COLLUSION: How Central Bankers Rigged the World

RT has this Keiser Report episode.

The ‘Mnuchin massacre’ and one-way bets on the dollar are among the topics for Max and Stacy in this episode. In the second half, Max interviews Nomi Prins, author of the soon-to-be-released book, ‘COLLUSION: How Central Bankers Rigged the World’. They also discuss the current market situation and how a new Fed chairman may approach a crash.

I may have a few long term philosophical differences with what is being said here, but in the short term, I agree with their outlook as to what may be most likely to happen. Mnuchin is actually right that it is better for us for the dollar to decline relative to the rest of the world’s currencies, for, as this report says, it was inevitable anyway. Yes, there will be pain in this country during the transition. At least some of the pain will be felt among the oligarchy that has wealth denominated in dollars (of course they can shift a lot of that wealth into other currencies or into gold.) In the short term, we don’t have the manufacturing capacity to replace everything we buy from other countries, but if managed well (and there is certainly no quarantee on that) our employment level in the manufacturing sector will rise to adjust.

As for the conversation with Naomi Prins, I have to also agree with her analysis of what is happening. Philosophically, I understand the fiat monetary system we have and how it can be managed well. In actuality, it is not being managed well, and it is not being used for the best purpose for all of society. I think that to some degree the Fed was forced to take the actions it did in a futile attempt to compensate for what the rest of our government refused to do. The Fed didn’t have all the right tools, so they had to use the tools that they had.

As I have been saying all along, the tremendous infusion of liquidity that the Fed has created has not caused inflation yet, except in the stock market. There was no place else for the oligarchs to put that liquidity. If and when the economy turns around so that investing this liquidity actually makes sense, then we could have a terrific inflation problem. To offset this possibility, the Fed and the rest of the government needs to have an emergency plan on how to reduce the Fed’s flooding of the economy with liquidity. The trouble is, that I don’t see the practical way to do this.

The real solution is to suck the liquidity out of the economy with much higher taxes on a stiffly graduated basis so that large incomes and great wealth bear most of the burden. Then the liquidity needs to be put back into the economy by the government by its purchase of goods that are truly useful to the economy (infrastructure, education, research, health care, etc.). It is just that in this political environment, it is impossible to get such a policy enacted.

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