Thursday, August 28, 2014

The Fiscal Fantasies of Stephen Zarlenga and Other Monetary Reformers

 The Fiscal Fantasies of Stephen Zarlenga and Other Monetary Reformers - Or "Won't Get Fooled Again"?



                                  Youtube link


[Time saver: this article is fairly long-winded, and somewhat repetitive, so if you are short of time just skip to the very last part - the short post summary-highlighted in brown text- regards, onebornfree]

           
              "Freedom is not a system" - Jon Rappoport


Over the past few months, several members of the Freedom Network have expressed an interest in, and their support of, the various [and in my opinion dangerously wrong]  proposals of a US monetary system reformer named Stephen Zarlenga, and have asked me for my opinion of Mr Zarlenga's proposals for reform of the US monetary system  [Lord knows why :-) ]

This article is therefor an attempt by me to make my position on Mr Zarlenga's ideas clear to those members, possibly help them, and to possibly help others as well. 

My Own Self- Education In Economic and Investment Philosophy

From approximately 1983 to around 1995, my primary learning focus was economics and investment philosophy.

 I therefor studied [privately- not in school] the writings of classical economists such as :Adam Smith and David Ricardo, plus other none- classical economic theories from: Karl Marx, John Maynard Keynes,  Karl Menger, F.A. Hayek, Ludwig Von Mises, Murray Rothbard, Henry Hazlitt, Frederic Bastiat and others, as well as the investment philosophies of investment advisors such as Doug Casey, Harry Browne, John Pugsley,Terry Coxon, Harry Schultz, and Richard Russell. 

Assume Nothing

Of course, this does not mean that you should assume I know what I'm talking about here :-).

So Anyhoo...

So anyhoo, to cut a long story short[er], during my studies all those years ago I came across the monetary reform theories of Mr Zarlenga, [before he had published a book, I believe].  

Zarlenga's Ideas Still Do Not Make Sense To Me

Quite honestly, his theories did not make any sense to me back then, and as these days I do not have time to wade through his very long book, [unless someone is going to pay me to so do :-)] - after re-checking more recent comments from a speech he made in 2003  before members of the US Treasury,  to  try to see if anything major in his viewpoint had changed in the intervening years since I'd last taken a serious look at his theories,  I have to say that  my original opinion of Mr Zarlenga's monetary reform theories  remains unchanged.  

 Assumptions, Assumptions, Assumptions : The  Assumptions of Stephen Zarlenga's Monetary Reform Theories 

In order for Mr Zarlenga to reach his present conclusions about what, to him, has to be done in the area of monetary reform in the US, he has to have first made certain assumptions, yes?  

A Common Mental Process - We All Do It

It's the same process for all of us in life. 

We first of all, for various reasons, come to make certain, often unexamined/unquestioned assumptions that we believe to be true [with out any real proof], and then, "truth" in hand via those various assumptions, we go on to draw our conclusions and to try to take action, based on those unquestioned assumptions, as needed. 


Assumptions Always Lead To Conclusions Drawn


We all  quite often go through this same mental process [i.e. making unproven assumptions] before reaching what we believe to be definitive conclusions - to a  greater or lesser degree - and to an extent this mental process  is unavoidable in life, for you, me, Zarlenga and everyone else.

Therefore, logically, Mr Zarlengas original unexamined pre-assumptions  must inexorably  lead him to draw his final conclusions to date about what has to be done in the area of US monetary reform, yes? 

Are Zarlenga's Assumptions True, Or False?

But what if his pre-assumptions are incorrect? 

If so,  then wouldn't that mean that his final conclusions to date, based on those false assumptions, would also be incorrect ? 

Many Wrong  Zarlenga Assumptions

I believe that Mr Zarlenga has made many false [i.e unexamined/unquestioned] assumptions, and that therefor his conclusions about what needs to be done to reform US monetary  system are not only wrong, but dangerously wrong, and if enacted, might actually make things even worse that they already appear to be right now . 

 Two Main Culprits: So Only Two  Zarlenga Assumptions Are Examined Here:

However, for  purposes of  both clarity and relative brevity, for this article I intend to focus only on what I see as the two main false assumptions  of Mr Zarlenga's monetary reform proposals, because, as I see it, these  false assumptions are the main culprits and directly lead to  the  false conclusions  that he and his followers continually labor under. 

[False] Zarlenga Assumption Number [1] { The "Biggy"} = Government Works, Government is Necessary, Government Solves Problems; Therefor, Government Can Solve The Monetary System Problem:

Zarlenga says: ".. the nature of money is a fiat of the law, " [emphasis mine]

Zarlenga says:"I am suggesting that the nature of human affairs requires government to have four branches, not three; the fourth branch to embody and administer the monetary power.[emphasis mine]

Zarlenga says:"The De-funding of government at the local, state and federal levels, arises out of this disease of attacking government as the enemy."[emphasis mine]

Zarlenga quotes source

Therefore, I Conclude That The Primary, False Zarlenga Assumption = Government Works/ Solves Problems

From those [2003] Zarlenga quotes above it is perfectly obvious to myself that Zarlenga sincerely believes that government is necessary, that it works and can solve problems, including the perceived current US monetary system problems.  

So this appears to be Zarlenga's primary assumption, from which nearly all others follow, and from which all of his reform conclusions duly follow.

 Zarlenga [False] Assumption Number [2]  = The True Nature of the Current Federal Reserve System - [i.e. Zarlenga's "Straw Man" Argument]:

 Mr Zarlenga claims that the Federal Reserve system is privately owned, and that therefor, "logically", that it has failed solely because it is a private, and not  a government-run entity. 

But this is, in point of fact, a "straw man" argument being made by Zarlenga -  the truth of the matter is that the Federal Reserve system, although  ostensibly privately owned, is fully protected by the government, and enjoys government enforced monopoly privileges whereby no competitors are allowed to operate/copy its functions. 

As  Bill Bonner  has said: "That is why we have the Fed. It is really a cartel of bankers who make sure they protect and defend the right of bankers to make a lot of money."                              

Other quotes concerning the true nature of the Fed [as I see it]: 

"While it is undoubtedly true that the Fed is owned by private banks, the notion that it is a private company, as private as Federal Express, is wrong."

"First, the Fed was created through an act of Congress. Not only that, a separate constitutional amendment was added in order to create the central bank. What other private company can claim the same? Certainly not Federal Express." [My emphasis]


"Second,  the Fed has been given the governmental authority to control the nation's money supply and direct monetary policy. As a rule, private companies don't enact and enforce national policy. That is the function of government. Any entity authorized to enact and enforce policy is a de facto government agency."


"Third, one of the Fed's main functions is to fund government expenditures. The same can be said for almost all other central banks in history. Obviously, the private bankers reap huge profits from this partnership with the state, but that does not negate the fact that the state itself benefits hugely as well."


"Since the creation of the Fed, all the of the United States' wars and all of its major welfare programs have to a very large extent been funded by the Fed's printing presses." 


Source for above quotes 

Zarlenga's Fictitious "Bass Ackwards","Straw Man" Claim

 Mr Zarlenga's claim that the Fed has done what it has done to date because it is privately owned/operated is ficticious- entirely "bass-ackwards", as it were; the Fed is in fact a 100% government protected and guaranteed "legal" monopoly.  

Fact: The Federal Reserve causes the problems it causes directly and only because it is a fully government protected, legally enforced [by "rule of law"], monetary monopoly system.

Meaning that in reality, and entirely contrary to Zarlenga's assertions, the Federal Reserve system is a problem directly  because, and only because it is a legally [i.e government] protected monopoly with exclusive rights and privileges not available to everyone else.

The Fed = The US Post Office

The Federal Reserve is no more private than the US Post Office, yet another allegedly private entity that is fully protected  from nearly all competition by the government- and therefor the Fed, just like the Post Office, consistently fails in its publicly stated purpose [although it works just fine for the employees of the system itself and for other, associated "insiders".]

Take away those government enforced monopoly privileges of the the Fed system and the Post Office etc. [like that's ever going to happen :-)] , and it/they would have to succeed or fail in competition with other freely competing monetary and postal systems.

The "Magic Wand" Zarlenga "Solution" For Monetary Reform [and everything else presumably] Always = Even More Government:

Because Zarlenga and his supporters actually seem to  believe :

[1]: that government actually "works", is necessary, and can solve problems...[i.e, it's not just a criminal scam, as I would assert]

and they also appear to believe that:

[2]: the Federal Reserve System is actually some sort of genuinely private company, and not  simply just another poorly disguised, government favoured entity, and because they believe that private ownership [and not government protection from competition] is the root cause of the Feds historical shenanigans since its 1913 creation [via an act of Congress, no less]:



............Zarlenga's "solution[s]" to the problem of the Federal Reserve System are as follows: 

1]"Nationalize the Federal Reserve, place it within the Treasury .."

2] "Remove the privilege banks have to create money. Only government should have this power. "

3]"Institute anti-deflationary programs to assure that sufficient money is introduced by government into the system."

Source of above Zarlenga quotes

So What Would Happen If Zarlenga's Proposals Were Ever Enacted?

"Freedom is not a system" - Jon Rappoport

To cut a long story short, because Zarlenga proposes even more government control of the monetary system than presently exists, if enacted, Zarlenga's reform proposals would end up causing just as much damage as the current system,  if not more. 

In other words:

"Meet the new boss, same as the old boss [or worse]" 


This Just In: Government Cannot Work/Has Never Worked.

In direct opposition to Zarlenga's primary assumption, I will simply assert here  that ALL governments, right from  from the very first one, have ultimately failed to deliver what they promised [except to the insiders, of course], and that all future governments, regardless of the details of the actual form they might take, will inevitably act in the exact same way as all previous governments. 

As to exactly why this is so , I am not going into get into details here - suffice to say that the reason is a result of mix of the true nature of man and human action, and the true nature of all governments.

 Zarlenga's Assumtions, Your Assumptions[?]  

If you, dear reader,  believe that the  monetary reform  proposals of Mr Zarlenga and other, similar claimed monetary reformers ,  make sense, then obviously you must fully agree with  what I would claim to be his many false assumptions, including the two that I have briefly outlined above. 

Psychological Issues

Please notice that I have not attempted to explain exactly why I believe that his main assumption [1], [i.e. that government actually works] is incorrect.  

And for his secondary assumption concerning the true nature of the Federal Reserve System, as proof of my contention all I have offered are a few quotes from other writers, and then simply concluded with the assertion that Zalenga's proposals would actually make things even worse, if enacted, and I have offered little else. 

Question: Why have I acted in this way- instead of trying to completely refute Zarlenga, point by point here?

Answer:  Time [Is Money]

The reason I only make a few simple assertions here, instead of getting deeply into Mr Zarlenga's [and your?] assumptions, is because these type of assumptions, although false in my opinion, are typically very deeply and closely held by an individual, and are always backed up/reinforced by other, equally  false, never seriously questioned,  assumptions. 

In other words, to look closely at these types of assumptions [assuming you also make them] takes time, and patience, and a lot of thought, usually. 

Bluntly, as a financial safety consultant and an alternative psycho-therapist and personal freedom therapist,  I  do not have the time to help you to take a closer look at these types of assumptions and others related- unless I am going to be duly compensated for my time and effort.

 I believe that Zarlenga's [your?] assumptions are both incorrect and, more importantly, psychologically dangerous for the individual, and just as dangerous in the real world that individuals live in day by day.

 In Defense of Zarlenga [You Too?]

In Zarlenga's and your defense - assuming you have similar beliefs - for various cultural/sociological reasons, these beliefs/assumptions are extremely common these days - from personal observation I'm guessing that at least 95+% of the population in the US have made the exact same primary assumption[s] as Zarlenga has, plus others related. 

Take Responsibility For What You Have Freely Chosen To Believe

 If you believe that his two pre-assumptions  as briefly outlined here are in fact correct, so be it- I have no desire or need to change your opinion on these matters, nor the time to discuss them with you for free-  bluntly, I don't do free psycho-analysis, even for Zarlenga himself. 

After all, it's your life- in the end, if you believe in Mr Zarlenga and his monetary reform proposals,  then the truth is that at  some time in the dim, distant past you freely chose to accept, unexamined, the exact same assumptions Mr Zarlenga and others like him have made. 


In other words,  just like Zarlenga, your assumptions are your responsibility, not mine, nor "society's" [however defined], and that in fact, that's the way its always been, and that's the way  it always will be [4 evva 'n evva, amen :-) ].

Dangerous Assumptions?

I would only once more point out that in my opinion, if you, dear reader , really do share Mr Zarlenga's and other financial reformers primary number [1] assumption as  briefly outlined here [let alone his "straw man" no. [2] argument concerning the nature of the Fed] that, as I see it, and if it has not already done so, that single false assumption of yours [plus others closely related but not covered here], will cause  you considerable damage in both your  future private life in general, your personal freedom, and in your future financial/savings and investment "life" also. Possibly other life areas too- assuming it has not already done so.

My Concluding Assertion = Zarlenga Is Flat-Out Wrong:

As a Personal Freedom consultant, I boldly assert here that Mr Zarlengas pre-assumptions, [and therefor his "final solution" conclusions about monetary reform] , are flat out wrong.

Still, Everything's "Fine and Dandy"

 However, again, assuming you hold similar beliefs to Mr Zarlenga, and despite the fact that I believe that you, in my opinion, have some very serious personal issues to confront and hold up to the light of day; along with ideas/concepts  that if left unexamined can be very self-destructive and dangerous for you, I am unwilling to expand on/attempt to justify in any detail my simple assertion[s] here; meaning that if you believe both of  Zarlenga's assumptions and conclusions [ and more besides], then that's just fine and dandy with me, it's your life after all. 

"Dreams [Anarchist Blues]"

Instead, by way of "refutation", and for your continued listening displeasure, I would simply offer my musical composition "Dreams [Anarchist Blues]":



Youtube link

Your Opinion: Good News/Bad News

In the final analysis you are, no different from Mr Zarlenga or anyone else, fully entitled to your opinion , and I respect that. 

If however, you are seriously interested in learning more about why Mr Zarlenga's assumption's [1] and [2] are in my opinion flat out wrong [and consequently very dangerous to you, your freedom, and your financial safety], then feel free to email me at: onebornfreeatyahoodotcom and we can possibly discuss session times, rates etc.  





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Short Post Summary

In summary , I believe that Mr Zarlenga's core assumption[1] - that government can solve problems- any problem, including monetary system problems- [however defined] is a major misconception, both for him, and for you if you share that same core assumption. 

This Just In: Government Causes Problems- It Never Solves Them

The truth is that the problems that people like Zarlenga see with the US monetary system were/are directly caused by the federal government's interference and protections,  and in that respect are no different from most other social problems that Zarlenga and others probably fantasize about as being solveable by governments. 

Governments cause problems- they never have, and never will , solve any of them. 

Given time, and concentration, the fundamental reasons that this is the case in the real world [and why therefor Zarlenga's and his believers instead inhabit a  fantasy world], can be explained fairly easily, but I have deliberately made no attempt to so do within this article. 

Your Own Self -Psycho- Analysis?

Unless you, like Zarlenga,  can see nothing wrong with the assumption that the government can solve monetary [or any other] problems, I would strongly suggest that  you set aside some serious time for self-analysis/examination to ask yourself the question:

 exactly why do I continue to assume/believe that governments can solve problems, including perceived fiscal/monetary problems [and other closely related questions/assumptions]?. On what real-world evidence do I continue to believe that assumption?

Or Use A Pro?

If you have no idea how to go about such a process, then I'm afraid that you are going to have to find a professional who can perhaps help you to analyze this fundamental, very important, and entirely unrealistic assumption that is in complete denial of how the real world  has ever actually worked, can work, or will work, and that, because it so far from reality, will cause you considerable problems in you life in many areas, both personal, professional, and financial in the future, and even that's assuming it has not already caused you considerable anguish in your life to date. 

Regards, onebornfree.
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"Blue Pill" Versus "Red Pill" Afterword [Added 09/01/14]:


Youtubelink direct


Q: Does The Matrix Still "Have" You [Just As It "Has" Zarlenga]?

If you are familiar with the movie "The Matrix" , you are probably aware of the "blue pill" /"red pill" concept.

You may well imagine yourself as having taken "the red pill" and as therefore currently being "outside the Matrix", as the heros of that movie are once they have taken the red pill.

However, I would strongly suggest that you are still very much inside this matrix [i.e. blue pill] , and that "the Matrix" most definitely still "has" you, [ as Morpheus says to Neo] if you continue to believe any of the following:

1]: that governments can solve problems- or have _ever_ solved _any_ problem. [This is an essential, core belief within the "blue pill" , matrix belief system ] .

In Truth

In truth [i.e. "Red Pill"], there are, [and never have been, nor will there ever be in the future], no government solutions to monetary problems, nor to any other perceived  problems in this world. 

Governments  only create problems- they will never solve them.

WARNING!: Your own continued belief in this one, single lie/fantasy/chimera/ mirage, or whatever else you wish to call it, will keep you firmly locked inside "The Matrix" for the rest of your life, unless you can find a way to break free of it.

2]: that the federal reserve system is a fully private company that can be freely competed with by other monetary systems and non-systems alike, and that it has no special, legally enforced, government granted  monopoly privileges [i.e. at the point of a gun- or many guns, more accurately] .

Isn't it time for you to take that "Red Pill" [ or to at least take another, far more potent one, instead of the watered down version you appear to have been using to date]?

Regards, your "Red Pill" therapist, onebornfree.


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More About "Onebornfree":

"Onebornfree" is a financial safety consultant, a personal freedom consultant an alternative-psychotherapist, and a musician. He can be reached at: onebornfreeatyahoodotcom  .

Onebornfree Personal Freedom Blogsites: 

                                                                                         







Music Info: 

Other 2014 "Studio" Remixes:


"The Thrill Is Gone"


"Face In The Crowd Blues"
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Wednesday, August 6, 2014

The Federal Reserve = Central Planning by Central Bankers

Article quote: "In other words, Western economies are centrally planned economies. They are not called this, but this is what they are. They are simply not centrally planned by the government. They are centrally planned by a cartel that represents about a dozen banks. The economics textbooks do not discuss this aspect of the economy."


Related post on the futility of central planning.


"One of the problems that anyone who is critical of the Federal Reserve System faces is the fact that he is regarded as someone without any expertise in the area of money and banking.
In a 2009 article, the Huffington Post went into considerable detail about the number of people with PhD degrees in economics employed by the Board of Governors of the Federal Reserve System. This is the government's branch of the Federal Reserve. It is not one of the 12 regional Federal Reserve banks, all of which are privately owned. The Board of Governors at the time the article was written had 220 full-time economists on its staff. The author did attempt to find out how many economists are on the payroll of the 12 regional banks, but he could not. These are major institutions. Each of them publishes its own monthly magazine.
In terms of the number of people with PhD degrees in economics who specialize in money and banking nationally, there may be as many as 1500, but it could be as few as 1000. Anyway, that was the case in 2009. So, we're talking about a situation in which perhaps as many as a third of all the specialists in the field are employed by some branch of the Federal Reserve. But this is only the tip of the iceberg. The Federal Reserve has part-time contracts that it doles out to economists in the field. It sets aside almost half a billion every year to pay economists. That is an enormous amount of money to flow in the direction of a single profession.
The article concluded that the Federal Reserve has basically bought control of the field. Almost nobody challenges the Federal Reserve in any serious way.
Here's a situation in which the agency that controls monetary policy for the United States has an unlimited amount of money to buy support, compliance, or least silence within that segment of professionally trained economists that specializes in money and banking. The Federal Reserve gets to keep all the money that it wants for operations. It has to turn back over to the Treasury Department any money that is not used for operations, but it does not answer to Congress or the Treasury with respect to how it spends its money. This means that the Federal Reserve has essentially unlimited funds available to buy off those critics who might challenge Federal Reserve policy.
The Federal Reserve System is a cartel. It operates for the benefit a relatively small number of banks, probably fewer than two dozen, which constitute at least 80% of all bank deposits in the United States. Really, the Federal Reserve is dealing with about a dozen of these enormous banks. It does not answer to close to 7,000 small banks. They have no clout. They have so few deposits, compared to the giants, that whether they survive or not is basically irrelevant to the Federal Reserve System.
The organization is truly untouchable today. It has never been audited by an agency not employed by it. It is not going to be audited. Nobody knows how much gold is in it. Nobody knows what liabilities or claims against this gold there are. In other words, the central agency that controls the central economic institution in modern society, meaning commercial banking, is beyond control of the vast majority of those banks, and it is beyond the control of Congress. No President ever challenges the Federal Reserve System.
Under these circumstances, what possible effect does criticism from outside the Federal Reserve have? We know how much effect it has. None. If Congress, which is supposedly in charge, does not have the votes to get an audit by the Federal Reserve by the Government Accountability Office, then the Federal Reserve is truly independent of the government. It may go along with a particular presidential administration, but it does not have to.
I do not think there is any other institution in the United States that has this degree of autonomy from government. It proclaims itself as independent of government. It is lauded in the textbooks because it is independent of the government. I am aware of no other institution in the United States whose main claim to fame is that the federal government has no control over it. In textbooks written by leftist authors who want to see control, or least severe regulation, over every aspect of the capitalist economy, they all give a free ride to the Federal Reserve System. In this one case, they pull back from their ideological position, and they claim that the great advantage of the Federal Reserve is its independence from politics. This is completely contradictory to the party line of the American Left, yet there are almost no deviants from this party line.
It is an arcane system. Almost nobody understands how it works. Nobody is supposed understand how it works. Those inside the system who publish their unreadable articles in the regional Federal Reserve magazines never get to the heart of the system. You don't even get a clear explanation of what constitutes excess reserves. You don't get an explanation of how it is that, since late 2008, the excess reserves had climbed almost 3 trillion dollars, when those reserves were virtually nonexistent prior to 2008. There is no open discussion of this. It is the central fact of monetary policy today, yet it is not openly discussed. This kind of silence is not random. It is imposed.
If the central institution of an economy is the monetary system, and this institution is controlled by a government-created cartel, and this cartel is independent of the government, then what possible opportunity does the general public have to reclaim freedom for monetary affairs? The answer is obvious: none.
When you consider the fact that the Federal Reserve System is the central bank among the central banks of the world, at least for the present, you begin to understand how a tiny handful of people, who are in charge of an institution that is beyond political control, and whose ownership is concealed with respect to the 12 regional banks, is in control of the economy. This is central planning. We should call it what it is. I know of no socialist government in the West that has ever had the same degree of power over the entire economy that the Federal Reserve System has in the United States. I'm not speaking here of the Soviet Union or Communist China. The Federal Reserve was never in a position of being able to have people arrested in the middle of the night, carried away, and executed. But if you're talking about central planning over the central institution of the economy, this is true central planning. It is licensed by the federal government, but it is not controlled by the federal government.
In other words, Western economies are centrally planned economies. They are not called this, but this is what they are. They are simply not centrally planned by the government. They are centrally planned by a cartel that represents about a dozen banks. The economics textbooks do not discuss this aspect of the economy.
There are a few critics of the system on the Right and the Left, and there is the old populist movement that has been critical of central banking from the beginning. I would put this movement on the Left politically, but I think it is on the Right socially. It is represented these days by Ellen Brown. That anybody with this little economic knowledge as Ellen Brown possesses could become the major spokesman for the populist movement is indicative of just how bad the situation is in the general population. She has no influence. I have replied to her here.
Going up against the Federal Reserve today is about as politically suicidal as anyone could imagine. The FED is truly untouchable.
The people in the FED think they know what they're doing. But here is an organization that, from 1914 to 2008, accumulated $800 billion of Treasury debt. It did this through two world wars. It did this in the Great Depression. And then, in a period of five years, added $3.2 trillion to its portfolio. This is not the response of a group of professionals who understand what they are doing. This is not the response of a group of technicians who have a systematic plan to direct the economy. This is the Keystone Cops. Yet these people really are in charge of monetary policy, which means they really are in charge of the amplitude of the business cycle. They cannot suppress it permanently, but they can make it much, much worse. They can hold off disaster, but they cannot avoid disaster. We saw that in 2008 in 2009. There is going to be another similar event, except it will be of greater magnitude.
Then the question will be this: who will represent the critics of the Federal Reserve? There will be millions of critics at that point. The Federal Reserve can run, but it cannot hide. It will be left holding the bag. It will be blamed for the cycle. It will not escape criticism next time. The problem is, it is not clear which critics of the Federal Reserve will gain the ear of the public, and it is not clear whether Congress will actually listen to the voters. Central banking is at the heart of the modern economy, and it is a central planning agency that is attempting to control the lives of several billion people worldwide. This can be done for a while, but it cannot be done indefinitely.
We do not know what is to replace central banks, but we do know this: failure on the magnitude of what is coming cannot be hidden. Next time, or perhaps a time after, the public will understand that the Federal Reserve is the cause of the problem, and that it must be abolished. Milton Friedman finally came to that conclusion, after having defended the legitimacy of central banking throughout almost all of his career. He finally gave up. Http://bit.ly/FriedmanFed.
People get upset about the Federal Reserve. It doesn't do any good to get upset. You can't change the system under the present circumstances. But, at some point, central planning will do what central planning always does, namely, crash the economy. At that time, there will be numerous opportunities for critics of the Federal Reserve to take on the bureaucrats, despite all those PhD's in economics that are on the staff. They will be left holding the bag. They will be left with the blame for the crisis, which they truly will have created. We will see at that time what the public really wants.
My fear is that the public will accept the fact that Congress can intervene to take over the Federal Reserve. That would be a true catastrophe. We will see whether people really believe in the free market. It is the job of those of us who are critics of central planning, and also critics of monetary inflation, to make the best possible case we can.
The Austrian school will have the best shot at it, because the Austrian School has been most consistent and the opposition to central banking. This goes back to Ludwig von Mises's book, The Theory of Money and Credit, which was published in 1912, in which he attacked the whole idea of central banking. But during the interim, there is going to be much pain. There will be a lot of people unemployed who will not understand why they are unemployed. There will be losses in the equity markets that are staggering, which will dwarf what took place in 2008-2009. The Federal Reserve seems untouchable today, and it is untouchable today. But that kind of power always leads to market failure. It is our job to make certain that, the next time it happens, the Federal Reserve System does not get a free ride." 













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