classical economics
for analysis,  forecasting
and policy design

Monetary Policy End Game

 Central Banks To Fight Fake “Deflation”

By Wayne Jett © September 11, 2019

     Central banks of the world aka “the Rothschild banks,” including the Federal Reserve, always have the same “end game” in mind: to take to zero the purchasing value of the fiat currency each bank produces, and to do so according to a time schedule that is most advantageous to their owners’ acquisition of wealth produced by others. This truth was known by many Americans when the Constitution was ratified in 1787, and when the Fed was created through political subterfuge in 1913.

Surprise! Fed “Notes” Headed to Zero!

     So why should anyone have been surprised when one of the chief investment officers of BlackRock – said to be the largest U. S. hedge fund investor – wrote on September 5 to divulge the Fed’s “monetary policy endgame” is to do precisely that?  Perhaps the stir rising from the BlackRock piece was not so much from surprise as from excitement that the timing is now at hand. The crash of the world’s largest ever fiat currency, the Federal Reserve Note, is said to be coming promptly into the here and now.

     What is remarkable, predictable and laughable simultaneously is that the monetary policy endgame to take the Fed Note to zero value, according to BlackRock, will be played in the name of “fighting deflation!” When Americans are presently experiencing price inflation for necessities closer to double digits than to zero, how is it possible for even a Wall Street operative to keep a straight face while asserting that the monetary challenge ahead is “fighting deflation?!!!”

     The answer to that question is “easily” only if you are completely fooled by Keynesian economics and you have the Establishment media to vouch for Keynes’ credibility at every turn. Here is the monetary scenario according to MSM: the Fed note (they still call it the dollar) is by far the strongest currency in the world in the current financial markets. So (they say) the Fed has no choice but to flood the world with Fed notes – far beyond any regard for actual growth in economic production – in order for Americans to avoid being priced out of the global markets for goods and services. In other words, when the dollar’s value rises (deflation) relative to fiat currencies of other nations, the cost of U. S. made goods and services in dollars makes the prices even higher in foreign currencies, so foreign buyers cannot afford to buy from us.

     BlackRock’s CIO puts the blame for all this on market forces rising and fading over the years, forgetting Milton Friedman’s maxim that inflation (and deflation) is always and everywhere purely a matter of monetary policy. As Fed chairman during 1979-1987, Paul Volcker made a mess of implementing Friedman’s theory by refusing to use the gold price as his primary signal for the amount of monetary base required by economic production. Clearly Chase Manhattan’s Volcker had marching orders aiming at objectives other than monetary stability at the time.

     What BlackRock and presumably the Fed fail to acknowledge is that deflation endangers U. S. businesses only when the purchasing power of Fed notes is above the value during the U. S. business cycle of production costs. The Fed could safely allow other nations to inflate their fiat currencies without joining a global race to zero fiat currency values. But that approach would not be consistent with the announced objective of former New York Fed CEO William C. Dudley to assure that President Donald Trump is not re-elected. 

Bank of England Governor Wants To Play

     The Federal Reserve is not the only player on the world stage with something to say about what is to become of the Fed “notes,” still referred to by most people as “the dollar.” Recently the out-going governor of the Bank of England (BoE, the UK’s version of the Fed) spoke at Jackson Hole of the financial instability which now exists in the world due to rejection of Fed notes as the international reserve currency. Briefly stated, the BoE governor described how the network of Rothschild central banks hopes to continue controlling financial affairs around the world now that they have destroyed the dollar and stripped the Fed note of almost all of its usefulness to them.

     The BoE-proposed plan has no provision for placing anything of value in the pockets of the persons who actually work and produce value. Instead, the central banks propose to substitute electronic crypto-data to replace the Fed’s paper notes – neither having any intrinsic value but the crypto-data being entirely traceable and instantly destructible. No, these ideas are not satisfactory solutions to placing real wealth in the hands of the person who earns it.

De-Bunking Fed Dogma

     No wisdom will be found in pursuing a “race to the bottom” of currency value as envisioned by BlackRock – a race the Fed has orchestrated and conducted most years since 1971 (with very notable periods of deflation led by the Fed during 1980-1983 and 1997-2002). Instead, President Trump should draw upon the best qualified talent of the executive branch to assist his determination of the most non-inflationary, non-deflationary value for the dollar measured in gold. Each other trading nation should do the same for its own currency so these currency values can be reflected in trade agreements among nations.

    This approach can provide the multi-polar system of currencies suggested by the out-going Bank of England governor as appropriate to the 21st Century trading environment. Not surprisingly, that multi-polar system for trading among nations and efficient settlement of payments will resemble in many respects the gold-backed trading system which produced sharply rising prosperity in centuries past.