Monetary Reform In Iceland: Maybe There Is Still Hope?

Despite the barrage of catastrophic financial data throughout the Western world, there may be a glimmer of hope coming from the tiny Nordic island of Iceland.

It must not be forgotten that it was Iceland which was one of the first to feel the fallout of the financial crisis of 2007-08. Unlike most of the other nations, however, Iceland showed tremendous backbone and did not allow, for the most part, any of the NWO monetary agencies to intervene in its affairs. So, any Icelandic currency reform considerations must be taken seriously.

Instead of following in the global insanity of massive money creation, artificial suppression of interest rates, and all other sorts of tricks and gimmicks, Iceland is considering the prohibition of banks from artificially increasing the money supply through the fraudulent and evil practice of fractional reserve banking (FRB).

The Financial Times reports that the government in Reykjavik is contemplating “a complete ban on its banks creating krona when they issue new loans. Growth in the money supply would become a matter of government policy alone.” In the proposal under consideration, “the state has complete monopoly on legal tender. Banks can only lend what they have previously gathered in state money.” The Times adds: “Money created ‘out of thin air’ – the devilish secret at the heart of fractional reserve banking – becomes a relic of the past.” Oh, if it was only so!

Of course, the Financial Times gets much wrong in the story; but it does show that the monetary authorities of Iceland recognize that there is something radically wrong with the current monetary order, especially with FRB.

While Iceland’s proposal to eliminate banks from fractional reserve practices is commendable, the replacement of it by total governmental control would lead to similar, if not worse, problems. Under such a system, the money supply would be subjected to the whims of politicians who, no doubt, would expand it at the drop of a hat to gain and/or maintain their power among constituents. Such an arrangement should send chills down the spine of every native Icelander.

Economic theory has clearly demonstrated that a monopolist will exploit the privilege he is given, and the Icelandic government would be like any other monopolist. Monopoly control leads to higher prices and shoddy services. In the case of a money monopoly, the quality of money (its purchasing power) would drop.

A far sounder proposal for Iceland (and for the world at large) is to take away the power of both banks and governments to create money “out of thin air.” This would mean a complete “de-politicalization” of the Icelandic monetary order. A non-statist monetary system would surely be based on commodities – gold and silver – where the money supply would be determined by the amount of minerals mined, not by government fiat.

A metallic monetary standard naturally puts a limit on the amount of money in “circulation” since it has to be “produced.” Extracting gold and silver from the earth is an expensive process. Printing paper notes is virtually costless.

What Iceland (and, for that matter, the rest of the world) apparently does not understand is that economic growth is determined not by the amount of money there is, but the amount of genuine savings. If Iceland seeks economic well-being, it should undertake policies that increase savings.

There is a bigger hurdle that will most likely prevent either Iceland or any other nation from undertaking any meaningful monetary reform. FRB and central banking (which was created to legitimize fractional reserve banking) are the instruments where governments and the political elites derive much of their power. Central banks buy the public debt that allows government to spend recklessly without recourse. If this was taken away, and states had to rely solely on taxation, their power would be severely curtailed.

Iceland and the Western world’s financial doldrums will only be cured when FRB and central banking are eliminated. Prior to this, however, the public must be convinced that the only economically sound and morally defensible monetary order is one where money is fully redeemable in gold and silver. Until this is recognized, Iceland and the rest of the global economies will continue to stagnate and eventually collapse.

Aquinas@AntoniusAquinas

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Equipping You With The Truth

Big Banks Profit While Main Street Suffers

If anyone doubts that the Western world’s monetary order is rigged to enrich the banking system, the first quarter financial reports of America’s top banks should disabuse any unbelievers.

The Financial Times reported that four of the five big U.S. trading banks had a combined revenue of $19.4 billion in the first quarter of 2015. Goldman Sachs had a 14.7 percent* return on its equity in the first quarter, while J.P. Morgan, the nation’s largest bank, earned $5.91 billion (or $1.45 a share), up 3.6% from a year earlier.** Revenues for J.P. Morgan grew 4% to $24.8 billion.

The enthusiastic coverage of the big banks’ healthy first quarter proceeds and the chest-thumping of its bank executives left out, not surprisingly, the real reason for their windfall gains – the Federal Reserve. The big banks have been the chief beneficiaries of the Fed’s easy monetary policy since the start of the financial crisis.

The Fed’s “zero interest rate policy” (ZIRP) and its “quantitative easing” (QE) program have been the catalyst for the large banks’ recent record performance. Ostensibly, these policies were instituted to assist the economy in its recovery from the Great Recession; however, in actuality they have been done to save the big banks from collapse while the economy has been flooded with billions of increasingly worthless dollars causing significant price inflation.

Low interest rates have enabled the banksters and financial houses to borrow at next to nothing and invest in all sorts of ventures, many of which are highly risky. Easy money is also the cause for the huge run up in assets prices and the highs in nominal stock prices.

Worse, ZIRP has allowed the federal government to sustain its ridiculous level of spending, borrowing what it cannot raise in taxes at a near zero rate of interest. When interest rates do rise, the federal government will most likely default, bringing the banks down with them.

While the big banks and Wall Street have done quite well from the Fed’s massive money printing, everyone else has suffered and has seen their standard of living plummet even from official estimates.

The Federal Reserve reported a slowdown in hiring in March, a big drop off in industrial production, and lower housing starts in the first quarter–to mention just a few troubling statistics. Things are getting to the point that the Fed is reconsidering whether it should raise interest rates in the second half of the year as it had hoped to do. Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, admitted that “Data available for the first quarter of this year have been notably weak.”***

The first quarter sizable earnings of the big banks are an example of what a number of commentators have termed “crony capitalism.” Through government assistance, businesses earn wealth not by pleasing customers and satisfying their needs, but by currying favors from the state. In the banksters’ case, instead of making wise and prudent loans, they receive largesse in the form of billions of Federal Reserve notes.

Not only is such a system immoral, but it gives legitimate market activity – those firms that do not receive state assistance – a bad rap as profitable enterprises are lumped in with state favorites. This ultimately leads to greater regulation as calls for the government to tax “windfall profits” would affect all firms–even those who earned rightful profits.

The solution to crony capitalism and the ill-gotten gains of the banking system is not greater oversight, but instead the abolition of the Federal Reserve and a return to sound money based on gold or silver. Under such a system, banks and financial houses would profit only if they satisfied consumers’ wants.

In the banks’ case, this would mean safeguarding depositors’ money and making prudent loans with the funds they were entrusted with to lend. For those financial institutions that succeed at such tasks, profits would be their reward; those who do not and mismanage investment funds would be out of business and allowed to fail. Banks would operate under the same economic laws as any other enterprise.

The prevailing system of crony capitalism which benefits the 1% must be exposed for the grand redistribution scheme that it has long been. Only when bankers earn their wealth as Main Street does will America return to a just and sound monetary order.

*Tom Braithwaite & Ben McLannahan, “Goldman in Robust Return on Equity Showing,” Financial Times, 17 April 2015, 14

**Ciaran MCEvoy, “JPMorgan Profit Beats Wall St. Views, As Does Wells Fargo by Shrinking Less,” Investor’s Business Daily, 15 April 2015, A1.

***Jon Hilsenrath, “Fed Shies Away from June Rate Hike,”  The Wall Street Journal,  17 April 2015.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Equipping You With The Truth

A Few Words On Obama’s Call For Mandatory Voting

Facebook/Barack Obama

As if there have not already been enough signs pointing to a future totalitarian America, President Obama’s recent remarks on “mandatory voting” is further evidence of what is in store for those who continue to remain within the confines of the former “land of the free and home of the brave.”

In lamenting to a civics group about the amount of money that now accompanies most elections, Obummer suggested that mandatory voting requirements “would be transformative if everyone voted. That would counteract money more than anything.” Naturally, he did not mention the vast sums of cash that the Obama re-election team spent during the 2012 presidential campaign, some of which has been estimated to have been on the north side of $40 million!

The Dictator-in-chief uttered more hypocrisy when he suggested that the young, lower-income groups, immigrants, and minorities were being kept from voting by Republicans in some states: “There’s a reason why some folks try to keep them away from the polls.” While there has never been a shred of evidence of Republicans or conservative groups keeping any eligible voter from the polls in any recent election, there is plenty of eyewitness accounts and video footage of the Obama re-election team’s Stalinist employment of black thugs in certain Philadelphia precincts intimidating white voters in the last presidential election farce.

Such a scheme coming from an avowed statist as Obama, who brought coercive health care to America, should be of no surprise. Yet, this is the natural outcome of social democracy; and if trends are not reversed, compulsory voting will become a part of the U.S.S.A’s political landscape.

The two criminal, oligarchical political parties that have run this country into the ground over the last hundred years or so understand that mandatory voting will further legitimize their corrupt rule. With it, people will be forced to participate in the bread and circuses that the American political process has become, including the grand hoax that is conducted every four years to determine which demagogue will weasel and lie his or her way into the highest office in the land.

More fundamentally, if mandatory voting becomes a feature of American political life, it will mean that the modern democratic state born during and in the aftermath of the French Revolution will have achieved one of its most cherished goals in its quest at becoming mankind’s foremost “god.” Mandatory voting will require citizens (“subjects”) to pay homage to the state-god through the “sacred” process of voting. At such a point, its suzerainty will be nearly complete.

While critiquing Obummer’s latest draconian scheme is necessary, alternative and counter measures need to be proposed. Short of scrapping altogether the current constitutional republican system and returning to a more preferable one of a “confederation of states,” the following reforms (as a start) should be enacted to curb confiscatory mass democracy:

First, instead of enlarging the franchise, it should be severely limited with significant property qualifications for voting. Age requirements should be increased to at least thirty years. U.S. Senators should once again be appointed by state legislatures. Also, anyone who receives public monies, be they government contractors, welfare recipients, bureaucrats, elected officials, or teachers, should be prohibited from voting. This would also include employees of the Federal Reserve and its member banks.

Above all else, the idea that voting and democratic elections are synonymous with freedom and liberty must be debunked. Mass democracy needs to be ideologically demystified as a force for social good and seen as a grand redistributive engine of wealth from the productive to the parasitical classes. It remains the greatest threat to private property, individual liberty, and global peace that mankind faces.

Proponents of mandatory voting like Barack Obama need to be ridiculed and driven from the positions of power they hold for advocating such tyrannical notions. Mandatory voting is a bad idea whose time will hopefully never come.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

Don’t ‘Audit The Fed’ – Abolish It

Photo credit: International Monetary Fund (Flickr)

In recent remarks to the Senate Banking Committee, Federal Reserve Chairwoman Janet Yellen (pictured above) was her typical evasive and non-committal self when the topic of interest rate hikes were broached. When the subject of potential oversight of the Fed came up, however, Ms. Yellen became quite forthright in her response.

When asked about a bill introduced by Kentucky Senator Rand Paul to “Audit the Fed,” Ms. Yellen declared: “I want to be completely clear: I strongly oppose ‘Audit the Fed.’”  Ms. Yellen defended her position on the grounds (which have been given by every previous Fed Chairman) that oversight would lead to politicized monetary decision making, thus compromising the central bank’s “independence.”

Senate Banking Chairman, Richard Shelby, R-Ala., countered the Chairwoman, saying “there is an even greater need for additional oversight” of the Fed since the onset of the financial crisis in 2007.

Ms. Yellen, her predecessors, and every other Fed apologist are simply wrong when they assert that the central bank is an independent agency that is free of political influence. The Federal Reserve System was created by an act of Congress (1913) and can ultimately be “reformed,” altered, and/or abolished by Congressional fiat if so desired.

That Congress does not oversee Fed policy is a result of its charter, which was originally crafted by the Big Banksters of the time (mostly the Rockefellers and Morgans) in concert with their bought-and-paid-for politicians. The lack of oversight was a deliberate part of their plan to give bankers and financers free reign to conduct monetary policy for their own benefit.

The Federal Reserve is and has always been a political creature designed for the benefit of financial elites. It is a highly privileged cartel with monopoly control of the nation’s money supply. Unlike the propaganda that emits from Fed officials, the central bank was instituted to protect banksters from financial collapse and bank runs. Fine-tuning the economy, reducing unemployment, or fighting inflation are all ancillary concerns for the Fed.

These are the simple facts that are deliberately kept from the public at large by the political establishment, academia, and the media.

The Audit the Fed movement, which began in earnest with Ron Paul’s first presidential run, is a wrongheaded approach to solve the nation’s ongoing financial crisis. Senator Rand Paul’s bill is mostly grandstanding to bolster his status among the Republican Party’s populist contingent in his anticipated race for the nomination.

In fact, instead of meaningful reform, greater public oversight of the Fed would most likely lead to worse results. Every Congressman and Senator would be pressuring the central bank to fund their pet projects. Can one imagine what the growth rate of the money supply would be if 535 ravenous politicians had a say in the conduct of monetary policy?!

Those who want to reverse the nation’s economic malaise should seek the Federal Reserve’s abolition and advocate its replacement with a de-politicized monetary order free of central banking. Such a system would most likely be based on a commodity (gold and/or silver) where “money producers” are free to engage in the creation of the “best money” and banking services to satisfy customers’ needs.

In such an order, banks would function as any other enterprise by profit and loss. If banks loan funds wisely, they will succeed; if not, they will fail and go out of business, replaced in the marketplace by more savvy entrepreneurs. There will be no bailouts at taxpayers’ expense for reckless financial speculation. Money and banking would become a sound and honest undertaking.

To actually believe that an Audit the Fed initiative would become law is beyond naïve. The political establishment will never voluntarily relinquish or allow any legitimate oversight of one of its chief pillars of power.

Instead of seeking change via politics, reformers must first change the climate of public opinion–which can only be accomplished when the prevailing ideology is debunked. Until the Federal Reserve is seen as an engine of inflation and the creator of economic disorder that needs to be eradicated, America’s financial woes will, unfortunately, continue.

Antonius Aquinas@AntoniusAquinas

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom

Political De-Centralization: The Model For Western Rejuvenation

Photo credit: Jordi Escuer (Flickr)

As the modern secular nation state becomes increasingly totalitarian, European history provides the model for the political reconstruction of the Western world. This historical map of Europe circa 1300 should be the ideal for those opposed to the corrupt and now bankrupt nation state and the system of international political and financial governing bodies and organizations that seek the elimination of all regional and local sovereignty.

The map shows that Europe at the time and for many years afterwards was comprised of numerous political configurations – principalities, duchies, confederations, and city states. Instead of a few centralized nation states that currently dominate the landscape, Europe was, for the most part of its history, politically decentralized–which explains not only the Continent’s tremendous economic growth, but also its unparalleled cultural achievements.

Monarchical style governance was the most popular form of rule during the period; and despite the negative modern bias against kings and queens, there was far greater personal freedom than there has been in the “democratic age.” More importantly, warfare, when it was conducted, was far less destructive in loss of life and that of wealth and property than the horrific contests that have since taken place. Moreover, the monarchical age was one of metallic money, which proved to be difficult to manipulate by the political classes.

Political and economic theory has long since shown that decentralization results in greater individual liberty and economic growth. A multitude of independent states and sovereignties is a far better check on tyranny than the supposed “checks and balances” of modern constitutional democracies. Even the much celebrated “separation of powers” concept adopted by most constitutional republics has not prevented the rise of the “total state.”

Numerous states provide the opportunity for the oppressed to “vote with their feet,” expatriating from draconian regimes. The threat of population drain and thus a reduction in the tax base is a far superior check on state power.

A number of small states makes it unlikely that a fiat paper money system, in which the world currently suffers under, would emerge. It would be extremely difficult for a dominant monetary authority to coerce and get a multitude of states to agree to accept a single currency outside of their control. Even the Euro almost failed to come into existence; and had Europe been more decentralized, the “Euro experiment” would have never been attempted.

Unfortunately, under the current ideological mindset, the breakup of the nation state into smaller units does not seem likely. Social change typical occurs after there has been an ideological shift, and the present dominant political paradigm is that of statism. However, an economic collapse or the continuing fall in living standards could lead to the breakaway of regions from their nation-state overlords.

Those opposed to the current world order need to redirect their efforts away from “reform,” electoral politics, or lobbying for favorable court decisions and instead focus on the development of organizations, the forming of alliances and relationships whose end result is the creation of new autonomous entities outside the hegemony of the nation state.

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The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by WesternJournalism.com.

This post originally appeared on Western Journalism – Informing And Equipping Americans Who Love Freedom