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Stoking the Fire Without Burning Down the Barn
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The Fed has options for countering the record inflation the U.S. is facing that are more productive and less risky than raising interest rates.

The Federal Reserve is caught between a rock and a hard place. Inflation grew by 6.8% in November, the fastest in 40 years, a trend the Fed has now acknowledged is not “transitory.” The conventional theory is that inflation is due to too much money chasing too few goods, so the Fed is under heavy pressure to “tighten” or shrink the money supply. Its conventional tools for this purpose are to reduce asset purchases and raise interest rates. But corporate debt has risen by $1.3 trillion just since early 2020; so if the Fed raises rates, a massive wave of defaults is likely to result. According to financial advisor Graham Summers in an article titled “The Fed Is About to Start Playing with Matches Next to a $30 Trillion Debt Bomb,” the stock market could collapse by as much as 50%.

Even more at risk are the small and medium-sized enterprises (SMEs) that are the backbone of the productive economy, companies that need bank credit to survive. In 2020, 200,000 more U.S. businesses closed than in normal pre-pandemic years. SMEs targeted as “nonessential” were restricted in their ability to conduct business, while the large international corporations remained open. Raising interest rates on the surviving SMEs could be the final blow.

Cut Demand or Increase Supply?

The argument for raising interest rates is that it will reduce the demand for bank credit, which is now acknowledged to be the source of most of the new money in the money supply. In 2014, the Bank of England wrote in its first-quarter report that 97% of the UK money supply was created by banks when they made loans. In the U.S. the figure is not quite so high, but well over 90% of the U.S. money supply is also created by bank lending.

Left unanswered is whether raising interest rates will lower prices in an economy beset with supply problems. Oil and natural gas shortages, food shortages, and supply chain disruptions are major contributors to today’s high prices. Raising interest rates will hurt, not help, the producers and distributors of those products, by raising their borrowing costs. As observed by Canadian senator and economist Diane Bellemare:

Raising interest rates may cool off demand, but today’s high prices are tightly tied to supply issues – goods not coming through to manufacturers or retailers in a predictable way, and global markets not able to react quickly enough to changing tastes of consumers.

… A singular focus on inflation could lead to a ratcheting up of interest rates at a time when Canada [and the U.S.] should be increasing its ability to produce more goods, and supplying retailers and consumers alike with what they need.

Rather than a reduction in demand, we need more supply available locally; and to fund its production, credit-money needs to increase. When supply and demand increase together, prices remain stable, while GDP and incomes go up.

So argues UK Prof. Richard Werner, a German-born economist who invented the term “quantitative easing” (QE) when he was working in Japan in the 1990s. Japanese banks had pumped up demand for housing, driving up prices to unsustainable levels, until the market inevitably crashed and took the economy down with it. The QE that Werner prescribed was not the asset-inflating money creation we see today. Rather, he recommended increasing GDP by driving money into the real, productive economy; and that is what he recommends for today’s economic crisis.

How to Fund Local Production

SMES make up around 97-99% of the private sector of almost every economy globally. Despite massive losses from the pandemic lockdowns, in the U.S. there were still 30.7 million small businesses reported in December 2020. Small companies account for 64 percent of new U.S. jobs; yet in most U.S. manufacturing sectors, productivity growth is substantially below the standards set by Germany, and many U.S. SMEs are not productive enough to compete with the cost advantages of Chinese and other low-wage competitors. Why?

Werner observes that Germany exports nearly as much as China does, although the German population is a mere 6% of China’s. The Chinese also have low-wage advantages. How can German small firms compete when U.S. firms cannot? Werner credits Germany’s 1,500 not-for-profit/community banks, the largest number in the world. Seventy percent of German deposits are with these local banks – 26.6% with cooperative banks and 42.9% with publicly-owned savings banks called Sparkassen, which are legally limited to lending in their own communities. Together these local banks do over 90% of SME lending. Germany has more than ten times as many banks engaged in SME lending as the UK, and German SMEs are world market leaders in many industries.

Small banks lend to small companies, while large banks lend to large companies – and to large-scale financial speculators. German community banks were not affected by the 2008 crisis, says Werner, so they were able to increase SME lending after 2008; and as a result, there was no German recession and no increase in unemployment.

China’s success, too, Werner attributes to its large network of community banks. Under Mao, China had a single centralized national banking system. In 1982, guided by Deng Xiaoping, China reformed its money system and introduced thousands of commercial banks, including hundreds of cooperative banks. Decades of double-digit growth followed. “Window guidance” was also used: harmful bank credit creation for asset transactions and consumption were suppressed, while productive credit was encouraged.

Werner’s recommendations for today’s economic conditions are to reform the money system by: banning bank credit for transactions that don’t contribute to GDP; creating a network of many small community banks lending for productive purposes, returning all gains to the community; and making bank behavior transparent, accountable and sustainable. He is chairman of the board of Hampshire Community Bank, launched just this year, which lays out the model. It includes no bonus payments to staff, only ordinary modest salaries; credit advanced mainly to SMEs and for housing construction (buy-to-build mortgages); and ownership by a local charity for the benefit of the people in the county, with half the votes in the hands of the local authorities and universities that are its investors.

Public Banking in the United States: North Dakota’s Success

That model – cut out the middlemen and operationalize community banks to create credit for local production – also underlies the success of the century-old Bank of North Dakota (BND), the only state-owned U.S. bank in existence. North Dakota is also the only state to have escaped the 2008-09 recession, having a state budget that never dropped into the red. The state has nearly six times as many local banks per capita as the country overall. The BND does not compete with these community banks but partners with them, a very productive arrangement for all parties.

In 2014, the Wall Street Journal published an article stating that the BND was more profitable even than JPMorgan Chase and Goldman Sachs. The author credited North Dakota’s oil boom, but the boom turned into a bust that very year, yet the BND continued to report record profits. It has averaged a 20% return on equity over the last 19 years, far exceeding the ROI of JPMorgan Chase and Wells Fargo, where state governments typically place their deposits. According to its 2020 annual report, in 2019 the BND had completed 16 years of record-breaking profits.

Its 2020 ROI of 15%, while not quite as good, was still stellar considering the economic crisis hitting the nation that year. The BND had the largest percentage of Payroll Protection Plan recipients per capita of any state; it tripled its loans for the commercial and agricultural sectors in 2020; and it lowered its fixed interest rate on student loans by 1%, saving borrowers an average of $6,400 over the life of the loan. The BND closed 2020 with $7.7 billion in assets.

Why is the BND so profitable, then, if not due to oil? Its business model allows it to have much lower costs than other banks. It has no private investors skimming off short-term profits, no high paid executives, no need to advertise, and, until recently, it had only one branch, now expanded to two. By law, all of the state’s revenues are deposited in the BND. It partners with local banks on loans, helping with capitalization, liquidity and regulations. The BND’s savings are returned to the state or passed on to local borrowers in the form of lower interest rates.

What the Fed Could Do Now

The BND and Sparkassen banks are great public banking models, but implementing them takes time, and the Fed is under pressure to deal with an inflation crisis right now. Prof. Werner worries about centralization and thinks we don’t need central banks at all; but as long as we have them, we might as well put them to use serving the Main Street economy.

In September 2020, Saqib Bhatti and Brittany Alston of the Action Center on Race and the Economy proposed a plan for stimulating local production that could be implemented by the Fed immediately. It could make interest-free loans directly to state and local governments for productive purposes. To better fit with prevailing Fed policies, perhaps it could make 0.25% loans, as it now makes to private banks through its discount window and to repo market investors through its standing repo facility.

They noted that interest payments on municipal debt transfer more than $160 billion every year from taxpayers to wealthy investors and banks on Wall Street. These funds could be put to more productive public use if the Federal Reserve were to make long-term zero-cost loans available to all U.S. state and local governments and government agencies. With that money, they could refinance old debts and take out loans for new long-term capital infrastructure projects, while canceling nearly all of their existing interest payments. Interest and fees typically make up 50% of the cost of infrastructure. Dropping the interest rate nearly to zero could stimulate a boom in those desperately needed projects. The American Society of Civil Engineers (ASCE) estimates in its 2021 report that $6.1 trillion is needed just to repair our nation’s infrastructure.

As for the risk that state and local governments might not pay back their debts, Bhatti and Alston contend that it is virtually nonexistent. States are not legally allowed to default, and about half the states do not permit their cities to file for bankruptcy. The authors write:

According to Moody’s Investors Service, the cumulative ten-year default rate for municipal bonds between 1970 and 2019 was just 0.16%, compared with 10.17% for corporate bonds, meaning corporate bonds were a whopping 63 times more likely to default. …[M]unicipal bonds as a whole were safer investment than the safest 3% of corporate bonds. … US municipal bonds are extremely safe investments, and the interest rates that most state and local government borrowers are forced to pay are unjustifiably high.

… The major rating agencies have a long history of using credit ratings to push an austerity agenda and demand cuts to public services …. Moreover, they discriminate against municipal borrowers by giving them lower credit ratings than corporations that are significantly more likely to default.

… [T]he same banks that are major bond underwriters also have a record of collusion and bid-rigging in the municipal bond market. … Several banks, including JPMorgan Chase and Citigroup, have pleaded guilty to criminal charges and paid billions in fines to financial regulators.

… There is no reason for banks and bondholders to be able to profit from this basic piece of infrastructure if the Federal Reserve could do it for free. [Citations omitted.]

To ensure repayment and discourage overborrowing, say Bhatti and Alston, the Fed could adopt regulations such as requiring any borrower that misses a payment to levy an automatic tax on residents above a certain income threshold. Borrowing limits could also be put in place. Politicization of loans could be avoided by making loans available indiscriminately to all public borrowers within their borrowing limits. Another possibility might be to mediate the loans through a National Infrastructure Bank, as proposed in HR 3339.

All of this could be done without new legislation. The Federal Reserve has statutory authority under the Federal Reserve Act to lend to municipal borrowers for a period of up to six months. It could just agree to roll over these loans for a fixed period of years. Bhatti and Alston observe that under the 2020 CARES Act, the Fed was given permission to make up to $500 billion in indefinite, long-term loans to municipal borrowers, but it failed to act on that authority to the extent allowed. Loans were limited to no more than three years, and the interest rate charged was so high that most municipal borrowers could get lower rates on the open municipal bond market.

Private corporations, which the authors show are 63 times more likely to default, were offered much more generous terms on corporate debt; and 330 corporations took the offer, versus only two municipal takers through the Municipal Liquidity Facility. The federal government also made $10.4 trillion in bailouts and backstops available to the financial sector after the 2008 financial crisis, a sum that is 2.5 times the size of the entire U.S. municipal bond market.

Stoking the Fire with Credit for Local Production

Playing with matches that could trigger a $30 trillion debt bomb is obviously something the Fed should try to avoid. Prof. Werner would probably argue that its policy mistake, like Japan’s in the 1980s, has been to inject credit so that it has gone into speculative assets, inflating asset prices. The Fed’s liquidity fire hose needs to be directed at local production. This can be done through local community or public banks, or by making near-zero interest loans to state and local governments, perhaps mediated through a National Infrastructure Bank.

This article was first posted on ScheerPost. Ellen Brown is an attorney, chair of the Public Banking Institute, and author of thirteen books including Web of Debt, The Public Bank Solution, and Banking on the People: Democratizing Money in the Digital Age. She also co-hosts a radio program on PRN.FM called “It’s Our Money.” Her 300+ blog articles are posted at

(Republished from Web of Debt by permission of author or representative)
• Category: Economics • Tags: Banking Industry, Federal Reserve, Inflation 
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  1. You see, Germany is better because they have not-for-profit community banks.

    In other words, socialism.

    Even though socialism is bad, Germany does better under it. Strange but true.

    • Disagree: Tjoe
    • LOL: Wade Hampton
  2. @obwandiyag

    Just as having a fire and police department is socialism. Just as social security is socialism.

    Every capitalist country must have their banking under some controls for the country and its people to prosper and innovate.

    If that’s socialism, bring it.

    • Agree: Alfred, JWalters
    • Thanks: Tom Welsh
  3. SafeNow says:

    I think German and Chinese people are more disciplined and conscientious than American people, and would use the borrowed money more carefully and honestly. Also, more proficiently. There’s a great scene in “The best years of our lives” in which Frederick March is a community banker. He trusts the borrower and grants the loan, but that was a really solid borrower, different from today’s borrowers.

    • Agree: Tom Welsh
    • Thanks: simple mind
    • Replies: @Trevor
    , @Petermx
  4. So what do you want, a Robber Baron banking system or a banking system whose goal is to support communities and small businesses?

    Remember that many U.S multinationals made their size off the backs of U.S taxpayer funded research….isn’t that socialism for the rich?

    These same business then repayed the American worker/tax payer by bailing out into a low tax low wage jurisdiction.

    Americans owe crony capitalism nothing, you can structure your banking system and society anyway you want, one that benefits those that do the work sounds good.

  5. I doubt it is that simple … after all the Community Reinvestment Act was
    supposed to address this, and when Clinton forced it down banks´throats
    at gunpoint it caused the crash of 2008/9.

    – Germans do not usually regard stocks as a source of rent income freely
    disposed of but as an investment, so their companies can spit on shareholder value
    if necessary while US ones are purposely ruined to increase it.
    – Allowing communities to take on credit to spend on gibs is
    a death spiral.
    – Last not least inflation increases inequality and eases paying off incurred debt,
    so interest from the top and the gubmint to end it is somewhat limited.
    Only the little ones lose – and they don´t count.

    • Replies: @Irish Savant
  6. Levtraro says:

    Even if they tried to implement these ideas, which they won’t for obvious reasons, there is no time, inflation rises much faster than restructuring the banking system, so interest rates have to go up.

    The Federal Reserve is caught between a rock and a hard place. Inflation grew by 6.8% in November, the fastest in 40 years, a trend the Fed has now acknowledged is not “transitory.” The conventional theory is that inflation is due to too much money chasing too few goods, so the Fed is under heavy pressure to “tighten” or shrink the money supply. Its conventional tools for this purpose are to reduce asset purchases and raise interest rates. But corporate debt has risen by $1.3 trillion just since early 2020; so if the Fed raises rates, a massive wave of defaults is likely to result.

    Not necessarily. Corporations have been and will again be selectively bailed out, at the expense of the American taxpayer and the national debt. Who batted an eyelash when Buruk Obembe umleashed TARP? The only critical, existential risk is the US dollar dropping in value and/or ceasing to be demanded from outside of the USA for international settlements. That will be the final reckoning for all these decades of mismanagement under neolib policies.

  7. Miro23 says:

    A very good article. How to take the speculation out of finance and invest productively.

    • Agree: john cronk
    • Replies: @Skeptikal
  8. anon[196] • Disclaimer says:

    In October, the Vanderbilt Law Review published a 69-page paper by Omarova in which she made the following bizarre recommendations to reform the U.S. banking system:
    (1) Move all commercial bank deposits from commercial banks to so-called FedAccounts at the Federal Reserve;
    (2) Allow the Fed, in “extreme and rare circumstances, when the Fed is unable to control inflation by raising interest rates,” to confiscate deposits from these FedAccounts in order to tighten monetary policy;
    (3) Allow the most Wall Street-conflicted regional Fed bank in the country, the New York Fed, when there are “rises in market value at rates suggestive of a bubble trend,” such as with technology stocks today, to “short these securities, thereby putting downward pressure on their prices”;
    (4) Eliminate the Federal Deposit Insurance Corporation (FDIC) that insures bank deposits in the U.S. and prevents panic runs on banks;
    (5) Consolidate all bank regulatory functions at the OCC – which Omarova was nominated to head.—

    Another route to Sovietiation of economy as the professor Richard (re- Japan ) seems to imply in his You tube interview will happen if central bank becomes the only bank in town

  9. This Ellen Brown character is a retarded Statist. All these complicated new regulations are proposed, yet the problem is simple. When you print more currency on the computer to the tune of an extra $4,000,000,000,000 a year instead of just that standard $1 Trillion, the inflation rate* goes higher. This currency is getting worth LESS quicker – not worthLESS yet, but that’s coming.

    This is why the real estate market is so hot. Even if people don’t read anything from economists (and most times they are better off for it, Exhibit A being this ridiculous article), they have a general idea of what holds value. That’s the same story as in China, as people put money into housing, as inflation there has been high – one of America’s top exports to the place, since they peg the Yuan to the Dollar.

    The only thing the author is right about is that the FED is caught between a rock and a hard place. If they raise rates, or I should say, LET rates rise to a natural level (the price of money), then:

    1) The stock market will crash, as people will be able to get similar returns from less risky investments.
    2) You know those pie charts the IRS still (amazingly) includes near the back of the 1040 instruction book .pdf files? Well, that currently 8% “net interest on debt” piece of pie will be a high calorie 40 or 50 % slice, and it will be obvious to everyone that there’s no getting out of this US Gov’t debt hole.

    If the FED keeps this 13 year-old granny-savings-plan-killing low rate policy, yeah, inflation will be very hard to hide. Those COLAs, the increases for SS payments and the like will be more budget busting and the BLS green-eyeshade boys will be under pressure to become even more creative.

    * For crying out loud, even the 2nd sentence is written stupidly: “Inflation grew by 6.8% in November,…” No, inflation WAS 6.8% (probably higher) not GREW BY. Inflation grew by 50% or more. It’s been 4-5% over the last decade or so, not the BS BLS numbers of 1-2%.

    Peak Stupidity has loads of examples in posts with our Inflation topic key – healthcare, college tuition, insurance, utilities, auto parts, building materials, you name it, rates are around 4-5%, as calculated from the mid-1990s to the present, with compounding incorporated.

    • Agree: Verymuchalive, David
    • Thanks: Badger Down
    • Replies: @onebornfree
    , @Si1ver1ock
  10. Trevor says:

    … in Japan in the 1990s. Japanese banks had pumped up demand for housing, driving up prices to unsustainable levels, until the market inevitably crashed and took the economy down with it.

    Hasn’t China just done that with the Evergrande fiasco and real estate collapse? And Chinese individuals are heavily invested in real estate other than their house.

    Isn’t the USA in the process of doing the same thing (again, like 2008)?

    It would seem that governments do not learn from history.

    • Replies: @Mulga Mumblebrain
  11. “According to financial advisor Graham Summers in an article titled “The Fed Is About to Start Playing with Matches Next to a $30 Trillion Debt Bomb,” the stock market could collapse by as much as 50%.”


    Ponzi schemes always collapse eventually……. 😉

  12. Petermx says:

    I believe it was in the 1990’s that lending practices changed. At one time the borrower had to impress the lender and convince him that he was responsible and would be able to pay the loan back. By the 1990’s the lenders had become salesmen, trying to convince those that wanted a loan to borrow from them and that was when people got loans they could not pay back.

  13. Negative interest Rates should be considered—as a priority.

  14. Thanks Ellen
    I’ve been a fan of your writing for some time

  15. Brown’s proposals are all far too late. The economic collapse of the United States is imminent. Any number of events could precipitate it, including a Russia-Ukraine.

    In the modern era, something like this has happened before – the apparent collapse of Spain in the later 17th. But Spain had something that America doesn’t.

    In addition, one of the reasons other powers
    came to the rescue of Spain in 1667–8 and on later occasions was a concern that Spain should throw its still enormous resources into the struggle to restrain Louis XIV, who had replaced the king of Spain as the main threat to the European balance. Those resources included substantial remittances of bullion from the Indies; indeed bullion imports in every decade after 1660 exceeded the peak achieved in the 1590s

    All America has is fiat currency. Its collapse will not only be apparent, but actual and severe. Spain was still able to retain its empire, America won’t.

  16. I intend to explore with my 38,000 member homeowners association the prospect of creating its own local credit union or public bank with lending limited to activities that boost the local gross domestic product, such as new construction lending but not for the big corporations or franchises. This would be contingent upon study to determine if the banking market was already over saturated with non-profit credit unions and public banks. One of the HOA board members once ran a bank so the experience might already be in place.

    There needs to be a way to re-develop the local economy against the globalist retailers and banks so as to rotate money from the older population segment to younger people to start businesses, buy or build buildings, etc. A higher interest rate would attract capital over the puny rates of the globalist banks.

  17. I can safely predict something: with the alternative to SWIFT being lowered into working, demand for dollars will come down to the same extent non-SWIFT expands; right now if Russia wants to import Chinese manufactured goods, it needs dollars first. When this trade is taken out of SWIFT and dollars, Russians and Chinese wont need dollars to settle their trades – they can be settled in the final count by the old system: exporters and importers in one country will trade and settle their bills, and the difference between the final position of the two countries (balance of trade) can be settled by exporting goods needed by the other party; if China has imported less from Russia than vice versa, that is, if the balance of trade is in China’s favour, the difference can be settled with Russian oil and gas; if it is the other way round, it can be settled with Chinese goods. And the ultimate imbalances will be recorded in the non-SWIFT ledgers and will be settled over longer durations with all possible goods and services. Voila, those many dollars are now not necessary. If the annual trade between Russia and China is $5 billion, now those many dollars are no longer needed. So, all those dollars will flow back to the issuing country, America, stoking further inflation.

    Americans can do a lot of things with these returning dollars: dollar is ultimately backed by the output of American people. This is what is often obscured. When people say fiat currencies are not backed by anything, they are wrong. Fiat currencies are backed by the output of the economy of the issuing country. If these dollars are treated as foreign investments, allowed to start businesses and manufacturing, employing Americans, then these returning dollars will spur some real growth. However, if the foreigners sending these dollars back to US are told that they can’t use these dollars to start any business or employ Americans and get their output, but can only buy movable assets, soon the flooding dollars will buy anything not pinned to ground, and those will be exported. Since the inflation will be much more, foreigners will be effectively buying goods at highly inflated prices. This is good for Americans, but bad for dollars. America will be essentially defaulting on its debts, but in an invisible way. The net result will be poverty among American people. a lack of trust in currency, and hyperinflation.

    Another way to handle this incoming dollar deluge will be to allow the foreigners buy immovable assets. However, this will lead to Americans paying rents for these assets for a long time to come.

    In short, American government has always drawn its promissory notes on the American people’s work output. American government simply issued a dollar bill, and foreigners accepted it, because ultimately the American people will honour that dollar bill and give some work in return to that foreigner. Dollars are thus promissory notes for American work. If all the manufacturing is outsourced to China, and all white-collar services are outsourced to India, Philippines etc., and menial jobs are taken over by illegal invaders, what will be the output of American people? Nothing much. And therefore, these dollars are going to get very less in return. China and others who hold these T bills and dollars, will be spectacularly cheated. America lived on borrowed money, and is not going to repay.

  18. @anon

    These will push the economy firmly into the clutches of the banksters. 2030, you will own nothing, and you will be happy.

  19. sarz says:

    In a sane world Ellen Brown would be running the Fed or Treasury.

  20. @restless94110

    The great socialist activity is war. And doesn’t government make a great job of that?

  21. Levtraro says:

    As a side note, Prof. Werner is actually more well-known for providing the first empirical evidence that banks create money out of thin air. He devised an experiment where he took a 200 thousand euros loan from a bank while monitoring all internal processes leading to crediting his account with a new 200 thousand euros. He proposed the experiment to several large banks and all declined to help. One of those small, community banks mentioned in this article and that are plenty in Germany did accept in the interest of research. His paper was published in Elsevier’s International Review of Financial Analysis, here is the doi address:

    From the last sentence of the Abstract: “The money supply is created as ‘fairy dust’ produced by the banks individually, “out of thin air”.

    It makes for fascinating reading for those that are interested in how banks work in our economies.

    See also his follow-up paper here:

    • Replies: @HdC
  22. GMC says:

    Between the Covid Scam, the Banking Scam , the Wars etc. etc. , the picture of Who, and Why the US and other countries are failing is getting easier and easier to see. It’s certainly not the poverty or lower /middle classes, can’t even blame it on the Ghetto rats anymore.

    It’s totally the upper classes, with the never ending help of the Zionists, globalizas, bankers, and the Federal State and Muni workers who have looked the other way , when facing the problems that needed to be addressed , whether it was a federal, State or Muni problem 50 years ago or just a few years ago. These problems were bypassed because of laziness and people put in tough positions that were totally unfit to be there, so everyone just collected a paycheck and good pension and pushed all these serious problems to the next lazy, incompetente Gov worker, politician, University, etc. etc. etc. Just look at the economic, social and shape of American cities and the incompetence of their governments and high dollar experts stands out like a sore thumb. And they all hide or hid behind each other.

    Just look around at all the unfit medical class that is pushing the murderous Covid agenda in the media and then times those educated morons by a thousand and we can easily see how the Country , whether at the Federal, State or Muni level, has fallen to the basement level. Of course, all these upper class people who were hired to help run the country, and didn’t do their job, all retired quite nice and will live happily ever after – or at least they think so. It won’t take decades to see exactly what happened to the USA – it’s Highly Visible – today.

  23. We are still juggling this percentage and that percentage when we need to look at the economy from the perspective of “Raw Materials” and the monetization of their production, where the historical record demonstrates that when you pay full dollar for wealth, then that wealth will support an economy without unnecessary debt that can’t be paid.

    The equations are simple and based upon U.S. Constitution, that Congress shall determine the value of our currency, to which was determined in 1933 to be the Law, 7 USC Sec 602 that agriculture would be paid a full dollar relative to manufacturing and service sectors….a policy that FDR did not understand until World War II forced full 90% Parity and was the basis of the post war boom until….but General Motors and the banks did not want people paying for cars with cash, they wanted credit and loans and bankrupt farmers to build the rentier class paradise of suburban hell….now about to starve!

    Here is the chart and what Trump did not do!

  24. Borrowing the nation to enrich a parasitic elite and letting prices rise to impoverish the population, this is not an economy, it is a plunder of the national wealth; and evidently as James K Galbraith said of the financial fraud of 2008, “that is something intentional.”
    The Federal Reserve is destroying the country.

    • Agree: Realist, Fart Blossom
    • Replies: @Neuday
  25. @Levtraro

    Corporations have been and will again be selectively bailed out, at the expense of the American taxpayer and the national debt.

    Yup. Socialism for the rich. Especially the rich mafiosi. Time after time. Every single time. All the time.

    I have to laugh when some pissant philosopher starts spouting “the” cure…

    Dream on.

    • Replies: @Realist
  26. @anon

    Another route to Sovietiation of economy …

    No surprise.

    5. Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.

    The Ten Planks of the Communist Manifesto
    1848 by Karl Heinrich Marx

    • Replies: @sarz
    , @anon
    , @Mulga Mumblebrain
  27. The punchline is that inflation grew by 6.8% in November, whatever that means. Was everything 6.8% bigger on November 30th than it was on November 1st? I doubt it.

    • Replies: @Rooster12
  28. The real antidote to inflation is sound money instead of state/bank manufactured currency.

    With real money, as in gold, silver or some other commodity that can’t be conjured into existence, there would be no need for economists, the single largest fraudulent profession on the planet. Governments would be out of the currency/money business since the metals or other commodities are fungible. The miners could mine, the refiners could refine, the mints could mint and all this could happen without any gov’t interference as there is no need for gov’t in that entire chain.

    No more arbitrage. No more creating currency via the process of lending. No more deficit spending. No more wars paid for by printing press. No more gov’t programs that can’t be paid for via direct taxation. No more central banks. No more gov’t stealing purchasing power via inflation as policy.

    The evil that is gov’t currency just needs to be done away with.

  29. gotmituns says:
    @Wizard of Oz

    And doesn’t government make a great job of that?
    Well, yes. The object of war now is to continue fighting so all the contractors can make the most money they can. It’s not to win or lose but to continue contracts.

    • Agree: HdC, simple mind
  30. onebornfree says: • Website

    E.B. said: “The Fed’s liquidity fire hose needs to be directed at local production. This can be done through local community or public banks, or by making near-zero interest loans to state and local governments, perhaps mediated through a National Infrastructure Bank.”

    So, according to Brown, there’s nothing wrong with the Fed central bank system, and it having a “liquidity fire hose”, it’s just that the the Fed’s “liquidity fire hose” is pointed in the wrong direction? Yeah, “right”! 😆😂😎

    Brown is just another anti- free market, transparent apologist for the Fed and for centralized, fully government protected monopoly currency issuance systems via quasi- private Inc.s, in general.

    And so it goes……

    “So: if the chronic inflation undergone by Americans, and in almost every other country, is caused by the continuing creation of new money, and if in each country its governmental “Central Bank” (in the United States, the Federal Reserve) is the sole monopoly source and creator of all money, who then is responsible for the blight of inflation? Who except the very institution that is solely empowered to create money, that is, the Fed (and the Bank of England, and the Bank of Italy, and other central banks) itself?”
    Murray Rothbard

    “The drum-fire of propaganda that the Fed is manning the ramparts against the menace of inflation brought about by others is nothing less than a deceptive shell game. The culprit solely responsible for inflation, the Federal Reserve, is continually engaged in raising a hue-and-cry about ‘inflation,’ for which virtually everyone else in society seems to be responsible. What we are seeing is the old ploy by the robber who starts shouting ‘Stop, thief!’ and runs down the street pointing ahead at others.” Murray Rothbard

    “Regards” onebornfree

  31. onebornfree says: • Website
    @Achmed E. Newman

    “This Ellen Brown character is a retarded Statist.”

    Are you implying that statists who are not retarded exist, somewhere,(over the rainbow, perhaps)? 😎

    Regards, onebornfree

    • Replies: @Achmed E. Newman
  32. Realist says:
    @Fart Blossom

    Agreed. Initially, inflation is not a problem for the rich…they can pay $100 a gallon for gas or milk, they can pay$25 for a loaf of bread. Inflation does become a problem for the wealthy when those that produce, process, and deliver the essentials of life…stop. Fly over country supplies all essentials of life to the worthless scum of large cities (where most of the wealthy live). Large cities produce nothing of value and are completely incapable of sustaining themselves.

    • Thanks: Fart Blossom
  33. @gotmituns

    And that is funded by inflation, which is merely central bank creation from thin air of “more” money via printing, or typing into a digital ledger – really just devaluation-per-unit of existing money, not added value.

    Inflation will never be transitory until the Federal Reserve Bank and its analogs around the world are transitory. Added value comes from work, not typing imaginary wealth into ledgers. Stone soup is made of food, not theories.

  34. jsinton says:

    Sure, the road to heaven is just print more money and this time hand it out to small businesses. Earth to people: We already jumped the shark on this. You can’t just max out the credit cards and lose your job, expecting to get more credit cards to pay your mortgage. There is no more good solutions other than to declare bankruptcy and smash the system, which is what they are doing now. The world economy is intentionally being smashed to write off the debt, wipe out the little weaklings, kill off the useless eaters, and put the oligarchs into total control. The only way to protect yourself is with buying gold and silver or converting to some other hard assets and go debt free. Nations will crumble, people will die, and that’s just the way it will be. The Titanic is sinking and we can’t stop it.

    • Replies: @Fart Blossom
  35. @onebornfree

    I did not mean to imply that, OBF, so I stand corrected!

    I appreciate your previous comment. One can’t go wrong learning from Rothbard, Rockwell, Paul, and that crowd. Here this broad has written 3 of her books about financial matters, yet she doesn’t get the most basic thing. She’s got an awfully close relationship with “Fed’s liquidity fire hose” … I’m just sayin’ …

  36. @Levtraro

    Thanks, Levtraro. The $’s time as reserve currency is ending.

    Miss Brown did not mention the major economic factor, China. As I wrote, they peg the Yuan to the US Dollar. That has been done to keep the exports, i.e, the Cheap China-made crap at Walmart and Target, inexpensive.

    Peak Stupidity speculates on how Chinese businessmen may loot America in the same way that NY financial types looted Russia starting 30 years ago. Do you all understand that a $500,000,000,000 trade yearly means that China accumulates enough US currency in one decade to buy up all the good farmland?!

    See: “Will America be looted by China?”:

    Part 2 – Housing
    Part 3 – Big Biz
    Part 4 – The Fruited Plain
    Part 5 – The Wilderness
    Conclusion – the Golden Rule

    • Replies: @sally
    , @Mulga Mumblebrain
  37. Tjoe says:

    I’m an engineer and have management degree. I have been an entrepreneur, worked with universities and state Corp for Science and Technology and the only US company making similar machines, from 1982-85

    Everyone said when the prototype was operating, proving my invention worked to get 25% more hardwood in primary production, that funding would come. About 4 years and unlike E Holmes, we had a $100k machine that WORKED BETTER THAN CLAIMED and was fully ready to go to the forest products industry. That was 1988.

    Imagine my personal investment and the few small equity holders, with a full developed, tested, optimized machine and a 50% margine. In 1988 there was NO equity or debt to cover our $150 k investment. First, nobody wanted any risk and nothing but media got investor dollars and second, I was not willing to project windfall profits and lie like E Holmes.

    Developing a company even with advanced technology but no sugar daddy is impossible. 95% of us fail and have huge debt from the effort. Maybe a few succeed….but as an entrepreneur for 40 years, unless EQUITY money is available to the REAL (not connected like E Holmes)…. the reward for most entrepreneurs is BANKRUPTCY.

  38. @nokangaroos

    This is where culture (which in turn is based on race) comes into play. ND is well over 90% White and this demographic is heavily of northern European descent. Try this system in Southern California and see what happens.

    • Replies: @nokangaroos
    , @frontier
  39. Tjoe says:

    M3 can be predicted by a simple equation of compounding math. Do a graph of $1.00 borrowed in 1913, capitalizing the interest (at 6%) for 110 years. That graph represents what M3 would be showing us…..exponential rise in the supply…..just to keep the economy moving. It will show you why they got rid of the M3 indicator….it was going to scare the shit out of everyone with its unstoppable rise.
    And here is the kicker. Lower and raise the interest. Watch the immediate effect, especially with a rise, the quantity of dollars rockets upward.

    The answer is EQUITY money, not debt. Good ideas and having money available are almost mutually exclusive. WW 2 was fought over Germany developing equity money (which brought EVERYONE out of extreme poverty).

    Myself, I think a 50/50 partnership of Treasury equity money (Treasury dollar) and FED debt money (Fed debt Note Dollar) is the answer.

  40. Frannie says:

    Where work is no longer worthwhile in Germany

    ”The Mittelstandsinstitut Niedersachsen expects that of our five million entrepreneurs, not only 160,000 to 200,000 will emigrate from Germany because of the poor general public data, but another 100,000 will give up their independence, summed up 300,000 to 400,000 businesses would be closed this year and the following. The loss of around half a million entrepreneurs would lead to public revenue losses of 8 to 9 billion euros and, above all, hit the social security funds.

    The tendency towards a decreasing number of service providers, i.e., decreasing taxes and social security contributions, and vice versa, an increasing number of social benefit claimants with a further influx of social immigrants can only be financed in the short term, will force drastic corrections from the coming government and it will force to reduce the standard of living of large parts of the middle and lower classes.”

  41. @Wizard of Oz

    What is socialist about war?

    Next you’ll be trying to say brushing your teeth is socialism.

    When you say government are you talking about the people of a country? Who fight a war?

    Why are there so many incoherent boobs here?

  42. @Bard of Bumperstickers

    Wow/ Got to hand it to you guys. You hijacked this thread back to your favorite conspiracy theory!

    By the way, what is stone soup? You eat stones for a soup? Sounds like a theory to me.

  43. Agent76 says:

    Aug 20, 2021 Bretton Woods Long Gone: What To Expect From The Coming Reforms

    Since Nixon’s detachment of the dollar from gold, fiat money has been a decades long failure. It has financed overwhelming government interventions, both at home and abroad. A government that can lean on The Fed to counterfeit money is a government that is financially unrestrained by the people. Reforms are coming as the monetary failure reaches a crescendo.

    Jun 30, 2021 The Whole World Needs to Pay Attention to This | SOONER THAN EXPECTED

  44. @Wizard of Oz

    The great socialist activity is war.

    True. To a point.

    And doesn’t government make a great job of that?

    No. Government is merely a tool of the masters (aka criminals) of corporations (as we commonly use the term). Corporations are socialist in the sense that they socialize risk for the benefit of criminals (CEOs, bankers, major shareholders, etc.) So a more functional way of stating your first statement is to say that the great criminal activity is war and one of their chief tools is government.

    One conclusion, therefore, is that we can rail about government as much as we want, but unless and until we do something effective about the criminals at the top, effectively nothing shall change.

    For now we seem to be stuck putting up with whatever we must while the big criminals fight it out amongst themselves.

  45. Neuday says:
    @Liborio Guaso

    The Federal Reserve is destroying the country.

    A who has controlled the Federal Reserve for the past few decades? Hint: You’re not allowed to criticize them. Another hint: They’re also in control of most if not all the other institutions destroying the country. It’s a a cohencidence, of course.

    Anyone who thinks any effort to alter the current banking system in the US has any chance in hell is smoking something. The current regime is run by and for the benefit of Globalists, aka rootless cosmopolitans, and they very much approve of the current trajectory of the US.

  46. sally says:

    One thing not for profit community banks are not <= is crony owned banks<= at best, mafia owned banks <=as is the normally the case, or organized criminal enterprise owned banks <= as in case of most big banks.

    In short what has stymied the growth in the West has been monopoly power vested by the political system in big business. Monopoly power has been used to divert entrepreneurial endeavor, and used to build a rule of law backed regulatory structure that has focused on narrowing the width of the gates small business enterprise used to get their businesses products into the market place; and that competition limiting gate has been extended into the market to eliminate regulations and government watchdog activities in order to be sure no small business in the system of capitalism has access to, or can enjoy the benefits of monopoly power except the bug guys.
    In a capitalist economic environment, keeping the gates which enable access to knowledge (copyright protected high subscription priced journals) and science ( classifying everything science as top secret defense related so no one can know about it or use it, except the big guys who developed it under government contracts) ; access to education (graduate school allowed only to foreigners and minorities); which enable the use of existing known-how and experience (such is denied when patents and copyrights are allowed to be used by Wall Street Barons to remove from America, most of Americas largest industrial enterprises ), and entrepreneurial-ism (denied by who you ares instead of what you want to be isms and by Wall Street which suck up all local capital and directs it into big daddy global monopoly powered greedy enterprises).

    Business environment and economic opportunities in foreign lands, conducted by these globally distributed, greedy wall street funded enterprises are often supported by military and intelligence action, and by bank and sanction power manipulation, so that the foreign place is against their will or wish, obligated to allow the western businesses to operate in the foreign place such businesses have decided to operate from.

    In the defense of government, once they government allowed the enterprise of the criminals to exceed the size and wealth of the government themselves, it became impossible for the government to control or effectively regulate them. Courts could no longer operate with impunity. Appointments to bureaucratic positions were no longer in the hands of the politicians but instead were dictated by massive in size, monopoly powered corporations.

    Interest rates do not control the competitive economy, but they do keep the banks safe from the value erosion caused by inflation.

    What is needed is just what the article says, to stimulate supply, and to do that effectively copyright and patent restrictions against competition must be denied to any operation larger than 100 employees and even to business of 100 employees or less, copyright and patent protection should not be allowed to exist for longer than three years. The big guys have all of the advantages, they can hire whomever they want from the biggest and best colleges or from their own competition, (government laws and regulations work for the big guys, but strangle the little guys), and big guy operators take none of the risk (passive wealthy investors take the hit when a wall street enterprises fails, but the same guy running the small business takes the hit when his business fails).

    Great article.. One more point, the credit unions should be given access to more capital..

  47. sarz says:
    @Fart Blossom

    You are suggesting that Ellen Brown is somehow pushing for Sovietization, that your quote from Marx associates with bank centralization and monopoly.

    Now take another look and see what Brown says about banking under Mao, and Deng’s reform.

    • Replies: @Barr
  48. Emslander says:

    Germany does better under any system where discipline and competence are permitted to profit naturally from the good effects of those virtues. The USA was that way for a long time, until the only way a person could profit was by being a victim of his or her own lack of discipline and competence.

    • Agree: HdC
  49. ‘The conventional theory is that inflation is due to too much money chasing too few goods, so the Fed is under heavy pressure to “tighten” or shrink the money supply.’

    that’s the standard book theory

    high prces are the result of years of no income and people are attempting to catch up

    the government has not infused the economy with more money than has been lost by two major hits

    1. 2008/2007
    2. incorrect response to covid

  50. @Achmed E. Newman

    This Ellen Brown character is a retarded Statist.

    No. She actually deals with inflation intelligently. It is at least somewhat a supply problem brought about by the COVID shutdown and China trade war.

    The Powers That Be juiced the economy to get it over the COVID bump. The money was to allow people to adjust to the “New Normal,” whatever that is going to be.

    There is a mismatch between the New Normal and the old pre COVID economy which is causing supply chain shocks. People eat at restaurants less now than before COVID, so there is more demand for home style groceries and less for restaurants.

    Same with cars. Fewer people want to use public transit which means everyone needs a car and no one is making them at the same volume as pre COVID. Auto makers are even adding market adjustment fees above MSRP .

    We are at odds with China and China IS our supply chain, ports backed up, etc. I could go on, but suffice it to say Ellen Brown is correct and you are wrong. In fact, she puts forward community banking and state owned banks as an alternative to the Central Banking model, devolving power back the states and to the people. The exact opposite of your Statist claims.

    • Replies: @Achmed E. Newman
  51. T’was the day after Christmas

    T’was the day after Christmas
    All the Jews were sad
    Cause the Christians bought food
    They made jew Santa mad


    Avoiding toys
    Made by chinks in Pong Yang
    They called santa names
    Fatso, drunk, ding ah ling dang

    They ask Rabbi Madoff, a genius Jew
    And Hanukkah Harry, just what to do
    With a cart pulled by donkeys
    And all of them gay
    What do you expect on this Jewish payday

    Herr Moishe, herr Hershel, and Shlomo
    They wanted St. Nick but you sent them a ho
    Now left with so many unsold toys
    Not a one for uncircumcised boys

    With tax season near
    And time at an end
    They wrote it all off
    With money to lend

    Tis the season to be Jew
    I heard one say
    I make more money
    On this one glorious day

    Now every year Jews they come
    The night after Christmas
    For their payday run
    While Christians are sleeping
    With nightmares of gays
    The Jews who borrowed
    Make a quick get away

    Happy Kwanzaa homies, burn loot murder fo ever.

  52. It’s a fatal assumption these clowns want things to improve when they’re entire shtick since the plandemic began is to disempower the people.

  53. @RoatanBill

    The real antidote to inflation is sound money instead of state/bank manufactured currency.


    The evil that is gov’t currency just needs to be done away with.

    You only addressed one of the two sources of fiat currency you mentioned in the first sentence. Why the failure to address the second?

    Is it possible that governments exist as agents of the usurious thieves in suits known as bankers?

    Hint: See comment 30.

    • Replies: @RoatanBill
  54. @jsinton

    The Titanic is sinking and we can’t stop it.

    And all the lifeboats are packed with, and under the control of, the big kleptocrats. Who’re not known, despite being billed as “philanthropists,” for subscribing to “Love thy neighbor.”

  55. “… if the Federal Reserve were to make long-term zero-cost loans available to all U.S. state and local governments and government agencies.” Get real. They’d waste every penny.

    • Agree: Emslander, nokangaroos
  56. @Cookie Boy

    The latest is the covid jab research that was paid for by Uncle Sam and then sold back to Uncle Sam. Enlighten me as to the cost of each jab.

    • Agree: JWalters
  57. anon[527] • Disclaimer says:

    The German Community Banks are more akin to Co-Ops oriented to ‘Farmers and Merchants’. Small Town Burghers.

  58. HdC says:

    The statement that money is created out of “thin air” is not new.

    I first read about it, but do not remember the time nor names, when a USA Federal Reserve executive was testifying before a committee of senators or representatives… Again I don’t remember this detail.
    But I remember the to and fro dialogue. After some questioning by a committee member, and getting the usual obfuscating answers, this questioner finally nailed down this issue and the bank executive was forced to answer: “Out of thin air”, in answer to where the Fed’s money came from.

    As to the question, do retail banks create money out of thin air? The answer is yes, and with some really eye opening implications.

    Most people are aware of Fractional Reserve Banking. But what does this really mean? For a long time I was of the belief that, if someone were to deposit, say, $1000, the bank would loan out $900, keeping $100 as reserve. The interest the bank would collect on the $900 loan would pay for the interest payable on the $1000 deposit, plus some earnings for the bank after the overhead was paid.

    THIS IS NOT what happens! Suppose someone deposits $100 in his local bank. The bank executive goes hmmm, we have $100 bucks here. We can lend out $1000 with the deposit being the 10% reserve!

    The effect, of course, is that the $1000 loan money is created out of thin air. It didn’t exist until the check was issued! And it gets much MUCH worse! The bank now collects interest on the ficticious dollars of the $1000 loan. Ie. the bank collects interest on money it neither owned nor had any rights to, such as a bank deposit.

    So who is the rightful owner of the interest payments the bank collects??? I submit it is the workers of the community in which the bank operates. It is their work and the payment of taxes that enables a bank to do this, what I believe to be, a fraudulent act.

    The next issue would be, what is the actual % interest the bank collects. I submit that this percentage is INFINITE, because the bank collects it on ZERO dollars out of its account because the dollars didn’t exist in the first place.

    You gotta love banking, and the political dunces that enable this corrupt scheme.

    Full disclosure: I have on my home a mortgage of $250,000 outstanding, for what I believe to be sound financial reasons. And this mortgage is held by a bank. When do you play a crooked game? When it is the only game in town.

  59. @Fart Blossom

    Today, there are no bank currencies or anything else but gov’t currencies, so I addressed the only currencies in existence.

    What was I supposed to glean from comment 30? If you’re insinuating that the Federal Reserve is some second entity, then we’re quibbling over nuance. The Fed issues gov’t currency.

    The whole point is to get rid of currencies of all types, be they paper, digital, whatever. Currencies shouldn’t exist, only money.

    • Agree: Ralph B. Seymour
    • Replies: @Fart Blossom
  60. @Mustapha Mond

    Yes, but any ideas how to prop up these indefinitely???

  61. @Irish Savant

    An ethnic divide is visible also within Europe, aye even within Italy (!).
    Joining the Euro gave the PIGS access to cheap credit with the Germans
    as collateral but not the wisdom to accompany it, and now they can no longer
    devalue their way out of it.
    – The Germans have their own reasons to go anaphylactic at the slightest
    whiff of inflation but it goes deeper: They subsidize saving while the US
    after WWII subscribed to the Keynesian motto Saving is Sin! which
    enabled faster but not altogether healthy growth, in essence subsidizing
    Contrary to popular belief Bretton Woods was not “gold-backed” i.e. the US were
    already waging their wars with other peoples´money, the “closing of the gold window”
    was just the grudging admission.
    In the long run – like the Gods of the Copybook Headings – the Law that you cannot consume
    more than you produce will always return to bite you in the derriére,
    and the US have violated it for too long;
    no simple restructuring will fend that off.

    • Agree: RoatanBill
  62. Jon Chance says: • Website

    “What is the robbing of a bank compared to the founding of a bank?”

    – Bertold Brecht

    When a counterfeiter “earns” a generous rate of return while claiming to benefit the public, should we embrace her “solution”?

    Since money is a representation of territory, and the “banking” business is effectively “legal” counterfeiting, why not root out the problem at its source?

    Genuine law-enforcement is not practiced by today’s so-called “governments”.

    Reestablish legitimate governments with genuine public treasuries issuing all money — such as United States Notes — fully backed by sovereign national territory (Location Value Rent).

    Examine Article Eight of the First US Constitution (Articles of Confederation):

    Arrest, prosecute, and imprison all “bankers” for their treason, theft, slavery, and terrorism.



  63. I didn’t finish the article. The idea that raising interest rates will not help inflation is ludicrous. Interest rates at the zero bound causes less savings and more spending. This effect then increases when price inflation begins to creep up. People buy now instead of paying more later. The supply shortages may have been the trigger to help get inflation started but it has very little to no effect now. Too much spending by the government and no incentive to save and invest (real investment not stock speculation) will keep inflation increasing for some time. The Fed will want to crash the economy anyway and get rid of small businesses for the advantage of multinational corporations just like they did in 1929. It’s going to be a rough ride.

    • Agree: Emslander, Fart Blossom
    • Replies: @anon
    , @sally
    , @simple mind
  64. frontier says:
    @Irish Savant

    This is where culture (which in turn is based on race) comes into play

    It does come into play but only inasmuch as amount of theft is concerned. Germany is high productivity, high theft economy, Africa is low on both counts. There is also the added complication of Germany being the host of the EU central bank, adding theft from the periphery of the EU to the theft from the German people. Nat gas is around $2000 inside Germany up from $300 from the Gazprom pipe at the border…

    If you focus on percent theft, nether system is nearly low enough. I’m yet to see a proposal for something sane but one thing is 100% certain – culture cannot fix any of this.

    Ellen Brown is a known entity, an avid spammer of ridiculous economics opinions, at least she doesn’t come with credentials like Michael Hudson, who peddles similar garbage from a position of authority. Ellen Brown is also better because she isn’t a professional liar and her shilling is significantly less obfuscated. Case in point, her entire theory rests on this simple assertion:
    “Rather than a reduction in demand, we need more supply available locally; and to fund its production, credit-money needs to increase. When supply and demand increase together, prices remain stable, while GDP and incomes go up.”

    Given an economy saturated by printer dollars, which are already driving inflation higher, supply and demand do NOT “increase together”, that would be like eating your cake and having it too. Wiemar has shown that even an advanced culture is quickly brought down by such nonsense. The US have had super easy money for 12 years now, it destroyed internal supply, enriched the corrupt and the stupid and produced enormous debt and inflation instead of stable prices. Brown’s asking for more of the same…

  65. @Si1ver1ock

    Just like this character Ellen Brown, you are looking only at the small picture, but missing the simpler big picture. Supply & Demand is a natural economic law that works. (Even the robed idiots of the US 6th Circuit Court can’t overrule it.) It works on a small scale, and it works on a large scale.

    On the small scale example you give, the current supply-chain problems, sure, lumber is a great example. The US is not running out of trees. Yet 8′ 2×4’s were at $12 or so for a spell. This “new normal” and supply chain screw ups were caused by this COVID PanicFest, which has been a perfect example of an exercise in Statism. You don’t fix it by interfering some more – you do by staying TF out of it!

    These are short-term price increases, and prices on lumber have already gone down, but, not down to 1990’s prices, not to ’00’s prices, and not to ’10’s or even 2020 prices. They won’t, because inflation has been steadily running at 4-5%, during times of a “production” of on the order of a Trillion extra US bucks yearly. (Just look at a table of the national debt.) When you ramp up to $4 Trillion extra bucks, well, you won’t have 4-5%* inflation anymore.

    You and Miss Brown have obviously not thought about the big Supply & Demand law application, on the US currency. When you create a bigger supply of dollars for the same amount of products and services, you get higher prices. Simple, but apparently not something you two have contemplated yet. Read some Ron Paul. He’s right here on this very website.


    * Which is bad enough. The value of a man’s labor, put into savings in dollars, will be 1/2 stolen in under 18 years at 4% and in under 15 years at 5%.

    • Replies: @Si1ver1ock
  66. Skeptikal says:

    The German Sparkassen are actually often referred to as Ortssparkassen.

    Literally, tied to a specific locale (Ort).

  67. @RoatanBill

    The whole point is to get rid of currencies of all types, be they paper, digital, whatever. Currencies shouldn’t exist, only money.

    True as far as it goes, but then your original comment should have stated that and not limited the concept to “The evil…gov’t currency…”

    The Fed issues gov’t currency.

    Is that all it does? Even then the guv is just a tool.

    Folks who rail against da gubbermint are a lot like those who rail against guns. Both are just tools except that governments, like bombs, are hardly ever a permanent force for good whereas guns or hammers or money or can be useful at times.

    The point is that civilized people would do better to focus on finding some sort of straight jacket for the crackpots who run the show and control government, but even at that it’s certainly and sadly an empty dream.

    Anyway, I suspect the covid con has been useful as a cover for the collapse of the old sytstem. The new one though, is like the old one, i.e., build back better… for the plutocrats. So all this talk about inflation and the government’s role is little more than trimming a decaying tree.

    • Replies: @RoatanBill
  68. As always, Ellen Brown provides us with intelligent, clear sighted analysis of our current financial issues. And that is the problem with it, the intelligence of what she says…

    Unfortunately, we have the dumbest people on earth running our federal government who have no ability to understand intelligent, forthright solutions.

    But they will when the government collapses and the citizenry comes for them with pitch forks…

  69. Barr says:

    Neither Richard Werner nor Ellen Brown is advocating centralization of monetary power in the hands of the few elect or the grand elder of the politburo . That policies ruined Weimar , Stalin-Krushev economy and Mao’s economy .
    Japan’s economy was not centralized but acted like a bad one .

    One of the reasons offered by the main line economic school was Soviet collapsed because the feedback loop broke down . It was economy top down , and managed by decree and executive order and always ignoring the responses or effects the men on the street or small council run corporates we’re sending to the market . Market was politburo and it’s economists.

    Now when we say Main Street and Wall Street diverged , we tend to admit the same process being at work . The tendency has got worst . Gov now or Fed now wants to take over the entire system and use policies to control wage , bank deposit , spending , and remove small banks and allow some big banks who are either part of Fed or advises Fed or regulated by Fed same time sits on the board .

    There is never one factor that decimates one country . Weimar is our close parallel and also anti -parallel . Sovietization mirrors us in the followings – war , reckless intervention, economic colonization of west , losing wars , and arriving without any public debate but by diktat from Fed.
    There is also erosion of public faith and erosion of privileges enjoyed by public .

    Our asset earned by our labor is not safe and is under the microscope of the concept-changing and concept-crafting Fed . Today they think they can offer negative interest to savings . They are already doing it by offering ‘0 ‘ interests .Tomorrow they might start asking why I have 2 car
    or 3 homes or 4 ranches or taking more than one foreign vacation .

    Who is going to prevent them ? They can get away with giving trillions year after year to failing corrupt banks and primary leaders . They can float trial balloons of seizing asset in times of duress . Their ‘s duress not our , unless it trickles down like a gushing torrent eventually confirming the diabolical soothsayer‘s dreams in perverted way .

  70. nsa says:

    JOONOMICS 101: create ersatz money and credit out of thin air and then dole it out to your friends, relatives, fellow tribalists, and by necessity the whorish legions of gentile useful idiots and apparatchiks. Eventually, maybe half of the swag trickles down to the peasantry….even drywallers in Des Moines knocking down 5.9% Ice House 24 ouncers in their doublewides……even dim lights selling appliances or mixing paint at the local JooieDepot. That’s how the system more or less actually works……..

    • Agree: Fart Blossom
  71. Barr says:

    Interest rate should have been raised way back in 2010 and should have continued as long as money continued getting pumped into Wall Street . Interest rate should have always mirrored the yearly inflation even when trillions were not being pumped out .

    It might be late to raise and is likely constrained by Covid that any raise will tame market ‘s inflation or affect possibility of deflation .

    Inflation of today is from issue of production, supply , delivery . But before Pandemic ,it was visible in our daily lives and due to none of those reasons .

    That inflation was the trickle down effects from the trillions we pumped .
    We won’t admit and those who would , would be called names .
    Inflation of stock , devaluation of wage and labors and devaluation of pensions were the results of those pumping of money .

  72. sally says:
    @Achmed E. Newman

    You have expressed the real problem.. The 256 member states, each a part of the globally connected nation state is a system which has been engineered to allow persons with power to manipulate the system so that no one in the governed classes can do anything to stabilize corrupt government long enough to fix it.

    The next revolution, to be effective, will need to be world wide.. the pandemic showed that unless every people of every nation act together, the powers that be will use the nation state system to accomplish their nefarious ends. There is no need to re establish anything like the nation state system once it is disabled. Instead the new system must find ways to deny any system that tries to govern the masses, to be instituted, if that system can be used to manipulate the governed masses. and no system should allow media to operate independently of

    We are no longer separate groups of people each assigned to slave in, and to defend the owners of one of the 256 nations, instead we have become one global people who collectively need to establish for our own needs.

  73. @Achmed E. Newman

    I’ve read Ron Paul for several decades. I disagree with him.

    For one thing, there are strong deflationary trends and processes that Mr. Paul ignores. Prior to the COVID crisis the Fed had trouble maintaining inflation at even 2%. Ms. Brown’s contention is that the current spate of inflation is mostly a supply problem not a monetary problem. She gives what she believes is a solution for fixing the problem i.e. increasing production and supply.

    She is saying that global interest rates (that the Fed usually resorts to) are too blunt an instrument with which to formulate an Industrial Policy. So she puts together a patchwork of state and local credit-funding backstopped by the Federal Reserve to direct monies into productive investment rather than asset inflation and speculation.

    She also makes the point that the Fed can do this largely without an act of Congress, by using previously granted authorities, thus bypassing Washington gridlock.

    All-in-all some fairly well reasoned, well thought out policy analysis.

    Always nice to hear from Ms Brown.

  74. @Si1ver1ock

    Prior to the COVID crisis the Fed had trouble maintaining inflation at even 2%.

    Haha! “Maintaining inflation”?! I can remember, Silverlock, an article from the WSJ that I clipped out and unfortunately have lost since then which bemoaned DEFLATION. There’s nothing bad about deflation for the working man. Real deflation can happen when a country has a REAL currency (as in backed by REAL MONEY), and productivity goes up.

    That was somewhat the situation in the whole century of the 1800s. Besides during the government spending periods during the War of 1812 and the big one, the CPI was steady in general for that entire century. That means a man’s life of labor could be actually saved without being steadily stolen over his years.

    Tell me, Silverlock, exactly why should people WANT to maintain 2% inflation? (A pointless idea, since it’s been running at 4 to 5% for a couple of decades now anyway.)

    You keep missing the big picture that Ron Paul TRIED to teach you over those 2 decades. There is no NEED for an industrial policy. That is Socialism. You need sound money and a government that leaves people the hell alone economically. There was such a thing, long ago in a far away land called America – till ~the year 1913.

    • Agree: RoatanBill
    • Replies: @Si1ver1ock
    , @Si1ver1ock
  75. Interesting facts on the bank of North Dakota. I was told by my best friend in high school. whom I had known since the 4th grade, that North Dakota has a huge number of frugal, hardworking and sensible people. His grandparents lived there and he would sometimes visit them on summer vacation. Now this was many many moons ago. I don’t know if the character of the state, that is, its people, is still the same.

  76. @Fart Blossom

    I get the impression you believe that the bankers are in control and gov’t is theirs to use as they see fit. That may be partially true in good times, but we’re way past that.

    I look at who has the guns, who makes the laws and when the SHTF, who will use those guns and laws to come out on top. Hint – it’s not the bankers.

    All national currencies are gov’t issue in the final analysis. Central banks were created by gov’t and are still chartered by gov’t. The bankers might have floated the idea, but it was gov’t that instantiated that idea into fact.

    The Fed just recently got its charter renewed by the Fed Gov. The plausible deniability that exists because there is this nebulous line as to who controls what between gov’t and the central banks is there precisely to cause confusion. It allows for finger pointing in both directions. As Turkey just recently showed, the central bankers are subservient to the gov’t, not the other way around.

    As this currency fiasco unfolds, I fully expect the Fed Gov to nationalize the US GSIB’s and either outright cancel the Federal Reserve (not that likely), or pull it into the gov’t directly so it’s no longer a phony independent entity.

    As things get tight, the thieves start turning on each other and that’s where those that control the guns win.

  77. anon[358] • Disclaimer says:
    @Fart Blossom

    Credit should be created by a central bank controlled by the counytry’s elite drawn from each and every stratum – academia,church,union ,poltical prties,banking,economist ,merchant associations and finacial mathmetivians but on a rotating basis so none stay in position for more tha 3 years consequtuvely.
    Local bank should stay local .
    Mergers shoukd be prevented .
    Just like a man cant combine his labors of 8 hours with 8 hours labors of another wage earners ,so cant finacial houses and banks.

    • LOL: RoatanBill
  78. The financial scam of fiat money cannot be perpetrated unless you have a pyramid power structure that allows a few crooks to run the show.

    All our human efforts and means of exchange were created originally with good intentions , but all these good ideas are rendered mute because of the fundamental fault of the pyramid system of power, and that is the system can be captured by a few crooks to all our detriment.

    To solve all our current woes mean a solution to dissipating this pyramid structure of power without civil upheaval.

    This can only happen if enough turn their back on the system and find another way.

  79. @Steve Naidamast

    Unfortunately, we have the dumbest people on earth running our federal government who have no ability to understand intelligent, forthright solutions.

    True, but that’s not the half of it.

    We also have the slimiest criminals on Earth running the Federal Reserve and other large banks, which run the federal government among other things.

    An endless supply of details here.:

  80. anon[307] • Disclaimer says:

    it’s not strange. the only reason socialism is (((vilified))) is the same reason capitalism was vilified.

    there is only one system which prevents jewish domination.

    would that it were true. but this hungarian jew is just jewing. mette frederiksen is the closest to hitler in contemporary politics.

    We are all national socialists now. Of course the proportions of the compound of nationalism and socialism vary from country to country; but the compound is there, and even where social democracy prevails, it is the national feeling of the people that ultimately matters. What was defeated in 1945, together with Hitler, was German National Socialism: a cruel and extreme version of national socialism. Elsewhere nationalism and socialism were brought together, reconciled and then compounded, without violence and hatred and war. — John Lukacs

  81. frontier says:

    Prior to the COVID crisis the Fed had trouble maintaining inflation at even 2%

    In the past 20 years real inflation has never fallen down below 5%, gov stats are cruft like most of what the gov does. Use the shadow stats, they are much better.

    Ms. Brown’s contention is that the current spate of inflation is mostly a supply problem

    Wrong contention due to circular thinking. Supply problems do not cause inflation – they are themselves caused by inflation or they are manifested in shortages without causing inflation. In short, inflation cannot happen without excess printing, it’s the only cause even if delayed in time.

    She gives what she believes is a solution for fixing the problem i.e. increasing production and supply

    Why not milking pink unicorns for free organic orange juice? The whole fake science of economics is about “increasing production and supply” and it’s sheer idiocy to troll this by “proposing it as a solution”. The who;e question is how to do that given the many constraints and inherent instability created by reckless government spending and wanton corruption of the banking sector, both greased by Fed’s fake money printing. Never in history has the Fed balance sheet approached one tenth of what it is now. Yours and hers actual proposal is to print more fake money, nothing else is different from what we have at the moment.

    So she puts together a patchwork of state and local credit-funding backstopped by the Federal Reserve to direct monies into productive investment rather than asset inflation and speculation. The Fed can do this largely without an act of Congress

    Well, if nothing special about it why hasn’t the Fed done it until now? We have plenty of banks, the baking system is flush with cash but somehow none of that ever went to productive investment… why would a nebulous “patchwork ” of new banks do any better instead of joining the corruption party?

    As I said, there’s nothing new in this proposal except the naked call to print more fake money, in addition to the ocean of cash stashed in the big corps and the banking system. I’d say this – first reverse the raging inflation, then propose your “solution” to the Fed and come to us with something realistic which the Fed agrees with. Then we’ll discuss it. No more BS before that.

    • Agree: Achmed E. Newman
  82. @restless94110

    Capitalism= hatred of others. Socialism=human solidarity.

  83. @Cookie Boy

    Being against the financial predators is the very worst type of ‘antisemitism’.

    • LOL: JWalters
    • Replies: @JWalters
  84. ingotus says:

    Thanks for the comment. Would you care to explain deflation and why it is considered a bad thing?

    • Replies: @Si1ver1ock
  85. frontier says:

    Explain this, Intel didn’t invest in production, they blew $50 billion into stock buybacks. Now they are asking for $50 billion in taxpayer subsidies – this is the corruption problem we’re dealing with, no patchwork of stupid new banks can solve it, it’s a problem of deep political corruption. I don’t want to give the likes of Intel any money, let the market clear itself of corruption.

  86. @Trevor

    China is NOT Japan. Japan is a US colony, and when the US shoved the Plaza ‘Accord’ up the Nipponese fundament in 1985, the ‘Japanese miracle’ loyally committed seppuku. Good luck getting the Chinese to do that. The party is over, Septics-get used to the long slide. Ask the Pommies what it’s like.

    • Agree: nokangaroos
    • Replies: @anon
  87. anon[123] • Disclaimer says:
    @David Homer

    Interest rate has not rise for more than 10 years at least .During that prices have increased while you purchase flight ,rent a car, buy a car, buy insurance -car and boat rental or home and health insurance
    Price for buying homes have gone up ,home modelling /remodeling have gone up . Star buck and Mcdonald prices have gone up .
    During those times prices of the produces vegetables rices, coffees and wheat from the primary sources like farmers have gone down and fertilizer process and market prices at the super stores and fast food windows have gone up . Timber from Amazon Lithium or cobalt extracted from S America or Congo nor coal or iron extracted from India or Indonesia have not seen increases at the level of exporting countries . But it increases when the finished products like machines come to those countries to extract the same resources quicker But the increase doesn’t reach the minders or the farmers or the owners of the coffee farm
    Can you explain why and how ?

    “Value is added somewhere “- that is rent is added by western nations for the corporations and sold at inflated prices.

    Airlines started charging for bags when oil prices went up Then oil price crashed But the charge remained in palce

    Air flight imncrease doesn’t reflect any supply issue but value added by the companies in each step of the way without benefiting the providers of the services or the resources

  88. anon[123] • Disclaimer says:
    @Mulga Mumblebrain

    Did Japan understand the Plaza accord? did it understand the ramifications ? Has our economists ever told us the accord was political pressure and not economic explanation ?

    We still don’t know what it was all about .

  89. @RoatanBill

    To the extent that blackmail, bribery and murder still work to get you what you want, and I think they still do, the bankers OWN the government.

    So, is there really a distinction?

    You could even make the case that the bankers have already rolled out a their global government—– they just haven’t told us yet.

    Note that I stated THEIR global government.

    • Replies: @RoatanBill
  90. @RoatanBill

    I get the impression you believe that the bankers are in control and gov’t is theirs to use as they see fit.

    Your impression is spot on. That’s the way it is. Government is created by the moneyed powers to protect their interests and theirs alone. Look who was behind the coup d’ etat that formed the U.S. federal government.:

    . The Constitution had been laid down under unacceptable auspices; its history had been that of a coup d’état.

    It had been drafted, in the first place, by men representing special economic interests. Four-fifths of them were public creditors, one-third were land speculators, and one-fifth represented interests in shipping, manufacturing, and merchandising. Most of them were lawyers. Not one of them represented the interest of production — Vilescit origine tali. (the dice were loaded from the start)

    Albert Jay Nock, Liberty vs. the Constitution: The Early Struggle

    He’s backed up by many who’ve studies the origins of government.

    The economic want of the master group has no limits...The political means are turned on new groups of peasants not yet subjected, or new coasts yet unpilfered are sought out. The primitive state expands, until a collision takes place on the edge of the “sphere of interests” of another primitive state, which itself originated in precisely the same way. Then we have for the first time, in place of the warlike robbery heretofore carried on, true war in its narrower sense, since henceforth equally organized and disciplined masses are hurled at one another.

    – Franz Oppenheimer, The State [1919]

    That illustrates the obvious fact that governments are formed after, and are under the control of, the most violent and successful gangs of theives.

    I look at who has the guns, who makes the laws…

    He who has the power to create money makes the laws and controls the guns. It’s one reason why Communists love central banks and banking monopolies. In fact, Communism is just another rich man’s project to enslave the gullible and massacre the resistance under the guise of benefitting the “proletariat.” It’s why the U S government, for the benefit of certain banking and industrial interests, supported both the USSR and Mao.

    As for Turkey, that article today at LRC was pretty interesting, no? Anyway, think what you will. I’m not trying to convince you; I’m just trying to present the ideas to the few who may benefit.

    • Replies: @Jon Chance
  91. @Ralph B. Seymour

    I think the political class isn’t going to give in to anyone. They are useless in any other capacity, so they need to keep their positions. They are closer to the police and military than the bankers, so there’s that. It wouldn’t surprise me if the military took over overtly, since they’ve been a soft dictatorship for decades.

  92. Jon Chance says: • Website
    @Fart Blossom

    That’s right Sir Fart Blossom.

    The so-called “US government” has been an Anglo-Jewish hoax since the “Federalist” coup d’etat of 1787.

    Useful idiots like Ron Paul and every other politician continually remind their public-debt slaves to worship Fools’ Gold and a fraud called “The Constitution” and another hoax known as “The Old Testament”.

    Of course, anyone could examine the First US Constitution (Articles of Confederation) and the Virginia Declaration of Rights and Common Sense by Thomas Paine if they sincerely want to understand how a legitimate government functions, but everyone is too busy consuming fake news and Judeo-Nazi propaganda.

  93. JWalters says:

    And the US military is socialism.

    It seems to me the question is – what is the optimum mix of socialism and individualism? I think we want to allow for individual initiative and creativity. So we want to let a creative person (or team) start up their own business. The problems comes in when monopolies arise, with their power to corrupt the system, both the markets and the regulators.

    For Unz readers who haven’t seen it, the story of the mega monopoly that controls our government, and our commercial monopolies such as Big Media, Big Pharma, Big Oil, and Big War, along with some key financial steps to take it down, are in “War Profiteers and Israel’s Bank”

    • Replies: @restless94110
  94. JWalters says:
    @Mulga Mumblebrain

    The “anti-semitism” smear is wearing real thin. Most people now see it for what it is and laugh at it. Or even consider it a badge of honor. Here’s an article on the latest campaign to revive it. (This is on a Jewish-run website.)
    “New front in ‘antisemitism’ battle is anti-Zionists’ alleged denial of Jewish historical ‘experience’ and ‘intergenerational trauma’”

  95. JWalters says:

    I suspect Ellen Brown knows the Fed is owned by a bunch of crooks, and will do as you describe. I think her strategy is to inform the public what could be done within our current framework, so people can see the contrast with what is done. And while she is trying to get these ideas into the public discussion in an “acceptable” way, other states could follow North Dakota’s and Germany’s examples.

    She has said she thinks the Fed should be nationalized. In an interview with her, economist Michael Hudson said,

    “Central banks are created to take monetary policy out of the public domain, out of the Treasury, out of electoral politics, and to make it part of un-elected politics. Creating the Federal Reserve is the number one policy of oligarchy. Once you create a central bank that is independent from politics you’ve essentially moved from democracy to oligarchy. And that was the intention of J.P. Morgan when he and his fellow bankers designed the Federal Reserve specifically to exclude Washington. Washington and the Treasury weren’t even allowed on the Federal Reserve board as it was first structured. It was Franklin Roosevelt who put the Treasury back on. So basically, all the functions that are performed by the Federal Reserve today, and used to be performed by the Treasury, should be returned to the Treasury. And the Treasury should manage the money supply in the public interest. And credit, and loans, and extend credit for purposes that are deemed to be in the public interest. Not the Federal Reserve, which is independent and antithetical to the public interest, directly adverse to the public interest. The inherent policy of the Federal Reserve is to create a depression. That is what debt deflation is. As long as you have the Federal Reserve and a privatized banking system you are mathematically creating the dynamics of exponential debt growth, leading to permanent debt peonage for the economy, permanent until there’s a change in the system.”

    • Replies: @Levtraro
  96. Rather than a reduction in demand, we need more supply available locally; and to fund its production, credit-money needs to increase.

    One of the reasons that the Fed could continuously flood the economy with new money from the 2007-08 collapse through today is that energy supplies were growing along with the money supply. Growing energy supplies increased the supplies of all goods and services and helped keep prices down.

    Now with the Biden regime steadily crushing energy production (the Keystone Pipeline was just the beginning and an indication of things to come) inflation begins to take hold.

    Continuing to “increase credit money” will be throwing napalm on an exploding dumpster fire.

  97. Richard B says:
    @Mulga Mumblebrain

    Absolutizing abstractions = Stupidity.

    • Agree: restless94110
  98. 50% stock market crash? HAHA It would still be wildly overvalued. How can a 5% growth stock like walmart have a PE of 35?

    The S&P500 needs to go from it’s present 4700 to under 1000. Just 13 years ago it was at 666.

    At least the author did not mention bitcoin. What a scam that is . Bring back the gold standard.

    • Replies: @sally
  99. @Levtraro

    Your scenario is probable, …then the books can be cooked in other ways. The interaction between the outside world and the US will be parted as with corona and vaxxing singularly as to the excess populations and the elites.

    The cooking(of the books, alas the socialism of banking and feds, the public sector bureaucrats) is now indeed no longer in the hands of the US elites, but the cooking will go on. We have Ellen Brown as one more “sophomore”. Too scared to hack into the core, and incite for action from the parties concerned, but suggest solutions within convention.

    This is an old phrase i found as happens: “no good will come of more of the same”. “The economy, the economical public theories i-s the people who mock-up” These mongers are quite comfortable, since the rabble middle class does not rise hell. Wait for E. Brown to fore-cast and post-cast the “downfall” of the US.

  100. @Bard of Bumperstickers

    If you think so, then what the fuck are you doing reading her articles and littering her comment threads then?

    You don’t like her? Change the channel.

    I happen to believe what she writes is vital and accurate. I don’t need to read some dickwad who doesn’t agree. By the way, ace, she obviously knows everything of economics and finance. State and city banking? The true promise of MMT, which has nothing to do with what’s going on today right now; the idea of doing banking out of the US Post offices (as was done before and is done now in France); the ins and outs of Chines state banking; the state money Hitler issued and used to end depression times in Germany (he took the example of Abe Lincoln’s greenbacks in the Civil War).

    Her writings are powerful, innovative, and knowledgeable. Why are you commenting here? Why are you trolling? Don’t you have anything better to with your time than to put down other people? Do you do that in real life? What an asshole.

    And what is stone soup, you dipshit? That’s what I asked you and what you are supposed to be answering. You are replying to me. I asked you what is stone soup. You came back on me with some pissing match from some nobody about nothing.

    It was like you were telling me there is no Santa Claus and sniggering all the while. What a sadist you are. Why don’t you go out and slap old ladies upside the head on the street? That might be more satisfying to you.

    Whatever you do, SFTU if you don’t have anything relevant and constructive to say. And what were you mumbling about earlier about stone soup?????

    • LOL: simple mind
    • Replies: @simple mind
  101. @JWalters

    Monopolies are a perversion of capitalism.

    Plus it’s human nature that after a period of time there will be 20 percent winners and 80 percent losers. In ancient times they had a wiping out of debt allowing people to start fresh. In other times, monopoly and crony capitalism was prevented. In other times banking was for lending to generate business and individual innovation and commerce, not to inflate assets and play paper financial games.

    Are all of the above a form of socialism? Not really. Regulation and prohibition is what makes capitalism durable and what makes it last. Without it, you will lose capitalism to real socialism (state centralized control). Which doesn’t really work.

    But screaming socialism whenever innovative recommendations on decentralizing forced by the state on the society via rules and prohibitions is not socialism at all.

    • Agree: JWalters
    • Replies: @simple mind
  102. sally says:
    @Hang All Text Drivers

    we need to find a fixed currency supply.. fixed,
    the number of square millimeters on the moon is fixed.
    so lets issue at par $1/mm^2 on the surface of the moon.. Each
    millimeter has a gis position so every thing about the supply of
    currency is fixed world wide. every dollar can be traced and so
    counterfeit is stymied. no bank is needed.. just trade the dollars.
    the economy can neither expand nor contract its money supply
    therefore it will become self – efficient and global eliminating
    any currency differences between nation state any where in the world.

  103. sally says:
    @David Homer

    how about fixed-quantity, interest-free currency, created by dividing the fixed space on the surface of the moon into square millimeters and we issue $1 for each square millimeter.. so every dollar bill is indexed to its geographic position on the moon.. Using that system the bills can be accounted for..

    never any interest charged to anyone for currency.. As fat cats amass substantial sums, the people rise and relieve the fat cats of it all to put the currency back in circulation and to get rid of the hoarders.

  104. Rooster12 says:
    @Badger Down

    I believe what they meant was inflation was 6.8% higher this November from last November. However, that’s not completely correct either, if you calculate the inflation rate using the original formula before .gov changed it, the real inflation this year is closer to 15%.

  105. Anon[348] • Disclaimer says:

    This is a terrible article. Boiled down, it’s basic idea is to print more money and hope that is is used productively. That doesn’t happen.

    • Replies: @simple mind
  106. @Cookie Boy

    Nobody “funded research” by splitting off contributions from hard hat America. Money is fungible and infinite, and most productions went out the barrel of a cannon at some point, was sunk to the sea bottom, built into a pharonic monument (skyscrapers), wasted on massive lighting, heat, and AC. Also becoming massive obesity and traffic jams. Industrial progress consists of cars idling on the freeway.

    The Moricano “workers” biggest claim to fame is a bowling alley, and I like bowling.

  107. requiring any borrower that misses a payment to levy an automatic tax on residents above a certain income threshold

    Tax authorities require permission from their voters to enact any “levies”…. only an Oriental Despot or Skool Marm would come up with this dribble. There is no such thing as “default”, I don’t know why it is so hard to just admit that bonds are money.

    All “debts” are constantly rolled over into new issues, so there’s no point to chasing your own money. The govt. does not collect taxes for revenue and does not need tax collections to sped money, this is the whole point of the article which missed the point.

    Currency gets issued, get over it already.

  108. @Anon

    Printing money is going to happen anyway so making the subject widely understood is beneficial. Hope or hopeless, the money is getting issued anyway and it’s time for people with any sense of awareness to recognise the power involved with money creation.

    Otherwise mankind will stay the eternal child, while others grow up anyway.

  109. @Achmed E. Newman

    They (the Fed) target 2% inflation. It is or was their official policy. There are lots of reasons for it.

    The Fed’s Inflation Target: Why 2 Percent?

    The Big Picture is that there are two main types of Economics.

    1. Hard Currency Economics

    2. Soft Currency Economics

    We have type 2, Soft Currency Economics, i.e. a fiat currency issued by a sovereign nation.

    If we had a gold standard (or any other convertible currency like oil or silver backed) then the rules of Hard Currency economics would prevail.

    We don’t have that. We have a Soft Currency (fiat). So the rules of Soft Currency economics prevail.

    • Replies: @Achmed E. Newman
  110. @David Homer

    The market adjusts for all prices, rates up or down makes little difference. The inflation comes from increasing the money supply, the rates can be 200% it won’t matter so long as the money keeps getting issued freely. Most “debts” are designed to eventual bankruptcy discharge, corporate insolvency, to be written off or balanced in new issues.

    Most debts are “rolled over” into new finance, most houses are permanently mortgaged in functional reality, etc. All that lifetime gobbledly blobble about “rates” is just another skool marming edjamacashunal fantasy meant to distract from the real world. The market sets “interest” by the P/E ratio, the “bank rate” is meaningless.

    The paper account is not physical reality, where effective money is always pressing on real assets besides goods and services. Nobody “has” to pay anything, the currency takes its charge from acceptance, and the reflection of assets purchased with that currency.

  111. @restless94110

    Modern times is founded on “wiping out debt”:



    time bars

    write offs




    roll overs


    • Replies: @restless94110
  112. @Achmed E. Newman

    There’s nothing bad about deflation for the working man.

    Let’s say you are producing widgets. The current price is X.

    With Inflation by the time you get to market the price will be X + inflation.

    With Deflation by the time you get to market your widget price will be X – deflation.

    With deflation the producers get less than their current target price.

    The last severe deflation was the Great Depression.

    Before that there was the deflation after the Civil War when the money supply was greatly reduced. It caused a lot of grief.

    The Long Depression

    …the US government passed the Coinage Act of 1873 in April. This essentially ended the bimetallic standard of the United States, forcing it for the first time onto a pure gold standard. This measure, referred to by its opponents as “the Crime of 1873” and the topic of William Jennings Bryan’s Cross of Gold speech in 1896, forced a contraction of the money supply in the United States.

    • Replies: @Achmed E. Newman
  113. @Bard of Bumperstickers

    There is “value” added in changing the balance of power by funding “everyone” versus “just some”. Since monetary current will be issued regardless, everyone had better scramble for their piece.

    The work to create “added value” is stimulated by the currency which motivates action.

  114. @ingotus

    Would you care to explain deflation and why it is considered a bad thing?

    It can lead to an uncontrolled deflationary spiral.

    What Is a Deflationary Spiral?

    A deflationary spiral is a downward price reaction to an economic crisis leading to lower production, lower wages, decreased demand, and still lower prices. Deflation occurs when general price levels decline, as opposed to inflation which is when general price levels rise.

    When deflation occurs, central banks and monetary authorities can enact expansionary monetary policies to spur demand and economic growth. If monetary policy efforts fail, however, due to greater-than-anticipated weakness in the economy or because target interest rates are already zero or close to zero, a deflationary spiral may occur even with an expansionary monetary policy in place. Such a spiral amounts to a vicious cycle, where a chain of events reinforces an initial problem.

    • Replies: @ingotus
  115. @restless94110

    Stone Soup is a European folk story in which hungry strangers convince the people of a town to each share a small amount of their food in order to make a meal that everyone enjoys, and exists as a moral regarding the value of sharing. In varying traditions, the stone has been replaced with other common inedible objects, and therefore the fable is also known as axe soup, button soup, nail soup, and wood soup.

    All of this “economics” chatter is irrelevant either way, what matters is the access and control of land.

    “Possession” is 9/10th the rule… very few seem to grasp this simple fact.

    • Replies: @restless94110
  116. @simple mind

    Don’t know what half those things are, but if anything is clear it is that modern times (why you have it in quotes is beyond my comprehension) is most certainly not founded on wiping out debt.

    Call me when your student loan debt is wiped out.

    • Replies: @simple mind
  117. Inflation destroys the workers purchasing power, the “elite” have been using the manipulation of money supply for ever to consolidate and then increase their power.

    Its as simple as owning assets when money policy is loose and cashing out just before money tightening.

    Its funny how they know when the right time is to get in and out?

    You must understand the powerful take no risk, they know the outcome before it happens.

    Its like insuring buildings before a “terrorist attack” how lucky was Mr Silverman?

    Same as elections, if you own both sides you always win!

    • Agree: JWalters, nokangaroos
  118. @simple mind

    I don’t see what the fable about stone soup has to do with in regard to this article but it took so long for you to explain what the devil you were talking about that I forgot the context in which you brought it forth.

    All that matters to you is control of land?
    Inflation of land makes that inequitable.

    Possession is 9/10s of the law, and very few understand that?
    Obviously everyone understands that so again what the fuck are you even talking about?
    The only one who doesn’t understand that 9/10’s is a home invader.

    Why don’t you go back to Lew Rockwell land or something. Or just remain silent. Take the 5th. Thanks.

    • Replies: @simple mind
  119. Corrupt says:
    @Mulga Mumblebrain

    Yes, this time will be different, and socialism will work… says no one with a brain.

  120. @restless94110

    Ha ha you are retarded! I’m a different poster altogether, you asked about “stone soup” and I knew the reference. Another raging child trying to compete with grown ups

    • Replies: @restless94110
  121. @simple mind

    You are right. I am retarded. But aren’t you retarded, too?

    What kind of person is eavesdropping–and so knows there’s a context for a mystery term–so unhelpfully explains half of the equation?

    I could have looked up stone soup, too, guy. I didn’t because the only thing that was important was the context of what the guy you were creeping on was communicating.

    Thanks to your help it’s still as clear as mud. As they say, fahgeddaboutit.

  122. @Si1ver1ock

    We have type 2, Soft Currency Economics, i.e. a fiat currency issued by a sovereign nation.

    I should correct that to “by a private bank unaccountable to the people”, but that aside, Silverlock, if you would just understand that Type 2 is NO GOOD, then we’d pretty much be in agreement here.

    Again, 2 % means the theft of 2% of Americans’ savings EVERY YEAR. Silverlock, I don’t want even 2% of the savings from my labor to be stolen every year! How about you? You’re just A-OK with that?

  123. @Si1ver1ock

    Your manufacturing example is unsound. You come out with the price that’s appropriate when you sell the product. Deflation may encourage more of a just-in-time supply chain, rather than a build-up of lots of inventory (at least anything with a good shelf life) during inflationary times.

    The currency obtained from sales will be worth that much more in profits, re-investment or buying power for the supply chain.

    No, the only crowd that loses during deflationary periods is the financial services crowd, the folks that make money by playing around with our money. That’s why the FED, the US Gov’t, and the white shoe financial boys want to “maintain that 2%” (actually 4-5%) “inflation, for the good of the economy.” It’s complete bullshit, Silverlock.

    When you, the working man, can put your savings in an account getting a natural rate of interest (the current “price of money”) and have the principle itself become worth MORE, how can that be a bad thing?

    And now, seeing as I keep mentioning the working man, here is a good one from The Workingman’s Dead:

    A lot of poor men got them Cumberland blues.
    He can’t win, for losin’
    A lot of poor men gotta walk that line
    just to pay his union dues…

    I don’t know, I don’t know, if I’m goin’ back again.

    • Replies: @ingotus
    , @Anon
  124. ingotus says:

    Thanks. The article says these occur during recessions or depressions, which is what spurs the spiral.

    Earlier you mention that the Fed had had trouble keeping inflation at 2%, highlighting underlying deflationary pressures that shouldn’t be ignored. Would you explain what those pressures may have been at the time or may be now?

  125. @restless94110

    That you don’t know half those terms is why you still think debt is real. All student loan “debt” is a delusional fantasy you only heard about on the interwebs, credit reports don’t keep it after a number of years, and credit reports can be repaired much sooner.

    The entire upside of “student loans” is that MAYBE if there is a public job they will “tax” 10% of the check, which is just another tax like all other taxes. If you cannot understand the mechanical structure, the “debt” part becomes another suburban fantasy about ideas.

    All jerbs are just jerbs with a final paycheck each week or month, so take it or leave it.

    Debt is LITERALLY wiped out in bankruptcy. Debts are “wiped out” all the time, most credit cards and other toys are routinely written off. There is a time limit to prosecute every claim, and time limits to enforce judgments. There are many exemptions and exclusions to levies and seizures, and many ways to become “judgment proof”.

    Like I said in another post here, the real issue is access to land. Nothing against Ellen Brown!! I don’t care about boomer BS either way.

    • Replies: @restless94110
  126. ingotus says:
    @Achmed E. Newman

    I suppose if one considers deflation simply a lowering of prices over time, then there are probably two types of causes for it – real and monetary.

    Real causes for deflation include advances in technology and in other aspects of the conduct of business leading to lower costs, and competition. None of these are bad per se. These advances including electricity, automobiles and so on, have enabled dramatic increases in the standard of living. Some talk about rigidity in the labor market as why deflation is bad. After seeing many folks have their wages lowered during the pandemic, I suspect much of the alarm is not warranted regarding this particular issue.

    Monetary causes for deflation are related to the lowering of the money supply, which could happen due to real or “fiat” reasons. A real lowering of the money supply could include a fire involving a large amount of paper currency, or (in olden times) the sinking of a ship loaded with gold in the middle of the ocean. But presumably these assets were owned by someone, and the owners would bear the costs, as in when a house burns down, the owner (or their insurance company) bears the cost. It’s bad, but it doesn’t require a central bank to solve.

    Fiat reasons for deflation on the other hand I think deserves more attention. For starters, it can only happen when a small group of people have access to a money printing machine (mostly electronic these days). Note that only that certain small group of people are allowed this privilege. Everyone else’s engagement in the activity would be illegal. This raises a few questions. How is the recently issued currency disseminated in the economy? Meaning who gets to spend it first and on what? Presumably the folks that issued it, or their (legally allowed, as the case may be) close associates. Now imagine for a moment if this were a private operation, where the currency issued really was not detectable as fake. The main beneficiaries would be the issuers of the currency, it is plain to see. Such is also the case when governments do it. Therefore, there is strong incentive for governments and their close associates to maintain that constant inflation is good for all, as long as it is only issued by a specific group of people or institutions.

    Now back to deflation. Surely, if the idea of “constant inflation” is sold to the populace, a new “equilibrium” can be created and maintained for a while. History seems to show this is like the juggler adding more and more balls to his act: at some point the juggling collapses. The crisis is identified, deflation pointed at as a potential disaster, the prescription being more money printing.

    So the idea that deflation is bad, is really just a way for governments to legitimize their constant fiat issuance, for court economists to quickly respond to objections, and for everyone else to have a quick response as to why inflation is good.

    You have to hand it to them.


    • Replies: @HdC
    , @Achmed E. Newman
  127. WJ says:

    The German government doesn’t own BMW or Siemens or many other German companies. Hence they are not socialists. Not that I give a crap.

  128. Anon[726] • Disclaimer says:
    @Achmed E. Newman

    “ No, the only crowd that loses during deflationary periods is the financial services crowd, the folks that make money by playing around with our money. That’s why the FED, the US Gov’t, and the white shoe financial boys want to “maintain that 2%” (actually 4-5%) “inflation, for the good of the economy.” It’s complete bullshit, Silverlock”

    More printing of money or weekly QE wet the primary dealers , hedge fund , companies , real estate and insurance agencies with downpours of dollars bills ( computer keys rapidly clicking ) .
    They buy stock and real estate . The values go up .
    Deflation has not happened either on stock or real estate and neither for daily essentials for a basic sustenance.
    Bit have inflated , groceries have slowly .

    Now if the printed money came to the common folks through 1 increased interest on bank deposit
    2 by increased wage
    3 by less taxation for common folks .
    4 or by decreases on tariff on imported food or gas or electronics
    5 not- commodification of agricultural products – a complex process but made possible by fiat and free money rich business houses .
    6 reduction on school tuition
    7 or came to the states and counties who could have offered better services through more employment and not raising taxes

    we might have seen deflation years ago .

  129. @simple mind

    That you don’t know half those terms is why you still think debt is real. All student loan “debt” is a delusional fantasy you only heard about on the interwebs, credit reports don’t keep it after a number of years, and credit reports can be repaired much sooner.

    I just graduated from a US university 5 years ago.

    I assure you:

    Student debt is very real and cannot be discharged.

    As a journalist I have interviewed dozens of former students similarly encumbered.

    You are so ignorant. I could not read a word beyond your first paragraph of fake news.

    Get help.

  130. Miro23 says:

    The main point of her article seems to be getting lost. It’s easy to create money – it’s done all the time by banks when they provide “financing” at the level of the FED for ZioGlob projects or a local retail customer to buy a sofa.

    The question concerns how the created money is used.

    If it goes into new technology/ industry then the growth produces sufficient income to pay back the loan with interest. For example railways in the early 19th century opening up the West, or computers/digitalization enabling the internet in the late 20th century.

    Over the last 50 years NE Asia has regarded credit as a precious resource and used it carefully to enable technological advancement/ develop export quality products. Over the same period the neoliberal West has treated credit as something available more or less for free – feeding into massive asset speculation and consumption (financialization of everything).

    At the limit, if the West went back to exclusively valid technological/industrial investment it would have the interesting result that the public would have to pay cash for property and consumer products (or go without). Demand would collapse one time along with prices – which wouldn’t necessarily be a bad thing. At least it would reflect reality – and financial crashes and inflation would be a thing of the past.

  131. HdC says:

    The best example that lowering prices are good, are flat screen TV’s, cell (smart) phones, and long-distance phone calls. I’m sure there are numerous others such as air travel.

    A most recent interview with the past governor of the Bank of Canada had him espouse that deflation is bad because dropping prices would cause customers to postpone their acquisitions, thus negatively affecting the economy.
    The interviewer was not fast or smart enough to call the ex-governor on this.

    My first statement above immediately came to mind and I thought: “Where do they find these people and put them in charge of the country’s money supply and policy?

    It certainly is not meritocracy, which is obviously sorely lacking in Canadian, and other country’s, governments. The results are there for all to see.

    • Replies: @ingotus
  132. Levtraro says:

    I agree a bit with Hudson, though Hudson is like Marx, good on diagnostics but poor on treatment. The solution is not to bring monetary policy into the public arena and electoral politics. That would simply mean taking central planning off of bankers and onto the politicians. This is what MMTers smoking something strong dream of, to pass the control of the banking system from greedy bankers to petty, incompetent and greedy politicians. In your quote, Hudson seems to want to bring monetary policy to the Treasury. Isn’t that the department that has been given to jews since Clinton?

    The system promoted by Brown has been tried to a certain extent in the EU and the result was widespread corruption and bank restructuring (i.e. consolidation) after the 2008-2009 great finantial crisis. Germany may be considered an example of success except that German banks suffer from chronic low profitability and are even struggling to pay for their surplus deposited in the Deutsche Bundesbank given negative rates. German banks tried to pass on the cost of negative rates to customers (i.e. a charge proportional to the deposit) but then current chancellor and former finance minister threateaned to block any such charges. Even the biggest German bank, Deutsche, has been in long term decline and has posted billions lost in some recent quarters. German banks suffer low profitability not because of inefficiencies but simply because of low revenues and higher costs connected to their fragmentation. I know nothing of North Dakota (where is that?) so cann’t comment on actual outcomes.

    I don’t agree either with Dr. Paul and other American libertarians about simply abolishing the Fed and bringing about currency competition. He idolizes the idea of the free market, and anybody idolizing an idea has lost some analytic capacity.

    Sorry to not be more enthusiastic or positive but it’s just the opinion of some guy commenting some stuff. Maybe that place North Dakota has a model banking system.

  133. ingotus says:


    Unfortunately, I suspect the disconnect between power and ability is a feature, not a bug. More specifically, abilities that allow folks to ascent to and maintain power are not (perhaps inversely) related to abilities that enable good judgment, common sense and a long term view of what is best for the nation.

    Oh well. Where’s the next America?

  134. @RoatanBill

    How would you deal with the famines that a restored gold standard would cause? Murray Rothbard anticipated that famines would return with the gold standard when he constructed the argument that in his libertarian utopia, children would have no right to their subsistence, since that would force an involuntary claim on their parents’ wealth. He did this to give parents a way to triage their children during famines so that they could legally and morally starve the ones they didn’t want or couldn’t afford to feed.

    • Replies: @RoatanBill
  135. @advancedatheist

    I fail to see how a metals standard causes famine. I believe a lack of food causes famine, correct me if I’m wrong. Therefore I find your assertion flawed.

    BTW – I don’t care what Murray Rothbard or any economist has to say about anything as they’re the premier bullshit artists in the society.

    • Agree: Realist
  136. Quaker says:

    An *actual* holocaust would fix inflation, and the entire planet would be at peace.

    Just sayin’.

  137. Our woes aren’t economic…they are political.

    For a pyramid hierarchy to work….the best men of a state must rule, and there lies our present problems, the best men of a state don’t rule, we have a criminal cabal who have usurped the best men for the likes of Trump and Bidet!

    The only way forward is to usurp the criminal and restore the best men/women if we are to keep this system…or find another system that cannot be captured by a criminal gang.

  138. @Fart Blossom

    The alternative, neo-feudal rule by banksters, is your preference, is it?

  139. @RoatanBill

    It’s NOT ‘government’ currency. It is Federal Reserve ie a consortium of a dozen or so private banks, nearly all controlled by our Judaic friends. They create the money, hand it to other private banksters at zero interest rate, who then lend it to the serfs at ever growing rates, up to 20% plus for credit cards, and the sky is the limit for pay-day lenders etc. The Cantillon Effect. And they own the ‘Government’, which becomes the patsy for elite blood-sucking.

  140. @Achmed E. Newman

    Gosh! That would be ironic, wouldn’t it? After 200 years of looting the world, the USA ends up looted itself. Karma IS a bitch. Don’t worry-the Chinese are not so stupid as to humiliate the USA.

    • Replies: @Achmed E. Newman
  141. Jon Chance says: • Website

    You’re almost right on all points, Sir Bill, but you’re embracing one HUGE error.

    Money is a representation of territory — NOT of gold, silver, petroleum, corn, tobacco, or other common commodities.

    Who exactly should issue a nation’s money?

    What exactly does each unit of genuine money represent?

    Please examine Article Eight of the First US Constitution (Articles of Confederation).

    Read Common Sense (1776) by Thomas Paine and the Virginia Declaration of Rights (1776) by George Mason.

    Thank you.

    • Replies: @RoatanBill
  142. @Jon Chance

    Money has been around for thousands of years and therefore, no document from any source has any legitimate bearing on money. There should be no such thing as a national money/currency. It is the intrusion of gov’t into the money sphere that IS the primary problem the entire world now faces. Gov’ts sole contribution to the concept of money is to debase it, invent a money substitute known as currency and then cheat their citizens with engineered inflation.

    The metals producers should get together and coin “money” for circulation denominated in the WEIGHT of metal. A gold coin could be struck with 100 stamped into its face denoting 100 grams, for example.

    Prices of everything would be set as G:S:C so a typical widget would cost 945:50:0 meaning 945 grams of gold, 50 grams of silver and no grams of copper. The units could actually be whatever could be agreed upon. No one would care if the gold was minted in the US, Russia, or on mars.

    This would eliminate currency arbitrage, exchange rates, central banks and would mean that government is out of the “money” business. Price inflation would be a market force, not the whim of some banking cabal. Deficit spending with central banks monetizing the debt would be impossible. Wars would be less likely as now they need to be paid for in cash G:S:C, not thin air “currency”.

    Credit card companies could store all the metal an individual or company owns and we can all use plastic as a convenience with the option to withdraw any part of OUR metal any time we want. No more fractional reserve banking.

  143. @ingotus

    Thanks, Ingotus, for the concise and informative comment. In paragraph 4, I believe you meant to start with “Fiat reasons for inflation…”

    • Replies: @ingotus
  144. @Mulga Mumblebrain

    Well, not really ironic or Karma really but just the same-old same-old, Mulga. It wasn’t all Americans who looted Russia but just the usual crowd of financial jackals. I’d guess it would be corrupt CCP members who’d get the bulk of the loot from America too, not your average Chinaman.

  145. @RoatanBill

    Very good.

    I don’t see any other way to solve the problem.

    The bankers are willing to will do ANYTHING to prevent it.

  146. ingotus says:
    @Achmed E. Newman

    Thanks Achmed. Well, I was referring to deflation, since that was the topic of discord, apologies if it wasn’t clear. That paragraph was meant to highlight that there is a type of deflation – that created by the lack of fiat issuance – that is only possible in an environment of fiat issuance. And that perhaps that is the type of deflation people so fear, and that it would go away if the nefarious printing machine ceased to exist.

  147. Jon Chance says: • Website

    Yes, we’ve all heard the seductive theories proffered by Mises, Rothbard, and other Jewish bankers for many years.

    As mentioned, money is a representation of territory — NOT of gold, silver, petroleum, corn, tobacco, or other common commodities.

    Firearms are far more valuable than gold.

    Coinage is a form of currency, but coinage is not money.

    Fools’ Gold – Robert Carroll


    By monopolizing this commodity the moneyed classes have got Nature by the throat and the community under their heels… Compared with this process, usury is mere child’s play.

    – Alexander Del Mar in The Science of Money

    Advocacy of gold or gold “backed” money rests on dubious foundations. The discussion that follows will reveal some of the semantic deception, half-truths, doublespeak, self-interest pleading, and historical errors employed in gold advocacy polemics.

    The Pope admitted in 1992 that Galileo had been right. This has nothing to do with gold money, but it is offered to show that neither antiquity nor authority makes a phony idea anything but phony.

    There is a strong belief among gold money advocates that little bits of gold, especially if they are stamped with the image of some authority and numbers make better price counters than numbered pieces of paper or computer bytes. The belief involves a perception of what money is.

    The person who holds that belief perceives money to be something real and apparently needs to see and hold in his hand a physical manifestation of it. Gold is heavy, and refined gold is bright and shiny. It satisfies an emotional need however meaningless it is to the function of money. Money is a product of human mental fabrication. It always has been; it always will be. It is a tool that facilitates exchange. Modern society could not run without it or some equivalent accounting system.

    A rational business decision would require that monetary symbols cost the least possible to manufacture. Presently, (1998), it costs around $280 to mine and refine an ounce of gold. Mining decades of tons of ore per ounce of gold has left holes in the ground measured by cubic miles. The ore is leached by toxic chemicals that have produced environmental pollution. Banks create money in any amount with the touching of computer buttons.

    Abstract numbers, meaningless in and of themselves, that count quantities of amperes, wheat, gasoline, volume, distance, area, force, or any measurable, quantifiable thing, suffice in commerce, science, and technics without the clumsy inconvenience of metal counters. Why should it be different with money?

    A pseudo-legal argument is sometimes advanced by advocates of gold money that a debt cannot be paid with another debt. This is semantic deception. A debt can be paid with anything that is acceptable to the payee. In addition, as long as debt in the form of deposit entries in bank accounts or Federal Reserve Notes can be exchanged for real goods and services, the payee is just as well off as if he had received little lumps of metal. Further, the multi-trillion dollar world economy runs almost exclusively on exchange of debt-money which only consists of numbers in deposit accounts at banks.

    A common argument for gold money that accompanies the pseudo-legal sophistry is that gold has “intrinsic value,” another semantic deception. Gold has interesting intrinsic properties such as chemical stability and excellent electrical conductivity, but “intrinsic value” is a semantic error if not outright doublespeak. Value(1) is a subjective judgment and cannot be rationally thought of as intrinsic. Subjectivity is exclusively a product of human minds. “Intrinsic value” is a deceptive euphemism for price.

    If people were stranded in some remote location without food, water, and shelter, a mountain of gold would serve no more purpose than so much sand. It would have no price. Gold has no intrinsic value. It merely has a price which is the result of complex factors associated with its subjective price value compared to other commodities. Industrial usefulness of gold as well as human subjectivity that desires gold for personal adornment, etc., does assure that gold will fetch a price in a modern market. But what price?


    • LOL: RoatanBill
  148. @obwandiyag

    That is not socialism, and you are observably a moron.

  149. @Steve Naidamast

    No, the ones on top have already prepared getaways, and they’ll operate them well before people start wrapping torches.

  150. @Mulga Mumblebrain

    Capitalism is Greed. Socialism is Envy.

    They’re both moronic.

    • Replies: @HdC
  151. HdC says:

    Hence National Socialism, a third way of organizing an economy and proven superior to the alternatives of capitalism or communism.

    By all foreign accounts, the authors of which had unimpeded access to any place in Germany, Germany was doing very well by the mid 1930’s with happy people being encountered everywhere. Even Churchill’s daughter had this opinion!

    But the leaders of the capitalist and communist countries would not have this. A third way that would prevent international banks from raking off the profits off the toil of the working man? Couldn’t have that, could we? This according to Churchill.

    Thus the worst of capitalism and communism allied themselves to destroy the “third way” being implemented in a small European country that had the guts and brains to try something different.

  152. jadan says:

    It should be said that inflation is not inflation, it is a tax imposed by capital on the mass of people. Too much money chasing too few goods is not the cause of the current inflation. ROI is. Capital demands tribute and calls it return on investment.

    In non-productive economy such as this one, capital gets its ROI through devaluation of the currency. This looks like inflation, but it is in reality the tribute demanded by the investor class from the tiny net worth majority. When the money for nothing class experiences good luck at the casino who pays? When a guy bets 100$ and the stock sores and he sells it for 1000$, where does the 900$ profit come from? From the perpetual money machine.

    The cost of Cheerios goes up. The cost everything goes up and the investor class pockets the spread. Ellen Brown says make more money available so that supply and demand equalize. Inflation will go away! No, sorry this won’t work under financial capitalism. Investors demand their vig and non-investors ( also known as “suckers:) pay it through the defacto devaluation of their common currency. The truth is the country is not experiencing inflation. It is deflation, debt deflation.

    The public is mired in debt, the economy is not productive of anything but more debt, so corporations raise the price of goods to enhance their stock value and investors enjoy a nice ROI in a non-productive economy! The miracle of compound interest is the Law of financial capitalism! It’s called the highway to hell.

    • Replies: @HdC
  153. HdC says:

    Methinks you’re too verbose in trying to explain what are the SYMPTOMS of inflation.

    The man in the street sees inflation as increasing prices for his everyday needs.
    The investor demands higher returns on his “forgone purchases” (money not spent but invested) to make his decision worthwhile.
    And the business needs a higher ROI to pay higher returns, thus raises prices.
    The man in the street cannot afford to pay these higher prices and curtails his expenditures.
    Etc., etc.

    So the fundamental question remains: What is the driving force that upset the apple cart of economic stability?
    At the fundamental level it is the central bank putting currency -bank notes- into circulation for which no goods and services have been produced. Period.

    Note that there may be non-inflationary reasons for higher -or lower- prices, such as speculation of well-heeled individuals in the commodity marked. Bad harvests in major agricultural countries.

    Lower prices may be caused by more efficient manufacturing such as smart phones and flat screen TV. More efficient mining and agricultural processes, etc. Thus one must be careful before yelling “inflation”.

    However, more currency put into circulation without an increase in goods and services, this remains the fundamental criterion for inflation.

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