STAFF NEWS & ANALYSIS
End of the Fed?
By Staff News & Analysis - November 23, 2010

'Credibility of the Fed' Under Historic Attack: Mishkin … The Federal Reserve is undergoing what former central bank governor Frederic Mishkin (left) is calling an unprecedented level of attacks caused by its inability to articulate a clear message regarding its multitrillion-dollar monetary policies. In a CNBC interview, Mishkin said the Fed has done a poor job justifying its efforts to buy Treasurys and other securities as a way to stimulate the economy—a policy often referred to as quantitative easing. Washington officials have sharply criticized the central bank, with some recently saying that the Fed ought to lose its dual mandate of controlling inflation and ensuring maximum employment, and focus solely on inflation. In several decades of studying Fed history, Mishkin said he has never seen attacks more intense. Mishkin is an economist and professor at Columbia Business School and served on the Fed from 2006-08. – CNBC

Dominant Social Theme: Where the heck did this come from? Why the haters? …

Free-Market Analysis: So Federic Mishkin, who is a well-known economist of the Keynesian variety has realized, perhaps belatedly, that the US Federal Reserve is under attack and that the attacks are "unprecedented." This does not surprise us however (nor you), as we predicted this about a year-and-half-ago. In this article, we want to use Mishkin's statement to restate the Bell's underlying premise regarding the Internet and the Western power elite – and how it helped with a conclusion long before Mishkin came to his apparent perspective.

We wish to do so because it seems to us at this juncture that the confrontation we have regularly tracked is deepening. We also wish to restate this theme because we continue to get regular feedbacks maintaining that the Internet is not having an impact and that there has been no change in the way the Western power elite's are conducting themselves. Thus, we will briefly restate the Bell's fundamental theme below and then further discuss Mishkin's statement in light of predictions we made about the Federal Reserve way back in May 2009.

Theory first. Our perspective, shared by others in the alternative 'Net press, is that a small group of powerful Western banking families have been engaged in a conspiracy to move the West toward one world government for at least a century or more. The weapon of choice (we posit) is dominant social themes, which we also describe as fear-based promotions, that panic Western middle classes into giving up more and more power and authority to entities of global governance that have been prepared especially for this purpose. Chief among these entities are the UN and its subsidiaries.

The paradigm we use postulates that the truth-telling of the Internet, blossoming as a powerful communication technology in the past decade, was an entirely unexpected phenomenon and caught the power-elite by surprise. The Internet was a creation of US DARPA, which stitched together universities and laboratories for purposes of (mostly) military information sharing. The unanticipated invention of a personal computer by two adolescents in a garage in the late 1970s eventually collided with Internet technology and created the World Wide Web in an act of Hayekian spontaneous order.

Throughout the 1980s and into the 1990s, the elite continued with business as usual. But at some point in time in the 1990s, the elite Western braintrust must have concluded the Internet was undermining its campaign for world governance. Those involved evidently speeded things up. Instead of moving slowly and deliberately using the mind control of fear-based promotions, the powers-that-be began to generate legislation based on these memes, even when the ground was not properly prepared. In fact, instead of countering the truth-telling of the Internet, the elite insisted on advancing dominant social themes even when they were discredited. Global warming is a case in point.

To us, the key to understanding the events of the early 21st century has to do with the confrontation of the truth-telling of the Internet and the efficacy of the fear-based promotions of the power elite. As an investor or simply as a concerned citizen or family man (or woman), one needs to watch closely to see how elite promotions are being undermined by information on the Internet. If elite promotions are indeed being compromised (we argue they have been) this has a direct effect on the ability of Western elites to pursue one-world government in an efficacious way.

Since everything from currency to banking to the larger worldwide economy is in a sense based on plans to implement a one-world government, it is of the utmost import that people understand the underlying communication confrontation between the Internet and the powers-that-be and continue to track its evolution. This, the Daily Bell tries to do every day.

The elite's disarray seems to be deepening. Some of it may be purposeful – as out of chaos comes (a new) order. But there are various statements we can point to that seem sincere and express a degree of distress. The Mishkin statement, in fact, (see excerpt at the beginning of this article) is only one of a number of such. US Democratic Senator Jay Rockefeller has said in public testimony that the Internet is a "fearsome awesome problem" – one that might better have never been invented. And recently in a speech, elite-mouthpiece Zbigniew Brzezinski warned, "For the first time in all of human history, mankind is politically awakened. That's a total new reality and has not been so for most of human history."

We would argue that by applying the Bell's paradigm to the larger sociopolitical conversation, it is possible to track the struggle that we have described. Not only that, but it is possible to do so in a kind of "real time" – to identify what is going on as it is happening, not nearly two years later. Here is an excerpt from a Bell article published in May 2009 that we wrote after watching the Fed's Elizabeth Coleman give the single worst defense of a major institution we'd ever seen:

The [Youtube testimony] of Elizabeth Coleman [is entitled] … "Is Anyone Minding the Store at the Federal Reserve?" and it is one of the single most astonishing moments (or minutes) ever manifested or preserved in this already-amazing digital era … The economic ramifications of what is going on couldn't be more obvious. Post Coleman, the Fed is suddenly, inconceivably, an institution fighting for its political life. (Perhaps you read it here first …) This financial behemoth, the most powerful single entity in the world, has likely already begun to topple. But as it is with any figure of titanic proportions, the fall is still silent to begin with for contact with the ground has not yet been made.

You can see the whole article here: Beginning of the End? Fed Cannot Account for $9 Trillion.

We knew what we were watching was a turning point in the Fed's history. That the braintrust running the US central bank had thrust such an unprepared person onto center stage at a critical juncture meant to us that there was STILL no real comprehension of the struggle in which the bank was engaged. They did not for instance understand that Coleman's testimony would find a home on Youtube and would be replayed literally millions of times. They did not understand the bloggers and blogs that would point to it and comment on it. The promotion that is central banking – the seminal and most important promotion of the power elite – began to die with the testimony of Coleman in our view.

We can make the same points about other promotions as well – and often do. The global warming promotion is withering no matter what the powers-that-be try to do to salvage it. The European Union and the euro are beginning to collapse it seems. The faux-authoritarian state that the US has tried to erect is under attack now, with the problems the TSA is having. The narrative of 9/11 itself, and the larger war on terror, is becoming increasingly unsupportable, or at least questionable. The war in Afghanistan is not going well. Previous promotions involving NASA, JFK and the Cold War itself are also coming under fire.

We understand the counter-arguments of course, and certainly we do not wish to appear over-optimistic. The power elite may certainly have planned to initiate a certain level of chaos in the world in order to create a New World Order. Perhaps much of what is going on today may have been preplanned. And yet … it is surely difficult to run a secret conspiracy to create world government when tens or even hundreds of millions (if not more) are well aware of what is going on and don't wish to participate – and are even growing increasingly upset about it.

There is a reason why the elite used fear-based promotions throughout the 20th century to channel Western society's evolution toward world government. It is evident and obvious when there are 6,000 of you and six billion who are not … well, let's just say that brute force is not a great option. And yet the Internet every day erodes the credibility of these promotions and makes them harder to market. The elite is reduced to a frenetic effort to generate conferences, treaties and legal structures that have the force of law but increasingly lack credibility. With its promotions misfiring, the elite clothes its machinations in the color of law, but that is all it can do. And how can it be enough?

What empire has ever lasted where the ruled believe not a wit in the glory of the state, nor its destiny? What cohesiveness can be discovered in a society that no longer believes in the mythic narratives of its elites? What broad-based acquiescence can be gained when more and more people every day discover that they have been living a lie specially cultivated for them by the leaders that they once trusted? Mishkin may be surprised by the vehemence of the sentiment against the Fed. But the economic downturn combined with the truth-telling of the Internet has mixed a bitter brew indeed when it comes to continued acceptance of the elite's dominant social themes.

Again, we are not arguing that the struggle between the Internet and the elite is over by any means, or even that the elite, vanquished, will somehow disappear. Far from it. The best that can be hoped for in our view is that the elite will be forced to take a step backward from its goals of world government. But we believe this is certainly feasible in the (unexpected) era of the Internet.

We would argue in fact that the history of humankind ought to be interpreted as a struggle between innovative communication technologies (and tool kits) and the determination of the powers-that-be to maintain control of extant sociopolitical narratives. One can apply this perspective historically, over a nearly 50,000-year sweep of human evolution. Or one can apply it more parochially to current-day events. We would argue that those who wish to do so will be able to see more clearly what is taking place in the world right now and thus will experience fewer surprises and will be better prepared for what it is to come.

We would stress that seeing what is occurring today as a process (similar to that took place most recently when the Gutenberg press helped initiate the Renaissance) could help ease the psychological weight that so many feel when they begin to analyze these issues. The elite is by no means monolithic or all-powerful. In fact we would argue that in aggregate, its leaders despite their power and wealth are most disturbed by what has taken place and by the increasingly generalized knowledge of their ongoing manipulations.

After Thoughts

It may not be possible to impose a New World Order worldwide simply based on brute force; or at least it may pose significant problems. (In fact, if it were feasible, wouldn't it have been tried already?) Lacking this option, the struggle between elite narratives and the truth-telling of the Internet will surely continue. And there are not guarantees in our view as to whom will prevail – or how or when.

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