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EXCLUSIVE INTERVIEW, Gold & Silver
Doug Casey on the Continuing Debasement of Money, Language and Banking in the Modern Age
By Anthony Wile - April 06, 2014

Introduction: Doug Casey has appeared on hundreds of radio and TV shows and has been the subject of articles in People, US, Time, Forbes, The Washington Post and numerous other publications. His books include The International Man, Crisis Investing (17 weeks at #1 on the New York Times Bestseller list), Strategic Investing (seven weeks on the NYT list) and, most recently Totally Incorrect. He's the Chairman of Casey Research (caseyresearch.com), which publishes about two dozen newsletters and numerous special reports. Doug Casey, who's travelled to over 175 countries, and his team have been correctly predicting major budding trends in the overall economy and commodity markets for over three decades.

Daily Bell: Hello, Doug. Please update us on your perspective regarding the US economy? Is it a recovery yet?

Doug Casey: I don't see a real recovery until they stop debasing the currency, radically cut government spending and taxation and eliminate most regulation. In other words, cease doing the things that caused this depression. And that's not going to happen until there's a collapse of the current order.

Things have cyclically improved since the height of the crisis of 2008-09. The trillions of currency units created by the Federal Reserve have jammed the stock market higher and kept the big banks from going under. What surprises me is that retail prices have not moved as significantly as I would have expected. The reason, I believe, is that most of that money is still sitting in financial institutions. It has gone into cash out of fear, into stocks because they represent real wealth with earning power and into various speculative assets like artwork and collectible cars. Real estate has recovered somewhat, not because of strong fundamentals but strictly because of money creation.

This isn't going to last because the way you get wealthy is by producing more than you consume and saving the difference – not by consuming more than you produce, and borrowing the difference. With the Fed keeping interest rates at artificially low levels, hoping to increase consumption, they're making it very foolish to save – when you get ½% or 1% on your savings. So people are saving less and they're borrowing more than they otherwise would. This is a formula for making things worse, not better. They are, idiotically, doing exactly the opposite of what they should be. Although, I hasten to add, I hate to pontificate on what the Fed "should" do. In point of fact, the Fed should be abolished; the market, not bureaucrats, should determine interest rates. We wouldn't be in this pickle to start with if the government wasn't involved in the economy. In fact, if it wasn't for the state, I suspect we'd all have a vastly higher standard of living, and would be colonizing the Moon, Mars and the asteroid belt.

I expect that we'll go out of the eye of the storm this year; it's overdue, actually. The analogy I like to use is that the leading edge of the storm was in 2007, now we're in the eye of the hurricane, and when we move into the trailing edge it's going to be much, much worse and last much, much longer than it was in the leading edge.

Daily Bell: Is Janet Yellen going to do a good job at the Fed? They say she's the second coming of Ben Bernanke but even more level headed. What's your take?

Doug Casey: I don't know what "they" really believe, but everything that I've heard her say indicates that she has absolutely no understanding of economics, sound money, or banking. If Bernanke was bad, Yellen's likely to be even worse. I pity her having taken the helm just now because I think her entire tenure as Fed chairperson will be full of catastrophic monetary and economic conditions. And she's likely to be blamed for it. Of course, it will be partially her fault because all of her policies will be wrong. But it will truly be the fault of what's happened for years and decades before, because of people who came before her. Her timing on being director of the Fed is terrible and there's nothing she can do about the situation. It's totally out of control at this point. Perhaps they appointed her because she's a woman, and it would be unseemly to hang a grandmotherly woman from a lamppost, the way they might a male bureaucrat, after this all blows up…

Daily Bell: Is she going to do away with Quantitative Easing? Will it matter?

Doug Casey: Well, Janet and I don't stay in close touch, but I presume she'd like to do away with it, as evidenced by the "Taper," and even go into reverse by selling all the paper they've bought. But that's impossible at this stage; they'll have to buy more, not sell. The Chinese, the Japanese – everybody is selling, trying to pass the Old Maid card of US Government debt, which represents return–free risk. Nobody other than the Fed is buying, and interest rates would skyrocket if they stopped. The more QE there is, the more distortions it will cause, however, making for a bigger disaster the longer it goes on.

One thing that amazes me is how they've created all these terms, like Quantitative Easing, and The Taper, and how the booboisie and the lapdog media unquestioningly accept them. Quantitative easing is just a euphemism for currency debasement, of course, and the taper is their word for inflating somewhat less. Quantitative easing – they've created this term so the destruction of the dollar doesn't sound so bad – and everybody idiotically parrots the term. It's shocking and disgusting the way the bad guys have captured the language that's used to discuss these things, just as the CIA came up with "terminate with prejudice" and the Soviets came up with "liquidate" as alternatives to an honest word like "murder." It's further proof to me that there's really no hope. Western society is corrupt to the core. Perhaps it needs to be flushed …

Daily Bell: Will the Fed continue to inflate the money supply?

Doug Casey: They have to, because with the huge amount of debt in the world – and the amount of debt in the world has increased something like 40 or 50% just since the Greater Depression started – if they don't keep increasing the amount of money in the world then nobody's going to be able to service the huge amount of debt that is out there. So I don't see anything changing in the years to come. They've truly painted themselves into a corner. They're caught between Scylla and Charybdis, and we don't have Odysseus steering the ship of state.

Daily Bell: There are those – especially these days – who don't believe that central bank monetary inflation matters. The argument is that commercial banks provide the monetary inflation via loans. What's your take?

Doug Casey: Both are very bad. Let me say, again, that the Fed serves no useful purpose and it should be abolished. Central banks create "super money" by buying government or other debt with new currency units that they credit to the sellers' accounts at commercial banks. That's the actual engine of inflation. But it's greatly compounded in the commercial banking system through fractional reserve lending – which would not be possible without a central bank. Fractional reserve lending allows banks to multiply the money supply several times. If $100 of Fed super money, freshly created, is deposited in a commercial bank like Chase or Citibank, then $90 can be lent out with a 10% reserve, the current number. That money is redeposited. They'll then lend out 90% of that $90, or $81, and then 90% of that $81, so it multiplies. Central banking and fractional reserve lending go hand-in-hand. Without a central bank, any bank that engaged in fractional reserve banking would be considered guilty of fraud and, when discovered, would be punished by a bank run, followed by criminal charges. The point to be made here is that the entire banking system today is totally unsound and totally corrupt.

In a sound banking system you have two types of deposits – checking account (or demand) deposits, and savings account (or time) deposits. They are completely different businesses. With demand deposits, you pay the bank to store your money securely, and write checks against it. A bank should no more lend out demand deposit money than Allied Storage should lend out the furniture you're paying them to store.

Savings accounts are completely different. Here you lend money to a bank, perhaps at 3%, and they relend it at 6%, making 3% to cover costs, risks and profits. A sound bank not only has to match the maturities of its deposits with the maturities of its loans, but must insure loans are both highly secured and self-liquidating.

These principles have been totally lost. Today banks operate as hedge funds. But it's important to understand the way banks used to work and should work. As an aside, if someone were to set up a well-capitalized 100% reserve bank in a tax haven, especially using gold as an alternative currency, it would be immensely successful in the years to come – when most all conventional banks will fail.

Daily Bell: Where are gold and silver headed?

Doug Casey: Back in 2001 I was telling people, "If I could call your broker and buy these metals for you, I would." Gold at $260 an ounce and silver at $4 an ounce were cheaper then, in 2001, in real dollars than they were in 1971, at $35 and $1.29, before the first big devaluation. Since then gold ran up to $1900, and silver to $50. It was a wonderful bull market from 2001 to 2010. Now they're $1300 and $20, respectively.

At this point they're no longer selling at giveaway levels, but I consider both good, sound value. Both metals have bottomed, and you have to be bullish. At this point you don't buy gold for spectacular capital gains the way you could ten years ago, but you buy it for prudence, for safety, for insurance, for savings – which are the most important reasons to own gold anyway. The same argument goes for silver.

Daily Bell: What would you suggest people do now with their investments?

Doug Casey: By all historical, normal parameters, the stock market is greatly overvalued. The trillions of new currency units that the Fed is creating are creating bubbles, and one of them is in the stock market. The biggest bubble, of course, is in the bond market – that's a super bubble.

So I'm not interested in the stock market, and absolutely not interested in bonds – they're a terminal short sale, perhaps the biggest bubble in history. Nor am I interested in real estate in any OECD country, because it floats on a sea of low interest borrowed money. Actually, we're in an economic twilight zone, where almost everything is overpriced and even holding cash is dangerous because inflation could just explode overnight. Not only does the dollar have no real value but the banks you keep it in are all insolvent.

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There are few sound investments out there. Today there are no investments; there are only speculations. And a speculation is an allocation of capital to capitalize on distortions caused in the markets by various kinds of political intervention. From the economist's point of view, the bubbles created by central banking are a disaster, but from a speculator's point of view they're a godsend. It's becoming harder and harder to be an investor; I define an investor as someone who allocates capital to productive business. It's hard to be an investor because you now have to spend more money on lawyers than on engineers and workers if you want to produce something. You're increasingly forced to be a speculator in today's climate. The markets are going to be extremely volatile, the economy is going to become very ugly, and it's going to make classical investing very hard.

Daily Bell: Tell us how your Argentine property is doing, La Estancia de Cafayate.

Doug Casey: As we speak, we've just had a large owners' event; owners are from 25 countries, and mostly successful entrepreneurs, libertarian-oriented, of all ages. There are about 60 houses built or under construction, in addition to 20 townhomes at the 5-star Grace Hotel we've co-ventured on our property. And last week 30 more potential buyers visited; eight joined the party as owners. So it's doing extremely well. Anybody who's in a position to, and who has any sense, will get themselves a second residence outside their home country. Political and geographical diversification are critical in today's world.

I like Argentina because they're quite used to handling the stupidities of government and nobody takes the state seriously. I like it because it's the eighth largest country in the world but only has 40 million people, and most of them live right around Buenos Aires. So once you're here in the provinces, in a quiet vineyard, in a grape-growing wine producing region, basically in the middle of nowhere with perfect weather – it's great. I'm delighted to be here with a vast array of amenities – like the superb golf course and world-class gym and spa – and really nice people to socialize with. The town has lots of sidewalk cafes around the plaza, and it's isolated from most of the bad things that are likely to happen in the world at large. Once you're out of the vineyards, you can ride your horse for 50 miles in any direction and not see another person. People should come down and take a look.

Daily Bell: How is Argentina doing? Is it coming back economically?

Doug Casey: Argentina itself, of course, is run as badly or worse than it has been the last 60 or 70 years, and they're destroying the currency again. But that's not only irrelevant to a foreigner living here, but beneficial. The cost of living is about 25% of what it is in North America or Europe, and the quality of life is higher. Eventually the Argentine government will reform, out of necessity, as did that of New Zealand. When I moved to New Zealand in 1999, mainly to play polo, it was about the cheapest country in the world; we bought a bunch of property. Now it's more expensive than the US, and we benefitted not only from the ultra low cost of living, but from huge capital gains on the property. The same thing could happen here in Argentina. But, in the meantime, the country is very nice, more European than Europe, in a good way, and extraordinary value.

Daily Bell: What about the BRICs? How about China? Are they headed for a soft landing or a hard one?

Doug Casey: Stock and bond markets all over the world are overpriced – with the exception of Russian stocks right now; they could be a very interesting speculation. I wouldn't touch anything in China yet, because all the Chinese banks are going to go bust. The Chinese have been more profligate inflating the yuan than the Americans have been with the dollar. It's fantastic what the Chinese have done since Deng liberalized the economy in the early '80s, but now's not a time to be in their markets. I'm not interested in Brazil; it's very expensive, and extremely bureaucratic – the government there is out of control. Remember, we're on the point of going back into a world-class economic hurricane.

Daily Bell: Let's turn to Russia, then. What just happened? Did the West provoke the Bear?

Doug Casey: Yes, of course. The US Government has been incredibly stupid and reckless, as usual. Everybody knows at this point – at least, I hope they do – that Crimea has historically been Russian for centuries, and it was only because of a gift in the 1950s by Khrushchev, who himself was Ukrainian, that it was taken out of the Russian SSR and put into the Ukrainian SSR. They had a legitimate poll where a large majority of the people wanted to go back to Russia from the Ukraine.

Of course, this whole idea of nation-states is a stupid construct, and if I was a Crimean, as a first step I would vote to be totally independent, not part of either Ukraine or Russia. Ideally the world should have seven billion independent little states. But that said, the Crimeans voted to go back to Russia – so the US has absolutely no business sticking its nose there. Anything that goes wrong is going to be the fault of the US government. They're meddling everywhere, even while they're on the edge of a catastrophic bankruptcy at home.

Daily Bell: What is Putin's future? Has he outsmarted the West or outsmarted himself?

Doug Casey: He's vastly smarter than Obama, who was just a small-time community organizer; I don't know how they come up with these people. It's not that I'm a fan of Putin, or any national leader that I can think of, but when it comes to both intellectual smarts and street smarts, he's totally outclassed the Americans. As long as the nation-state exists within the current framework, I think he did the right thing and is backed up by a poll of the people who live in the Crimea.

Daily Bell: Is the Great Game being resuscitated?

Doug Casey: I don't think it should be treated as a great game. And you shouldn't call it that, because it validates the machinations of these horrible people. You've got to remember there are two types of people in the world: people who want to control material reality and people who want to control other people. It's that second type who go into politics. They play games – here it's called the Great Game, which dignifies it in a way it shouldn't be – with other people's lives and property. It's been this way ever since the state was created about 5,000 years ago, and I don't think you should play games with other people's lives. Forget about the "great game"; it's a fool's game.

Daily Bell: Where is the West headed economically? Will it ever recover?

Doug Casey: On the bright side, there are more scientists and engineers alive today than in all of human history put together, and so technology is advancing more rapidly than ever for that reason. That's a huge plus. The second good thing is that the average person, at least those who aren't on welfare, tries to produce more than he consumes. That creates capital. Although he is discouraged in that by state policies, artificially low interest rates and the state provision of welfare, Social Security and so forth.

But I'm afraid that Western civilization reached its peak before World War I. World War I destroyed a huge amount of capital and, more importantly, it changed the moral bases of so many things. Then World War II institutionalized the State as the most important part of society – which is perverse, because the state is actually the enemy of civil society. I think Western civilization reached its peak in 1913, when it reached its maximum geographical extent. That was coincidental with the peak of its technological and philosophical influence on the world, much the way the Roman Empire reached its peak at about the end of the first century, then went down, slowly at first and then quickly. That's what's happening to the West. Relative to the rest of the world, and contribution to world production, our piece of the economic pie is getting smaller and smaller. If we have another serious war it would be absolutely smaller, and the final nail in the coffin. Meanwhile, the US, with its bloated military, is just itching for another war. It's out of control, and unlikely to change at this point. That's a big trend that is in motion that I think is going to stay in motion.

Daily Bell: Hence your decision to live in Argentina, away from much of civilization.

Doug Casey: Well, it's very civilized here, but away from any likely nuclear targets. It's very enjoyable down here, eating grass-fed beef and fresh fruits and vegetables. I pay my maid $500 a month to cook and clean and do everything for me, and a bit more for my groom, who takes care of my horses. It's the way life ought to be; I don't miss the US at all. And I don't have to worry about a SWAT team kicking down my door at 3:00 in the morning, either.

Daily Bell: How about Europe?

Doug Casey: Europe is in particularly bad shape. The place is a fascist/socialist disaster. It was possible for the average European to keep his head above water through tax evasion in the past, but now those governments have broken bank secrecy everywhere, and it will destroy a lot of capital. Europe, as I've often said, will be nothing but a source of maids and houseboys for the Chinese in a couple of generations. The US is little better. You've got to remember, the US today barely resembles the US of 50 years ago. It's changed that radically.

Daily Bell: Perhaps the question of secession efforts in Scotland as well as other places now is related to that. Is Scotland going to secede from Britain?

Doug Casey: I've said for years the colors of the map are going to be running, as Al Stewart sang in one of my favorite songs, "On the Border." I certainly hope the Scots get out of the United Kingdom. There's every reason why they should and no reason why they shouldn't.

And it's not just Scotland. This is one of the few favorable trends in Europe. It's also happening in Spain, in the Basque regions, and now in Venice and the surrounding region, where there was a poll in which 93% voted to leave Rome and the rest of Italy. And in Sardinia. Of course, Brussels and the government in Rome are going to disregard it. But when 93% of the people vote to do something, I suspect something's going to happen; it's a groundswell type of thing.

This is happening everywhere. Most of the countries in the world – all of those in South America and even to a much greater degree all the countries in Africa, all the countries in the Middle East, all the countries in central Asia – are all totally artificial constructs. They were put together by politicians in boardrooms, with little or no regard for ethnicity, language, or traditions, so most of these countries are going to break up because they serve no useful purpose. The "nation-state" is a really stupid and dysfunctional idea, and I'm glad it's on its way out.

That said, even the US, which from a cultural point of view is as much of a country as any place in the world, should actually break up into at least five or six regions. Canada should break up into at least five or six regions initially. But, again, my idea is to not just see 1,000 more countries in the world but 7 billion more countries in the world, if you follow my meaning.

Daily Bell: Until that happens, do you think some of the emergent political parties like UKIP will have more influence in the near future?

Doug Casey: I don't think politically; politics is the problem, not the solution. I think that the ideal solution is for every individual to opt out of the current system. When they give a war, you don't come. When they give a tax, you don't pay. When they give an election, you don't vote. You even try not to use their currency and their banking system. The ideal thing is to let the system collapse under its own weight as opposed to starting a new political party and then continuing to act politically, which is to say to use force on other people. That said, Nigel Farage is generally on the right side of the issue, so his political party would be preferable to any of the others that I know of in that part of the world. However, it's not an ideal solution.

Daily Bell: What do you think about private money?

Doug Casey: Well, bitcoin is a nice innovation, although it's useful mainly as a medium of exchange, not a store of value. And, of course, it has no utility in and of itself. I wish it well, but am inclined to wait for version 2.0. That said, I wish I'd backed up the truck when I was promoted on it at $15. Oh well, there's always another train leaving the station.

As for conventional currencies, there shouldn't even be things like the dollar, the franc, the marc, or the pound. Originally, they were just names for a certain amount of gold, in a given region. Then people started to confuse the paper currency with gold, which is actual money. That said, people should use whatever they'd like for money; the market will decide what's most acceptable and convenient. Chances are, in a free-market world that would be gold. It might be some other commodity, possibly silver. There really aren't any other good alternatives, that cover the five Aristotelian measures of a good money. But this isn't for governments to decide; it's for the markets to decide.

Daily Bell: Will we see private money again in our lifetime?

Doug Casey: I believe we will, because all over the world currencies are going to be destroyed over the next generation, over the next 20 years. People will go back to gold simply because they don't trust paper money, which will prove to be a costly failed experiment. It will be intellectually gratifying to see paper money disappear, although the transition to gold will also likely be scary, unpleasant, inconvenient and costly for a lot of people. But like I said, the intellectual gratification alone might be worth those passing tribulations. After all, we do live in an entertainment society…

Daily Bell: What might that look like and what could people be doing to prepare for that, now?

Doug Casey: Market risk is huge today, but political risk is even bigger. One indication of that was, when the banks in Cyprus went bust some months ago, the government essentially confiscated everybody's account above 100,000 euros, in what they called a "bail-in." You could see that happen absolutely anywhere. The same thing could be true of your pension fund. The government could confiscate that and tell you they'll give you something on the never-ever plan, like some form of Social Security in exchange for your private pension plan. It's already happened in a half-dozen countries, without very much press coverage.

When they start doing things like that, it's close to "game over." The world's economic/financial system is going to reset, and you don't want to have significant assets in a form that they can easily confiscate. So I think owning real estate in the right places in the world is important, as is having gold and silver abroad. You've got to be diversified politically and internationally. That's absolutely critical because if you aren't, you can't escape from your masters' tax farm.

You need several options. It seems like people haven't learned anything from what happened in Russia in 1917, Germany in 1933, China in 1948, Cuba in 1959, or Vietnam in 1975. Rwanda, Cambodia, Yugoslavia, Zimbabwe, Ukraine, Syria … there are lots of examples and these things can and will eventually happen almost everywhere. When the chimpanzees go crazy, you don't want to be where they are. You've got to have a Plan B. You've got to have a crib out of that political jurisdiction. Acting like a plant, and staying put, isn't a good survival strategy for a human.

Daily Bell: How can people live more prosperous lives with less impact from wars and military actions?

Doug Casey: Personally, having visited over 175 countries and having lived in 10, I had to decide where I wanted to settle. It came down, for me, to either the Orient or to Latin America, which are very different places. They're antipodal both geographically and culturally. Despite that, I like them both. But I decided I wanted to be some place with a very low population density, but all the advantages of modern technology, entirely self-sustaining, inexpensive, stable and with good weather. That's how I wound up here in Cafayate, in the Calchaqui Valley, where we have all the infrastructure a Renaissance Man would want but in a quiet and peaceful place, not near a city. It's like Aspen used to be. Hopefully, it will remain that way as the rest of the world devolves into war. And I do expect war is coming because these governments always like to blame somebody else for the problems they create. That's a big cause of war.

Daily Bell: Any other things you'd like to mention, books or publications, more information about what's happening at La Estancia de Cafayate?

Doug Casey: In terms of speculation, I'll take back something I said about there not being any bargains in the world. I actually just managed to put a little bit of money into a stock trading on the Mongolian stock exchange that is investing in North Korea that makes sense to me. There are always anomalies out there; there are always speculations. Recently, before coffee doubled, I was suggesting going long coffee vs. short Starbucks. My cattle herd here in Argentina keeps growing, and cattle are a truly great investment now – especially here. Next week, I'm flying to Albania to scope out what might be a major oil deal. Perhaps a mania will develop in the companies that are legally growing marijuana in Canada, a space where I recently made an investment. I'm getting involved in a private deal, to export jade from Guatemala to China. And, of course, I'm always looking for private placements with warrants in well-positioned mining explorers; I'm of the opinion there will likely be a super bubble in their shares, again, at some point.

So there are always situations that come up like that, always anomalies and exceptions out there. I'm just not interested in the kind of stuff they squawk about on MSNBC. When we re-enter the economic hurricane those blow-dried zombies are going to get what they deserve. Then again, almost everybody eventually does ….

Daily Bell: Thanks, again, for your time.

Doug Casey: It's always a pleasure.

After Thoughts

Doug Casey says a great many things we agree with in this interview. We wrote not long ago that Janet Yellen could end up living a nightmare given the precarious position of the Fed and the US dollar – and Doug says something similar.

He also points out that the terms the Fed creates for its increasingly insane activities are astonishing from a standpoint of euphemism and media acceptance. That the Fed – and the Bank of England – can come up with so many dishonest terms for currency debasement and that the mainstream media parrot them incessantly is one of the wonders of the age.

But for us, one of the best things in this article was Doug's lucid description of how modern banking ought to work versus how it IS working. He writes:

In a sound banking system you have two types of deposits – checking account (or demand) deposits, and savings account (or time) deposits. They are completely different businesses. With demand deposits, you pay the bank to store your money securely, and write checks against it. A bank should no more lend out demand deposit money than Allied Storage should lend out the furniture you're paying them to store.

Savings accounts are completely different. Here you lend money to a bank, perhaps at 3%, and they relend it at 6%, making 3% to cover costs, risks and profits. A sound bank not only has to match the maturities of its deposits with the maturities of its loans, but must insure loans are both highly secured and self-liquidating.

This is probably an excellent description of how one type of banking can – and should – behave. It's a lucid but terse description of real banking in the modern age, and as Doug says, its methodologies and practices have been basically abandoned.

Here at The Daily Bell, we've never taken the position that anything less than full-reserve banking is criminal. In a free market, we've always believed people should have a choice – and that the choice might be influenced by higher rates. In other words, banks engaged in "riskier" lending would end up compensating customers with higher returns.

Doug also points out that inflation is a phenomenon of monopoly central banking. In doing so, he makes clear that while money creation can take place at the commercial banking level, the entire process of fiat-money creation would collapse without today's egregiously active central banks.

This puts the lie to the recent study issued by the Bank of England that tries to blame inflation on commercial bank processes. Those who run central banks are growing increasingly desperate and looking to blame any other party – Wall Street, commercial banks, hedge funds – for their own misadventures and currency depredations.

But in the long run, history will record this Dark Chapter in the history of humankind as one generated out of the lie of central banking and the idea that ten good, gray men in a room can fix the price of money for the rest of us.

They can't. They don't. They won't. Thanks to people like Doug Casey for eloquently explaining the lie and reminding us once more that one day truthful economic and financial processes will be available once again, as before.

Posted in EXCLUSIVE INTERVIEW, Gold & Silver
  • Danny B

    Well Anthony, an interesting and very clear report. I see things just a bit different than Doug in regards to war.
    “China is at war with us.

    ““The Three Warfares is a dynamic three dimensional war-fighting process
    that constitutes war by other means,” said Cambridge University
    professor Stefan Halper, who directed the study. “It is China’s weapon
    of choice in the South China Sea.”

    “The unclassified 566-page report warns that the US government and the
    military lack effective tools for countering the non-kinetic warfare
    methods, and notes that US military academies do not teach future
    military leaders about the Chinese use of unconventional warfare”

    “According to the final Pentagon report, China’s use of Three Warfares
    is based on the notion that the modern information age has rendered
    nuclear weapons unusable and conventional conflict too problematic for
    achieving political goals. China’s goals are to acquire resources,
    influence, and territory and to project national will.”
    http://www.presstv.ir/detail/2014/03/30/356581/chinas-secret-threefront-war-vs-the-us/
    The report suggests that kinetic warfare is a thing of the past. That
    is fine with me. Economic competition demands efficiency. War has to
    bring gains of some sort if it is done for economic reasons rather than
    ideology. Blowing things up doesn’t bring gains.

    $2 billion long range bombers and $ 35 million fighter jets just don’t make economic sense.

    We now have 3D printed drones. Another thing that will shape the
    battlefield will be energy. We can’t waste huge amounts of energy
    fighting wars.

    • Don Duncan

      “China’s goals” are the same as every govt. since their inception. “…resources, influence…” are euphemisms for wealth & power. If you are trying to make the case that China has come to realize that war is not the best way “to project national will”, so what? War is still a fallback option. It is still “the health of the state”. It is destructive on net, but it, like govt., benefits TPTB. You seem intent on seeing governments as basically rational. The pursuit of wealth/power by violence (govt.) is not rational. Governments only back off on violence when they lose power and have to retreat.

      No matter how bad a political situation gets, war can make it worse.

    • polonius

      Blowing up $2B bombers and $35M fighter jets makes all the sense in the world if you are in the business of building them and/or the infrastructure necessary to keep the whole system spinning. Do you really think the Anglo-American economy could survive in its present form without perpetual war?

      • Hey you

        Yes, we could prosper without perpetual war, but the sociopaths in charge would not.

  • B.

    Yet another candid discussion stripping the artificial veneer of our politically manufactured society. DB continues to set the bar. Bloody good-show, DB and DC! Now, ‘gotta go… there’s an Argentinian steak with my name on it!

    • http://www.thedailybell.com/ The Daily Bell

      Thanks.

  • RED

    Some additional reading regarding Bitcoin that concurs with earlier pieces from the DB.
    If the IRS is truly an onerous and F_ _ _ _ _ T entity.

    http://www.wallstreetdaily.com/2014/04/02/bitcoin-4/

    • http://www.thedailybell.com/ The Daily Bell

      Thanks. There are fairly anonymous, non digital monies that have been available for thousands of years. They are instantly comprehensible and utile. Gold and silver are as relevant today as ever. Bitcoin is not the “new gold.” It is bitcoin.

  • Hugo

    Always a pleasure to listen to mr Casey, thanks for the interview.

    As always an off topic post from me. An amazing piece from the Guardian about the implosion of the MSM (papers) in Spain,

    ”Media revolution in Spain as readers search for new voicesOnline startups staffed by mix of veteran and young journalists challenge old guard amid row over media impartiality”

    ”To lose one top editor at a major Spanish newspaper may be regarded as a misfortune. To lose two looks like carelessness. But when Spain’s three leading dailies each replace their editors in as many months, it’s clear that something is afoot.”

    ”As Spain teetered on the brink of financial meltdown, Spaniards started demanding more accountability from their institutions, said Rafael Aníbal, a former journalist who now works in communications. “People went looking for sources of information that aren’t directly related to power.”

    ”The result, said former El País journalist Pere Rusiñol, is that it is now impossible to untangle the paper’s coverage from its financial situation. “You can’t have press freedom in a company that’s bankrupt and belongs to the bank.”

    “There’s a lot of evidence to show that it’s not possible to do any kind of journalism – or anything even minimally worthy of the name – in traditional media.”

    ”When El Mundo’s Pedro J Ramírez was ousted this year, the editor played up the notion that political forces had exerted considerable influence on the newsroom. In his final editorial as director of the paper he had founded 25 years earlier, he linked his fate to the paper’s reporting on the alleged secret payments that had the prime minister, ”
    http://www.theguardian.com/world/2014/mar/25/media-revolution-spain-readers-new-voices

    Just wow I say…

    • http://www.thedailybell.com/ The Daily Bell

      Excellent, Hugo, thanks.

  • Jim Johnson

    Plain and simple that my community needs a bank operating under these strictures. Now it is, then, that I must go out and find why this can not be done, and slay those dragons. There is the Fix, or better yet, a Fix. I am so tired of waiting for a horrible Crash before we get after this stuff. It is not so much about what we can do as what we are doing. Thanks for the many good ideas, DB.

  • http://www.electricsitar.com/ Gregg Fosse

    Mr. Casey sees everything with laser precision and crystal clarity. Great piece, both the questions and of course the answers. If in fact the FED has painted itself into a corner (it has) it is because that was the plan all along. Not by the “ten good, gray men in a room” (who are in fact window dressing), but by those who truly pull the unseen strings. None of this is happening by accident: problem, reaction, solution rules the day with the full support of the mainstream media propaganda machine.

  • Bill Ross

    DC: “It’s totally out of control at this point.”

    NO, its NOT. The “unseen hand” of the productive, acting in individual, integrating to collective self-interest is “at the helm”. Prognosis, GRIM, for many:

    http://www.nazisociopaths.org/modules/article/view.article.php/c1/32

    unproductive thieves, with delusions of being “in control” ARE the “problem”. The more they “succeed”, the closer their doom.

  • Hey you

    Doug Casey is very perceptive. His evaluations of world events are mostly parallel to my views. This period may be a dark period in human history, but if “we” can get through the next 5 or 6 years of what may be a war period, there may be rational civilizations in our future.
    Last evening, I viewed a movie about the start (for the USA) of WWII as related to the Pearl Harbor attack. I recall the chief sociopath in charge of the USA government administration saying that he didn’t expect the carnage to be so great. That is revealing as evidently he expected less carnage; that is to pursue the USA government’s objective of getting the citizens to support the USA’s entrance into WWII, it was surprising the such a toll was paid. The unanswered question is how many USA citizens’ would have been O.K. in the government’s viewpoint?

    • Don Duncan

      FDR was feigning sympathy. He laid the trap carefully. He made sure no carriers were in the harbor so nothing of military significance was sacrificed. He was overjoyed to be given the ploy to justify entering the war. A declaration of war would not have been possible without it.

      • Hey you

        It seems that FDR was a true sociopath as he exhibited little concern for the over 2,400 personnel who lost their lives on December 7, 1941. Yes, he was probably overjoyed that he got his wish for the USA to enter the European second world war on the bodies of those USA citizens.
        Of course, that war caused a lot of deaths and in finality put eastern European people into the shakles of the Soviet sphere.
        We, in the USA, have been served very poorly by those people who have taken charge of the USA government over the past centuries. It’s been out of control for decades and decades and there are still many supporters of big government and empire screwing up peaceful living.

  • gordon

    Well done DB yet another great article which I am e-mailing to all my friends around the world.

    • http://www.thedailybell.com/ The Daily Bell

      Thanks.

  • Contrarianism

    I’m a big Doug Casey fan. Excellent interview.

    The US Empire along with their coconspirators, the central banks, have ignited fires all over the world, most intentional, and some as a result of bone-headed decisions that will reap unintended consequences. So far the political and banking elites have been able to contain these fires, but if mother nature or Mr. Market has their way (and they always get their way in the end) and the wind begins to blow, these fires will jump containment and nobody will be able prevent them from spreading out of control.

    A raging fire that has jumped containment is unpredictable and will destroy everything in its wake. If is fruitless to try to predict when it will happen or how bad it will be. As Nassim Taleb says, “you should not waste your time trying to predict black swans. Instead, spend your time building systems (or portfolios) that are robust and able to withstand black swans.”

    Internationalization of your assets including holding cash and gold outside the Matrix (the banking system) makes you robust to whatever firestorm we encounter in the future, i.e. wars, deflation, inflation, monetary system reset/collapse. This is just about the best anyone can do to protect themselves financially in this distorted economic environment.

  • http://Yahoo.com victorbarney

    Doug Casey makes a lot of sense to me. I just know that this “fundamental transformation of government” is all a OUTRIGHT GIGANTIC LIE & destruction of our economic system is now at hand! I think I just read something somewhere talking about July 1st, 2014, which seems likely to me at this point! I took things such as Economics 101, Business Law, and a few other Business courses back in 1966 and from what I learned about economics then, we’re still doomed and by people “who” only are after POWER & CONTROL & GEORGE SOROS will NEVER SAVE US EITHER!!! WATCH…

  • http://sfschoolofeconomics.com/ Ingo Bischoff

    CASEY: “The same thing could be true of your pension fund. The government could confiscate that and tell you they’ll give you something on the never-ever plan, like some form of Social Security in exchange …”

    BISCHOFF: That’s exactly correct. In order to save the banks from endless lawsuits for failure to redeem bank notes, FDR issued Executive Order #6102 in April of 1933. With this executive order, FDR nationalized the gold savings of the American people. Supposedly, this gold amounting to approximately 8,300 tons, is stored at Fort Knox.

    Since one cannot save, except with gold, the Congress provided the American workers with the Old Age, Survivors and Disability Insurance (OASDI) Act, better known as Social Security Act. OASDI is no insurance. It is a mere transfer scheme which has present workers pay present retirees. As long as the payment is made by productive present workers to workers retired from the productive sector, the scheme can work. However, as soon as you add service workers to the system, or worse social service benefit clients, the whole thing is doomed.

    The scenario I see for the future has your federal government look out to safeguard your 401K investment. They’ll blame a crooked stock market for the need to do so. They’ll come up with a personal “ERISA” account which they will “guarantee”. In turn, you have to hand over currency earned for productive work to make the scheme work.

    It’s the currency from workers in the private productive sector which they are after. They are desperately short of currency that has any kind of productivity connected to it. The federal government already confiscated the gold. Just as Social Security is no insurance, neither is Obama Care an insurance. It is a scheme that amounts to “prepayment” for medical services paid with hard earned currency in the private, productive sector. The problem is, nobody with productivity connected currency seems to buy into the scheme to “prepay” for medical services of which the quality seems very, very dubious.

    The federal politicians are deathly afraid to raise taxes on productive workers, fearing a huge backlash politically. Increasing taxes on service workers (academics, government employees) does not get them any currency earned through productive work.

    Therefore, to get at currency earned in the productive, private sector, they’ll promise to take your “savings” (401K), and they make sure that it is securely invested for you. Watch………

    • Dave Meekhof

      The very first thing they’ll do, is say; if you have a 401K or any kind of private savings, then you don’t need SS. Or Medicare, or any assistance, even if it was ‘paid in’ for a lifetime. TPTB do not like seeing inheritances contributing to wealth accumulation among the plebes.

    • SteveRN

      So question I have been trying to answer. Cash out my 401K and take the hit on penalties and taxes? If my/our pessimism is ill founded, I lose out in the long run, but I don’t think we will be that lucky. If I do take it out, do I then pay off the majority of my debt? Or buy gold, silver, food and bullets? I wish I could see the future to know for certain the right move to make, or felt like I knew enough to make an educated guess, but there is so much to know, so many angles, and so many lies put out by TPTB.

      • http://sfschoolofeconomics.com/ Ingo Bischoff

        Check on the ability to roll your equity investments in your 401K into physical gold holdings in your 401K. You may not earn interest, but you are insuring your savings against loss. Hold the gold until you are able to withdraw without penalty. Then do it as soon as you are eligible.

      • Antonio

        SteveRN, I have had the same thoughts. Take the payment, take the tax hits, invest in gold and silver (not in an IRA; I want physical control) and make up the taxes many times over in the long run.

        The fear that the government, at any time, will say, “The game is over, we’re taking all your money”, haunts me just about every day. The time for all of us to make our moves is now, not when it is too late.

  • Chad3434

    We are dead meat. End of story.

    • http://sfschoolofeconomics.com/ Ingo Bischoff

      CHAD: “We are dead meat. End of story.”

      BISCHOFF: No, its not the end of the story. If we are dead meat, it’s our own damn fault. Why…??? Because we are swallowing the BS shoveled out by Washington politicians, and which is then fed to us by the media owned by the QMT crowd.

      It seems that very, very few individuals look at what is behind the BS. Granted, the BS had been laid on us for decade upon decade, and until recently it was difficult to check on the veracity of the BS the mainstream media spewed forth. However, this is no longer the situation, and we deserve to be dead meat, if we fail to make use of the internet and the data available there to give us the answer as to what has to be done to save us from an economic and financial collapse.. Information that quite convincingly can show us the way out of the present predicament accessible at the click of a button.

      Most of the comments here seem defeatist to me. There is no reason to be discouraged, provided you are armed with information. People wrongly assume that committee chairman of the House and Senate banking committees would now the history of the FED. They don’t, Barney Frank, the chairman of the House banking committee amply proved that in open hearings. I won’t even mention the shortcomings of the Senate banking committee, Chris Dodd. With regard to the FED chairman, the situation is not much better. When asked what gave the FED the authority to monetize sovereign debt, Ben Bernanke had to admit in open hearing that he had no clue.

      These are the people in charge of charting the course of your country’s monetary system. Alan Greenspan went from being a gold hawk and a groupie of Ayn Rand to bailing out the stock market in 1987 and arranging the survival of the banks under the auspices of the FED after the losses due to the disastrous collapse of LTCM. Bernanke lauded Open Market Operation in his academic career. He had no problem carrying on with TARP after Paulsen has gotten the legislation out of Congress. TARP didn’t end the financial squeeze. It merely delayed it for a few month. Bernanke’s legacy will be Quantitative Easing. I am certain, the new chairman of the FED will even have less of clue of what it takes to turn the situation around. She’s already stated that she’s perfectly happy to turn the QE wide open.
      What about the big banks whose representatives sit on the FMOC of the FED. They have no clue either. If the trouble they get themselves into an a frequent basis were to become public, there’d be a cry and a hew. J. P. Morgan can lose $20 billion and not find out for weeks how it happened. Forget about Citi and BofA. Now that Goldman, Sachs & Co. has become a bank while it continues be an investment house, Senators Glass & Stegall, though long dead by now, I am sure wouldn’t like it.

      Anyhow, those clowns in the banking committees, in the FOMC, and among the QMT crowd of the big banks aren’t really as smart as most people suspect. So why listen to them…??? Come up with a plan and vote the changes.

      Here is the plan:

      1. While pushing for an Article V convention to propose and ratify an amendment to repeal the 17th Amendment, agitate for Congress to remove the “legal tender” protection from the Federal Reserve Note.
      2. After the FRN has lost “legal tender” status, have states charter banks to create a currency under the Gold Bills Doctrine redeemable in gold specie. State can get together under Section 10 of Article I to form a pact to issue a national currency. They can use the original Federal Reserve Act of 1913 as a guide for setting up the system on today’s data based computers. The pact only needs to be concurred to by Congress.
      3. When a revived redeemable national currency circulates parallel with the irredeemable Federal Reserve Note, there will by a value difference. The FX markets will determine the value. The redeemable currency can only be generated by the private productive sector. This time however, the federal government will have no hand in the redeemable national currency creation. The states, through the pact formed under Section 10, Article I of the U.S. Constitution will be fully in charge.

      That is why the first thing which must be done is to repeal the 17th Amendment. The QMT crowd of the big banks presently own the majority of U.S. Senators. They know that the Democrats are naturally on their side, as is the Republican establishment crowd. It’s conservatives who favor the gold standard for a redeemable currency the QMT crowd worries about. So, give them something to worry. By repealing the 17th Amendment, the QMT crowd loses the influence they have enjoyed by financing senatorial campaigns. Senators elected with bank campaign funds keep the FED banking system and the QMT monetary system in business.

      If the states get back their power by reclaiming their voice in Congress, the rest of the problems created by popular elections of U.S. Senators will be solved easily. We are not dead meat, if we speak up and demand change. I little bit of research and study can arm the average American with knowledge to make the politicians shake in their boots.

      Remember the opponents of a redeemable currency are not nearly as smart as they are made out to be. Facts, reason and logic can easily get the better of them.

      • http://www.thedailybell.com/ The Daily Bell

        You are not going to turn the clock back on Leviathan. Get rid of corporate personhood and monopoly central banking and the system will quickly collapse. Otherwise it will collapse more slowly. But it is not salvageable.

        • http://sfschoolofeconomics.com/ Ingo Bischoff

          The founders had no illusions about power concentration when writing the provisions of the U.S. Constitution. Particularly, George Mason feared the excesses of the federal government. For that reason, he insisted that the amendment process include an avenue which allows the states to gather in convention to propose and ratify amendments to the Constitution, not only the Congress.

          Though all amendments to the Constitution so far have first been proposed by the Congress, in the face of Congress’ inaction, the convention of states to propose and ratify amendments is still a viable process. It is one which must be exercised to repeal the 17th Amendment, as Congress will never propose such an amendment.

          Once this has been accomplished, the country has been saved. I know the British and many in the British Commonwealth are no fans of the U.S. Constitution. However, most of those who live in this country, and particularly those who have given military service, feel the U.S. Constitution is worth preserving. To return it to a state which matches the intent of the founders takes very little, namely the repeal of the 16th and 17th Amendments. All our travails are directly due to the ratification of those two amendments.
          The two amendments allowed the federal government, meaning all three branches, to turn the Constitution on its head. After the repeal of these two amendments, the addition of a handful of amendments can make certain that the excesses of the last one hundred years will not soon occur again.

          You say, “Get rid of corporate personhood and monopoly central banking and the system will quickly collapse.” This is a statement certainly in line with anarcho-capitalist thinking.
          However, I don’t want to get rid of the central bank just yet. Their QMT junk currency still has some value as a circulating currency worldwide, though its value is fading quickly. It is for this reason that time is of the essence in stripping the FRN of “legal tender” protection.
          By taking away the central bank’s monopoly of currency creation, the states are free to again charter banks to create a currency which is redeemable in gold specie. With the advent of two U.S. currencies circulating parallel, an instant currency market will spring up to value the redeemable U.S. Dollar currency vis-à-vis the irredeemable U.S. Dollar currency.
          Redeemable currency can only be earned in the private productive sector. The central bank can use their QMT currency to pay the government employees, and the academics and teachers in the public sector education establishment. They can then be satisfied to earn irredeemable currency whose value is adjusted to the value of the redeemable currency every time they go shopping. The other choice which exists for them is to quit their government job, and to find work in the private productive sector. With gold bills financing the production, there will be more jobs available than can be filled. The solution is so easy, it puzzles me that a Convention of States hasn’t already been called.
          The intentions of the founders could easily be restored by the repeal of the 16th and 17th Amendments, along with the return to redeemable currency. Why would I want to see a collapse of the present regime, when it is much better to take advantage of the difficulties in which the QMT crowd finds itself, and use them to save the country and the Constitution instead….???

          • http://www.thedailybell.com/ The Daily Bell

            Because it is not going to happen. This system will only turn around when people actually lose faith in it. And that is already happening. And when it does, then people won’t want to calibrate what they ought to keep and what they want to discard. God willing, they will start over with modest communities and an agrarian republican culture of the sort that the served the US well (before it was the US) and Switzerland even Native Americans …

          • http://sfschoolofeconomics.com/ Ingo Bischoff

            Things don’t have to fall apart to know what is wrong…??? To start over with the Mayflower is not something that is going to happen. All we need are sovereign states with their voices returned to Congress, a taxation system on the federal level that is confined to excises, duties and imposts plus funds on a per capita basis requisitioned from the states by vote of Congress. An Anglo-Saxon taxation system within the states will assure that small business agriculture will make a comeback.
            It’s difficult to compare Switzerland with 8 million people, as many people as live in the greater San Francisco Bay area, with the United States. As long as power is returned to the states and to local government, the spirit of early North America will be recovered.

      • Dave Meekhof
        • http://sfschoolofeconomics.com/ Ingo Bischoff

          Normally, I don’t follow up on the links given in reply. If someone replies to my comments, I like to get his personal views directed to my points. An assumption that I desire the views of a third party, views which may or may not be relevant, is misplaced. However, in this case I am glad that I clicked on the link you cited.

          Dr. Vieria did some very fine work in “Pieces of Eight” in my opinion. However, I think he lost perspective when discussing our present economic and financial predicaments. He is much too strident in his assessment about the efficacy of an Article V Convention. He re-enforces many of the basic tenets I hold, but his solutions to the problems are way too unrealistic and too extreme to be taken seriously.

          As to our $200 trillion of debt, there is of course no way to pay it. However, there is a way to get out from underneath it before a total collapse occurs. By re-establishing a paper currency under the Gold Bills Doctrine redeemable in gold specie which circulates parallel with the FRN, FX markets will settle the value difference between the two currencies. This will allow an orderly settlement of the assets valued by the FRN currency. There is no need for a catastrophic collapse with all the attending problems to escape the debt. However, this can only be done, if the “legal tender” protection is removed from the FRN. The Congress will never do it.

          That’s where the Article V Convention comes in. The first and foremost amendment which such convention must propose and ratify is the repeal of the 17th Amendment. It is the majority of U.S. Senators, popularly elected with campaign contribution from the QMT crowd who will never vote to repeal the legal tender provision the FRN enjoys.

          A threat to abolish the popular vote for U.S. Senators and to return to the selection of U.S Senators by state legislators will quickly get the attention of many senators who are now only responsive to the QMT crowd in lieu of their state governments. Not until the states will re-take their legislative vote in the U.S. Congress will the QMT crowd be convinced that the game is up. An Article V Convention to repeal the 17th Amendment will indeed convince them.

          This country has operated a very successful dual paper currency system for many decades. Redeemable currency circulated parallel with the Greenback for over six decades. When the U.S. Treasury issued too many “Greenbacks” (Bills of Credit) with which to pay federal employees, the “Greenback” fell below par to the redeemable currency. Immediately, federal employees screamed for Congress to stop authorizing excess “Greenbacks” to be issued. On the other hand, to help out long-term federal employees with their savings, the Congress on several occasion directed the U.S. Treasury to redeem “Greenbacks” for gold during a limited period of time.

          What Dr. Vieria seems to rellish is a total collapse of the system, in order to start from scratch. What I advocate is a measured deflation of the irredeemable FRN until it reaches parity with the re-established redeemable currency. At that point, the government agency known as the 1935 FED should be abolished, and the FRN obligations should be turned into U.S. Treasury “Bills of Credit” (Greenbacks). This is then also the time to repeal the 16th Amendment and to get rid of the IRS.

          None of this however is possible with the 17th Amendment being a part of the Constitution. An Article V Convention can both propose and ratify the necessary amendment to repeal it. At this time, 32 states have expressed a desire to convene a convention to repeal the 17th Amendment. The difficulty at this time is to establish a procedure to call and convene the Convention of States. It has never been done before. All amendments part of the Constitution now have first been proposed by the Congress.

          However, with sober thoughts and a workable plan, a convention can be called very quickly. The proposal and ratification of an amendment to repeal the 17th Amendment then becomes a formality. That is why the hysterical assessment Dr. Vieria gives of our economic and financial situation and the remedy he suggests are not helpful.

          Thanks for pointing me to his website.

          • http://www.thedailybell.com/ The Daily Bell

            “What Dr. Vieria seems to rellish is a total collapse of the system, in order to start from scratch.”

            He’s not relishing it. He’s being practical. Societies never go back. Read the Claudius books.

            There will be a “reset” but it will happen via individual human action, not because some group of hypothetical well-meaning people get together to refurbish the republic. THAT is the impossible dream, Ingo …

          • http://sfschoolofeconomics.com/ Ingo Bischoff

            I counter by urging you to read the “Wisdom of Crowds” by James Surowiecki. There is a difference between “crowd” and “masses”. The decision derived by a “crowd” (local governments, free markets, any group making decisions having a common purpose) is invariably wiser than that made by a sole individual.
            The founders knew this well. They learned this lesson from the Anglo-Saxons and their governmental system which prevailed in early England after the Romans vacated the Isles until the invasion by William the Conqueror.

            This understanding about the wisdom of crowds was behind the framing of the Constitution. It is not an impossible dream at all to rally likeminded people to act in concert in order to fulfill the aspirations of the founding fathers for a government from the bottom up.

          • http://www.thedailybell.com/ The Daily Bell

            “The decision derived by a “crowd” (local governments, free markets, any group making decisions having a common purpose) is invariably wiser than that made by a sole individual.”

            You’re serious? This is why so many scientific breakthroughs have been made by groups, why great art and writing is a communal affair, why creativity generally is derived from an afflatus of the masses! Sarcasm off.

            You may believe in the wisdom of crowds, Ingo, but we’ll stick with human action …

          • http://sfschoolofeconomics.com/ Ingo Bischoff

            Scientific breakthroughs are wise…??? Great art and writing is wise…??? You don’t mean it…..do you…???

            Decisions are wise……or they are not. The input by a group of people with diverse backgrounds, but with a common purpose results in decisions which are invariably wiser than those made by an individual.

            You are not saying that an individual can decide on a more accurate price than can the participants in free markets through a collective decision based on their individual perspective, are you….???

      • Chad3434

        I know of what you speak of but there are only a small percentage of the people in this country who do. I was a delegate to the RNC in 2012. I sat in Tampa and watched as the Republican Party hooked and crooked in the new rule changes while America sleep. I watched as Boehner read from the teleprompter, “the ayes have it”. The ayes did not have it and I know because I was there. Can we say preplanned? That thing was cut and dried from the get go. The delegates from Texas got up and walked out and so did I because I was done. Like I said we are dead meat. Our problem is both the Democrats and the Republicans who are both spend crazy. Every year we sit and watch as the National debt rises. I wish there was some way we could stop them but if I want to live in reality then I have to say that I see no way to stop them. When they crash the system and we go through some major pain then and only then will things change. Wish you well.

        • http://sfschoolofeconomics.com/ Ingo Bischoff

          I am not as pessimistic as you. The internet and social media are vastly underrated as a distributor of information that can get people to think and to act to change things. The tea party without the internet and social media would never be in existence.
          There are people like Ted Cruz, Rand Paul, Mike Lee, Marco Rubio in position of power today who only a few years ago would never have been able to overcome the control exercised by the “Demopublican” machine having a bottomless campaign fund chest furnished them by the big banks.
          People are catching on, if ever so slowly. You and the Texas delegation walked out of the RNC convention. Next time, it maybe half of the convention is dissatisfied with the establishment schemes.

  • Danny B

    Echoing Bischoff, our value-added industries left the scene. This is only expected to get worse;

    “According to Professor Alan Blinder of Princeton University, 40 million
    more U.S. jobs could be sent offshore over the next two decades if current trends continue.”
    http://theeconomiccollapseblog.com/archives/shocking-facts-about-the-deindustrialization-of-america-that-everyone-should-know

    Disposable income is lagging and there isn’t any slack to pay new taxes,,, it all goes to debt service;
    http://www.gordontlong.com/Tipping_Points-2014-Q1/03-29-14-US-CATALYST-DI-Duncan-Household_Net_Worth_versus_Disposable_Income-1B.png
    Family income has crashed, http://www.gordontlong.com/Articles/art-2014-04-B-Macro_Insights-The_Unsustainable_Distortion.htm

    “When we additionally consider the degree to which margin is presently being used (once again)
    in the equity markets, we see not only the excess, but that investors
    have never been poorer while falsely believing themselves to be rich!”
    http://www.gordontlong.com/Tipping_Points-2014-Q1/04-03-14-US-ANALYTICS-STUDY-LEVERAGE-MARGIN_margin-debt-2.jpg

    The investors have all been skint by HFT but, they just increase margin debt. Grantham seems to agree with the elves;
    “We do think the market is going to go higher
    because the Fed hasn’t ended its game, and it won’t stop playing until
    we are in old-fashioned bubble territory and it bursts, which usually
    happens at two standard deviations from the market’s mean. That would
    take us to 2,350 on the S&P 500, or roughly 25% from where we are
    now.”

    Again, I agree with Grantham on this point. In my own estimation, it
    is unlikely that the Fed will stop its excessive intervention until the
    Dow Jones Industrial Average reaches at least 18,000. That is about 11%
    higher from here. I think that 11% is the minimum upside from here. But
    Grantham could certainly be correct in his optimistic belief that U.S.
    stocks climb another 25% from here.”
    http://ftmdaily.com/daily-briefing/032514/

  • Mark Branham

    Damn little understanding of money and banking here. So, I’ll suggest a one hour and twelve minute video that should clear up a lot of misconceptions.

    http://www.youtube.com/watch?v=7_yh4-Zi92Q

    Now, what do you think is our future?

    • http://www.thedailybell.com/ The Daily Bell

      Another military guy that suddenly “discovered” the system is wrong. Just like Bill Still, who was a military brat, etc.

      And what does he discover? The horror of debt money. And even more interestingly. he distinguishes between “banks” and “government.”

      That’s because private banks are bad and public government is good – so long as the “people” run the public banking system.

      Of course the people will end up being beholden to the same crowd that now runs the so-called private central banking system.

      Just another bait and switch designed to cast aspersions on the one monetary analysis that makes sense: Austrian economics.

      Privatize money. Let monetary systems compete without government favoritism. Nothing wrong with market competition.

      • Mark Branham

        Whadya gona do??? Some people, if they don’t know, ya can’t tell um.

        Listen up DB, money(debt) is already privatized. Who do ya think creates it… sure ain’t the government. You remind me of our current political predicament: just get the other guy in there and he’ll fix things. Ain’t no such thing. Just because Austrian’s are out of the picture presently, don’t make the mistake assuming their ascendancy will solve our problems – won’t. ever. happen. And still you don’t know what will because I haven’t told you and I will not; some things ya just have to figure out on your own. You’ve still got some work to do.

        • http://www.thedailybell.com/ The Daily Bell

          Money is NOT privatized. The system is mercantile. It is a combination of private interest and public privilege. It is incredible that people like you can’t see it and then have the arrogance to act as if you know more than the next guy. We’ve been studying monetary theory collectively for about half a century. The Austrian model has some difficulties but it is the best one out there because it is the simplest and most profound. Privatize money, let money compete, get rid of state-enabled central banking and corporate person-hood and things will start to change.

          • B.

            Schill-alert. As they say, “If you don’t have any enemies, then you have never stood up for anything.” Regarding the Austrian vs. Keynesian argument; most seem to miss that Keynes never disparaged gold… just his contemporary experience with the International Gold Standard, (which also exempted US Citizens from an inherent right to property). He, I think, was, (deep down), a humanitarian who saw the beauty in mankind… I also think he may have underestimated its ugly side. I am still studying this matter and remain undecided as to his intentions. “The road to hell is paved with good intentions.” – Dad’s Wisdom.

          • Mark Branham

            So, banks(private) get to create money out of nothing… place it on their balance sheets as an asset, collect interest on that created(private) money and then run to the government to restock their equity(reserves placed at the FED collect interest) if they get in trouble. AND THAT’S NOT PRIVATE???

            What the hell you been smokin. I don’t give a damn what you call your discipline… Austrian, Keynesian, who gives a damn. What’s wrong is wrong and allowing private parties to profit from counterfeiting money is wrong. It is right, a privilege, and a responsibility all sovereign nations enjoy to create and spend their own money. It must never, never, ever allow ANY private party to usurp that right and responsibility because it creates exactly what we have now – government control by monied interest.

            Ya gotta get your head around this. You’ll understand nothing of economics OR politics if you don’t.

          • http://www.thedailybell.com/ The Daily Bell

            “So, banks(private) get to create money out of nothing… place it on their balance sheets as an asset, collect interest on that created(private) money and then run to the government to restock their equity(reserves placed at the FED collect interest) if they get in trouble. AND THAT’S NOT PRIVATE???”

            Mark, is there some disconnect between your fingers and your brain. You explain the privileges of private banking and then write that bankers “RUN TO THE GOVERNMENT TO RESTOCK THEIR EQUITY/RESERVES.”

            This is classic mercantilism, the utilization of government privilege to advance private interests.

            The problem is not the competitive “private” marketplace but the ability of powerful people to use government power for their own purposes.

            You then want MORE government power in order to discipline such people – but the problem is that they are taking advantage of government and giving government more power will only further empower THEM.

            The only way to stop the cycle of mercantilism is to shrink government radically. To “drown it” in the proverbial bathtub.

            This is not so hard to understand …

          • Mark Branham

            Yes, they run to the government, to order the government to do as they demand.

            Look, the real problem is that there is no solution to the current system that would not involve some serious trouble. A solution will evolve over time, could be a long time… concurrent with the advancement in human consciousness. So our disagreement is really inconsequential.

            Do I want more government? I’d like some government at least; now we’re ruled by the capital machine entirely. Not a person in government wipes their nose without permission. Divide and conquer has been been the Oligarchs most useful tool… that’s the whole of the supposed conflict between Reps and Dems, conservatives and liberals, left vs right, all an effort to keep us fighting each other so “they” can continue stealing from us, which they do daily because banks create money out of nothing to in-debt us all.

            To repeat. There is no solution. Something will evolve out of the chaos that may be just around the corner. Without an understanding that a central government is not only necessary but should keep for itself the power to issue it’s own money, if not that, our descendants are doomed to repeat the same dark history we’re now suffering.

            Some day, in that far distant future, in an era of Light And Life, no government will be required. Evolution takes its own time and humans will get there, someday. For the present, a strong government consistent with the ideals of the constitution, is the best we can hope for.

          • FEEuser

            Sorry, pal, I don’t buy it. That is, I don’t buy that there is “no solution,” and I don’t buy that “a strong central government is necessary” now, or ever.

            Your thinking is full of the archetypes of fairy tale history which emanate from the halls of power against which Libertarians struggle. Such ideas are meant only to control and demoralize us. That won’t happen here.

            Even your reference to the Constitution is ill founded. It replaced the Articles of Confederation, a document which represented the one chance that we had at a critical time to create independent libertarian societies. That chance was hijacked by Alexander Hamilton and his big government faction, and we have suffered with the consequences ever since.

            Incidentally, your thinking has curious parallels to Hamilton’s, i.e., a fatalistic view that political power in the hands of elites is “natural” and “inevitable,” and “the best we can hope for.” “Evolution” has nothing to do with this except as a convenient mental construct for brainwashing us which the power elite uses to justify the horrific, criminal status quo which they themselves have created. It is glorious to watch this outmoded paradigm of power crumble right before our eyes.

          • Mark Branham

            First off, I’m not your “pal.” Keep your condescension to your self. From a few comments you think you know how I think??? not a chance “pal.” I have no use for anyone who defines himself by one theory or another… your a human being and if you think evolution has nothing to do with this then you know nothing of history, it didn’t start with the revolution.

            We disagree. You will take your beliefs to your grave but that’s all they are, just beliefs born of prejudice and preconceived ideas. History and the evolution of human thought buttress my ideas about the best way for humans to organize themselves. We’ve progressed over long millennia from family to tribal to enclaves to cities to nations and we have much further to go. This whole “libertarian” ideal is simply a rebellion against progressing human evolution temporarily sidetracked by a monetary system that ensures a very small elite power over an elected representative government… which brings me back to the point I made in the beginning – a debt-money monetary system eventually runs out of host. You are confused, your enemy is not government but the parasites that control it and feed off the debt serfs – you and me and all others not part of the parasitic class.

            As “Paul” said, “evolution baby.” It’s the way of the universe. If you can step away from your prejudice for a few moments you might discover a whole new universe in which an open mind is the best antidote against the strait jacket of stratified thinking. Here’s wishing you the best of luck, we’re all going to need it in the rough times ahead.

          • alaska3636

            “You are confused, your enemy is not government but the parasites that control it and feed off the debt serfs – you and me and all others not part of the parasitic class.”

            All states/governments have crumbled. Why? Because they create perverse incentives to increase consumption over production. As long as there exists a state/government, a centralized power, there will be opportunists (parasites: psychopaths & their sycophants) who try and take control of that mechanism.

            Your enemy, if you are an empathy feeling human, is the State in all of its manifest forms. Accountability can only be reasonably managed from the ground up, decentralized. History bears this out because history is the sequential consolidation and destruction of individual power. It is also the awakening of the natural state of man: liberty. Sometimes we must learn lessons the hard way: only by giving up liberty has man realized what he has taken for granted. Liberty is now not just a vague feeling but a full-blown philosophy expounded and advanced by many great thinkers over the past 500 years.

            As long as the temptation to live at the expense of others exists, by either well-meaning people or otherwise, there will be a lot of energy wasted in defining, maintaining, justifying and rationalizing that temptation (the state/government). You, Mark Brantham, see the effect, parasites, and mistake it for the cause, the incentive to live at the expense of another person.

            Evolution is descriptive not prescriptive. It is a tautology that states that what is fit survives. It does not deign to tell us what is fit. States crumble time after time and you take this for fitness? The incentives that create the production by which we all live are the incentives of personal responsibility, adaption and competition, charity and faith. There are no short-cuts only more and less effective means for achieving ends.

          • Mark Branham

            I remain unconvinced. The cause of a great deal of the problems we face are a direct result of PRIVATE bank created debt posing as money. Now there’s a move afoot to eliminate paper and coins, the cashless society. So even that tiny amount of debt-free money will be eliminated… no place to run to.(OK, gold and silver… sure to rally any day now, right.

            And for all those who, for some reason, pass right by those points I made earlier…

            http://www.youtube.com/watch?v=VIMnIh10po0

            Perhaps this young woman will convince you. I would add that government, being in debt to the capital machine, is in the same position as most of us debt-serfs, totally under the command of the monied elite. So all you government haters out there, ya got the wrong man… look behind the curtain.

            So, that’s it for me, goodbye and thanks for all the fish.

            PS You guys really need to chill out, ever helpful, here’s a little something to get you started.

            https://www.youtube.com/watch?v=foUrBztgzZA

          • http://www.thedailybell.com/ The Daily Bell

            “Now there’s a move afoot to eliminate paper and coins, the cashless society. So even that tiny amount of debt-free money will be eliminated… no place to run to.”

            Of course, as you imply, private entities will use government power to regulate away “cash.”

            And, of course, you will continue to rail against “private” enterprise even though it is government power, via mercantilism that is being employed to create the very problems you anticipate.

            Another prediction: You will remain “unconvinced” that competition is a good and the monopoly force of government is a “bad.”

          • Mark Branham

            Yes

          • Antonio

            I think you and Mark are talking past each other a bit. Yes, the Fed and all central banks are “private”, but they are also mercantilist monopolies, so not really free-market either. Central banks are a cartel, granted monopoly privilege by government. But the solution, if I understand Mark correctly, is not to let governments issue money, but let the market decide what is money, through competition.

            True private money would take many forms, not just one, and as the DB says, would be competing with each other. Definitely not the situation now.

            Overall, I agree with the DB on this one.

          • http://www.thedailybell.com/ The Daily Bell

            No, what Mark probably wants is for some hypothetical honest “people” to issue money out of “government central banks” without dreaded “debt” attached to it. This is actually a US Intel sponsored meme so far as we know as many of its visible proponents have a military or state background of some sort. Why would the CIA want to go online and spread this kind of theme? Because they do not care how money is issued so long as it comes from a central authority they can control. Even the debt issue is likely a red herring designed to draw attention away from the real issue which is monopoly issuance of money, private or public.

          • Antonio

            I agree – monopoly issuance is the issue.

            In a previous post, I saw your mention of Bill Still, and I couldn’t agree more. I was very much into his analysis…until he suggested that the answer was to have the government issue money, without interest. It seemed to me that this was not any closer to the true Constitutional provision, which is for the government (Congress) to regulate the weight of the coinage in circulation. Even here, this is not ideal. There is no need for government to be involved at all in monetary matters, unless you allow them to regulate their own coinage but allow competing coinage at the same time.

          • pdxr13

            “regulate” is a pivotal word.

            The 18th century geniuses (no irony here: fact) who founded our Republic understood this word as we might use the word “calibrate” in a laboratory setting. A is compared to B and adjustment or notation made to compare the (unit) accurately-precisely-tracably-fairly and over time. “regulate” is what is done to a watch mechanism to set it against a known-good time-frequency Standard (some multiple of superior quality). When you have 2 similarly (unknown) accurate timepieces without external reference, you can’t know when it is.

            See: “A well-regulated militia” in 18th century understanding. Unorganized is not the same as disorganized. State National Guard is not “the militia of the people”. NG is a distributed Federal force inside the CONUS, and is centrally-federally controlled for cost savings/shifting when compared to AD or Reserve components. A little OT, but military power is critical to fiat money.

            At least physical devices operate according to law, but when central bankers and their minions print or digitize unbacked currency, there is no natural reference that is fixed. A fix can be anything real, with supply limits, but PM’s (esp. AU) have the best combination. We don’t have to trust that the US Treasury won’t 4X increase the volume of currency when it mints pm coins, because that is physically impossible. Banks, otoh, can effectively “make” currency by taking in deposits and lending at multiples of those deposits. Hard money and prohibiting .gov-backed insurance schemes (like FDIC), along with full-disclosure that your deposits are subject to partial or complete loss based on the quality of loans made, efficiency of the Bank, criminality of Bankers, etc., would make people think again when making deposits. The up-side is that banks would pay real interest to depositors (10+%) and wages for professional bankers would drop to approximately a middle-class income (from 20+% of GDP to 3% of GDP) as their functionality as a utility merits. Bad bankers would be (dead), broke, imprisoned, digging ditches without the power of central .gov to protect them. Smart kids would not aspire to run hedge funds (strictly requiring named hard-money to risk, OPM full-disclosure, failure bringing prison, shame, suicide) when inventing good stuff or running an efficient factory will bring wealth-fame-admiration.

            This “regulation” is the point of the National Bureau of Standards (now, NIST National Institute of Standards and Technology), which is to facilitate standardized measures to improve trade. Trade is the magic feature the founders understood as the best path to a wealthy strong nation. The Red Chinese know this, as do the Russians, and most of the OPEC world.

            Perhaps a metrology education and experience could be a requirement for those who would allow central bankers to run roughshod over the world? I would recommend USAF AFSC 324×0/2P0x1 training and 5 years OJT.

          • Antonio

            Yes, I believe I used the word ‘regulate’ in the proper, Constitutional sense, that being the meaning of standardizing, or making regular, not in the sense of control or micro-managing. There is a reason, as I’m sure you know, that the coinage clause is in the same line of text as the weights and measures clause. The two ideas are closely related when it comes to money.

            This is also the case for the word ‘regulated’ in the Second Amendment. It doesn’t mean controlled or micro-managed, but to make regular or standardized, or, simply, well-trained.

          • http://sfschoolofeconomics.com/ Ingo Bischoff

            BD: “Privatize money, let money compete, get rid of state-enabled central banking and corporate person-hood and things will start to change.”

            BISCHOFF: Private money…..??? Do you mean private currency…???
            Money is neither public, nor private, nor the exclusive monopoly of a special group. Money is a standard which measures value, just like a tape measure is a means by which to measure linear distance. Calling for the privatization of money is like calling for the privatization of tape measures.

            However, since money is also a store of value, besides being a standard of value, it does very much matter whether government protects or prohibits the holding of money. Without money, one cannot save. Without savings, one cannot survive in old age, except through charity.

            As to money competing with money, it makes no sense. Gold is money, and nothing else. Gold to compete with gold…??? Do you see what I mean….???

            On the other hand, to have a currency redeemable in gold compete with an irredeemable currency makes all the sense in the world. On one side you have a currency with a fixed value which lets people exchange value for value, while on the other hand you have a currency devoid of a standard of value, circulating through propagandizing its efficacy, and because it is mandated to be the exclusive instrument of “legal tender”.

          • http://www.thedailybell.com/ The Daily Bell

            No, Ingo, money has come in various shapes and sizes throughout history. Salt, beads, circular stones – whatever the culture decided on was MONEY. Not currency.

            And yes “money” can be private or public in terms of its ISSUANCE. It can arise in the private sector and compete or it can circulate via government force within monopoly context.

            We find competitive monies to be far preferable to monopoly fiat currency. And gold (and silver) are not historically the only monies.

  • FEEuser

    Excellent article, very rich in ideas. Doug Casey is spot on with devastating analysis of the insane money and banking system that we are suffering with.

    The choke point in political struggles always seems to get down to money and banking. What better way for those of the “political” persuasion (see Franz Oppenheimer’s The State) to dominate the world than to control the money and fix prices? The monstrous hubris of these types prevents them from being satisfied with the “economic,” i.e., honest, lawful, and productive, means to wealth creation.

    But of course, what the elites don’t realize is that, in the long run, such an idea is a delusion. Though controlling the money DOES give them great temporary power, it does NOT mean that the economy will not continue to evolve in unpredictable ways which they CANNOT control. “Chaos” can easily sweep away any stratagems for collectivist control that they can come up with.

    Another myth which must be destroyed is that the primacy of the State in human culture. The State is a criminal hijacking of human society perpetrated by gangs of conquerors who perpetuate the system by clothing it in mythology, sanctity, and “time-honored tradition.” Bunk! The State must be abolished. As Casey says, it serves NO useful purpose whatsoever. People will NEVER have the libertarian society they want and deserve with the State standing in the way. Thankfully, the State is beginning to crumble spontaneously, under the weight of its own lies.

    However, although I think Casey’s interpretation of history is right and insightful as far as it goes, I think this whole problem is even more fundamental than that. It started long before our time and long before 1913. The US got started on the wrong foot when it discarded the Articles of Confederation and replaced it (illegally) with the Constitution. The latter document needlessly increased the power of the feds and opened the door to all sorts of unforeseen abuses of power too numerous to name here. Hamilton’s dreadful “Bank of the United States” (1791-1811) set the pattern for American central banking long before the Federal Reserve Act. We have been at war over this issue ever since.

    But even more to the point is that the US as a republic was an unworkable concept on its face. As Jefferson pointed out so long ago, even at that early stage, the US was simply too big and complex to be administered by one central government. He was right. Now we are seeing the natural processes of economic and political change bring us to the realization that peaceful secession is the only way out of this dilemma.

    • Antonio

      Your fourth paragraph is gold, my friend.

      • FEEuser

        Thanks, your comment is much appreciated!

  • Cluless

    What I don’t get is – if all countries are in debt who is the creditor?

    • http://www.thedailybell.com/ The Daily Bell

      Money center banks and central banks.

    • http://sfschoolofeconomics.com/ Ingo Bischoff

      Seems like a credible question…..no pun intended.

      There are in fact no creditors in existence, yet. Everyone is a debtor. The creditors have to be born yet. They are our future children and grand children.

      Today’s monetary system works through circulating paper currency with negative value. In other words, we are just passing around debt. Central banks are the generators of the negative value currency by monetizing sovereign debt.

      For the guarantee to settle the debt, we are told to look to our progeny yet to be born. They are to be taxed to liquidate the debt monetized into paper currency passed around by us today. Get it…..???

    • veerar

      Some Debt may be due to CORRUPTION too.For example in India it is common to “siphon out money” by TPTB.This gets converted into NPA ,forever

  • Antonio

    If I could, I would like to ask one thing from all the posters: Please refrain from the use of abbreviations and acronyms if they are not defined beforehand. I know many are in very common use (LOL, LMFAO, TPTB, IMHO, etc.), but others are very obscure. I can usually figure out what they are from the context, but not always.

    Please take a cue from very good writers, technical or otherwise, to define abbreviations or acronyms before they are used in your postings. Then, feel free to use them to your heart’s content.

    I really enjoy reading everyone’s comments, even the ones with which I disagree, but it’s hard to understand some of them when they are literally littered with acronyms with which I am not familiar. That makes it harder to understand the writer’s points.

    Thank you.

  • Pete

    I’ve read a number of articles that covered the un-sound practice of centralized banking and fractional reserve lending, and ,generally, all the articles are on the same track. My question is what is stopping anyone from starting a bank. or chain of banks, that are not connected with centralized banks?

    • veerar

      BND[Bank Of North Dakota].a State-owned Bank is doing well.Other States in “the States”,should follow suit.

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