By Ron Paul
September 17, 2019 was a significant day in American economic history. On that day, the New York Federal Reserve began emergency cash infusions into the repurchasing (repo) market. This is the market banks use to make short-term loans to each other. The New York Fed acted after interest rates in the repo market rose to almost 10 percent, well above the Fed’s target rate.
The New York Fed claimed its intervention was a temporary measure, but it has not stopped pumping money into the repo market since September. Also, the Federal Reserve has been expanding its balance sheet since September. Investment advisor Michael Pento called the balance sheet expansion quantitative easing (QE) “on steroids.”
I mention these interventions to show that the Fed was taking extraordinary measures to prop up the economy months before anyone in China showed the first symptoms of coronavirus.
Now the Fed is using the historic stock market downturn and the (hopefully) temporary closure of businesses in the coronavirus panic to dramatically increase its interventions in the economy. Not only has the Fed increased the amount it is pumping into the repo market, it is purchasing unlimited amounts of Treasury securities and mortgage-backed securities. This was welcome news to Congress and the president, as it came as they were working on setting up trillions of dollars in spending in coronavirus aid/economic stimulus bills.
This month the Fed announced it would start purchasing municipal bonds, thus ensuring the state and local government debt bubble will keep growing for a few more months.
The Fed has also created three new loan facilities to provide hundreds of billions of dollars in credit to businesses. Federal Reserve Chairman Jerome Powell has stated that the Fed will lend out as much as it takes to revive the economy.
The Fed is also reducing interest rates to zero. We likely already have negative real interest rates because of inflation. Negative real interest rates are a tax on savings and thus lead to a lack of private funds available for investment, giving the Fed another excuse to expand its lending activities.
The Fed’s actions may appear to mitigate some of the damage of the coronavirus panic. However, by flooding the economy with new money, expanding asset purchases, and facilitating Congress and the president’s spending sprees, the Fed is exacerbating America’s long-term economic problems.
The Federal Reserve is unlikely to end these emergency measures after the government declares it is safe to resume normal life. Consumers, businesses, and (especially) the federal government are so addicted to low interest rates, quantitative easing, and other Federal Reserve interventions that any effort by the Fed to allow rates to rise or to stop creating new money will cause a severe recession.
Eventually the Federal Reserve-created consumer, business, and government debt bubbles will explode, leading to a major crisis that will dwarf the current coronavirus shutdown. The silver lining is that this next crisis could finally demolish the Keynesian welfare-warfare state and the fiat money system.
The Federal Reserve’s unprecedented interventions in the marketplace make it more urgent than ever that Congress pass, and President Trump sign, the Audit the Fed bill. This would finally allow the American people to learn the truth about the Fed’s conduct of monetary policy. Audit the Fed is a step toward restoring health to our economic system by ending the fiat money pandemic that facilitates the welfare-warfare state and the unstable, debt-based economy.
Throughout the country, bureaucrats and politicians are clamping down on the Constitution in the name of fighting a virus that thus far has not shown itself more deadly than the seasonal flu. Those numbers can change and it can be a serious disease, but as after 9/11 we are being told we must sacrifice our liberties in the name of security. Government did not deliver then and it will not deliver now. Liberty stolen will not be returned. Is there a better way?
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It's never "different this time." The Fed's bubbles and busts keep coming and they're getting more intense. Every bubble is bigger than the previous one, as is every "bailout." Every "bailout" carries with it a promise for a future economic crisis. The Fed will fail.
The assault on our civil liberties is in overdrive. Habeas corpus is thrown out the window and the government is asking to be able to indefinitely detain Americans without charge or trial. Constitutional law attorney John Whitehead, President of the Rutherford Institute, joins today's Liberty Report to discuss these threats...and to let us know what we can do about them!
By Chris Rossini
Every single human being is a one-of-a-kind creation. There are no carbon copies.
The way that each of us look at, and interpret the world, is completely unique to ourselves. When any event occurs, your explanation to yourself about what it means will be influenced by your prior experience, by what you've been taught in the past and accepted as true (even if, in reality, it is false).
Since no human individual is all-knowing or omnipotent, it means we all walk around with some level of ignorance. We all carry falsehoods between our ears, and we're all responsible for replacing them with the truth if we want the best that life has to offer.
We're all uniquely wise, as well as uniquely ignorant.
Our local situations are completely different as well. Imagine if you could walk down your street and could go into each person's home. By the time you get to the last house on the block, the following thought would smack you in the face:
"Boy, we may all be human beings, but we are all certainly different."
Different preferences, different talents, different abilities, different tastes, different desires, different personalities, different body types, different heights, weights, shoe sizes....etc., etc., etc.
Difference is the distinguishing characteristic of all the human beings that comprise humanity.
So how are billions of different people supposed to interact with one another?
Well, since difference is such an obvious part of our nature, there is a concomitant part of our nature that compliments it perfectly --- Liberty.
We are free to think whatever we please, and act according to our thinking. We are not programmed robots. There can be no algorithms for humans.
We each identify a localized discomfort, and then act to remove it. We do this over, and over, and over....all day, every day. We're constantly switching out what we believe to be unsatisfactory with something that we believe would be more satisfactory.
What is unsatisfactory to you may be perfectly OK to another. What seems to be a problem to you, is considered a blessing to another. You run from a fire, another runs towards it.
We are all different, and we are all free.
So how are billions of different and free people supposed to interact with one another?
The only logical answer is that we should first respect (and accept) that we are different and free. Since we are different, it would be foolish to try to impose uniformity. One cannot impose uniformity on that which is naturally different.
The keyword is "impose," which means "to force."
Violent force is the enemy of human nature. It is the weed that tries to overtake the garden. It is the free radical that tries to destroy the cell.
If the imposition of force is the enemy of our nature, it means that we are meant to interact with one another voluntarily. We are to give our consent, or refuse to give our consent. We can say "Yes," or we can say "No."
Is there a time where the use of force can be ethically justified?
Since we are free, it means there will always be the unfortunate few who (out of error) will choose to be violent. If someone is aggressive, then force is justified to put down that aggression.
Force can be ethically justified for defense only. When there is a weed, you rip it out by the roots. You defend the garden.
The key for billions of different and free individuals to interact with one another is "First, do no harm."
Solve problems, create a more satisfactory set of circumstances...but first, do no harm.
If you think you have to harm someone else first in order to solve a problem, you need to think again.
You're in error.
Today we live in a time, where some individuals wield aggressive force, trying to impose "one-size-fits-all" solutions on a population of different and free individuals.
There is no "one-size-fits-all" in this world. Humans are not homogeneous. We are not like a box of identical nails that you can buy in bulk at the hardware store.
We are unique. Our situations are unique.
Our solutions must be uniquely and peacefully arrived at.
Our individual solutions require "First, do no harm."
But for many, it is perfectly acceptable to do harm first, in order to help others.
That's a very big problem.
Now that the coronavirus scare has much of the country fearful and sheltered-in-place, there are more than a few special interests that are profiting massively from the "Emergency State" that has emerged. Crony capitalists, corporate criminals, Keynesians, big brother government advocates, previously unknown minor county officials...there is plenty of profit to go around.
While major military exercises have been cancelled in Europe due to coronavirus fears, the US has decided to continue with war games in the Middle East aimed at making war on Iran. On the home front, Secretary of State Mike Pompeo is using the virus to fight a hybrid war on Iran and other US 'enemies.' Will kicking them while they're down really work to our advantage? More sanctions on suffering countries?
By Ron Paul
Last Monday, a bipartisan group of Senators and a coalition including libertarian and progressive activists thwarted a scheme to ram through the Senate legislation renewing three provisions of the USA FREEDOM Act (previously known as the USA PATRIOT Act). The bill had already been rushed through the House of Representatives, and most expected it to sail through the Senate. But, instead, Senate leadership had to settle for a 77-day extension.
Senate leadership was also forced to allow consideration of several amendments at a later date. Included is Sen. Rand Paul’s amendment that would forbid the FISA court from issuing warrants targeting American citizens.
Deep state supporters claim the expiring business records provision (which authorizes the collection of our communications and was at the center of Edward Snowden’s 2013 revelations), lone wolf provision (which allows government to subject an individual with no known ties to terrorists to warrantless surveillance), and roving wiretaps provision (which allows government to monitor communications on any device that may be used by a targeted individual) are necessary to keep Americans safe. But, since Congress first passed the PATRIOT Act almost 20 years ago, mass surveillance, warrantless wiretapping, and bulk data collection have not stopped a single terrorist attack.
The legislation does have “reforms” aimed at protecting civil liberties, but these new protections contain loopholes that render the protections meaningless. For example, the bill requires those targeted for surveillance to be notified that the government spied on them. However, this requirement can be waived if the government simply claims — not proves but just clams — that notifying the target would harm “national security.”
The notice provision also only applies to the target of an investigations. So, if you were caught up in a federal investigation because a coworker is being targeted and you shared an office computer, or if a store clerk reported to the government you and others bought pressure cookers, the government could collect your phone records, texts, and social media posts without giving you the chance to challenge the government’s actions.
The bill also makes some reforms to the special FISA court, which serves as a rubber stamp for the intelligence community. These reforms are mainly aimed at protecting political campaigns and candidates. They would not stop the FISA court from rubber-stamping surveillance on organizations that oppose the welfare-warfare-surveillance-fiat money status quo.
Anything limiting warrantless wiretapping and mass surveillance should be supported. However, nothing short of repeal of the USA FREEDOM Act will restore respect for our right to live our lives free of the fear that Big Brother is watching. The path to liberty, peace, and prosperity starts with eliminating all unconstitutional laws and returning to a system of limited government, free markets, individual liberty, sound money, and a foreign policy that seeks peaceful commerce and friendship with all instead of seeking new monsters to destroy.
With nearly one-third of all Americans on government-enforced lockdown and the National Guard pouring into the streets, it's a good time to take stock of the coronavirus scare and the real nature of the threat. What is our most important investment as the markets crash?
By Llewellyn H. Rockwell, Jr.
Governments all over the world are using the alleged threat of a COVID-19 pandemic to shut down the world’s economy. Daniel Lacalle, an authority on energy economics, writes: “The decision to shut down air travel and close all nonessential businesses is now a reality in major global economies. The United States has banned all European flights as Italy enters a complete lockdown, Spain declares a state of emergency, and France closes all nonessential public places and businesses.”
Further, he points out, governments can’t solve the problems they have created through massive spending programs and bigger deficits. These policies make things worse: “Governments will implement large demand-side policies that are the wrong answer to a shutdown of the economy. Most businesses will suffer from the collapse in sales and subsequent working capital build, and none of that will be solved with deficit spending. You cannot mitigate a supply shock with demand policies, which increase debt and overcapacity in the already indebted and bloated sectors and do not help the sectors that are suffering an abrupt collapse in activity.” And government printing of money, i.e., outright inflationism, is even more dangerous.
Lacalle’s remarks bring to mind the trenchant comments on Ludwig von Mises. He warns against attempts to shore up disastrous policies by printing more money. Mises says, “No emergency can justify a return to inflation. Inflation can provide neither the weapons a nation needs to defend its independence nor the capital goods required for any project. It does not cure unsatisfactory conditions. It merely helps the rulers whose policies brought about the catastrophe to exculpate themselves.” He tells us where a policy of inflationism will end: “Inflation is the fiscal complement of statism and arbitrary government. It is a cog in the complex of policies and institutions which gradually lead toward totalitarianism.”
Bill Sardi emphasizes the criminal folly of US government policy. The federal government, he says. is “willing to crash the economy, kill businesses, particularly churches and restaurants that are unlikely to have the resources to re-open their establishments, and coerce people to stay indoors, a practice that will further lower vitamin D levels and result in widespread infection and death among retirees.” States and cities have rushed to follow suit. Los Angeles and San Francisco, for example, are now under drastic “shelter-in-place” orders that require “non-essential businesses” to close and forbid dining in restaurants.
To understand more fully what is happening, we need the guidance of two great thinkers, Ludwig von Mises and Murray Rothbard. They teach us a vital lesson. Civilization depends on the international division of labor. To destroy the division of labor would plunge us into chaos. Life as we know cannot survive under a system of economic autarky.
Rothbard explains this key principle in “Freedom, Inequality, Primitivism, and the Division of Labor:” No one can fully develop his powers in any direction without engaging in specialization. The primitive tribesman or peasant, bound to an endless round of different tasks in order to maintain himself, could have no time or resources available to pursue any particular interest to the full. He had no room to specialize, to develop whatever field he was best at or in which he was most interested. Two hundred years ago, Adam Smith pointed out that the developing division of labor is a key to the advance of any economy above the most primitive level. A necessary condition for any sort of developed economy, the division of labor is also requisite to the development of any sort of civilized society. The philosopher, the scientist, the builder, the merchant — none could develop these skills or functions if he had had no scope for specialization. Furthermore, no individual who does not live in a society enjoying a wide range of division of labor can possibly employ his powers to the fullest. He cannot concentrate his powers in a field or discipline and advance that discipline and his own mental faculties. Without the opportunity to specialize in whatever he can do best, no person can develop his powers to the full; no man, then, could be fully human.
While a continuing and advancing division of labor is needed for a developed economy and society, the extent of such development at any given time limits the degree of specialization that any given economy can have. There is, therefore, no room for a physicist or a computer engineer on a primitive island; these skills would be premature within the context of that existing economy. As Adam Smith put it, ‘the division of labor is limited by the extent of the market.’ Economic and social development is therefore a mutually reinforcing process: the development of the market permits a wider division of labor, which in turn enables of further extension of the market.”
Mises writes along the same lines: “The fundamental social phenomenon is the division of labor and its counterpart human cooperation. Experience teaches man that cooperative action is more efficient and productive than isolated action of self-sufficient individuals. The natural conditions determining man’s life and effort are such that the division of labor increases output per unit of labor expended.” The division of labor, Mises tells us, is the key to the development of civilization. He says, “We conceive what incentive induced people not to consider themselves simply as rivals in a struggle for the appropriation of the limited supply of means of subsistence made available by nature. We realize what has impelled them and permanently impels them to consort with one another for the sake of cooperation. Every step forward on the way to a more developed mode of the division of labor serves the interests of all participants.”
Now, governments all over the world want us to give this up. Abandoning the international division of labor will hit Africa, dependent on trade for bare survival, especially hard. To what end is the world’s carefully wrought economic system being dismantled? Does the spread of COVID-19 require us to destroy the world’s economy? Here we can learn from another outstanding thinker, Ron Paul, who is a medical doctor and can give an expert analysis of government medical propaganda. He says: “On Face the Nation, [Dr. Anthony] Fauci did his best to further damage an already tanking economy by stating, ‘Right now, personally, myself, I wouldn’t go to a restaurant.’ He has pushed for closing the entire country down for 14 days.
Over what? A virus that has thus far killed just over 5,000 worldwide and less than 100 in the United States? By contrast, tuberculosis, an old disease not much discussed these days, killed nearly 1.6 million people in 2017. Where’s the panic over this?
If anything, what people like Fauci and the other fearmongers are demanding will likely make the disease worse. The martial law they dream about will leave people hunkered down inside their homes instead of going outdoors or to the beach where the sunshine and fresh air would help boost immunity. The panic produced by these fearmongers is likely helping spread the disease, as massive crowds rush into Walmart and Costco for that last roll of toilet paper.” Ben Swann supports Ron Paul’s skepticism with a careful analysis of World Health organization statistics in this important video:
Even if the COVOID-19 virus turns out to be more severe than the skeptics give us reason to think it is, we can get through it. We cannot survive the end of the division of labor. It would be the finish of civilization as we know it.
This article was originally published at LewRockwell.com