DONALD TRUMP is the obvious choice for President in 2016. It could even be argued that he is the only real choice Americans have had for a century or more. All of the other candidates have been, and are now, obvious shills for Wall Street and Zionist extremism.

Putting Hillary or Bernie in charge would be like sowing salt in the fields of America: Nothing would change, nothing would grow, America would keep on dying.

Hillary and Bern are oligarch-puppets, sexless mannequins made out of GMO- and pesticide-laced stale bread and kept animated by toxic preservatives and string-pulling media con men.

Trump is fresh, brash, brutally honest, red-blooded, masculine, and vitally alive. He is a real man, a real American — who prevails and gets stronger and stronger every time the media attack him. The people sense that honesty and that strength — and are giving him their loyalty, enthusiasm, and votes in ever-increasing numbers.

Donald J. Trump refuses to kowtow to Political Correctness. For example, he’s willing to notice differences, such as the differences between Muslims and the mostly Christian and free-thinking population of the United States. He’s even called for a temporary ban on Muslim immigration until we can decide as a nation which Muslims we should exclude for our own good — and which we should accept.

On the subject of “our own good”: To even utter the idea, as Trump has, that the existing American population has interests of its own that might not be served by wide-open borders is streng verboten according to the oligarchy that rules us. Trump’s blasting of the rotten oligarchy’s taboos to pieces with his frank words and powerful personality has opened up the Overton Window and brought us some real debate for a change. And that’s exactly what we needed.

He openly questions the wisdom of so-called free trade, going against the rotting secular religion of free market liberal democracy. “Free trade”? Bad idea, kills American jobs, makes us weaker, says The Donald. He doesn’t give a damn if his fellow billionaires are making more money exploiting Third World labor than can be imagined in the wildest dreams of avarice. He wants American jobs and American manufacturing protected — and expanded. And the financiers that run business and politics in this country hate that.

Candidates are supposed to be bought and paid for. They’re allowed to make occasional noises criticizing free trade, but never do anything substantial about it. Donald J. Trump, on the other hand, wants to renegotiate all the existing trade deals — with the interests of the American manufacturer, small businessman, and worker paramount in his mind — and set up some steep tariffs for foreign countries that won’t play fair. And the money-men know he means it. That’s why they hate him with a passion.

I wouldn’t trust the Wall Street crowd with my ice cream cone money, but I do trust their hatred of Donald Trump as an accurate indication that the Man in the Red Hat would spoil their selfish games. About time too!

Even though he has Jewish family members and is enthusiastically supportive of Israel, Donald Trump was against and remains firmly against the “neoconservative” cabal that brought us fifteen years of wars for Zionism in the Middle East, wars that have ravaged that part of the world, killed millions of innocents, and made an entire generation of Middle Easterners 1) hate the West, including America, and 2) migrate to the West, including America — a deadly combination for all concerned.

Donald Trump is simply being honest when he says we need to rethink these wars — and this wave of migration. He also says he would be an even-handed negotiator when it comes to peace between Israel and Palestine, which has enraged the neocons and some extremist Israelis — but given real hope to practically everyone else.

Speaking of hope, Donald J. Trump offers more real hope for African-Americans in one campaign stop than Barack Obama or Hillary have given in their entire sordid, sycophantic careers. Obama played Stepinfetchit to the bankers and the warmongers, and demoralized Black folks who thought he would be different. Bernie and Hillary would dance to the same tune, and everybody knows it.

The lying national media pillory Trump as a “racist,” but African-Americans have a sense that Trump is the real deal and his lack of smarmy PC-speak is proof that he’s not jiving them. They respect him. In a world of phonies, D.J. Trump is a real man. Black people are some of the biggest economic victims of mass immigration and “free trade” and plenty of them know it. People of color are among those most affected by America’s crumbling economy and infrastructure, and nobody but Trump has a plan to fix — or even seems to care about — those things. Many African-Americans are ready for a change and ready to vote Trump — the only Republican in decades with that kind of appeal.

Just because he laughs at liberal orthodoxy doesn’t make Donald Trump a conventional conservative. He’s more of a practical man — a deal-maker; a business-builder — who simply wants to make America great again by making things work again: and that means people, infrastructure, government, business, the works. And he’s willing to use the power of government to make that happen. Like Putin in Russia, Trump would be able to sit opposing factions down at a table and make things happen by the force of his personality and the implied force of the state behind his words. And he’d use both those forces against the entrenched, moneyed interests, too — something that the bought-and-paid-for milquetoasts who usually get elected are paid not to do.

Speaking of Putin, Trump is someone the Russian leader — and other world leaders — could work with and respect. Putin himself said so, and Trump reciprocated. (Trump is even willing to defy taboos and sit down and talk with Palestinian and North Korean leaders — what a refreshing change!) Respect is a word that is never used in conjunction with the pathetic crop of US presidents we’ve had lately — clueless boob and war criminal George W. Bush, servile lackey and war criminal Barack Obama, serial rapist, war criminal, and intellectual nonentity Bill Clinton. What a sad lot of amoral, order-taking phonies.

We at the Mercury do not hand out endorsements often or lightly. Most politicians are despicable criminals and employees of our oppressors — and some of the worst are Republicans. As our founder, H.L. Mencken, said: “In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican.”

Frankly, the Republican establishment that openly hated Trump until a few weeks ago (and now secretly hates him) was right about one thing: Donald Trump is not really a Republican. True indeed. In our thoroughly crooked “two-party system,” Trump had to assume the mantle of one establishment party or the other. He took the Republicans’ mantle — against their will. But when he wins in November, he will not be a Republican president. He will be an American president.

NO ONE WOULD be so absurd as to propose that you might restore a nation’s prosperity by changing its weights and measures. Suppose the Government should say, on behalf of the wheat farmer, to increase his income, “Hereafter the half bushel shall be the legal full bushel”; and on behalf of the cotton grower who sells his product by the pound, “Hereafter eight ounces shall be the legal pound”; and on behalf of industry, “Hereafter eighteen inches shall be the legal yard and every other weight and measure is halved”; and on behalf of labor to increase wages, “Hereafter thirty minutes shall constitute the hour.” What would happen? Prices per bushel, per pound, per yard, wages per hour, and so on, would immediately fall until relations were again as they were before, nobody by that result could be made either rich or poor, and the economic state of the nation would be the same as it was….

Except, first, that all who were so lucky as to have made contracts beforehand to deliver wheat at a certain price per bushel, or cotton at a certain price per pound, or cloth at a certain price per yard, by being able to tender half a bushel for a full bushel, half a pound for a full pound, or half a yard for a full yard, would profit at the expense of those who were obliged by the decree to receive everything in half measure for full price, and thus wealth would be transferred in an arbitrary political manner from buyer to seller; but this could happen only once.

Come now to the universal measure, the one wherein the dissimilarities of all physical weights and measures – bushels, yards, pounds, gallons and feet – are reduced to a single expression for purposes of exchange – come, that is, to money – and somewhat less than half our total common sense is at any moment ready to depart from us, and it happens that once in a generation that even more of it is dangerously is dangerously on the verge.

If a senator should propose a law to increase everybody’s income and so restore prosperity by halving all weights and measures, it would be understood that he was not serious. But they may hold themselves out to be champions of the oppressed, fighting for a new deliverance, who propose to change the money measure by decree, saying, “Hereafter fifty cents shall be equal to one hundred, half a dollar shall be a legal dollar,’ in order that everybody may have twice as many dollars and so be able to buy, consume and enjoy twice as much.

Wherein there is any difference between halving every physical kind of weight and measure and halving the value of money measure it is only that the delusion comes upside down. In the first case, which we know to be preposterous, prices fall until all relations are again as they were. In the second case, the money measure being halved, prices rise. Every seller receives more money and, correspondingly, every buyer pays more money, until presently all relations are restored and by this magic the economic state of a nation is not changed at all, except again…..

First, that all who are so lucky as to owe money are immediately benefitted at the expense of those to whom money is due, the creditor being obliged by law to receive as payment in full the exact number of dollars that he loaned, notwithstanding the fact that the value of the dollar has been halved by decree. Thus there is an arbitrary transfer of wealth from creditor to debtor by political fiat, which can happen once, and…..

Second, that with the value of money, the money standard itself, subject to change by political decree, there is chaos in the world of credit and capital, no obligation or contract has a definite meaning, all borrowing and lending must be loaded with a charge for hazard, and this charge may be ruinous to civilized business.

With that strange kind of panic running in Germany and merchants barring their doors against people clamoring to exchange marks for goods of any kind on any terms, a professor became suddenly aware of what the uproar was about, rushed hatless to his bank and drew out his whole fortune. He then stood in the street with a quarter of a million paper marks in his hand, trying to think what he should do with them. He must spend them, and quickly. He understood that. Minute by minute their value was less. But what should he buy? His bewildered glance fell on a saddler’s window. The sight of a saddle hanging there started in his mind the reminiscence of a boyhood wish, which had been to ride; and with that he ran to the saddler’s shop. Then again, as if it were a dream, he stood in the street with a saddle in his arms, and that incongruous object represented his own and his wife’s inheritance and all their years of thrift and self-denial together for the security of a high-born academic family.

Do you remember the gold certificate? That was the yellow-paper money in multiples of the ten-dollar denomination that used to turn up among the green bills in your pocketbook. It was a very special kind of paper money, redeemable by the United States Treasury in gold. On the face of it, you read: “This certifies that there have been deposited in the Treasury of the Treasury of the United States of America ten dollars in gold coin payable to the bearer on demand.” It might be for twenty, one hundred, one thousand. This, you see, was simply a receipt for actual gold dollars, like a receipt for so many bushels of wheat; and as the law stipulated that a gold dollar should be of a certain weight and fineness, the holder of one of these certificates was the actual owner of a specific amount of gold. The certificate was his absolute title to it.

It was the finest, safest, most beautiful paper money in the world. Wherever you went in the whole world, it was accepted as actual gold, and was much preferred over the actual gold because it was so much easier to carry. Here the faith was, first, that the gold itself was in the United States Treasury, dollar for dollar, according to the receipt; second, that the American gold dollar would never in any way be debased; and, third, that the United States Treasury always and without question honor the receipt. No one could imaging a time when the United States Treasury would refuse to honor its own receipt for actual gold intrusted to its keeping.

Well, but since March 6, 1933, it has been unlawful for an American citizen these certificates in his possession. By decree of the President, it is unlawful. And now, if you should go to the United States Treasury, saying, “Here is your receipt for gold; it is mine and I want it,” you would not get the gold that belongs to you by right of title; more than that, if your certificate should amount to more than one hundred dollars you would be subject to prosecution, fine and imprisonment merely for having that gold title in your hand.

The United States Treasury does not refuse to honor its receipt for gold because the gold is not there. The gold is there in the vault, just as the certificate says it is. It refuses to give you the gold because a law has been passed saying the President by decree may reduce the gold content of the dollar one-half. That is, by decree he may say, “Hereafter fifty cents shall be a dollar.” That is the devaluation we are talking about. The gold content of the dollar is reduced one-half, by law or by decree, then, perhaps, you may take your gold certificate to the Treasury and demand the gold dollars without fear of arrest or imprisonment, but if you get your dollars, to the exact number specified on the certificate, you will get only half as much gold. Your Government will keep the other half.

All the same, this was an unimaginable thing to happen, and it is a terrific blow to everybody’s faith in the integrity of money.

To move the inflation law authorizing the President to print three billions of fiat paper money and to halve the gold content of the dollar, several ideas were acting together. Almost the only idea was the one of necessity. There was no necessity for this country either to abandon the gold standard or to debase the currency. It is perhaps the only instance in modern times of a country doing it deliberately. England was obliged to do it. Here there was plenty of gold.

When the dollar had greatly fallen, one of the unexpected problems that awkwardly appeared was what to do with the new gold produced in this country. The America gold-mining industry is very important. Since it was illegal to possess gold, illegal to buy or sell it at a statutory price of $20.67 an ounce. But if he did this he lost money because he received $20.67 in paper dollars worth one-third less than gold. If he could sell his gold in Canada for Canadian dollars, or in London for pounds sterling, or in Paris for francs, then, by converting Canadian dollars, British pounds, or French francs back into American dollars on the international money market, he could realize at least ten dollars more per ounce than the United States mint would give him for it. But to export gold was forbidden. Therefore, it had to be smuggled out; there began to be sold in this country a bootleg market for gold.

Nevertheless, the problem somehow had to be solved; and it was solved in the most absurd way. The President, by decree, authorized the United States Treasury to receive the total output of American gold on commission, sell it on the open gold markets of other countries, and give the American gold miner the proceeds….. And thus it was that the United States Treasury, in the capacity of an agent, began to receive the total output of the American gold-mining industry and to sell it away in foreign countries for the account of the American citizens who had produced it, but who were not permitted to keep it or sell it at home….

Aside from any ethical considerations, the procedure, on its merits, was mad. But so are all procedures of inflation. If you ask why the Government itself does not buy the gold at its true value, paying the premium in paper dollars, the answer is that if it did, the illusion of rising values would be damaged in exactly the same way as by an open gold market.

People could no so easily continue to deceive themselves about what was happening. That values had been rising was an appearance only, produced by the fact that the value of paper money had been falling. But the Government thought it was more important to protect this appearance than to keep in this country the gold we mine out of our own ground.

The intermediate way is to speculate. A shrewd, imaginative minority will buy imperishable commodities, such as cotton, copper, tin and rubber, because these will rise in price as the value of money falls; others will buy unlimited dividend-paying shares, and some will go heavily into debt to buy equities of any kind, even real estate, with the idea that when money is very much cheaper they will pay off the debt and have the equities clear. It was in that way that a few men made prodigious fortunes in the German inflation. One who had been able, at the beginning of it, to borrow marks enough to buy the whole of Berlin might then, at the end of it, for as little as one thousand dollars in gold, have bought the same number of marks to pay off what he had borrowed and so have owned Berlin clear at a net cost of one thousand dollars.

In 1926-27-28, people had plenty of money, more than they ever had before; and they were prosperous, but not for that reason. They were not prosperous because they had plenty of money; they had plenty of money because they were prosperous. Proof is that at the very lowest of the depression there was actually more money of all kinds – more gold, silver and paper money – than in those years of high prosperity.

Every owner of a corporation bond is a creditor. Every owner of a government bond, a city or county bond, is a creditor. Every owner of shares in a building-and-loan association is a creditor. Every owner of a bank deposit is a creditor. Every owner of a life-insurance policy is a creditor. These will all be victims of inflation, and they are millions.

– November 4, 1933

AS THE ECONOMY STUMBLES the American standard of living recedes. Forty-four million people are using food stamps and in one year that figure will be 60 million. Washington and Wall Street say “what, me worry?” Of course not; they are the “masters of the universe.”

We are 24 months into an inflationary depression and it still goes undiscovered. Who cares that the issuance of food stamps is up 80%, as long as the bonuses on Wall Street and in banking continue to flow and bureaucrats get higher and higher salaries and benefits? The high cost of health insurance, no longer affordable to most have increased and Medicaid users are up 17%, as the program costs increased 36%. Those on welfare rose 18%, as costs rose 24%. It is now evident to many that the choice of early retirement in the late 1990s at 52 and 59 years old was a big mistake. Many must now work into their 70s, or starve. Many retirees are forced to reenter the workforce. Recently there were 2,000 job openings and 75,000 people applied. How is that for recovery? The birth/death ratio is bogus and real unemployment is 22%. The economy needs 2 million new jobs a year and that is impossible. Good paying jobs are still being offshored and outsourced. How about the millions without jobs now for years? While all this transpires the Fed bails out Wall Street, banking and government and leaves crumbs for the dispossessed.

It always gets us when these acceptable writers use soft or euphuistic phrases to describe creeping national state socialism. The big picture is dreadful, but government, Wall Street and the media won’t tell you that. Truth has nothing to do with business. They all spin one lie after another, just as you have recently seen with a certificate of live birth and the death of Mr. bin Laden. It reminds one of the old song, “Anything Goes.”

Those running Washington from behind the scenes know America can never pay off and liquidate its debt. That is why there is little effort to do so. The real idea is to destroy the system. It reminds one of Argentina in 1999, before they defaulted on 2/3’s of their debt only in a much bigger way. The dollar, because it is the world reserve currency, and that nations hold about 60% of foreign reserves in US dollars affects the entire world. America’s Wall Street, banking and government has had a 66-year party and everyone gets to pay for it. The next step, rather than austerity, will be confiscation of all, or part, of pensions, that $12 trillion pool of government and individual retirement funds. Needless to say, such irresponsible actions only delay the inevitable monetary collapse.

Tagging not far beyond is England and Europe, both of which have used the same template for so many years. In the US and all of these nations we see more than 50% of the population functionally illiterate and this same group country to country essentially pays little or not taxes, and receive benefits from government. That does not include the illegal alien population in each country that pays virtually no taxes. Spending far beyond tax receipts can only mean eventually that the deficits will destroy the system. That means a lower standard of living, which has already manifested itself in all three regions. Such profligacy has in the US, UK and Europe caused the Fed, the Bank of England the European Central Banks to create money and credit out of thin air monetizing buying and holding sovereign debt as well as debt clogging the balance sheets of the financial sector. In Washington the administration is considering an oil tax increase as the public pays more than $4.00 a gallon and in Germany it’s $9.00 a gallon. Expect more of this non-income tax taxation. Each tax increase and each loss in services brings less purchasing power, as inflation rages.

All these entities each day find it harder and harder to sell bonds to support their debt load, thus, revenues have to be increased. In the US the top 10% of taxpayers will end up paying 75% of total income taxes. This has already started an exodus of high-income earners to leave the country over the past 15 years, and the numbers are increasing exponentially. That in turn throws an added burden on middle class taxpayers.

At the root of the problems of all these nations is Keynesian economics, which has become the basis for corporatist fascism. The growth of money and credit worldwide has been exponential and continues apace as nations refuse to cut spending and central banks continue to be fonts of money and credit for their financial sectors and for governments. The financial system worldwide is awash in liquidity, which is accompanied by low or near zero interest rates. If those conditions were to be higher interest rates and less monetization the world system would collapse, although governments are manipulating markets downward such as gold, silver and commodities. What they are accomplishing is very little versus the intermediate to long run. That is why in the long run gold, silver and commodities have to move higher, as investors flee the general stock and bond markets, that don’t reflect the results of inflation. That is why inflation will worsen as central banks continue to spew out more money and credit, which is now euphemistically called quantitative easing. First we saw inflation rise in the developing world for a number of reasons, which has since moderated to a great extent. Inflation is growing at a realistic 4% to 6% overall. The problem lies in the developed world where real inflation runs from 8% to 20%. Nations such as the US, UK, China, India, Brazil, etc. are not only suffering high inflation, but they are exporting it as well. Not enough to keep inflation at bay in their own countries, but enough to make financial conditions in victimized countries difficult. As an example, take America’s neighbors Canada and Mexico; instead of having a natural 3.5% inflation for 2011, their inflation at year-end will be 4% to 4.5%.

As we predicted a year ago, QE3 will become reality, although it will be called something else. Not only in the US, but also in the UK, Europe and other countries, as well. If the issuance of money and credit were to stop and interest rates were to rise the world would head into deflationary depression. That is why the music has to continue. Sooner or later it will stop and when it does the bottom will fall out of the world economy and financial system.

The Fed continues to create money and credit and prices continue to rise and will do so for at least 1-1/2 more years. If we get the equivalent of QE3 that will be extended 1 to 1-1/2 more years. Dependent on how big a QE3 could be two to three years ahead, inflation could range from 25% to 55%. As this affects the US economy the banking system will remain weak and near insolvency. As inflation rises in a moderate fashion in the developing world the first world will see inflation rise higher quickly.

We currently see yields on Treasuries falling again from 3.60% on the 10-year note to 3.22%, as the Fed manipulates lower yields into position. That would be in anticipation of higher real interest rates caused in reaction to QE3. This is all rear guard action to try to create employment from a sector that remains under intense pressure. Any job creation is being offset by the high layoff rates of municipal and state workers. These measures by the Fed will also continue downward pressure on the dollar and upward pressure on gold and silver and commodities. Any tightening by the government or austerity measures to reduce the fiscal deficit would be disastrous. That is if you want to keep the game going at today’s level. It is a different story if you really want to solve the problem.

As we switch to the Middle East we see serious trouble coming. In fact it probably is the groundwork for World War III, the event needed from an historical prospective to begin a new world war to cover up the economic and financial collapse now taking place. Why else would the US and UK stir up rebellion in Syria, the home of a Russian naval base and in Libya where the Chinese just recently had to remove 29,000 workers due to a US and UK created rebellion. Libya supplies relatively inexpensive quality oil to China in large quantities. As these adventures unfold it becomes more obvious that a new war is being set in motion. As a reaction we see China saying they want to reduce their dollar forex position by 2/3’s or by $2 trillion. The US won’t let that stop them, so China is going to be a large dollar seller and part of those funds will go in gold and silver. That means the dollar will definitely fall lower both in terms of other currencies, but more importantly versus gold and silver. Dollar bulls are very hard to find. Those negative regarding the dollar we doubt have a clue that WWIII is underway. What has come to the attention of those negative on the dollar is that the US is developing into a Nazi police state. The US government wants to know exactly where all the assets of every American are and at the same time set compliance rules on foreign banks and institutions, which have US persons as clients legally. For Americans, foreign countries have to report any real estate owned by Americans in their country and on January 1, 2013, annually these nations banks have to send 1/3rd of all bank assets to the US IRS ostensibly to pay taxes, which in most instances have already been paid. It is a grab of the assets of Americans who dare to live in another country. As a result the US government gets little or no respect outside the US. The US is a pariah and the laughing stock of the rest of the civilized world. What people other than Americans could believe the fantasies of the obviously phony “live birth certificate” and the death of a man that had already been dead for almost 10 years. The foreign opinion is that the sheeple deserve it.

As an adjunct to this the US government is going to keep US troops in Iraq beyond the end of the year. The Iraqis have to approve this action, so we’ll have to see what happens. It is obvious the US has no intention of permanently withdrawing their troops. The excuse is based on the Shiite uprising in Bahrain and the massive Saudi intervention, along with events in Yemen where the dictator has agreed to leave. Iraqis believe that accommodation with Iran is the only way to coexist. They see iran as the only real power in the region. They also recognize Iran as an emerging regional power. Thus, we see Iran balking at the US leaving 20,000 troops in Iraq.

As Iran vies for influence in Iraq so does Saudi Arabia. Both are funneling money into Iraq. Iran is the target of the US, Israel and Saudi Arabia, but it has an edge at the moment. That is because of a multiplicity of problems in Saudi Arabia itself and on its borders with Bahrain and Yemen. Thus, Saudi is in a difficult situation in trying to extend its influence into Iraq. The only real weapon the Saudis’ have is money and lots of it. They cannot really pretend to be anything but a minor defensive military power. Thus, their reach is limited. As of late the US has only been of limited assistance. Naval and air solutions lack the ability to threaten Iran’s center of gravity, its large ground force. The intrusions already made have been dangerous and the US lacks ground troop ability. One thing learned over the centuries of warfare is that if you conquer you have to occupy. Each place you occupy involves leaving troops that are lost to the vanguard. The US simply does not have the troops to occupy or to engage massive Iranian forces. In addition a war with Iran that probably would become WWIII, would cost trillions that the US doesn’t have. As opposed to the past America’s allies outside the region don’t have the stomach for war, or the resources and appetite for involvement. Their militaries are skeletons of what they had in the past.

We recently saw aggressive action long planned for in the Middle East and North Africa by the US. They may be able to create turmoil and a civil war in Libya and replace one group of American dictators with another, but no substantial change will take place. What has taken place is a temporary pacification process to leave the road to Iran unfettered. The supposed execution of Osama bin Laden has definitely made matters worse in the region just to make Mr. Obama seem like he has accomplished something. These are some of the worst foreign policy moves we could ever imagine.

*  *  *

We at The American Mercury are honored and pleased to welcome back to our pages Mr. Bob Chapman, an international economic expert and distinguished writer who was part of the print Mercury in the pre-Internet era.

Read the full article at The International Forecaster

by Dean Vandruff

“LET ME TELL YOU ABOUT AN INCREDIBLE ground-level business opportunity…” someone says, and you are invited to a house or to lunch for “a discussion.” Funny enough, you feel in your gut that there is some hidden agenda or deception. “Probably a multi-level marketing (MLM) organization,” you think. Suppose it is? Should you trust your instincts? Is there anything wrong with MLM?

This article will analyze four problem areas with MLM. Specifically, it will focus on problems of I) Market Saturation, II) Pyramid Structure, III) Morality and Ethics, and IV) Relationship Issues associated with MLMs. Thus, you can properly assess your “instincts.”

I. Market Saturation: An Inherent Problem

Back to the Basics

A tutorial on market saturation hardly seems necessary in most business discussions, but with MLM, unfortunately, it is. Common sense seems to get suspended when considering if MLMs are viable, even theoretically, as a profitable means of distribution for all parties involved. This suspension is created by a heightened expectation of “easy money,” but more on that later.

New, Innovative?

MLM can no longer claim to be new and, thus, exempt from the normal rules of the market and the way goods and services are sold. They have been tried and, for the most part, have failed. Some have been miserable failures in spite of offering excellent products.

Marketing innovations are not rare in the modern world, as evidenced by the success of Wal-Mart, which found a more efficient and profitable way to distribute goods and services than the status quo, providing lasting value to stockholders, employees, distributors, and consumers. But this is not the case with any MLM to date, and after 25 years of failed attempts, it is time to point out the reasons why.

Don’t Some People Make Money in MLM?

First, we will analyze the “driving mechanism” of MLMs. We will detail how they are intrinsically unstable, guaranteed by design to oversaturate the market with no one noticing. We will look at why MLMs can never equalize into profitability the way companies in the real world can, so that the result will be that the organization as a whole cannot, even in theory, be profitable. When this inevitable destiny occurs, the only money to be made is not from the product or service but from the losses of people lower down in the organization.

Thus the MLM organization becomes exploitative, and many high-level MLM promoters have been shut down, the “executives” incarcerated, for selling the fraud of impossible success to others. Other, larger, MLMs have survived by hiring large batteries of attorneys to ward off federal prosecutors, even bragging about the funds they have in reserve for this purpose.

The unfortunate “distributor” at the bottom is the loser, and once this becomes apparent beyond all the slick videos and motivational pep-talks, good people start to get a bad taste in their mouths about the whole situation.

So, yes, money can be made with MLM. The question is whether the money being made is legitimate or “made” via a sophisticated con scheme. And if MLM is “doomed by design” to fail, then the answer is, unfortunately, the latter.

But how exactly does this happen, and must it always?

Doomed by Design?

The first question is this: Is any company choosing this marketing strategy destined to fail, to degenerate into an exploitative venture, regardless of how good the product is?

To see this clearly we must go through an, otherwise, obvious and elementary discussion of how any business must be careful not to overhire, overextend, or oversupply a market.

The Real World

Any business must carefully consider supply and demand. For example, if the ReVo Corporation thinks that it will have a full-fledged fad on their ovoid sunglasses next summer, perhaps they should plan to build and distribute, say, 10M units. This involves gearing up factories, setting up distribution and dealer networks, and carefully managing the inventories at each level so that ReVo will still have credibility with their distributors, retail outlets, and the public the following year.

If it turns out that there is a “run” on ReVo products, and they sell out in mid-June, then they have miscalculated demand and will miss out on profits they could have made. The more serious problem, however, is overestimating the saturation point for the product. If they make 10M units, and sell only 2M units, this may be the end of ReVo as a company.

The all-too-obvious point here is that management of supply and demand, and keen insight into realistic market penetration and saturation are crucial to any business, for any product or service. Mismanagement of this aspect of a business will eclipse good market access, excellent product design, human resource assets, production quality, and so on. Simply stated, a failure to “hit the target” of supply and demand can ruin a company if the market is oversaturated.

Market Dynamics and the End of the Cold War

Interestingly, the issue of supply and demand is what brought the USSR to its knees. By design, the Soviet government tried to macro-manage supply, where bureaucrats would decide how many potatoes were needed, how much toilet paper, etc. Assuming these bureaucrats did the best they could, unfortunately their efforts to deliberately manipulate the control “knob” of supply and demand was not good enough. Notwithstanding their good intentions, they were usually wrong, which created huge shortages and surpluses, and led to a massive economic collapse.

Seeing the disastrous end of market naiveté in Russia should help clarify the fundamental problem with the MLM approach. In the real world, the profit of a company is directly related to the skill and prescience of the “hand” on the “supply knob,” so to speak. In the USSR, that “hand” could not react fast or accurately enough to market realities through the best efforts of the bureaucrats.

With MLMs, the situation is much worse. Nobody is home. Even the Soviets had someone thinking about how much was enough! If the bureaucrat in Russia was having a hard time trying to play Adam Smith’s “invisible hand” in setting the supply level in the Soviet Union, then an MLM “executive” is in a truly unfortunate position. Not only is there no one assigned to make the decision of how much is enough, the MLM is set up by design to blindly go past the saturation point and keep on going. It will grow until it collapses under its own weight, without even a bureaucrat noticing.

MLM is like a train with no brakes and no engineer headed full-throttle towards a terminal.

“Everyone Will Want to Buy This Product!”

All products and services have partial market penetration. For example, only so many people wish to use a discount broker, as evidenced by the very successful but only partial market penetration of Charles Schwab. Not everyone wishes to join a particular discount club, or buy gold, or drink filtered water, or wear a particular style of shoe, or use any product or service. No one in the real world of business would seriously consider the thin arguments of the MLMers when they flippantly mention the infinite market need for their product or services.

The Demand Problem: Of Widgets and MLMs

Imagine a neat new product called a Widget that will sell for $100 (a fixed price, to keep it simple). Now, while everyone could use a Widget, not everyone will. Some will be afraid of anything new. Some will be loyal to existing brands. Some will want to buy an inferior product for less money. Some will want a more expensive product for prestige, regardless of quality. The reasons go on and on, and the fact is that only “X” Widgets will sell at $100.

The question for would-be marketers is: What is the quantity “X,” and how can it be predicted to maximize profits? The fact that “X” is hard to pin down does not mean that it does not exist, and every Widget built beyond “X” will end up producing a problem for the organization. The market only wants “X” Widgets at $100. What are you going to do with your extra inventory of Widgets beyond “X” that no one wants — and the sales people you hired to sell them?

No one can perfectly predict “X,” and the situation is not nearly as simple as considered here, but the objective for marketers is to forecast “X” as closely as possible in order to provide lasting value to all parties involved: to avoid missed opportunities as well as waste, loss, or failure.

The MLM Forecasting Approach: Ignoring the Target

Who has an eye on “X,” the point of market saturation at a given price, in an MLM? Well, the funny thing, or perhaps the tragic thing, is that “X” will be reached and exceeded without anyone noticing or caring.

Let’s just suppose that “X” has been reached today in a particular MLM; the number of possible units sold at this price has just been exceeded, and you happen to be a starry-eyed prospect sitting in an MLM meeting listening to the pitch. Now consider: Does anyone in this company know about “X”? Does anyone care? Is the issue being suppressed on purpose for some other motive? Since we are supposing that the market saturation number “X” has been reached, everyone joining the MLM from now on is buying into a false hope. But that is not what the speaker will be saying. He will be telling you, “Now is the time to join. Get in on the ‘ground floor’.” But it is all a lie, even though the speaker may not know it. The total available market “X” has been reached and nobody noticed. All the distributors will lose from here on out. Could this be you? How could you possibly know at what point you will become the liar in an MLM?

Pop or Drop

Perhaps a better paradigm than the runaway train analogy offered earlier of how MLMs perform over time is this: a helium balloon let loose in an empty room with a spiked ceiling, where product quality is analogous to the amount of helium. The better the product, the faster the balloon will rise, accelerating unhindered, towards disaster. The other option would be the case of a lousy product, in which case the balloon will sink of its own accord, never getting off the ground. To be sure, equilibrium is not in the cards, except perhaps as an accident, and then only temporarily. MLMs are intrinsically unstable. For any company that chooses an MLM approach, it’s pop or drop.

MLMs vs. the Real World

The basic question that needs to be asked is this: If this product or service is so great, then why isn’t it being sold through the customary marketing system that has served human society for thousands of years? Why does it need to resort to a “special marketing” scheme like an MLM? Why does everyone need to be so inexperienced at marketing this? Is the product just a thin cover for what is really a pyramid scheme of exploiting others? But more on that later.

From Contracted, Protected Distribution… to Mayhem

Imagine that Wendy’s became suddenly possessed by the idea that “everyone needs to eat,” and opened four Wendy’s franchises on the four corners of an intersection in your neighborhood. Who would benefit from this folly? The consumer? Certainly not the franchises; they would all lose. Wendy’s corporate? Perhaps temporarily, by speculative inventory sales while the unfortunate franchises were under the delusion that they could all make money. But in the end, the negative image of four outlets dying a slow death would likely offset the temporary inventory sales bubble. Even the most unreflective of the hapless franchisees would think twice about doing business in such a manner again. This is why real-world distributorships and franchises are contractually protected by territory and/or market.

Again, the simple fact is that even the most successful products will have partial market penetration. The same is true for services. Demand and “market share” are finite, and to overestimate either is catastrophic.

So why are MLM promoters obscuring this? Who is in control of the supply “knob,” carefully and skillfully managing the size of the distribution channels, number of salespeople, inventory, etc., to insure the success of all involved in the business? The truth is chilling: nobody.

Imagine trying to write a computer model of how MLMs work, and you will see this point most vividly. An MLM could never work, even in theory. Think about it.

The People Machine

Chernobyl had a control system that failed. MLMs have no control mechanisms at all.

Where is the “switch” that can be flipped in an MLM when enough sales people are hired? In a normal company a manager says, “We have enough, let’s stop hiring people at this point.” But in an MLM, there is no way to do this. An MLM is a human churning machine with no “off” button. Out of control by design, its gears will grind up the money, time, credibility, and entrepreneurial energy of well-meaning people who joined merely to supplement their income. Better to just steer clear of this monster to begin with.

There is simply no way to avoid the built-in failure mechanism of MLMs. If a company chooses to market this way, it will eventually “hire” (with no base pay — and charging to join) far too many people.

Thus, the only “control system” will be the inevitable losses and subsequent bad image the MLM company will gain after it does what it was designed to do: fail. And sooner or later we have got to stop blaming this particular MLM company or that, and admit that the MLM technique itself is fundamentally flawed.

Read more of this article at Dean Vandruff’s page

by Bob Chapman
Publisher of The International Forecaster.

THE ADMINISTRATION and those who control it, the House and Senate, want us to believe that debt can be paid out of revenues now and forever. As inflation and perhaps hyperinflation set in we could easily see 10% interest rates. If that happened debt service would consume more than 40% of tax revenues. The projection that tax receipts over the next four years would grow by 1/3rd is ludicrous. That is more than 12% a year. Further increased taxation would send more companies and jobs offshore. The bottom line is that further will impede GDP growth and further stagnate the economy. Do not forget 70% of GDP is via consumption. There is no conceivable way with free trade, globalization, offshoring and outsourcing preceding a pace and with the manufacturing base in a shambles, that production and exports can pull the economy from its doldrums. How can revenues be increased under such circumstances? At the same time consumers are reducing debt and saving about 4% of income. This kind of environment is not inductive for consumption to rise from 70% of GDP to 74%, which is needed to bring about those revenues.

That brings us to QE2, and $862 billion in spending. QE1 and $868 billion did not cause a lasting recovery, so we do not believe Qe2 and pork spending will either. Last time we had five quarters of 3% to 3-1/4% subsidized growth. We call it the law of diminishing returns. We believe that by the end of September when the fiscal year ends that the Fed will again have spent $1.7 trillion, as they did in QE1, money and credit that they created out of thin air. Presently the expansion in spending from QE1 and stimulus 1 are starting to be monetized within the system in the form of inflation above and beyond that which is needed to neutralize the undertow of asset deflation. Presently Chairman of the Fed Bernanke tells us there is no inflation, and government tells us it is 1-1/2%, when in reality it is 6-3/4%. We believe by the end of the year we will be looking at 14%.

In QE1 the funding went to the financial sector, which was on the verge of bankruptcy. That was followed by record bonuses for the criminal syndicate known as Wall Street. QE2 is being used to bail out the US government by purchasing US Treasury and Agency securities again with funds created out of thin air. In the first process some $13.8 trillion was used to assist financial institutions in both the US and Europe. The Fed wouldn’t tell us what they were up to so the people had to get a court order to force them to reveal where all the funds had gone and how much had been spent.

We have spent ten years in which growth has been created by inflation. As far as we can see in the future this will continue to be the case, and as a result the US dollar will continue to deteriorate versus other major currencies and in particular versus gold and silver. Even though official Fed interest rates are close to zero real rates are advancing. That is in spite of Fed support of the long end of the market. The US 10-year note has recently traveled from 2.20% to 3.65%. It is probably headed to 4% to 4-1/4% by the end of the year. This is a reflection of investors demanding higher yields to protect against further dollar deterioration. These higher rates mean that US debt service will grow in the future causing debt service to become more onerous. As a result the Fed will have to create more money and credit and monetize it by buying ever more Treasuries and create ever more inflation. That is a vicious circle. In the meantime taxes will be raised, which will cut back on economic activity, which will cut revenues eventually and at the same time increase already high unemployment. The Fed is surely headed for a crackup of enormous proportions.

In the House and Senate and in the White House there is no talk of a balanced budget and budget cuts will be at a minimum. The cycle continues of never ending debt, as taxes move relentlessly higher. That includes 44 million on food stamps that could grow to 88 million – 15.7% below the poverty line that could easily double, unemployment at 22.6%, which could double. At the peak in 1933 unemployment, U6, was 37.5%. Yes, this time it will be worse. Workers are now receiving 42% of their income from non-government income. That could fall to 21%. The 18% receiving who get their income could rise to 36%. Calling U3 at 9% is an insult to any thinking American. There is a way to cut costs under the Medical Reform Act; all those with chronic diseases will be allowed to die. Society can no longer afford useless eaters.

Inflation officially is 1.5%. Real inflation is 6-3/4%. It will be 14% by the end of 2011 and higher in 2012, as QE1 and QE2 flow through the system. The creation of inflation does not create jobs. It makes the rich richer. Government is presently trying to redefine a balanced budget by eliminating interest payments, which shows you the arrogance of these criminals. The President and his advisors know that interest payments will eventually become the largest debt budget item.

The President tells us he will increase spending by $20 billion, which will accompany taxes. We certainly do not call this tax reform, but an open door to tax increases and major spending policies. The CBO, the Congressional Budget Office tells us the bipartisan tax cut legislation, or pork package of $862 billion in stimulus, will drive the government’s deficit to a record $1.5 trillion in 2011.

Government is going to continue to borrow 40 cents of every dollar it spends. Soon the cash deficit will reach $14.3 trillion, which is the current limit by law. We expect the limit to be raised to about $17 billion and the best we can hope for in spending cuts will be $50 billion. If you subtract the President’s spending increases that is really a $30 billion cut. Who knows at this stage whether these cuts will really become reality. It just shows you the Republicans haven’t changed much. The cuts are really just cosmetic. In addition, the CBO believes GDP growth in 2011 will be 3.1%. We believe it will be 2% to 2-1/4%. If the CBO is incorrect it will deeply affect economic statistics and outcome. If you add in a 2% payroll tax cut this year and extended unemployment benefits you will get much different results. The payroll cut alone will cost another $400 billion.

The CBO also says Social Security will pay out $45 billion more in benefits this year than revenues, because since June 1935 the fund has been looted by channeling revenues through the general fund, which were immediately spent. After the next election in 2012 you can expect a reduction in future benefits and an increase in retirement age further reducing future benefits. We expect a 15-cent a gallon increase in gas taxes and a further scaling back in tax breaks, including the child tax credit. They will also try to eliminate the mortgage interest reduction, which would further devastate the residential real estate industry. The House will attempt to end the deduction claimed by employers who provide health insurance in exchange for rate cuts for corporations. The 500 major corporations are presently sitting on $1.9 trillion in cash, domestically and $1.9 trillion in offshore accounts — a benefit derived from free trade and globalization. There is already in the works, via secret White House talks on December 15th, a plan to bring those funds back into the US at 5-1/4% taxation rather than 35% costing taxpayers $650 billion in lost tax revenue. Those funds will be used to buy company shares boosting them, allowing officers to cash in their stock options and make billions of dollars, prop up the stock market and assist by buying Treasury and Agency bonds. This is what corporatist fascist governments are all about.

From 2010 onward two million addition citizens are expected to sign up for Social Security, Medicare and Medicaid annually. The COLA formula has been falsified for 30 years by bogus CPI figures. As bad as that has been and is, it will be much worse when that link is broken and only a flat benefit will be paid as inflation rages. If you couple this with the Medical reform death panels there will be very few Americans roaming around America. They’ll either have been eliminated as useless eaters or starved to death. Believe us this is no exaggeration.

In 2011 the US dollar will continue to deteriorate. It will test 71.18 on the USDX, which are 6 major currencies versus the dollar. The dollar will also fall versus gold and silver as will other currencies. Over the past ten years nine major currencies have fallen an average annually versus gold by 15-1/4% and versus silver 20-2/3%. Those are the real benchmarks of dollar deterioration. Versus the USDX 71.18 should be broken in 2011 and eventually reach 40 to 50 over the next few years as gold and silver rise. Do not forget based on 1980 methods of value, when gold was $850 an ounce officially gold should be selling for $2,400 an ounce. If you use unadjusted figures that price would be $7,700 today. It just shows you the extent of gold suppression by the US government, the Fed and other central banks over those years. If you were depending on Social Security for retirement or your pension, 401K or IRA, forget it. Your only guaranteed protection will come from your gold and silver assets and do not forget that.

The situation in the euro zone is well known to most readers. Greece has borrowed $132 billion or is in the process of doing so, and the EU, the ECB and the IMF are committed to $1 trillion in bailout money for the six countries in trouble. Several of these countries have been downgraded by rating agencies. This situation is problematic, but the US situation is fundamentally worse. In a way the European situation although not good has been used as a cover for US systemic problems. That is because American professionals do not want to hear about it and the American public is still wondering around in the darkness.  They still for the most part do not know what is being done to them, nor generally do they care. It is all Super Bowl and beer while it lasts. The US has been in a mode of printing money instead of producing goods and services for years. Dollars are the world’s reserve currency, which has given the dollar an unnatural extended life. In addition to that foreign countries have continually printed their own currency, bought dollars and bought US Treasuries in order to manipulate and cheapen their currencies. In this process the US has been able to export inflation. In time this unusual situation will end and the inflation will be turned inward in the US becoming very disruptive. This means at the dollar’s present pace it soon won’t be the world’s reserve currency. As currencies such as the dollar fall against other currencies the cost of imported goods will rise and US inflation will get another boost.

America needs to recapture its manufacturing base, which has been the basis of its success for more than 250 years. The way to do that is impose a 25% plus tariff on all goods and services. This is a matter of survival, not politics. The US carried the world for 65 years and it is time for these complainers to pay a price for their success and standard of living. The US will also profit from a much higher savings rates, 10% or more would be helpful. It is currently 4%, down from 7% prior to November.

There is no question that the dollar’s reserve status has and is being abused. The prime reasons for that status was it was the only nation really left standing at the end of WWII, and the dollar was backed by gold. That has not been the case since August 15,1971. If the US is to maintain its dollar status it has to devalue and revalue versus other currencies and go into multilateral default. Then gold backing can again be put behind the dollar. If they do not have the gold they will have to buy or borrow it. If that is not done another currency or group of currencies will have to be used.

Since WWII all other nations have deliberately devalued their currencies. The US didn’t mind because it was by far the strongest nation in the world. Whenever the world had a recession the US bailed it out by creating more money and credit. That made everyone happy and the world rolled along. This is no longer the case. Since the 1980s, at the behest of WTO, NAFTA and CAFTA, the trade tariffs have almost all been removed. This free trade, globalization, offshoring and outsourcing by transnational conglomerates has destroyed America’s internal manufacturing infrastructure with the loss of 42,400 company and 8.5 million good paying jobs. As long as this is allowed to continue America cannot compete and will continue to slip toward a lower status among nations. The only way to stop this headlong rush into oblivion is to leave WTO, NAFTA and CAFTA and reinstitute tariffs including penalties on those countries that insist on continuing to depreciate their currencies. If this is not accomplished with the unpayable debt the country is carrying, it is doomed.

Yes, tariffs mean higher prices for imported goods and more inflation. Our trade deficit would fall and the dollar would stabilize. All those American corporations that moved to foreign countries to take advantage of cheap labor would no longer be able to capitalize on cheap labor and perhaps keeping their profits offshore in secret tax havens when they pay no US taxes. Things have to change and change quickly, or America’s competitive position will be permanently destroyed. Other nations will be able to buy more domestic goods with their stronger currency, raise their standard of living and develop their own domestic economies.

Those whose aim is to bring about world government know that if a country does not have a sound industrial base it can never be successful as a nation. What is being done to the US and Europe in the name of free trade is to force the people of those nations with a collapsing economic and financial structure to accept World Government. This is what this deliberate destruction is all about. In order to rebuild the manufacturing base the US has to erect tariff barriers on goods and services and savings have to be increased. The situation with savings is the same as it was in 1959, 43% of Americans have less than $10,000 saved for retirement. America needs a 10% savings rate if they ever hope to recover. Accumulation of savings has been difficult since 2000 due to declining interest rates. Stocks have risen only 9%, bonds 67%, but gold has risen five-fold and silver six-fold. We have recommended gold and silver coins and shares over that 11-year period so subscribers have been able to save and profit. The other 99% of professionals have been losers, not to mention the losses to inflation. The gold and silver bull market will be the greatest bull market of all-time. There is no safer place to be.

Listen to American Mercury contributor Bob Chapman on GONOB Radio (Though the host has a few flights of fancy, he’s learning, and it’s great to hear Bob’s insights, from being trained in intelligence work a half century ago to becoming the “worst nightmare” of our illegitimate rulers. — Ed.)

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We at The American Mercury are honored and pleased to welcome back to our pages Mr. Bob Chapman, an international economic expert and distinguished writer who was part of the print Mercury in the pre-Internet era.

Read the full article at The International Forecaster

WHEN YOU STOP and think about it, the Fed’s main instrument of monetary policy, the manipulation of interest rates, has been lost to it. That is two years with the same rate. What has become very obvious is that an official rise in rates would create all kinds of havoc. The same is true for Europe. This past week the ECB held rates steady as well. South Korea raised their rates. As the TV camera panned downtown Seoul we observed a large sign that said “buy Korean” — so much for free trade.

2011 will witness the US financial structure and economy under severe pressure again, especially in the second half of the year. The US is forced with major refinancing and the issuance of new debt in the trillions, the municipal problems will come to fore after July 1st, not that they haven’t already with an illiquid market and Europe will be embroiled in keeping six of its EU-euro zone members from insolvency. It is going to be some year. Germany is comical. On one day the public says no more bailouts beyond the $1 trillion already committed. The next day Mrs. Merkel says Germany will save the euro. The euro can only be saved with a commitment of $3 to $5 trillion. That means an additional major financial commitment. We do not believe the solvent nations of Germany, France, Holland and Austria will commit for that. If they do they will go bankrupt.

In coming up with trillions of dollars to purchase Treasuries and agency bonds they’ll monetize and the US will have much higher inflation.

The states and municipalities are essentially on their own. It is now very difficult to sell bonds, if possible at all. They’ll be no more Build America bonds and the federal government refuses to make additional loans, as Meredith Whitney has said more than 100 municipalities could stop paying interest on their bonds and approach insolvency.

These three events alone could bring down the financial structure of the Western world and perhaps the entire world. It could lead to no sovereign bond bids, as it already has for municipals. The deliberate effort to interconnect nations, regions and states could expedite such failure. It is not any longer possible to deal with problems in isolation. One thing affects another.

The denigration of the American middle class began three years ago and it is still just getting underway and the public hasn’t a clue as to what is happening to them and what is going to happen to them. An indication of that is this past Christmas spending. At the upper end sales rose 9% and at the lower end only 1.5%. There is no question that austerity is starting to take hold in America’s lower and middle class. What we see over the horizon is going to take its toll on U.S. GDP. Even with $2.5 trillion in net spending GDP growth in 2011 will be 2% to 2-1/4% down from 3% to 3-1/4% yoy. In addition what the government finally has to admit is that CPI and unemployment figures are totally bogus and GDP figures are substantially lower than stated. We can promise you in time this will all come out in the wash. We can also throw in that debt to GDP is not 80%, but 115% on a par with other failing nations. The financial and economic profile of the US has been altered by free trade, globalization, offshoring and outsourcing and without tariffs on goods and services prosperity can never return to what was once the greatest nation on earth. Listen Americans, if you want to live in a third world nation that is fine. If you don’t, force your representatives and senators to pass such legislation. If you are not successful and when all is said and done revolution will be your only choice, unless you like living on your knees.

If you refer to the last issue and the three problems facing Europe and the US next year you will also be facing an increase in global yields and much higher inflation. That is with official rates at zero and no exit strategy and perhaps QE3, as we predicted last May. Needless to say, these events are all going to be painful and destabilizing. These financial events are bound to have their social costs and that could cause severe changes in stock market performance. 2011 is going to be a very nasty year.

The handwriting is on the wall, but in Washington neither party is listening and they are accumulating debt by not altering their borrowing and spending habits.

Not only that, we have our states acting like Greece and Ireland, either of which could break out in full scale revolution at any time. The papering over of problems and the issuance of Build America bonds are history. Wait until the derivative bomb explodes. When will those who run Wall Street have another flash crash? Who will they blame it on this time? Who cares — the SEC doesn’t care and neither does the CFTC. At the same time we have an advancing credit bubble. QE3 could well cause hyperinflation, and QE3 will come. What a terrible web they weave.

Problems are not confined to the US. Ireland, England and Greece are on the hot spot. The debt Ireland has guaranteed is colossal. It is 30% of GDP. It bails out not only Irish banks, but British, French and German banks as well. What a sellout. It is impossible to take 40% of tax revenues to pay down outrageous debt at 6% interest. Needless to say this is unsustainable and the result will show up in spring elections. We expect the new government to renege on the deal. This is worse than WWI German reparations. They must believe the Irish are stupid. Do not forget it was the Irish that saved civilization and all is not lost until the last nail is hammered into the coffin. Europe has no contingency plan and the Irish exiting the euro zone and perhaps the EU could be the start of an exodus. Very simply the arrangement, a Bilderberg sellout, will be history. The $100 billion owed to US banks and $200 billion owed to the Royal family will not be repaid. That means the CIA and MI6 will again infiltrate Ireland and try to turn it upside down. As we said, if Ireland refuses to be destroyed then all the other nations in trouble will do the same thing. It will all come just be patient.

The subprime ALT-A crisis is still with us only bigger than ever. Our Fed Chairman tells us it was an isolated incident. We wonder what he has been smoking, or is he just a compulsive liar. It is the policy of such people to leave the public to their own devices and take care of the financial sector.

We predicted months ago that the bond market was a bubble, but we didn’t know when it would begin to be over. The beginning has begun. We have just seen the biggest bond fund outflow in almost 30 years. In December that was accompanied by a massive outflow from stock funds. For stocks that was the 33rd week in a row. This all was accompanied by an almost $10 billion outflow in municipal bonds. Bond mutual funds saw the biggest outflow in two years. You ask, with all the funds flowing out of bond and stock funds, how do these sectors hold up? The answer is your friendly government does not want you to know what they are up too. Even at PIMCO bond investors pulled out $1.9 billion. As more and more scandals break, on insider trading and market manipulation by government, less and less investors want to participate in markets. There is certainly nothing free or fair about them. Bonds are under pressure because of profligate Fed spending known as QE2 and the pledge to spend $900 billion. It is known as monetization and it is very inflationary. When the Fed continues to buy 75% of US Treasuries, government has a problem.

We received a taste of the future in the recent passage of the $862 billion pork tax bill, or stimulus 2. Anything goes to keep the system from collapsing from both parties. The new Republican majority in the House has said no increased spending without compensating cuts in other budget items. We do not think the House will cut military spending of $700 billion. If any cuts come they will probably come from Medicare and Social Security. The retired and baby boomers won’t like that one bit. Perhaps in two years they will see the wisdom of removing incumbents from office.

As municipalities approach failure and as the Fed keeps a broken system alive, Europe does everything possible to keep the euro zone and the EU from collapsing. Due to ECB and Chinese intervention, Portugal, Spain and Greece are hanging on, but barely. As the ECB tries to gain time Mr. Trichet attempts to garner an even bigger rescue package, one we believe could bankrupt solvent members of the euro zone, if not the EU. While this transpires just Portugal, Belgium, Spain and Italy have to raise $800 billion this year, the bulk of it in the first two quarters and the lions share in the first quarter. Greece and Ireland kick the total up to $1 trillion. In addition, Belgium has political problems and has had them for some time. It seems citizens want to split the country in two, which is only natural. The two groups have little in common. We know we have spent plenty of time there. As we said before the year is out these three problems will converge and the result will be extremely disruptive.

We now have a Federal Reserve that controls a financial monopoly over the American people, as a result of recent legislation. In this process more power is also being given to the IMF, the BIS and the WTO. Power is being taken away from sovereign countries and put into the hands of people who want world government. If you do not think that is real, recall the comments of former US Secretary of the Treasury, Mr. Paulson. If the financial sector wasn’t rescued Americans would wake up to Martial law. In other words, you either go along with our program or we will destroy you and the system.

Then, of course, there is the ongoing threat of terrorism, which is married to all of the above. Government is currently preparing to protect us. There is cyber security in the works to make sure terrorists do not get us or our wealth and threat is why they must know where everyone’s assets are. They have to check every wire transfer to make sure you are not a terrorist or a money launderer to protect you. Now everything everyone does is subject to scrutiny. Americans are to be treated like common criminals by their government. As a result, America’s land of individual freedom is dead, unless there are major government changes.

Every event is staged with several special purposes. The main goal is to bring out dissidents and to further advance world government.

In all likelihood capitalism in its present form won’t survive. Credit and debt are in such an advanced stage that even zero interest rates cannot turn the economy around. Worse yet, it gets more difficult to sell debt. The underlying problem is just too much debt to overcome. The departure on August 15, 1971 from the gold standard sealed the fate of the dollar. It allowed endless creation of money and credit that became overwhelming debt. Due to this profligacy in dollar issuance, and similar experience in all other currencies, the dollar fell close to 30% versus the price of gold this past year. This is gold replacing the dollar and other currencies, as the world reserve currency. This is 11 straight years of gain in a classic flight to quality. The elitists know their game to suppress gold and silver has been lost. What they now must do is have a meeting of all nations, revalue and devalue currencies, have a multilateral default and re-back the dollar with gold or have an international trading index of currencies that will have to be gold backed. That means currencies will be backed by gold at a much higher gold price, perhaps $6,000 an ounce or higher.

Over the past three years investors in general have reduced risk and consumers have avoided accumulating more debt. These responses to inflationary depression are normal, but they are opposite, what the Fed needs for a recovery. The upper middle class and the rich are expending buying, but the poor and middle class are not. The miracle of credit and debt is coming to an end, and the parasites are looting the system for a final time. It isn’t going to do them much good because we know what they are up to and who they are. This time there will be legal retribution, they can count on that. Forty years of looting will soon be over.

In the late 1990s the dotcom boom in the stock market could have easily been taken under control by raising margin requirements from 50% to 60%, but the essence of what the Fed and Sir Alan Greenspan were doing was to force the markets higher to bring in more mega-profits for Wall Street and banking.

The same thing happened during the real estate boom. Lenders, the Fed and regulators deliberately created a bubble. Fraud was rampant as rating agencies colluded with bond syndicators of mortgages. Anyone could buy a house even if they couldn’t qualify. Bonds were rated Triple-A when they in fact were Triple-B, the difference between a 10 and a 4. These criminal acts brought the housing boom an additional lease on life. No criminal or civil actions were ever brought against these fraudsters which tells us the Fed had to have had sub-rosa deals with the buyers of these toxic bonds, especially in Europe, which absorbed 60% of the toxic waste. This is probably why the Fed had to be forced to reveal how much money had been lent to European lenders and what the collateralization for the loans were. Trillions of dollars were used to bail out the buyers of toxic MBS-CDO bonds. We believe this was the deal from the very beginning. If you correlate the funding by the Fed you will find most of it went to banks that absorbed the MBS.

The tip-off is simply that no buyer ever initiated even civil action. Thus, you can see what the game was all about. Needless to say, no one will ever go to jail for the fraud and the American taxpayer will pay for the losses.

In the early 1960s we fortunately were able to see what lie ahead for the dollar and the monetary world. In 1964 we saw inflation start to spin out of control. That was the year the US removed silver from its coins and began the trek to abandonment of the dollar on August 15, 1971 and the inflationary blow off of 1980. The actions that began in the early 1960s led us to where we are today. The system has been looted. Americans and Europeans are being traumatized by a failing system, which has been engineered to bring about world government and the total enslavement of mankind. Over all those years, more than 50 years we have advocated that the system was indeed meant to collapse and that the only safe place to be, which is for financial salvation, was to be in gold and silver. It has certainly turned out that way.

This is why it is so important for writers, economists and analysts to understand why we have the problems, why they were caused and who caused them. All the answers lie in economic, financial, social and political history. What is being done has been tried many times in the past, but always unsuccessfully. You would think these planners would learn, but they haven’t. The reach for ultimate power is simply too attractive and enticing. Thus, for over 50 years gold has disappeared from government hoards, only to end up in private hands that understand that the ultimate money is gold. Gold is power and he who has the gold makes the rules. If you cannot grasp this small piece of history you will never understand the course we are on and how we got there. Ignorant of history, overall, Americans and Europeans probably as individuals probably only hold less than 5% of all gold in existence. If we include peoples of other nations and elitists, that figure catapults to probably 60% to 70%. As you can see people in the Western world do not get it and if that situation does not change they’ll lose all of their wealth and purchasing power. No matter what governments and those who control them do the fact remains that gold and at times silver, are the ultimate money. People are going to learn this lesson soon and you do not want to be one of them.

*  *  *

We at The American Mercury are honored and pleased to welcome back to our pages Mr. Bob Chapman, an international economic expert and distinguished writer who was part of the print Mercury in the pre-Internet era.

Read the full article at The International Forecaster

THE CHAIRMAN OF THE FEDERAL RESERVE, Ben Bernanke, would have us believe that if it were not for QE1, unemployment would have been considerably higher. Since QE2 began in June, U6 has only improved by ¼%. Perhaps better numbers are on the way, but that has not been an auspicious start. If we remember correctly almost all the funds in QE1 and now in QE2 have been lent to financial firms in the US and Europe, transnational conglomerates and governments and central banks. Most of those funds have been held on balance sheets to fain solvency. Very little has reached the public or to reduce unemployment. All we have to show for 2-1/2 years is a financial sector hanging on by a thread and more massive debt in the trillions.

What should be permanently stamped in your minds is that the financial carnage we have experienced is the fault of the Fed and the financial sector and that same Fed bailed out the crooks and left the public high and dry with 22-3/8% unemployment and a shattered residential and commercial real estate sector that is still two years from the bottom and perhaps 30 years away from appreciation.

It is despicable for Mr. Bernanke to have insinuated he helped avert higher unemployment when it was the policy of the owners of the Fed and Wall Street and banking, which was the cause of the worst depression since the “Great Depression” of the 1930s. It should be noted that the end of the damage is nowhere in sight. Throwing trillions of dollars at a problem doesn’t solve it, and in this case will only make it get worse. In addition, trillions of dollars in wealth were destroyed and as a reward for their greed the Fed, which allowed the public to pay for the Ponzi scheme, protected the financial sector.

As far as we know the Fed has already purchased with taxpayer funds about $1.5 trillion in MBS, known as toxic waste, which was created by the financial sector. The question is how much more has been purchased by the Fed and are they going to purchase more to bail out financial institutions and others? One of the things that is never mentioned is restitution for all the money these crooks stole. In a civil action concerning $5 billion in bogus MBS and other derivative products, Goldman Sachs, neither admitted or denied, and was found guilty of civil fraud, and paid a fine of $500 million. They got to keep the other $4.5 billion – another sweetheart deal to permanently protect them of criminal charges. Michael Milkin stole $3 billion, gave $1 billion back and kept $2 billion after doing 1-1/2 years in a prison country club. Then there was Warren Buffet’s, Berkshire Hathaway, which defrauded the government of $300 million. His firm paid a $100 million fine and kept the rest. Milkin was the exception, no one else since has been incarcerated. As you can see, it pays to be an elitist crook in America.

Now banking and Wall Street gets interest-free money, but the public does not. What is wrong with the public? Don’t they realize what is going on? What has happened to our representatives and senators and our courts? We’ll tell you what has happened; the NYC-Washington crime syndicate is paying almost all of them off. Americans have lost control of their government and if the slight improvements in the past elections are indicators, the situation is going to get worse.

As a result the Fed is monetizing debt in order to bail out government, banking and Wall Street, and to offset the persistent undertow of deflationary depression. All we can say is what is wrong with the American people? Can’t they see what is going on? If they do not wake up soon we could have a revolution on our hands.

America is facing almost zero interest rates. If those rates are raised the bottom will fall out of the economy and the financial structure will collapse. Any talk about higher rates is just that — talk. The only way out now is for the elitists to have another war as they did in 1941. How much longer can corporations keep two sets of books? What you have seen just didn’t happen, it was planned that way to force Americans and Europeans to accept world government.

Due to the current power of the Fed and other interconnected central banks, all other factors take a back seat to credit creation and their creation of money supply. Under mercantilist Keynesianism, which we prefer to call an economic plan for corporatist fascism, the greater the distortions the deeper the depression. This is the method of perpetual political and social control, which in one way or another has been successful over the centuries. These are the same people who have deliberately created economic cycles, which are extremely profitable, and when things are not going as planned they simply have another war. None of what you have seen has happened by chance, it has been planned that way.

As George Wallace said, “there isn’t a dime’s worth of difference in either party.” He was right. What he should have said was both parties are almost totally owned by Wall Street, banking, insurance, big Pharma and transnational conglomerates. The criminal deals that have and continue to exist in Washington are far worse than anything the Mafia ever did. Our government is operated just like any criminal syndicate.

What is becoming evident to us is that all is not going well for the Titans of Wall Street. Investors have been fleeing the stock and bond markets in hordes, although their owned rubber stamp is still in place. In fact, some of the higher placed elitist players are questioning whether they can again pull off a deflationary depression and war and still survive? As you can see they still have more than 50% of the electorate buffaloed, but as any student of history knows revolutions are led by 5% to 15% of the citizens. The rest are split along the sidelines.

Oddly enough what has suited both Democrats and Republicans has been a big loser for Americans, because the elitists almost in total control both parties. As a result, major Wall Street firms, which have for years owned the SEC and the CFTC now have virtually no regulatory oversight. Essentially Wall Street has a license to steal and they take full advantage of it.

The big question is can Ron Paul disarm or perhaps even eliminate the privately owned Fed? The answer to that question we should have over the next two years. Will it take a constitutional amendment or a monetary collapse? Again we will have to wait and see. It should be noted that after China and Japan the Fed now holds third place among those holding Treasury and Agency bonds. More than 60% of Americans want to dump the Fed and Wall Street, which owns the Fed, owns Congress, thus it will have to change by other means.

The greed of transnational conglomerates just never ends. Readers you are soon going to witness another great scam pulled off by America’s elitist corporations to further enrich themselves at your expense.

In a secret meeting on December 15th, business executives met in the White House requesting that the President declare a tax holiday, so that they could repatriate as much as $1.9 trillion from offshore subsidiaries in tax havens such as the Cayman Islands. Instead of going through Congress as they had to do six years ago, these crooks want an executive order. We were wondering how long it would take them to be back at the trough.

To make it simpler, participants recommended a reprise of a 2004 tax holiday that allowed these multinational conglomerates to return profits to the US at a tax rate of 5-1/4%, not the regular 35%. That piece of largess allowed these crooks to move $362 billion virtually tax free back into the US by declaring they will use the funds to create jobs for Americans. Needless to say, very few jobs were created. That money laundering operation and this new proposed operation would move part of $1.9 trillion into the US stock market, as was done before, to buy the shares of these US blue chips, which in turn buoys the stock market. The shares would rise in value as they did six years ago, and the executives would cash in their stock options making themselves billions of dollars. This is what this was all about last time and it is what it is all about this time. If under normal circumstances these companies paid the 35% tax they would owe the American people $665 billion. At a 5-1/4% tax rate that figure would be just under $100 billion. Is it any wonder that our government is broke?

In addition to this new caper in banditry these multinationals are already finding legal ways to avoid taxes. We won’t go into the details here but believe us their actions of the last five years have cost taxpayers billions of dollars. These US companies are very sophisticated and are routinely repatriating hundreds of billions of dollars in foreign earnings.

This is one of the main reasons tariff walls were torn down and why today we have free trade, globalization, offshoring and outsourcing. This not only enabled these crooks to pile up profits in tax havens, but it has hastened the demise of the American economy, so that Americans will be forced to accept world government, something these fascist monopolists want to take place in order to impose a new world order. This is really what this is all about. This is much more than meets the eye if you know what to look for.

Needless to say, there is a very simple solution to this financial treachery. All we have to do is re-impose tariffs of 25% to 40% and then there would be no reason to hold earnings offshore. This exercise over the past ten years has cost America 42,000 lost businesses, which were shipped overseas as well as 8.5 million high paying jobs. You ask yourself how could this happen? The answer is your House and Senate are bought and paid for and whatever these elitists want they get. If tariffs are not soon implemented there will be no way back for the US and European economies.

The answer by these transnational conglomerates is America is uncompetitive due to its tax structure. They convinced Congress of this some time ago and that is why they are allowed to keep profits offshore. The problem is when they bring those profits back to the US it is at 5-1/4% and these profits end up in the stock market for reasons we’ve explained. Thus, they get enormous tax benefits but in the process they destroy the underpinnings of society. In 1967, we wrote an article in a leading journal stating that this was where the elitists were headed and the article has proven prophetic. The American Mercury‘s legacy lives on. Such tax breaks for the mega rich holds no water. These are the same corporations that in part are already sitting on another $1.9 trillion in cash in the US. This has nothing to do with investment or job creation and everything to do with corporate greed. This infusion of offshore funds onto the active US balance sheet has a tremendous levering effect as well on earnings.

We have all the dirty details but we’ll spare you homework. It is the way we say it is. Let’s see if they try to end run Congress on this issue and perhaps in the interim we can find out how much the President is being paid for ramming through such a grand venture. Why do you think such meetings are secret?

If you are wondering why your country is broke, one of the reasons is the antics of these elitists, when great profits are never enough.

First it was Argentina two years ago, then Hungary and France and now it is Poland. Argentina took over pensions and the others are using pension funds. Poland wants to limit transfers to private pension accounts to plug a widening budget deficit.

Poland faces an excessive debt, in part a result of pension contributions. Legislators want to limit transfers not temporarily but permanently. That being the case this move is not to solve a short-term problem, but a new policy to cut off retirees from their benefits and to spend the funds elsewhere. Politicians being what they are won’t reduce the deficit appreciably. The idea is to cut pensions from 7.3% of salaries to 2%. Just to give you an idea as to how efficiently government has been run since 2007, the deficit went from 1.9% to 7.9% of GDP. The pension flow demand is 40% of GDP. As you can see worldwide everything is on the table and America will be no exception.

Even though Ben Bernanke may end up being recognized as a disaster for the American economy, he is particularly popular on Wall Street and in banking. He supplies the liquidity for financial institutions to increase profits hopefully exponentially. Simultaneously, via the “President’s Working Group on Financial markets,” he directs the manipulation of markets. The results are known as the Bernanke put. There simply cannot be market and bond declines except for gold and silver. The latter have been restrained, but only on a temporary basis, because that is what they now are only capable of.

As we wrote this past January, the effect of stimulus would end in April and in May some sort of effort had to be put forward to help a sagging economy. That came in the form of aid from the Fed in the bond market and via swaps. This proved an important event because we could then see that the Fed had to get more accommodative and allowed us to predict QE2. Thus, there is the Bernanke put. You can be sure he guaranteed Wall Street, before he was ever appointed, that he would do exactly as they instructed. No one has ever had that job that didn’t do so, and those orders come from JPMorgan Chase, which is the ringleader and always has been. Why do you think we have quantitative easing and zero interest rates? Those are Morgan’s orders. From Ben’s utterances we believe there will be a QE3 and more as we move toward hyperinflation and we predicted that last May. We also see indefinite low interest rates. He and they are not really concerned about the dollar. They have influenced many other nations to do the same thing, so its bad currency versus bad currencies. This way they can lay off their inflation on everyone else. That is why they have suppressed gold and silver because versus all currencies they are the only alternative. In that process they will make those who understand what the Fed is up to, essentially the Fed’s enemies, wealthy, an unavoidable fallout the elitists will have to live with to retain control of the system.

Mr. Bernanke arrogantly tells us he saved the system. What he should have said is that “I saved the finance houses and moneylenders at your expense; it is the way we have done it for the last 1,000 years.”

*  *  *

We at The American Mercury are honored and pleased to welcome back to our pages Mr. Bob Chapman, an international economic expert and distinguished writer who was part of the print Mercury in the pre-Internet era.

Read the full article at The International Forecaster

Exclusive to The American Mercury

TODAY THE FEDERAL RESERVE, America’s private central bank, began to ship billions of dollars to the central bankers of Europe in an attempt to stem the fall in the value of the euro created by Greece’s debt crisis. The total value of the deal could easily top $1 trillion according to experts. Americans — suffering from high unemployment and a tanking economy themselves — are expressing astonishment that 1) the “Fed” has the authority to unilaterally ship dollars to foreign bankers, and 2) that the desires of European-domiciled bankers come first in the Fed’s eyes over the needs of suffering, over-taxed, and unemployed Americans. (ILLUSTRATION: Federal Reserve Chairman Ben Bernanke)

According to Congressman Dennis Kucinich, Congress did not authorize the move. “The Federal Reserve is no more Federal than Federal Express,” he said, which means that, as a consortium of private banks, the Fed can decide on its own and Congress can do essentially nothing about it. Pittsburgh Examiner financial commentator Joe Schoffstall added “Their ultimate goal, just like [that of] any other bank, is to maximize their net profit to the highest levels possible. None of this would be possible without the option of printing endless amounts of money at will….”

The dollars created by the Federal Reserve — which, according to analysts, will dilute and reduce the value of every dollar in Americans’ pockets — will be swapped for rapidly-declining euros, just as the euro’s value is plummeting, and for that very reason. The Fed is acting in concert with other central banks — including the Bank of Canada, the Bank of England, the European Central Bank, the Swiss National Bank and others — in the so-called “dollar swap” effort.

The European Union and the International Monetary Fund had already pledged a $140 billion “defense package” for the euro, but it wasn’t enough. Estimates of the ultimate cost of the Fed’s dollar giveaway run from $900 billion to more than twice that amount — nearly as much or more in a single day’s pledge, critics say, as in a year of the disastrous Iraq war, which has already devastated the US economy.

The Federal Reserve’s decision today constitutes a reopening of a program started during the 2008 “global financial crisis” under which dollars are shipped overseas directly to foreign central banks. These central banks can then lend the dollars they receive to commercial banks in their home countries that they decide are “in need of dollar funding” to prevent their collapse — and make a huge profit in the bargain, courtesy ultimately of the US taxpayer.

The New York Times published information this morning which appears to buttress supporters of the deal, saying “The swap operations do not carry any exchange rate risks or credit risks… The Fed would not be a party to whatever dollar-denominated loans the European Central Bank may make to European financial institutions…. The Fed actually made money from the previous dollar swap program. The foreign central banks paid the Fed interest equivalent to what they made from lending the dollars.”

Critics say the “making money” and “no risk” claims are irrelevant, though: the dollar’s value is being diluted nevertheless and the fact that the lenders of these newly-created funds will make huge profits should be a source of outrage, not reassurance, they say.

According to American Mercury analyst Gideon Dene, “It is an outrage. But Americans have slept while the Fed has been given the power to control our entire economy. When private banks — and that is what the Federal Reserve is, the central hub of the private banking system — control your currency, you’re naturally going to see them act in their own interests instead of in the interests of American workers and small businesses. The Fed has essentially taken over one of the functions — you might say the most important function — of government: control of the currency. And so you get government by the bankers, of the bankers, and for the bankers.”

“And remember,” Dene added, “European-domiciled banks aren’t necessarily ‘European’ in any real sense. Look at the stockholders and you’ll find out that many of these characters are no more European than George Soros or the Rothschilds. These are internationalist, globalist ‘operators’ with no loyalty to any country. It’s both insane and tragic that we’ve handed over our currency to these private bankers. It’s like hiring Al Capone to run your Neighborhood Watch program.”

I asked Dene what could be done: “The problem actually goes deeper than the Fed,” he said. “The ‘Audit the Fed’ folks, if they get their way, will just uncover the tiny tip of a mountainous problem that’s been buried in ignorance and obfuscation. And that problem is fractional reserve banking. That’s the system that essentially is our financial system today. Most money is not created by the government. Most money is not created by the Fed either — most money is created by commercial banks through the ‘magic’ of the fractional reserve system, acting on demand deposits — like checking accounts. The Fed supervises and hopes things don’t get out of hand — and steps in when they do.

“The fractional reserve principle is based on the idea that most depositors won’t ask for their money all at once. So you can lend out 90 per cent. of your depositors’ funds without deducting the amount you lend from their accounts — in essence creating money.

“That’s a system that guarantees panics, failures and bubbles. And until people understand that, there will be no push for meaningful reform. Not one citizen in ten thousand has even heard of fractional reserve banking. And not one journalist in a thousand understands it. And those who are getting rich off of it are going to do everything they can to maintain that general ignorance. I do hope that what the Fed did today has an educational effect.”

THE WORKS of American Mercury contributor and editor Henry Hazlitt (he was H.L. Mencken’s chosen successor) are brilliant gems of economic insight which, if they were only more well known, could change the downward spiral of the West’s economic fortunes.

Did you know, for example, that inflation is not a rise in prices?

Did you know that “government economic stimulus” is in the fact the opposite of what its name implies?

Hazlitt was a man of logic, reason, and science who could also write with wit and style. He was a gentleman of the old school whom we’re proud to have had on the Mercury masthead. Hazlitt had his lapses. He favored a gold standard as a form of discipline, or enforced honesty, upon banks and governments, as he should have. But he failed to address the ways in which bankers can get around that discipline through fractional reserve banking.

His greatest contribution was to dispel the hoary shibboleths of economics that are, sadly, still taught in the schools and parroted by media talking heads. When Henry Hazlitt clears the cobwebs from your mind, you’ll probably say “Wow!” I did.

Two of his most important books have recently been republished in new editions. According to the Henry Hazlitt Web site:

The Inflation Crisis and How to Resolve It

Henry Hazlitt was not mainly a theoretician. He was a financial journalist, commentator, and interpreter of current events. In this sense, he was one of a kind: a learned economist with both feet in the real world of politics, financial markets, and the economics of everyday life.

The Inflation Crisis and How to Resolve It , newly in print in hardcover at a low price, is his masterpiece on money. The book reappears just in time: we are in the midst of an inflation crisis even if the effects are not yet fully felt.

By inflation, he didn’t mean rising prices. He meant the tendency of government and the central bank to print money in pursuit of prosperity. In this sense, no book could be more directly related to our own times, as Bernanke and Company use and abuse the power of the Fed as never before.

He begins with an overview of what inflation is and covers the abysmal record of government money management. He clearly explains the cause and effect: first comes the printing and then come the business cycles and price increases. He explains that the only real cure for all of the effects is to treat the cause: end the government’s power to print. For this reason, Hazlitt favors a gold standard.

From a reader point of view, Hazlitt’s book is pure pleasure. As Mencken said of him, he was the only economist of his generation who could really write. He is clear as a bell, and why? Because he had a passion for explaining economics to every living person. He did not think that economics should be left to the academy or to investment firms.

This book came out in 1978 and it’s been thirty years out of print. It is one that the Mises Institute wanted to have in print for many years, and it is an event to celebrate that it is finally here, in a beautiful edition at a rock-bottom price.

Economics in One Lesson

This is a new edition of the classic book that has taught many millions sound economic thinking. It is a hardbound volume, and now available for anyone who needs to understand what economics implies for the society, government, and civilization.

Hazlitt wrote this book following his stint at the New York Times as an editorialist. His hope was to reduce the whole teaching of economics to a few principles and explain them in ways that people would never forget. It worked. He relied on some stories by Bastiat and his own impeccable capacity for logical thinking and crystal-clear prose.

This is the book that made the idea of the “broken window fallacy” so famous.

The new edition is beautiful, it is hardcover, and it is newly typeset for modern readers. It has a full index. It includes a wonderful foreword by Walter Block.

This is the book to send to reporters, politicians, pastors, political activists, teachers, or anyone else who needs to know.

Professor Block explains that it was this book that turned him on to economics as a science. He believes that it is probably the most important economics book ever written in the sense that it offers the greatest hope to educating everyone about the meaning of the science.

Written for the non-academic, it has served as the major antidote to fallacies in the popular press, and has appeared in dozens of languages and printings. It’s still the quickest way to learn how to think like an economist. And this is why it has been used in the best classrooms more than sixty years. The new edition dispenses with the additions made by later editors, which only date the book, and reverts to Hazlitt’s own first edition.

Henry Hazlitt Web site