"To Keep It Afloat Let's Inflate," Says the Fed !!!!!

The Federal Reserve is desperate. Like Ron Paul said during the Congressional Joint Economic Committee hearings on November 8, 2007 when he was questioning the Fed Chairman Bernanke: the Federal Reserve "is between a rock and a hard place."

But the solution was to allow the recessionary process to clear the economic system of all the malinvestment caused by the inflationary actions taken by the Federal Reserve in the past. In other words, do not inflate. Inflating at this time delays and intensifies the economic fallout. It compounds the problem in ways not easily traced because it distorts the entire capital structure. Most immediately it steals the value of people's savings and passes it along to those who are politically connected and who are bellyaching to their lapdog politicians like only a politically well-connected lobbiest can.

Stop the theft, stop the counterfeiting, stop stealing from the middle income citizens, stop stealing from those who save and from those who have fixed incomes, and stop enriching those who go to bed with the government, that is, all the politicians who ignore their oath to uphold the Constitution.

If you need educated, listen to Ron Paul. If you need courage, emulate Ron Paul. If you need ethical training, follow the example of Ron Paul.

Zero Is The Value Of The Dollar And The Amount Of Ethics!

Take a look at this picture of Federal Reserve Chairman Ben Bernanke standing in front of a multitude of zeros!

What are we to make of this backdrop? Does it mean that Bernanke can keep lowering interest rates to zero and below by printing up money as if that is the solution. This is what this man, who claims to be an economist, has suggested during his rise through the ranks.

The zero (in the background) in such a case represents the value of the dollar. This is no joke - we are all broke - at that point!

Or are the zeros symbolic of the number of alternatives available to the Federal Reserve to restore the value of the dollar, that is, other than the ethical alternative of tying the dollar to gold and silver. Maybe the zero is really an 'O' as in 'Oh!' as if this is a novel and completely revolutionary idea. It is a revolutionary idea and the revolution is to get rid of those institutions which are un-Constitutional.

The zeros in the picture are numerous and cover the entire backdrop. What these zeros represent is the level of widespread confidence that the American people have in the Federal Reserve and the level of tolerance that the American people have for the bungling and counterfeiting that is going on behind the secret doors of the Federal Reserve.

Zero is actually better than our real status. Who is to blame? The blame for bankruptcy belongs to all of the ego-driven interventionists and their collusive imaginary bank, the central bank - the source of all of the play money.

The zeros are really 'O's spoken as 'Uh-Oh!' in unison by the Chairman and the Governors of the Federal Reserve. They know their scam is exposed.

And finally the zeros represent the amount of ethics demonstrated by these charlatans.

Exposing the 'Stabilizer" As A Sham.

The economically illiterate citizenry believes what they are taught in school and told by the media and that is that the Federal Reserve is the stabilizer of the economy. What is stabilizing about the Fed actions?

Take a recent example: Last week (reported on November 2, 2007) the Fed cut the interest rate by a quarter point and couched it in a warning about inflation so the Dow Jones goes up 137 points one day and then plummets 362 points the next day. How wonderful to have the stabilizing influence of the Fed!

The false signal deliberately generated and sent by the Fed caused a brief frenzy for scarce capital but printing money and pumping it into the economy through the favored credit outlets is not real capital. And so 'Poof' - the illusion disappears!

Combining the warning of inflation with the cutting of the interest rate potentially is a rational statement however the Fed always portrays inflation as external to itself and actually uses rhetoric to blame the consumers for inflation. This distortion and complete reversal of cause and effect is deliberate and deceitful just like all shams.

The indoctrinated belief (promulgated by the government funded education system) that the Federal Reserve is a stabilizer of the economy is a complete fallacy. The actions of the Fed are the sources of inflation and the actions of the Fed send false signals in the market causing overconsumption and malinvestment.

The Dollar Bubble Dwarfs the Housing Bubble and the Nasdaq Bubble!

More descriptively: the dollar bubble (looming) dwarfs the housing bubble (in the midst of) and the Nasdaq bubble (late 1990's)!

Think of the process of boiling water. As things heat up small bubbles form and everything looks like it is in an excited state. As the intensity increases the bubbles are released and rise to the surface. At first the bubbles that come to the surface are the small ones because they can travel through the medium more quickly because of their size.

The large bubbles which begin to form at the interface with the source of heat travel slower to the surface than the small bubbles but they bring with them a much greater volume of inflation. Eventually all the bubbles are large and all the bubbles come to the surface quickly causing total disruption of the medium.

There have been small bubbles coming to the surface ever since the adoption of a fiat currency. These small bubbles represented certain segments of the economy that were affected in specific ways by the manner in which the artificial credit entered into the economy.

But the ego-driven interventionists changed the temperature from medium to medium-high. Consequently the bubbles became larger and more frequent. The Nasdaq bubble is an example of the seriousness of a medium-sized bubble. At that size of inflation the surface of the medium churns and there are widespread secondary effects as the bubbles pop and splash in unpredictable directions.

Helplessly ignorant and hopelessly addicted, the ego-driven interventionists changed the temperature to high. The last of the medium-sized bubbles then comes to the surface but at an accelerated rate. That bubble is the housing bubble that we are now seeing!

When the first large bubble inflated by the high heat (chosen by the interventionists) arrives it will pop and exclaim - 'I am the dollar bubble!!!!!' Know then that the full boil of the medium is about to occur!

There is only one solution. Turn off the heat and ride out the volatility until it subsides. Stop inflating!

There is only one statesman in America who understands the economy - because he is a scholar in the classical liberalism tradition - and that is Ron Paul.

There are two sources of the inflation and both are taken care of by the Constitution. 1. The ego-driven interventionists (also known as politicians) are under oath to uphold the Constitution and should be convicted of treason if they violate their oath. The Constitution outlaws intervention. 2. The Federal Reserve is unconstitutional. Whether prosecuted for its crimes or made irrelevant by allowing gold and silver to be monies (as specified in the Constitution) the source of the inflation and its vehicle (a central banking system) will be terminated.

Tranquility and peace will return and from that and the other freedoms granted by the Constitution prosperity will return as our American birthright. That example will inspire the rest of the world and America will begin fulfill its destiny as a beacon of hope and justice.

The Ethics (or lack of) Of Inflation - Part Two.

This is the continuation of Part One. In this blog entry, Part Two, the intensity of the evil of inflation will be made evident.

Sure, counterfeiting is an evil thing just as is theft which is exactly what happens when counterfeiting occurs. Now consider the degree of evil attributable to being able to conceal the theft because of a central banking system and then the magnified degree of evil attained since the theft is concealed, thereby allowing the magnitude of the counterfeiting to become massive. Guess what, that does not even reveal a fraction of the totality of the evil of inflation!

How can that be, you say! 'Hold on to your horses!'

By way of inflation a system dependent on inflation is built. It is a power system. It starts by having the power to inflate but then it grows.

When newly printed money (generated by an act of counterfeiting) enters into the credit system it has to come out somewhere. The interventionist in power makes sure that those who are favored receive the money first. Before the flush of money begins to circulate the value of the money is still at pre-inflation levels and so goods and services are channeled to these favored ones (these are the same ones that become addicted to this privilege) before the purchasing power of the currency falls. These groups become enriched and become collusionists and become dependent like addicts.

Meanwhile those receiving the currency later in its circulation get the same 'pay' but by then it is worth less. Theft has occurred.

This entanglement and dependency within the power system takes on a life of its own. The beneficiaries of the system of inflation gain power and eventually use that power to take control of the power to inflate, and then, feeds itself to become even more pervasive and powerful!

These words describe the steps but in the political world the intensity of the evil is even more extreme. For example, at some point the education system is taken over and people are indoctrinated. Case in point, students are taught that the Federal Reserve fights inflation. At some point the media is taken over and the evils of inflation are not allowed to be aired. Case in point, the media ignores or distorts the Ron Paul campaign but the information still flows on the internet. Who do you think wants to regulate the internet?

To oppose and expose the system of inflation takes courage and righteousness and integrity. These are the qualities of the statesman Ron Paul. He is the only candidate for President that is knowledgeable about the economics rooted in classical liberalism. He is the only candidate that isn't an addict of inflation.

The Ethics (or lack of) Of Inflation - Part One.

As an overview I will mention that the end result of inflation is a decrease in the purchasing power of the currency. Part One will address the origin of inflation and the system, emphasizing whether these are ethical or not.

Inflation is a good word because it induces the thought of a balloon which induces the thought of floating away. Prices rise and in hyperinflation the sky is the limit!

Another good analogy is dilution. Imagine yourself ordering orange juice at a restaurant. It comes and it is thick and nutritious and fresh squeezed like it states on the menu. If those managing the restaurant add water to the juice and do not change the 'fresh squeezed' description on the menu then you will be cheated even if your palate is not fine enough to detect the sham.

This is where ethics enters in. To dilute (or inflate) surreptitiously is untrustworthy. It is clear that the inflator benefits from the theft of a portion of someone else's property or wealth. Inflation (dilution) is untrustworthy and it is theft. This is exactly the reason why counterfeiting is a crime!

We have made the transition now to money (our ballon and orange juice analogies served us well). The origin of the inflation is the existence of a fiat currency. Instead of the currency being defined as a portion of a measurable unit of a commodity, it is merely authorized by government decree. The government declares it as legal tender without tying it to anything that has real value. The origin of inflation is when the government prints more of this fiat money. Ethically it is criminal because it is nothing more than government sanctioning its own counterfeiting which is still theft and deceit.

When a counterfeiter prints money he or she directly benefits. But the government is a large entity so to who and how do the benefits flow? First of all the system requires compliance. There cannot be alternatives or renegade banks that are not part of the inflation scheme. The necessary requirement is the establishment of a central bank combined with legal tender laws. Once this central bank system is in place the inflation of a national currency is possible.

This is where I will pick up next time in a future blog entry.

P.S. There is only one statesman knowledgeable enough about classical liberalism and principled enough to speak honestly about these violations of civil rights and that is Ron Paul.

Money And Ethics And Loanable Funds.

The interest rate is the price where the supply of loanable funds equals the demand for loanable funds.

We all know that, currently, there is a scramble for loanable funds. This is another way of saying that the demand for loanable funds is high. I will briefly go into the reason for the scramble for resources.

If demand increases and the supply stays the same then the price (the interest rate in this case) will go up. These are the current conditions, where the increased demand is caused by cumulative malinvestment. But under these conditions higher interest rates will aggravate an already tenuous situation. The Federal Reserve decided on September 19th to not only maintain the price (interest rate) but to actually decrease the interest rate, even despite the increased demand for loanable funds.

The only way to accomplish this interest rate reduction is to increase the supply of money injected into the banking system. The amount of money injected is intended to not only move the supply of loanable funds outward (visualize the demand and supply curves), but to move it out so far as to intersect the demand for money, such that the interest rate will decrease!

Yesterday those loanable funds did not exist, today they do. How is that possible? Is that a miracle or an act of counterfeit? Who and/or what institution is so completely out of touch with ethics and money that it would unscrupulously practice counterfeiting? The problems that need fixed are the result of the malinvestments caused by earlier artificial injections of money into the banking system. Compounding poor ethical judgments on previous poor ethical judgments cannot be wise or just. Rather, it is unwise and unjust.

Constitutionally the Federal Reserve is illegitimate. And counterfeiting is illegal. The solution to this problem of ethics and money is clear.

Gold Meets the Criteria of Money and Ethics !!!

Here we have a blog about Money and Ethics and the most obvious link between them is gold. Despite the determined, deliberate, and diabolical efforts of the central banks and the politically compromised economists around the world to make gold appear to be obsolete what we find instead is the soundness of gold.

The volatility in world markets is because everyone is searching for real value. Most people are not aware of the pernicious nature of intervention and so they seek real value in places influenced by the interventionists, for example, real estate as influenced by low interest rates created by intervention into the credit markets.

There is no real or lasting value in these mirages created by the interventionists. But the interventionists cannot allow gold to be seen as an alternative so the politically compromised economists spout out progaganda dissing gold and the interventionists intervene in the gold market by flooding the market with gold from central bank reserves to give the impression that gold is a poorly performing investment.

These unethical practices are short term and unsustainable. Gold is ethical and it trumps the unethical practices of the interventionists. Gold is money that holds its value because it is a commodity, unlike the fiat currencies around the world which are no longer tied to anything of real value. The printing of more and more currency by central banks is illusory like a mirage and it is unethical and exposed as what it really is - mere counterfeiting.

Gold is ethical and it trumps the unethical schemes of the interventionists

Money And Ethics And Greenspan And Bernanke.

Those who are responsible have to take responsibility! Of course these two men have merely been spokespersons for an institution that never has been and never will be ethical. The Federal Reserve is purely a political instrument.

How did Alan Greenspan handle the ethical dilemma of creating money to manipulate the economy? He did it by mastering the art of deception. He spoke in a language of nuances with an air of humility and detachment. That was the art of deception. The nuances of language were deliberately vague and elusive. The humility and detachment were all a part of the persona for that era of the Fed. Once upon a time Alan Greenspan knew and wrote about the virtues of the gold standard but later chose to be duplicitious for whatever reasons.

How will Ben Bernanke handle the ethical dilemma of creating money to manipulate the economy? It appears that the underlying hypocrisy at the highest level of the Fed is gone since the current Chairman does not see any merits in a gold standard. But the question remains: Is the behavior (creating money to manipulate the economy) ethical simply because the decision-makers are ignorant of the ethics involved?

The degree of secrecy about what is really being done (the details about the steps being taken) is a testimony of the realization across-the-board within the Federal Reserve that it is unethical to create money and distribute the newly created money to those who are favored politically.

Money and Ethics on August 10th, 2007!

On August 9th what wasn't in existence came into existence and that was $24 billion dollars and then on August 10th another non-existent cache of money sprung into existence, this time to the tune of 38 billion dollars!

This is the news reported on August 11th in the New York Times:

• 'Hoping to provide some comfort that there is ample cash available, the Federal Reserve made its largest intervention since the markets reopened Sept. 19, 2001, in the wake of the terrorist attacks. The central bank injected $38 billion into the financial system on top of the $24 billion it put in on Thursday.'

There is nothing ethical about creating money out of thin air.

Notice the word used in the report - 'intervention.' At least the word selection is straightforward yet only because they (the financial media, academia, and the politicians) are ignorant of the divine economy theory do they not realize how damning the use of that word is.

In broad strokes it is unethical to steal and to lie and to act in an untrustworthy manner. Where can the interventionists hide except behind the veils of government bureacracy?

Technically, democracy makes the politicans accountable and so the people have the right to remove the veils, thereby exposing the interventionists.

Launching of the Money and Ethics Blog!

It may appear that this blog is politically motivated, but really it is apolitically motivated! To explain the distinction I refer you to the divine economy theory. In reality there is no political role in the economy - which I realize is a jolt to contemporary thinking - and that is because every act of intervention is a source of disruption, an extention of corruption into the economy, and a cause of a cascading series of injustices.

This blog is also apolitical in the sense that it is not partisan. All parties are seen as intent on intervening for their own sake. All intervention - all acts of political involvement in the economy - are seen as unethical.

One of the keys to prosperity, stolen by the thieves and used repeatedly and surreptitiously, is money! Control of the money system enables the politically motivated to intervene in the economy.

Consider the implication of the following sequence:

• Financing a war is only possible when the money supply can be expanded; combined with any and all propaganda to convince people that the enemy is vile. Even when public opinion turns sour the war can still continue because the money supply can be expanded.
• However, a day of reckoning is on the horizon, as a consequence of the counterfeiting by the ego-driven interventionists, but the goal of the interventionist is to shift the blame politically, with total disregard for the pervasive impoverishing of the nation.
• Now an unforeseen problem appears: a bridge on a major thoroughfare collapses and the structural soundness of bridges all over the nation become suspect. The only recourse to the interventionists is to throw money at the problem and to do that it is necessary to crank up the printing presses and print more money. This politically sanctioned counterfeiting operation can take no repose, which means that it becomes more difficult to hide itself from scrutiny plus the time horizon for the subsequent disasterous effects on prosperity becomes much abbreviated.

This blog will sometimes show the natural relationship between money and ethics but most of the time it will point out the detrimental effects of artificial money - more frankly, of corrupt fiat currency - and the ethical consequences.