As the health of much of the global economy weakens on a daily basis, political leadership increasingly ignores the source of the malady and instead focuses on short term band-aid remedies. These measures which may buy a few months, or years, of relative well being, will convince the public that problems have been solved and will thereby take pressure off governments to make the needed structural changes. The $1 trillion Fourth Reich(EU) bailout is a perfect example of this band-aid approach. Napoleon Sarko threatened to pull out of eurozone, unless Merkel agreed to back the Fourth Reich's bailout plan!
The euro has been rescued for the moment, but Eurokleptocrats have thrown the foundations of Fourth Reich's common currency overboard with their unprecedented bailout package. In the longer term, the dangers of the crisis can only increase, and the flood of billions of euros will lead to inflation. Eurokleptocrats have thrown overboard all the noble principles and promises of the formal, tough treaty-based foundations for the introduction of the euro and the independence of the European Central Bank.
Eurokleptocrats sacrificed the independence of the European Central Bank and paved the way for a European Inflation Union. There won't be any state bankruptcies in the eurozone in the future. ECB will just purchase government bonds ofthe country in trouble. The money can't run out as ECB prints it itself. A flood of money like that can't continue without any consequences. The currency's stability will be undermined and inflation will destroy Fourth Reich.
In the future, ECB plans to purchase government bonds in emergencies. Not only has this been prohibited until now, it also contradicts the central bank's overarching goal: keeping the value of money stable. Once this taboo has been broken, the very foundations of the euro will erode. sacrificed the independence of the European Central Bank (ECB), and paved the way for a European Inflation Union.
ECB now purchases government bonds in emergencies. Not only has this been prohibited until now, it also contradicts the central bank's overarching goal, keeping the value of money stable. Now this taboo is broken, and the very foundations of eurozone are eroded. ECB's independence' has now been shown to be nothing more than a sham, a chimera, a will-o'-the-wisp. In the end, ECB and euro will be punished for this decision to stand down from what had previously been considered sacred. The sacrifice of the ECB independence paved the way for a European Inflation Union.
Most crises are similar. There is a stage of boom and bubble before the bust and the crash. People will see the value of certain assets like homes or equity go up, then they will use these assets as a collateral for borrowing too much and therefore you have a build-up of leverage in the financial system. And then, once the bubble goes bust, the value of the assets falls and people are stuck with all this debt they can't repay.
European Central Bank President Jean- Claude Trichet calls for more effective sanctions against countries violating eurozone's Stability and Growth Pact. Trichet calls for a quantum leap of mutual control among eurozone governments. ECB sould not be listening to recommendations from Eurokleptocrats.
Kleptocrats are creating zombie banks and companies that are kept alive artificially. We started with a too-big-to-fail problem, and part of the policy response to the crisis has been even more financial consolidation. JP Morgan took over Bear Stearns and Bank of America took over Merrill Lynch. What we have now is financial institutions that are even bigger. Those institutions, even more then before, know if they do something very risky, something reckless, they will be bailed out again.
The Federal Reserve refuses to give a public accounting of the trillions in recent taxpayer-backed loans. Congress has the responsibility to force a public audit of the Federal Reserve, and the American people deserve to know how their tax dollars are being spent. Allowing the Fed to remain out of control and shrouded in secrecy clearly allows for abuse and the continued stealing of our tax dollars through inflation and unaccounted electronic bank loans.
The Federal Reserve's abuses lead to constant economic crises like the current housing crisis, international banking crisis and the resulting chaos. The Federal Reserve System forces fuel, food, housing, medical care and education costs upward, meaning that everyone who is not on the government dole is forced to make do with less as the value of money slowly decreases. History shows us that riots, violence and full-scale police states can result when people finally realize fiat money isn't worth the paper it's printed on and refuse to accept it.
There is no suggestion that interest rate swaps, the largest category of OTC financial derivatives, or foreign exchange swaps played any role in the financial meltdown. Yet the kleptocrats' proposals extend regulatory rules for futures to these bank-based products. Wantonly extending futures regulation to swaps applies the wrong tool in the wrong application. The result would be ineffective regulation damaging everything involved.
Individuals and banks should be free to choose what money they use. This is an especially controversial, but absolutely essential, component of a truly free society. The government may not force us to use infinitely-inflatable, green pieces of paper. Historically, when left free from government-dictated currency, the overwhelming choice of individuals has been gold money — which has objective value, a stable quantity, and other qualities that make it an excellent form of money. Interest rates on a gold standard are set by supply and demand in the marketplace; there should be no governmental manipulation of interest rates, and thus no ability of the Federal Reserve to create massive bubbles such as the dot-com and housing bubbles.
Basil Venitis points out that since its inception in 1913, the Federal Reserve has helped to devalue the dollar by 96%. During the recent economic crisis, it has poured trillions of dollars into the economy with no oversight, made secret agreements with foreign banks and governments, and has refused to tell Congress who is getting the money or to give it the details of what deals are being made. We demand full transparency from the central banks.
Play misty to me! Central banks play a confidence game with us. A confidence game is defined as an attempt to defraud a person or group by gaining their confidence. The victim is known as the mark, the trickster is called a confidence man, and any accomplices are known as shills. Confidence men exploit human characteristics such as greed, vanity, honesty, compassion, credulity, and naivete. The common factor is that the mark relies on the good faith of the confidence man.
Central bank's mission to instill confidence in us about the economy while simultaneously instilling confidence in us about the abilities of the central bank itself. Central bankers are almost always publically bullish and hardly ever publically bearish about the economy. The economy always looks good, if not great. If there are some problems, don't worry, the Fed will come to the rescue with truckloads of money, lower interest rates, and easy credit. If things were to get worse, which they won't, the Fed would be able to respond with monetary weapons of mass stimulation.
Central bankers are the people who said that there was no housing bubble, that there was no danger of financial crisis, and then that a financial crisis would not impact the real economy. These are the same people who said they needed a multitrillion dollar bailout of the financial industry, or we would get severe trouble in the economy. They got their bailout, and we got the severe trouble anyways. It is time to bring this game, this confidence game, to an end.
Venitis notes that central bank's artificial creation of credit is the culprit in the business cycle. As the boom turns into bust, the economy tries to readjust itself into a configuration that conforms to consumer preferences. That is why it is so essential for government to stay entirely out of the adjustment process, because arbitrary government behavior can only delay this necessary and healthy process.
Wages and prices need to be free to fluctuate, so labor and other resources can be swiftly shifted away from bloated, bubble sectors of the economy and into sustainable sectors of the economy where consumers want them. Bailouts obstruct that process by preventing the reallocation of capital into the hands of firms that genuinely cater to consumer demand, and by propping up instead those firms that have deployed resources in ways that do not conform to consumer preferences. Fiscal and monetary stimulus do nothing to address the imbalances in the economy, and indeed only perpetuate them.
There has been much discussion of moral hazard in connection with the flurry of bailouts that began in 2008. Moral hazard refers to people's readiness to act with an artificially elevated level of risk tolerance because they believe that any losses they may incur will be borne by other people. Hence the bailouts will tend to make major market actors even less likely to behave prudently in the future, since if they believe they are likely to be considered too big to fail, they have more reason than ever to believe that they will not be allowed to go out of business, and therefore that they may continue to make risky bets.
Venitis asserts the very existence of a central bank such as the Federal Reserve and ECB aggravates, indeed institutionalizes, moral hazard. Since there is no physical limitation on the creation of paper money, firms know that no natural constraint exists on the power of the central bank to bail them out of any serious trouble. The Central Put is the implied promise that the central bank would intervene to assist the financial sector in the event of a serious downturn. No one has a right to be surprised when market actors behave accordingly.
Everybody's money income is somebody else's cost. In the case of the stupidus stimulus, the administration paid for it through taxation, borrowing, and printing new money. With all three methods the net result was that someone was made better off but only at the expense of someone else. When the government forced up the minimum wage, there was no added amount of production to offset the increase in business costs. Instead, we have seen a record level of teenage unemployment.
Corpfare is corporate welfare, such as subsidies, bailouts, and monopolies, granted by government to davajides, pimps of kleptocrats. Corpfare destroys the level playing field that free markets depend on, creates a corrupt relationship between government authority and special interests, transforms corps to corpses, and is unconstitutional. Even loans by government-sponsored entities constitute another form of subsidy. Zombiecorps, zombie corporations, badly in need of structural reform, but kept alive by state subsidies, badly hamper growth. Basil Venitis figures that at least four trillion euros are wasted on corpfare worldwide every year.
Whenever government tries to force up wages, real purchasing power falls. That is because the negative effects, which are unavoidable when such policies are implemented, will always outweigh the positive effects. While money wages might increase for some people, government has forced up business costs, so less is produced. Consumption ultimately is made possible by more production.
We need venitism now! If not now, when?
Venitism is a new libertarian paradigm, introduced by Basil Venitis, which integrates politics, economics, ethics, and spirituality. Venitists follow the Venitis Laws:
Venitis Law of Black Hole: Taxation is armed robbery that feeds the black hole of political corruption; it's the perfect index of corruption and tyranny. Only evil governments tax citizens and companies.
Venitis Law of Constitution: The only purpose of a constitution is to protect citizens from government abuse. Reform treaties of a confederation not voted by the citizens are null and void.
Venitis Law of Democracy: Every democracy is eventually hijacked by rabblerousers, pullpeddlers, clans of kleptocrats, bumptious bugaboos, busybodies, butterbabies, nabobs of nepotism, cranks of cronyism, pusillanimous pussyfooters, riffraffs of rascals, socialist sophists, and machiavellian mafiosi. Democracy tends to kleptocracy. Venitism should replace democracy.
Venitis Law of Depression: Only governments can cause economic depressions and funny money. Lower tax rates, a reduction in the burden of government, and elimination of kleptocracy and VAT are the only way to boost growth.
Venitis Law of Education: There is no direct relationship between education and schooling. You might be schooled but uneducated, and you might be educated but unschooled. Schools are concentration camps for the drones of society. Unschooling is much better than schooling. Internet is the best source of knowledge and information, replacing schools, libraries, media, parliaments, and postoffice.
Venitis Law of Environment: The best way to save the environment is vasectomy. Deadly viruses are Gaia's antibiotics against the cancer of overpopulation.
Venitis Law of Equality: Death is the only equalizer. Egalitarianism brings death to society, transforming citizens to zombies.
Venitis Law of Evolution: The ultimate phase of human evolution is the complete domination of soul.
Venitis Law of Faith: Faith is retarded thinking that keeps you away from God. You have to become faithless, in order to start your journey to God! You have to discover God your own way without intermediaries. God's truth should replace faith.
Venitis Law of Government: The only purpose of government is to protect citizens from criminals. Public services, central banks, and fiat money should be abolished.
Venitis Law of Heroism: Entrepreneurs, innovators, and heretics are the real heroes.
Venitis Law of Insurance: Citizens with proper individual retirement accounts and health savings accounts should be allowed to opt out of State Insurance.
Venitis Law of Intervention: Any government intervention deteriorates an existing trend. Laissez-faire is the only progressive policy.
Venitis Law of Legislature: Parliaments should be abolished, because they continuously create laws that enslave citizens, constraint economic activity, loot producers, reward drones, and encourage political corruption.
Venitis Law of Misery: Throwing money to misery brings more misery. Fighting wild leverage with more leverage is homeopathic repression of reality. A deluge of fiat money brings financial plague and haemorrhage of economy. Real money is tied up to precious metals and strategic metals.
Venitis Law of Patriotism: Patriotism is addiction to local hysteria.
Venitis Law of Property: Governments should not own or regulate any property, including waves. The first individual who improves or cultivates any unclaimed property is entitled to that property. Governments cannot own, allocate, regulate, or manipulate frequency fields and media. Eminent domain is null and void.
Venitis Law of Religion: Religion is spiritual slavery. Church is the business of religion. Religious monopoly turns bishops to ayatollahs, and churches to Sodom and Gomor. Spirituality and metaphysics should replace religion.
Venitis Law of Rule: Anarchy is the rule of gangs, infinitesimal government is the rule of law, and big government is the rule of the cancer of socialism.
Venitis Law of Selfownership: You own your body and your soul, and nobody should dictate what you take in and what you take out. Speech, education, heresy, habeas corpus, military service, mating, healthcare, abortion, cloning, drugs, guns, and euthanasia should be personal choices.
Venitis Law of Style: Your soul needs to resonate with mighty words and unique acts that express your style and destiny. Your government cannot dictate your language, your words, and your culture. Resonate now and sing your song!
Venitis Law of System: The most efficient political system is venitism, where everything is private, there are no taxes at all, there is no parliament, and a powerless infinitesimal government is chosen and supported not by hoi polloi, but by the most generous benefactors.
Venitis Square Law: Political corruption is proportional to the square of the size of the government.
Venitis Tax Law: For each percent of lower taxes, the economy grows by at least four percent more, and the government gets more revenue. Raising tax rates is masochism. Smart stimulus is to cut tax rates. Stupidus stimulus is to increase spending, which stimulates the cancer of socialism!
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