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Bernanke’s ‘Counterfeiting’ is Attracting Copycats!

April 5, 2013

Mr. Kuroda, the new Governor of the Bank of Japan is now planning to DOUBLE their monetary base (via new counterfeiting of the YEN) to achieve a 2% inflation rate for their economy by 2015. What Ben Bernanke has created…via his QE policies these past 5 years… are a bunch of Copycat policymakers (other Central Bankers) who now desire to monetize and/or create money units via OFFICIAL COUNTERFEITING. Give this missive some serious thought! So where is all this leading going forward? Why is ‘official’ counterfeiting of money units so easy and prevalent in today’s world? Does anyone understand the ‘Nature’ of money today? Just what has evolved these past 42 years since the ‘closing’ of the Gold Window (1971)? Who discerns the real issues??? Let’s review some history and current events for understanding!

Historically, money was a ‘thing’ outside the human mind. Gold coins and/or silver coins were the historical units for creating ‘prices’ of other goods. These coins were desired by the public as the public perceived that these coins contained ‘intrinsic’ value. This mindset allowed these coins to serve as a proxy for ‘valuing’ all other goods within an economy (marketplace). I could exchange a silver coin for a quantity of bread, milk, eggs, meat, human labor, etc. This process created what we experienced as Capitalism in the marketplace. Real (physical) coins with ‘intrinsic’ value served as our Medium of Exchange, Standard of Value, and Store of Value. This mindset was the foundation of Capitalism and led to the expansion of our economic pie (productive growth and prosperity). So what has happened to change this mindset? What has happened to our MONEY?

Gradually (after the closing of the Gold Window in 1971) a New Monetary Regime emerged. This new regime started in 1973 with a world of fiat paper currencies (with no official convertibility into a gold…a physical commodity perceived to have ‘intrinsic’ value). This new regime was called the Floating Currency Regime. The Dollar became a weighted average (a mathematical index number) of other fiat currencies and ALL global currencies became ‘floating’ numbers which exchanged via a relative ‘floating’ mathematical logic. Gradually, this regime emerged into today’s digital fiat currencies (now merely numbers within the computer screen). This new electronic currency regime (which is now ubiquitous globally) has evolved into an inter-connected global network of computers which are used for currency exchange, distribution, clearing and settlement, and the creating of new money units for the System. Central Bankers have become the Centralized Source for all this new money creation and official counterfeiting.

Mr. Bernanke and his creative Mind has set the stage for a bunch of new Copycats (other Central Bankers) who now desire to follow his lead into a new world of money creation (via official counterfeiting of their currency units). The Dollar, Yen, Pound, and Euro are the key currencies on our planet. All these currencies are now created and distributed digitally via our new computer technology. What Bernanke does is THINK up currency numbers in his Mind (as our Dollar is now a mental abstraction) and then adopt a quantity (say $85 billion per month) to serve as his concept of ‘quantitative easing’ (QE). Mr. Kuroda of Japan now desires to follow this mindset and create some $600 billion (of Yen) annually for his marketplace. He thinks that this action will increase consumer/investor confidence and grow his economy. Is this a reality or is this type of behavior creating a serious moral hazard ? Let’s explore some additional consequences which could emerge from this type of official behavior!

First of all, all global currencies are now really ‘mental abstractions’ (concepts of one’s MIND) which then become digital units after being officially inputted into a computer account (for the United States the official computer account is called the SOMA). The U.S. Federal Reserve Bank (under the control of Bernanke and Company) has a computer account at the New York Federal Reserve Bank which is named:  The System Open Market Account. This account and similar accounts in all Central Banks is increased with new digital units by a decision of a policymaker (Bernanke, Kuroda, Draghi, King, et al) and these new units then can be used as official ‘legal’ tender (it’s called ‘legal tender’ by these policymakers) for purchases of mostly any asset in the marketplace (but usually government bonds or agency assets at this time). So let’s review this process and ask some questions!

Today, Central Banks, under the CONTROL of mostly unelected bureaucrats (as most Central Banks are legally established as independent private entities) can now create money units OUT OF NOTHING (their mental thinking) and then increase their computer accounts with new money units (by a decision). What does this imply? To me, this implies that all these Central Banks can now officially counterfeit their own sovereign currencies via their thinking (MIND). Since the Dollar, Yen, Pound, Euro, etc.  is no longer a ‘thing’ (gold or silver is a ‘thing’), these unelected bureaucrats can create unlimited money units by a decision (of their MIND) and then increase their computer banking accounts via merely pressing keys on their official COMPUTER at their BANK headquarters! Does anyone discern this SHELL GAME? Can you discern the effects this PONZI SCHEME has on the markets once traders, investors, lenders, and the public CATCH on to this ‘MORAL HAZARD’? Who discerns this PONZI SCHEME?

How can this SHELL GAME continue once the marketplace becomes AWARE of these actions? Anyone in their right MIND would want to revert to historical money units (real things) like silver and gold. Anyone in their right MIND would want to squash this official counterfeiting (a dreadful moral hazard) of money units by STORING their savings in physical gold/silver bars, coins, or similar items that could be bartered and exchanged when this HOUSE OF CARDS collapses (as it will and must)! History shows clearly that a ‘no thing unit’ ( ‘mental abstractions’) as money units can not serve as MONEY for any long-term period. If money units can be created from one’s THINKING then why not let everyone (all consumers of goods) create their own money units for whatever items they desire to purchase (with no restrictions)? What meaning does MONEY have if units are created from the MIND of unelected bureaucrats arbitrarily and ubiquitously. Where is the STORE of VALUE for my savings?  Why make ANY long-term LOANS with money units that are mere fictional units of one’s imagination? Can these type of units last for a 30 year loan period? I don’t think so!

Let’s summarize what has happened to our MONEY and why this HOUSE OF CARDS can not last much longer:

1. Money today is a ‘no thing’ unit (nothing but symbols, names, and numbers) within one’s MIND. Look all around you and try discover a money unit called:  the dollar! Where is it? You will need to look inside yourself for the answer!

2. Central Bankers (like Mr. Bernanke, Kuroda, Draghi, King, etc.) can now create these numbers, names, symbols via the COMPUTER (by an arbitrary decision). Arbitrary decisions do not lead to monetary stability or long-term CONFIDENCE!

3. Money units now emerge from the Mental Thinking of unelected bureaucrats who have no incentive for establishing long-term stability within the marketplace. All is done for the immediate effect of keeping the System from COLLAPSE!

4. The incentive to hold or store money units for the longer term is destroyed via all this OFFICIAL MONEY COUNTERFEITING.

5. Our monetary policies are now mostly administered by those who have NOT been vetted by the public citizens! Central Banks are established as PRIVATE legal entities to avoid the voices of the voting public! Is this what our Constitution requires? How did all this evolve?

6.  What is now developing is a global monetary collapse (much more serious than 2008) and few seem to care or understand. Why?

7.  Bernanke and his thinking (QE infinity) has started a new global currency crisis of monumental proportions as new COPYCAT bureaucrats desire to SAVE their own currencies value. Mr. Kuroda of Japan is likely just the beginning of a global currency counterfeiting process. Watch Brazil, China, Europe, Russia, and all the other Central Banks going forward!

Give this missive and the message some thought at your leisure. I realize that most citizens of all our Nations have little understanding of monetary history and the current machinations of our un-elected bureaucrats (Central Banks). Check out some of these websites for more understanding:  www.financialsense.com, http://www.321gold.com, http://www.howestreet.com, and http://www.dollarcollapse.com. Enjoy! I am:  kingdomecon.wordpress.com.

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