“No Bull” Prize in Economics

Posted on November 25th, 2011

Fixing By Economists by Paresh Nath, The Khaleej Times, UAE

By Richard Benson, SFGroup

The crux of any economic theory starts off with the magic words “first assume that” and then using dazzling logic follows an irrefutable happy conclusion. The real key to using economic theory and logic is in the assumptions.  Assume the correct things about the world, and you have a chance of getting the outlook right.  Assume the wrong things, and any model will generate totally unreliable garbage.

My experience in the business and investment world over the last thirty five years has taught me a few things about assumptions, so if you are interested in surviving the slings and arrows of outrageous fortune, putting some good business policies in place is crucial.  Always assume nothing, verify everything, assume the worst could happen and, if things can go wrong, they do and will.  Even my motto around the house “if it isn’t broke, I can fix that” is based on experience. I have learned wisdom can be as simple as substituting facts for assumptions.

As a baby boomer facing retirement down the road, I can’t help but wonder whether there will be anything left in the Social Security Fund and my personal investments by the time I need them.  I rely on assumptions when making my own investment decisions and if they are not right, I could outlive my money and starve.  Now, many corporations and government pensions, insurance company annuities, and retirement advisors rely on investment, economic, and corporate projections that are all based on critical assumptions. The assumptions used by big business and big government are all generated and reinforced by legions of economists, accountants, actuaries and pundits, who, by the way, are all bought and paid for by the government and powerful corporations. The experts are paid very, very well. Why?  Because, it seems, the experts are paid twice. The first time is to figure out what an assumption needs to be to get the result the corporation or government wants to hear.  The second time is to justify the assumption by creating up a bunch of bull to hand out to the public.  The bull in turn is fed to the public by reporters and TV hosts who are also paid very, very well not to question the experts or their assumptions.

It’s these bull assumptions I keep hearing that hit me over the head and between the eyes like a two by four.  The biggest bull is that both corporations and state and local governments assume their investment portfolios will grow an average of 8.5 percent a year.  This assumption continues today, despite the fact that 10 year treasury securities have on average yielded less than three percent over the last three years, and currently yield two percent.  So, an 8.5 percent investment assumption on a safe asset is laughable and only one of many assumptions about the present and future that might as well be from Mars.  Another such assumption is that banks can hold assets on their balance sheet at cost and not what they are worth today, or that real economic growth will be three to four percent a year for the next 10 years. One of the craziest assumptions, however, is that inflation is contained and the money available for retirement will cover the future cost of living.  These are just a few on the list of unrealistic and hopeful assumptions that stretches on and on.  If you’re a Baby Boomer like me, and fearful of the future, instead of looking at happy business and government assumptions, perhaps we should all be looking at hard cold facts and make decisions based on them, not fiction or hope.

For instance, even if the reinvestment rate of investment in pension and retirement accounts was 8.5 percent, pensions and retirement accounts are still under-funded by trillions of dollars. Governments don’t want to tap taxpayers, and corporations don’t want to contribute to those funds from earnings. Why? Because it’s a mathematical fact that when you start with underfunded pensions, and have core government interest rates as low as three percent, virtually all of the defined pension plans (regardless of whether companies and governments will be asked to actually step up to the plate and contribute) are close to being bankrupt.

It’s also a fact that the Federal Reserve has guaranteed to keep short-term interest rates near zero well into 2013 and beyond.  Indeed, the Federal Reserve is running an overt and knowing policy of keeping the rate of inflation well above the rate of interest. For a saver or senior depending on a pension, this is not reassuring.  In other words, basing a retirement model on 8.5 percent investment returns is about as realistic as assuming that pigs can fly.  The government also wants to change the nature and composition of the Consumer Price Index to keep reported inflation down.  Under-reporting inflation will give Social Security and Medicare less money and save the US Treasury hundreds of billions of dollars.  But retirees are already short-changed by the government price indexes because most of what retirees pay for is rent, food, fuel, and other utilities that go up rapidly in price.  Meanwhile, the Consumer Price Index includes a lot of high-tech gadgets and games which show price decreases because computers run faster and store more data.  Much of what is consumed is videos, games, and social networking.  As I get older, my problem is that I want to eat and drive somewhere, and not play computer games or socialize with silly twits on Facebook.  Over time, Social Security will be forced to change its name to “Social Insecurity” because cuts in retirement benefits are coming, and the value of the dollars paid to retirees will drop because of inflation.

At my age, I’ve given up dreaming of winning a Nobel Prize based on dazzling logic applied to delightful assumptions. Instead, I have settled for simply trying to understand the interplay of political reality smashing against the rock of hard economics caused by older workers retiring faster than younger workers are entering the labor force. In short, I just want to sniff out the bull that is being handed out as laughable assumptions and twisted by economic logic into total crap.  I’m only looking for a “No Bull” prize in economics, in a world where in print and on TV the bull never stops. (my emphasis)

By Richard Benson for SF Group

By permission Richard Benson

www.sfgroup.org

Richard Benson, SFGroup, is a widely published author on securitization and specialty finance, and a sought after speaker at financing conferences on raising equity for mid-market companies.

Prior to founding the Specialty Finance Group in 1989, Mr. Benson acted as a trading desk economist for Chase Manhattan Bank in the early 1980’s and started in the securitization business in 1983 at Bear Stearns, and helped build the early securitization businesses at Citibank and E.F. Hutton.

Mr. Benson graduated from the University of Wisconsin in 1970 in the Honors Program in Math, and did his doctoral work in Economics at Harvard University. Mr. Benson is a member of the Harvard Club of New York and Palm Beach.

The Specialty Finance Group, LLC is a Florida Limited Liability Company and is registered with the FINRA/SIPC as a Broker/Dealer.

Manipulated U.S. Rates Seesaw Gold Prices

Posted on November 25th, 2011

Fed Zero Interest Rates by Mike Keefe, The Denver Post

By John Browne, Senior Market Strategist, Euro Pacific Capital, Inc.

This week, world attention finally shifted away from debt problems in Europe to the unresolved and worsening debt crisis here in the United States. The Congressional Super Committee, which had been created over the summer to postpone making tough cuts, chose to avoid responsibility itself. In so doing, the Committee has followed the path of least resistance and maximum irresponsibility. Given the likely after-effects, the outcome should be judged as criminal dereliction of duty. It should now be crystal clear to even the most casual observer that a solution to the U.S. debt crisis will not come from within, but will be imposed, perhaps brutally, from without.

But while the media focused on Washington, institutional investors remained focused on Paris and Brussels where beleaguered European banks continue to suffer from dangerous overexposure to bad sovereign debt. To avoid these risks, institutions are locked into a flight to what they perceive as ‘safety.’ Despite the abject failure of American politicians, many of these institutions may be flooding into U.S. dollars and U.S. Treasuries, driving yields to historic lows.

This unexpected fund flow is acting as a fortuitous camouflage for the U.S. Congress. With the U.S. dollar rising, and U.S. interest rates falling, the inability of Congress to curb its profligate spending habits appears in some eyes to be less urgent. At the same time, commonly held secure investments such as precious metals, appear to be increasingly volatile and viewed increasingly as less of a safe haven.

Both these conclusions are fatally flawed and risk serious investor disappointment.

First, it is likely that a collapse of either the euro or the European banking system will flow rapidly to America, threatening U.S. banks, the U.S. Treasury market and even the continued viability of the fiat dollar-based monetary system. In short, the U.S. dollar and U.S. Treasury bonds are two massive but latent bear traps. Investors should be wary of both.

Second, the safe haven aspects of precious metals, especially that of gold, have been distorted by the Fed. Most debtor central banks and politicians would be pleased by any reduction in the embarrassing ‘safe haven’ image of gold, and have historically done all that they could to undermine confidence in the gold market.

It is important to recognize the major distortion that Fed Chairman Bernanke has thrust into the gold price. Under his guidance, the Federal Reserve has abused its monopoly power to manipulate short-term interest rates, which are currently 1.5 percent below the level of inflation, a level that has inflicted, and will continue to inflict, untold damage on the economy. Negative real rates deny investors a secure economic repository for their cash. In reaction, many have used gold as an alternative to replace bank deposits. This added demand has boosted the marginal prices of gold and silver.

Today, precious metals appear to track stock markets. When stock markets rise, investors tend to hold their accumulated cash not in zero interest bank deposits, but in precious metals, driving prices upwards. When stocks fall in price, investors sell precious metals to raise cash to meet normal cash requirements including redemptions and margin calls, adding enormously to the marginal price volatility of precious metals. However, this volatility does not foreclose on gold’s ability to retain its value when confronted with additional rounds of currency debasement.

Second, precious metals are not merely a hedge against inflation. They are insurance also against financial catastrophe. With quantitative easing likely to be the recommended panacea for recession, we may face economic recession accompanied by financial inflation and a threat to the fiat monetary system. If this disaster transpires, one major safe haven could be precious metals. As a result, Fed inspired short-term price volatility should not deter investors accumulating positions on price dips.

In short, the current news from both sides of the Atlantic should provide further reasons to feel comfortable with precious metals.   (my emphasis)

By John Browne, Senior Market Strategist, Euro Pacific Capital, Inc.

www.europac.net

John Browne is a Senior Economic Consultant to Euro Pacific Capital. Opinions expressed are those of the writer, and may or may not reflect those held by Euro Pacific Capital, or its CEO, Peter Schiff.

Happy Thanksgiving!

Posted on November 23rd, 2011

Happy Thanksgiving Card

Just a brief message to wish all of you a Happy Thanksgiving!

The Many Collapses of Keynesianism

Posted on November 23rd, 2011

Wrong Track by Eric Allie, Caglecartoons

By Lew Rockwell

It should be obvious to everyone but the most dedicated adherent of Keynesianism that the stimulus did not accomplish its end. The combination of outright spending by Congress, the desperate schemes to reflate the housing market, the attempt to transfuse bleeding firms with other people’s money, and the creation of trillions in artificial money, has not done a thing to lift the US economy.

Actually, the reverse has been true. All these efforts have prevented the adjustment of economic forces to the post-boom world. And all the resources that the stimulus consumed were extracted from the private sector, for we must always remember that government has no resources of its own. Everything it does must come from the hides of private producers and the citizenry in general, in the future if not immediately.

It’s tedious that we had to learn this lesson yet again, for it was only 38 years ago that we experienced yet another collapse of the Keynesian paradigm. The color of the theory was a bit different in those days. The fine-tuning operations of the government were supposed to operate according to a fixed model in which there was a tradeoff between inflation and recessionary unemployment. If unemployment got too high due to slow economic growth, their solution was said to be simple: reflate and deal with the costs. If unemployment then became too low in recovery – leading to an “overheating,” as the parlance of the time put it, the answer was to deflate.

The point of this simple trade-off was to boil down the opaque notions of Lord Keynes to their central-planning essence, and to avoid the endless legislative tangles that plagued the New Deal years. The Keynesians had claimed that FDR’s experiment in countercyclical policy was not well planned and not scientifically administered, which is why it didn’t go as planned. Thanks to the postwar clarity of the new, simple model, Keynesians would get it right this time.

They certainly got their way in terms of policy. In 1971, Richard Nixon had abolished the last vestiges of the gold standard, finally untying the dollar from any relationship to physical gold and setting it loose to float like a kite on a string – or maybe without the string. It was supposed to be the Keynesian ideal. No more fetters. No more of the barbarous relic. No more limitations on what the scientific planners in government could or could not do. Now they could act to bring about the socially optimal combination of inflation and unemployment. Nirvana!

Now keep in mind, here, that this was a testable proposition. If there was a trade-off at work here that the government could manage, what we would not see would be, for example, unemployment increasing at the same time as inflation. Mostly we had not seen this in the past, it is true. During the Great Depression, prices kept falling (and thank goodness for that, for this was the only saving grace of the entire period). There was a slight uptick of inflation in the mid-1950s but it wasn’t enough to set off alarm bells.

Then came 1973-1974. Unemployment was high and rising from 4 to 6 percent from the recession lows – and, yes, that was considered high in those days. At the very same time, inflation rocketed upward into the double digits. Thus was born the inflationary recession. This was an animal that was not supposed to exist, according to the model as understood at the time.

Writing in an essay now featured in his giant collection Economic Controversies, Murray Rothbard explained:

This curious phenomenon of a vaunting inflation occurring at the same time as a steep recession was simply not supposed to happen in the Keynesian view of the world. Economists had always known that either the economy is in a boom period, in which case prices are rising, or else the economy is in a recession or depression marked by high unemployment, in which case prices are falling. In the boom, the Keynesian government was supposed to “sop up excess purchasing power” by increasing taxes, according to the Keynesian prescription – that is, it was supposed to take spending out of the economy; in the recession, on the other hand, the government was supposed to increase its spending and its deficits, in order to pump spending into the economy. But if the economy should be in an inflation and a recession with heavy unemployment at the same time, what in the world was government supposed to do? How could it step on the economic accelerator and brake at the same time?

The answer, of course, was that government and its policymakers could do no such thing. This was when panic set in, and every cockamamie theory known to man was employed to reduce unemployment and inflation at once. But there was a problem. The policy makers are always and everywhere loath to admit fault for anything. Surely it is not monetary policy that is to blame, they said. Instead, it was the greed of businessmen, the voraciousness of the consumer class, the panic of the general population – anything and everything was at fault except the government itself.

So while the Keynesian paradigm had obviously failed, who in government was willing to take responsibility for this failure? No one. Therefore matters only became worse, and the inflationary recession became a way of life for Americans, all the way to the outrages of the late 1970s that finally swept Ronald Reagan into office.

Reagan campaigned on an anti-Keynesian platform. He even talked about re-instituting a gold standard. He said he would cut taxes and let the economy work. Those promises amounted to nothing, but there did seem to be some consciousness at the time that government was not capable of forever leaning against the market winds. The real credit, of course, goes to Carter-appointee Paul Volcker. As head of the Fed, he engineered an actual reduction in the money supply, and broke the back of the crisis. Think of him as the anti-Greenspan or the anti-Bernanke.

Greenspanism-Bernankeism reigns today, and that is the true tragedy of our times. The Fed, the Treasury, the president, the regulators, and the Congress have done everything possible to reflate, stimulate, stabilize, and counter market forces. As expected, they have lost the battle. Unemployment is still outrageously high, and inflation is working its way up yet again. But there is an even more serious problem. In the course of stimulating the economy, the Fed has created incredible amounts of fake money that it has stuffed in the vaults of its best friends in the banking industry. And those phony reserves seem now to be leaking out to cause horrific waves of price inflation.

Those who blame Obama for this might consider whether any Republican but Ron Paul would not have done exactly the same thing. The Obama prescription for economic recovery was actually started under George Bush – in exactly the same way that Hoover was the first New Dealer. The problem is the man in the White House, to be sure, but he is not the only problem. The core issue is that 1) we have a monetary and banking system that is socialistic and therefore used by the power elite to enrich themselves at our expense, and 2) the policy elite clings to the Keynesian pretense that government is capable of waging a war against market forces. That, and the fact that Keynesianism empowers the elite, is why this pathetic and dangerous history keeps repeating itself. (my emphasis)

In the market economy, there is a long-run tendency for errors to be corrected and replaced by different practices that uplift the people. In government, there is a long-run tendency to keep trying the same thing again and again, no matter how often or how badly it fails. Keynesianism is, after all, as Joseph Salerno points out, the “economics of state power.” And that guides us to the foundational problem:  the monopoly entity that rules and devastates society for its own benefit.

By Lew Rockwell

By permission Lew Rockwell

www.lewrockwell.com

Llewellyn H. Rockwell, Jr, former editorial assistant to Ludwig von Mises and congressional chief of staff to Ron Paul, is founder and chairman of the Mises Institute, executor for the estate of Murray N. Rothbard, and editor of LewRockwell.com. See his books.

Copyright © 2011 by LewRockwell.com

Don’t Sweat the Correction in Gold

Posted on November 23rd, 2011

Stacked Gold BarsBy Jeff Clark, BIG GOLD

I’ve told more than one concerned investor that when the gold price falls, they should “come back in three months” and see if they’re still worried. The idea is that the daily and monthly gyrations are nothing to fret over, that the price will recover and, in time, fetch new highs.

That advice has worked every time gold underwent any significant correction (except in late 2008, when one had to take a longer view than three months). Here’s proof.

I’ve traded emails regularly with Brent Johnson ever since meeting him at an investor event I spoke at a couple years ago. He’s the managing director of Baker Avenue Asset Management, a wealth management firm with over $700 million in assets. He forwarded some charts he’d prepared for his clients that put gold’s September decline into perspective; it’s a good visualization of my standing advice to worriers.

The following charts document corrections in the gold price of 8% or more – first measured with daily prices, then monthly, quarterly, and finally annually. See if this doesn’t put things into perspective.

Gold Corrections of 8% or More - Daily

While the gold price has had plenty of big corrections since late 2001, they’re not so concerning when viewed beyond a day-to-day basis. In fact, if one resists checking the gold price except once a quarter, one might wonder what all the fuss with price declines is about.

You’ll also notice that the September decline, when measured monthly, was our second biggest in the current bull market (and third when calculated daily). This suggests to me that unless we have another 2008-style meltdown in all markets, the low for this correction is in.

That’s not to say the price couldn’t fall from current levels, of course, nor that the market couldn’t get more volatile. It’s simply a reminder that when viewed on any long-term basis, corrections are nothing but one step down before the next two steps up. It tells us to keep the big picture in mind.

It also implies that pullbacks represent buying opportunities. It demonstrates that one could buy any 8% drop with a high degree of confidence. Keep that in mind the next time gold pulls back.

Until the fundamental factors driving gold shift dramatically – something that would require most of them to completely reverse direction – I suggest deleting any worries about price fluctuations from your psyche.

And if you’re still a tad uneasy about today’s gold price, well, let’s talk next February.

[The current issue of BIG GOLD lists the top stocks to buy in our portfolio, ones we’re convinced are destined for much higher stock prices before this bull market is over. Get their names, along with our new Bullion Buyers Kit, with a risk-free trial here.]

http://www.caseyresearch.com/editorial.php?page=articles/dont-sweat-correction-gold&ppref=WIM422ED1111C

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Clinging to a Bankrupt Monetary System

Posted on November 23rd, 2011

Way to Solution by Paresh Nath, The Khaleej Times, UAE

By Eric Fry

“Europe is in one of its toughest — perhaps the toughest — hours since World War II,” German Chancellor, Angela Merkel declared yesterday.

Who would argue with her?

The Second World War crippled the European economy. The victors suffered almost as much as the vanquished. Nearly ten years after the war ended, the British were still rationing sugar and meat.

Notwithstanding these hardships, however, the history of the post- WWII European economy is mostly a story of economic renaissance. From the rubble of war, the European Continent produced decades of economic growth.

Attempting to perpetuate and enhance that growth trajectory, the leading economies of Europe thought it best to pool their resources. So they formed the “European Union” and abandoned their national currencies in favor of the euro.

Nice idea. But the execution may have been flawed.

Just like a “group project” in junior high school, there’s usually an A-student in the mix…as well as an F-student. So what happens? The A-student does all the work to make sure he gets his habitual A. The F-student does nothing, but still receives the “A” he never could have earned on his own.

That’s the European Union.

Unfortunately, the F-student is on his own most of the time. He still has to get passing grades in his other courses…like “Tax- Collecting I” and “Remedial Budget-Balancing.” When the F-student fails to get a passing grade, there’s very little anyone can do to change the transcript…other than writing over the F’s to make them look like “B’s.”

That’s the European Union’s rescue plan. Every kid gets a passing grade, no matter how awful his homework may be.

But out in the school of hard knocks, an “F” is an “F.” Greece has failed already…and several of the other “students” are close to failing as well. The leaders of the euro zone are trying to change the transcripts. But that gambit will likely fail. A curriculum without absolute standards is a curriculum of no value.

The moment the EU began bailing out the Greeks, it abandoned the absolute standards that rendered the euro viable. If the EU had applied absolute standards and booted Greece out of the euro block, the euro’s credibility would have been validated. Without those standards, the euro’s value becomes as dubious as an online degree.

That’s why the Greek crisis has become a euro crisis. In fact, the entire system of currencies-backed-by-nothing may be lurching toward a crisis.

“If ideas could file for bankruptcy,” James Grant muses in the latest edition of Grant’s Interest Rate Observer, “the modern model of money and banking would have beaten MF Global Holdings to the courthouse. The concept of leveraged finance in a world of paper money and socialized risk deserves rehabilitation under an intellectual Chapter 11.”

The world’s monetary model is bankrupt — both intellectually and in fact. But if ever there were an institution that was too-big-to- fail, it is the institution of paper currencies. It is too-enormous- to-fail, which is why the world’s central bankers will stop at nothing to rescue it.

In general, the central banks are borrowing and/or printing money to buy “distressed assets.” By removing these distressed assets from the marketplace, the central banks hope to clear away some of the rot in order to “stabilize” the financial system and, by extension, the value of the currencies they print.

But since central banks are functionally outlawing bankruptcy for every large institution and government in the Western world — along with a few of those in the Eastern world, the rot remains…and it’s spreading. The rot is not only undermining economic activity, it is also undermining the entire global monetary system.

Throwing good money after bad — even newly printed, pretty good money — does not really clear away the rot; it merely smears it around…like a dry windshield-wiper smears bird-droppings.

Bankruptcy clears the rot away. Nothing else will do.

But since bankruptcy has become the ultimate non-option, the world’s largest central banks are all printing currency in the name of alleviating economic stresses. And they are swapping this currency for troubled assets.

For example, here in the States during the 2008-9 crisis, the Federal Reserve purchased hundreds of billions of dollars’ worth of mortgage-backed securities. It still owns them. Today, the European Central Bank is busy buying up the dodgy debts of Greece and Portugal.

Even the Chinese are in on the game. China’s sovereign wealth fund recently announced that it was “investing” in four of the largest state-owned banks in order to stabilize their share prices and support their operations.

The central banks dress their brutish market manipulations and backdoor bailouts in the elegant vernacular of ivory tower economics. Thus, “counterfeiting” becomes “quantitative easing,” while “using my influence at the Treasury Department to bail out my buddies at Goldman Sachs” becomes a “Troubled Asset Relief Program.”

But at the end of the day, the central bank manipulations are as clumsy, counter-productive and/or illegal as they appear at face value. And the worst of it is that these multi-trillion-dollar interventions do not remove the rot from the financial system; they merely relocate it from the private sector to the public sector.

The European Central Bank (ECB), for example, holds sub-AAA assets equal to 14 times its equity. Large portions of those sub-AAA assets are the very sub-AAA government bonds of Greece, Portugal, Italy and Ireland. If these assets, in the aggregate, were to lose 7% of their value, the ECB’s equity would be zero. (For perspective, the government bonds of Greece, Portugal, Italy and Ireland have already lost 30% to 60% of their values).

But don’t lose any sleep over the math; that’s what printing presses are for — to paper over the asset values the financial markets take away.

Observing these phenomena, Grant concludes: “There are better ports in a monetary storm than government securities denominated in paper money.” (my emphasis)

By Eric Fry for The Daily Reckoning

http://dailyreckoning.com

Why Gold Sells Off and What Will Happen Next

Posted on November 22nd, 2011

Fine GoldEDITOR’S COMMENT: With the recent drop in the price of gold and the related gold shares, a number of people are asking about gold’s somewhat unexpected reaction to the latest turmoil in the Euro sovereign crisis, as well as the demise of the U.S. Deficit supercommittee. Anthony Wile provides his take on what’s happening, and what might happen in the long run to the price of gold. A very informative and thought-provoking commentary.

By Anthony Wile

Reuters just published an interesting article that makes the following point: “As the Dow struggled over the past few weeks, gold has confounded market watchers by tracking equities, even as the European debt crisis escalated. U.S. December gold futures fell $3.80 to $1,716.40 an ounce.”

This brings up an interesting question. I will try to answer it in this essay. Two weeks ago, the Dow Jones Industrial average was up marginally and so was the price of gold. This past week the Dow lost some 300 points and gold sold off as well. Yes, it would seem that now “gold tracks stocks.”

Further, we are informed that there is a “rush to safety” when the stock market runs down. People sell off both equities and gold for the “safe-harbor” of US notes and bonds.

This is a kind of dominant social theme, in my view: Gold is now to be portrayed (by Reuters and other elite-controlled media) as just another investable commodity like IBM or Exxon. But this ignores some important points. I researched them to make sure of my conclusions.

Start at the beginning, then. The powers that be HATE gold. Money Power is derived from the central bank printing press. The idea that people on their own can go out and dig up money out of the earth means that the people STILL have the opportunity to better themselves independently of the power elite.

This is very hard to tolerate if you are trying to set up a regime to rule the world, as the Anglosphere elite apparently wants to do. If people can still get wealthy independently then you don’t have TOTAL control. And total control is what Money Power seeks, or so it surely seems.

For this reason, the powers-that-be do everything they can to manipulate and squash the price of gold. This is why fiat money bulls are likely longer by years and decades than precious metals bulls. The elites drag out the fiat bull markets as long as they can.

The last big precious metals bull market was in the 1970s, and it lasted about ten years. Then came the fiat leg that lasted about TWENTY years. Two-to-one. This precious metals bull market started right around 2000. I knew it, too, and so did many others.

Gold has been going up throughout the 2000s. Of course, the stock market has been going up as well, and that has obscured the gold bull market that we are in. Because of this, many in the mainstream media can avoid talking about business cycles and simply talk about gold being “in a bubble.”

This is not so. The early 2000s were marked by tremendous monetary stimulation, with more to come. This is what happens when equity markets blow off. To begin with, central banks print money and inflate the stock market until the boom turns to a bust.

But you can’t keep doing this. Eventually, the market distortions become too damaging. There is a limit after all, and we have reached it. Right around the turn of the century, the bust was enormous and the resultant stimulation only made it worse. The cycle had turned and gold (and silver) was on its way up.

Because the cycle had turned, the resultant stimulation was bound to fail, and it did. This failure is referred to as the “mortgage crisis” or “housing bust.” It began in America but soon spread throughout the world.

People have attributed the housing bust to many things, including deregulation. But when one steps back and looks at the larger picture, the reality becomes evident. The Austrians are correct. In the modern era, economies are driven by central bank inflation. First a boom and then a bust.  Had nothing to do with re-regulation or anything. Purely a banking phenomenon at its heart.

Here at the Daily Bell we’ve explained numerous times that this is likely the “final” bust. The dollar reserve system is probably dead. It died when the Fed had to print at least US$16 trillion to support crony banks and financial firms throughout the world during the height of the 2008 crisis.

The powers-that-be don’t want to admit this, of course. Even in this Internet era, they’re hiding their manipulations as best they can. Even as they try to replace the current financial system with a world currency, they are struggling to maintain the present system.

To do this, they confuse the issue. They certainly don’t want to speak about the golden bull, because then they would have to speak about the business cycle and they don’t want to do that, either, because THEN they would have to explain how central banks DRIVE this ruinous and horrible cycle.

So they make up stories. The latest story is that gold is not just another investable asset like a stock and indeed tracks the stock market. These last two weeks are being held up, once more, as proof positive.

Of course, to some degree this is true. Institutions have begun to buy gold and they do buy and sell gold the way they buy and sell stocks. But the idea that the average investor sells his or her gold when the stock market goes down (in order to buy Treasuries) is ludicrous. Doesn’t happen.

Gold tracked the Dow in the 1970s, too. I checked. The Dow and gold prices rose and fell together, roughly anyway. That’s because the big institutions were likely buying gold then, too.

But in 1979 and 1980 something else happened. The gold market went vertical. Look it up for yourself. The verticality is astonishing.  From about US$400 to US$800, and then right back down again. This is what will likely happen during the last phase of THIS golden bull. But we are not there yet. Wait.

People say that the 1980s were anomalous because of the great inflation and because the Hunt Brothers tried to corner the silver market. That’s what caused the verticality too. But this is nonsense as well. Because of the central banking business cycle, this golden bull will end the same way as the one in the 1970s, if it is not interrupted. It almost has to.

Why? Because the powers-that-be may keep printing money and keep inflating in support of this horrible fiat money system until the bitter end. They may FORCE a blow-off of the golden bull, just the way they forced one in 1980.

“But the verticality was due to market manipulation,” some will object. Of COURSE there was market manipulation. If it hadn’t been the Hunt Brothers it would have been something else. Blow-offs FEATURE market manipulations.

Here’s my bottom-line point, from an investment standpoint. During the 1970s, people could have been fooled by the way stock markets and gold markets acted. They might have seen the parallelism and simply concluded that gold was just another commodity or that it was acting like stock.

This would prove to be a major miscalculation. Bull markets always come to a head in the modern era, thanks to central banking, which always turns a common cold into pneumonia.

That’s how you should think of this market, by the way. The market has a quiet fever right now, but before the power elite is through poisoning this business cycle, that fever will have become a raging, out of control sickness. There is no telling how far the price of gold may travel.

Of course, when prices go so high, people start buying paper gold, which they are already starting to do. This is where the losses come. Ask Gerald Celente, who chose not to simply buy physical gold (in this instance) and was playing the futures market as way to do so. He lost his account, apparently, when MF Global went bust.

And this is another point. This same horrible central bank-inspired business cycle inevitably causes an uptick in “financial fraud.” It’s inevitable. Then elites and their associates and enablers use the resultant bust to pass MORE laws and MORE regulations, further consolidating state power in support of their damnable central banking racket.

So don’t be fooled by all this talk about gold tracking the Dow. It did in the 1970s, too. Right until it went vertical. People who held gold then in many forms – and got out – made fortunes.

Easy enough, then. Just hold gold until it goes to US$5,000 and sell. Not so fast. Today, thanks to what we call the Internet Reformation, too many savvy people understand what I have just explained. And the elites who control central banking know it, too. I have a hard time believing that the powers-that-be will let gold go to US$5,000 (or wherever it would ordinarily end up).

Something else will intervene. A war. A deliberate promotional campaign against Wall Street and “speculators.” A terrible, expanding Depression that will cause the confiscation of gold and the creation of a new worldwide money standard. Or perhaps all three at once.

People who own gold and silver will no doubt be rewarded (at least to some degree) before any of this (potentially) takes place. But one needs to be careful now! We are entering another leg of the cycle, in my view. To ignore the possibilities is to be blind to the reality of modern history. The last time this sort of blow-off took place was in the 1930s. Look what happened then.

You remember, don’t you? The New York Fed illegally printed money and FDR covered it up with his “bank holidays.” The power elite of the day used every promotional trick they could to shift the blame. They pointed fingers at “Wall Street,” arrested thousands, destroyed companies, passed Draconian new regulations (that only prolonged the recession and further institutionalized the Fed), confiscated gold and then – finally – when nothing else worked, started a world war.

That’s my take on it anyway. Call me a conspiracy theorist. That’s OK. To me, it’s all directed history and more in tune with reality theory.

And it’s happening again … (my emphasis)

By Anthony Wile for The Daily Bell

By permission The Daily Bell

www.thedailybell.com

Occupy Wall Street Put Nation on Notice

Posted on November 22nd, 2011

Wall Street Culprits by Paresh Nath, The Khaleej Times, UAE

By Peter Morici

Occupy Wall Street may be out of Zuccotti Park but Americans ignore its message only at their peril.

Dispossessed by police from prominent venues around the country, the forces that inspired mass, albeit unseemly demonstrations have not abated.  America is rapidly fracturing into two nations—affluent players in the global economy and a growing mass facing diminished circumstances for themselves and their children.

If forces marginalizing millions are not addressed, America is headed for much worse than tent cities and baths in parks. Economic bifurcation into the super affluent and the poor will erode the institutions and values that bound together immigrants from many heritages, faiths and tongues into a single nation.

The Census Bureau reports about 100 million Americans—one in three—live in or perilously close to poverty. Many are working but rely on food stamps, government agencies and charity to feed, clothe and provide medical care to their children. Most have too few resources to see a dentist regularly or even subscribe to a daily newspaper. They rely on cars, often because decent housing is much too costly near their work, and are forced to live too inconveniently from grocery stores, other services and multiple jobs to practically rely on public transportation.

Hardly all marginalized Americans are recent immigrants with poor English proficiency. Many are high school graduates or have been to college but can’t land a decent, permanent job that permits skills building and initiates the climb to middle class affluence. Many are older workers, whose positions permanently disappeared during the Great Recession.

The economy has changed and simply no longer needs these workers, and that is nothing new. Stagnant wages, declining living standards and a shrinking middle have been in the headlines for more than a decade.

Globalization—transcontinental commerce and high-speed communications—and labor saving technologies that displace even well-educated professionals in traditional industries are creating only limited numbers of new opportunities in knowledge-based and creative activities—industrial design and software, high-tech manufacturing, sophisticated finance, national media, health care, and the like. Getting a first opportunity for a rewarding career often requires focused skills acquired at elite universities, and to progress and stay on the ladder, sophisticated career management and some good luck.

For the rest of America, global competition, communications technologies and essentially unchecked immigration have hammered down wages and winnowed opportunities in once decent paying occupations—for example, ordinary line work in manufacturing, middle management and sales, and writing for a daily newspaper. So much more can now be outsourced and accomplished on the internet with inexpensive software or performed by semi-skilled immigrant workers.

Sending more Americans to college is not the answer—degrees in the liberal arts are simply not as valuable today as 25 years ago, and many students are not suited to engineering and other technical disciplines. The workforce is well overstocked with business school graduates. The problem is not too few educated Americans but too few good jobs for most of them to do.

Heavier taxes on the wealthy to redistribute income won’t help. Many will take their work and income offshore but more importantly, the U.S. economy is shrinking. Not only is income increasingly less equally distributed, but per capita income is falling at an alarming pace. Simply, the pie the government can carve up is shrinking.

Germany and China, two of America’s toughest competitors, recognize the challenges posed by globalization and manage them. They engage in mercantilist policies—undervalued currencies and industrial policies that seek out high paying jobs for ordinary people through exports. And those jobs are frequently mined from America’s Heartland.

Certainly, America doesn’t want a protectionist world, but the United States can’t always dictate the terms of competition and continue to stand idle without more effective responses than bailouts for General Motors, subsidies for Solyndra and Social Security tax holidays, all paid by borrowing from China.

The United States must force open foreign markets or protect its own, or it will perish.

It is a tough world beyond the water’s edge. Either Americans learn to compete in the world as they find it or America will be no more. (my emphasis)

Peter Morici is a professor at the Smith School of Business, University of Maryland School, and former Chief Economist at the U.S. International Trade Commission.

Peter Morici
Professor
Robert H. Smith School of Business
University of Maryland
College Park, MD 20742-1815
pmorici@rhsmith.umd.edu

On the Super Committee

Posted on November 22nd, 2011

Ron PaulBy Ron Paul, U.S. Congressman

This week marks the deadline for the so-called congressional Super Committee to meet its goal of cutting a laughably small amount of federal spending over the next decade.  In fact the Committee merely needs to cut about $120 billion annually from the federal budget over the next 10 years to meet its modest goals, but even this paltry amount has produced hand-wringing and hysteria on Capitol Hill.  This is only cutting proposed increases.  It has nothing to do with actually cutting anything.  This shows how unserious politicians are about our very serious debt problems.

To be fair, however, in one sense members of the Super Committee face an impossible task.  They must, in effect, cut government spending without first addressing the role of government in our society.  They must continue to insist the federal government can provide Social Security, Medicare, and Medicaid benefits in the future as promised, while maintaining our wildly interventionist foreign policy.  Yet everyone knows this is a lie.

Keep in mind that the 2011 federal deficit alone was about $1.3 trillion, which means the Super Committee needs to cut that much PER YEAR rather than over a 10 year period.  If Congress ever hopes to address its debt problem, it must first stop accumulating any new debt immediately, in 2012.

Federal revenue likely will be about $2.3 trillion in fiscal 2012.  The 2004 federal budget was about $2.3 trillion.  So Congress simply needs to adopt the 2004 budget next year and the federal government will balance outlays and revenue.  That’s all it would take to produce a balanced budget right now.  Was the federal government really too small just 7 years ago, in 2004?  Of course not.  Only Washington hysteria would have us believe otherwise.

Yet our Republican and Democrat friends on the Super Committee want to take 10 years, or even 30 years, to produce a balanced budget.

Government spending isn’t just wasteful; it is often actively harmful to stated goals.  The Super Committee could simply apply 2004 spending levels across the board and a tremendous victory for fiscal sanity would be accomplished.

What seems more likely, however, is a rearrangement of the tax code in an attempt to bring in more revenue.  Deductions and credits will be taken away, and the Bush tax cuts will be allowed to expire.  As a result, less money will remain in the private sector to create jobs and produce economic growth.  The Super Committee has an opportunity to take a small baby step in the right direction.  Instead, they no doubt will take this opportunity to raise taxes and make everything worse.  But increasing taxes will only diminish freedom and deepen the recession.  Instead of looking for ways to hike taxes under the guise of “raising revenue,” the Super Committee should put forth a plan of real spending cuts to put America back on the path to liberty and prosperity. (my emphasis)

By Ron Paul, U.S. Congressman

http://paul.house.gov

Budget Deadlock in Washington

Posted on November 21st, 2011

Supercommittee by Daryl Cagle MSNBC

EDITOR’S COMMENT: As of this writing, it is being reported (see our links) that the Deficit Supercommittee will report later on Monday that it has failed in its mission to reach $1.2 trillion in debt reduction cuts over the next ten years. Sensing this outcome, Gary North provides us with his insight, as to why this Deficit Supercommittee was doomed from the start, as well as stating emphatically that, as a result, there will not be any solution to the current fiscal crisis in Washington. He concludes by writing that deficits do have meaning, and eventually they will point to a U.S. bankruptcy.

By Gary North

The debt ceiling battle led to a compromise. Congress and the President promised to submit to mandatory budget cuts. A bipartisan super committee was set up to put together a package of debt reduction cuts totaling several trillion dollars over supposedly a decade. If the committee deadlocks, the cuts will begin automatically on January 2, 2013. These must be $1.2 trillion in cuts, or $120 billion a year.

As expected by everyone, the committee is deadlocked. The Democrats want $3 trillion in debt reduction, mainly from tax increases. The Republicans will not grant this.

Democratic sources told CNN that at the meeting Tuesday the plan was presented to the 12-member committee by Sen. Max Baucus, D-Montana, the Finance Committee chairman. A majority of the six Democrats on the super committee supported the proposal but sources declined to say which member or members disagreed.

The plan would have made cuts to entitlement programs such as Medicare and Medicaid, which the Democratic sources described as a major concession from their party. In return Republicans were asked to go along with between $1.2 and $1.3 trillion in new tax revenue.

An unnamed Republican aide expressed anger that some Democrat had leaked the details of the deal to the press. I mean what kind of stab in the back is this? Telling the public what’s in store for them! This is clearly an outrage. It means, the aide said, that the Democrats think the super committee will fail.

Did anyone in his right mind expect it to succeed? The August deal to extend the ceiling and thereby avoid shutting down some government agencies temporarily was based on a sham solution.

The politicians want no responsibility for cuts. There was no record of which Democrats opposed the leaked deal. Some did. Everything is being kept hidden. There is an election year coming up.

This was the first proposed plan. The committee has not gone public with anything in two months. It has a deadline for announcing a plan: November 23. That is less than one month away. If Congress and the President refuse to accept a plan, or if no plan is offered, then cuts will begin a year later.

So, phase one deadlock is here. There is little likelihood that members of the super committee will put their careers on the line and vote publicly for cuts that specific special-interest groups can identify. There would be retaliation in November 2012.

THE IMPORTANCE OF POLITICAL SYMBOLS

The debt ceiling extension had a back-up plan: mandatory cuts, imposed by no one in particular, beginning on January 2, 2013. That gives the politicians a year to find a way to defer the cuts.

The cuts can be blamed on no one in particular. But the cuts will start hurting special interests. One of the main targets will be the military. The Pentagon will howl.

I think the reason why Obama is pulling out all U.S. troops from Iraq in December is to take advantage of the deadlock. He is willing to accept these cuts in the Pentagon’s budget in 2013. They will not be blamed on him in 2012. After all, this was part of a bipartisan compromise. Those Republican voters who were committed to keeping troops in Iraq “for as long as it takes” – with “it” being undefined, open-ended, and forever – will not be able to pin the tail on the Democrat donkey. The cuts in the Defense budget will come because Republicans in Congress demanded this budget compromise. This is Obama’s moment of opportunity. One of his campaign promises was to pull the troops out of Iraq. He is finally doing it. He gets a Republican cover. He can say that these reductions are part of his good-faith attempt to conform to the budget compromise made in August 2011.

The deadlock in the super committee transfers to the President the right to pick and choose the cuts he will make. Constitutionally speaking, the House must introduce all spending bills. In fact, the President has possessed this power for two generations. Obama has been granted a license to cut as he sees fit. It is clear that his first cut is the cost of keeping troops in Iraq.

The name of the political game is to defer taking unpopular political actions. The Congress is a master of this game. The public put pressure on Congress last summer to do something symbolic to defer the debt crisis “with honor.” The looming debt ceiling limit was a convenient hammer for the minority of Tea Party-leaning Republicans in the House of Representatives to use to force the Republicans to agree to something resembling a balanced budget.

Of course, the budget is not going to be balanced. The Congressional Budget Office has projected $1 trillion annual deficits through 2020. But the Tea Party Republicans demanded a fig leaf: $1.2 trillion in cuts over a decade, beginning in 2013 at the latest.

These cuts are symbolic. But symbols are important in life. They are important in politics. Someone has to propose cuts, and some special-interest groups must suffer cuts. Special-interest groups resist all cuts.

EMERGENCIES ALLOW DEFERRAL

Politicians will label their spending programs with whatever emergency is available. In Eisenhower’s era, Congress passed spending bills in the name of national defense. The best example is the interstate highway system. In 1956, Eisenhower signed into law the National Interstate and Defense Highways Act. In 2001, terrorism was the catch- all. The homeland security law had been sitting in Clinton’s files for years in 2001. He just did not introduce it. The time was not ripe. Today, it’s job creation.

As the U.S. economy heads into a recession in 2012, an election year, the government is running a deficit of over $1 trillion. This is four years after the recession of 2008 and the bailouts in September and August of that year. Unemployment is still over 9%. Businesses refuse to borrow. New businesses, which provide most increases in employment, are locked out of the bank loan market.

The voters are most concerned over the rotten job market. The deficit is a nagging concern, but unemployment is on the front burner. The politicians know this.

So, as the economy slows, and unemployment rises, Congress will be able to come before the public and call for emergency increases in spending. It is unlikely that unemployment insurance will be cut off. Other programs will receive funding. But new large-scale programs are less likely in an election year. Republicans will block them.

It is doubtful that Obama will get another stimulus package passed in the House. He keeps proposing big spending plans in the name of job creation. Why? Because he knows the House will reject these bills. He can go to the voters in the name of the Democrats in 2012 and claim that the Republicans are to blame for the lousy job market.

For the first two years, he blamed Bush. This year, that strategy has failed to gain traction. It is now his labor market. So, he is setting up Republicans in the House for the great tail-pinning in 2012. He will cease blaming Bush and instead blame Republicans for their refusal to pass his stimulus bills.

He may not get away with this. His rhetoric is no longer drawing crowds. The word magic has worn off. But it is clear what his strategy is: propose, propose, propose; blame, blame, blame. He has the mainstream media on his side. He also has academia.

THE KEYNESIAN ESTABLISHMENT

His political strategy assumes that Keynesianism is true, that the best way to create jobs is for the government to borrow or tax or inflate in order to get the economy rolling again. It assumes that money extracted from the private sector by force today (today’s taxes) or promise of future force (tomorrow’s taxes) will be used to create jobs, while money left in the private sector will not.

The political economy of the world is built on this assumption: in the USA, in Europe, and in mercantilist Asia. At the center of the modern economy, according to Keynes and his disciples, are the state and the central bank.

In contrast to the Keynesian worldview is Austrian School economic theory, which argues that there is no center. There is decentralized capital in the broadest sense: money, tools, skills, and vision. The absence of any center is the basis of creativity and growth, including job growth. Other schools of free market economics accept this same outlook to one extent or another, but all of them insist on the need for a central bank.

President Obama is relying on the Keynesian analysis to justify additional stimulus spending laws. But he faces a major obstacle. His $787 billion “shovel-ready” law of February 2009 has not led to a strong job market. This job market has been the most resistant since the Great Depression. The unemployment rate stubbornly refuses to come down. This is creating problems for Keynesian economists. They are calling for even greater stimulus spending. But this is no longer politically marketable. The voters have had enough. They know the spending will not lead to unemployment at 5%.

This is not the first time that economic reality has put a crimp in Keynesian theory. The Keynesian outlook was called into question in the 1970s by stagflation. By the end of the decade, the monetarists had gained considerable influence in Washington and in academia. Academia worships power, and monetarism seemed to be the wave of the future. It looked as though Keynesianism was in retreat. The 1980s and 1990s brought a boom and a rising stock market. Keynesianism seemed vulnerable.

The recession that began in late 2007 has brought Keynesians back into unchallenged power. The monetarists are nowhere to be seen or heard. They did not challenge the Paulson-Bernanke coup in 2008. They either said nothing or hailed the October big bank bailout as necessary. They did not challenge Obama’s stimulus, either. Yes, a few did, but they were minor figures for the most part: a few hundred out of tens of thousands of economists on various payrolls.

There is not much price inflation today. This undercuts the monetarists. Their schtick rests on either double-digit price inflation (late 1970s) or double-digit price deflation (1930-33). There is surely stagnation today. Monetarism seemed to explain the 1970s: two recessions and rising consumer prices. It does not explain today’s economy. This puts monetarist defenders of limited government at a disadvantage in the competitive marketplace of ideas.

Monetarism for over three decades has been the only prominent alternative to Keynesianism. The supply-siders have never had a college-level textbook. The public choice theorists have no unique monetary theory. The rational expectations economists’ position is “accept the present and make no changes.” Only the Austrian School has provided both a theoretical explanation for the bubbles and the busts. Only they called the recession in advance. Only they argue that decentralization is the only theoretically plausible solution to the problem of systemic unemployment: the decentralization of ownership, political power, and money creation.

This defense of decentralization dooms the Austrian School in academia. Liberal arts academia worships power. Academics did not actively criticize all aspects of the Soviet Union, Red China, and their satellite nations. The intelligentsia did criticize a few peripheral aspects of Communism, such as its limits on the freedom of speech. The intelligentsia did not criticize central economic planning in terms of its inevitable waste of resources and its decades-long failure to increase the standard of living. Academic economists publicly denied that the Soviet Union suffered from widespread poverty. They trusted the published statistics issued by the Soviet Union. The handful of economists who said that the statistics were fabricated were ignored. How many economists in 1970 had ever heard of Naum Jasny (d. 1967), who showed for years that the statistics were fake? Hardly any, and those who had heard of him usually rejected his warnings. I cited his findings repeatedly in the chapter on Soviet economic planning in my 1968 book on Marx, but who noticed? No one. (http://bit.ly/gnmror) Most important, in the eyes of academia, was this fact: the Soviets had nuclear weapons. They also had domestic power. Academia did not turn on the USSR until after the Communist Party committed suicide on December 31, 1991.

The Austrian School argues that centralized political power makes nations poorer. Some call for a lightly armed night watchman state. Others call for disarming the night watchman. All call for a vast decrease in political power, taxation, and regulation. They call for a comprehensive surrendering of power by Washington. Academia will not tolerate this. It is subsidized by the state. Its bread and butter is supplied by the state. Eliminate all academic subsidies from the state, including the state’s enforcement of accreditation, and college professors would wind up at the unemployment office – the privately funded unemployment office.

This is why there will be no solution to the fiscal crisis in Washington. There is no body of academically acceptable economic opinion that can be invoked by any political faction to justify the only viable solution: the decentralization of political power and the cutting of Federal spending back to what the Constitution authorizes.

A SYMBOLIC DEFEAT

The inability of the super committee to come up with any plausible plan to balance the budget is an indicator of the present state of the economy. The automatic budget cuts that will begin in January 2013, if they even take place, are merely symbolic. They will not do much to balance the budget. But they at least will be symbols of the need to do so.

Then what of the debt ceiling? Will Republicans be able to hold the line and force a balanced budget? Ron Paul has offered the only plausible scenario for doing this. No other Washington politician in modern times has.

No one takes it seriously in Washington. They do not think he will be elected. They know he will leave Congress in 2013. They think they can safely ignore the plan.

When the symbolic budget cuts begin in 2013 – assuming they are not deferred by a new law – the voters will have a play-pretend solution to keep them asleep at the wheel. The trillion-dollar-plus deficits will continue. The Federal debt will grow.

The symbolic victory of the August debt ceiling compromise was in fact a symbolic defeat. It meant that the Congress is not serious about the cuts. There were some promised cuts, but they will be dwarfed by the deficits.

The fiscal numbers are not irrelevant. They do have meaning. They do point to the bankruptcy of the U.S. government. They cannot be evaded. They can be sustained only for as long as investors, especially the central bank of China, continue to fun what is obviously a suicidal fiscal policy that cannot possibly be sustained for another decade.

CONCLUSION

Most investors hide their eyes. Most voters hide their eyes. All but two members of Congress hide their eyes. There is universal blindness. The masses really do think that the day of reckoning will never come.

They are wrong. It will come. Deferral is a tactic, not a strategy. Blindness is a tactic, not a strategy. (my emphasis)

By Gary North and LewRockwell.com

By permission Gary North and LewRockwell.com

www.garynorth.com and www.lewrockwell.com

Copyright © 2011 Gary North

Gary North is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 20-volume series, An Economic Commentary on the Bible.

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