During the Great War (a.k.a., World War I), both sides insisted on running head-on against the other, despite the fact that military technology had advanced far beyond tactics. Nevertheless, the leaders kept on using tactics that were at least half a century out of date. Yards of territory were gained or lost at the cost of hundreds of thousands of lives. The current economic situation bears a strong resemblance to that ultimately pointless conflict. It is due (in our opinion) to the fact that all the experts today, the Ph.D. economists and politicians, are in substantial agreement. They all insist on using a financial technology and an economic assumption that was proven fallacious more than three centuries ago. Frankly, using the Federal Reserve the way Bernanke is using it is analogous to using a machine gun like a bow and arrow. We doubt very much if Federal Reserve Chairman Benjamin Bernanke — or any of the dime-a-dozen economists on tap — can even define a bank of issue or central bank properly. The economic and political guildsmen continue to insist, in the face of all evidence to the contrary, that all banks are banks of deposit, and that only government debt (or, for the pseudo reactionary elements, gold and silver) can back the currency. The result is that government power has increased exponentially throughout the world. This is precisely as Harold G. Moulton predicted in 1943 when the Keynesian “new philosophy of public debt” began dictating global monetary and fiscal policy.
Posted on: Thu, 20 Jun 2013 16:09:21 +0000
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