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By Liberty Report Staff
Manipulated interest rates, a distorted economy, tariffs, a government that attempts to regulate everything.... An economic meltdown is ahead, and there's nothing The Fed can do to avoid it. Dr. Paul's segment begins around the 2:25 mark: 
By Simon Black
In the year 1157, the Republic of Venice was in the midst of war and in desperate need of funds. It wasn’t the first time in history that a government needed to borrow money to fight a war. But the Venetians came up with an innovative idea: Every citizen who loaned money to the government was to receive an official paper certificate guaranteeing that the state would make interest payments. Those certificates could then be transferred to other people… and the government would make payments to whoever held the certificate at the time. In this way, the loan that an investor made to the government essentially became an asset– one that he could sell to another investor in the future. This was the first real government bond. And the idea ultimately created a robust market of investors who would buy and sell these securities. When a government’s fortunes changed and its ability to make interest payments was in doubt, the price of the bond fell. When confidence was high, bond prices rose. It’s not much different today. Governments still borrow money by issuing bonds, and those bonds trade in a robust marketplace where countless investors buy and sell on a daily basis. Just like the price of Apple shares, the prices of government bonds rise and fall all the time. One of the most important factors affecting bond prices is interest rates: when interest rates rise, bond prices fall. And when rates fall, bond prices rise. And this law of bond prices and interest rates moving opposite to one another is as inviolable as the Laws of Gravity. Back in the 12th century when Venice started issuing the first government bonds, interest rates were shockingly high by modern standards, fluctuating between 12% and 20%. In France and England rates would sometimes rise beyond even 80% during the Middle Ages. Needless to say, it didn’t take long for banks to get in on the action; they realized very quickly that by controlling government debt, they effectively controlled the government. The dominance of the banks over the government cannot be overstated. Miriam Beard’s book History of the Businessman, for example, describes medieval politicians in the Italian city-state of Genoa as having to pledge loyalty to the banks before they were allowed to take office. Thus began the deep, long-standing relationship between banks and the government: Banks buy government debt– helping to finance spending packages that keep them in power. And the government bails out the banks when they get into trouble. You scratch my back, I scratch yours. All along the way, of course, they both use other people’s money. YOUR money. Governments bail out the banks with taxpayer funds. Banks fund the government with their depositors’ hard-earned savings. Of course, it’s so absurd now that they’ve simply resorted to creating money out of thin air to benefit the both of them… which is precisely what central banks do. A decade ago during the 2008 global financial crisis, central banks around the world created trillions of dollars, euros, yen, etc. worth of currency and effectively gave it all away to their respective governments and commercial banks. In the Land of the Free, the US Federal Reserve conjured $4 trillion out of nothing and “loaned” most of it to the federal government at record low interest rates. But here’s the weird part: if you remember that inviolable law of bond prices– when interest rates go up, bond prices fall. And that’s exactly what’s been happening. The Fed bought trillions of dollars worth of government bonds at a time when interest rates were at historic lows. Then, starting about two years ago, the Fed began slowly raising interest rates. But each time the Fed raised rates, the value of the government bonds that they had purchased would fall. This seems insane, right? By raising rates, the Fed was creating massive losses for itself. I’ve written frequently that, as the Fed continues raising interest rates, it will eventually engineer its insolvency. Well, that’s now happened. Yesterday the Fed released its latest quarterly financial statements, showing that the value of their bonds is now $66.5 billion LESS than what they paid. And that $66.5 billion unrealized loss is far greater than Fed’s razor-thin $39 billion in capital. This means that, on a mark-to-market basis, the largest and most systemically important financial institution in the world is objectively insolvent. (It’s also noteworthy that the Fed’s financial statements show a NET LOSS of $2.4 billion for the first nine months of 2018.) This is all truly remarkable… and highlights how utterly absurd the financial system is. Our society has awarded an unelected committee the ability to conjure trillions of dollars out of thin air and render itself insolvent to support the ongoing, mutual back-scratching of governments and banks, all at your expense. But what’s even more remarkable, though, is how little anyone has noticed. You’d think the front page on every financial newspaper would be “FED INSOLVENT.” But it’s not. No one seems to notice that the Fed is insolvent. Or, for that matter, that most Western governments are insolvent. It’s crazy. It’s as if it doesn’t matter that the government of the largest economy in the world loses a trillion dollars a year, has $22 trillion in debt, $30+ trillion in unfunded pension liabilities, or suffers a debt-to-GDP ratio in excess of 100%. Or that the central bank of the largest economy in the world is insolvent on a mark-to-market basis according to its own financial statements. There seems to be an expectation that none of this matters and it will continue to be rainbows and buttercups forever and ever until the end of time despite some of the most compelling evidence to the contrary. It’s difficult to imagine a consequence-free future with data like this. Peaks, corrections, crises, etc. are often preceded by similar dismissive, willful ignorance and irrational optimism. It would be foolish to presume that this time is any different.
This article was originally published a Sovereign Man.
By Adam Dick
Jesse Ventura dedicated the second half of the latest episode of his RT show The World According to Jesse to a foreign policy discussion with prominent libertarian communicator Ron Paul. Ventura and Paul’s discussion is focused on Paul’s criticisms of the United States government’s commitment to intervention overseas, as well as the potential benefits of instead pursuing a noninterventionist foreign policy. Paul, in the in-depth discussion, takes on trade wars, US membership in the North Atlantic Treaty Organization (NATO), sky-high US military spending, and US involvement in the war on Yemen. Watch the complete discussion below. Ron Paul's segment begins around the 12:25 mark:
Originally published at The Ron Paul Institute for Peace & Prosperity
The economic roller-coaster of booms and busts, that we're all forced to ride, is a creation of the Socialistic institution called The Federal Reserve. By manipulating interest rates and by generating money out-of-thin-air, the Fed creates an artificial boom. Everything artificial must ultimately return to reality. The sooner the return, the better.
Among many Christians there is a notion that support for free markets is somehow selfish and anti-Christian. What is the morality of opposing an ever-encroaching state and ever-increasing taxes? Acton Institute President Fr. Robert Sirico joins today's Liberty Report to explain...
By Chris Rossini
For those who still choose to watch "the news" on television, what are you greeted with every day? The countless good things that happen every second? The new life that is now with us? The new wealth that has been created? The peaceful interactions that take place at every moment? No...of course not. If you turn on government's FCC-licensed media, you're going to get a good dose of the opposite. And their goal is to get you to let down your guard, and to be afraid. The moment that you're afraid is the moment that you become easy prey for those who want to take what you have, and who want to treat you like their pawn. But they can't do these things to you, unless you beg them to. If you're afraid...you'll beg. You see, the political class doesn't generate wealth. If they're going to become wealthy, they're going to have to take it from people who do create wealth. How successful would the political class be if they had to deal with a population of individuals that were unafraid and who guarded their liberty with their lives? Not successful at all. They would have to close up shop, and go do the hard work of generating wealth in the marketplace. However, if the political class can get everyone else to be afraid of their own shadows, extracting wealth becomes a piece of cake. The wealth generators will cough up their money (and their liberties) with ease. Let's focus on how the FEAR game is done in America, because it's become a reliable "system." In the United States, you're presented with one of two choices as to who will rule over you. It's best that you choose one of these options, or you're liable to be looked at with a crooked eye. The side that you pick doesn't matter. You're going to get your pockets cleaned out either way. But pick a team you must, because by doing so, you're very likely to identify yourself with "your team," no matter what it does to you. Your team can take your last nickel, but because it's "your team," it's OK. And so, like everyone else, you "pick a team." ... Left or Right. Now that you're on a "team," you have to internalize the primary FEAR. Both teams have their overarching FEARS. On the Right, you have the FEAR of foreign boogeymen. The list is never-ending ... the wars are never-ending ... and the loss of your earnings and liberty will not come to an end either. This FEAR generates a cool $1 TRILLION per year to the political class, and those who latch onto it. The foreign boogeyman FEAR is the motherlode of authoritarianism. You are to sacrifice everything for it .... your privacy ... your dignity ... It is never to be questioned or touched. If you choose to be on "The Left," you are expected to internalize another overarching FEAR. The name of it is always changing, and funny enough it goes by the name of "Climate Change." This FEAR also requires you to sacrifice everything to the government .... If you don't submit, then the world is going to come to an end. The Earth will either turn into a fireball, or an ice cube...depending on what the "experts" want you to believe at the moment. How would you like that on your conscience? So you have FEAR in two different wrappers. They both add up to the same result. Your life, liberty and property gets turned over to the political class. In fact, today we read at Bloomberg: Stopping climate change before the effects get truly severe is going to be a huge undertaking — the equivalent of a global mobilization for war. See! Whether it's War or Climate Change ... The Government is going to "mobilize" against your life, liberty and property. Pick your Team ... Pick your FEAR ... And they'll take care of the rest. Liberty is not an option in this "system." But, here's the silver lining to this FEAR matrix: Liberty is always an option. That's why the propaganda has to be 24/7 and has to come at you from every angle. The option for Liberty is always there. The political class has to try to drown it out, and wants your eyes and ears to be flooded with their nonsense at all times. We're all born free, and we always have the option to stay that way. We just have to stop being suckered by the political class. It's a choice that has to be made on an individual basis....One-at-a-time. Make a decision never to believe the FEAR peddlers in the political class and you make the whole world a better place. One less person for them to mentally prey upon. The world would have one less dupe. That's a very powerful position for every individual to be in. So....Enough with picking poison. Pick Liberty instead!
The illegal US "base" at al-Tanf in Syria, along with the final terrorist enclave in Idlib and the Kurds in the north are three flash points where a major conflict could break out at any moment. Why does the US remain? What will the Russians do? The Turks have announced they will soon attack US-backed Kurds in Syria. You heard it here first!
Pride is one of the seven deadly sins. It is also deadly when it drives your foreign policy. President Trump's pick for Joint Chiefs Chairman, Gen. Milley, has promised that the US military will beat any adversary harder than it has every been beaten before. That may well be true. But is it relevant?
By Ron Paul
Washington is once again gripped by the specter of a government shutdown, as Congress and President Trump negotiate an end-of-year spending deal. A main issue of contention is funding for President Trump’s border wall. Sadly, but not surprisingly, neither Congress nor the administration is fighting to cut, or at least not increase, spending. Federal spending has increased from 3.6 trillion dollars to 4.4 trillion dollars since Republicans gained control over both chambers of Congress in 2014. Some may try to defend congressional Republicans by pointing out that for two years the Republican Congress had to negotiate spending deals with President Obama. But federal spending has increased by 7.5 percent, or over 300 billion dollars, since Donald Trump become President. A big beneficiary of the Republican spending spree is the military-industrial complex. Republicans have increased the “defense” budget by eight percent in the past two years. President Trump and congressional Republicans claim the increases are necessary because sequestration “decimated” the military. But Congress, with the Obama administration’s full cooperation and support, suspended sequestration every year but one, so the planned cuts never went into full effect. Congress and Obama also “supplemented” the official military budget with generous appropriations for the Pentagon’s off-budget Overseas Contingency Operations fund. Spending on militarism increased by as much as 600 billion dollars over the amounts allowed for under sequestration. President Trump has proposed reducing the projected military budget for fiscal year 2020 to 700 billion dollars. This would be a mere two percent cut, yet the usual voices are already crying that this tiny reduction would endanger our security. If history is any guide, the military-industrial complex’s congressional allies and high-priced lobbyists will be able to defeat the president’s proposed reductions and convince President Trump to further increase the military budget. This huge military budget has little or nothing to do with America’s legitimate security needs. In fact, as candidate Trump recognized, America’s military interventions in the Middle East have endangered our security by empowering terrorist groups like ISIS and al-Qaeda. While the warfare state has been a big beneficiary of the Republican spending spree, the GOP has hardly neglected the welfare state. Domestic spending has increased seven percent since 2016. Except for a half-hearted attempt to repeal Obamacare and some food stamp reforms that were included in and then dropped from this year’s farm bill, Republicans have not made any effort to roll back or even reform the welfare state. The farm bill, which Congress is expected to pass this week, will spend as much as 900 billion dollars over the next ten years. Much of that spending will be on taxpayer subsidies for wealthy farmers and even “farmers in name only.” Trump’s budget deals have been supported by the majority of Democrats. Even those who have called for the president’s impeachment are more than happy to vote with him when it comes to increasing spending and debt. These Democrats are the mirror image of 1990s Republicans who made a big spending deal with President Clinton while simultaneously trying to impeach him. We suffer from too much bipartisanship when it comes to the welfare-warfare state. This bipartisanship has resulted in a national debt that is rapidly approaching 30 trillion dollars. This will inevitably lead to a major economic crisis. The way to avoid this crisis is to replace the bipartisan welfare-warfare consensus with a new consensus in favor of limited government, peace, free markets in all areas including currency, and auditing then ending the Fed. 
By Bill Bonner
Whatever good was done by the Trump/Xi trade war truce in Buenos Aires was likely undone by what was done in Vancouver Airport earlier this month. Bogeyman Program The U.S. stock market warmed to the idea of a ceasefire last Monday morning. Then came word that the U.S. government had arrested Meng Wanzhou, the chief financial officer of Chinese technology firm Huawei. The feds got the Canadians to collar the poor woman while she was changing planes in Vancouver. Few people in the U.S. have ever heard of Huawei. Still, the event had a pin-like look to it. And by the end of the week, investors had lost $1 trillion. This morning, by inference from futures trading, they are set to lose a half a trillion more. What was Ms. Wanzhou’s crime? Mass murder? Grand larceny? Nope. Even she didn’t know what the charges were. But whatever they were, the U.S. government had not only made a federal case of it, but an international “cause célèbre,” too. What Ms. Wanzhou is accused of is neither a genuine crime nor a misdemeanor. Instead, she apparently ran afoul of the Deep State’s bogeyman program. Officially, her company is accused of using shell companies to access the Iranian market in defiance of U.S. sanctions on the country. That is, it is not enough for the feds to regulate every living creature and every transaction that takes place in the 50 states. They also claim authority over the rest of the world. No money can change hands without the consent of the U.S. (which controls the world’s reserve currency – the dollar – and the international banking protocols – the SWIFT system – that allow people to transfer money from one country to another)… Nobody can trade with a foreign country if it doesn’t meet U.S. approval… And no sparrow can fall anywhere on the planet without a shove from the Pentagon. Ms. Wanzhou was told to jump. She apparently didn’t jump high enough. Deep State Hysteria Ms. Wanzhou is the CFO of the second-largest cellphone maker in the world, and the daughter of its founder. Huawei has 170,000 employees. It is as important to the Chinese government as General Motors once was to the U.S. Of course, Ms. Wanzhou has nothing against Iran. China has nothing against Iran. Most of the whole bloomin’ world has nothing against Iran. But the Deep State pretends to protect Americans from bad guys – in this case, Iranians – by imposing sanctions on people all over the Earth. You can imagine what a hullabaloo would follow if the Chinese pulled a similar stunt. Suppose they tried to boss other nations around with a “sanctions” list that included some half a million of the world’s leading business and government officials. And suppose, honoring a Chinese warrant, the authorities in Singapore picked up Mark Zuckerberg or Bill Gates. The Chinese, for example, regard Taiwan as their territory. And they regard the present Taiwanese government as illegitimate traitors. They could easily announce “sanctions” against anyone trading with Taiwan… which would implicate thousands of American businessmen, politicians, and government employees. Then, stopping at Singapore airport for refueling, perhaps en route from a conference in Moscow back to a home office in Sydney or San Francisco, an executive could be nabbed by the Chinese – for an offense that Americans might find silly, irrelevant, or plain stupid. If humans were cows or tree squirrels, no offense might have been taken. But we homo sapiens live in a world of jealousy, hate, and revenge. The U.S. would be outraged. It could be an Archduke Franz Ferdinand moment – the kind of event that is hard to reconcile with today’s power politics… and hard to ignore or forget. In the present case, the Chinese, who value “face” more than money, took offense. They see the arrest as illegal, high-handed, and a breach of the ceasefire reached only a week earlier. Read the rest at Bonner & Partners |
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