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Jim Cook



Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

Best of Bill Buckler
September 6, 2012
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The New "Dogma":

Just about the only central bank official left in the world who is still speaking out against the practice of monetizing government debt is Jens Weidmann, the president of the Bundesbank in Germany.  Mr Weidmann's two predecessors at the Bundesbank, Axel Weber and Jurgen Stark, both resigned their positions in protest at the ECB's sovereign bond buying.  Mr Weidmann remains aboard as Bundesbank head and as a member of the ECB's Governing Council.  His has
become an all but lone voice among the monetary elite, not just in Europe but worldwide, in opposing the recipe of "curing" a debt crisis by piling more debt on top of it.

In the course of an interview which appeared recently in der Spiegel, Mr Weismann was asked this question regarding his continuing opposition to "quantitative easing": "Isn't it necessary to occasionally break dogma to prevent something worse from happening?"

Dogma is an idea or set of ideas not to be disputed or doubted by anyone.  What was conventional wisdom five years ago has now become "dogma".  We've come a long way in a very short time.

The Problem Of Loss Of Control:

Modern economic parlance is littered with "dogmas", of course, none of which are ever questioned by those whose task it is to legitimise government control in the eyes of those
being controlled.  Gold, or any other media of exchange NOT controlled by the government, has long been deemed a "barbarous relic".  The era of US financial institutions before the introduction of the Federal Reserve is called the age of "wildcat banking".  The inducement to borrow by means of the manipulation of interest rates and acceptable collateral used to be called a credit expansion.  It now glories under the title of "economic growth".  Inflation used to be an increase in the stock of money.  Today it is a rise in the prices of very carefully selected consumer goods.  A tendency towards lower prices used to be an unmistakable sign of economic progress.  Today it is deemed a signal of imminent financial and economic disaster.

One piece of jargon which has survived all but intact throughout the entire era of the collapse into government control is the concept of the "business cycle".  This is the idea that any type of market economy operates in a series of fits and starts.  It is the idea that any upswing in the pace with which prosperity is growing sows the seeds of an inevitable downswing to follow.  One of the fundamental justifications of the introduction of almost every step towards government
domination of the economy is that it would "smooth" out the inherent and highly inconvenient ups and downs of the business cycle.

The irony of this particular piece of economic "dogma" is that a business cycle is not inherent in a free market economy, it is inherent in an interventionist or command economy.  The truth of this assertion is easily tested by comparing economic booms and busts in the era before the Fed and the century since the Fed was imposed upon the US economy in 1913.  Today, the business cycle has reached such extremes that our economic and political rulers fear losing control altogether in the next "bust".  That being the case, they are resolved to prevent it from happening at all - whatever it takes – whatever the cost.
We have now reached the point where any and all of the truths of politics and economics are expendable "dogma" because they have one thing in common.  They threaten the rule of the

The Problem Of Loss Of Freedom:

The minor problem we face is that government wants to rule.  The major and much more difficult problem we face is that the majority of those that are governed want to BE ruled.
Many if not most of these people would indignantly deny it if the statement was made to them in so bald faced a manner as it is stated above.  But the actions of most people speak for themselves and belie any and all protestations to the contrary.  Most people want (or think they want) the government to "run" the country.  Most people want (or think they want) the government to provide them with "security".  The vast majority of individuals would not dream of holding up a
fellow citizen in broad daylight and demanding a portion of his paycheck.  But most of these same people have no qualms about having the government do it for them under the guise of
"legality".  Money extracted in this manner and "redistributed"  to those who have not earned it is an "entitlement".  The vast  majority of the people in every "developed" nation do not want
their "entitlements" tampered with in any way.

In casual conversation, the majority of people will freely acknowledge that the money they have paid to government in the form of pension or "social security" extractions have long
since been spent by the government.  They know that the money is gone.  Most people who are receiving pension or social security payments are well aware that the means of payment are extracted from those still working, including their own children and grandchildren.  This does not stop them from demanding their "due".  Nor does it stop those who buy government bonds while knowing full well that the only final means of servicing and repaying the debt is to extract the wherewithal from those who still produce something.

The great truth is that those who demand both freedom AND security will wind up with neither.  People who rely on the government have not learned that lesson.  It is the hardest lesson of all to REALLY learn.

The Debt Hangover:

As long as governments maintain their monopoly over what is used as money and manipulate the ease with which that money can be lent through their tame central and commercial banks,
there will be a business cycle.  That means that all booms based on credit will be followed by busts when the true quality of that credit can no longer be disguised.  As long as
the economics profession maintains the business cycle (instead of the causes of the business cycle) as a legitimate area of study, serial credit collapses are assured.  There are only two variables.  The first is the old adage that says that the bigger the boom, the bigger the bust.  The other is that governments and banks will ALWAYS try to prolong the boom and their efforts will ALWAYS make the bust worse than it otherwise would have been.

There has never been an instance in history when governments and banks went as far as they are going today.  Up until about two years ago, they were still trying to prolong the boom.
Today, they are desperately trying to stave off the bust.  This cannot be done.  It is an impossible task no matter how many financial "nuclear options" are resorted to in the process.
Every major bank in the world today is singing the same chorus.  They all say that they will do whatever it takes to "fix" their common problem.  In the process, what was once illegal has now become inconvenient and policies which were recently deemed ridiculous have become respectable.  Indeed they have gone further than that, they have become dogma.

The global credit freeze in 2008 was not allowed to run its course.  Nor have any of the ensuing ones, including the long and drawn-out agony now threatening to overwhelm Europe.
Everywhere, the powers that be and their legion of sycophants is assuring us all that the "next" big meeting is the one that is going to change everything.  And if it doesn't, there will be
plenty more where that came from.

Officially, the business cycle has been suspended.  Economic busts are no longer countenanced, they are swamped by ever larger deluges of the medium of control which is still euphemistically called "money".  Everybody knows that the end result will be frightful.  Nobody - neither those desperate to rule nor those content to be ruled - wants to experience it.  There is only one problem - it cannot be avoided.   

Grasping The Nettle:

A nettle is a stinging plant common throughout the English- speaking world.  If it is brushed against or gingerly touched, it will inject stinging toxins into the skin which can be very
painful.  But if it is grabbed firmly, the hairs which inject the toxin are usually pushed flat and will not penetrate the skin or cause any harm at all.  From that fact has evolved the figure of
speech - to grasp the nettle - meaning to tackle a problem firmly and boldly in order to solve it.  The same principle can be seen in the best way to remove a bandaid.  Peel it off gingerly and the discomfort lingers.  Rip it off and the relief is almost instant.

The only viable way to deal with the present global distortions caused by the prolonged credit crisis is to grasp the nettle very firmly indeed.  It will not be a painless process.  The minor
problem will be the widespread destruction of phantom "wealth" which will inevitably occur.  The major problem will be the exposure of the folly of dividing any society up into the
rulers and the ruled.  The rulers will be exposed as the charlatans they are.  The ruled have an even worse ordeal in prospect.  They will no longer be able to "convince" themselves that a "free" country is one whose citizens are "free" to do exactly as they're told.  Worse still, they will no longer be able to avoid the realisation that they never really wanted to be free, they merely wanted to be "safe".

Those who know what freedom is are always a minority.  In the US, they were called the "remnant" as far back as the 1930s by men like Alfred J Nock.   But they are always there,
and their influence has always been out of all proportion to their numbers.  The problem is as simple as it has always been.  It is the problem of putting governments and the financial
entities they control back in their place as being servants instead  of masters.  The first step towards any viable solution is to stop  grabbing for the brass ring.  All that will get you is another ride in the direction the government wants to take you. 




.Ó 2009 – The Privateer

(reproduced with permission)


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