Debt Rattle Aug 26 2014: Central Banks and Free Money

[Raúl Ilargi Meijer]

DPC Post and Montgomery, corner of Market, San Francisco post quake Apr 1906 Courtesy of Tyler Durden comes a 22,000+ word ‘essay’ from Mark Blyth and
[See the full post at: Debt Rattle Aug 26 2014: Central Banks and Free Money]

[jal]

re.: free money
I have these simple numbers running in my head.
7% double in 10 years
10% double in 7 years

I also got a magic lamp that can make things appear out of thin air.
Just got to rub it the right way.

[rapier]

I couldn’t bear to read the Foreign Affairs article or the ZH summary when it was posted, knowing it would be a logical train wreck. Obviously the Fed is not going to be passing out dollars to regular citizens or households because first there is no possible mechanism and second it would be politically impossible. Sure a majority of voters would agree but nobody who is anybody would and that’s who counts.

That’s all setting aside the fact that the idea there is a shortage of money is so profoundly stupid. To quote Gandhi somewhat inappropriately, “There is enough for everyone’s need but not everyone’s greed.” Or deeper into things that need to be set aside when discussing money printing and economics itself is the fact that neither can address the real situation which transcends money and that is earths capacity to supply the human population with food water and energy enough to stay alive.

Who knows, maybe Hussman’s deconstruction of the article might gain some traction but he isn’t about to admit that money or economics themselves cannot fix all things, the really big ones. In fact can only make them worse.

[Professorlocknload]

Can’t have Free Market Capitalism without Capital. Real Capital, not government issued IOU’s posing as money. Or even government intervention in the economy of any sort, outside of judicial enforcement of contracts.

Continuing along the present course is like suggesting Liberty exists best in captivity.

Bad money has driven out good. Case closed.

Rulers, having chosen devaluation, default by stealth, over logical repudiation-of-the-debt default, we wait for the inevitable destruction of the currency. Who knows what then,,,but I’m sure the CFR and their Pentagon will have some fine suggestions.

[Professorlocknload]

Here’s a plausible outcome, given the present political environment.

Imagine three or four big assed Military Industrial Complexes competing with each other to see who becomes Dr. Strangelove.

[₿oogaloo]

I like my idea for free money more: The US Treasury should melt down the 8133 tonnes of gold into American Eagle gold coins and send them out as stimulus payments to the taxpayers. After all, gold is nothing more than a barbarous relic, and it makes no sense for the government to incur costs to vault a barbarous relic. Some people love gold and some people hate it. Those who hate it can either eat it or sell it. Those who love it can go on loving it, with a little more in their pockets. We can call the law the “Give it Back Act” or the “throw Out the Trash Act” — and it will prove that the government really believes its own propaganda.

[Dr. Diablo]

I have heard rumors of this shift to private equity before. For one thing, governments are bankrupt and discredited, and their bonds will fail. That will shift capital flows from public to private, for which you can read Martin Armstrong’s extensive coverage. And certainly bait-n-switch to handing the money to Sachs for safekeeping is a winner for the bonus train.

But let’s do another mental experiment here: suppose we print money and use it to buy private equity. How is that any different from handing it to CEO’s directly, considering stock option and proportional ownership of equity? Printing money is from the taxpayers directly, and flows to whom? The wealthiest insiders, who have access to the most leverage, and are most invested in world equity. So we can count on this being done as it’s simply doing more of what we’re already doing, loving, and protecting: FROM the poor, TO the rich.

But my mental experiment goes further. So if the Fed prints 20% GDP ($3 Trillion) and buys who? Not Hobby Lobby. Not wankers like Smith and Wesson. Not Joe’s Public-Traded Pizza Corp, Inc. No, only “Our Friends and Insiders, LLC” Monsanto, ADM, Halliburton… And Monsanto with $3 Trillion in free money instantly drives “Burpee Private Garden Seeds” and “Joe’s Public Pizza” out of business. Until we have 5 companies that the Fed likes. There’s no Federal oversight, so why not?

But even that’s not getting to my point. So we take $3 Trillion and buy Lockheed-Martin and Monsanto. Doesn’t that make Lockheed/Monsanto 20% bigger and the corresponding power and oversight of the U.S. government 20% smaller? What better way to finally erase the effective power of governments vs. corporations?

[Author]

Posts