Tag Archives: central bank

Central Banks Have Pushed The Middle Class Into Neo-feudal Serfdom

The injustice of central-bank enforced neo-feudalism cannot be suppressed like interest rates.

In traditional feudal systems, serfs were the landless peasantry who worked the land of their feudal lords in exchange for protection. In our present-day neo-feudal system, serfdom has a different definition: present-day serfs own little or no productive capital and have few opportunities to ever acquire any.

The Marxist term wage-slaves describes those who, lacking capital, have only their labor to sell. This describes the vast majority of people in both capitalist and socialist systems, but what makes the present system neo-feudal is the central banks: by extending essentially unlimited credit at near-zero interest rates to financiers and corporations, the central banks have given the top .01% the ability to outbid mere savers for income-producing assets (i.e. productive assets).

Just as the feudal-era serf had no choice but to enslave himself and his family to the manor-house lord, the modern-day serf must indenture himself to banks to “own” a car or home or “buy” a college education.

The X22 Report and I discuss this and related topics in the podcast Central Bankers Are Creating A World Where We Are All Serfs (38:10).

As I outlined in The Flaws in Basic Income for Everyone, all the guaranteed basic income schemes being proposed as solutions to automation are merely institutionalized serfdom as they sentence the unemployed to the marginalized political status (equivalent to powerless serfs) of state dependents while stripping them of purposeful work and the opportunity to acquire the means of production and productive capital.

Guaranteed basic income is thus the perfection of neo-feudal serfdom.

The central banks are the critical enforcers of this neo-feudal system. Without access to unlimited credit at near-zero rates, financiers and corporations would not be able to outbid savers for productive assets.

Here’s an example that illustrates how central banks have created a neofeudal system. In an economy not suffering from extremes of central-bank financial repression, home mortgages in recent decades were around 7.5%. This rate of interest (coupled with strict lending standards) was high enough to make credit-fueled bubbles difficult to inflate, so homes cost $100,000.

Those who had saved $50,000 had an advantage over financiers who were borrowing the full $100,000. The base operating costs of buying the home as a rental (investment) property was roughly $4,000 more annually for the financiers than for the savers: the savers’ $50,000 mortgage cost around $4,000 a year (not including property taxes and other expenses of ownership) while the financiers’ mortgage was around $8,000 annually.

This difference was large enough to make the property unprofitable for the financiers to buy and rent out, and large enough to make it a risky bet to buy the home and hope appreciation exceeded the annual expenses.

If the home rented for (say) $1,200 per month, the financiers’ higher mortgage expenses put them at a disadvantage to the saver/owner, who had a significantly lower monthly expense.

Contrast this with the world of today, where financiers can borrow essentially unlimited sums at rates far below what savers can get. As a direct result of ultra-low rates for banks, corporations and financiers, even high-earning wage-slaves cannot outbid the financiers for productive (i.e. income-producing) assets.

If a person is unable to earn enough to save, and is unable to compete with financiers and corporations for productive assets, that person is a modern-day serf, a debt-serf indentured to banks and stripped of opportunities to own the sort of assets the Financial Nobility use to accumulate ever-greater wealth and income.

The injustice of this central-bank enforced neo-feudalism cannot be suppressed like interest rates.

Central Bankers Are Creating A World Where We Are All Serfs (38:10) (X22 Report podcast).

The $100 Trillion Reason the Fed is Terrified of Deflation

by Phoenix Capital Research

Falling Prices Ahead

Over the last few months, Janet Yellen, head of the Federal Reserve Bank repeatedly stated that lower oil prices were “positive” for the US economy. This is simply astounding because the Fed has repeatedly told us time and again that it was IN-flation NOT DE-flation that was great for the economy.

And yet, repeatedly, the head of the Fed admitted, in public, that deflation can in fact be positive.

How can deflation be both positive for the economy at the same time that the economy needs MORE inflation?

The answer is easy… Yellen doesn’t care about the economy. She cares about the US’s massive debt load AKA the BOND BUBBLE.

Yellen knows deflation is actually very good for consumers. Who doesn’t want cheaper housing or cheaper goods and services? In fact, deflation is actually the general order of things for the world: human innovation and creativity naturally works to increase productivity, which makes goods and services cheaper.

However, DEBT DEFLATION is a nightmare for the Fed because it would almost immediately bankrupt both the US and the Too Big To Fail Wall Street Banks. With the US sporting a Debt to GDP ratio of over 100%… and the Wall Street banks sitting on over $191 TRILLION worth of derivatives trades based on interest rates (bonds), the very last thing the Fed wants is even a WHIFF of debt deflation to hit the bond markets.

This is why the Fed is so obsessed with creating inflation: because it renders these gargantuan debt loads more serviceable. In simplest terms, the Fed must “inflate or die.” It will willingly sacrifice the economy, and Americans’ quality of life in order to stop the bond bubble from popping.

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This is also why the Fed happily talks about stocks all the time; it’s a great distraction from the real story: the fact that the bond bubble is the single largest bubble in history and that when it bursts entire countries will go bust.

This is why the Fed NEEDS interest rates to be as low as possible… any slight jump in rates means that the US will rapidly spiral towards bankruptcy. Indeed, every 1% increase in interest rates means between $150-$175 billion more in interest payments on US debt per year.

If you’ve ever wondered how the Fed can claim inflation is a good thing… now you know. Inflation is bad for all of us… but it allows the US Government to spend money it doesn’t have without going bankrupt… YET.

However, this won’t last. All bubbles end. And when the global bond bubble bursts (currently standing at $100 trillion and counting) the entire system will implode.

World War III Has Started

by Greg Hunter

Analyst and trader Gregory Mannarino says, “We are deeply engaged in an economic war against Russia. This is a collective collusion that is very scary.

“We are watching epic events occur. People have been saying for years, where is the collapse, where is it? It’s now.

“The strength of the U.S. dollar is a fear trade. When you see the dollar going parabolic with a flattening yield curve, this is a huge tell.”

“People need to understand here that economic warfare is war. World War III, beyond any shadow of a doubt, is already here.”

The Baltic Dry Index is another tell that says the economy is not good because the shipping of goods has come to a crawl.

County Officials Use 24 Cops and Military Vehicle To Collect Civil Judgment

Marathon County sent this armored vehicle along with two dozen officers to collect a civil judgment from Roger Hoeppner and possibly remove wooden pallets and other items from his home outside Wausau.

Escorted 75 year old to bank and forced to withdraw $80,000 and hand it over to police

by Bruce Vielmetti

When officials in the tiny Town of Stettin in Marathon County went to collect a civil judgment from 75-year-old Roger Hoeppner this month, they sent 24 armed officers and an armored military vehicle.

Among other issues, the recent unrest in Ferguson, Mo., focused attention on the growing militarization of local law enforcement, particularly the use by even very small police departments of surplus armored military vehicles.

Marathon County sheriff’s officials aren’t apologizing for their tactics. Sheriff’s Capt. Greg Bean said officials expected to have to seize and remove tractors and wooden pallets to pay the judgment — hence the cadre of deputies. He also said what while Hoeppner was never considered dangerous, he was known to be argumentative.

Hoeppner said when he noticed deputies outside his house, he called his attorney, Ryan Lister of Wausau. Lister said he quickly left for Hoeppner’s house but was stopped by a roadblock that was kept up until after his client had been taken away in handcuffs. “Rather than provide Mr. Hoeppner or his counsel notice…and attempt to collect without spending thousands of taxpayer dollars on the military-style maneuvers, the town unilaterally decided to enforce its civil judgment” with a show of force, Lister said.

Bean said deputies had to handcuff Hoeppner because he was not following all their instructions, but did eventually agree to pay the $80,000 judgment after a visit to a bank — accompanied by deputies.

Bean also said the armored truck was summoned only after Hoeppner initially refused to come out of his house. Once the truck appeared, so did Hoeppner.

“I’ve been involved in about five standoff situations where, as soon as the MARV showed up, the person gives up,” saving time, money and increasing safety, Bean said.

Madison’s police recently made a similar endorsement after officers used one to carry out the safe arrest of a man who had fired at police from a window of his home.

MARV stands for Marathon County Response Vehicle, which his department obtained in 2011. It’s the only one in the county and gets used 10 to 20 times a year, Bean said.

“People may not always understand why, but an armored vehicle is almost a necessity now,” Bean said.

Long Standing Rift:

Hoeppner has filed a notice of claim against the town, and is considering a federal civil rights lawsuit, according to a Madison attorney who represents him in another case about Hoeppner’s right to speak at town meetings.

“It’s a long-running, heavily litigated dispute over his use of his property,” said the lawyer, Jeff Scott Olson. “They’re trying to collect in a very heavy-handed manner.”

Hoeppner owns about 20 acres along Packer Drive, which runs nearly parallel with Highway 29 west of Wausau, where he restores antique tractors and runs a pallet repair business. The latter at times featured giant piles of the wooden pallets visible from Packer Drive.

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In 2008, the town sued Hoeppner over claimed violations of ordinances about zoning, signs, rubbish and vehicles. About a year later, the two sides settled; Hoeppner was supposed to clean up his property, and the town was supposed to open discussions about its zoning.

The town felt Hoeppner had not complied, and it brought a motion for contempt and enforcement. In September 2010, a judge ordered Hoeppner to remove certain items from his land.

The following May, the judge found Hoeppner had still not complied and authorized the town to seize assets. In the summer of 2011, the town hauled away several tractors, pallets, equipment and other items and auctioned them off for “pennies on the dollar,” according to Lister.

But the dispute wasn’t over. In April 2013, the judge entered a final judgment that imposed a $500-a-day fine against Hoeppner for not adhering to the original May 2011 order, and granting the town’s legal fees.

Hoeppner appealed, but lost in a March ruling. So by Oct. 2, he owed the town about $80,000, according to court records, and the Town of Stettin obtained a writ of execution to collect — without notice to Hoeppner or his attorneys, they say.

Threats Alleged:

Town Chairman Matt Wasmundt said neither he nor other town officials and their attorneys could comment about Hoeppner or the serving of the writ, citing pending litigation and “threats.”

Hoeppner, retired from a job at a paper factory, and Lister deny Hoeppner ever engaged in threats of any kind against Wasmundt or other town officials.

In a federal civil rights suit, Hoeppner contends that Wasmundt infringed on his free speech rights by calling deputies to town board meetings where Hoeppner wished to address the board during public comment periods, and for later eliminating public comment entirely from meeting agendas.

Once, Hoeppner said, he was arrested by the deputies at Wasmundt’s direction, only to later be released without charge.

Town Called Unfair:

In an interview, he said he wanted to address what he felt was the town’s unfair focus on his property, when there are dozens of others arguably in violation of the town’s zoning, which is all agricultural-residential.

He said he felt Wasmundt has a “vendetta” against him and a “my way or the highway” style of running the town.

He described deputies with guns drawn walking around his garage.

Asked if he was, as the sheriff’s captain described him, argumentative, Hoeppner admitted he was probably “hostile,” though not threatening when confronted with a writ.

“The $86,000 figure is enough to shock most men,” he said. “And they wanted it now, today.” He said the town later agreed to $6,000 less because it wouldn’t have to pay for hauling away his other equipment to sell.

Hoeppner estimates that, in all, his battle with the town has cost him about $200,000, a retirement fund he “worked very hard to accumulate.” In addition, he said, his arrest the day the armored truck appeared upset his wife so much, he had to take her to a hospital for a few hours.

What Happens When Your Friend’s Smartphone Can Tell That You’re Lying?


Get ready for that smartphone to know your true feelings. (Michael Nagle/Bloomberg)

In just a few weeks, the next installment of “The Hunger Games” will arrive in movie theaters. The latest in a long line of films to depict a future all-knowing or controlling government — think “1984” or “Minority Report” — the dystopian tale will likely be a runaway hit. But the power to seem all-knowing – or at least know more than do now – may soon lie in technology that’s already in the palm of your hand.

We are nearing a point where our smartphones will be able to recognize a face or voice, in real life or on-screen. And identification is only the most basic of the possibilities. Many app-makers are experimenting with software that can also analyze – able to determine someone’s emotions or honesty just by a few facial cues.

This interpersonal assessment technology promises to make our lives easier. For instance, facial recognition technology can allow people to get immediate and amazing customer service. If a restaurant or retailer can identify me before I walk in the door, it would be able to identify me as a returning customer, accessing my favorite dishes or products. I would be greeted like an old friend (whether I were, or not).

Similarly, algorithms are now being developed that link thousands of facial cues with human emotions. Our brains do this naturally – we know without asking whether someone is happy or upset based only on their expressions. Law enforcement and poker players take this a step further, using facial cues to determine someone’s honesty. But with technology augmenting our brain’s natural behavior – possibly providing direct, measurable and verifiable input – we can produce measurable and verifiable data. As sensors move from our smartphones to activity trackers to smart watches from Apple and Samsung, we are measuring more than ever and are not far off from continuously tracking our emotions. And software is now in development to interpret people’s emotions, then project the results via an app onto a screen such as Google Glass.

Technology can also analyze the human voice to determine emotion – again, not just mimicking, but surpassing our brain’s abilities. Moodies, an app developed by Beyond Verbal, is able to detect a speaker’s mood based on nothing more than a voice. Worldwide call centers are testing the technology to help operators determine whether callers are upset and likely to switch their business to a competitor.

There are also some potentially negative consequences. If you can simply run a person’s image and voice through an app to determine their emotions and veracity, we will have to adjust as a society. Many of our daily interactions are built on small lies: “So happy to see you”, “Of course I remember you,” and “This is the best (food, activity or place).” In other words, society’s function is smoothed by little white lies – do we really want to eliminate that?

As we uncover our deceptions – implicit and explicit, including those of which we have convinced even ourselves – a market for technology that hides our emotions will arise. Entrepreneurs may create “emotion-cloaking devices.” Facial coverings may become more popular. Perhaps there’ll be sanctuaries where no devices are allowed, either by custom or law — an atmosphere akin to how we now feel about taking pictures in public bathrooms and kids’ classrooms.

One thing is for sure: politics is in for a major overhaul. With every smartphone possessing a virtual lie-detector test, elected officials will need to be creative in the ways they talk to us. In fact, my fear is the most insecure and most powerful politicians will resist, and quickly seek to regulate or restrict these technologies — ignoring their obvious good — in a hidden but discoverable attempt to preserve their own power and half-truths.

Ready or not, technologies are quickly arriving, which allow us to assess other people to a degree of accuracy we never before imagined. While by no means a cure for Alzheimer’s — at least in the disease’s early stages — facial recognition software could supplement a sufferer’s slowly deteriorating memory and help recall acquaintances, friends and loved ones.

Before we rush to decry these assessment technologies, we must also consider their incredible array of benefits. If this “recognition revolution” can indeed realize its potential, won’t it absolutely be worth a little uncertainty today?

50 Years Later: Reagan’s ’A Time for Choosing’ Speech

Fifty years ago Monday, Ronald Reagan gave the speech that launched his career in politics and made him a star.  The speech, called “A Time for Choosing,” aired to a prime time NBC audience and made him a household name.