Big Lie

IMF pronounces Bulgaria’s banks safe, 2 weeks before bank run

"Earlier this summer, IMF bureaucrats went to Sofia, Bulgaria to study the country’s economic progress. And roughly a month ago, they released an official report which stated, among other things, that Bulgarian banks are 'stable and liquid.' Talk about epic timing. Because less than two weeks later, Bulgaria’s banking system was in the throes of a full-blown crisis. There was a run on two of the nation’s largest banks—several hundred million dollars had been withdrawn in a matter of hours. And the Bulgarian central bank had to step in and take over both of them or risk a collapse in the entire system." Continue reading →

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When Zero’s Too High: Time preference versus central bankers

"Central banking has taken interest rate reduction to its absurd conclusion. If observers thought the ECB had run out of room by holding its deposit rate at zero, Mario Draghi proved he is creative, cutting the ECB’s deposit rate to minus 0.10 percent, making it the first major central bank to institute a negative rate. Can a central-bank edict force present goods to no longer have a premium over future goods? Armed with high-powered math and models dancing in their heads, modern central bankers believe they are only limited by their imaginations. More than half a decade of zero interest rates has not lifted anyone from poverty or created any jobs—it has simply caused more malinvestment." Continue reading →

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Central Planning by Central Bankers

"The agency that controls monetary policy for the United States has an unlimited amount of money to buy support, compliance, or least silence within that segment of professionally trained economists that specializes in money and banking. The Federal Reserve gets to keep all the money that it wants for operations. It has to turn back over to the Treasury Department any money that is not used for operations, but it does not answer to Congress or the Treasury with respect to how it spends its money. This means that the Federal Reserve has essentially unlimited funds available to buy off those critics who might challenge Federal Reserve policy." Continue reading →

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An Ever Deeper EU to Join the Wall Street Party?

"The central bankers have reason to inflate. The European experiment is precarious and economies around the world are teetering. Part of Mr. Andors's speech, no doubt, has to do with creating the possibility, rhetorically at least, that the EU, too, can join in the mass inflation building around the world. This no doubt seems the only way out for those who have engineered the current economic cul de sac. They will print and print until the danger is past and stock markets have traveled through the roof. Wealth is to be destroyed and pensioners bankrupted, but the system itself is to be perpetuated and expanded. It continues to be a cynical exercise in creating haves and have-nots." Continue reading →

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Fed Money Pumping Brings Results: The Affluent Society Returns

"Once again, monetary inflation is being confused with high-end entrepreneurialism. Ludwig von Mises, the great Austrian economist, was not fooled about the wealth effect of modern finance and, indeed, with his colleague FA Hayek dealt a devastating blow to the ever-reoccurring idea that 'this time it's different.' It's not different. Never. It just depends on where you are in the business cycle. Like a bad penny, this dream often recurs when the Fed has dumped enough money into the economy. These funds slosh around in the recesses of commercial banks and financial firms and then gradually find their way into stock markets and thence into high-end real estate." Continue reading →

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Economy Tanks … and Stocks Soar?

"Negative 1 percent. That’s how much the U.S. economy managed to 'grow' in the first quarter, according to the government’s revised estimate. After more than $800 billion in stimulus spending from Washington. After more than $3 trillion of QE from the Federal Reserve. After six-plus years of record-low interest rates … record levels of monetary intervention in the U.K., Japan and Europe … and the biggest bailouts in the history of the world. It’s much worse than the 0.1 percent gain the Commerce Department originally reported. It was twice as bad as the 0.5 percent decline economists were expecting. And it’s the worst reading since the first quarter of 2011." Continue reading →

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Bill Bonner: Why I Sued Washington 28 Years Ago

"When the Spanish conquered South America, their encomienda system of slavery typically required only 40 days of work from their victims. The French conquered Madagascar; they forced male Hovas between 16 and 60 to work 50 days a year. The US example is closer to that of Russia – where Emperor Paul I, in 1797, declared that three days a week was enough for serfs to give their lords and masters. That works out to nearly 150 days a year. A 50% tax rate – federal, state and local – is the equivalent of about 125 days of forced labor a year. Pretty steep. But that’s just the beginning. In our system of crony democracy, all the major industries have whips in their hands." Continue reading →

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Bailout Banks Made Riskier Loans: Study [2011]

"The government bailout made banks appear safer but actually caused them to take on more credit risk, according to a University of Michigan study released Wednesday. According to a working paper by finance professors Ran Duchin and Denis Sosyura of the university of Michigan's Ross School of Business entitled Safer Ratios, Riskier Portfolios: Banks' Response to Government Aid, banks participating in the government's Capital Purchase Program as part of the Troubled Assets Relief Program, or TARP, 'significantly increased their investments in risky securities,' by 10%, 'displacing safer assets, such as Treasury bonds, short-term paper, and cash equivalents.'" Continue reading →

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Lew Rockwell: Speaking Truth to Monetary Power

"We have every reason to expect governments to exploit their positions as monopolists of the production of money in ways that increase their power and benefit favored constituencies. We do not need 'monetary policy' any more than we need a paintbrush policy, a baseball bat policy, or an automobile policy. We do not need a monopoly institution to create money for us. Money, like any good, is better produced on the market within the nexus of economic calculation. Money creation by government or its privileged central bank yields us business cycles, monetary debasement, and an increase in the power of government." Continue reading →

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Hidden Erosion of Corporate Worth Since U.S. Abandoned Money

"For 173 years, the United States used money as a medium of exchange. In 1965, it switched to using a floating accounting unit. This change coincided with a dramatic yet hidden reversal in the net trend of worth for U.S. corporations. The shift to fake money in 1965 just happens to coincide with the year that divides the long term trend of corporate worth in the United States from mostly up to mostly down. This chart reveals the breathtaking rise in total U.S. corporate worth during the money period and exposes the stunning net destruction of U.S. corporate worth since the start of the non-money period." Continue reading →

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