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Category Archives: Fictions

A House of “Special Effects”?


President of the First Fictional Bank of America (a fictional banker for a fictional dollar) [courtesy Google Images]

President of the First Fictional Bank of America
(a fictional banker for a fictional dollar)
[courtesy Google Images]

Bix Weir was recently interviewed by Greg Hunter on USAwatchdog.com.

During that interview predicted that an economic crash was virtually certain to strike before the end of this year.

More, Mr. Weir predicted that the crash would be “electronic” and at least start on computers.  According to Weir,

 

“All electronic assets will be frozen and wiped away”.

 

It occurred to me to ask, What’s the difference between an “electronic asset” (like the sum in your bank account that exists only as a series of digital 1’s and 0’s on some hard drive) and the “special effects” seen in a Star Wars movie?

Both “electronic assets” and “special effects” can make you jump and get your heart pounding and thereby seem “real”.

But aren’t “electronic assets” and “special effects” both illusions that have no tangible reality?  Aren’t we being fooled by “electronic assets” in bank accounts in the same way we’re fooled by “special effects” in movies?

Is investing in “electronic assets” the economic equivalent to buying a light saber or a pet Wookiee over the internet?

Can “electronic assets” be properly understood as nothing more than “special effects”?

If so, is our economy and financial system built on “special effects”?

Can our economy be more accurately described as a “house of cards”–or as a “house of special effects”?

Which is more stable?  A house of cards or a banking house of special effects?

How long can a banking house of special effects be expected to last?

 
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Posted by on May 24, 2016 in Banking, Fiat Currency, Fictions

 

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A “real” economy vs. an “unreal”?


Market Manipulation by the Federal Reserve [courtesy Google Images]

Market Manipulation by the Federal Reserve
[courtesy Google Images]

Richard Fisher was the president and CEO of the Federal Reserve Bank of Dallas from A.D. 2005 to A.D. 2015 . He’s now a director of PepsiCo and ATT, a senior advisor to Barclays, and a CNBC contributor. The man is accomplished and “connected”.  We he talks, we’d do well to listen closely.

In reaction to the dramatic stock market sell-off during the first week of A.D. 2016, Mr. Fisher “talked” in a recent article entitled “Don’t blame China for the sell-off”:

 

•  Fisher:

 

“Recent volatility and downside slippage in the equity markets has been ascribed to China and the potential for slowing global economic growth. To be sure, these are factors worth watching but they are hardly newsworthy.

“While I would not completely pooh-pooh the effect of developments in China on the rest of the global economy, I believe another factor is of greater importance in pricing the U.S. stock market going forward: the effect of accommodative Federal Reserve policy.”

 

Mr. Fisher is telling us that, contrary to popular opinion, the recent US stock market fall was not triggered by China’s economic problems—it was caused by Federal Reserve policies.

Few would be surprised by Mr. Fisher’s statement.  We all pretty much suspect that the Fed is responsible for the current economic problems.  Still, given that a former president of the Dallas Federal Reserve Bank is making these admissions, they are amazing.

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Does Fiat Currency Make Fiat Debt and Fiat Debtors?


Fiat Dollars make Fiat Debt? [courtesy Google Images]

Fiat Dollars make Fiat Debt?
[courtesy Google Images]

The New York Times published,“Greece Flashes Warning Signal About Its Debt”:

 

“As Greece now gropes for a resolution to its current financial problems . . . Athens might still be holding out hope for a restructuring [defaulting on most] of its debt burden of 303 billion euros, or $327 billion.

“. . . the eurozone braced for the prospect of a default. . . . Repercussions of such a default are so difficult to predict that European officials have spent the last five years trying to avoid one.”

 

I agree that the “repercussions” of a Greek default are “hard to predict”.   But that difficulty doesn’t necessarily mean that all of the possible outcomes of a Greek default would be catastrophic.

Most people assume that a Greek default could precipitate a Greek depression, EU depression or even a world depression.  All of the possible repercussions seem grim, but could it be that this Greek tragedy is really a black comedy?

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Posted by on April 26, 2015 in Debt, Fiat Currency, Fictions, Money, What Can't be Paid

 

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“In person”–or “in the flesh”?


Frog Legs [courtesy Google Images]

Frog Legs
[courtesy Google Images]

•  I received the following email from a reader (I added the bold highlights):

 

“Hi Al,

“I recently had an interesting experience in court that I would like to share with you.

“In a nut shell, I gummed up the works with the judge by stating that I was present “in the flesh.” She was literally tossing and turning in her seat, visibly frustrated and was searching for ways to regain control of the situation.

“I believe that the judge was trying to find a way to have me make an appearance in court “in person” or by representing myself (my self?), so that she could administer the trust account.

I said that I was not representing any artificial persons, that I do not make appearances in court by paper and that I was present “in the flesh.”

“Perhaps by me stating that I was present in the flesh, it had some effect which rendered her unable to proceed.

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Posted by on May 23, 2014 in Fictions, Person

 

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President Obama–Stop “Helping” Us!


[courtesy Google Images]

[courtesy Google Images]

A recent article in The New York Times (“Obama Will Seek Broad Expansion of Overtime Pay”) reports that,

 “President Obama this week will seek to force American businesses to pay more overtime to millions of workers, the latest move by his administration to confront corporations that have had soaring profits even as wages have stagnated.

“On Thursday, the president will direct the Labor Department to revamp its regulations to require overtime pay for several million additional fast-food managers, loan officers, computer technicians and others whom many businesses currently classify as “executive or professional” employees to avoid paying them overtime, according to White House officials briefed on the announcement.”

The rationale for this increase is probably the belief that if people’s incomes rise, they spend more and theoretically stimulate the economy.

But, on the other hand, if corporate labor costs rise, either corporate profits fall and/or prices go up.  If prices rise, the economy tends to slow.

So what will happen?  By raising some employee’s incomes, will we stimulate or slow the economy?

Answer:  That’s the wrong question.

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Bitcoin and other Intangible Savings Vehicles


Bitcoins are always portrayed as tangible "coins" rather than intangible, digital "bits" [courtesy Google Images]

Bitcoins are always portrayed as tangible “coins” rather than intangible, digital “bits”
[courtesy Google Images]

Reuters reported in “Bitcoin plunges after marketplace indefinitely halts withdrawals,” that,

“The price of the digital currency bitcoin slid to its lowest level in nearly two months on Monday after bitcoin digital marketplace Mt. Gox said a halt on withdrawals it announced on Friday would continue indefinitely after it detected “unusual activity.”

“The bitcoin price varied dramatically from one exchange to another, with Tokyo-based Mt. Gox, the best known operator of a bitcoin digital marketplace, recording one of the biggest drops for the day.

“On the Mt. Gox platform the currency plunged to as low as $500 early on Monday, down more than 27 percent from Friday’s final price of $692, according to the Mt. Gox website. It last traded at $595.74, off nearly 14 percent from Friday.”

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7 Comments

Posted by on February 17, 2014 in Fiat Currency, Fictions, Money, Savings, Values

 

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What’s a “Bubble”?


The Federal Reserve's Most Important Product [courtesy Google Images]

The Federal Reserve’s Most Important Product
[courtesy Google Images]

In economics, “bubbles” are typically entire markets wherein the majority of product in that market are significantly and artificially over-priced.

For example, if the housing market goes into a “bubble,” most homes in that market will be selling for prices that seem unreasonably high.   If tech stocks go into a “bubble,” virtually all of the individual stocks in that particular market will be selling for unreasonably high prices.

Bubbles can occur in a particular nation’s bond, stock, housing, and commodity markets.  All bubbles share a single common denominator:  they’re significantly over-priced.

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5 Comments

Posted by on February 13, 2014 in Economy, Federal Reserve, Fiat Currency, Fictions, Lies, Values

 

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