U.S. President Barack Obama’s recently submitted budget proposal for 2015 revisits against U.S. coinage, its composition and cost. The President has shown an interest in updating and streamlining U.S. currency by cutting costs to production or eliminating altogether the smallest denominations since at least 2010, “in order to efficiently promote commerce in the 21st Century.” Both pennies and nickels cost some twice their face value to produce, despite the fact that the amount of copper and nickel contained within has been dramatically reduced. Canada is now a year into the apparently seamless and successful elimination of its penny coin. But the real significance of debasing or eliminating coins is an implicit acknowledgement that the dollar continues to fall in value, as do all fiat currencies in the world, and that no one has any intention of restoring that lost value.
Mar 01 2014
The fallacy that inflation is beneficial has gained great traction in recent years. The generation of working, saving U.S. taxpayers that lived through the runaway inflation of the 1970s came out of it convinced that inflation must be stomped out at all costs. But it turned out zero inflation wasn’t so great for the sectors of society with the most the economic and political power—government and political leaders, financial institutions and the banking system. So a process of re-education of the public began, with central bankers and politicians explaining that a certain level of inflation was necessary to create jobs and allow the economy to grow, and mainstream media obligingly echoing the conventional wisdom.
From that highly effective propaganda campaign emerged what is now widely accepted as economic dogma, that a slow, steady rise in inflation at some pre-determined rate is the optimal condition for healthy economic growth.
Feb 05 2014
Despite silence and zero denials from the conventional media outlets, our post Media Gets It Wrong — Debt Ceiling Suspended (Permanently), Not Raised, appears to have got it right and offers a cautionary observation on prospects for the value of the Federal Reserve’s dollar in the months and years ahead.
Despite a big to-do about the impending Congressional battle over raising or refusing to raise the debt levels in one way or another (ceiling began in 1917), the newly enacted law of the land in the U.S. remains unmentioned in mainstream media, with annual theater proceeding just as it has for hundreds of years.
On October 20, 2013, U.S. law changed to transfer final spending authority from the legislative to the executive branch. The little-noticed yet epic transfer of power was enacted as part of the Continuing Appropriations Act passed on October 17, 2013.
Jan 18 2014
Our brackets, underlines, bolding and heavy redaction of linked opinion by dissenting federal employees, outlining to the States where usurpations lie. For if we are to be a healthy host, not only for free immigration, but for human progress, then vitality must be maintained. More on this in How to Reverse Creaking Empire. In that light, the editing is intended to bring out the circumstances of the present day, while not to misrepresenting the intent of the authors. Please comment, with any corrections.
Chart from Incrementum.li, and photos of the Justices from Wikipedia.
"Mr. Justice [Willis] VAN DEVANTER, Mr. Justice [George] SUTHERLAND, Mr. Justice [Patty's-day Pierce] BUTLER, and I [Mr. Justice James McREYNOLDS] conclude that, if given effect, the enactments here challenged will bring about confiscation of property rights and repudiation of national obligations.
Nov 28 2013
How does the Federal Reserve Bank (Fed) taper quantitative easing (QE), to aid the "take away?"
How does the Fed raise rates, and regain control over the short interest rates heading subzero, while better focusing credit on prices planners prefer manipulated... In turn, manipulating expectations, and in turn, human action?
How does the Fed continue QE indefinitely, while varying pace to meet their needs?
We have seen "many" officials at the Fed want to formally allow an unlimited amount of deposits to earn a rate fixed from the Fed (likely starting near 0.16%), in turn the market gains Fed-owned Treasuries or mortgage backed securities, causing two of 4 formerly clogged conduits of credit to soon flow:
1. As Fed's Treasuries rise, they can be sent back into the market to displacing demand in reuse, where multiple cash loans can be made against the same collateral type (increasing propensity to lengthen collateral chains, or create new ones as Fed's supply becomes a known quantity).
Aug 09 2013
A federal judge ruled this week that Bitcoins, a “digital crypto currency” that has been touted as a potential free market alternative to traditional, government-controlled currencies, is legally money.
The ruling came up in a U.S. Securities and Exchange Commission lawsuit against Texan Trendan Shavers, who is charged with committing fraud in a Bitcoin Ponzi scheme worth millions of dollars, according to an NBC News report. Shavers attempted to counter the SEC charges by claiming that Bitcoins are not money, therefore shares of his company, Bitcoin Savings & Trust (BTCST), are not securities, and therefore the SEC has no jurisdiction. The U.S. District judge put the kibosh on Shavers’ argument, stating:
May 26 2013
The People’s Bank of China (PBOC), China’s central bank, holds a vast amount of foreign currency in reserve. At the end of 2012, China’s hoard stood at $3.3 trillion and rising, a 700% increase since 2004 and enough to purchase the gold reserves of every central bank on Earth twice over. China’s reserves are far and away the largest of any central bank.
Most of China’s foreign exchange reserve comes from the country’s huge trade surplus. Global demand for Chinese goods provides a stream of foreign currency into manufacturers and suppliers. Businesses in turn deposit the dollars, euros, pounds or yen in exchange for Chinese yuan, and the foreign notes end up at the People’s Bank of China. China also accumulated foreign currency to maintain the yuan at an artificially low rate of exchange. A low exchange rate keeps the price of Chinese exports low and reinforces trade surpluses. Through 2010, China pegged the renminbi to the dollar. Since then, valuation is tightly controlled within a small range.
May 10 2013
A measure introduced in the U.S. Congress seeks to replace the base metal of most American coins with steel. The move would slash zinc, nickel and copper content of U.S. coins to a fraction of today’s already reduced levels. Like past changes in metal content, the bill represents a logical continuation of currency debasement and calls into question the strength of U.S. fiat currency—yet another sign of the decline of the global monetary system.
Aug 27 2012
If you are, you already save in silver and gold coin, and have been counting your stacks in terms of ounces. If not, ask yourself: Why not? Do I really want to miss out on something that is both so simple and so absolutely massive?
Aug 02 2012
Floating Rate Notes (FRN), or “floaters,” are a go, according to the U.S. Treasury. This is the first new security offered in 15 years. We warned on April 25 in our premium piece, Treasury Bonds, Notes and Bills - The Pain of Interest Rate Rises, that the Treasury may decide to bail out banks on the taxpayers’ dime, risking even more printing down the line than otherwise would have taken place.