STAFF NEWS & ANALYSIS
Fiat Currencies Are All Funny Money
By Philippe Gastonne - May 05, 2015

The International Monetary Fund is close to declaring China's yuan fairly valued for the first time in more than a decade, a milestone in the country's efforts to open its economy that would blunt U.S. criticism of Beijing's currency policy. The fund's reassessment of the yuan—set to be made official in IMF reports on China's economy due out in the coming months—follows years of IMF censure of Beijing's management of the currency. – Wall Street Journal, May 4, 2015

If you've been dying to know whether the Chinese yuan was at fair value, you can finally rest easy. The IMF says it's almost there.

This leaves another question, though. By what authority does the International Monetary Fund decide a currency's value is "fair" or not?

Furthermore, even if the IMF has the authority to make this judgment, does it have the ability to do so correctly?

Of course it doesn't. No one does. Like everything else, a currency's "fair value" lies at the intersection of supply and demand. All the IMF needs to do is leave the market alone. It will very quickly tell everyone what value is "fair."

Of course, the IMF can't leave the market alone because its very existence is an attack on the market. Its mission is not to help markets operate, but to stop markets from operating. This is necessary so that its international banker overlords can manipulate asset prices and further enrich themselves.

With that caveat, we can go on to look at this story for the hidden agenda it serves.

The Obama administration, like its predecessors, argues that China keeps the yuan artificially undervalued in order to promote exports.

Of course, Obama has no more grounds for saying this than the IMF does. Nevertheless, the IMF has long concurred with this U.S. assessment. Now it is changing its mind. Why?

The WSJ story goes on to say that China wants its currency added to the IMF's "Special Drawing Rights" reserve basket. The SDR currently includes the U.S. dollar, the euro, British sterling and the Japanese yen. Beijing thinks it should be in this group.

Beijing might have a case there. The Chinese regime might be manipulating the yuan, but so do the governments behind the other SDR component currencies. All are fiat funny money with no intrinsic value whatsoever. The IMF's opinion on "fair value" is no more legitimate than anyone else's.

Why doesn't WSJ explain this to readers? Both the newspaper and most of its readers think this kind of manipulation is normal. Educated by Keynesian economists, they don't comprehend how fiat money is an affront to both honesty and human nature.

Just as fish are not conscious of the water around them, modern bankers and investors are blissfully unaware that they are swimming in a monetary vacuum.

They will learn this lesson. The only mystery is when.

Posted in STAFF NEWS & ANALYSIS
  • Earn nest

    End the IMF!

  • Bill Ross

    not too “funny” after a lifetime of contributing to civilization (producing) to discover that all of your monopoly “money” and investments based upon it have run out of “full faith and credit” (the gig is up) and are on an inevitable trend to worthless. And, our international trading partners providing REAL good and services in exchange for these “empty promises” are “not amused”. In fact, historically, reneging trading partners (including public “employees”) has been “just cause” for war and social / economic re-evolution.

    Oh well, the productive, as slaves have for all of history, DO have a “remedy”. Sucks to foolishly depend on those who cannot be depended upon. I mean YOU predators / parasites. This dependency will be reversed, as it must for collective survival:

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

    If YOU want something, earn it. Whining / fraud as methods of goal seeking are rapidly becoming unaffordable, obsolete and a serious threat to collective survival. We need to return to REAL civilization (peaceful “division of labor” as opposed to conflictual “division of spoils”):

    http://www.nazisociopaths.org/modules/article/view.article.php/c1/34

    Fools. It is not “consent of the governed” that is required it is “consent of the productive”. Or else, you get what we’ve got: social / economic collapse leading to total “war of all, against all” (unfettered anarchy, might is right until none are left standing).

    • “unfettered anarchy” – what you mean an abundance of living without rulers! Sounds OK to me. Sounds GRAND.

      • Bill Ross

        “unfettered anarchy” means “violence OK”, far cry from “peaceful anarchy”.

        have a little bit of “unfettered anarchy” and you too will be demanding the “lessor evil of states” who must a least pretend to seek “consent of the governed”. Which is why, IMHO they do false flags: to terrify and remind us that they are a lessor evil than what could be (and, has been).

        It’s all in the concepts / definitions. Suspect when you hear “anarchy”, you assume “peaceful anarchy”. Anarchy means disorder, no rules, precludes common interest (which is a set of rules, peace being the primary one).

        • When I hear the word ‘anarchy’ I think without rulers, as in the word’s origin: Mid 16th century: via medieval Latin from Greek anarkhia, from anarkhos, from an- ‘without’ + arkhos ‘chief, ruler’.

          When I hear someone using the word ‘anarchy’ to describe ‘violence’ I fear I may be confronted by a person who does not respect the basic tenants of liberty and freedom. A person who has taken that word to mean its usurped bastardisation, its twisted propagandistic corruption, its false inversion.

          A society without rules and rulers is by no means de-facto one that will be racked with violence. Indeed look at the record of violence that result from the actions of ‘the state’, by far the greatest numbers are murdered by people who believe that the magical authority of ‘the state’ immunises them from normal human decent conduct whereupon they, for example, go to war and slaughter with apparent personal immunity. It is a simple fact that many more have died at the hand of the cult of ‘the state’ in the last 100 years than all other non-state based violence together.

          The only way ‘the state’ survives is through the use of force, the constant threat of violence. Without the monopoly on violence ‘the state’ would collapse. So is it any coincidence that in modern understanding the one word that describes the solution to this hateful system has been twisted inside-out to be taken to mean the very opposite, to strike the greatest threat to the cult of ‘the state’ a slanderous blow. NO! This is how language is used the build false ideas into the minds of the common man.

          And all that said. What on earth is ‘fettered anarchy’? Fettered anarchy would not be anarchy else who is doing the fettering and how. How can you fetter anarchy without preventing it being anarchy in the first place. Anarchy is like pregnancy, you are either pregnant or not. Fettered pregnancy is not pregnant.

          • Bill Ross

            So, are we gonna fight regarding “meaning of words”, or deal with “action precedes consequence reality”?

            Your and historical “meaning” of anarchy (no rulers) was the result of centuries of tit for tat conflict where it became apparent that “no peace or property rights” equals “no survival”, so first, “rulers” were tried, then, once it became apparent that “ruler” is a synonym (behavior) for tyrants and thieves, rulers were “dealt with” (by the people) and, peaceful anarchy was the consensus, shortened to “anarchy”.

            We no longer have this peaceful epiphany / consensus within society. Our experience (and thus, assumed reality) is the opposite. Many “feel” entitled and are not fussy regarding how they get their “fix”. To salve any incipient “conscience” (or awareness of victims) they may risk, they commission “our bandit the state” to do the dirty deeds. Peace and knowledge thereof has been intentionally destroyed by arbitrary rulers. When they are dealt with and no more, we will still have “might is right” bullies foraging, displaying zero “problems” with using violence.

            Call Hobbes “war of all, against all” (I use anarchy) and absence thereof (I use peaceful anarchy) what you will. The “reason” IS: These are the terms that people (and “official” definitions) have been skooled to think in. So, rather than fight lost battles (restore original meaning), I use the words / tools at hand.

            Now, if I were to enter redneck territory in the deep south and correctly claim to be a Liberal (am, in classical sense), I would be assumed to be a socialist and, in peril. Definitions again: the socialists claimed to be liberals (social consensus) and usurped the concept, evicting all true liberals from “the party”. Now, having been evicted from our own liberal intellectual home, we call ourselves libertarians. And, when (not if) we win, all of the rats will flock to our ship. Will we let them sink it by redefinition, same as they sunk the classical liberalism brand? And, apparently, the “anarchist” (now portrayed as bomb throwers) brand.

            So yes, I agree with you, the war for objective meaning of words and preservation of the knowledge they contain is necessary. Is it more necessary than stopping peace and civilization from plunging over the abyss? Win some, lose some. Let them have “Anarchy”. Pretty soon, it will be generally apparent that this is what states represent, by their own definition.

          • The misuse of the word, anarchy, is fundamental. The idea that an absence of rulers, anarchy, would so defiantly result in the total and violent breakdown of social order, anarchy2, is not only false; it is the polar opposite. So to use the word in its false meaning is not the true error, the error is to consciously use the word to express the acceptance that: an absence of rulers defiantly results in the total and violent breakdown of social order.

            I am not a clever clogs picking at your use of words I am (a clever clogs) picking at your use of an expression that says you consider that: an ‘unfettered absence of rulers would defiantly result it the total and violent breakdown of social order.

            I say an absence of rulers could only result in a pure, balanced and harmonious social order. The only thing preventing a balanced and harmonious social order from manifesting is but one of the effects of having rulers. Far from ‘the state’ preserving social order, ‘the state’ causes social order’s breakdown by reserving for itself the right to total violence – especially through the coercive and constant threat of violent force. Do people see this effect of ‘the state’ in their everyday experience? Not always, they accept the tyranny, living kowtowed under the threat of use of violent force, as normal, an easily acceptable trade-off to allay their implanted and false fear, therefore essential, desirable even.

            This is where I differ from the Libertarian. Just as it is imposable to be a little bit pregnant, I do not believe there can ever be social harmony whilst there exists any form of ‘the state’. Whilst belief in the cult of ‘the state’ remains, no restraint can be devised that will stop it from growing into the Leviathan. Just look at the degradation of America: from being the nation with apparently the most liberal constitution in the world’s history of governments to what it is now, a disgusting military and intelligence complex, a police state and a nest of fascism: a human tax farm to feed the corporate internationalist oligarch’s global hegemonic ambitions.

          • Bill Ross

            “‘unfettered absence of rulers would defiantly result it the total and violent breakdown of social order”

            YES, because true rulers are free people, ruling themselves and forging peaceful associations by “mutual consent”. The knowledge / values required to do so has been ruthlessly subverted by predator central control of skool, MSM, law…

            As a consequence, the majority of people have adapted to dependency / servitude and whining to arbitrary power. When the state inevitably splinters and implodes, it WILL be predators preying on those adapted to be prey, falsely believing they are dealing with the “reasonable”. This is THE WAY that we have been Pavlov conditioned to believe is the ONLY “reality”.

            The knowledge to live anarchy (your definition) DOES NOT EXIST with sufficient penetration for true leaders to have effect within the body politic. It will take TIME to adapt to the “unfettered anarchy” and for sufficient numbers to conclude “live and let live” and, for true leaders to be acknowleged.

            I really HOPE that the VAST scope of elite evil and crimes against civilization and humanity are beginning to penetrate the consciousness of humanity.

            End the state.

          • Rock on! I am a monarch, ruler and subject, sovereign of myself only. A state of anarchy does exist, has to exist, can only exist; now and at all times. The impositions and bamboozlements of the believers in the cult of ‘the state’ has to work against, deny and hide this constant state of anarchy from view. ‘The state’ is false, an illusion, and therefore does not exist. ‘The state’ is just cult members doing whatever it is they think they are required or authorised to do. There is only one freedom and that is the freedom of your mind. They may chain you to the ground but whilst your mind is free you are free. End ‘the state’!

        • Samarami

          “Anarchy” is (supposedly) defined as “absence of political authority”. “A-” = “absence”. But people of our persuasion seem to get all wigged out over definitions — so definitions get defined all over the map, and bickering ensues over meanings. “Unfettered” generally means release from restraint or inhibition. Some (particularly, I think, those who support arguments that political authority indeed serves-the-greater-good) will insist “unfettered anarchy” means chaos, disorder and violence. I highly recommend this: http://faculty.msb.edu/hasnasj/GTWebSite/Obvious.pdf Sam

          • Fred Bastiat

            “Anarchy refers to a society without a central political authority. But it is also used to refer to disorder or chaos. This constitutes a textbook example of Orwellian newspeak in which assigning the same name to two different concepts effectively narrows the range of thought. For if lack of government is identified with the lack of order, no one will ask whether lack of government actually results in a lack of order. And this uninquisitive mental attitude is absolutely essential to the case for the state. For if people were ever to seriously question whether government is really productive of order, popular support for government would almost instantly collapse.”

            The second paragraph to the essay is exceptionally well said and a necessary preamble to any discussion of anarchy with the uninformed.

          • esqualido

            The entire United States Code of 1950 was shorter in length than the monstrosity known as The Affordable Care Act. The virtual maze of fetters in today’s legal code, devised, in the words of HL Mencken by “the great practical jokers of the race”, the modern version of the Lilliputians, forms the basis for the appeal of anarchism: it might be that no law is better than a system where you are probably in violation of some law at any given instant.

        • davidnrobyn

          Thank you, Bill, for your clear-headedness re “unfettered anarchy”. Too many libertarians look at anarchy through rose-colored glasses. Q: How to achieve “peaceful anarchy” in the absence of coercion? Catch-22!

          IMHO: The freest, least oppressive state of affairs in all history was the time of the Judges in Israel. They were, however, subject to invasion/oppression/conquest from every king/dictator/despot that came along. Their freedom and prosperity depended on their adherence to a very simple (simple yet difficult) code of laws. They couldn’t hack it, and were continually overrun and oppressed. Finally, they ran out of patience with their unstructured situation and demanded a king–a strong central government with all that came with it.

          So we think we can do better? We flatter ourselves.

          I appreciate your commentary, Bill.

  • I have long contemplated on the question of ‘what money is’, both what it should, unmolested, be and what it tends to become as subject to the unyielding influence of ‘the state’. The drive toward a centrally issued single global currency appears to be a long desired outcome of the banking elites who substantially own, control and benefit from the central banking network about the world.

    As seen with the incantation of the EU, originally sold to the plebiscite as a trading union, the launch of the EURO single currency was widely understood to be unsustainable without the simultaneous total political and economic integration of the disparate independent nation member states. This obviously intentional outcome was endlessly scoffed-at and robust derided but the conclusion, now it is upon us, is simple: the creation of the EURO was either implemented by utter ignorant fools or it was a covertly intentional device used to force the amalgamation of the independent European nations into a Greater Europe.

    With Europe as the template moves are clearly under-way to enact the same set of circumstances in the forming of a North America political and monetary union and then undoubtedly further regional trade unions will be subjected to similar drives towards their forming political unions too.

    It appears that simultaneous to that momentum the SDR mechanism will gain significance apparently with the objective of developing the SRD value into more than a IMF and central bankers device by allowing transactions to be conducted between parties in SDR values without need to exchange into any other of the root currency when making settlement. No doubt when an SDR currency becomes established the demand will then be for, step two, the currencies included in the ‘pot’ to peg their individual rate to a given value.

    The effect of this SDR based currency will be to draw the major currencies, and the separate sovereign economic states from which they emanate, into the same eventual and inevitable trap as that which the previously independent nation states of Europe were enticed. So I conclude that it will be greatly as a result of this growing global monetary union from which a growing global economic and subsequently global political union will also be demanded and formed.

    When rarely questioned, the political momentum behind this open conspiracy is justified and explained as the ambition to raise-up the poorer economies of nations across the world to parity and to bring about the end of war between separate sovereign nation states. On the surface that may be so but at what cost?

    The cost will be the lack of competition between states. When each country has to vie in the ‘market’ against each other to offer the best environment for a flourishing social and economic condition, nations that make bad choices pay the price and learn from nations that do well and thrive. People and business are drawn to the more liberal and successful nations leaving the tardy nations one simple option: change for the better.

    The international central banking establishment is not the property of the nation states or their populous. The mechanism behind the issue of money is the state-dependent corporate (read neo-feudal) and so clearly, at some level, all actually privately owned. Issuing money is a vastly profitable enterprise and inflation adds a further cost to the use of money to the people who use it as any-sort of measure or store of wealth. There is no better means for the enslavement of the people: all encompassing yet covert. The banker’s tribute is gathered by ‘the state’ by way of taxation to pay interest on debt and by way of the perpetuation of the system of ‘the state’ for their continued control and gain.

    Whilst money is controlled in any way by ‘the state’ there will always be the propensity for this ultimate and fundamental tool to be usurped and use to profit against the interests of the population and for dictatorial control.

    • 2prickit

      Really! Ask one what does feudalism look like? Suddenly appear before their eyes images of moats and castles; most consumers anticipate a new war game video! Will they ever make the connection with the contemporary state-violence, both international and domestic, of which sort is broadcast 24/7 by Main Stream Media to promote the state as a necessary good in its pursuit of evil? Those castles are the corporations that, since the creation of the Federal Reserve system, and internationally, as WWII war booty, through the IMF, have not really competed at all in open markets, but rather have bought and used Washington DC to regulate the competition; and those companies not regulated out of business were consolidated into the mega global corporations standing like castles, today, their foundations based on fiat money and state enforcement.

      • Feudalism today may be, in surface appearance, as different as is almost * every other aspect of life, but in modus operandi and fundamental intent it remains unchanged.

        * I doubt drinking and wenching has undergone much of a shift!

  • Fred Bastiat

    No government currencies are fairly valued. Fairness would necessitate a price set by a free market and voluntary exchange.

    • esqualido

      Absolutely. The legal tender laws are an affront to liberty, but what is more amazing is that the banks, which have gotten away with paying no interest to savers while simultaneously paying virtually nothing for money from the Fed (which they own) are beginning a campaign to prohibit the use of cash in paying their own credit card balances. This is hubris on an epic scale- what they are aiming for is you paying them a fee for every single financial transaction.

  • Jim Johnson

    I believe this subject will finally precipitate a Constitutional crisis, as it can not be read in any fancy fashion allowing us official recognition of any currency but that which we issue. Should the federal overlords choose to do so, States will begin saying No, and develop their own solutions. Even Bernays couldn’t get us there.

  • Samarami

    Fiat “money” makes perfect sense — for the conqueror(s). Because the object of conquest (which defines the history of virtually every part and parcel of earth on the planet) is to garner all production into the hands and control of the subjugator(s). If not for that it would make as much sense for conquerors to revert to the mode of operation of the early marauding hordes — who, once they breached the walls of a city, would proceed to rape all the women, slaughter all the men, women and children, leave their carcases to rot on the desert floor; then pillage the city and leave it in burning ruins.

    So, call it “funny money” if you will (it is), it makes sense. For us to expend time and energy bickering over the details does not conform to logic. About the best we can hope for is the inevitable worldwide collapse to manifest itself as quickly and painlessly as possible. Most of us need to move on with our lives and provide aid and comfort to those we love. And, hopefully, to abstain from beans (the majority of us anyway). It makes even less sense to feed the beast that ravages us.

    http://www.anarchism.net/anarchism_abstainfrombeans.htm

    Because fiat (“arbitrary orders”) has made it impracticable — illegal for the most part — to trade in anything but authorized fiat “money”. Bitcoin and that type exchange are admirable, but not readily useable for the general run of the unwashed masses in day-to-day exchanges for groceries, etc. I see more and more signs “we accept bitcoin” — and that might increase in the near future. But “cryptic currency” (or whatever it’s being called nowadays) has its drawbacks also. One being that it is apparently not 100% immune from criminal intercession from that superstition most people think of as “authority”.

    The original video was banned (taken down), but I recommend you listen to this: https://www.youtube.com/watch?v=2WirZPJtosc

    Again.

    Sam

  • Danny B

    Fiat currencies may all be funny money but, it isn’t funny when it comes out of your pocket.
    “It is estimated that $3/4 Trillion in the US has already been transferred from private sector savers and pensioners towards the reduction of US debt obligations. It is anticipated that 3–4% of the national debt will continue to be “debased” away every year over the next decade and a half.”

    “Financial Repression can be expected to last a long time and has proven to authorities to be successful. After WWII US debt ran nearly 122% of GDP. Artificially low yields from financial repression helped lower debt levels to almost 30% of GDP by the mid-1970.”
    https://gallery.mailchimp.com/30541a7ac196d53ed7527745c/files/Financial_Repression_Brief_Institutional_Funds_Pension_Insurance_SWF_Version_4.pdf

    I don’t believe that things are going to run real smooth;
    http://whtt.org/us-treasury-bondsthe-godfather-of-all-bubbles/#more-5227

  • wraft

    I don’t know why people are worried about dollar devaluation. It would be the greatest of blessings to the average person. While the price of goods would skyrocket, so also would wages. The only losers in the deal would be creditors and they should be happy just to escape with their onerous lives.

    The IMF is simply trying to keep the creditors in control and everyone should oppose this.

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