Free Republic

The deregulation of the financial system during the Clinton and George W. Bush regimes had the predictable result: financial concentration and reckless behavior. A handful of banks grew so large that financial authorities declared them “too big to fail.” Removed from market discipline, the banks became wards of the government requiring massive creation of new money by the Federal Reserve in order to support through the policy of Quantitative Easing the prices of financial instruments on the banks’ balance sheets and in order to finance at low interest rates trillion dollar federal budget deficits associated with the long recession caused...

A Congressional report quietly released last month suggests that bitcoin could be a threat to US monetary policy, and makes the case for continued central banking control. The report, Bitcoin: Questions, Answers, and Analysis of Legal Issues, was published by the Congressional Research Service, which produces research reports for US policy makers. It argues for the benefits of a single, incumbent currency (the US dollar), for stability. “If greater use of bitcoin (and other cryptocurrencies) leads to multiple monetary units, these benefits could be threatened, particularly if these new currencies continue to exhibit a high degree of price volatility,” the...

The Day the Dollar Dies America’s financial Pearl Harbor is coming December 6, 2015, 3 p.m. HKT, Hong Kong Twenty-one men representing China’s most powerful institutions file into a conference room atop the ICC Tower looming over Victoria Harbor. The Politburo Standing Committee has mustered the CEOs of China’s four largest banks, Sinopec, and several other state-owned multinationals, plus officers from the Central Military Commission and a pair of academics from China’s top technology universities. The general secretary formally opens the meeting.“As you know, the United States of America continues to manipulate its currency,” he begins. “It is devaluing...

Bitcoin is rapidly becoming part of the everyday lexicon. Following David Woo's investigation, National Australia Bank's Emma Lawson looks at its creation, use, and quality as "currency," and find that Bitcoin meets most, but not all the conditions required to be a currency. Lawson concludes Bitcoin may not be the most efficient monetary system, given the costs to create, and that the supply set-up can be seen as both an advantage (hyperinflation is not possible) but also a disadvantage (there are conditions which may create deflation). But, if enough people believe in it, and use it, it may be here...

On the flat lava plain of Reykjanesbaer, Iceland, near the Arctic Circle, you can find the mines of Bitcoin. To get there, you pass through a fortified gate and enter a featureless yellow building. After checking in with a guard behind bulletproof glass, you face four more security checkpoints, including a so-called man trap that allows passage only after the door behind you has shut. This brings you to the center of the operation, a fluorescent-lit room with more than 100 whirring silver computers, each in a locked cabinet and each cooled by blasts of Arctic air shot up from...

A paper currency system contains the seeds of its own destruction. The temptation for the monopolist money producer to increase the money supply is almost irresistible. In such a system with a constantly increasing money supply and, as a consequence, constantly increasing prices, it does not make much sense to save in cash to purchase assets later. A better strategy, given this scenario, is to go into debt to purchase assets and pay back the debts later with a devalued currency. Moreover, it makes sense to purchase assets that can later be pledged as collateral to obtain further bank loans....

America, if there was ever a time in our nation’s history that it was imperative that we as Americans separated ourselves from the constant dribble of the false paradigm of American politics, the time is definitely now. I find myself in total disbelief as I watch the obvious consequences of the corruption, massive wasteful spending, the outsourcing of the American labor force and many other ills that have plagued this nation for decades come boiling to a head like a massive pimple on a teenager’s forehead. When this pimple pops, it is going to hurt. We have to stop pretending...

There are conflicting stories among Bitcoins’ supporters about why a Japanese programmer or team of Japanese programmers, who are known by a pseudonym Satoshi Nakamoto, developed the original idea for the Bitcoins software. The primary justification for Bitcoins among libertarians is the prediction that Bitcoins will become an alternative currency to all existing central bank currencies. Bitcoins are seen as a first-stage revolt against central bank money. In this essay, I’m going to make a series of arguments. I’m going to tell you in advance what my arguments are. You can then judge whether or not I have been successful...

Mark Twain once said, “The reports of my death are greatly exaggerated.” And speaking of an overstated demise, the same can be said these days regarding the U.S. dollar. Indeed, there isn’t a day that goes by that I don’t hear or read various pundits continuing to shout the praises of gold as the next currency. In fact, according to these so-called experts, it seems as though we’ll be utilizing gold in order to do our Christmas shopping sooner rather than later. Nevertheless, I must declare strong support for the highly coveted precious metal. Lord knows I bought enough...

He is spearheading a bill in Congress called The Inform Act. It is an attempt to wake up the nation to our dire financial situation so something can be done to fix this enormous problem. Dr. Kotlikoff explains, “The bill has been endorsed by over 1,000 economists, including 15 Nobel Prize winners in economics . . .Never in the history of this country have this many top economists from all political persuasions endorsed a piece of legislation like this.” Dr. Kotlikoff and his fellow economists all contend, “The country needs to do honest accounting.”

In the wake of all the misguided pleas for negative interest rates in Europe (hoping to get banks to lend), comes news US banks warn Fed interest cut could force them to charge depositors. Leading US banks have warned that they could start charging companies and consumers for deposits if the US Federal Reserve cuts the interest it pays on bank reserves. Depositors already have to cope with near-zero interest rates, but paying just to leave money in the bank would be highly unusual and unwelcome for companies and households. The warning by bank executives highlights the dangers of one...

The Dow rallied more than 100 points to close above the 16000 mark for the first in history amid optimism the Fed will keep its foot firmly on the economic accelerator. The Dow Jones Industrial Average (DJI) rose 109 points, or 0.69%, to 16010, the S&P 500 (GSPC) advanced 14.5 points, or 0.81%, to 1796 and the Nasdaq Composite (IXIC) gained 47.9 points, or 1.2%, to 3969. Wall Street has rallied in a big way this year. The Dow is up more than 22%, and has rallied 145% since its bear-market low in March 2009.

One day before the Senate's digital currency hearing titled "Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies", Bitcoin is largely oblivious to any potential regulatory threats, either at the legislative or the city level, where as reported previously the New York superintendent is in a rush to enforce BitLicenses on businesses that accept BitCoin, and moments ago crossed $500 for the first time ever. Instead, it appears that as we also reported previously, the Chinese Bitcoin craze has reached the parabolic threshold, going so far as making Bitcoin an acceptable payment for real estate, which means...

Moments ago BitCoin hit $395, and will likely cross $400 in the immediate future (the chart looks a little less scary in log scale). So as more and more pile into the electronic currency, some due to ideological reasons, some simply to chase momentum, some out of disappointment with the manipulated gold price looking to park their savings in an alternative, non-fiat based currency, which a year ago traded 40 times lower, the attention of the government is finally starting to shift to what has been the best performing asset class in the past year, outperforming even the infamous Caracas...

Having now tripled since August, Bitcoin's break above $300 ($324 highs) raises an important thought experiment - can a digital currency act as a global reserve currency? It seems yesterday's CNBC discussion that Bitcoin is nothing but a beanie-baby fad just served to feed the beast... on heavy volume after Draghi's comments... Charles Hugh-Smith, from OfTwoMinds blog, attempts an answer of just that question: Could Bitcoin (or equivalent) Become a Global Reserve Currency? Could a non-state issued digital currency like Bitcoin become a global reserve currency? The idea came up in my recent conversation with Max Keiser on the Keiser...

Detroit was to be a workers' paradise, a symbol of progressive success. Instead, it has become a symbol of big government failure, corruption, violence, and decay. In 2013, after a great withdrawal of more than a million productive residents, once-great Detroit became the largest American city ever to declare bankruptcy. "The Great Withdrawal" explores why Detroit failed, why other liberal cities may soon follow, and how this could drag America into insolvency and prolonged depression. It explores the bizarre Nanny Statist Progressive movement that took power in America in 1913 and has driven America on a 100-Year detour away from...

Former Assistant Housing Secretary Catherine Austin Fitts says all U.S. citizens are partly responsible for banker fraud. Fitts, also a top Wall Street Banker, says, “What popular opinion has said again and again and again is it wants the dirty money. . . . It wants the U.S. to play this geopolitical top dog game to the extent it provides subsidy to them. We can’t have our cake and eat it too. . . . If we have a model that is dependent on crime and fraud . . . we have to change the model.” Fitts calls what we...

AN ECONOMIC CHART THAT COULD SPELL TROUBLE Oct. 21, 2013 by Becket Adams Fund flows are interesting in thatthey help market analysts gauge investor sentiment in specific assets or the markets as a whole. “For instance,if net fund flows for bonds funds during a given month is negative by a large amount,this would signal broad-based pessimism over the fixed-income markets,” Investopedia notes, offering a helpful explanation for the concept. That being said, something interesting happened earlier this year with foreign interest in USD-denominated assets. Simply put, foreign interest collapsed. Here’s a chart to help you visualize the drop: “It...

The US dollar hit 8-1/2-month low on worries about U.S. economy, the headline blares. usdeur101913 True, but the USDEUR rate took its biggest beating during the 2002-2008 period. But since the latter half of 2008, the dollar has been floating around in a relatively narrow band (although it seems larger on a day-to-day basis). bfmB3 And if we look at a longer term pictures of the US dollar spot rate (DXY), we see the Reagan economic recovery and asset bubble and then the Clinton/Bush economic recovery and asset bubble. dxy1960s But the asset bubble that followed the Clinton economic growth...

(Reuters) - The dollar fell to eight-and-a-half-month lows against the euro and a currency basket on Friday on expectations the Federal Reserve will delay scaling back its monetary stimulus following this month's political battles over the U.S. budget.Volume was thin as investors braced for a deluge of U.S. economic data next week now that the U.S. government was open following a two-week shutdown. The September nonfarm payrolls report is due on Tuesday.The first wave of U.S. data released on Thursday after the government returned to work was fairly upbeat. September U.S. payrolls are due next week, with the market forecasting...