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?