Month: August 2020

Washington is the greatest American who has ever lived. He was a legend in his own day and thousands of years from now he will still be honored for his great virtue.

He is known as the American Cincinnatus, an ancient Roman who when Rome was threatened was implored to drop the plow and become dictator. After saving Rome, he relinquished power and returned to his farm. Washington imitated this superb example and to this day we take for granted that the civilian arm is superior to the military arm. Generals don’t just overthrow our elected government as they have throughout history across the globe.

The English Civil war ended in the dictatorship of Oliver Cromwell. The French Revolution with the crowning of Napoleon as Emperor – who would later write that he couldn’t be George Washington. Both started as republics that barely made it a few years. It was accepted at that time that republican government was utopian and that people could not be ruled by reflection and choice but only accident and force.

Throughout the war the British repeatedly tried to negotiate with him directly and he always deferred to congress. After the war he arrived in congress, surrendered his sword, resigned his commission and returned to his farm.  After two terms as President he resigned his office. Upon hearing this George III exclaimed that he truly was the greatest man in the world.

He was a vestryman, a delegate to the House of Burgesses, a member of Congress, commanding officer of the armed forces, president of the constitutional convention, twice elected unanimously in the electoral college, and never once asked for anyone to vote for him

A virtual prince in is own day; he was born into a slave owning family and inherited a massive 3000-acre plantation and 300 slaves. Upon his death he made provision in his will to free all of his slaves and gave them each land of their own.

Washington is an American hero who deserves our gratitude for the legacy he has handed on to us. It is truly a shame that he is being spit upon by mobs that could never dream to aspire to his greatness.

History shows that in the long run fiat money always fails. The temptation for politicians to simply inflate the money supply to pay the bills, instead of cutting spending, grows and becomes irresistible. 

Our rulers and their court economists tell us the reason the Fed exists is for your benefit citizen – why it stabilizes prices and regulates the economy! We need a printing press not to finance our nefarious activities, but for the well being of the people!

Since the end of the quasi-gold standard of Breton Woods in 1971, debt both public and private has exploded, US manufacturing has been shipped overseas, and income inequality has soared all directly related to monetary policy.

Federal debt has gone from $400 billion to $26 trillion; household debt $475B to $16.2T; corporate debt $180B to $6.7T. Since March the balance sheet has gone from $4T to $7T and the money supply from $17T to $21T. The deficit this year is $4T. Meanwhile savings are in the toilet while interest rates have been pegged at zero and, in an Orwellian fit,  $15 trillion of debt worldwide has a negative yield. What happens when interest rates go up?

All great nations come to an end when they spend beyond their means. Political radicalization gains steam in moments of economic turmoil. The US has had two national banks that came and went. It is long past due that we take the idea of sound money seriously and end the Fed before it’s too late.

Printed in the Leelanau Enterprise August 6th, 2020

From the beginning I have been skeptical, opposed and outraged about the corona hysteria.

When it broke in China my immediate reaction was that it was another Virus Scare (e.g. Swine, Bird, etc.). I predicted that it would be talked about on the news, sorta hyped, and that it would have no lasting impact on anything.      

Eat crow.

In my defense, virtually all politicians and investors, pundits and “experts” were in complete agreement. And no one, and I mean no one, saw this coming.

When Trump banned Europe and the market began to sell I was surprised not by the selling, but its timing. I didn’t foresee this as the Black Swan that would derail the market. After the panic was on I predicted that the Fed would lower rates to zero with minor QE at best as markets sold off 15% or so and that would be that.            

Eat crow.

I believed that the lockdowns would be relatively short term (over by Memorial Day) because Americans loved liberty and that the unpopularity of it would bring about the change. This would bring about the illusive V-shaped recovery and that the predictions of a prolonged economic recession were premature.

Eat crow.

After Memorial Day, it sank in that the States and populations of the Western World were willing to tolerate an inordinate amount of State intervention and the corresponding economic pain in order to combat the virus.

But I did get one thing right.

I predicted that this was not the Big One and that Austrians should be leery about saying so and that new all time highs were still coming. However, I thought this would come about because Fed intervention and a quick snapback in the economy. I got the Fed intervention driving markets higher right – although I underestimated the intervention – and missed on the quick comeback of a wounded but still growing economy, albeit at a noticeably lower rate.