The Fed Will Save The Economy

Unfounded optimism is the basis of mental health

“We remain committed to using our tools to do what we can, for as long as it takes, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy.”

Fed Chairman Jerome Powell, September 22, 2020

Six months before the 2008 financial crisis, I addressed the Fed’s ability to fix the fundamental problems underlying credit and debt economies in The Die is Cast, The Cast Will Die, (March 24, 2008):

Today, Americans are looking to the Fed to protect them against the financial chaos threatening our economy. This is tantamount to the Jews in 1930s Germany looking to the Nazis to stave off a possible holocaust. The Fed cannot help America with its economic problems because the Fed is itself the cause of those problems.

While it is understandable that slaves would look to their masters to save them, it is futile to believe they will do so when their masters’ only concern is to save themselves…

In capital credit-based systems, credit is fed into the economy in a process whereby producers and savers are indebted and bankers are enriched. Because credit is an integral part of capital systems, as the economy expands the debt and the interest it produces benefits bankers. The debt and the compounding interest on that debt in turn enslaves producers and savers.

Like parasites, bankers cannot exist without producers and savers. In capital credit-based systems, producers and savers cannot exist without bankers. In savings-based systems where gold and silver are money as was the US prior to 1913, producers and savers can and do prosper without central bank credit and debt.

Over time, in capital credit-based systems, producers and savers become so indebted that the economy is no longer able to service and retire previously created debt. This is where the US economy is today. Homeowners cannot pay their mortgages, consumers cannot pay their credit cards, and governments cannot pay their obligations without issuing even more obligations.

The banker’s credit money system is now everywhere as are their resultant unsustainable debts; and those who profit by that system, the bankers [and the corporations that grew up around them] now control the media, the political process, and the agencies charged with overseeing and regulating the economy—the US Federal Reserve Bank, the SEC, the US Treasury, and indeed the US government itself: the Presidency, the Congress, and the Supreme Court. 

In 2020, the Fed cannot save the economy or us. The Fed is the cause of our problems. However, nothing lasts forever, not even central banking. Stand aside and let it fall.

GOLD AND SILVER

Regarding gold and silver markets, Sandeep Jaitly has given permission to reprint his latest thoughts on this of subject:

COURSE OF THE EXCHANGE

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Metals update:

Since the last update, stock markets have overtly recovered from their pandemic- induced woes, or have they? The Dow Jones Industrials/gold ratio currently stands at 14.10… down from the 16.25 high achieved in early June… and set to go lower.

Gold and silver futures have seen a lot of speculative interest over the past few months 

– gold’s open interest rising from 532K contracts at the beginning of July to a high of 603K contracts at the end of July; to currently stand at 580K contracts. However, growth in COMEX deliveries demanded have not kept with growth in interest.

Such interest drove forward gold/silver to huge premiums over spot gold/silver. Those premiums rapidly fell back with December gold/silver moving to the cusp of backwardation again (chart above.)

Speculative interest counts profits/losses in fiat and is temporary; fickle by its very nature. People with such positions will be looking to exit gold at some point. Technically, a (no-time-limit) close for December gold below $1,904 (v. $1,957 close on Friday 18th) would confirm a move towards the $1,500–1,600 region.

19th September 2020

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Money: Rock, Paper, Scissors, is being rescheduled due to the COVID-19 pandemic, Ralph Terry Foster (author of Fiat Paper Money: the History and Evolution of our Currency), Sandeep Jaitly, Peter Von Coppenolle, Martin Hickling and I will be speaking. The event will take place in London.at Imperial College School of Mines. Projected date is late summer 2021.

2020s: THE 1930s PLUS A PANDEMIC

The end of an epoch, e.g. a destabilized and collapsing economy, extreme weather events, institutional failure/collapse, a deadly pandemic, heightened collective denial, etc., was a subject I addressed in 2008 in D is for Dominance, Debt & Depression—Sell dreams on credit, you’ll make a fortune on the interest:

Often, at the end of a movie, clues once hidden become obvious and the reasons for the fall of the hero or heroine are evident. So, too, it is with history. It is at the end of eras that the causes behind the rise and fall of epochs can be seen.

We are at the end of an epoch and the signs are as disturbing as they are increasing in occurrence and severity. We now understand the industrial revolution has overheated the Earth to the point of disassembling its life support systems; and that oil, which fueled its rise and perhaps its demise, may be running out as well.

There is a persistent feeling that for many reasons our present world is unsustainable, that its end is perhaps near; that the apocalypse feared by religious fundamentalists may somehow prove to be true, though not necessarily in the form expected. Systems that previously promised to lead us to a better world have been found to be wanting.

Democracy, freedom’s vaunted vehicle, has now shown itself as inept and as fallible as the Catholic Church during the Inquisition…Democracy’s greatest moment now appears to have already occurred; when under the tyranny of kings democracy was hoped to be the solution to the world’s ills. The answer is now known. It is not.

But the greatest failing of this epoch is still to come. The collapse of the world economies created by modern banking—built on a foundation of debt larger than ever imagined—is now about to occur. And, as this epoch ends [2020], the role modern banking played in the coming collapse of the world economy is clear.

When epochs end, the attention is on the collapse of the epoch. It would do us well, however, to remember that the endings of such eras are succeeded by new—and better—eras.

As per Professor David Hackett Fischer’s The Great Wave, Price Revolutions and the Rhythm of History, the Middle Ages was succeeded by the Renaissance, the Renaissance by the Age of Enlightenment, the Age of Enlightenment by The Era of Victorian Equilibrium, etc. Each era unimaginable in the one preceding.

A better world is coming.

My livestream Q&A on September 13th is now posted at https://www.youtube.com/watch?v=QTYY0CcDiX8&t=3664s

When the Fed falls, gold and silver will rise.

Buy gold, buy silver, have faith.

Darryl Robert Schoon

www.drschoon.com

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