understanding that if it supplies them with infinite and indefinite amounts of free credit, they will “somehow” take care of the details. But the entire process is breaking apart in absurdity and the Fed is being progressively revealed for what it is … a tale told by an idiot, full of sound and fury, signifying nothing.

 

Swamp the Banking System!

You may recall that in 2008 the Fed bailed out the banks by “buying” trillions of dollars of defaulting loans from them at 100 cents on the dollar … which filled the banks with newly counterfeited cash … which the banks promptly “loaned” back to the Fed which agreed to pay them a nice rate of interest on their new “deposits” … a rate that was much higher than any private saver could earn on his savings at the time or since.

In essence, the Fed added to its historical role of being the “overnight lender of last resort” to the banks by becoming the “perpetual borrower of last resort” from the banks. It no longer supplied “marginal credit” to the banks permitting them to act as the lenders to the real economy. Instead the Fed flooded the banks with counterfeit cash [accepting their worthless loans in return] and agreed to borrow back its own stash of counterfeit cash from the banks … without limits in amount or duration. The banks loved this deal which replaced their massive portfolios of defaulting sub-prime home loans with mountains of interest-bearing deposits at the Fed … by selling the Fed their worthless assets and then lending the Fed its own counterfeit money.

As the storm clouds slowly dispersed, the banks began lending more and more of their new hoard of counterfeit cash to others and slightly reducing their massive “deposits” at the Fed … because they could now earn more from others than the Fed was willing to pay. But with their remaining deposits at the Fed, the banks no longer  “needed” private savers. In effect, the Fed financially banned private savers from the economy while simultaneously competing with borrowers for the banks’ idle funds. The Fed became a one-man-band … usurping both the lending and the borrowing functions of the real economy.

Fast forward to today. The real economy is supposedly strengthening and the Fed is faced with whether or not to permit the interest rates it savagely suppressed to rise. So how is the Fed going to do this? John Hussman explains:

“Holding the Fed’s balance sheet constant, the only way to raise rates is to pay banks interest on idle excess reserves, and the main effect of that will simply be to draw currency into the banking system and make excess reserves even larger than they already are.” http://www.hussmanfunds.com/wmc/wmc151109.htm

In other words, the Fed is already holding [and paying interest on] massive amounts of the 2008 “deposits” from the banks which remain at the Fed because the banks cannot/will not lend them into the real economy. So the banks clearly do not need any more money from the Fed much less from real savers.  Now to “raise rates” the Fed is going to raise the rate it already pays to the banks on their idle deposits. The banks are ecstatic … even more income and no risk. The hope is that the banks will then offer private savers a “little more” to encourage them to increase their real savings [aka reduce their real consumption] which the banks will then turn around and deposit with the Fed under the new program earning income on the difference between what it pays the private saver and what it can earn from the Fed as the “borrower of last resort”. The end result, as Hussmann explains, will be even more idle deposits sitting at the Fed … and by implication … even greater profits at the banks … even less credit available to borrowers in the real economy … and throwing a phantom bone to real savers [who have been emaciated by interest starvation] by permitting them to lend to the Fed via the banks’ idle deposits. Is something wrong with this picture?

 

Drain the Swamp? No!

If this sounds absurd … it is. First the Fed releases a flood of fake money which swamps the banks. Now, in order to protect the real economy from flooding, the Fed proposes to pay the banks even more to drain private savings from the real economy in order to increase idle Fed deposits which still remain at flood levels from the 2008 swamping of the banking system. Of course, what needs to be done is to drain the swamp which the Fed created in the banking system and which is now threatening economic flooding [real inflation and speculative asset bubbles]. Hussmann explains what should be done.

“Without hiking the amount that the Fed pays banks to hold [their existing] idle bank reserves, the Fed [could] … contract its balance sheet by about $1.4 trillion before market forces would raise rates even to a fraction of 1%. In other words, fully $1.4 trillion of needless excess zero-interest liquidity could be removed from the financial system without pressuring rates higher.” ibid.

But this would mean the Fed relinquishing some of its control over the financial economy … and the Fed is not going to do that … what tyrant has ever voluntarily acted to reduce his power? But even if it wanted to do so, who would “buy” the worthless loans [acquired in 2008] that publicly adorn and silently damn the asset side of the Fed’s balance sheet? The Fed would literally have to give them away … and take huge losses ... at whose expense? At the expense of every person who holds cash in any form.

 

Just Dig It Deeper!

To the list of pejoratives describing it, the Fed must now add “bipolar”.  Hussmann describes the reason for this sad diagnosis somewhat more clinically:

“In essence, the economic value of time has [already] been driven to zero [by the Fed since 2008]. The incentive to save has been trampled. The Fed seems to want this in order to discourage investors from saving and encourage them to spend. Investors who refused to take the speculative bait may have been the first casualties of the Fed’s policies. But now, it is investors who [obeyed the Fed and] remain fully invested in obscenely overvalued equities and junk credit that have become the unwitting dupes in this game. If the Fed cannot force people to abandon saving behavior with zero interest rates, some members of the FOMC have openly talked about driving interest rates to negative rates to “stimulate” spending. This is not economics, it is megalomaniacal sociopathy. Centuries of economic history warn that this speculative episode, too, will end in a collapse.” ibid.

And so the Fed is put in the absurd position of forcing interest rates below ZERO [by acting as “lender of last resort”] … while simultaneously raising them higher [by acting as “borrower of last resort”]. The Fed has been reduced to lending its flood of fake money to itself … “playing economics”. While this may be cute with children, it reveals serious mental illness for adults. But, then, these are crazy times.

Financial Injustice ... and Ignorance

The politicians would rather talk, and the press would rather run stories, about “financial inequality” than tackle the question of “financial injustice” in America. Why? Because anyone can blather about the symptoms of sufferers … it makes good politics and great news … all you need is a bias and a favorite interest group to vilify or validate.

So it is not surprising to see a new study [reported by BloombergBusiness] telling us that [forgetting Social Security for the moment] the combined retirement savings by the top 100 American CEO’s is equal in amount to the combined retirement savings of 116 million everyday Americans representing 41% of American families.

This is a truly astounding statistic that [if it persists and even systematically increases in severity] will have profound socio-economic ramifications for generations to come. Indeed, it is hard to see how such a massive, accumulated imbalance could be “righted” short of some seismic shift in everything we have come to know and expect as normal in our economic lives.

You will hear 1001 explanations of what happened to bring us to this point … and 1001 proposed solutions to the problem … but not a single one of them will deal with the simple and solitary underlying cause of this devastating condition.

“Financial wealth” [the static function of money] has been consciously and intentionally detached from “real productivity” [the dynamic function of money].

And even if somebody dared to explain this, very few of the 41% would even remotely understand … because almost all Americans are financially ignorant [not stupid … just ignorant]. But you can be assured that all 100 of the CEO’s understand this very well.

The Great Disconnect

The sad fact is that nearly anyone who takes the time to think about it can grasp the symptoms caused by and imagine the consequences resulting from “counterfeiting”. The counterfeiting criminal literally “makes fake money” instead of “earning real money” through

• honest labor [the worker]
• honest investment [the capitalist] or
• honest tax collection [the government].

The symptoms and consequences arise because the static status of “fake money” cannot be distinguished from that of “real money” … which causes the two to be treated as equals in the dynamic stream of common commerce … resulting in the transfer [gradual or rapid] of scarce and valuable real things from everyone to the criminal … and the equivalent but reverse transfer of abundant and worthless fake money from the criminal to everyone else.

To put this another way, money always functions in two continuous stages.

• First money permits individual economic participants to unilaterally assign relative values to things [both present and future] that are scarce … labor, goods, assets, services, promises … let’s call this the static function of money.
• Second, money permits those same individuals to freely exchange [and thus reallocate] things of lesser value for those of greater value in a win:win marketplace transaction … let’s call this the dynamic function of money.

Counterfeiters simply skip the first stage … the static function of money … because fake money is not “scarce”.  And so when their fake money “changes hands” in a dynamic marketplace transaction, the dynamic function of money fails to properly reallocate the scarce real resources in the real economy. If unchecked, the counterfeiter ends up “owning” everything of real value … while everyone else is left with increasing amounts of the fake money which the counterfeiter does not value, since for him it is not scarce.

If the counterfeiter has guilt pangs or thinks somebody suspects him, he may stop counterfeiting for awhile … but the damage has been done … and real wealth has been unjustly transferred within the community. But worse yet, even if this criminal is caught, how do you begin to “unwind” all the injustices done as a result of this crime?

We can add natural extensions [deviations?] to the basic crime of counterfeiting … such as the counterfeiter making extravagant cash gifts to relatives, voters or even charities … or making loans to others [even interest-free].  But you cannot expect any just results to arise from the unjust manipulation of the supply of money. All that such extensions do is confuse those trying to “follow the money” to find the criminal and exacerbate the injustices already accumulating.

Financial Fracking [aka Gush Up Economics]

There is only one counterfeiter capable of causing financial injustices on the scale we see today: our federal government … or, to be more precise, the Federal Reserve branch of our federal government. For those of you who object to calling the Federal Reserve a branch of government, please understand that the Federal Reserve is unelected, owned by banks and independent of Congress, the President and the Supreme Court. It has unlimited and unchecked power over our money.

And in the last few years, the Fed has unilaterally and dramatically increased the amount of money in circulation … by multiple trillions of dollars. As this tsunami of fake money has been forced [not trickled] down into the real economy, a massive amount of real wealth has gushed up in reverse. Think of it as “financial fracking”.  The Fed pumps massive amounts of toxic fake money down into the middle class foundation of the economy until it cracks under the extreme pressure and releases its real wealth to gush back up towards the Fed.

But it is a little more complicated. The Fed merely “loans” all this fake money to others [at ZERO or NEGATIVE interest rates] … such as the government, commercial banks, GSEs, multinational corporations and even foreign central banks … and let’s them do the dirty work of forcing it down into the environment of the real economy to crack the middle class. And it is dirty work … which can only be done by those lacking any real conscience.

However, the fact that the Fed uses third parties to force its toxic brew into the real economy explains why the real wealth which gushes back up never reaches the Fed … but stops in the pockets of those third parties [and their CEOs] … and they have deep pockets that can be endlessly filled without overflowing. All the Fed has is a drawer full of IOUs from those third parties which it can never collect … because if it did, those third parties, including the government [which is already bankrupt], would be catastrophically exposed as spectacularly insolvent plunging the real economy into the Sudden Destruction [forget the Great Recession and even the Great Depression]. Checkmate … game over?

What To Do?

“OK”, you say, “I get it”. But do you?

Do you understand that ending this reign of financial injustice will mean deserved pain equal to the undeserved gain … but without any guarantee that it will fall, solely or even largely, on the guilty instead of the innocent? Then again, if you have not gained much, perhaps, you may not have much to lose. In fact, some who have lost a lot might just stand to gain substantially. The middle class would certainly find itself in a position to begin re-accumulating the wealth it lost … but, truth be told, this will take many years of patient work.

However, as bleak as the prospect of “coming clean” financially is for America, the alternative of continuing along our current deviant path is worse.  If the American “way of life” is to be saved from destruction, everyday Americans must do it. Are we collectively up to the challenge? If so, there are honest and principled men and women who can and will quickly deal with the Fed and lead us through the hard times ahead. If not, there are plenty of criminals and liars who will gladly conspire to lead us into what they will claim are America’s “best years” … just ahead. So whom do you believe? That’s the only real question isn’t it?

In the meantime, forget about retirement … keep working and pray for a miracle … unless you are among the unjustly privileged few … in which case you should pray earnestly there is never a return to financial justice in America.

When bad becomes good

For some years there has been a growing confession among economists [which it’s heresy to question] 

• that what began in the 1980’s under the Maestro Greenspan as “the great moderation” has, as it passed through the fires of the Great Recession, been transformed into a bold gospel [literally “the good news”] of QE,
• that QE, although previously unimaginable by us, has been revealed to us by the Savior Bernanke [which revelation is now recorded in a book of the Savior’s own words] and
• that, as proof of its verity, QE  has rapidly spread across a desperate world in dire need of financial good news.

Nonetheless, a small and stressed cadre of the faithful, like Swiss Re,  has recently broken the silence to label the “unconventional policy” of these great men [and now women] as “financial repression” with “unintended consequences” which range from unprecedented asset bubbles to unsustainable income inequality.

However this week Bank of America's FX strategist Athanasios Vamvakidis  has, perhaps, crossed over the line into blasphemy. He has ominously warned that the gospel of QE might be something else … something not altogether unintended … but something profoundly dangerous … a peril first of our own making and then of our own thinking which, if left unchallenged, dooms us to calamity … “financial reprobation”. And although Vamvakidis does not use those words per se, what he describes fits their definition perfectly:

“Bad news became good news.”

Bank of America: Here's the Precise Moment When We Should Have Known QE Went Wrong

What is reprobation?

The word reprobate comes to us from the Latin words … re- "opposite of, reversal of previous condition" + probare "prove to be worthy" … and is variously translated as “rejected by God” or “unprincipled person”. It was, perhaps, most famously used by the royal English translators of a 1^st century letter from Paul of Tarsus to the Church of Rome to render the individually psychological [and collectively socionomical] state caused by a persistent departure from accepted behavioral norms:

“And even as they did not like to retain God in their knowledge, God gave them over to a reprobate mind, to do those things which are not convenient.”  Romans 1:28 [KJV]

Paul used the same concept again in his explanation of how doom is sealed beyond the ability of the doomed to understand much less undo it:

[Doom comes] with all deceivableness of unrighteousness in them that perish; because they received not the love of the truth, that they might be saved. [And it is sealed at the precise moment when] God send[s] them strong delusion, that they should believe a lie: that they all might be damned who believed not the truth, but had pleasure in unrighteousness.  2 Thessalonians 2:10-12 [KJV]

In other words, there is a moment in time when the mind becomes reprobate [as a direct result of persistent behavior known to be in deviation from the norm] by inverting [defined as “reversing in position”] the customary notions of good and bad which henceforth causes [compels?] the reprobate to take actions which the translators describe as  “not convenient” in the normative sense. In the wake of WWI  Simone Weil went even further when she observed that

"Evil, when we are in its power, is not felt as evil but as a necessity, or even a duty."

What is financial reprobation?

So what is financial reprobation? Vamvakidis’ title says it all:

Financial reprobation is the socionomical state of mind, in which the rational norms of good and bad are inverted  [for purposes of taking and judging financial action], which is entered by an individual [or a collective body] at the precise moment when, based on obvious consequences, it should know that its past financial actions have somehow gone wrong, but, instead of desisting, consciously continues to embrace [and engage in] them with the unshakeable expectation that different and desirable results will happen in the future.

Vamvakidis identifies Spring 2013 [the first “taper tantrum”] as the point at which America [at least] entered a state of financial reprobation. Others could make convincing arguments for other dates. Indeed, if “should have known” is the proper standard for a definition, it would seem that evidences of the onset of financial reprobation could be found in earlier asset price collapses and the consistent [and increasingly deviant] responses to them.

Can reprobation be stopped … before it ends?

However, regardless of “when it started”, the more important question about financial reprobation is “how it stops” … short of ending in complete “inconvenience” [however that might be manifested]. Here, Vamvakidis offers little guidance other than to warn his readers to “buckle up” because this is  “a new regime” [which in reprobation-speak is translated “the new normal”]. However, this apparent refusal to draw a conclusion appears to vitiate the very allegation that something actually “went wrong” by implying that whatever “went wrong” can somehow continue as “a new regime” in which case it seems more logical to conclude that it was simply an “option” [even if not the best] or “enlightenment” [even if not yet understood].

The role and the rule of law … public opinion … and individual conscience.

In fact, one major role of “law” in society is safeguarding the future by regarding the past. Law seldom springs from the mind as theory and, as such, is able to stand upright even when the mind is inverted. Law almost always arises as the attempted [albeit imperfect] articulation of  a principle which somebody in the past became painfully persuaded was immutably true implying, as a result, that actions in violation thereof were inevitably wrong in the sense that they were unsustainable and/or would result in unforeseen and undesirable consequences. This persuasion persists in society by taking on the form [and becoming the rule] of law.

Thus it is the role of law to rule the actions of men for their own good … regardless of what they might think to the contrary at any given moment … at least until the law is consciously changed. This gives law an important “weight” permitting it to act as a center of gravity maintaining vital social order and well-being which we might call lex gravitas. But even when laws are changed to conform to reprobation, there remains the important weight of public opinion [populus gravitas] which can still restrain/stop reprobation [even when those openly opposing the state of reprobation remain a minority].

And, of course, history is filled with examples of individuals who took personal, principled stands against what they saw as reprobation, but this is quite difficult [if not impossible] to do and still retain one’s position within the community … since it inevitably involves choosing between a violation of conscience and great personal loss.

The thing to do

If Vamvakidis is correct and America, at least, has not found a gospel in QE, but rather, through QE, has entered a state of financial reprobation, we are [any hope of “new regimes” notwithstanding] in grave socionomic danger which is not merely unappreciated but being consciously [and what will become tragically] disregarded.

An immediate appeal to lex gravitas [in our case in the form of the Federal Reserve Act] should be the first line of any defense based on rational action. Failing this,  populus gravitas remains the last line of defense … if a vocal minority with sufficient socionomic influence remains in tact. Solitary individuals, if they remain separate, will simply  be crushed by the weight of reprobation.

And although these approaches to dealing with reprobation are consistent with what has been observed throughout  history generally, there is no guarantee that the doom of financial reprobation can be stopped prior to ending in socionomic collapse and the ultimate revelation of truth … which is not inconvenient for those who accept it … but is catastrophic for those who suppress it.

However, what is guaranteed is that when, as Edmund Burke noted, “good men [when undeniably confronted with bad things] do nothing”,  reprobation will not only arise but will, at some precise moment, be doomed to run its full course until it is proven to be totally “not convenient” in the painful retrospection of all survivors, reprobate or not.

The Abysmal Science of the Inflation Deniers

The difference between dismal science and abysmal science is that the first is true but discouraging while the second is encouraging but false. Climate change notwithstanding, abysmal science is clearly predominant when it comes to questions about the economy.

We can easily see obvious special interests at work when “big oil” pays scientists to prove that emitting massive amounts of carbon into the atmosphere has not caused [or meaningfully contributed to] rising air and ocean temperatures. However, we praise central bank scientists [who work for “big money”] for their faithful service in the public interest when they assures us that pumping trillions of units of “financial carbon” [aka fiat credit] into the global economy has not caused [or meaningfully contributed to] inflation  … and that, in fact, we need even more of it. The reason for this inconsistent response is that Americans no longer think scientifically [at least in economics] … we do not take the time [or do not possess the ability] to consider the economic facts which make a strong case for the proposition that

• the price of  essentials is rising much faster than what is officially reported and
• this [intentionally?] under-reported inflation is ravaging the largest part of our society.

So what are these facts?

In "The Middle Class Squeeze", Charles Moore makes a statement that is confusing to those who think about it, because it is bad science … comparing apples and oranges.

"My own children, who started work in London in the last two years, earn a little less, in real terms, than I did when I began in 1979, yet house prices are 15 times higher."

 

 The Apples

The "real" wages Moore's children earn today are "a little less" than his real wages were in 1979, because for 30 years the nominal prices of the things some government considered essential to a family [and thus included in its official price index] have risen "a little" faster than the nominal wages of Moore and his children [which nominal wages were also rising during those 30 years but at a lower rate]. In other words, even though his children's wages are nominally much higher than his were in 1979, the current "purchasing power" of his children's wages is really "a little" lower than the purchasing power of his wages 30 years ago ... and this is due to the difference between the rates of increase [over 30 years] in the nominal wages and the nominal prices of those things included in the government's official price index. Now that is good science !

 

The Oranges

However, when it comes to the price of housing, which is NOT included in the government's official price index, Moore sadly and unscientifically groans that nominal housing prices have risen 15-fold over the same 30 years. If Moore were a good scientist, he would have noted that his children's real wages when considered in terms of the explosion in nominal housing prices since 1979 had virtually "collapsed" when compared with his real wages in terms of housing prices in 1979. And this collapse of real wages in terms of exploding housing prices is important, since housing has always been a large percentage of the average family's overall cost of living. And those seeking to explain this wage collapse can find the easy answer in unreported housing price increases which were officially excluded from the government’s price index causing it to be dramatically under-reported. Bad science is dangerous !

 

Alchemy Redux

But there is more … something other than wages and prices had changed over those 30 years which may help explain the effects Moore observed ... and that was credit and interest rates. It turns out that in the 1980's the scientists at the Federal Reserve, foremost of which was America’s own Alan Greenspan, began live experimentation with a new monetary theory which, simply stated, claimed that:

The correct financial injections of fiat credit into the real economy would somehow [Greenspan claimed it was through the mysterious forces of free markets] make everyone's life better ... faster ... with no downside for anyone.

This theory, if proven true, would be the realization of an economic dream as old as kings ... make base materials into gold suddenly without work … mint your way to prosperity … politicians loved it … business leaders praised the Maestro … this was to be the previously unimaginable achievement of financial alchemy ... which Wikipedia defines as:

"chemistry of the subtlest kind which allows one to observe extraordinary operations at a more rapid pace – operations that require a long time for nature to produce."

 

GNP=QE²

And so was born the new science of fiat credit with rapidly increasing consumption, investment and faster economic growth. Of course, there were some unanticipated bumps along the road:

• American jobs first went to Japan ... then to Mexico ... then to China ... then to India ... and soon now to a new group of Asian nations under a secret international trade agreement.
• And even when everything seemed great, there were sudden unexplained collapses in the economy ... as if it was exhausted and needed a rest.
• Furthermore, as Moore [and most everyone else] observed, wages and prices of all sorts began to rise [with some like housing soaring] year after year though at different rates causing complex socio-economic effects across the globe.

 Nevertheless, central bank scientists considered the overall results of their theory to be acceptable ... even desirable [although for whom remains unclear] ... and proudly persisted in their real-time experimentation ... increasing the injections of fiat credit whenever the economy showed any signs of weakness. By the time of the unanticipated great recession in 2008, the head American central bank scientist, one Ben Bernanke, radically posited that unlimited and infinite injections of fiat credit were the only reasonable response to recurring and more severe bouts of economic weakness. Bernanke’s theory of quantitative easing took Greenspan’s “doubling down” to an exponential order of magnitude never imagined [much less attempted] by scientists before him … this, the pundits proclaimed, was true and bold genius ... and the theory spread across the entire globe.

 

Another Unexpected Development: Temperatures Rising

Meanwhile in the late 20th century, climate scientists began to form a new theory that rapidly increasing carbon dioxide emissions [resulting from rapid economic consumption and growth] were building up in the oceans and atmosphere and might, at some critical point in the future, via an already known and proven greenhouse effect, cause global water and air temperatures to rise ... with potentially disastrous [although not yet completely predictable] effects. However, it was not long before other scientists [mostly hired by big oil and big business] began to present opposing theories denying that increased human carbon emissions were causing or meaningfully contributing to change in the planet’s climate.

 

The Unthinkable ? ... not again !

Science has a long history of the unthinkable being proven true. But often that has required scientists across disciplines to think together ... because our planet's bio-chemical and socio-economic systems are complex and more interdependent that we have thus far been able to imagine. But, for the sake of argument, let’s posit a theory of our own.

• We have become the victims of bad science in central banking.
• Pumping trillions of units of “financial carbon” [aka fiat credit] into the economy has not only caused a consistent rise in global prices overall [causing real wages to collapse] but has resulted in massive and accelerated emissions of real carbon into the atmosphere causing [or meaningfully contributing to] a consistent rise in global temperatures overall [causing the overall quality of human life on the planet to fall].
• Thus the unanticipated consequences of bad central bank science have now extended beyond the economy per se ... into the planet's physical oceans and atmosphere.
• The dire socio-economic and atmospheric extremes [including such seemingly unrelated things as income inequality, market crashes, droughts and floods] which the planet and its people are experiencing with increasing frequency and severity are inter-connected … and ultimately caused … by the bad [and still largely unchallenged] science of conflicted central bankers working on behalf of “big money”.
• We must dismiss [even prosecute violations of law by] the abysmal central bank scientists who intentionally mislead us so that they [and their constituents] can profit [even temporarily] at our expense.
• We must be willing to become [for awhile at least] dismal scientists who honestly listen to the evidence even though it  consistently points to the need for painful changes to our socio-economic and atmospheric behavior.

From the Mouths of Two Witnesses

Perhaps, it is no coincidence that Pope Francis, who appears to be a thoughtful and reasonable [if simple] man, is warning Americans that our socio-economic and atmospheric lives are interconnected and that we must radically change our behavior if we are to avoid devastating economic and biological consequences. Does this simple man somehow suspect a real connection between economic and ecological forces which our greatest scientific minds are missing? It would not be the first time that simple powers of unbiased observation discovered truths that the greatest thinkers missed even though, in retrospect, the truths appeared obvious to any thorough but unbiased person.

 

Go Big or Go Home

Perhaps, it is time for everyday Americans to stand up and break the shackles placed on us by the bad science of special interest controlled central bank alchemists and to re-engage honest [albeit dismal for the moment] science in our economic lives. For who knows the breadth and significance of the goodness which the virtuous actions based on good science might once again [not suddenly but over time] bring to us [and our progeny] economically and in the quality of our lives on the planet.

Gross is not the issue

In his September 23, 2015 commentary entitled "Saved by Zero", Janus manager Bill Gross seems to second guess the Fed's zero interest rate actions without taking a position.

He reports that

"Ken Rogoff and Carmen Reinhart have meticulously documented periods of 'financial repression', long stretches of years and in some cases decades where short-term and even long-term yields were capped and suppressed below the level of inflation."

... but does not object to financial repression or interest rate suppression in principle ... just in application.

He alleges as

"fact that while 0% or .25% or other countries’ financially suppressed yields might be appropriate for keeping their economy’s head above water, they act as a weight or an economic “sinker” that ultimately lowers economic growth as well."

... but asks only for this to be acknowledged in the minutes of a central bank meeting.

He appears convinced that

"zero bound interest rates destroy the savings function of capitalism, which is a necessary and in fact synchronous component of investment."

... but is willing to settle for something that lets that vital savings function "survive – if only on a shoestring."

Finally, he laments that

"Mainstream America ... [is] on a revolving spit, being slowly cooked alive while central bankers focus on their Taylor models and fight non-existent inflation."

... but feels called only to give his "advice" to the financial malefactors.

Laws are not Fashions ... or vice versa.

The reason most people lose their way and wander in endless cycles when seeking to understand the role and effect of central banking is that they fail to distinguish between what is legal and what is fashionable.

• Laws connect the fundamental and invisible principles of social order with the unavoidable and obvious consequences that arise from obeying or violating them as evidenced by history.
• Fashions link anticipated but mutable human perceptions with the assumed but uncertain human actions that may give rise to them which only time can show to be true or false.

Mr. Gross does nothing other than deal in an unprincipled manner with central banking fashions. He fails to grasp that the real issue is

• not whether he [or anyone else] perceives the outcomes of central bank actions to be desirable
• but rather whether the actions of the central bankers are legal or illegal.

 Law enables freedom. Fashion incites tyranny.

Is resistance futile?

Reuters reports that in their increasingly radical but doomed and futile attempts to "stimulate" real economies that are still faltering around the world after years [in one case decades] of extreme monetary policies [now referred to as "financial repression"] consisting of:

• massive injections of fiat credit [usually extended directly to governments or GSEs] and
• interest rates forced to zero [ZIRP],

central banks are considering even more radical and desperate steps forward. The point for us is simple:

• it is time to turn back to the law because
• where human beings or institutions no longer observe the law, they are doomed to wander into an increasingly confusing and desolate social wilderness characterized by increasingly extreme and deviant stimulation and repression.

It is well past time to make the FED obey the Federal Reserve Act and stop dragging us into an economic wilderness it can neither understand nor control.

1. Targeting even higher inflation ... say 4-6% annually for starters.

The thought here is that if the central bank simply floods the economy with more "money" in the form of fiat credit [new loans made available by the central bank which are not backed by any real savings or by anything else of value for that matter], it will somehow

• seduce people into increasing spending on various things [assets and/or consumables]
• resulting in a jump in the demand for [relative to supply of] those things [be they stocks, houses, cars or just groceries]
• which would in turn cause the prices of those things to rise faster
• resulting in higher rates of price inflation on [i.e constantly rising prices of] those things.

Its lack of sound economics notwithstanding, this type of policy has already failed because it is hard to seduce somebody [with the promise of a new loan] who is already worried about his/her ability to repay existing personal debt [incurred during prior seductions] when wages are not rising and jobs are uncertain.


The only possible result of such a policy would be unleashing the financially irresponsible among us [starting on Wall Street] to reach levels of obscenity in their indulgence only dreamed of by history's most decadent deviants.

2. Making the central bank the permanent purchaser and everlasting holder of government debt.

The idea here is that the government can simultaneously

• buy the weapons to wage the wars needed to sustain the profitability of the military industrial complex [guns] AND
• make the continuous welfare payments needed to keep its citizens happy [butter]
• with the central bank permanently "printing" all the money needed to "buy" bonds [let's make them 1000 year bonds while we are at it] that finance the government's perpetual deficits
• until such time [if ever] as the real economy ... somehow ... miraculously ... begins to grow again at an acceptable rate.

This line of thinking has no rebuttal ... because it is delusional ... pure and simple nonsense.

3. Charging you to keep "money" in your bank account.

This is call using "negative" interest rates and is intended to force you to spend your money as quickly as you get it. If you want to "save" any money for your retirement [or for any other purpose] and you try to do so by putting the money in a bank account, the bank will charge you for the privilege of making a deposit ... and you will not be able to avoid this charge because there will be no such thing as "cash" you can withdraw and hold ... all money will be electronic and will exist ONLY in the central bank computer files. The idea is that faced with the systematic loss of your savings, you will choose [like a rapist lets a victim choose] to spend the money on something [anything] and to save nothing.

This perverse idea results in the saver paying the bank to make a deposit while the bank still collects from the borrower for making a loan ... because there is now NO LINK between the saver and the borrower. The saver is no longer needed or wanted in society ... only borrowers need apply. The central bank will provide fiat credit to replace real savings forever. Indeed, the object is to eliminate any private savings of any sort.

And lest you think negative interest rate policy [NIRP] is mere science fiction, it was suggested by one member of the US Federal Reserve Bank at their September 2015 meeting as the final solution for dealing with those persistently reprehensible savers who are bent on destroying the economy with their self-righteous frugality.

How do you resist tyranny? Require obedience to law.

Hannah Arendt caused a furor at the Eichmann trial by asking why the Jews did not resist Nazi repression during the Holocaust ... even if it meant death ... since the death of the Jews was the obvious goal of the Nazis. She was not the first or the last to ponder that. But hopefully Americans will be able to give history an answer of sorts to that question ... as we are reduced, without a whimper much less resistance, to financial slavery and ultimately financial death by a reprobate central bank that has become lawless.

Welcome to the future ...
"lower your shields and surrender your ships ... we will add your biological and technological distinctiveness to our own ... your culture will adapt to service us ... resistance is futile."

Law of Monetary Equality

Rowan County Kentucky Clerk Kim Davis is in jail as of this writing because she refused to comply with the law of marriage equality in her actions as a public official. Although Davis was technically jailed for contempt of court, casual observers quickly concluded that what she really held in contempt was the rule of law ... without which constitutional democracy is meaningless. The White House solemnly summarized the situation in four sentences:

1. No public official is above the rule of law.
2. Certainly not the President of the United States.
3. But neither is the Rowan county clerk.
4. That’s a principle that is enshrined in our Constitution and in our democracy.

The problem is only two of these sentences are true ... but "half truths" means "half lies".

Sadly, however, few Americans are even aware of [much less understand] the American law of monetary equality [known as the Federal Reserve Act] which, for over 100 years, has more or less successfully safeguarded our common right to our common currency. And yet this law is even MORE IMPORTANT than any law of marriage equality in the scope and severity of the consequences when it is violated. Back alley "counterfeiters" who break the law of monetary equality are put in jail. So why do we continue to allow Federal Reserve public officials [in league with powerful special interests] to break this law with "sovereign immunity" from the devastating damages they are causing socially?

If "no public official" is above the rule of law, as the White House announced, then the past and present members of the Fed need to be brought up on charges for their actions in violation of the Federal Reserve Act ... denying monetary equality not only to Americans but to every person worldwide who has ever trusted in the US currency as an honest store of wealth with which to manage the events of one's economic lifetime.

Disparate Voices … One Theme

Here are some voices, past and present, that all appear to be making similar points:

• central banks are not omniscient and therefore should not be omnipotent ... they are not gods ...
• they are not even masters of the natural cycles of human commerce and economy …
• they are servants charged with observing the laws [God ordained and man made] … by promoting just weights and measures … demanded by God and enabled by human laws ...
• and as such they should desist from [or be forced to cease] their misguided [and illegal], destabilizing [even disastrous] and increasingly [even absolutely] tyrannical financial manipulation of economic life on the planet.

But, as a practical matter, how does any society prevent the undesirable behavior and devastating results these voices appear to be condemning? The answer is clear ... central banks [like everyone else in a society] must be subject" to enforceable and enforced laws [rules] which actually limit their power ... for unlimited power, if it is to be used safely, belongs only to the all knowing ... which does not include any person or human institution.

It is time to demand that the FED obey the laws ... starting with the Federal Reserve Act under which it exists ... because the FED is not omniscient and therefore should not be omnipotent.

A President

In his charge to Congress endorsing passage of the Federal Reserve Act in 1913, President Wilson foresaw both the possibility of a central bank serving commerce under strict monetary laws ... and the hazard of a central bank attempting to rule the economy by taking unfettered control of the currency:

“The principles upon which we should act are also clear.

• We must have a currency … responsive to sound credit, the expanding and contracting credits of everyday transactions, the normal ebb and flow of personal and corporate dealings.
• Our banking laws must mobilize reserves; must not permit the concentration anywhere in a few hands of the monetary resources of the country or their use for speculative purposes in such volume as to hinder or impede or stand in the way of other more legitimate, more fruitful uses.
• And the control of the system of banking and of issue which our new laws are to set up must be public, not private, must be vested in the Government itself, so that the banks may be the instruments, not the masters, of business and of individual enterprise and initiative.”

A Pope

In his 2013 [100 years after Wilson’s remarks] EVANGELII GAUDIUM, I.57, Pope Francis said quite simply but clearly  “No to a financial system which rules rather than serves [the real economy which consists of and belongs to the real people].”

An Imam

In August 2015,  leaders of Islam worldwide made a declaration that

… affirmed

[The Lord]  raised the heaven and established the balance

So that you would not transgress the balance.

Give just weight – do not skimp in the balance.

So set your face firmly towards the (natural) Way

As a pure, natural believer

Allah’s natural pattern on which He made mankind

There is no changing Allah’s creation.

That is the true (natural) Way

But most people do not know it.

… recognized

• The corruption that humans have caused on the Earth due to our relentless pursuit of economic growth and consumption.

... called on the well-off nations and oil-producing states to 

•  Recognize the moral obligation to reduce consumption so that the poor may benefit from what is left of the earth’s non-renewable resources.

… called on the people of all nations and their leaders to

• Realize that to chase after unlimited economic growth in a planet that is finite and already overloaded is not viable. Growth must be pursued wisely and in moderation; placing a priority on increasing the resilience of all, and especially the most vulnerable
• Set in motion a fresh model of wellbeing, based on an alternative to the current financial model which depletes resources, degrades the environment, and deepens inequality.

… called upon corporations, finance, and the business sector to

• Change from the current business model which is based on an unsustainable escalating economy, and to adopt a circular economy that is wholly sustainable.

A Central Banker

And now the Fed itself, in its Current Federal Reserve Policy Under the Lens of Economic History:A Review Essay, is making what seems like the beginning of an attempt to disavow its deadly past and to lay the foundation for a “regime change” by suddenly discovering that the underlying rationale for and the unanticipated consequences of its extreme manipulation of money and credit aggregates without regard for actual production are troubling:

• “Evidence in support of Bernanke’s view of the channels through which QE works is at best mixed …. All of this research is problematic … Further there is no work, to my knowledge, that establishes a link from QE to the ultimate goals of the Fed …”

 

Too Little Too Late ?

Of course, everyone knows intuitively that ... the central bank emperors are naked ... and that the financial idols they have set up ... at which the banks and multinational corporations of the world worship ... MUST be torn down intentionally before they collapse on us without further warning ... and that either way the change is going to be very painful ... but if undertaken voluntarily according to strict laws, there is at least a chance of keeping our vision during the transition ... while if we wait for the inevitable collapse, the resulting panic will insure the complete destruction of any remaining free economy ... by an economic usurpation the likes of which the world is yet to see ... and the lies of which the world will almost certainly believe in its moment of despair.

When Tyranny Spirals out of Control ...

[If you have NOT yet read the foundational July 2015 posting for this blog entitled "America's Road to Ruin", you should do so before proceeding so that you understand the progression of lawlessness.]

While we rightly condemn the tyrants in the middle east who are destroying their own civilization … or the tyrants in Venezuela who are destroying their own economy … we are strangely silent about [even congratulatory of] the tyrant in America who is destroying our currency, and with it the free flow of capital, that underpins our past and future as free economic agents. This tyrant is the Federal Reserve which is violating the Federal Reserve Act … with consent from Congress and the President … and abstention from the Courts.

It is rapidly becoming chillingly apparent that the Federal Reserve’s monetary tyranny is drawing it [and all of us] deeper and deeper into uncharted and untested deviant behavior … to try to address unintended and unprecedented consequences … which are arising from its unwise and unlawful departure from the Federal Reserve Act … with the certain doom that this new deviant behavior will only lead to new unintended consequences … and an accelerating spiral downward … from law and order … into unrestrained chaos-induced tyranny.

In his concise summary entitled The Fed: A Loose Cannon With A Lit Fuse, Rodney Johnson explains how the Fed’s unprecedented and unlawful departures from managing credit aggregates according to the guidelines contained in the Federal Reserve Act have gutted the effectiveness of its only historic [and only lawful] mechanism for managing interest rates … the federal funds rate [the FFR].

The Fed was created to make fiat loans to the banks only as needed to keep money and credit “aggregates” growing “commensurate with” real “production” … and thus to alleviate credit squeezes [and rein in speculative excesses] in the real economy to which the banks provided real credit [from real savers] supplemented by this fiat credit from the Fed. The Fed was supposed to do this by raising and lowering the interest rate it charged the banks for these fiat loans … the federal funds rate [or FFR]. Lowering the FFR would create some temporary breathing space during difficult times for otherwise sound banks and their customers in the real economy ... and raising it would return control to [and demand responsibility from] the same banks and their customers in the real economy.

But due to the Fed’s unprecedented departure from [violation of] the Federal Reserve Act in its insatiable drive [as Johnson explains] to crush interest rates and inflate asset prices, the FFR transmission mechanism [which the Fed intentionally abandoned] has been irreparably broken … never to be useful again … and history has been made … but not in a good or a lawful way.

The Fed’s tyrannical departure from the boundaries of the law has now condemned the Fed [and all of us] to wander in a financial wilderness … without prudent or lawful guidelines … lurching from one experiment to another … proudly boasting of control … while everything is clearly spiraling out of control ... beyond the safe bounds of jurisprudence and morality.

The Fed is quickly and dramatically becoming a more and more powerful monopolistic force for destruction … bypassing the banks altogether ... intervening directly in the real economy ... picking winners and losers … favoring special interests … overthrowing constitutional democracy … and decimating historical social order and economic stability. How does this tyrant’s madness end? Perhaps, as T.S. Eliot said in his poem “The Hollow Men”, “This is the way the world ends … Not with a bang but a whimper.”

But before Eliot's final whimper, there will be increasingly deviant behavior … causing growing chaos … which can only result in complete desperation … and drag us down into total enslavement ... to our malevolent financial master. Perhaps, W.B. Yeats best describes what we are seeing, and also what to expect, from the Fed in his poem “The Second Coming”:

Turning and turning in the widening gyre  
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere  
The ceremony of innocence is drowned;
The best lack all conviction, while the worst  
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand.  
The Second Coming! Hardly are those words out  
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert  
A shape with lion body and the head of a man,  
A gaze blank and pitiless as the sun,  
Is moving its slow thighs, while all about it  
Reel shadows of the indignant desert birds.  
The darkness drops again; but now I know  
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,  
And what rough beast, its hour come round at last,  
Slouches towards Bethlehem to be born?

America's Road to Ruin ...

This blog does not attempt to present a comprehensive case against the Federal Reserve or fiat money and credit [paper or electronic] per se ... others have already done that quite well. Rather it assumes [rightly or wrongly] that, in a reasonable, non-revolutionary, best case scenario, these are constitutional and can play a beneficial role in American life ... as long as they remain within the limits of the law. Thus this blog simply examines whether the Federal Reserve in its management of our fiat money and credit is acting legally or illegally under the Federal Reserve Act which is a fundamental American question of law and order with deep and pervasive global ramifications.

If you can read the Federal Reserve Act and parse its nouns, adjectives, verbs and adverbs within the logical structure of economics and the evidential context of the Fed's own database, then you should be able to review the actual court case documents [left column] and judge for yourself whether the Federal Reserve is in violation of the law under which it was formed and by which it daily exercises power over, perhaps, the most important medium that socially, economically and politically links Americans ... to one other ... to our pasts and futures ... and to the rest of the world ... across classes, generations and ideologies... our money and credit.

The overthrow of constitutional democracy

But why should you, an individual American citizen, have to spend your time judging whether your own government is in violation of its own laws? Isn't the government which made the laws supposed to obey [or change] them and then to follow them impartially for the mutual benefit of all? Isn't that a given in a constitutional democracy?

Unfortunately, the answer is NO. Through constitutional slight of hand [aka separation of powers and the use of federal agencies], the Congress is able to enact laws ... creating federal agencies [like the Federal Reserve] with specifically limited powers ... which specific limits the President [with Congressional dysfunction or complicity] can then permit [or even direct] those agencies to violate ... resulting in actions that should be condemned as violations of law and abuses of power ... but which instead, over time, become routinely accepted as expediently replacing the rule of law by the exercise of unlimited power. Constitutional democracy and limited government are thus overthrown ... one agency at a time ... and the result is a virtual coup d'etat of the People by their own government.

The abdication of the Courts

But, you may ask, what of the Courts ... won't they judge whether the federal agency has violated the law ... and in so doing expose the subtle exercise of unlimited power for what it is ... the raw abuse of limited power? That was my hope when I filed my lawsuit in federal district court against the Fed for violating the Federal Reserve Act. 

Unfortunately, the answer is NO. The Courts [whose judges are appointed for life by the Congress and the President] conceived a circular argument known as sovereign immunity which "reasons" that federal agencies always act with implied Congressional and Presidential consent and are thus the best interpreters of their limits [if any] under the law which created and empowers them ... a clear abdication by the Courts of their duty to interpret the law under the doctrine of separation of powers. This refusal by the Courts to judge the federal agency's compliance with the law completes the subversion of constitutional democracy and enables the exercise of unlimited power by the agency ... unless ...

The Courts, still following their tortured logic, do concede that IF the Congress and the President, when enacting the law, explicitly permit a citizen to challenge a specific federal agency's violation of the law, then the government has implicitly admitted that ... that specific federal agency may sometimes violate the law ... with or without Congressional and/or Presidential complicity ... in which case the citizens may attempt to enforce the law ... by bringing an action for damages against the agency in the Courts. In other words, the Courts agree to do their job IF BUT ONLY IF the Congress and the President specifically authorize the citizen to complain about the federal agency's abuse of power.

Unleashing monetary power

Folks ... this is not rocket science ... any high school student should be able to see how the use of federal agencies coupled with the circular argument of sovereign immunity subverts the separation of powers and overthrows constitutional democracy. And because the Congress and the President did not explicitly permit any citizen [including me or you] to challenge the Federal Reserve's violations of the Federal Reserve Act, my lawsuit was dismissed by the Court without any consideration of the facts and arguments offered to prove the Fed's actions are illegal.

So the Federal Reserve is free to be a monetary tyrant [benevolent or not] ... violating the very law that created it ... with unlimited power over our money and credit ... and with the Courts making sure the Fed cannot be challenged by any citizen. And if this is not dangerous enough ... it gets worse.

Power corrupts and absolute power corrupts absolutely

Congress, the President and lobbyists for TBTF banks, multinational corporations, financial insiders, leveraged hedge funds, special interests of all sorts and even foreign governments are irresistibly attracted to the Fed's vast and unlimited monetary power ... like insects pressing closer and closer to a light in the darkness ... each greedily seeking to use that power for its own gain. But [with the exception of a truly voluntary exchange] wherever there is gain ... there is always a corresponding loss of equal magnitude ... for somebody to win, somebody else must lose.

In the case of the Fed's abuse of monetary power, the gains accrue to a small minority whose wealth soars while the loses fall systematically and heavily on the majority of citizens who hold larger proportions of their discretionary wealth in the form of a depreciating currency ... bank deposits, savings accounts and simple cash from paycheck to paycheck ... the middle class and the poor.

Neutering then fattening the middle class

But the Fed's actions have an even more disastrous impact on this large majority of citizens ... the de facto loss of their historical economic role, political power and social position. It used to be that ... for the government to run a deficit or wage a war ... or capitalists to build factories ... or bankers to make loans ... they first had to go, hat in hand, to the middle class saver ... and ask for money in the form of a treasury bill or war bond, a corporate bond or a bank deposit ... and promise to repay those savings with interest. This economic balance of power between the few big borrowers and the many small savers gave the middle class great importance, power and position ... the middle class was valued and needed in America for its hard work, frugality and savings.

But the Fed's willingness to break the Federal Reserve Act and provide unlimited and indefinite amounts of zero-interest, fiat credit [created out of thin air] gave government, corporations and banks the green light to turn their backs on the middle class ... and the middle class, which was no longer needed for its virtuous actions, began its slide into obesity, impotency and obscurity. Government could now spend without limits ... corporations profit without limits ... and banks lend [and speculate] without limits ... the Fed's unlimited power to print money and create credit eliminated any economic or political need for a virtuous middle class. The only role left for the middle class was to consume  without limits ... by amassing more and more debt to buy things it no longer produced ... the neutering and fattening of the middle class ... before the slaughter.

Reaping the whirlwind

The inevitable reactions to the Fed's actions [Newton's 3rd law] violating the Federal Reserve Act are playing out in myriad perverse economic, political and social trends across the nation and across the globe ... it is nearly impossible to exaggerate the scope and severity of their impact. And while proliferation is a concern with venereal disease and nuclear weapons ... proliferation is the goal when it comes to money and credit ... and thus it is no accident that the Fed has shamelessly and serially infected the entire world by its insatiable and unrestrained licentiousness.

What difference does it make?

Unfortunately ... most middle class Americans are simply unable to understand what is happening and what the consequences are ... and those very few Washington politicians who do understand and care are savagely opposed by the establishment and attacked by its media minions. But even the dumbest kid can learn something if it is repeated enough times ... and "better late than never" is still true. So take your time ... read the case ... and if you agree that there is a problem, talk to somebody.

I am making sure that every sitting member of the House and Senate get a copy of the link to this blog ... but the power of social media is repetition ... "hits" ... so do your part to get the word out. And maybe ... just maybe ... social media will prove to be the champion for the other vital medium in our lives ... our medium of exchange ... our money and credit.


PS to Congress.
STOP! You and your cohorts have shamefully and relentlessly undermined constitutional democracy ... usually claiming ignorance when the "bad stuff" happens. Well, I will not deny your ignorance ... but your good faith is a lie. You understand enough to know better ... as my grandmother would say. You stand condemned along side the Fed for leading America into tyranny and bankruptcy ... moral as well as economic.


PS to Everyone Else.
GO! If you have something that you believe will add to the simple issue of the illegality of the Fed's actions under the Federal Reserve Act and would like to get the word out to others, put it into a blog and send me a link ... I will try to add links that appear to be constructive and complementary.