Posts Tagged ‘fiat currency’

Our Subhuman Elite

Monday, July 31st, 2017

Dear Friends,

It seems to me, even a cursory glance at the news, highlights the terrible situation we are in and that it is getting worse by the day. Not just Americans or Europeans, not the riots and runaway hyperinflation of Venezuela, nor the threat of nuclear war with North Korea, or even the genocide of Christians… but all of us, every man woman and child on the planet, we are in deep trouble. So… why is it that our leaders, who are undeniably the reason the world is in the horrible shape it is in, distract, lie, steal from us, connive against us, vilify each other and make the situation worse, rather than try to improve it? The tired old adage they have differing views on how to solve the problems they created is too shopworn to take seriously. The elite act like children. If you or I did a tenth of what the elite do, and get away with, we would be fired, prosecuted and jailed. Make no mistake, those who run the world are basically, subhuman. A subspecies that lacks the morality of the herd, don’t have the intellect of a jack rabbit nor the backbone of a snake, they destroy everything they touch, and like a child who’s fingers are covered with sugary goo, they touch everything.

You really couldn’t make this stuff up. Had a writer written a century ago… that in 2017 in the US, babies would be slaughtered faster than the Nazis did Jews in the extermination camps, then sell their parts, the people who exposed them are tried and may go to jail, the government would establish atheism as the state religion, monuments to Jesus would be replaced by monuments to Satan, pedophilia would have an advocacy group, the government would sell guns to Mexican drug cartels then blame gun shops in an attempt to undermine the second amendment, the attorney general would lie to Congress without consequence, we would be taking in tens of thousands of people who openly despise us and our constitution, illegal immigrants would be above the law even allowed to rape and murder with only a temporary ostracism as punishment, our politicians would be above the law and care not who knows it, our money would be fiat, we would have to get used to terrorism to prove how inclusive we are, our children would graduate high school unable to read, write or make change for a dollar but know everything there is to know about how to have gay sex, even as we are facing dozens of potentially existential threats the government spends billions to prove a hoax, etc… the story would have been called too absurd to print!

To the elite, what is theirs is theirs, and what is our is theirs too. They have set up dozens of scams to steal from working people. From the monthly fines of the politically connected big banks to the tune of billions of dollars, where no one goes to jail but the shareholders are fleeced, by the executives as well as the government, where our earnings are stealthily whisked away by inflation due to the printed fiat currency, where our jobs are undermined and sent overseas by regulations designed to prop up politically favored derelict firms to the detriment of growing entrepreneurial firms, while our children’s money is stolen by deficit spending before they even get to grade school, as the elite cast a greedy eye on our bank accounts and 401Ks to “balance the budget,” and our real property is subject to forceful seizure for whatever reason the elite want it for. The elite, around the world, are criminals who in a sane world would be cooling their heels in prison, continue to destroy all that is good and prop up all that is bad.

The deep state war on Trump is only a symptom of the underlying problem not the cause. Trump derangement syndrome is a very real thing and can be seen in real time by watching any major news outlet. It is obvious they have gone completely insane. Those who have created this dire situation, are intent on pointing the finger at someone else, anyone else. The elite have shown themselves to be untermensch in the worst sense of the word. They are the underlying problem. The elite today are the epitome of every bad trait humanity has ever created. The problems we face today are mere symptoms of the evil of our leaders. It is past time for us to recognize our leaders only have their own narrow interests in mind as they rule. If we don’t act now, and demand the elite follow the law and especially our Constitutions, all will be lost. To borrow a phrase… You don’t have to be a weatherman to know which way the wind is blowing, especially when it is a typhoon wind.


John Pepin

Economic Cancer

Thursday, January 22nd, 2015

Dear Friends,

It seems to me, the economy has cancer, sectors that are supposed to facilitate business creation and operation are now the ones supported and the real economic actors, (firms that build things and provide services) are now facilitators. I am of course talking about the legal profession and the financial sector. Turning the economic incentives against the creation of businesses and capital expansion of their production. This has had the effect of decoupling wages from productivity, drying up capital available to expand production and start new firms, adding extraordinary costs to doing business and lowering profits for firms the create things. An economy reacts organically to inputs from the actions of it’s various sectors, as such, when incentives become perverted firms need to use more and more creative measures to stay competitive, and are forced to do creative accounting to appear more profitable than they really are. All these negative incentives in an economy result in lower economic outcomes for everyone… except those in the financial and legal services sectors.

The financial services sector of the economy is there to be a conduit from people’s savings to firms looking for capital to start or expand their businesses. The way economists traditionally see banks is that they take in the savings of individuals and firms, paying reasonable interest, amass that capital and make it available to businesses to start new ventures, or expand profitable ones. In this scenario both savers and firms win, a win win. However, today the financial services sector has become the be all end all of the elite. Politicians kowtow to the too big to fail banks, giving them special privileges denied to other sectors of the economy, they have out sized power over the policies of government, there is even a shadow pseudo government agency that explicitly protects them… the Federal Reserve. Instead of being a facilitator of business the financial services sector has become the focus of our economic policy. Wall street versus Main street if you will.

The legal services sector is there to allow self interested people to come to agreements that benefit both parties. It is imperative that when people do business they trust each other. That is impossible without verifiable contracts and standards holding all participants to their word. These important factors in facilitating business cannot be overstated. Sadly, the legal system has bent over backwards to undermine this very noble calling and pervert it to serving lawyers, at the expense of everyone else. Today, contracts are only as good as the lawyers who break them on some absurd technicality, the primary role of attorneys is to bankrupt businesses for huge profits, drive up the cost of doing business by a continual threat of frivolous lawsuits, and keep new possibly disruptive products from the marketplace to protect older less efficient ones who have political favor.

The liver is supposed to filter toxins from the blood. As long as it does it’s work the body is healthy, but when the liver becomes distended and cancerous, it ceases to filter toxins. Instead it adds to the toxin load in the body. In that case the liver has ceased being a facilitator of bodily health and instead has become a drag on the body’s ability to function. The financial services and legal service sectors have become like a cancerous liver and kidney. They don’t perform their function in our economy, like a cancerous liver and kidney cease to filter blood, they only serve themselves. In both cases, a cancerous liver/kidney and perverted financial/legal sector, the body eventually dies… and so does the economy. Until the cancer is removed, allowing them to return to their correct function, the body becomes more and more diseased, and the same is true with the economy.

The proof is in the out sized compensation of those in the legal and financial sectors. The wages of the lawyer far exceeds that of the entrepreneur. The bonuses of the “banksters” is exponentially more than the those who create wealth. From this small example we can see that the lion’s share of profits today, flows to those who are supposed to facilitate business, from those who actually do business. The huge percentage of the total economy of these two sectors, that are supposed to be facilitators, is proof they have outgrown their place and, like cancer, have become a threat to the very existence of our economy. Since everyone wants the most profit possible for their actions, it is clear that the extraordinary wages in the financial sector and legal profession, come at cost to the rest of the economy, imply that those sectors have more than their fair share of power, political and economic, because if they didn’t those profits would be instead kept by those who create things and provide other services.

The result is that our economy, the world over, has become dysfunctional. The financial services sector now only serves itself, at cost to the rest of the economy, it doesn’t fund small business start ups or CAPEX, because taking printed fiat money and investing that money in government bonds is more profitable, moreover, it earns the favor of the political elite. This drives up the cost, and pushes down the return, on those bonds. Lawyers get rich by finding ways to break contracts, drive up legal expenses, suing firms and individuals and otherwise undermining the economy. These two sectors have become cancer in the most alarming sense. Most people understand this, at least subconsciously, and hope it will solve itself, but cancer never spontaneously heals, it only grows. If we don’t cut the cancer out with legal and financial reforms, and prevent it’s recurrence… the cancer will eventually kill our economy.


John Pepin

Water No Longer Wets Us…

Wednesday, September 10th, 2014

Dear Friends,

It seems to me, our leaders want us to believe, that water no longer wets us and fire no longer burns. Taken from a line from the Rudyard Kipling poem, Gods of the Copybook Headings, it describes the absurdity we are expected, to not only believe but invest our lives, fortunes and the well being of our children in. From the War on Terror to monetizing debt what used to bad we are told is good and what was good is now bad. Our leaders have managed to break the most effective wealth creation machine ever invented in part by convincing us want is good and wealth is bad. They manage information via the unbiased news, insuring we never get the whole truth, only part truths, out of context and mixed with many lies. The path they have put us on can only lead to disaster.

The war on terror is a good example of this. Our leaders have placed members of the Muslim brotherhood in key positions of national defense. This despite the fact Al Queda, ISIS, Hamas, and many other terrorist organizations are a spin off of the Muslim Brotherhood. Even the founding documents of the Muslim brotherhood says they seek a Caliphate. No sane person would put someone who has sworn to be an enemy in a position to decide our strategy against them, but someone who is convinced water will no longer wet us and fire will no longer burn, would do it and call it a good turn.

Monetizing debt, we are told, is the only way to escape the economic doldrums the elite have put us in. History is adamant that such policies always lead to economic collapse by run away inflation. History is filled with examples where printing money to gin demand has led to disaster, Wiemar Germany, Argentina, Czechoslovakia, Colonial America, the list goes on and on. There is not one example where printing fiat money did not destroy a nation’s currency. Today however, we are to believe that water will no longer wet us and fire will no longer burn, and inflation can never return.

Our leaders tell us insistently they would never become tyrants and that Our Constitution is an outdated document. Ruth Bader Ginsburg, a Supreme Court Justice, entrusted with protecting our Constitution, said as much in a speech a few years ago in Egypt. She said if she were writing a Constitution today, she would not use the outdated American example, but the South African communist one instead. We are to believe that today’s leaders would never become despots because they care too much to do that. History on the other hand, is filled with examples of nations giving up their freedom to those who claimed to be human hearted, the story of Dion in Plutarch’s lives is a perfect example. Modern wisdom is, human nature has changed, or in other words, water no longer wets us and fire no longer burns, the goodness of our leaders is a trait that can be learned.

Even socialism is sold to us as a wonderful fix for all the problems that plague humanity. History is adamant that every time socialism has been tried, it has resulted in famine, slaughter and tyranny. Yet our progressive leaders, especially in academia, claim real communism has never been tried! Millions buried in rice paddies in Cambodia might disagree. But this time it will be different we are assured. Socialism will make every one equal, eliminate disease, conquer death, put an end to war and cause benevolent space aliens to land and help us… because they will be so impressed at our advanced social evolution. Water will no longer wet us and fire will no longer burn, the future is great and enlightened, and people will never more yearn.

Once a people have become transfixed with “magic,” it is hard to get them to look behind the curtain, especially if we are told by the unbiased media things are going great, if not in our own lives at least in everyone else’s. It takes strength of will and requires we use our brains to deny the dangerous fiction we are being sold. Those that do will always be vilified by those seeking to trick us into damaging our self interests, and the interests of humanity as a whole, in favor of their narrow selfish interests. If we fall for the delusion we have no one else to blame. Because we know in our hearts, water will always wet us and fire always burns, to ignore reality ensures, the Gods of the copybook headings, with terror and slaughter return.


John Pepin

The Deflation Bugbear

Sunday, November 10th, 2013

Dear Friends,


It seems to me, when economists worry about deflation it is like a doctor worrying about a runny nose, they both are concentrating on a symptom, not the underlying disease. The consensus among economists is that deflation is so bad a little inflation is needed to insure no deflation occurs. The possibility of deflation is why most economists agree we cannot go back to the gold standard, and why all the proven dangers of fiat money must be tolerated, else we would get the dreaded deflation. But, as we all know putting leaches on a patient because he has high blood pressure is not a viable solution, persistent inflation is as bad and probably worse than a little deflation. The safety of your IRA account and job security depend on this question.


The economy of a country is like the body of a person. The corpus economic is a complex system that reacts to stimulus as is the human body. If we give a person lead oxide, (as they did in the Roman times) it may have a temporary palliative effect but the long term effects will be profoundly negative. The state of modern economics is about where the Romans were in medicine. Our very limited knowledge gives our economists the hubris to prescribe lead oxide when penicillin is what the patient needs.


The argument against deflation is this; if a person knows his money will be more valuable in the future, a rational maximizer will not spend money and instead save it. Using the aggregate supply aggregate demand model as described by John Maynard Keynes, this incentive to save instead of spend, lowers aggregate demand below aggregate supply and this results in economic recession. This logic depends on the aggregate supply, aggregate demand model being an effective analog of how an economy works, it also presumes the incentives will outweigh the needs of individuals.


So, what he is saying is that we wont spend our money, if we know it will be more valuable later. Let’s look into this presumption. If I have a dollar in my pocket, and I know that next year it will be worth one dollar and one cent, is that sufficient incentive against my rumbling stomach? Further, if my washing machine breaks down today, is it logical that for the gain of a penny or two in a year, I will put off buying a new one, and instead wash my clothes in a creek with a washboard? Moreover, if we take the opportunity cost into consideration, in other words the good I could have today weighed against the good I could have tomorrow, it only makes sense to buy the things I need today.


Deflation does provide a greater incentive to save just as inflation does a disincentive to save. If we consider the effects of a greater savings rate in a country, say, the US, we can see a lot of good that can come of it. The balance of trade is effected by the savings rate in a country. Balance of trade is both in goods and money. If the demand for money, capital, exceeds the savings rate money will flow into that country. This importation of money is counted in the balance of trade. If the savings rate exceeds the demand for capital then money will flow out, again effecting the balance of trade, but for the good.


Another effect of a greater savings rate is that more capital would be available for entrepreneurs to invest in ideas, small businessmen to invest in equipment or start businesses and more money available to build homes, cars and washing machines. A greater availability of capital means lower capital costs. But this doesn’t come at cost to savers because the money they have put away is growing both by compounded interest and deflation. There is no need for government to use lead oxide to gin up the savings rate against the disincentives inflation creates.


Economists will scoff at he idea pointing to the Great Depression as historic proof that deflation is a bad thing. In doing so they will confuse the fact that deflation was a symptom not the cause. The cause was government’s tampering in the economy. Price controls, regulations about what farmers could plant, how much any given product could be made, what could be made and making it nearly impossible to start a business. The result was the lowering of the demand for labor, this caused high unemployment and lower wages, lowering demand below aggregate supply. The government poisoned the patient and economists blamed the symptoms not the cause.


Some of the times where growth was highest was in times of deflation. During the 1800’s there were times where the Dollar was deflating… but the economy was growing. This further undermines the historical argument that the consensus of economists use. Economists use this spurious argument against deflation while ignoring the pernicious effects of inflation, negative incentive to save, negative balance of trade that the low saving rate creates, perpetual lowering of wages through the devaluing of the wages that are paid, allowing government to run up huge deficits, all the negative effects of fiat currency… among many others.


Inflation is simply a modern form of seigniorage. Seigniorage is where kings would collect all the money, shave a bit from them all and reissue the coins a little smaller. Inflation allows Governments to rack up huge deficits and have confidence that those deficits will evaporate due to inflation. History shows us that where deficits were too big and money printing got out of control the effect has always been runaway inflation, or in other words, hyper inflation. This is far more destructive of the wealth of a nation than anything proposed by economists about deflation.


So, when you hear that government must do this or that, to defend against deflation, (like monetizing the debt), you will know they are engaging in group think. Today economists are giving the corpus economic lead oxide and leaches when what the economy really needs is the penicillin of deregulation and the nutrition of lower taxes. This doesn’t serve the interests of the elite however, who want more control, not less. So we will continue to be bled, suffer heavy metal poisoning and all the while our leaders will claim it has to be done. To the destruction of the wealth of our nations… and by extension, us.





John Pepin