Tag Archives: Currency Regime

Economics, Politics, The Mint, True Capitalism

The benefits of Decentralized power, Rumblings of QE3, the clock is ticking on the currency regime

12/12/2011 Portland, Oregon – Pop in your mints…
There is something strangely satisfying about sitting around a large indoor fire just feet away from the Christmas tree with family.  In those moments, one can partake of all that is right with the world.  It occurred to us that we all strive for these moments yet at times they can seem elusive.  Eternity is placed in our hearts, and time on earth seems to be in short supply.
As such, we must use it wisely.
We have been extolling the benefits of what we have been calling True Capitalism.  True Capitalism is what we here at The Mint humbly offer as the solution to what currently ails the world.  There is one byproduct of True Capitalism, a radical respect of life and property, which is often overlooked and is perhaps “central” to the advantage that it has over every other conceivable construct of society:
True Capitalism works to decentralize power.
In other words, it naturally evens the playing field by removing unfair advantages realized by some at the expense of others.
But isn’t that what Government is supposed to do?  Of course it is!  However, governments circa 2011 are in the middle of an unprecedented power grab.  This centralization of power, they say, is necessary in order to homogenize life as we know it and to help everything run smoothly.
Even if this were possible, there is a fundamental problem created by the centralization of power which is without resolution.  In layman’s terms, it makes for an easy target.
When we see the word target, your mind may conjure up images of vulnerability of a military attack.  However, what we have in mind is much more dangerous.  An army of lobbyists.
Herein lies the weakness of centralized power.  However good its intentions, it will constantly be under attack and subsequent influence of groups who desire this centralized power for their own benefit.  Repelling these attacks is expensive.  Succumbing to them, as is more often the case, will bankrupt a nation.
Governing is not cheap, and there are no economies of scale in it.  Rather, the larger it is, the less efficient it becomes.  Does this sound familiar?  This is what we have now thanks to the Might Makes Right ideology by which we are ruled.
Enter True Capitalism.
In a Truly Capitalistic system, the cost of the nation state drops to zero, for the nation state as we know it would cease to exist.  Does this mean that there will be not be a need for governance?  No, on the contrary, the roles which we now attribute to government will be carried out by any number of organizations.  Governance, in general, would increase, yet it would cost less!
How is this possible?  Voluntary governmental bodies are generally more responsive and efficient, in large part because the cost of governance falls directly to those individuals who desire to pay for it.
Governance has value, and its value can and is be properly set on an open market.  The phenomenon of corporations and persons choosing to reside in low tax venues represents a conscious choice of where and by whom one prefers to be governed by those individuals.
In the west, the value of the brand of government provided in the US and Europe is dropping along with its bond prices.  The fact that nations issue bonds is proof of two things:  That their service oriented businesses are failing and that they will be increasingly reliant upon their ability to forcefully relieve their citizens of their assets (commonly known as taxation) to continue operations.
In other words, they will rely on their Might, the use of force, to justify their “right” to govern.
This untenable “Might Makes Right” system that can only operate as long as people believe that the aggressor has absolute power over them.  This is why countries have flags and dictatorships have the image of the dictator plastered everywhere.  This is why people are being forced into the current banking system, taught to rely upon it, and subsequently shut out of it.
This is a reason why Modern Central Banking and the Corporations that have sprung up around the Central Banks are man’s greatest disaster.
Once the currency and banking systems of Europe and America are completely broken down, people’s blind faith in the currency and its issuer will be destroyed.  The currency regime will then quickly disintegrate
The Federal Reserve will likely allude to QE3 to the tune of $1 trillion dollars today in a desperate attempt to keep the currency regime afloat.
The clock is ticking on these failed monetary experiments.
Do you know where your money is?
Stay tuned and Trust Jesus.
Stay Fresh!

Key Indicators for December 12, 2011
Gold Price Per Ounce:  $1,665 PERMANENT UNCERTAINTY

M1 Monetary Base:  $2,255,500,000,000 RED ALERT!!!  THE ANIMALS ARE LEAVING THE ZOO!!!
M2 Monetary Base:  $9,623,700,000,000 YIKES UP $1 Trillion in one year!!!!!!!

Economics, Events, Gold, Politics, Silver, The Mint

Losing even blind faith in the Euro and USD, remembering Pearl Harbor

12/7/2011 Portland, Oregon – Pop in your mints…

Today we continue to watch the relative calm in both the stock and bond markets with our jaw hanging just inches from the floor.  In our estimation, the calm, or homeostasis, is perhaps the only thing that is completely inexplicable under the current state of affairs.

Just what is that state of affairs, you ask?  A few off the top of our head:

–          Downgrades or the threat of downgrades to nearly every sovereign bond on the planet

–          A resulting dearth of quality assets to be used as collateral in the financial system

–          A debt based economy collectively attempting to live within its means

–          The resulting collapse of the debt based economy

–          An imminent war in Persia

But these are simply large events that are leading to a great number of small decisions which are in turn causing more unforeseen large scale events, etc.  The result being that, much to the chagrin of the financial authorities, a majority of the world is embracing frugality.

A quick recap for those are joining us for the first time, the powers that be, the current currency regime, rely on an ever expanding amount of debt in order to continue to function.  It is a system that is based on trust and blind faith, for it offers nothing of lasting value.

In the short term, the system, if functioning properly, allows a great deal of power to be centralized.  It also encourages, albeit indirectly, nearly every sort of vice and shuns virtue.  The system tends to reward bad behavior and to promote into leadership those who are least likely to possess a moral compass.

The system is no longer functioning as designed.  The reach of the currency regime is shrinking and will continue to shrink until the only ones who maintain faith in it are the most morally decrepit individuals and institutions on the planet.  They will continue to trade their increasingly worthless paper until they realize that they are simply shuffling paper amongst themselves, long after they have completely lost any semblance of control that they had on the situation.

Much of this paper shuffling is running through the stock and bond markets, and seemingly these markets are calm.  However, the illusion of stability is being maintained at the cost of trillions of new dollars and Euros being created which are rapidly losing value against anything tangible.

In the United States, the dollar will begin to significantly deteriorate sometime in March, according to our crude calculations.  The Euro, whose handlers have been late to start the game of shameless currency debasement, is more likely to implode with the European banking system as they gag on the sewage of assets that are on their balance sheets.

The great irony of the current currency regime is that a currency which has attempted to maintain its value will become extinct, shunned for one whose value is plummeting.

The Euro and US Dollar are showing the world the two paths that a currency regime can follow to destruction.  It will be interesting to see which car ceases to operate first, the motor that runs out of gas or the one that has its gas tank overflow and goes up in flames.

Either way the economy, which is the motor of the vehicle in the metaphor we have just jumped to, is currently being retooled to run on another type of combustible, one that will last much longer than the current blend of currency gasoline which is nothing more than flammable vapors.  If the currency, and the assets which back it have real value, the economic motor will be allowed to run at a more even pace.

Gold and Silver, ready or not, here we come.  Until then, the economy is sputtering and running on fumes.

Pearl Harbor

We cannot let today pass without a few brief words about Pearl Harbor.  Like 9/11, Pearl Harbor served as a national wake-up call.  Both served as the justifications for the largest military actions and suppressions of freedom (which seem to go hand in hand) that America has known. 

The explosion of the USS Shaw during the attack on Pearl Harbor, courtesy of the US National Archives

As this day that lives in infamy passes, we pause to honor those who perished in these events and the subsequent military actions which occurred as a result of these events.  May they rest in peace, and may mankind learn to avoid the suffering and sacrifices they had to endure at all costs.

War is not necessary and must be undertaken only after every other attempt to engage and deter an aggressor has been exhausted.  It is an act of desperation, not a form of economic stimulus, and it troubles us that the widespread loss of life and property has been referred to as the force which lifted the US out of the great depression.

Those who hold to such a theory are not only following an indefensible logic, they are hurling the ultimate insult to men and women who have fought to defend Freedom throughout history.  For any “stimulus” which has been observed is not the result of the decision of a politician to go to war, rather, it is a result their tireless efforts and indomitable spirits which lifted this and many other countries from the ashes of war.

We pray that more of these heroic efforts and indomitable spirits will not be squandered in Persia.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for December 7, 2011

Copper Price per Lb: $3.53
Oil Price per Barrel:  $100.51

Corn Price per Bushel:  $5.82  
10 Yr US Treasury Bond:  2.12%
FED Target Rate:  0.08%  ON AUTOPILOT, THE FED IS DEAD!

Gold Price Per Ounce:  $1,742PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.00%
Unemployment Rate:  8.6%
Inflation Rate (CPI):  -0.1%
Dow Jones Industrial Average:  12,020  

M1 Monetary Base:  $2,155,200,000,000 RED ALERT!!!  THE ANIMALS ARE LEAVING THE ZOO!!!
M2 Monetary Base:  $9,627,300,000,000YIKES UP $1 Trillion in one year!!!!

The Mint

Waiting for a Default, the Search for Knowledge, Final Prices, and What do Schlitz and the US Dollar have in Common?

6/22/2011 Portland, Oregon – Pop in your mints…

We search for answers, yet the questions are trumping them right now.  This phenomenon is inherent to human existence.  People are always chasing after knowledge.  In the Bible, the book of Daniel speaks of our times when the Angel tells Daniel in his vision:

“But you, O Daniel, shut up the words, and seal the book, even to the time of the end: many shall run to and fro, and knowledge shall be increased.”

Daniel 12:4, King James Version

A little bit of knowledge sparks a thirst for more knowledge, which, once quenched, sparks an even greater thirst for knowledge.  Like Carmex, which soothes one’s chapped lips for a time only to dry them out again, which appears to create a perpetual “need” for to the product, knowledge provides answers and understanding which lead the enquirer to even more questions, and the cycle repeats itself.

The phenomenon expresses itself in markets in the form of a search for a “final price”.  In a free, unfettered marketplace, this price, in money terms, represents all that is known about the value of the good that is being exchanged for money at that point in time.  However, this “final price” is in and of itself a new data point to be considered, as is the exchange of goods which it represents.  This changing data necessarily creates a new “final price” which, by definition, takes into account all factors know about the value of the good and so on.

Ever since we decided to eat the fruit of the tree of the knowledge of good and evil, the chase for knowledge has continued and will continue until Jesus returns.

But what does this have to do with the US Dollar, let alone Beer?

We are glad you asked as we were getting a bit side-tracked.  Our personal search for knowledge has brought us to the most recent of the endless questions that need to be answered:

When will Central Bank Currency Regimes and Sovereign Governments admit they are bankrupt and be allowed to default?

This is an URGENT and very important question as the entire financial world cannot progress until this question has been answered.

To be clear, most western governments and their Central Bank run currency regimes are now technically in default.  They have been ever since they began to “solve” liquidity problems via money printing or “Quantitative Easing” (QE for short).

The acts of Quantitative Easing, which have been embarked upon by the US, Euro, and Japanese Central Banks is only necessary when the faith based currency regime in question has failed.  The necessity to print money which is not demanded by the market nor provided at market prices provides concrete proof that people are no longer willing to further enslave themselves by incurring additional debt.

As we have explained in this space before, debt is the lifeblood of the currency regime.  In these mindless confiscatory monetary systems where the only way to create money is to coax someone else into incurring debt, shrinking debt is the equivalent of someone pushing the currency regime’s self destruct button.

But instead of recognizing this fact for what it was, a failure of the system, much of western civilization continues in willful denial.  Soon, however, everyone will be rushing for the exits.

But we promised you a beer, fellow taxpayer, so crack yourself a cold one (on your own dime, of course, this is, after all, a free newsletter) and see if you tell us what the Federal Reserve Notes that we currently use as money and Schlitz Beer have in common?

What do Schlitz and the Federal Reserve Note have in Common?

Need a hint?  Think quality, or lack thereof.

Give up?  Here are the answers, as always, we invite inquiring fellow taxpayers to add to this list by commenting below.

First, both Federal Reserve Notes and Schlitz were once the gold standards of their product class (currency and beer, respectively).  Federal Reserve Notes took the place of US Dollars in 1913 and maintained the US Dollar’s tradition of quality and enjoyed increased market share until finally overtaking the British Pound Sterling as the world’s currency of choice.  In the beer industry, Schlitz rose to overtake rival Pabst as the most popular beer in the world in 1902.

In the 1970s, the Schlitz brewing process was changed to make use of high temperature fermentation in order to further speed production.  This change and subsequent changes in the formula had disastrous results which came to a head in 1982.  On the US Dollar front, then President Richard Nixon began to tinker with the US Dollar formula in the 70s, namely making the US Dollar no longer convertible into gold.  This watering down of the dollar supply had disastrous effects which also came to a head in the early 1980’s.

Both Schlitz and the US Dollar then continued to generally decline in status for close to 30 years.

In 2008, however, the old Schlitz formula was discovered and has been revived by Stroh’s Brewing Company to give new life to an old beer that everyone had left for dead.

Circa 2011, the US Dollar is still yearning to return to the “gold convertibility” formula that made it so insanely popular for the first half of the twentieth century.

Is there anyone who can find it?

Stay Fresh!

David Mint

Email:  davidminteconomics@gmail.com

P.S.  If you enjoy or at least otlerate The Mint, please share us with your family, friends, and colleagues.

Key Indicators for Wednesday, June 22, 2011

Copper Price per Lb: $4.10
Oil Price per Barrel:  $95.06 A FAILURE TO INFLATE

Corn Price per Bushel:  $6.07 MONETARY POLICY IS NOT WORKING
10 Yr US Treasury Bond:  2.99%
FED Target Rate:  0.09% FED IN PERMANENT DESPERATION MODE

Gold Price Per Ounce:  $1,549 BENEFITING FROM PERMANENT UNCERTAINTY

MINT Perceived Target Rate*:  2.25%
Unemployment Rate:  9.1%
Inflation Rate (CPI):  0.2%
Dow Jones Industrial Average:  12,163
M1 Monetary Base:  $1,921,900,000,000 RED ALERT!!!
M2 Monetary Base:  $9,084,400,000,000 YIKES!!!

*See MINT Perceived Economic Effect Rate Chart at bottom of blog.  This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy.  This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.