A Salutary Effect

BALTIMORE – “Ike and Dick Sure to Click” was an exciting election slogan. Their Democratic opponents, Adlai Stevenson and Estes Kefauver, had their snazzy campaign jingle, too: “Adlai and Estes… They’re the Bestes.”

Surely, the men behind these slogans had their private hungers and perversions. But they kept them to themselves. The 1956 presidential election campaign was a dull affair.

 

Google “Adlai Stevenson’s wife,” and you will get only the barest biographical information. But Google “Melania Trump” or “Heidi Cruz”… oh la la! Just be sure there are no children around.

 

melania-trump-1-800Mirror, mirror on the wall, who’s the fairest of them all? The reality TV election is here!

Photo credit: Kena Betancur / AFP / Getty, Scott Olson / Getty

 

It’s all out in the open now. This is the most entertaining election in U.S. history… and the first episode of Reality Democracy, in which the only apparent goal – or effect – is to get the ratings up.

When we were in grammar school, the teacher told us that “anybody in this classroom could grow up to be president.” We looked around the room with dread and foreboding. But now it looks as though she was right.

But this election ought to have a very salutary effect on the public: No one will ever take an election seriously again.

 

Silver-Haired Crooks

On Easter Sunday, we met a smart man who confessed to having voted for Donald Trump in the Florida primary. Of course, we wanted to know: What was he thinking? More on that in a moment…

A headline in yesterday’s paper jolted us away from the election. “Japan’s hard-up retirees turn to crime,” begins the headline in the Financial Times.

 

recidivist pensioners in JapanA gang of elderly recidivists in a Japanese jail. We apologize for using a kind of tinny word here.

Photo credit: Kiyoshi Ota / Bloomberg

 

After years of QE (quantitative easing), ZIRP (zero-interest-rate policy), NIRP (negative-interest-rate policy), and Abenomics (Japanese prime minister Shinzō Abe’s stimulus-focused economic policies) – which is to say, all the standard deviations of modern central banking – older Japanese people must now break the law… to get “free board and lodging behind bars.”

Is this what is coming to the U.S.? “Yes,” is the safe answer. Japan has been ahead of us on this entire trip. Its stock market crashed in 1989. That led to a Great Recession, which the authorities fought like the Imperial Army defending Okinawa. Japanese policymakers invented QE… and for 26 years, they’ve held interest rates near zero.

 

Japan, rates and NikkeiJapanese interest rates and the Nikkei – the former are now at or below zero, the latter remains about 60% below its all time high made more than 26 years ago – click to enlarge.

 

Shinzō Abe became prime minister specifically to end Japan’s quarter-century-long slump. He failed. The “three arrows” of his Abenomics platform – fiscal stimulus, monetary easing, and structural reform – seem to have driven the defenders even further to ground.

 

Hard Choices

It should, by now, be obvious to everyone that William McChesney Martin was right. As the ninth chairman of the Board of Governors of the Federal Reserve, he was the man on duty during the election cycle of 1956.

And he was the man responsible for “normalizing” interest rates, after the Fed’s war-time deal with the Treasury to help fund the deficit with ultra-low rates. Some feared this would trigger economic calamity. But Martin saw clearly what his homologues of the 21st century would rather go blind than see:

 

“Under the hard choices left to us in wartime, we had to dictate even some of the smallest details of our economic life, but that strait jacketing of the economy is wholly inconsistent with democratic institutions and a private enterprise system…

In a Free Market, rates can go down as well as up and thus perform their proper function in the price mechanism. Dictated money rates breed dictated prices all across the board.”

 

He then described the consequences of what would become the Bernanke-Yellen Money Dictatorship:

 

[W]e would have no reliable safeguard against the erosion of our savings, our pensions, our life insurance policies – the capital upon which the institutions of private enterprise rest…

 

15 Mar 1951, Washington, DC, USA --- Original caption: 3/15/1951-Washington, DC- William McChesney Martin, Jr., above, has been named to succeed Thomas B. McCabe as Chairman and member of the Federal Reserve Board. Martin, now Assistant Treasury Secretary, was recomissioned by McCabe, who has resigned.William McChesney Martin, old school central banker (this species is reportedly extinct).

Photo credit: Bettmann / Corbis

 

So far, Mr. Bernanke and Ms. Yellen seem to have the matter under control. We see no erosion of the value of our financial assets. Instead, stocks and bonds have gone up in price.

But the companies behind them are now encrusted with crony barnacles like an old boat. The boat slows… and rides lower and lower in the water. Real capital formation declines… productivity sinks… wages stagnate…

And then, you have people who get poorer, not richer… and silver-haired crooks… desperate to be behind bars, where they find warm beds and old friends. Mr. Martin, who lived to be 91 years old and died in 1998, would have understood it.

 

The Genius of Trump

But let’s return to our intelligent friend, casting his vote in the primaries for Donald J. Trump:

“I know him well. He’s a friend of mine,” he began.

“A lot of the things he says you can’t take literally,” he replied under cross examination.

“Like that wall. He’s not going to build a wall. The Mexicans aren’t going to pay for it. But it’s a great image. It’s one that sticks in your mind.

 

trumpswallPardon us for sticking images into your mind…

Image via flipflopflyin.com

 

“You get lost when you talk about trade policies and export account deficits. People don’t know what you are talking about. And they take you for another Hillary Clinton or some other Beltway Insider. Blah, blah, blah… more of the same.

“But the wall is a strong image. It announces that Trump is different. And he’s going to protect the American people. That’s all it’s meant to do. It’s not meant to be taken literally.

“That’s why Donald Trump is a genius. He’s able to communicate in a different way. The wall image tells people what they really want to know, without getting lost in details.

“He’ll do things differently. And that’s why the cronies and the Deep State are so afraid of him.”

 

Chart by: St. Louis Federal Reserve Research

 

Chart and image captions by PT

 

The above article originally appeared at the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.

 

 
 

Emigrate While You Can... Learn More

 
 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke

   
 

One Response to “Are We Becoming a Nation of Silver-Haired Crooks?”

  • paranumre:

    “He’ll do things differently”? Please define differently. Obama was going to give us “change” and sure enough he did. I’m with the deep state, I’m afraid of Trump too.

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • US Financial Markets – Alarm Bells are Ringing
      A Shift in Expectations When discussing the outlook for so-called “risk assets”, i.e., mainly stocks and corporate bonds (particularly low-grade bonds) and their counterparts on the “safe haven” end of the spectrum (such as gold and government bonds with strong ratings), one has to consider different time frames and the indicators applicable to these time frames. Since Donald Trump's election victory, there have been sizable moves in stocks, gold and treasury bonds, as the election...
  • Modi’s Great Leap Forward
      India’s Currency Ban – Part VIII India’s Prime Minister, Narendra Modi, announced on 8th November 2016 that Rs 500 (~$7.50) and Rs 1,000 (~$15) banknotes would no longer be legal tender. Linked are Part-I, Part-II, Part-III, Part-IV, Part-V, Part-VI and Part-VII, which provide updates on the demonetization saga and how Modi is acting as a catalyst to hasten the rapid degradation of India and what remains of its institutions.   India’s Pride and Joy   Indians are...
  • Global Recession and Other Visions for 2017
      Conjuring Up Visions Today’s a day for considering new hopes, new dreams, and new hallucinations.  The New Year is here, after all.  Now is the time to turn over a new leaf and start afresh. Naturally, 2017 will be the year you get exactly what’s coming to you. Both good and bad.  But what else will happen?   Image of a recently discarded vision... Image by Michael Del Mundo   Here we begin by closing our eyes and slowing our breath.  We let our mind...
  • The Great El Monte Public Pension Swindle
      Nowhere City California There are places in Southern California where, although the sun always shines, they haven’t seen a ray of light for over 50-years.  There’s a no man’s land of urban blight along Interstate 10, from East Los Angeles through the San Gabriel Valley, where cities you’ve never heard of and would never go to, are jumbled together like shipping containers on Terminal Island.  El Monte, California, is one of those places.   Advice dispensed on Interstate...
  • A Trade Deal Trump Cannot Improve
      Worst in Class BALTIMORE – People can believe whatever they want. But sooner or later, real life intervenes. We just like to see the looks on their faces when it does. By that measure, 2017 may be our best year ever. Rarely have so many people believed so many impossible things.   Alice laughed. "There's no use trying," she said: "one can't believe impossible things." "I daresay you haven't had much practice," said the Queen. "When I was your age, I always did it for...
  • Pope Francis Now International Monetary Guru
      Neo-Marxist Pope Francis Argues for Global Central Bank As the new year dawns, it seems the current occupant of St. Peter’s Chair will take on a new function which is outside the purview of the office that the Divine Founder of his institution had clearly mandated.   Neo-Papist transmogrification. We highly recommend the economic thought of one of Francis' storied predecessors, John Paul II, which we have written about on previous occasions. In “A Tale of Two Popes” and...
  • Where’s the Outrage?
      Blind to Crony Socialism Whenever a failed CEO is fired with a cushy payoff, the outrage is swift and voluminous.  The liberal press usually misrepresents this as a hypocritical “jobs for the boys” program within the capitalist class.  In reality, the payoffs are almost always contractual obligations, often for deferred compensation, that the companies vigorously try to avoid.  Believe me.  I’ve been on both sides of this kind of dispute (except, of course, for the “failed”...
  • Trump’s Trade Catastrophe?
      “Trade Cheaters” It is worse than “voodoo economics,” says former Treasury Secretary Larry Summers. It is the “economic equivalent of creationism.” Wait a minute -  Larry Summers is wrong about almost everything. Could he be right about this?   Larry Summers, the man who is usually wrong about almost everything. As we have always argued, the economy is much safer when he sleeps, so his tendency to fall asleep on all sorts of occasions should definitely be welcomed....
  • Trump’s Plan to Close the Trade Deficit with China
      Rags to Riches Jack Ma is an amiable fellow.  Back in 1994, while visiting the United States he decided to give that newfangled internet thing a whirl.  At a moment of peak inspiration, he executed his first search engine request by typing in the word beer.   Jack Ma, founder and CEO of Alibaba, China's largest e-commerce firm. Once he was a school teacher, but it turned out that he had enormous entrepreneurial talent and that the world of wheelers, dealers, movers and...
  • Side Notes, January 14 - Red Flags Over Goldman Sachs
      Red Flags Over Goldman Sachs Just to prove that I am an even-handed insulter, here is a rant about my former employer, Goldman Sachs. The scandal at 1MDB, the Malaysian sovereign wealth fund from which it appears that billions were stolen by politicians all the way up to the Prime Minister, continues to unfold.   The main players in the 1MDB scandal. Irony alert: apparently money siphoned off from 1MDB was used to inter alia finance Martin Scorcese's movie “The Wolf of...
  • Money Creation and the Boom-Bust Cycle
      A Difference of Opinions In his various writings, Murray Rothbard argued that in a free market economy that operates on a gold standard, the creation of credit that is not fully backed up by gold (fractional-reserve banking) sets in motion the menace of the boom-bust cycle. In his The Case for 100 Percent Gold Dollar Rothbard wrote:   I therefore advocate as the soundest monetary system and the only one fully compatible with the free market and with the absence of force or fraud...
  • Silver’s Got Fundamentals - Precious Metals Supply-Demand Report
      Supply-Demand Fundamentals Improve Noticeably Last week was another short week, due to the New Year holiday. We look forward to getting back to our regularly scheduled market action.   Photo via thedailycoin.org   The prices of both metals moved up again this week. Something very noticeable is occurring in the supply and demand fundamentals. We will give an update on that, but first, here’s the graph of the metals’ prices.   Prices of gold and silver...

Austrian Theory and Investment

Support Acting Man

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com