BREAKING: Panic Spreading Across Financial World After People Wake Up To Nasty Surprise

Fears over China’s economy sent stock markets tumbling worldwide on Monday, the first trading day of the year.

The selloff was sparked by a new report showing China’s manufacturing sector contracted during the end of 2015, according to CNN Money. The Shanghai Composite index plummeted nearly 7 percent for the day before trading was halted, while the Dow Jones Industrial Average and Nasdaq fell over two percent on Monday morning.

“Even though the manufacturing report was disappointing, it’s just the latest sign of a slowdown in China. Analysts said selling in Chinese markets was also driven by other factors, including the scheduled lifting of bans on IPOs (public offerings) and sales by larger investors,” CNN reported.

“With headwinds both domestic and external, investors feared a hard landing may be inevitable and rushed to the exits,” Emma Dinsmore, CEO of R-Squared Macro Management, wrote in a client note.

“More fluctuations in global markets are expected now that the U.S. Federal Reserve has started raising interest rates. The government needs to pay more attention to external risk factors in the short term and fine-tune macroeconomic policies accordingly so the economy does not fall off a cliff,” Caixin chief economists He Fan said, according to Business Insider

Another source for concern with investors is the volatility in the oil markets caused by rising tensions in the Middle East. Oil prices spiked 3.5 percent after news that Saudi Arabia (the world’s second largest oil producer) was severing diplomatic ties with Iran.

Breaking: Federal Gov’t Just Made This Big Move For The First Time In 9 Years- And It Means…

The Federal Reserve, for the first time in nine years, voted to increase interest rates on Wednesday, marking a move away from the easy money, interventionist policy initiated during the financial crisis of 2008.

“The policy-setting Federal Open Market Committee [FOMC] voted unanimously to raise rates by 0.25% to a range of 0.25%-0.50%, not a whole lot but enough to test the still-weakened U.S. economy’s ability to absorb the higher borrowing costs that will follow the increase,” Fox Business reported

“The Committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident that inflation will rise over the medium term to its 2% objective,” the FOMC said in its statement released at the conclusion of Wednesday’s meeting.

The real world implications for the consumer include higher costs for borrowing money for big ticket items such as homes, cars, and appliances. The danger, if the Federal Reserve keeps interests rates artificially low for too long, is that inflation will be ignited, hurting consumers’ buying power and ultimately the health of the economy.

The historic norm for interest rates is 4 percent, the Washington Post reports.

Federal Reserve Chair Janet Yellen said on Wednesday that although inflation is currently low right now, the Federal Reserve believes that is due to “transitory factors,” referring to the current glut in the oil market among other things.

She also noted that it takes time for monetary policy actions by the Federal Reserve to work their way into the economy, so acting gradually now would avert the need for more drastic moves later, which could push the economy into recession.

Does The Bell Toll For The Fed?

Last week, Federal Reserve Chair Janet Yellen hinted that the Federal Reserve Board will increase interest rates at the board’s December meeting. The positive jobs report that was released following Yellen’s remarks caused many observers to say that the Federal Reserve’s first interest rate increase in almost a decade is practically inevitable.

However, there are several reasons to doubt that the Fed will increase rates anytime in the near future. One reason is that the official unemployment rate understates unemployment by ignoring the over 94 million Americans who have either withdrawn from the labor force or settled for part-time work. Presumably the Federal Reserve Board has access to the real unemployment numbers and is thus aware that the economy is actually far from full employment.

The decline in the stock market following Friday’s jobs report was attributed to many investors’ fears over the impact of the predicted interest rate increase. Wall Street’s jitters about the effects of a rate increase is another reason to doubt that the Fed will soon increase rates. After all, according to former Federal Reserve official Andrew Huszar, protecting Wall Street was the main goal of “quantitative easing,” so why would the Fed now risk a Christmastime downturn in the stock markets?

Donald Trump made headlines last week by accusing Janet Yellen of keeping interest rates low because she does not want to risk another economic downturn in President Obama’s last year in office. I have many disagreements with Mr. Trump, but I do agree with him that the Federal Reserve’s polices may be influenced by partisan politics.

Janet Yellen would hardly be the first Fed chair to allow politics to influence decision-making. Almost all Fed chairs have felt pressure to “adjust” monetary policy to suit the incumbent administration, and almost all have bowed to the pressure. Economists refer to the Fed’s propensity to tailor monetary policy to suit the needs of incumbent presidents as the “political” business cycle.

Presidents of both parties, and all ideologies, have interfered with the Federal Reserve’s conduct of monetary policy. President Dwight D. Eisenhower actually threatened to force the Fed chair to resign if he did not give in to Ike’s demands for easy money, while then-Federal Reserve Chair Arthur Burns was taped joking about Fed independence with President Richard Nixon.

The failure of the Fed’s policies of massive money creation, corporate bailouts, and quantitative easing to produce economic growth is a sign that the fiat money system’s day of reckoning is near. The only way to prevent the monetary system’s inevitable crash from causing a major economic crisis is the restoration of a free-market monetary policy.

One positive step Congress may take this year is passing the Audit the Fed bill. Fortunately, Senator Rand Paul is using Senate rules to force the Senate to hold a roll-call vote on Audit the Fed. The vote is expected to take place in the next two-to-three weeks. If Audit the Fed passes, the American people can finally learn the full truth about the Fed’s operations. If it fails, the American people will at least know which senators side with them and which ones side with the Federal Reserve.

Allowing a secretive central bank to control monetary policy has resulting in an ever-expanding government, growing income inequality, a series of ever-worsening economic crises, and a steady erosion of the dollar’s purchasing power. Unless this system is changed, America, and the world, will soon experience a major economic crisis. It is time to finally audit, then end, the Fed.

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

U.S. Economy Deteriorating At An Even Faster Pace

Despite doubling the national debt and the expansion of the money supply to some $8 trillion since the beginning of Obummer’s misbegotten presidency, the U.S. economy is once again in a free fall. Actually, there has been no real recovery, but a continual deterioration of living standards despite the lies and distortions from the financial media and government authorities.

Conditions, however, are now descending at an even faster pace.

Recently, the leading manufacturer of heavy equipment, Caterpillar, announced that job cuts would exceed 10,000 through 2018. Up to 5,000 employees will receive pink slips between now and the end of 2016. Retail sales for the manufacturing giant have slumped 11% between June and August.

While Caterpillar’s contraction is an ominous sign, a more telling indicator of worsening economic conditions came from the Federal Reserve’s refusal to raise interest rates at its latest FOMC meeting. Many commentators had speculated that the Fed would raise rates at least a quarter of one percent on the belief that the economy was strengthening.

The Fed, of course, based its refusal to raise rates on “international concerns” – China’s stock market selloff. The real reason is that the nation’s central bank understands, although it will not publicly admit it, that the economy is far too weak to “absorb” a rate hike, no matter how infinitesimal.

More importantly, the Fed cannot raise rates to any significant degree because the entire financial system, which is built on “cheap money,” would immediately plunge into a significant downturn similar to that of 2008, or worse. The federal government and many of the states and municipalities would default since they could not continue to finance their current profligate borrowing and spending patterns with higher interest rates.

Thus, the Fed is trapped in a world of zero interest rates for the foreseeable future. As economic conditions continue to worsen, the central bank will more than likely turn to another round of money printing like its infamous “QE” program.

While the Fed is locked into a zero interest rate policy, the Obama Administration and Congress remain oblivious to economic reality. A few years back, Obama and the one-time Democratically-controlled Congress tried a “stimulus” program which did nothing but increase the national debt. Also weighing down the economy is the disastrous Obamacare program, which will only become more burdensome as time passes.

Just as troubling, none of the current crop of presidential hopefuls, with one possible exception, has proposed or suggested any credible measure that will improve matters. None of the fundamental problems that are crippling the economy have been seriously addressed.

The reason why there has been no recovery is that the malinvestments and bubbles created during the last boom have not been allowed to contract and/or burst. Instead, the Fed pumped massive amounts of “liquidity” (money printing) into the markets, which kept these institutions (mostly banks) and their assets afloat.

A credit implosion will not come about “voluntarily.” The Fed will not increase interest rates, nor will the Obama Administration or Congress have the courage to cut spending to relieve pressure on the Fed to finance its unsustainable deficits and continue to inflate the stock market.

Instead, there eventually will be a monetary crisis surrounding the dollar, which will force interest rates to rise, which will lead to widespread defaults and bankruptcies and an ensuing depression which will dwarf every previous economic downturn in American history.

Alternative financial analysts have, for some time, pointed to the declining living standards not only in the U.S., but throughout the Western world. Egon von Greyerz of Matterhorn Asset Management has predicted some very unpleasant times in the not too distant future: “The coming years will not be easy. I wrote an article a few years ago called ‘The Dark Ages Are Here’ and I now really think they are imminent. These will be difficult times for most of us.”

Ultimately, the only way the U.S. economy will be turned around is through a change in ideology. The ideas and policies upon which not only the U.S. but the entire Western world’s economies are predicated upon must be debunked. Until the principles and beliefs of the current economic system are intellectually discredited, the U.S. economy will continue to stagnate and eventually collapse.

Follow me on Twitter.

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

Who Are The Champions Of The Common Man?

The media’s caricature of libertarians is a pendulum that swings from one extreme to another. One minute we’re grasping plutocrats, championing the privileged, and the next minute we’re losers living in our parents’ basements.

Not long ago, Michael Lind adopted the first of these, professing to find it risible that a libertarian might pose as the champion of the common man. Why, libertarians favor the super rich!

Hence, according to Lind, the idea of “libertarian populism” is absurd. Now I agree with Bob Wenzel that the last thing we need is another term, and that plain old “libertarian” suits us just fine. But it’s worth noting that the idea of libertarian populism – that libertarians are indeed the champions of the ordinary folk, because we are champions of all innocent people against the predatory state – is not ridiculous at all, as the great champion of regular people, Ron Paul, has shown.

Now to be sure, libertarians don’t favor anyone in particular. We don’t single out the poor, the rich, the working class, the industrialists, the conservationists, the farmers, the young, the old, the black, the white, or anyone else for special treatment. We are the champions of everyone against the biggest ripoff of them all.

This was the view of Murray N. Rothbard, Mr. Libertarian himself, who said in 1977:

Too many libertarians have absorbed the negative and elitist conservative worldview to the effect that our enemy today is the poor, who are robbing the rich; the blacks, who are robbing the whites; or the masses, who are robbing heroes and businessmen. In fact, it is the state that is robbing all classes, rich and poor, black and white, worker and businessman alike; it is the state that is ripping us all off; it is the state that is the common enemy of mankind. And who is the state? It is any group who manages to seize control of the state’s coercive machinery of theft and privilege. Of course these ruling groups have differed in composition through history, from kings and nobles to privileged merchants to Communist parties to the Trilateral Commission. But whoever they are, they can only be a small minority of the population, ruling and robbing the rest of us for their power and wealth. And since they are a small minority, the state rulers can only be kept in power by deluding us about the wisdom or necessity of their rule. Hence, it is our major task to oppose and desanctify their entrenched rule, in the same spirit that the first libertarian revolutionaries opposed and desanctified their rulers two hundred years ago. [Emphasis added.]

This is why the Jacksonians (who were, to be sure, far from pure libertarians, but that isn’t the point) in 1830s America adopted “equal rights” as their slogan. We know what “equal rights” means today, of course: expropriation of one group to benefit another, with the state skimming off its usual cut for itself. But in those days, equal rights meant only that no person or group received any state-provided advantage, since state-provided advantages always come at the expense of other people or groups.

This was considered the obvious program for the common man. While the Whigs pined for a national bank and various corporate welfare projects, the Democrats believed themselves to be champions of the workingman’s cause by opposing all forms of state privilege. By and large they did not counter with federal programs of their own.

But hasn’t the state lifted up the poor? The state’s efforts to alleviate poverty have had minuscule effects when they haven’t been counterproductive. The vast bulk of the conquest of poverty that took place in the twentieth century occurred well before the federal government had done much of anything. It occurred because the unhampered market naturally leads to an improvement in the general standard of living.

Meanwhile, as the country at large endures great economic distress, civilian employment has skyrocketed in Washington, DC, where the average federal worker earns more than double the salary of the average worker in the private sector. The parasite-host relationship that exists between the ruling few and the toiling many is rarely so stark.

It’s no coincidence that Murray Rothbard was also a pioneer in power-elite analysis. For instance, Rothbard’s essay “Wall Street, Banks, and American Foreign Policy,” published as a small book by the Center for Libertarian Studies, proposes that there might be a teensy bit more to American foreign policy than a disinterested dedication to promoting “democracy.”

Consider just a few paragraphs:

A glance at foreign policy leaders since World War II will reveal the domination of the banker elite. Truman’s first Secretary of Defense was James V. Forrestal, former president of the investment-banking firm of Dillon, Read & Co., closely allied to the Rockefeller financial group. Forrestal had also been a board member of the Chase Securities Corporation, an affiliate of the Chase National Bank.

Another Truman Defense Secretary was Robert A. Lovett, a partner of the powerful New York investment-banking house of Brown Brothers Harriman. At the same time that he was Secretary of Defense, Lovett continued to be a trustee of the Rockefeller Foundation. Secretary of the Air Force Thomas K. Finletter was a top Wall Street corporate lawyer and member of the board of the CFR while serving in the cabinet. Ambassador to Soviet Russia, Ambassador to Great Britain, and Secretary of Commerce in the Truman Administration was the powerful multi-millionaire W. Averell Harriman, an often underrated but dominant force within the Democratic Party since the days of FDR. Harriman was a partner of Brown Brothers Harriman.

Also Ambassador to Great Britain under Truman was Lewis W. Douglas, brother-in-law of John J. McCloy, a trustee of the Rockefeller Foundation, and a board member of the Council on Foreign Relations. Following Douglas as Ambassador to the Court of St. James was Walter S. Gifford, chairman of the board of AT&T, and member of the board of trustees of the Rockefeller Foundation for almost two decades. Ambassador to NATO under Truman was William H. Draper, Jr., vice-president of Dillon, Read & Co.

That’s just half of Rothbard’s analysis of the power elite surrounding just one president’s foreign policy team. Not exactly a cross-section of the downtrodden, in other words.

(Read Rothbard’s essay in its entirety, by the way, where he discusses some of the less glamorous motivations at work in the making of foreign policy.)

Who has benefited from the American warfare state? Who, that is, apart from those with political connections or government jobs? The question answers itself. Everyone else has suffered from the trillions of dollars looted from them so the Pentagon might have the power to obliterate every conceivable enemy city a dozen times over. We have suffered from increased indebtedness, and – because capital formation is undermined by the squandering of resources in war and in massive diversion of resources to the military sector – lower real wages than we would otherwise have enjoyed. We’ve suffered from the civilian research and development that never occurred because the brains behind it were siphoned into military research. The costs go on and on.

We can repeat this analysis over and over again, as we survey important components of American life. Who suffers under the federal government’s drug war? Not the wealthy and powerful. And who benefits? Certainly not the poor. But the tax-funded police forces that are awarded with more powerful weapons, more authority, and a seemingly endless cash cow, seem to do rather well.

Who angled for the Federal Reserve? The American public, or the bankers themselves? Anyone reading Rothbard knows the answer. It is not reasonable to expect us to believe that in just this one case, an interest group coming together to enshrine its preferences in law was doing so entirely for the public welfare.

The Fed, meanwhile, has not “stabilized the economy,” contrary to the usual propaganda, and in recent years gave rise to a housing bubble that wrecked the finances of a great many ordinary Americans. Then, adding insult to injury, it bailed out – on preposterous and indefensible grounds – some of the most reckless and irresponsible institutions.

What has the Fed’s economic planning accomplished for Main Street? The Fed’s planning, according to David Stockman, was based on the “wealth effect”: if the Fed pushed stock prices higher, Americans would feel wealthier and would be likely to spend and borrow more, thereby stimulating economic activity.

The results? Zero net breadwinner jobs created between early 2000 and early 2007. From 2000 to 2012, there have been 18,000 new jobs created each month. That’s about one-eighth of the growth in the labor force over the same period.

This is what the average person is supposed to be so grateful for?

The state, in short, enriches itself at the expense of the public it fleeces, all the while using its influence over education, the media, and culture to persuade the people that all this fleecing is good for them, that taxes are donations, and that bombing foreigners on ludicrous pretexts is “serving your country.” It urges the general public to consider the absence of the state as the most horrifying, inconceivable scenario of all.

The libertarian tears off the mask of the state, revealing it as the wealth-destroying, poverty-enhancing instrument of terror and expropriation it is. The advances that constitute civilization, libertarians argue, have resulted not from the orders of hangmen and other executioners, or the social planning of bureaucrats and academics, but from human beings cooperating voluntarily in ways that will amaze and astonish anyone who opens his eyes to see them.

And that makes libertarianism the most liberating political philosophy of all.

Llewellyn H. Rockwell, Jr. [send him mail], former editorial assistant to Ludwig von Mises and congressional chief of staff to Ron Paul, is founder and chairman of the Mises Institute, executor for the estate of Murray N. Rothbard, and editor of His most recent book is Against the State: an Anarcho-Capitalist Manifesto. Follow him on Facebook and Twitter.

This article was originally published at and is reprinted here under a Creative Commons license. 

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