Is the Fed Due for Downsizing?
By Anthony Wile - November 21, 2015

Politico tells us that the "Fed pushes back as Congress eyes its billions" and that "Congress is aiming to take billions out of the Fed's accounts to help pay for a new highway and transit bill."

Beyond explaining the intentions of Congress in this regard, the article speculates on why the Fed hasn't been more vocal about Congress's intended raid on its coffers.


The Fed is balking, registering "strong concerns about using the resources of the Federal Reserve to finance fiscal spending." But members of Congress who consider the Fed money to be the only politically feasible way to fund a long-term transportation bill are wondering why the central bank didn't try to stir up opposition sooner.

The Fed has clearly been in Congress's cross hairs since at least July. Congress has until Dec. 4 to vote on a bill, whether it be a long-term deal or another temporary patch.

The article quotes Rep. Bill Huizenga, a Republican from Michigan as saying he doesn't understand why the Fed waited until so late to register objections. He suggests that the Fed wanted to be neutral regarding Congress's intentions, though the Fed is "not neutral or quiet on a number of other things."

To explain the Fed's lack of objections, lawmakers and aides have claimed that the Fed was faced with a kind of "either/or" situation regarding resource raids.

Congress was considering siphoning off Fed dividends (paid out to banks) and this was the alternative to confiscating a portion of the surplus account – which the Fed preferred. From the Fed's point of view, having Congress drain US$29 billion out of a US$4 trillion balance sheet is apparently preferable, the Politico article suggests.

But this still leaves unanswered the question of why the Fed hasn't fought harder. We've argued in the past that the Fed is a beleaguered institution in retreat on a number of fronts. A troubled institution may simply not have the organizational firepower to take on so many battles and critics … or perhaps Fed officials are cognizant that they need to retain what little credibility they have left to expend on really important issues.

The most important issue from the Fed's standpoint is probably a renewed challenge from Senator Rand Paul, son of famous libertarian congressman Ron Paul. Paul has resuscitated an "audit the Fed" bill that might seek to establish, among other things, the firms around the world to which the Fed has lent substantive funds.

There are two issues here: One, apparently the Fed made short-term loans in the billions or even trillions to overseas firms, mostly in 2008 – loans its charter may not permit. Second, the Fed has apparently never received payment on some or many of those supposed short-term loans. Unearthing this information, even part of it, might further damage the Fed as an institution and increase pressure for more Congressional oversight.

On the other hand, as ZeroHedge tells us, perhaps the "Fed Shouldn't Worry About Losing Credibility: It Already Lost It."

This article was posted at the site in mid-September and revolved around the issue of whether the Fed would or would not hike rates. "Either outcome has become a losing proposition," the article stated.

The reason for this perception was the article's suggestion that no matter what, financial markets around the world would perceive the Fed in a negative light that might translate into negative performances.

If the Fed does not hike, it will admit all its caveats about data-dependency (in an economy with 5.1% unemployment and a record high number of job openings) was nothing but a lie, and again expose itself as a muppet of the wealthiest market participants.

This is certainly a good description of how many view the Fed. Of course, we know now that the Fed supposedly decided not to hike because of instability generated by Chinese stock market volatility.

Likewise, apologists are already peppering the Internet with cautions about the Fed's further deliberations this year, claiming that the Fed cannot hike in 2015 at all because the Paris bombings have simply made markets too volatile.

The ZeroHedge article concludes with the statement, "It appears the Fed no longer cares about doing the right thing for a very simple reason – the Fed no longer is worried about losing credibility." And perhaps the reason why the Fed no longer cares is encapsulated in "a survey of 150 institutional RBS clients and investors [that] showed … two-thirds felt the Fed already had little-to-no credibility," according to the article.

Where does an institution like the Fed go from here? I'd suggest that the same Western leadership that created our current central banking system worldwide is not patient with institutions that have outlived their credibility.

We've pointed out in past staff reports that people's trust in the US Congress is in the single digits and that around the world people are generally losing faith in regulatory democracy. The solution, we've suggested, is a transition to global technocracy, a system in which nation-states and multinational corporations provide leadership within a more globalist context.

Likewise, I'd argue, the Fed is destined to be replaced by a more globalized central bank, perhaps an offshoot of the International Monetary Fund. Or perhaps the Bank for International Settlements will be reshaped with new responsibilities. Either way, it seems to me the Fed is "damaged goods" and as such is due for at least a downsizing and maybe more.

As this plays out, no matter the ultimate outcome, markets will become significantly more volatile than they are even today. Profit prescriptions, among others, will surely involve investments in pre-public opportunities that are not directly exposed to public marts – and also "lifestyle solutions" including precious metals, second homes, second passports, etc.

We are going through a momentous change in the world's economy – due to what we have called the Internet Reformation – and each of us has the duty to protect our portfolios and our loved ones security with increased vigilance. These are not hypothetical statements, unfortunately, as we have already seen.

You don’t have to play by the rules of the corrupt politicians, manipulative media, and brainwashed peers.

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  • Danny B

    All the world’s economists seem to have studied from the same book. That is why none of them have any idea of what to do. That is why they are incorrect time and time again. Here is an excerpt from their holy book.
    “Chapters 2 and 3 employ a neoclassical growth framework to study
    monetary phenomena. The neoclassical model is one in which growth is
    exogenous and money has no effect on the real economy’s long-run”

    Page xix http://www2.um.edu.uy/dtrupkin/Walsh.pdf
    This is neo-Keynesian claptrap. Growth is exogenous? Bunch of bozos.
    The bible seems to consider that population growth is continuous. It seems to believe that prices are stable even though different natural resources become more expensive to extract. Just like the global warmers, they espouse a much-simplified story because they don’t have the brains to understand reality

    • Don Duncan

      “…they don’t have the brains…”. It’s not a matter of intelligence. It’s professionals rewarded for not questioning, promoting lies, therefore it is more accurate to say they lack integrity, both intellectual and personal. Keynes was a genus who concocted a rationalization for the biggest wealth transfer in the richest country, later spread worldwide. It was only a matter of time. Once power is transferred to an elite, that elite will find increasingly effective ways to expand its power for personal benefit, until the parasite kills the host. In the end, everybody loses, i.e., less wealth exists, but it is more concentrated, and that is the goal of theft.

      I blame the thieves, but I blame their victims more. People who renounce their responsibility to self govern will be exploited. They may refuse to acknowledge their mistake, perpetuating their oppression, but they cannot avoid the results of their immature self slavery.

      • Marten

        Well said….everything is about “responsibility”

  • Danny B

    Had to break it up. I found an excellent article on the FORM act. There is even mention that congress has the right to coin money and regulate the value. The big surprise is something that Volker said.
    “Paul Volcker, who doesn’t support the bill but nonetheless articulates the logic of it.
    “By now I think we can agree that the absence of an official,
    rules-based cooperatively managed, monetary policy system has not been a
    great success,” the committee quotes the sage as saying (he made the
    remark in 2014). If the Fed does not want to reform itself — which is
    what the Congress is asking it to do — the result will eventually be
    less voluntary. Or maybe the Congress will start looking at the most
    logical and radical reform, the gold standard.”
    “Why is Congress itching for more oversight of the Fed? The reason is
    that the Fed was culpable in the crisis of 2008. And there is a growing
    sense that errors by the Fed itself — with quantitative easing and zero
    interest rates — have retarded the recovery, turning the crisis into the
    Great Recession.”
    Congress has VERY low approval but, they were bameless in the 2008 crash??? I think that the operative word is CLUELESS. They are trying to put the heat on the FED. Since WHEN is the gold standard the most logical reform?

    • robertsgt40

      Nation was founded on gold/silver standard. There’s a reason the founders left congress in charge of money. They knew what happens when a privately owned central bank is in charge of issuing the nation’s currency at interest.

  • robertsgt40

    Downsizing no. What the Fed should be slated for is the chopping block. The Fed(like its EU owners) was created to transfer the nation’s wealth into the hands of of the few. Mission Accomplished. That the Fed has scheduled an emergency meeting Monday apeaks volumes as to how close we are to implosion. Sow the wind. Reap the whirlwind.

    • Danny B

      “”First in private conversation and more recently on the record. Ben
      Bernanke, past chairman of the U.S. Fed, said to Jim Rickards, author of
      Currency Wars, in Seoul, South Korea in 2015: “The international
      monetary system (dollar based) is not coherent.” And he added, “We need
      new ‘rules of the game’.”

      • robertsgt40

        All fiar currencies meet the same fate eventually. They return to their intrinsic value. Zero. All Ponzis collapse. This will be no different. Just uglier with global impact. Not good.

  • gamathers

    “Likewise, I’d argue, the Fed is destined to be replaced by a more globalized central bank, perhaps an offshoot of the International Monetary Fund.” Sure let’s give the power to the bankers globally so they can be more corrupt on a global scale. Seems like biblical prophecy of a one world system is coming to fruition.

    • Arguing that’s what is destined is not the same as suggesting that’s what should happen. Simply an assessment of the likely situation.

      • natural organic human

        “The solution, we’ve suggested, is a transition to global technocracy, a system in which nation-states and multinational corporations provide leadership within a more globalist context.”

        Please help us understand, Mr. Wile, just exactly what you are implying. Is this the inevitable Hegelian solution we will be given whether we like it or not? Have we no alternative? Is there no hope that our massive numbers cannot overwhelm and overcome humanity’s most treacherous foe and move toward a more natural, decentralized form of societal organization? Or are you pressured to use your platform to soften up the DB’s constituency of libertarians and freedom lovers, creating a narrative designed to ultimately lead to resignation and defeat? The first alternative is, of course, horrifying and the second would be a terrible disappointment.

        • As has already been noted, the comment was not an endorsement of a specific sociopolitical evolution, merely an observation about what may – or may not – be in store. See here:


          • natural organic human

            “As regulatory democracy
            gives ways to increasingly complicated forms of regional and global
            governance, it is the technocrat who is elevated as the ideal manager.
            He has the degrees, the interpersonal skills and the academic knowhow to
            “manage” hugely complicated political programs. The root of this modern, expanding disaster must be traced back to central banking itself.”

            Your quote from the linked article above. Thank you.

          • What is your point?

          • dave jr

            The DB is simply pointing to the developing realities, just one of such is this:
            After being around this site for a while, one would know the DB does not endorse Technocracy.

          • Thanks, Dave. Of course that’s obvious but, as a guest in our “home,” Mr. two-names is apparently choosing to bring into question the integrity of the DB, and seems to be looking for snippets of text to “prove” his point. Perhaps that’s a mistaken interpretation, which is why we asked him directly, “What’s your point?” We’ll be interested to learn the answer to that.

          • natural human

            Sorry for the confusion. You misinterpret my second snippet. It was posted as acknowledgement that you have written about the horrors of technocracy. I can see now why you misunderstood the point of my second quote.

          • Okay. Thanks for answering.

      • gamathers

        Thanks for the clarification.

  • John Lock

    The author needs to do more research before making such drastic mistakes and misrepresentations. The Federal Reserve Board returns huge profits to the Treasury general account each year. Congress spends that profit as it wills. The Federal reserve banks are private but the Board of Governors are appointed by the Executive and they have the control over all monetary policy and report to the Treasurer.

    The Congress has total power over the system and can change how it functions, alter powers and even close it down if they desire.

    • Here are some more links on the issue. Congress may have “total control over the system” but “Congress” still has to decide what to do.




      But this is in a sense an ancillary issue. Our interest – the reason for this article – lies in the evolving challenges to the Fed. Because of public sentiment and Fed mishandling of its (admittedly indefensible) monetary brief, it should be increasingly apparent that the status quo is not going to last much longer.

      We’re simply alerting our readers to this and reminding them when the central banking system shifts worldwide, as it must at some point, there will be momentous changes to the way individual nation-states operate economically. Forewarned is forearmed.

      • John Lock

        The responsibility lies first with the voters then with the Congress for spending more than they can take from society and industry. Like individuals if you misuse your credit cards there comes a day of reckoning. That day is soon approaching and the Fed is doing the wishes of Congress, it is not the fed doing all this on their own.

        So, the only answer will be the massive printing of currency which will derive down the value and permitting a restart like Germany, and most of the South American nations. If the currency is made $ 100 for every today dollar the debt is reduced by 100% and revenue will go up as well.

        Then our only chance will be to industrialize. I wrote this idea many years back but today is it a real option to solve our debt to income issues and restore the economy.

        We put millions of skilled workers on manufacturing jobs building 500 to 1,000 Nuclear power plant of a low cost standard design. This will provide all the energy to accomplish a full restoration of our industrial base. How will this happen you ask?

        First we “MINE” the oceans for gold, silver, copper, uranium, methane, manganese and other valuable minerals and metals. It has been estimated that it will be profitable to mine gold from the seas at around $ 3,000 per ounce. Second we use cheap nuclear power to extract these metals which could make a profit to pay off the national debt. Third we use the byproduct “WATER” to farm the huge vacant dry south west feeding the entire planet with low cost food.

        Finally we use the cheap nuclear power to build factories to manufacture everything the entire planet needs and we return to zero unemployment and can pay good wages because we have free energy that makes a profit in it’s creation.The money generated can payoff all debts, build nuclear reprocessing plants, research and develop a system to render nuclear waste harmless.

        Just think, full employment, no energy crisis ever, gold to make money valuable, make the dollar the strongest currency on earth, end inflation, end government debt. Just imagine “AMERICA REBORN AND THE DREAM FULFILLED!!!

      • John Lock

        You always do first class work.
        The Federal Reserve is the most misunderstood agency on planet earth. As the Hill article said the 6% is only accrues on the value of the STOCK purchased by the member banks which is a very small amount – most believe that it is on the total value of all Treasury bills and bonds.

        Notice the zero hedge nor others mention the total value of the stock in the Federal reserve system. This is what the 6% is paid on. If it operated as many believe then the banks would not buy T-bills and treasury bonds which pays 1 to 3 %. They would just increase their reserves and earn 6%.

        The Fed gets blamed for doing as Congress instructs and they never blame Congress.

    • Praetor

      You speak of who is sovereign. Their be only one sovereign, and its not the fed board, treasury, congress nor the executive branch. This be the 21st century and the final march to one world governance is in its final stages. Past history will become meaningless in the new paradigm. When an organization or group of people can control the entire globe (earth), they become the new sovereign’s, and all others become meaningless!!!

      • Danny B

        You’re speaking of God, I presume,,, or maybe speaking of mother nature. The Royal Astronimical Society reports that withing 30 years, earth will go into a minimum like the Maunder minimum. Mother Nature bats last. 🙂

        • Praetor

          No. I speak of those who institutionalized war, those who build-up and then destroy civilized societies, so they can call themselves sovereign over all the other sovereigns. That is who I speak of!!!

      • Some would disagree, Praeter. Yes, there be only one soveriegn, and it is each individual.

        • Praetor

          Of course, stated that myself, here on the DB many times. But we be meme watchers, and how that plays into the future of our world, and how to overcome the control freaks of the one state, for they will not stop till they rule the roost. The Unseen action of human liberty be their nemesis. That is what makes them a bunch of savages, and they need to be put back in their caves from where they came!!!

  • Jose L

    “We’ve pointed out in past staff reports that people’s trust in the US Congress is in the single digitsp and that around the world people are generally losing faith in regulatory democracy. The solution, we’ve suggested, is a transition to global technocracy, a system in which nation-states and multinational corporations provide leadership within a more globalist context.”

    Worth repeating again (and again)…would it be an oversimplification to state that this “solution” is to be the provided solution to nearly every single socio-political issue in the current public discourse? If you look at nearly every major world issue through this context, nearly everything makes perfect sense.

    But this is the first time, I heard anyone suggest that the Fed attacks (and your newly coined term – Fed downsizing) are playing into the broader trend towards globalization and are also the result of an impatient elite looking to “rebrand” or shift its control. Your point offers a provocative insight and is a trend I will continue to observe for its veracity.

  • Ernie Hopkins

    Tend to agree with Jose L and think the article (while very good) could have hit harder on this. This is deliberate. Have to get rid of bational or regional institutions to replace them with the one world government agancy to rule them all. This is happening in all fields. Not a goofd fay for Liberty.

  • Praetor

    Absolutely correct. Fed destined to be replaced. Maybe this be the greater reason for no or almost no interest rates hikes. If we’re to have global governance, we most also have markets and financial global controls. That leaves the fed to be under the control of the one bank as the one state is working to be in a command and control position of the many country states, the one bank is asserting its position of command and control over the worlds reserve banking system. The 21st century is going to be a century of world government and all its pieces assembled and become a cogent organization. The problem the globalist mob organization has is some of ‘we the people of earth’ do not want global government nor any kind of tyrannical liberty sapping governance. All the worlds reserve banking system will be weaker. But their true colors (loyalties) will come to light and those loyalties do not lay with the countries of their origins, their only loyal to the one bank, just as all the county states most pledge allegiance to the one state and become apart of the NWO. It amazes me how people are so easily manipulated and deceived!!!

    • Samarami

      The reason for public whinging and whanging around talking, promising, wailing and gnashing teeth — but never coming to grips with an interest rate hike has to do with the impossibility of satisfying the interest on the trillions of “dollars” of debt. Even with fiat, digital script — an illusion created from nothing — even with numbers plugged into the air in terms of trillions. I guess we might as well fantasize quadrillions and perhaps quintillions, because these numbers are beyond even the most brilliant of us.

      How long can an illusory bubble amounting to religious faith be kept afloat? Until a critical mass of individuals lose that religious faith. It’s in the cards, I believe. Abstain from beans, my friends. http://voluntaryist.com/lefevre/beans.html#.VlD567_QNi0

      Let’s let ’em down easy.


      • Praetor

        That is the reason for fear. The faith may be lost, but, fear will keep them inline.

  • Rojelio Febrero
    • Samarami

      Poignant quotation from Rojelio Febrero’s linked article:

      “The bank hath benefit of interest on moneys which it creates out of nothing”

      ~William Patterson, founder of the Bank of England in 1694

      For some reason I began reading Mr. Wile’s article with mirth. Not mirth toward Mr. Wile, mind you. Mirth at the religion that has transcended me, you, Anthony Wile, all those who proclaim “atheism”, as well as those who profess this or that brand of faith. And all in between.

      I’m carrying around with me some pieces of paper on which are printed pictures of dead Caesars (called “presidents” in this part of the world). I know that by themselves they contain the approximate worth of a second tail on a dog. Correction: a dog with two tails would probably bring a pretty penny — and just one US penny (those minted prior to 1982) contained 3.11 grams, 95% of which was copper, before the psychopaths in 1982 “devalued” the US penny to 95% zinc (literally worthless compared to copper). This was in keeping with the science (faith) of thievery by replacing “honest money” with digits and chits and scripts with values of zilch.

      “Honest money” is another joke for another topic at another time. Because, due to our willingness to believe, it is all fiat (ordered by the king). Not to be duplicated or “counterfeited” (ha ha ha). Reread another excellent writing from the past by Mr. Wile:


      However, I know the folks down at the grocery store will gladly exchange bread, meat and bananas for enough of those hallowed notes of debt. Before I allow myself to become too hungry I’ll bike down to the store and procure a supply viands to quell hunger and satisfy needs. I’ve been car-free for 8 years now, so I bike to the store — keeps me out of the nursing home and sustains me as the healthiest 80-plus year-old in my city. I’ll pull out my wallet and hand over some of those scripts to settle my account with the grocer. Since s/he and I share the same religion, we’ll be mutually satisfied with the exchange. I know s/he has faith in all those dead Caesars.

      But back to religion. Whenever any of us sit down to write about or discuss economics — news of the day, often centering around that topic in one way or another — we’re in fact expressing our belief in zilch. In other words, a religious belief. None dare to admit it. But that’s what it is.

      Someone(s), somewhere(s), in past eons, realized it would be advantageous to keep “our forefathers” alive and producing; rather than raping all the women, slaughtering all the men, women and children, leaving their carcasses to rot in the desert sand. That we would show gratitude for the sparing of our lives by producing “for the country”. So, a “family of nations” arises. Religion.

      Some years ago a few psychologists put a name to this tendency to love and “voluntarily comply” with the conquerors — Stockholm Syndrome: https://en.wikipedia.org/wiki/Stockholm_syndrome This would serve to make it appear that capture bonding was rather of an isolated reaction in 1973 by a few captives in an obscure robbery in Sweden — not an all-pervasive religious bonding to the king that would give permission for the atrocities of war and federal reserve “banks” and “voluntary compliance” to income tax swindles.

      Even use of the term “the fed” is religious in nature. As though “the fed” is a living, breathing entity. One of the DB writers recently described the phenomenon as “…psychopathic idiots, gathering from time to time in luxurious hotels around the world, eating in fine restaurants, discussing billions and trillions — deciding upon percentage points of interest…”, etc etc etc — I may have the wording skewered a bit.

      But few of us can even comprehend “a billion” — of anything. And to talk about this being some sort of a “resource” — The Fed lending billions — yea trillions — to mindless abstractions (“countries”) is nothing more than an overwhelming religious thought process. And I have the eerie feeling that I will be alive to witness it all come crashing down. Well, it’s not a “feeling” — it is a hope. A hope that keeps me moving along instead of sitting back like many of my vintage.

      “…Likewise, I’d argue, the Fed is destined to be replaced
      by a more globalized central bank, perhaps an offshoot of the International
      Monetary Fund. Or perhaps the Bank for International Settlements will be
      reshaped with new responsibilities…”

      I have faith that the internet reformation ( http://www.thedailybell.com/definitions/params/id/2195/ ) will stand in the way of that taking place. Will a “critical mass” of ordinary folks be inspired and regimented freely to block it??? Sam

      • It is all just part and parcel of the cult belief in the religion of ‘the state’. Paper money is a good one. One upon a time, the knowledgeable Zoroastrianism priest class, known as magi, would write down, on a clay tablet I suppose, a spell or incantation with ‘magical’ powers that you could take away with you, in your pocket. Apparently the people did not necesserally even need to know how to read it; all they needed to know was that it had power. Not so much really changes from one era of man to the next it appears.

        • Praetor

          The reason for no change from one era to the next. Once upon a time, people past down their wealth and power to their prodigal sons and daughters. Those that have descended from the PTB from the past have been educated not to squander their wealth and power past down to them from their ancestry, and that be the reason for no change, just the same old same old, THING!!!

          • The who is who family tree, when it comes to the real power, appears to be rooted in the ‘black nobility’.

            See: The Committee of 300: A Brief History of World Power… Venetian Black Nobility, Roots of Today’s Ruling Oligarchy
            By Dr. John Coleman – http://investigate911.org/Oligarchy.htm

          • Coleman may be “iffy.”

          • Only ‘appears’ to be rooted….

          • natural human

            Pray tell. How? His assertions are indeed fantistical by present standards of historical understanding. But aren’t present standards just the propaganda of the victorious, and would it not require a nearly unbelievable narrative to explain how mankind ended up in its present condition? The assertions of his work are certainly not implausible.

      • Rebecca

        I have no faith. I am using up monopoly money to pay my mortgage, and transform my land into a food and water producing oasis. The rules against self-sufficiency increase apace. I commend your bicycling, my 61 year old knees won’t take it.

        • allenwoll

          If you wish to achieve “self-sufficiency”, find some isolated place remote from and cut off from ANY civilized forces at all and HAVE AT IT ! ! ! . Tell us where you go and we will put up a nice white wooden cross over your remains not long after. . Rebecca, THERE IS NO SUCH THING POSSIBLE IN THE REALM OF THE PRACTICAL ! ! ! . Even the cave men had tribes. The best that man can possibly achieve can only be achieved via COOPERATION ! ! !

          • Self-sufficiency is not the same thing as isolation, nor did Rebecca state she was isolating herself.

          • allenwoll

            Do you and Rebecca speak of ECONOMIC Self-Sufficiency or total Material Self-Sufficiency, economics not in question : The Lost Desert-Island Life ? ?

          • How could economics NOT be part of the equation no matter how one defines self-sufficiency? Obviously, it’s going to be, practically speaking, defined differently for each person based on their own goals, situation, etc. Again, Rebecca said nothing of isolating herself … Do you have some actual comment to contribute to this conversation or re. the article you posted to? If not, what IS the argument that you’re trying to start?

    • As mentioned previously, please include a description of what it is you’re posting when you post a link, rather than simply directing people away. Thanks.

      • Rojelio Febrero

        Sorry, I’ll remember next time …

  • Danny B

    “We’ve pointed out in past staff reports that people’s trust in the US
    Congress is in the single digits and that around the world people are
    generally losing faith in regulatory democracy. The solution, we’ve
    suggested, is a transition to global technocracy, a system in which
    nation-states and multinational corporations provide leadership within a
    more globalist context.”
    Global technocracy will never work.
    As wages in the West slowly dropped, industry worked harder and harder to be more efficient and meet the lower purchasing power of it’s intended clients. All the trade agreements are an attempt to remain profitable as the clientèle get poorer. We slide towards a global mean wage and buy less and less. We switched from retail to net buying. We punish any retailer with a high overhead.
    Containerized shipping throws everybody into worldwide labor competition. Capital goes to the lowest wage market for manufacturing. Look at the portion of profits that labor takes home, http://www.motherjones.com/politics/2011/06/speedup-americans-working-harder-charts
    Do you think that multi-nationals are going to pump up wages in the face of declining purchasing-power / shrinking markets??? Not a chance in hell.

    Why do you think that the CFR, et al have talked about helicopter money?
    Go out and try to sell a bbl of oil for $ 100. Go out and try to sell assembly-line labor for $25 an hour.
    Commodities are fixed price. In the search for market share, companies will look at wages to cut overhead and prices. A technocracy would cut wages and taxes to be more competitive. They would cut labor and pensions. Each cut impoverishes their target clientèle. A corporation has a mindless focus on productivity with little regard for consumption.

    “Let them eat cake” will NOT go over very well. We have cut out vacations. We have cut out having kids. The economy is shrinking everywhere that the core population is falling. No technocracy can reverse this. No technocracy can reverse the inroads of automation.

    “National Center for Children in PovertyChild Poverty. More than 16 million children in the United States – 22% of all children – live in families with incomes below the federal poverty level– $23,550”
    The damage is done. No technocracy can reverse this.

  • The ‘Fed’ is happy to pay to build roads, to cough up the cash, in preference to not having useful roads built. Not because they want to see the economic benefits, or please the political class, but rather for one simple reason: they want to charge road tolls so when they eventually hike their interest rates, up and up, there is a mechanism to gather the required revenue, (because the tax-tank is otherwise empty), plus if the ‘Fed’ is helping-out to fund the development of roads it adds a modicum extra of justification.

  • Bruce C.

    The piece above doesn’t make any sense, or at least it is very distorted. The Fed already reimburses the US Treasury of all of the interest payments it receives for the Treasury bonds that it holds, so there is no “siphoning off”, and there are no “excess reserves”. Secondly, the Fed – being the lender of last resort – can fund anything, including US infrastructure projects by issuing bonds. It’s a form of direct monetization of the US government’s expenditures/debts which is supposed to be against Congress’ own laws. Of course the Fed is reluctant to do that because it will probably never get repaid. But that is the next level of irony, because the Fed doesn’t need to get paid back because it is the issuer of the currency. It’s like stiffing a guy with a reliable counterfeiting machine. The problem for the Fed is maintaining the “confidence game”, the illusion that fiat currency has value because of what it requires to obtain it (i.e., an exchange of goods or services), not just creation out of nothing. Ironically, there is a way for the Fed/CBs to prolong the monetary status quo – by buying all public debt and then extinguishing it ( a “debt jubilee”). That would immediately relieve the entire country of trillions in obligations (to its bond holders, which would the Fed). Trouble is, people MIGHT start to figure out how precarious and fake the whole system is, but I am beginning to have serious doubts that most people would have any clue as to what that would mean. For that reason I consider that to be a definite possibility. Japan is already considering the ramping up of its government bond purchases such that the Japanese Central Bank (“the BOJ”) will own all Japanese government bonds by 2026 and could then waive them. The flip side to all of that, however, is that the Fed monetizes the US Treasury debt and then waives that too.

    • Congressional legislation has been floated to reduce dividends paid to banks. That’s the reporting – though, again, that was not the main point of the article.

      • Bruce C.

        What I’m saying is that Congress doesn’t seem to understand how the Fed works so it’s understandable that the Fed hasn’t “pushed back sooner” in response to stupid requests (hoping that someone will clear things up for them.) If Congress wants the Fed to sell $29 billion worth of bonds to give to Congress then fine (because that would effectively raise interest rates), and that is preferable to diverting some of the interest payments to the banks on their reserves, because that would effectively lower the Fed funds rate which would tend to lower rates overall.

        I’m not defending the Fed, or central banking in general. Quite the contrary, but it’s ironic that the loss of credibility in the Fed is due to misunderstandings. It should lose credibility, but not for some of the reasons people are giving. Unless central banking is criticized at the root a consolidation of the Fed and all the rest into one big global central bank will proceed. People need to understand and reject central banking fundamentally and in general and not just because the Fed made some bad calls and has gotten itself into a no win situation.

        • natural human

          Excellent point. Central banking is nothing more than a price fixing cartel disguised as a government entity. It is the most powerful glue holding the global consolidation meme together and it systematically transfers wealth from the earning, producing and saving class to the lending class, which is primarily the banks themselves. Central banking is quite possibly the most diabolically clever and massive scam ever foisted upon humanity. It is an entirely unnatural construct and like all other such consolidation schemes it must be torn out at the root and supplanted with a devolution toward systems and societal organizations of more manageable size. Of course, this truth is antithetical to the powers that shouldn’t be, and because they control the media educating the public to this most fundamental precept is not going to be easy.

  • Jacob

    I read the 44 previously posted comments. The critiques are pretty good. I’ve read many similar to them at this and other websites for many years. I ask myself, what has been gained? Maybe some understanding of the clever mechanisms of economic enslavement. Anything else? Buckminster Fuller allegedly wrote: ” You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” Accordingly, true economic justice can’t emerge and thrive from efforts to reform or destroy this present powerful resiliiant system. Bitcoin was a courageous step, but it has limited acceptance and legislative vulnerability. Barter clubs have the same limitations. The one thing that makes fiat money work is universal acceptance enforced with threat of violence by the state. Manufacture a new universal medium of acceptance that is fair and invulnerable and ….voila. I must leave that to greater minds.