Pacioli’s Gift vs. Bernanke’s Curse

3/25/2013 Portland, Oregon – Pop in your mints…

As events in the Cyrus experiment continue to unfold.  here at The Mint we are watching from a distance, aghast at the implications.  The sacred rule of the Financial Crisis, the one that shielded most banking clients from taking direct losses as a result of holding their funds in a weak bank in a sovereign nation without the means or the control over its currency to bail them out, has been broken.

Anyone who was unfortunate enough to be holding over 100,000 Euros in a Cypriot bank at the close of business on March 15, 2013, now stands to take a 40% bath on all “uninsured funds.”

This is a warning shot, and if you are reading these words and do not yet understand, let us spell it out loud and clear.  Funds held in banks or financial institutions are sitting ducks for bankrupt governments to line their pockets with.  Any wealth that one wishes to maintain must be kept close at hand in something tangible and trade-able.  Bank accounts are no longer risk free assets.  They never were.

How has the world come to this place, where a government would directly confiscate assets and assume that there would not be severe repercussions?

Luca_Pacioli_Gemaelde by Jacopo de' Barbari circa 1496
Summa de Arithmetica, Geometrica, Proportioni et Proportionale – Pacioli’s great gift to Western Civilization

We have been editing our latest e-book, which will hit digital shelves later this week if all goes well.  It is volume V in our “Why what we use as Money Matters” series.  In it we explore how humanity came to this point in history, what is wrong, and most importantly, the solution.

As an appetizer, we present to you the introduction.  Enjoy!

Pacioli’s Gift vs. Bernanke’s Curse

An Introduction

In response to what has become known as the Financial Crisis of 2008, the Central Bankers of the world have employed nearly every form of monetary alchemy at their disposal in a desperate attempt to maintain the status quo.  The status quo, which in this case means that all commercial banks and sovereign governments remain both liquid and solvent, has become increasingly difficult to maintain as each attempt to stimulate economic growth via ultra low discount rates and quantitative easing has seen a diminishing marginal return in terms of economic growth.  The longer the Central Banks of the world engage in these and other forms of financial alchemy, which in the end serve as futile attempts to defy immutable natural laws, the greater the danger of a complete economic collapse becomes.

The unconventional measures employed by the World’s Central bankers in increasing measures over the past five years are not only failing to achieve their stated goals of increasing employment and economic growth, they are triggering what is quickly becoming an unmitigated disaster in the fixed income markets.  These markets, once the bedrock of global finance, have now been conditioned to do nothing more than attempt to front run the FED and other Central Banks up and down the yield curve.

The action in the financial markets is akin to a 300 pound man, who represents the Central Banks, chasing an 800 pound gorilla, who represents the financial markets, around on a queen sized water bed.  The action is becoming completely unpredictable and downright dangerous.  Throw in the chaotic interventions of a 10 pound chihuahua, who represents the sovereign governments’ meddling in the market financial market mechanisms via commercial banking regulation and tax policy, and the entire situation is a basement flood waiting to happen.

As the chaos on the water bed, which is a metaphor for the wealth of the real world, continues to unfold, it is important to examine and understand, to the extent possible, how humanity has arrived at this critical juncture in history, where a fat man chasing a gorilla while dancing around a chihuahua on a water bed can threaten to damage the wealth of nearly everyone on the planet.

It is the aim of this volume to explore two of the oft overlooked elements that have, each in their own way, given rise to the system which enables a relatively small group of persons to the ability to destroy the accumulated wealth of mankind’s 9,000 years of toil in just over 100.  Dual entry accounting, which we refer to as mankind’s greatest invention, and Central Banking, which we refer to as mankind’s greatest catastrophe.

In the end, we present what is known as “Free Banking” as the antidote for the curse of Central Banking, and the ultimate solution to the current and future financial crises that the world will suffer at the hands of well-meaning Central bankers who, it would appear, are oblivious to the destruction that their chosen profession inflicts on humanity.

Intrigued?  So are we.  Stay tuned and Trust Jesus.

Stay Fresh!

David Mint


Key Indicators for March 25, 2013

Copper Price per Lb: $3.44
Oil Price per Barrel:  $94.75
Corn Price per Bushel:  $7.33
10 Yr US Treasury Bond:  1.92%
Gold Price Per Ounce:  $1,605 THE GOLD RUSH IS STILL ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.7%
Inflation Rate (CPI):  0.7%
Dow Jones Industrial Average:  14,448
M1 Monetary Base:  $2,368,600,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,521,800,000,000