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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 26, 2012
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There are two ways to get rid of a pernicious government institution – and today there are few other kinds.  It can be done through due legal process, or it can be done by popular revulsion.  Ron Paul and his potential (and ideal) choice as his Fed Chairman – James Grant – proposed the first method.  Sadly, they will not have the chance to deliver on what we are sure was a genuine promise.  That leaves the second method.  Mr. Bernanke and ten of his eleven colleagues in the FOMC have now made that a certainty.  We must here make mention of Jeffrey Lacker, the president of the Richmond Federal Reserve Bank and the lone dissenter at the fed’s September 13 meeting – as he has been at the six previous FOMC meetings.

The Fed has made a desperate bid to perpetuate a fatally flawed government by propping up their debts as well as those of a fatally flawed banking system by means of a fatally flawed currency.  They have chosen to do so by issuing an unending stream of Federal Reserve Notes (aka U.S. Dollars).  A Federal Reserve Note is itself a debt – a promise to pay.  To expect the open-ended emission of ever greater quantities of these debts to “cure” an existing debt problem of monumental proportions is the acme of absurdity.  The reaction of the precious metals to this Fed decision along with the instant dive in the U.S. Dollar and the price of longer-term treasuries in the secondary markets are stark indications that this truth is starting to hit home.

The new idea of an “exit strategy” from these gross Fed excesses is now a derisory fantasy.  The Fed – and along with it the U.S. government – has locked itself into a strait jacket of monetary debasement in perpetuity.  They have also made it certain that the entire idea of “central banking” is going to be exposed beyond the power to ignore as the pernicious enemy of freedom and prosperity that it has always been.

The “markets” chose to ignore the strictures put on the ECB’s ability to make good on its September 6 promises by the German Constitutional Court’s ruling on September 12.  They have also ignored all the certain future damage to be done to the U.S. and global economy by the Fed’s decision of September 12 – 13.  All they can or want to see is a never-ending stream of new “money” issuing from the central from the central banks to replace the “money” which has already gone up in smoke with their existing mal-investments.  They know that they stand or fall on this stream being perpetual.  They refuse to accept any prospect other than it will be perpetual.  Without this “money” and the ability to “borrow: it without cost, their “assets” literally bear not relationship to what is going on in the economy whose life blood they claim to be.

The Fed has claimed that their new round of printing will revive the “economy.”  They propose t continue on their path until their contention is “proved.”  How will it be proved?  By means of statistics put out by government departments which pretend to “measure” the prosperity of the economy and the level of unemployment in that economy.  It has been a long time since these concocted statistics bore any resemblance to reality.  Now, it is a safe bet that the distortions will greatly increase.  If Mr. Bernanke and the Fed do finally realize that they are skating in the middle of a melting iceberg and panic, they are going to have to have a justification for “reversing” their policies.  That justification would be provided by the government further falsifying their “measurements” to the extent that the Fed could claim “victory.”

Thus, the chasm between official claims and reality is set to widen even further than it already has.  The point will inexorably come when the long-suffering denizens of “Main Street” will rebel with the same combination of designed apathy and weary disgust with which the people of the East Bloc turned irrevocably away from their own rulers.  The first “victim” of this abhorrence will be the Fed.

“Even more insistent is the message that for markets to get through September and beyond, ‘more’ needs to be done.”  That’s what we said here two weeks ago.  “More” has indeed been done, on both sides of the Atlantic.  But the real damage has been perpetrated by the Fed. Inexorably, the world’s focus will now shift from the “debt crisis” in Europe to the even bigger “debt Crisis” in the U.S.

The surest indicator of this is, as already stated, the huge acceleration in the sell-off of both longer-term U.S. Treasury debt and the U.S. Dollar itself in the wake of the Fed’s announcement.  David Stockman’s famous advice to invest in – “ABCD – Anything Bernanke cannot destroy” – is gaining traction everywhere.




.Ó 2009 – The Privateer

(reproduced with permission)


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