Week 22 of the Quarantine
SAN MARTIN, ARGENTINA – The news this morning tells us that the Republicans and Democrats are still “$1 trillion apart” in their negotiations.
Both favor more “stimulus.” That is, both favor taking more money from people who earned it and giving it to people who didn’t.
They’re just dickering over the price.
But there are lots of ways of ripping people off. And the nice thing about the feds’ counterfeiting is that it is more like a white-collar embezzlement than sticking up a liquor store in a bad neighborhood. Often, the victims never even find out that they’ve been scammed.
That is why there is such widespread support for more “stimulus.” The voters see the money coming their way; they don’t see where it comes from.
Yesterday, we looked at why the “eat the rich” doctrine is likely to catch on. The feds corrupted the whole economy – and society itself – with their fake money, fake interest rates… and trillions of dollars given to Wall Street.
The fake interest rates increased debt and cut growth rates in half. And they twisted the economy away from Main Street (where most people earn their living) and toward Wall Street (where the top 10% of the population owns nearly 90% of the assets.)
This “financialization” made the rich richer, but it left most people (relatively) poorer.
People don’t understand how it works. And they don’t want to understand.
But they feel cheated. Many want revenge.
The solution, as we pointed out yesterday, is very simple: Just say “no” to the fakery and the larceny. No more stimulus. No more deficits. No more Federal Reserve support for Wall Street. No more counterfeiting.
If Mr. Trump really wanted to “make America great again,” and had any idea what was really going on, he’d have a “fireside chat” with the voters and explain it to them.
He’d look them in the eye and tell them the truth: that printing money does not bring them new wealth; it merely shifts it from those who earned it to those who didn’t… and that every penny of real wealth that comes their way from the federal government must sooner or later come from them.
He’d describe how American capitalism has been perverted by fake money. And he’d show how money-printing has slowed down the economy… and transferred trillions in real wealth to the people who need it least – the rich.
There are only two kinds of money – real or fake. (The president is welcome to draw on our Diaries to help voters understand…)
Real money is created by providing real goods and services to others. Traditionally, it is represented by gold or silver tokens… or pieces of paper backed by gold or silver.
Take out the gold or silver, and you just have pieces of paper – which can be printed in any quantity the authorities choose… regardless of the real wealth involved… and used for whatever claptrap purpose they want.
Easy Way Out
Forty years ago, then Fed chief Paul Volcker held the line. Instead of printing more fake money, he printed less… and saved the fake-money system.
But historically, at least since the reign of the Roman Emperor Nero, the temptation to create “too much” fake money has been irresistible.
And today’s leaders – in Congress and the Federal Reserve – are hewn from softer wood than Volcker; they bend easily. Faced with a “crisis,” they don’t rise to the challenge – they stoop to it.
What a delight it would be for The Donald to call out one of the biggest hinds in the whole jackass herd – former Fed chief, Ben Bernanke.
In the long, tawdry story of central banking, no better illustration of malfeasance and economic quackery can be found than in his book, The Courage to Act. He applauds himself – as if he were Horatio at the bridge – for having the “courage” to take the easy way out.
Instead of stiffening his backbone and letting the markets do what they do best – sort out the feds’ errors – he “printed” trillions of dollars in order to keep speculators from getting what they deserved.
And thus, did he make the rich richer… and hasten the arrival of the barbarians, now gathered at the gates, knives and forks in hand, ready to eat them.
Bernanke “printed” $3.6 trillion over a five-year period – an unprecedented increase in America’s monetary base. Today’s Jerome Powell-led Federal Reserve, however, printed nearly that much in just 90 days.
And it’s just getting started… Last week, there was a $4 trillion deficit to fund. Next week, the deficit may be $5 trillion or $6 trillion.
Neither conservatives nor liberals offer any objection. They, too, have the courage to spend other people’s money. Don’t ask; don’t tell. Just print!
Then, after describing the slimey hole into which the republic has fallen, speaking in a low, solemn voice, carefully reading from the teleprompter, President Trump could finally rise to the role he was elected to play.
As if his brain had suddenly come to life, he could announce a program that might actually “make America great again.”
He’d let it be known that he was planning to set things right – first, by removing the Fed chairman, and then, by vetoing all spending bills for which no funds were available.
In other words, if America was going to continue down this long, dark road to inflation, bankruptcy, and social suicide, it would be over his dead body.
Which is probably how it would turn out.
Immediately, Wall Street would crash. The problem of “inequality” would be solved in minutes.
Interest rates would rise. Bad businesses would go broke. Bad managers would lose their jobs. The share buybacks would end.
And anyone who had to refinance a house or a business loan would be in big trouble. Desperate for real money, entrepreneurs, businessmen, and ordinary citizens would have to get to work immediately to earn it.
The next day, there would be a full-page editorial in The New York Times, signed by hundreds of leading economists, telling us that the president had lost his mind and should be impeached.
The entire elite establishment – the Swamp, the press, the universities, the bureaucrats… the do-gooders and world-improvers… the cronies… and the military/industrial/Wall Street/medical/educational/prison complex – would be against him.
Going cold turkey wouldn’t be easy. Probably impossible. But what fun for us! Finally, there would be something true… straight… and honest to write about.
As it is, there are many different messages in the press. And they are almost all fraudulent.
The Trump Team wants more stimulus. Trump – the biggest spender in U.S. history – proposes another unfunded tax cut.
Meanwhile, the Biden-Harris team promises even more financial mayhem…
The Democrats’ current bid for the next stimulus program is $3.4 trillion.
Harris’ “LIFT the Middle Class” proposal would add $2.8 trillion to the debt over the next eight years.
Taken together, Biden and Harris’ proposals could cost as much as $10 trillion.
In this fantasy world, no proposal… no idea… no program is so outrageous or so stupid that it is out of the question.
Eat the rich?
Sure, why not?
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