Money Flow Trading Method along with Risk Management

loveandpeace

I will make it very simple for you to understand. I showed you how to get the results that you achieved. You know how your Forex trading improved.

I have no more interest in teaching you anything because you are not a fair or honest person.

When people always want to take and get something for nothing there is a flaw in their character and it guarantees that as a trader they cannot succeed.

As for a person you are not someone who I could teach because you have shown me no respect.

I offered to do things for free because I thought that you had exceptional talents based on your initial results. Clearly I was wrong about your ability to control your greed and your ego.

Please do not reply with negative remarks that cannot be justified. I wish you good fortune in whatever you do, however I strongly suggest that trading Forex is not for you. Your own past results confirm that.

 

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1. https://cdn-assets.faireconomy.media...ar392875_2.gif BenjaminIs
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Quoting loveandpeace
Good Morning Benjamins, I am very fortunate to find you in FF and whatever I am doing/struggling, just under your mentorship. I am just a student, still has to learn a lot from you. I am not very familiar with FXCM platform so I was trying to set a SL, but put A wrong button and the market threw me out with the loss( the one I made ). I have been doing forex for a long time, so I am good With MT4. And you know experience counts, so I am applying my experience here under your mentorship. I know you are busy Person, but please DO NOT go/leave this...
Good morning loveandpeace

I will certainly call you today after 6:00 PM

I appreciate your reply.

Here is my question after reading your reply. What is the main difference you find now with what I am teaching you and what you were doing on your own before we met recently on Forex Factory ?

You can see from your results as everyone else can see that my method works for you.

Look at my results here on my FXCM UK $50,000 US dollars demo accounts. I have been in this business since 2003. I started trading real funds with my first Forex trade being on March 9, 2006.

I have traded millions and millions of US dollars. My largest account was for $100,000 US dollars and I traded with PFG Best in Chicago under LPOA.

I made 1502 Forex trades and my first 673 were all winning trades. Probably a world record. (SMILE) !!! The reason that I share this information here is because to do that I needed to take risks that were not wise. However I learned from that great Forex trading experience. My Net Profit after exactly 36 days of Forex trading from October 2, 2006 to November 6, 2006 was just over $19,000 US dollars. I have the PDF file of all those trades just in case my representations are not accepted.

The real lesson that I learned during 2008 when I was then trading again under LPOA with over $120,000 US dollars for this same client from Hong Kong. I was then an introducing Broker with FXCM in New York City.

I told my client Cyber Planet that there was NO WAY that EUR/USD would go below 120.00. It did and I had a MARGIN CALL that caused an incredible loss of funds. My client invested more funds with FXCM.

I had just seen EUR/USD go over 160.00 during early 2008 and now later in the year I had open 30 positions LONG of EUR/USD near the 120.00 mark.

The lesson was The Market Is Always Right. I then had to develop a Superior Risk Management Plan where I never trade more than 20% of my capital. If I had this rule then I NEVER would have had the Margin call.

I have now reached the skill level of Forex trading that I formed my corporation on February 14, 2012 where my corporate charter in Canada allowed me to not only trade Forex for my corporation however now I can teach as well. The way that I do things I needed my own proof to see if I could actually teach others. I was very fortunate to have Keep Calm sign up and learn from me and she accomplished amazing results as you can see from her prior posts during 2017.

I now am moving everything to my corporate website and charging the very reasonable amount of $250 US dollars registration fee paid only one time for a three month course and a monthly fee of $50 US dollars for 24/7 access to see my trades in real time and work with me during Forex trading hours.

If anyone has any questions or comments then please post them here on my thread.

Thank You


Benjamin
BWM

 

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1. loveandpeace
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Quoting BenjaminIs
{quote} Good morning loveandpeace I will certainly call you today after 6:00 PM I appreciate your reply. Here is my question after reading your reply. What is the main difference you find now with what I am teaching you and what you were doing on your own before we met recently on Forex Factory ? You can see from your results as everyone else can see that my method works for you. Look at my results here on my FXCM UK $50,000 US dollars demo accounts. I have been in this business since 2003. I started trading real funds with my first Forex trade...


Before and after, there is a HUGE difference. Now with your Money Flow Method, I can predict market, most of the time successfully.

But still way to go, lots of the things to learn from you, my Mentor.

Let me tell you one thing, you know what I was about to Quit this FF, forex for good, because in forex my losses were huge than the

Winning trades. But NOW, under your mentorship, I can finally achieve my goal., and I could go back home and spend rest of my life

With my mother and siblings., and for this aim/ambition, I need your help/expertise. Would you help me out?? Take care.



Take care and be well.

Shabbot Shalom.


Benjamin

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1. VEEFX
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Quoting loveandpeace
So technically this thread is no more??? where is Mr BenjaminIs ??
He is probably soaking in sun on a beach somewhere in Turks and Caicos. What did you expect bro? He is 75+yrs old and keeping this thread alive for past 2 yrs with no active participation. He did what he could. Start standing up on your own feet and implement what you learnt thus far (in demo). Trading is a solitary journey so expect no one to hand-hold your trades. That is just how it is unfortunately... just my 2 cents. I could be wrong and he might return back here but we would never know and waiting for someone is never a good strategy imo (speaking from experience)

unsubscribing from this thread.... good luck brother

EDIT: If I ever return to spotfx and re-energize by old automation, I have several great ideas from this thread that I would love to implement but who knows where i will be in the future lol
Staying in my lane...

Hello Everyone

Hello loveandpeace

So you started off so well. Your first FX trade was on March 3, 2019. You started with 3 wins then a loss followed by 8 wins in a row and another 10 wins in a row.

I was very excited for you and myself as your teacher and Mentor.

Then on March 11, 2019 you had a loss of $958.00 which is the MAXIMUM LOSS my trading method allows. Then you had another 13 FX trades in a row that were all winning Forex trades. For awhile I was wondering if perhaps you might become a better Forex trader than myself with 16 years of hands on experience and results.

THEN you STOPPED LISTENING to me and stopped communicating with me. I did not say anything because I wanted to observe exactly how you would deal with your changing results.

You had your first break even FX trade, then a loss of $530.50 and three wins the last being $152.75 US dollars. Then IT ALL FELL APART.

On March 19, 2019 you had the following losses.

(1) $501.75
(2) $524.00
(3) $1017.00
(4) $1012.00

Then three small wins of $132 , $127 and $131 followed by these losses.

(1) $1516.00
(2) $1542.00
(3) $1006.04

So now you are even allowing your MAXIMUM losses to go over $1000.00

Then you lost another $12,000 or so US dollars in 14 more trades until today May 6, 2019 where your last two open positions of USD/JPY were closed for profits of $455.31 and $502.25.

Your closed balance now all in cash is as shown in the SCREENSHOT above.

I still have good confidence in your ability to become very wealthy however if you do not follow my instructions and trade just to trade and do not use Risk On and Risk Off as your guidlenes along with the proper Risk Management then you will go into the group of the 95% of all Forex traders both retail and professional that lose ALL their money.

At least the money that you lost are Demo Funds. If you start following my instructions again within 60 days you can get your balance over $60,000 US dollars or over 20% ROI (Return On Investment)


Please share your thoughts with me on this thread. My comments are meant to be positive and instructive so please take them as I mean them to be taken.

Sincerely yours


Benjamin

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1. https://cdn-assets.faireconomy.media...ar392875_2.gif BenjaminIs
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1. https://cdn-assets.faireconomy.media...ar392875_2.gif BenjaminIs
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Antal E. Fekete

January 9, 2003

That central bankers are the quartermasters of inflation is no longer a controversial assertion. That much was admitted by central banker Alan Greenspan in his speech before the Economic Club of New York on December 19, 2002 (see: www.federalreserve.gov/BoardDocs). He observed that as long as the gold standard was in charge of money-creation the price level was relatively stable. For example, in 1929 it was hardly different from that in 1800. But, after gold was banned and central bankers were put in charge in 1933, the consumer price index nearly doubled in two decades. And in the four decades after that prices quintupled. In other words, under the watch of the gold standard the dollar preserved its purchasing power for a period of one and one third of a century, but under the watch of the central bankers it managed to lose 90 percent of it in half of that time-period.

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The Specter of Deflation
Presently the specter of deflation is haunting the world, so much so that central banker Ben Bernanke felt obliged to address the problem in a speech before the National Economists Club in Washington, D.C., on November 21, 2002 (see: www.federalreserve.gov/BoardDocs). He presented a simplistic view of deflation defining it as a general decline in prices. Actually, it would be more accurate to say that deflation manifests itself through a general decline in prices andinterest rates. Mr. Bernanke identified the source of deflation as a collapse in aggregate demand -- a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers. Of course, this is the view of an unreconstructed Keynesian. But Keynesianism has been brain-dead for some three decades, so we ought to feel emancipated from its tyranny. We identify the source of deflation as reluctance of producers to take the loans that bankers try to push on them through ongoing interest-rate cuts. Uncharacteristically, producers are pessimistic about future profit opportunities. Instead of contracting new debt, they scramble to get out of the old, and try to retrench by reducing inventory.

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Guided Tour of the Star Chamber
Messrs. Greenspan and Bernanke claim that the Federal Reserve has the situation firmly in hand. If deflation were to develop, options for aggressive monetary policy response such as lowering interest rates are available. They admit that the zero lower bound on nominal interest rates presents a problem. Even if debtors were able to refinance loans at zero nominal interest, they may still feel excruciating economic pain caused by high and rising real rates due to the falling price level, as shown by their deteriorating balance sheet. However, Messrs. Greenspan and Bernanke reassure us that monetary policy will never lose its ability to stimulate aggregate demand and the economy, zero interest notwithstanding.

Mr. Bernanke gives us a guided tour of the Star Chamber, showing all the instruments of torture and explaining how they are to be used. The first of these is the printing press. Under a fiat money system the central bank generates inflation by this technology allowing it to create as many dollars as it wishes at essentially no cost. But it is not enough to create fiat money; you must also be able to put it into circulation or, at least, to make credible threats (sic!) to do so. Normally the Fed puts newly created fiat money into circulation through asset purchases. This particular torture instrument is used by the Fed to reduce the value of the dollar in terms of goods and services. Under a paper-money system a determined government and its central bank can always generate higher spending and induce positive inflation, we are told.

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Pushing on a String
If this has the result of pushing short-term interest rates to zero, the Fed will still not be at the end of its rope. It can further stimulate aggregate spending by expanding the menu of assets that it buys. If we do fall into deflation, we can take comfort in the thought that "the logic of the printing press" will ultimately assert itself. Sufficient injections of new money must eventually reverse a deflation.

So what may the Fed do if its target rate, the overnight federal funds rate, has fallen to zero? Why, it will change the target, that's what. It will stimulate spending by lowering interest rates further along the maturity spectrum. It will target the two-year rate by committing to make unlimited purchases of securities maturing in two years or less. But suppose that deflation is so stubborn that spending is not stimulated even as the two- year rate is pushed down to zero. Well, then change the target again, this time, say, to the ten-year rate, committing to make unlimited purchases of securities maturing in ten years or less. And so on, ad libitum. Mr. Bernanke says that lower rates over the entire maturity spectrum of public and private securities should strengthen aggregate demand "in the usual ways", and thus help end deflation.

This betrays our central bankers' ignorance of the nature of the beast. The Fed may be pushing on a string. People may refuse to spend the money in the "usual ways". It is one thing to print fiat dollars, and another to make people spend them. No problem, Mr. Bernanke says. If lowering yields on longer-term securities proved insufficient to re- start spending, the Fed might next consider offering fixed-term loans to banks at zero interest, with a wide-range of private assets (including, among others, corporate bonds, commercial paper, bank loans, and mortgages) deemed eligible as collateral.

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Operation Helicopter-Drop
But the banks may not use the loans at zero interest in the way intended by the Fed. They may not want to make further loans to their clients whose prospects to turn a profit are dim at best. The banks may find it far more attractive to invest in bonds for the capital gains guaranteed by the central bank's zero-interest policy. Business lethargy may not react to loans offered at ever lower rates. In this case Mr. Bernanke recommends the helicopter-drop of money, an idea first suggested by Milton Friedman. There must be a way to put fiat money into circulation, if not by hook then by crook! A broad-based tax- cut financed by open market purchases of securities by the Fed should do the trick. This "manna from heaven" should re-start spending. The Federal Reserve and other policymakers are far from helpless in the face of deflation, even if the rate of interest is already pushed all the way to zero.


Taking Risks out of Bond Speculation
All this talk is old hat, except for the fact that heretofore it hasn't been considered polite behavior for central bankers to flaunt their authority to create fiat money in unlimited quantities, and to boast their power to drive down the value of the dollar in terms of goods and services. More interesting than what these gentlemen say is what they don't say. They studiously avoid reference to the 100 trillion dollar behemoth: the interest-rate derivatives market, and to bond speculation. Derivatives are a tell-tale, revealing the big picture. Far from trying to prevent or to combat it, the Fed is promoting deflation. It does, in fact, act as the quartermaster of deflation. Every one of the torture instruments in the Star Chamber enumerated above is making deflation worse, not better.


What the $100 trillion derivatives market shows is that the main feature of deflation is the invisible but nonetheless real bull market in bonds. Nobody is talking about it, although the bull market in bonds that started in 1980 has been the largest of all bull markets of all kinds in all history. Fabulous fortunes have been made and will be made before it is over, thanks to the Fed that has taken the risk out of bond speculation.

The speeches of Messrs. Greenspan and Bernanke are the best example to demonstrate the charge. Speculators are told that the Fed is prepared to buy unlimited quantities of securities across the entire maturity spectrum. What is this if not an invitation to get aboard the bandwagon and share the ride to infinite riches? Come and get the bonds before we snap them up. Fear not, your investment is absolutely safe. Your friendly central banker has made bond speculation risk-free. He underwrites the unlimited capital gains you are going to make on your speculative bondholdings (or on your long positions on bond futures, or on your call options on bond futures). The figure $100 trillion shows the extent to which speculators have rallied to the call of the Pied Piper. It measures bets in the aggregate that speculators have made on ever-increasing bond prices or, what is the same to say, on ever falling interest rates.


Of course, interest rates will never go to zero. They just keep getting halved. The yield on long-term Treasury bonds was 16% in 1980. It has been halved to 8% and will be halved again to 4%, according to the script of Messrs. Greenspan and Bernanke. After that the target at successive halvings will be: 2%, 1%, 0.5%, 0.25%, 0.125%, 0.0625%, etc. As you see, it never gets to 0%.

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Falling Interest Rates Squeeze Profits
Paradoxically, falling interest rates squeeze profits. Conventional wisdom suggests otherwise: lower interest rates are considered salubrious to business. However, we ought to distinguish between a low interest rate structure and a falling one. Only the former is salubrious; the latter is lethal. Falling interest rates reveal that past investments in physical capital have been made at too high a rate of interest in view of lower rates presently available. Furthermore, even the low rates of today will appear too high tomorrow. This explains business lethargy. Expanding production would appear foolhardy as long as the decline in the rate of interest continued. Falling interest rates make the cost of servicing past investments soar. As bond prices rise, the present value of debt will rise as well. So does the cost of liquidating a liability. These increases hit the profit margin, regardless whether the fact is realized by the producers or not. If not realized, the outcome will be that much worse. As the firm is paying out phantom profits in dividends, it is undermining its own financial strength already weakened by the falling price level. At one point the firm will be unable to pay its bills and will be forced to seek bankruptcy protection. Then there is the matter of the domino-effect. Even perfectly healthy firms are hit by deflation: they may find it impossible to collect their receivables and go under after their debtors have -- all because of the falling interest rate structure.


Financial Vampirism
In the view presented here deflation is a huge wealth-transfer scheme from the producing sector to the financial sector, denuding the former of its capital, and enriching the latter with risk-free capital gains. Indeed, the beneficiaries of the falling interest-rate structure, making risk-free profits thanks to the zero-interest policy of the central bank, are the principals of the financial sector, chief among them those of the big money-center banks. Their obscene profits do not come out of thin air. Their wealth is not newly created wealth. It is existing wealth siphoned off the balance sheet of producing enterprise, forced into bankruptcy by the falling interest-rate structure. This is modern vampirism practiced by the financial sector, aided and abetted by the central bank, and its victim is the producing sector.
The bear market in stocks is not the cause but the effect of deflation. The cause is the artificial bull market in bonds financed by the central bank. If you ask the bond speculator about his obscene profits while the rest of the economy crumbles around him, he will shrug: "I play by the rules. And I did not make those rules either."


Bond Speculation Is No Zero-Sum Game
The proof of complicity of the banks in the bond-speculation-scheme is the $100 trillion derivative monster. No small-time speculators could create such a Moloch. It was created by the big money-center banks, for their own benefit, with complete disregard for the disastrous effect it has on the producers of goods and services. The total face value of outstanding bonds falls far short of the colossal figure of $100 trillion. It is against common sense, and an invitation to disaster, to allow speculative long positions to exceed total supply. Messrs. Greenspan and Bernanke have no comment on all this, except to confirm policies that are conducive to further increasing the debt behemoth and further whetting the appetite of the $100 trillion derivatives Moloch.

We are told that the sum of $100 trillion is "only a notional amount". However, the profits of the bond speculators are not notional. They are payable in cold cash. If indeed interest rates did go down, and the price of bonds did go up, say, one percent, then the speculators' profit would be $1 trillion in cash. Who is going to pay that?

Economists will tell you that the profit of one bond speculator is the loss of another. Don't buy that. It would be true only if speculation was a zero-sum game, and it was a case of stabilizing speculation. It is true that some speculative markets answer that description. An example is the commodity market trading agricultural goods. It fits the model of a zero-sum game. This is so because the risks involved in commodity trading are nature-given, having to do with the fickleness of the weather and the unpredictability of natural catastrophes such as a flood or a tornado. Human mortals are not privileged to see the future. Speculators in agricultural commodities make money by resisting the formation of price trends. But in markets where the risks are made (unmade!) by man such as the market for bonds and their derivatives, speculation is not a zero-sum game. There, speculators make money not by resisting price trends but by riding them. This is the case of destabilizing speculation.

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Power to Create Is Power to Destroy
The producers are sitting ducks in this speculative shoot-out. They have no choice. They must carry the risk of owning productive capital, without which there will be no consumer goods for Mr. Greenspan and Mr. Bernanke, or for you and me. This is an accurate description of the mechanism whereby the capital of the producing sector is surreptitiously siphoned off for the benefit of the financial sector as the rate of interest is driven down to zero. The producing sector is condemned to bankruptcy. It is a victim of plunder sanctioned by the Criminal Code. This is the essence of deflation: speculators aided and abetted by the central bank are allowed to bid bond prices sky-high, in complete disregard for the havoc that falling interest rates will wreak with the capital accounts of the producing sector, not to mention losses inflicted on stockholders. The $100 trillion derivatives market is a monument to the folly of man in delegating unlimited power to the central banker to create as much fiat money as he wishes. Former central banker Paul Volcker knows. He has been there. He is quoted as saying that "the truly unique power of a central bank is to create money and, ultimately, the power to create is the power to destroy." If the central banker has unlimited power to create, then he has unlimited power to destroy. And destroy he does, especially the savings of ordinary people.


Why Are Economists Silent?
I am aware that my warnings will be received with a great deal of skepticism. The central banker as the quartermaster-general of deflation? Arrant nonsense! Not only does the central bank has its own army of research economists, it also has the benefit of the knowledge and research of the entire profession. There can be no question that the central bank wields its awesome power while enjoying the best economic advice money can buy! Siphoning off wealth from the balance sheet of others is straight out of science fiction, my critics charge. The allegedly injured party, the producing sector, hasn't complained that its capital is open to pilferage. The media in reporting the crash of Swissair and United did not suggest foul play in plundering the airlines' balance sheets.

Yet you may dismiss my charges only at your own peril. The awareness is growing that not just the media, but the entire profession of monetary economists has been bought off by the central banking establishment in order to put the best possible spin on our fiat money system. In an interview on December 17, 2002, entitled "Our Dishonest and Corrupt Monetary System" (www.kitco.com), Dr. Larry Parks recalled that John Kenneth Galbraith, the Paul M. Warburg Professor Emeritus of Harvard University, had published a book in 1975 entitled Money, Whence It Came, Where It Went. In this book the professor wrote: "The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it." In other words, Galbraith is saying that when it comes to money, economists lie! Dr. Parks asks: why do they lie? They have tenure. Why don't they tell the truth? He concludes that the monetary economists, for the last fifty years or more, have been bought off. With Nobel-prizes, endowed chairs, research grants, board memberships, and other perks. Monetary economists have betrayed their Muse, to serve Mammon.


Off-Balance-Sheet Wizardry
That the profession of the accountants has been bought off by the financial sector came to light recently in the wake of the Wall Street accounting scandals. But in spite of the great publicity given to these scandals by the media, the problem has not been fixed. A few small-time crooks may have been apprehended, but none of the authors of the scheme whereby banks are allowed to cook their books has been charged. The truth is that banks can carry assets, such as bets in the derivatives markets, "off balance sheet". They do this in order to find shelter from the scrutiny of depositors, creditors, shareholders; more generally, from the scrutiny of taxpayers at large. Accountants, regulators, and bank inspectors know this, but that's a different matter. Apparently, they have been bribed, too. They are part of the conspiracy. This is how Dr. Parks describes the fraud:
"Fractional reserve lending is jargon for creating money out of nothing. That's what that means. In the case of derivatives, these are bets that the banks make. The banks today in the aggregate worldwide have made roughly $110 trillion worth of bets. That's all they are. Banks are making bets and creating money. One of the things that obscures this for everybody is that banks alone do not have to reveal their entire balance sheets, as all other public companies must do under Securities and Exchange Commission regulations. Banks have the option, with some of their assets, to put them in a basket that they call "held for investment". When they put assets in that basket (they could be stocks, bonds, or whatever), then those assets are held at historical costs, rather than at market value... Nobody else gets away with this except for them. The reason they get away with it is because they say, in effect: 'If we had to mark everything to market, there would be too much volatility in our earnings. We don't want you to find out.' All this is secret. It's called bank secrecy... There are winners and there are losers. The losers are the ordinary people who lose their pensions, their savings, their jobs. The winners are the financial guys... These guys have no downside... Do you know what the banks took out of the economy last year? Nearly $400 billion. The Wall Street firms who get transaction fees for moving the newly created money around took another roughly $250 billion. Between them they took out nearly three times the amount of money that the auto industry took out. But from the auto industry we got 20 million cars. What did we get from these guys? We got cancelled checks and bank statements. This is monstrous, don't you think?"


Playing with Fire
I am not predicting that interest rates will keep falling to zero and that the world economy will succumb to deflation. I just want to sound the alarm that it might, in view of the counter-productive monetary policy of central bankers. Other scenarios, no less frightening, are also possible. Paradoxically, the threat of zero-interest (deflation) and that of infinite-interest (hyperinflation) are separated only by the knee-jerk reaction of the marginal bond speculator. He may get scared by the threats of Mr. Bernanke to undermine the purchasing power of the dollar further. As he becomes persuaded by the "logic of the printing press", the marginal bond speculator may cut and run. Then other bond speculators, especially those abroad, could dump their U.S. Treasury bonds, too, and run for the exit. Quite possibly Mr. Bernanke thought that he was just "fine-tuning" the purchasing power of the dollar. Under this scenario he would destroy it. When the central banker threatens to reduce the value of the dollar in terms of goods and services, as Mr. Bernanke does, he is playing with fire. After dumping the bonds, people may dump the dollars, too. First the foreign and then the domestic holders. They need not be reminded that the central banker has the card to trump deflation -- by triggering hyperinflation. How desperate must the specter of deflation appear to Mr. Bernanke that he has seen it fit to flaunt his possession of that card!

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Congress, Not the Fed, Has the Solution
It is not too late for the U.S. Congress to act to fend off disaster. It should immediately take away the unlimited power from Messrs. Greenspan and Bernanke to create as much fiat money as they wish, and to drive down the value of the dollar in terms of goods and services. Not only are the present monetary arrangements blatantly unconstitutional, they are responsible for the destabilization of the rate of interest allowing it to swing from one extreme to the other, causing grievous economic damage along its path. The House of Representatives, to which the Constitution delegated the monetary powers, can rectify this by going back to constitutional money. It should stabilize interest rates without any further delay, and remove the threat of both zero and infinite interest, by opening the Mint to gold and silver. This is a Republic based on checks and balances. It has a government of limited and enumerated powers. Neither arm: not the legislative, not the executive, nor the judiciary may claim to have unlimited powers under the Constitution. Why should officers of the Federal Reserve be allowed to make such claims?
Free coinage, a right of the people enshrined in the U.S. Constitution, would remove the greatest threat this Republic has faced in its entire history up to now, greater even than that of foreign terrorists. This is the threat to destroy the capital of the producing sector, through the machinations of the financial sector, aided and abetted by the Federal Reserve.



Copyright 2003 by Antal E. Fekete

January 18, 2003

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CORRECTION
I am very grateful to James E. Schoenbeck for calling my attention to a mathematical error in the example I used in my latest article The Central Banker As the Quartermaster-General of Deflation. I also used the same example in earlier articles such as Wrecker's Ball of Swinging Interest Rates. Mr. Schoenbeck wrote me on January 8, 2003, as follows:
"Professor:
While I enjoyed reading your article, I take dramatic exception to your pricing of the hypothetical bond as interest rates decline. If the interest rate dropped from 16% to 0% overnight, the price on the 30-year bond with 16% coupon, $1,000 par, would go to $5,800. A nice increase, to be sure, but nowhere near the 1,000-fold capital gains of which you talk

While it is true that the value of a 30-year bond will almost double when the rate is halved from 16 to 8%, it is no longer true as it is halved further from 8 to 4%, from 4 to 2%, from 2 to 1%, etc. Below is a table showing how the value of a $1,000 investment in a 30-year bond goes up with each halving (after which the investor takes profits and rolls out to a new 30-year maturity)

16 to 8%$1,000 to $1,900- - - - - - - - - - - - - - -
8 to 4%$1,000 to $1,700or $1,900 to $3,200
4 to 2%$1,000 to $1,450or $3,200 to $4,684
2 to 1%$1,000 to $1,260or $4,684 to $5,855
1 to 0.5%$1,000 to $1,140or $5,855 to $6,675
0.5 to 0.25%$1,000 to $1,070or $6,675 to $7,142
0.25 to 0.125%$1,000 to $1,037or $7,142 to $7,406
0.125 to 0.0625%$1,000 to $1,019or $7,406 to $7,546
Wouldn't you agree that we are fast approaching a limit here? The value of the $1,000 investment will stay below $10,000 no matter how many times the rate of interest is cut into half, and will never be worth anything like $1,024,000 under any circumstances. Sorry... but making money is not that easy..."

James E. Schoenbeck
[email protected]
I concede that under the simple strategy of buying and holding the 30-year bond, or continually rolling it over to new 30-year bonds, the $1,000 investment cannot be doubled in value with each successive halvings of the rate of interest. But there are other more sophisticated strategies available involving strip bonds, and derivatives such as: bond futures, call and put options on bond futures, knock-out calls and knock-out puts, interest-rate swaps, and various combinations of these which bond speculators can use, and do use, in order to double their investment (or do even better) every time the rate of interest is halved. I quote from J. Taylor's Gold & Technology Stocks newsletter, January 7, 2003, issue (www.miningstocks.com):

"Michael B. O'Higgins was able to turn $1,000 into $415,302 by being in bonds, not stocks... If you invested $1,000 in the Dow in 1972, that investment would have been worth only $27,347 as of December 27, 2002. But had you invested $1,000 mostly in bonds during that time, your initial investment would have turned into $422,819." (Visit www.miningstocks.com for more information on this amazing but true story which can be fully documented. The point is that lenders make a killing during periods of falling interest rates at the expense of debtors.)



But even these fabulous profits could not explain the creation of the $100 trillion derivatives market coming, as it did, out of nowhere. Individual bond speculators could not possibly accomplish this feat. It was accomplished by the big money-center banks. They are responsible for the prolonged agonizing fall of the interest-rate structure, the flipside of which is the snowballing of the derivatives monster. They make up the bond market. They run it. They buy the bonds and interest-rate derivatives before the Fed can buy, since the Fed buys through services they can provide. If there has ever been socially devastating insider trading, then this is it.
My point is that Keynesian monetary policy takes the risk out of bond speculation. It makes it extremely profitable and a sure bet. This explains the persistent fall in interest rates, and the snowballing of the derivatives market, all of which spell deflation. Deflation is not merely falling prices; it is falling prices plus falling interest rates, squeezing the debtors. This deadly combination is not an Act of God. It is caused by unlimited speculation in bonds, with profits underwritten by the central bank.

Keynesian contra-cyclical monetary policy and "deflation control" is a disaster. Nostrums advocated by Milton Friedman and other monetarists are equally disastrous. Far from containing deflation, the central bank is causing it, through its counter-productive measures such as bond-buying programs widely advertised through speaking engagements such as those of Messrs. Greenspan and Bernanke, prompting more and more bond speculators to climb on the bandwagon to have a free ride to riches. Rather than relieving debt-implosion, this mindless monetary policy is, in fact, the one identifiable cause of it through the bankrupting of the producing sector.

Mr. Bernanke made a solemn vow to Milton Friedman at his 90th birthday party at the University of Chicago. He vowed that the Fed would not repeat the mistakes it had made in the 1930's in not whipping and chastizing deflation vigorously enough. This brings to mind the Biblical story of King Rehoboam, the son of King Solomon, who answered the people when they petitioned him to lighten their burden: "My father hath made your yoke heavy; I will add to your yoke. My father chastized you with whips; I will chastize you with scorpions." (First Book of Kings, 12:11.) May God save the producers of this country from the yoke and the scorpions of the Fed.
January18, 2003

Antal E. Fekete

From a Thread called Knowledge Is Power
Copy and Paste


We welcome constructive criticism and well founded discussion. Inflammatory, rude, repetitive, offensive, off-topic or otherwise disruptive messages designed intentionally to annoy, stimulate or antagonize the existing members or alter the flow of discussion are NOT welcome and will be reported to the moderator team.

I will also start a sister-thread as a digest and to store all the cream from this thread and also as storage for all indicators posted for ease of reference.

10 Trading Rules for Successful Traders
1. Limit your losses.
2. Let your profits run.
3. Keep position sizes within reason.
4. Know your risk-reward ration.
5. Be adequately capitalised.
6. Dont fight the trend.
7. Never add to losing positions. Dont average out.
8. Know market expectations.
9. Learn from your mistakes keep a trading journal.
10. Have a maximum loss or retracement in profits.


For beginners, please read this free Forex education material and learn to be a successful trader: www.BabyPips.com

And also you are advised to read these excellent books:
1. Day Trading the Currency Market: Technical and Fundamental Strategies To Profit from Market Swings (Wiley Trading) (Hardcover) - by Kathy Lien

2. Technical Analysis of the Currency Market: Classic Techniques for Profiting from Market Swings and Trader Sentiment (Wiley Trading) (Hardcover) By Boris Schlossberg

3.High Probability Trading Setups for the Currency Market By Boris Schlossberg, Kathy Lien


You can preview the 1st and 3rd books here:
http://books.google.com.my/books?id=...sec=frontcover

http://books.google.com.my/books?id=...+lien%22&psp=1

The Essence of the 3rd book is here:
1. Never let a winner turn into a loser
2. Logic wins, impulse kills
3. Never risk more than 2% per trade
4. Trigger fundamentally, enter and exit technically
5. Always pair strong with weak
6. Being right but being early simply mean you are wrong
7. Know the difference between scaling in and adding to a loser
8. What is mathematically optimal is psychologically impossible
9. Risk can be and is predetermined but reward is unpredictable
10. No excuses, ever

BEWARE:
Why Currency Trading Is Not For Everyone?
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for everyone. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. Remember, you could sustain a loss of some or all of your initial investment, which means that you should not invest money that you cannot afford to lose. If you have any doubts, it is advisable to seek advice from an independent financial advisor.

RISK WARNING: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your monetary objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your deposited funds and therefore you should not speculate with capital that you cannot afford to lose. You may be liable for losses that exceed the amount of margin that you post. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent advisor if you have any doubts. Past returns are not indicative of future results.

Though, I TOTALLY disagree with your remarks against me. I NEVER disrespect you, you are my Mentor, I always ask questions
With due respect, tell me any post where I disrespect you?? And you have NO right to judge anybody’s honesty. And you know
What I am not the only one here. you know what I mean. Your last post about me is really shocking, hurt my feelings. Anyway
You take care. You are still my Mentor because I learnt a lot from you. And I always respect you with the bottom of my heart.

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Learning Curve of Fed
THE LEARNING CURVE OF THE FEDERAL RESERVE
U.S. Monetary Policy 1965-2005
By Wayne Jett
2005

October 6, 2004, marked the 25th anniversary of the Federal Reserve’s move from an interest rate target to a money growth target as the tool chosen for fighting inflation. The Federal Reserve Bank of St. Louis convened aconference to consider how current U.S. monetary policy is informed by that 1979 milestone, by open market operations with money growth targets, and by 22 years of experience since the Fed abandoned money growth targets in 1982.

Three major papers were presented, plus commentaries on each, and two panels discussed their merits. Were monetary issues not such a crucial weakness in U.S. public policy, and thus a significant global concern, the St. Louis discussions might slide by as an academic exercise.

But they deserve attention. Not because they are clairvoyant or comprehensive – they are neither. In fact, the St. Louis discussions were often politically correct in the academic sense. The commentators were demand-side economists evaluating demand-side policies implemented by the Federal Reserve. Some sins are overstated, some go unnoticed and some are forgiven too quickly.
“Origins of the Great Inflation”

On the other hand, many insights are available, both in what is said and in what is not. Allan H. Meltzer of Carnegie Mellon University marks the “Great Inflation” as running from 1965 to 1984, emphasizes Fed conduct in 1965, and concludes that Fed chairman William McChesney Martin “… was in a position to stop…” inflation until January, 1970, but “… failed to do so.”

Meltzer reports that inflation “destroyed” the Bretton Woods protocol for the international monetary system, so the Fed and all other central banks were forced to stabilize their currencies with their own policies and ideas. He concludes that the Fed’s economic theories, despite flaws, were sufficient to defeat inflation, but politics (particularly unwillingness to pay the trade-off of higher unemployment) prevented effective action.

Christina D. Romer of UC Berkeley sees the cause of the Great Inflation somewhat differently. Defective theory involving the “natural rate” of unemployment required to prevent inflation came into use in the mid-1960s giving rise to moderate inflation. Both theory and inflation worsened in the early 1970s, and then improved before turning worse yet into the late ‘70s. During this time, Fed chairman Arthur Burns saw the Fed’s primary role as “managing aggregate demand” to achieve “a return to price stability.” Nevertheless, after “tightening” during recession in 1974, Burns “led rapid monetary expansion in 1977.”

In Romer’s view, ideas began the Great Inflation and ideas ended it. So politics were not entirely to blame, although unwillingness to pay the “natural” unemployment price for low inflation played a role. Romer refines an improved idea from this experience: “inflation can be controlled by aggregate demand policy,” which she credits as the idea that “fueled the Volcker disinflation” and “broke the back of inflation worldwide.”
“The Reform of 1979 – How and Why It Happened”

Other commentators at the St. Louis conference from the Federal Reserve System (Lindsey, Orphanides and Rasche) point out that the Paul Volcker-led Fed on October 6, 1979, conditionally adopted a target for aggregate money growth, not aggregate demand. Volcker led the move to money growth targets from interest rate targets, not as a monetarist, but partly to shield the Fed from public criticism for sharp rises in interest rates.

These commentators note that, while targeting money quantities in 1980, Volcker lamented the murkiness of any relationship between money quantities and GDP growth, and the arbitrariness of defining and measuring money. The Fed abandoned money aggregate targets in mid-1982, and money aggregates play no role in today’s Fed operations.
Monetary Policy Debate Since 1979

Marvin Goodfriend of the Richmond Fed describes the “consensus model” of monetary theory. Depending on who is using it, the model is sometimes called the New Neoclassical Synthesis Model and other times the New Keynesian Model. The model focuses on managing aggregate demand to optimize unemployment at its “natural rate” where “output equals potential.”

Goodfriend perceives an irony that “monetarists deserve much of the credit” for defeating virulent inflation in the early 1980s, “yet the Fed currently ignores money” quantities. He argues that money quantities ought to be integrated into Fed operations “to some extent.” He further notes that U.S. monetary policy has had no anchor for the dollar since the Bretton Woods international monetary protocol “collapsed in 1973.”

Goodfriend observes that neither Congress nor the Fed has acted to provide a dollar anchor, and concedes that recent developments may make an anchor unnecessary. But he contends the desirability of an anchor “is [at least] debatable” in view of changing Fed membership and U.S. fiscal policy. Nonetheless, Goodfriend sees monetary theory and policy as “revolutionized in the two decades since the Federal Reserve moved in October 1979 to stabilize inflation and bring it down.”

If the views related so far indicate a significant degree of divergence from consensus within demand-side monetary theory, stay tuned. Laurence M. Ball of The Johns Hopkins University reviews Goodfriend’s survey of “current mainstream thought,” asserts no revolution has occurred since 1979, and credits Milton Friedman’s 1968 “precise theory of the Phillips curve” as “still the best simple theory of the unemployment-inflation trade-off.”

Ball questions the usefulness of “rational expectations theory” (nee “credibility” of central banks) for “understanding inflation in the real world” and he finds “little evidence that inflation targeting changes the behavior of output or inflation.” Moreover, Ball examines the “modern consensus model,” describes it as “wildly counterfactual,” and concludes its “absurd predictions make it a poor tool for policy analysis.” He shows that corrections necessary to make the “modern consensus model” useful amount to abandoning it and returning to Friedman’s 1968 re-statement of the Phillips curve theory.

Ball reports that “the Fed has not been unusually successful in reducing inflation” and has, in fact, been “near the middle of the pack” among the world’s central banks. He says reducing inflation is “easy to accomplish … if policy-makers are willing to slow the economy sufficiently.”

Ball credits U.S. unemployment performance as excelling compared to other countries, but dissents “180 degrees” from Goodfriend’s view that the reason is the Fed’s unflinching inflation fight. Ball says U.S. unemployment has been relatively low because the Fed “has not been as single-minded about fighting inflation” as other central banks.

Anna J. Schwartz of the National Bureau of Economic Research, speaking on behalf of monetarists at the St. Louis conference, says the economics profession now embraces the belief that “… there is no long-run trade-off between inflation and unemployment….”

With dissension of this magnitude within its ranks, is criticism from outside the demand-side fraternity really necessary? Of course. With disagreement of such fundamental gravity among those who guide U.S. monetary policy, inquiry into the soundness of the Fed’s theory and practices is urgently needed.
A Classical Critique of Demand-Side Theory

The question above may not seem serious, but the answer requires understanding that demand-side economics and classical (supply-side) economics are not merely two divergent branches of a common intellectual field of inquiry. Demand-side theory is relatively recent in origin, first gaining traction through Depression-era politics of the Franklin Roosevelt presidency.

Young advisors surrounding FDR undertook development of intellectual theories to support federal relief programs. These theorists tended to examine the economy from the viewpoint of the central planner, and from the viewpoints of political constituencies, primarily consumers. The resulting economic ideas were often attributed to the English classical economist, John Maynard Keynes, although he did not participate actively in their development and is known to have dissented from them at times in occasional written comments to FDR.

Given primacy as foundation for federal government programs during five consecutive presidential terms (1932-1952), demand-side economic theory gained firm footholds both in public policy and in academia. By the mid-20th century, demand-side theory was well established in academic institutions alongside classical economics. In the ensuing 50 years, demand-side theory came to dominate the academy so thoroughly (to the exclusion of classical economics) that no institution of higher learning presently offers an accredited degree in classical economics.

Classical economics came through Adam Smith, Alexander Hamilton and others who probed conditions that promote individual productivity and prosperity. Classical theory fashioned public policy accordingly. The gestation of classical theory was much longer than demand-side, though the “supply-side” descriptive name for classical economics is more recent.

Classical theory was dubbed “supply-side economics” in the midst of the Great Inflation of the 1970s, partly because classical economics had been wrongly faulted as blameworthy in the Crash of 1929 and the Great Depression. The case showing serious violations of classical theory as the true culprits, thus exonerating classicists, has been made elsewhere to willing minds. The focus here will remain the merits of current U.S. monetary theory and policy.

The point of this passing reference to the genesis of demand-side theory is that it was born of a political motive to escape classical principles. From the outset, monetary and fiscal principles of classical economic theory were politically troublesome to New Deal policy-makers.

While the U.S. remained ostensibly on the gold standard, FDR devalued the dollar from $20.67 to $35 per ounce of gold in 1934. The dollar devaluation introduced 41 percent inflation into the U.S. economy as the cheaper dollar worked its way through private transactions in ensuing years.

In addition, FDR confiscated privately owned gold, paying the pre-devaluation price of $20.67 with post-devaluation dollars. Combined as it was with dollar devaluation, the gold confiscation amounted to federal seizure of a major portion of private investment capital in the nation.

This federal confiscation of private capital debilitated investment in production and employment, importantly setting back economic recovery. Making matters far worse, legislative “reform” of the Federal Reserve in 1935 gave FDR effective control of the Fed. The FDR-dominated Fed further contracted the private economy by twice radically increasing required bank reserves in 1936-37 after the banks had already safely rebuilt reserves, assuring that banks could make no new loans and would have to call in existing loans.

Another aspect of Roosevelt’s influence deserves acknowledgment in the current debate of U.S. monetary policy. FDR viewed the analyses developed by his aides and called “Keynesian,” not as serious economic theory, but as intellectual cover for his political programs.

The diaries of FDR’s Treasury secretary, Henry Morgenthau, record their discussions of March 5 and 7, 1939, when FDR suggested to Morgenthau greater government spending to off-set the business downturn. Morgenthau countered FDR by proposing tax cuts he assured would produce “… within a month … a boom.”

Roosevelt admonished Morgenthau for bringing him “a Mellon plan of taxation” that would signal a victory by his political foes in business, ridiculed as “very stupid” a small sign (“Does It Contribute to Recovery?”) Morgenthau kept on his desk, instructed “this is a matter of politics,” and shouted as Morgenthau and his undersecretary John W. Hanes departed his office “For God’s sake, don’t be so innocent!”

Innocent or not, academia continues to treat demand-side theory as serious intellectual endeavor, much to the detriment of scholarship and global economic progress. The Federal Reserve Board and staff follow in its thrall. Regardless of guile, no chain of abstractions can achieve price stability while the currency unit value fluctuates unpredictably.
The Bretton Woods Responsibility

Under the Bretton Woods protocol of 1944, the U.S. took upon itself the key role in the international monetary system. The U.S. was obliged to maintain the dollar’s value at $35 per gold ounce, so that every other currency could link its own value to the dollar.

The Bretton Woods protocol did not simply collapse of its own accord, nor fail because it was unworkable, nor was it innocently “destroyed by inflation.” The Bretton Woods protocol was destroyed by the failure of the U.S. Federal Reserve to honor its obligation to maintain the dollar’s value. The Fed knowingly created inflation by issuing excess currency to fund federal debt at below-market interest rates.

The Fed’s practice of accommodating federal debt appeared subtly in the 1950s, reappeared in the mid-60s, and grew each year as demand-side theory became more supportive. The seminal event, going entirely unremarked at the St. Louis conference of 2004, occurred August 15, 1971, when President Nixon closed the gold window to European central banks. By mid-1972, the price of gold doubled and, by Spring 1975 hit $200 per ounce, five times the price four years earlier. (Figure 1)

Why would the noted scholars of St. Louis 2004 avoid mentioning such an obviously pivotal event that unleashed soaring inflation on U.S. and world economies during the following years? The answer is patently obvious. Acknowledgment of the importance of cutting the dollar’s anchor to gold would raise questions whether that was the central error, and whether it should be reversed.

Gold Bullion Price-New York (US$/Ounce) (Symbol: __XAU_D)
http://classicalcapital.com/images/g..._1986_ktxu.bmp
Figure 1.

Sadly, to sidestep the same subject, the esteemed outgoing chairman of the Fed, Alan Greenspan, testified to Congress on July 21, 2005, that no advantage exists in returning U.S. monetary policy to the gold standard. Why? “Because we’re acting as though we were there.” From an eminently educated economist who witnessed the gold price move unpredictably between $250 and $480 per ounce during his last ten years in office, this testimony is difficult to fathom.
http://classicalcapital.com/images/ten_year_gold.bmp

Figure 2.

Admirers of Chaos

When the gold standard rule was lifted in 1971, discretionary power was conferred upon the Fed chairman that no incumbent has been willing to yield. This power includes use of currency creation to resolve crises encountered - a discretion quite attractive to private banks wishing assistance on occasion. Another faction loving the status quo floating dollar is the foreign exchange investment community, which presently invests more funds in currencies than are invested in corporate stocks and bonds.

The Fed could choose, as chairman Greenspan says it has, to behave as if it is on the gold standard. The Fed could adopt a price target for gold and create only the number of dollars required to hit the target. The benefits of a stable dollar to the U.S. economy, to other G8 economies and to emerging economies would be very significant. Of course, a stable dollar would be much less interesting to forex speculators.

This may not be as apparent to those guiding the Fed as it should be. Demand-side theory is deeply embedded in the thought processes of Fed policy-makers. Economic theory can misguide attention, confuse thinking and produce counter-productive actions despite good intentions.

New Reality Show: 1979-1982

The October 6, 1979, Fed meeting provides a case in point. Commentators in St. Louis 25 years later unanimously credited that meeting as a turning point in the fight against inflation. No one acknowledged that inflation skyrocketed after the meeting and as a result of the actions taken.

In adopting a new target for money growth, the Fed misjudged the appropriate limits on money quantities and actually added substantial new liquidity to the economy. In response, the price of gold (which had been $240 in the Spring and below $300 in August of 1979) spiked to $890 per ounce in February, 1980. During 1980, the gold price fell to $500, and then rose again to $750 before ending the year above $600. (Figure 3.)

After the 1980 election of President Reagan raised prospects of significant cuts in marginal tax rates, demand for dollars increased and the dollar’s value recovered sharply. With economic growth absorbing excess monetary liquidity, the gold price ended 1981 near $400.

The gold price fall (dollar appreciation) continued in early 1982, slipping $10 on St. Patrick’s Day to $310, and commodity prices adjusted to the deflated dollar as they must. Classical economists Robert A. Mundell of Columbia University and Jude Wanniski alerted Fed chairman Volcker that dollar deflation below $300 gold would cause severe distress in financial institutions and commodity-based industries. Regardless, the Fed remained attentive to the views of monetarists who insisted addition of liquidity would re-ignite inflation and collapse the bond market.

In August, 1982, Mexico notified U.S. banks of its impending default on loans collateralized by oil, since the oil price had fallen $5 below the “tipping point” of $36 needed to repay the loans. The Fed had no choice but to abandon monetarist advice and monetize $3 billion in Mexican bonds to avoid the default endangering U.S. banks.


Gold Bullion Price-New York (US$/Ounce) (Symbol: __XAU_D)
http://classicalcapital.com/images/g..._1979_1987.bmp

Figure 3.

On this news, the gold price moved higher, but interest rates did not follow. Instead, the bond market rallied strongly and equity markets surged (DJIA from 790 to 1100 and NASDAQ from 150 to 250 at year-end). Economic growth had strengthened the dollar but required a stable dollar (meaning sufficient liquidity) in order to continue at rates permitted by the cuts in marginal tax rates.

One will not find these facts and analysis examined, much less expressed as consensus, in the St. Louis proceedings. Demand-side commentators acknowledge that the Fed abandoned money quantity targets in 1982, but are far too lenient in explaining why monetarism theory failed in practice.

Selection of the appropriate measure of money, current gauging of money growth, estimate of liquidity requirements – each of these proved to be beyond the capability of Fed planners in 1979. Moreover, the crucial “velocity” factor assumed by monetarist theory to be very stable (as Friedman concluded it had been during the gold standard) turned out otherwise. In short, the monetarism experiment begun by the Fed October 6, 1979, failed miserably and was near disaster from beginning to end.
Today’s Demand-Side: A Bankrupt Central Tenet

On June 6, 2003, the Financial Times of London reported Milton Friedman’s concession that his theory of money quantities had failed. The St. Louis commentators made no such concession, and continue to honor as a central tenet of their economic model Friedman’s theory describing inflation as a trade-off for employment.

Another central tenet of demand-side theory credited to Professor Friedman is “… inflation is always and everywhere a monetary phenomenon.” Of the two tenets contributed by Friedman, demand-side theorists should recognize, but apparently do not, that they must choose which to believe is valid. Both cannot be true.

Classical economists have no difficulty making the choice. A monetary phenomenon is one exhibited by the currency managed by the central bank. Inflation is always and everywhere a monetary phenomenon, and thus is a creature that lives and dies by the hand of the central banker.

This being the case, then who could believe that inflation is caused when the employment level rises above a “natural” rate? Apparently the demand-siders who guide the Fed believe it. So they choose as the Fed’s only inflation-fighting “tool” an interest rate target that provides no prospect of stabilizing the dollar’s value. The Fed actually wields the funds rate target as an instrument of fiscal policy to raise and lower the government-imposed cost of doing business, much as tax laws do.

As reflected in the St. Louis proceedings, the Fed uses the funds rate target to manage “aggregate demand.” By raising the funds rate target to reduce aggregate demand, the Fed aims to slow production, thereby increasing unemployment so wage-push inflationary pressures will be subdued.

Often Fed actions run directly contrary to congressional or executive branch fiscal policy. Demand-siders view this as a benefit of the “independent” Fed, so that expert economic planners are empowered to offset fiscal “excesses” of the elected branches of government.

Let’s be clear about why inflation is a monetary phenomenon and why inflation is not caused by employment. Inflation (or deflation) is a change in value of the monetary unit. Any such deterioration in monetary unit value must be worked through the entire pricing system of the economy to preserve the value of property, goods and services. The Fed can control the unit value of its currency; workers cannot control or affect the unit value of currency received as pay.

By treating the employment level as a purveyor of inflation, the Fed robs the labor market of the benefits of supply and demand signals. Oil, e.g., needs a trustworthy signal of a higher oil price to justify investment in more production. When labor is in short supply, the signal of higher wages will attract more workers. Meanwhile, workers who can provide the desired services during the shortage are entitled to gain from their market advantage. This does nothing to produce inflation. If workers are not permitted to gain in periods of labor shortage, the market will not work to supplement and replenish supply.

By slowing economic growth to produce higher unemployment, the Fed reduces demand for dollars in the productive economy without removing dollars from the system. This results in greater excess liquidity and more inflation. The Fed could hardly design a more counter-productive way of conducting itself.

As it produces inflation through creation of excess liquidity, the Fed impedes the validity of market price signals. Untrustworthy currency undercuts the supply message given by higher wages or prices. Labor is handicapped by bad money in this manner, as are all other goods and services. But labor is dealt a doubly damaging blow by the Fed’s erroneous embrace of Phillips curve theory, even as refined by Friedman. The Fed beats down any employment rate above what is perceived as “natural” by Phillips curve theorists.

Thus, the U.S. market for human services is furnished a deteriorating currency by the Fed. The Fed then acts to prevent the workers from adjusting to the changed currency value. Workers might choose to work more, or require more members of the household to work, to restore purchasing power. Regardless, the Fed acts with its funds rate target “tool” to slow economic growth and reduce employment opportunities.

This is unwise management of the most important central bank in the world, and a great disservice to all workers. The labor markets of the world cannot function fairly or efficiently under such irrational handicaps imposed by central planning.

When the unit value of the dollar is changing, the Fed cannot achieve price stability by managing the output gap by managing aggregate demand by managing the funds rate target. This chain of abstractions strung together by demand-side theorists to guide Fed practices ignores reality, without escaping it. When the dollar changes value, prices measured in dollars must be adjusted to maintain accurate, fair value in transactions.

The market supply/demand mechanism works best when the currency unit value does not change. To achieve currency value stability, the central bank must target the desired value and act directly to achieve it. Here, theoretical simplicity is to be admired, and will be rewarded with greater prosperity around the world.

The roundabout demand-side theory now dominant at the Fed and other central banks will not work. Flaws in use of the funds rate target itself are only part of the problem, but are significant. Here are the most significant flaws:

• The funds rate is not a controlling variable in the dollar’s value, so changing the funds rate produces no predictable change in the dollar’s value.
• Under Fed practices, raising the funds rate target does not actually “tighten” flow or quantity of dollar liquidity; it merely raises the cost of capital.
• The Fed cannot really control the funds rate target, since market pressures force the Fed to change the target against its wishes.
• The Fed’s attempts to control the funds rate cause market conditions to change in ways they would not otherwise, thereby destabilizing the dollar’s unit value.

The monetarist Anna Schwartz reported at St. Louis a consensus that “… there is no long-run trade-off between unemployment and inflation….” Indeed, demand-side economists do use this statement uniformly. Yet Goodfriend and Ball showcase the existing consensus supporting Friedman’s definition of the Phillips curve trade-off between unemployment and inflation.

Thus, denial of any long-run link between unemployment and inflation merely serves to mask the Fed’s practice of targeting a higher funds rate to reduce aggregate demand, slow economic growth and raise unemployment in the short-run to reduce inflation. One presently out of work would remind demand-siders, as Keynes did long ago, that “in the long-run we are all dead.”

Demand-side monetary theory is bankrupt, having no essentially valid core. The Phillips curve inflation-unemployment “trade-off” is theoretically absurd, and its effects are diabolical on workers at every income level. The Fed’s manipulation of the funds rate target destabilizes other market variables affecting the dollar’s value, so isolation of employment as inflation’s controlling variable is both logically indefensible and morally repugnant.

There being no true inflation-unemployment trade-off, the entire demand-side theory chain that aims to slow the economy is misconceived. There is no point to slowing the economy, since no theoretically sound reason exists to raise unemployment.

Though debate of monetary policy may seem esoteric to some, misery flowing from the errors discussed has many human faces. Service as the reserve currency of the world carries with it grave moral responsibilities. The standard of living of many societies – American, Mexican, Brazilian, Argentine, Korean, Thai, Chinese, Russian, African - has suffered greatly from the U.S. Federal Reserve’s failure to meet its duty to provide honest currency. The Fed’s use of complex oratory does not hide the inadequacy of its policy, nor does it meet America’s moral obligation to act uprightly as a nation.

The Fed’s management of the dollar has fallen short of American standards. Demand-side theory ought to be cast out of the Fed’s operations immediately, freeing central banks worldwide to follow sound monetary principles. What ought to replace it is a simple rule targeting the desired value of the dollar relative to gold. If the Fed will not do so, the President or the Congress should provide leadership. ~

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June 2019 IceCap Global Outlook – “Threading the Needle”


For many, the investment world can be a confusing place. Banks, mutual finds, stocks, bonds, currencies, insurance, inflation, taxes, economies – it’s no wonder the majority have glossed eyes.

And sitting on top of this confusion pie are central banks.

Each country has its own central bank which is responsible for setting overnight interest rates and the amount of money in that country’s financial system.

Yet, there is one central bank that is the most important, sits on top of the world, and all of its actions impact not only their local country, but also every other country in the world.

This central bank is the US Federal Reserve.

In this latest IceCap Global Outlook we share how actions by the US Federal Reserve are always reactive to a crisis which, ironically, it helped create in the first place.

Today’s central banks are once again, trying to thread the financial needle, and rescue us from the crisis that was born from the depths of the 2008-09 Great Financial Crisis.

The crisis is happening, yet there is good news – the crisis is creating opportunities to not only preserve your hard earned savings, but to capitalize too.
Please continue reading.

PDF 2019.06 IceCap Global Outlook

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http://classicalcapital.com/Make_Ame...apitalist.html

Make America Capitalist Again
MAKE AMERICA CAPITALIST AGAIN!
Liberate US From Mercantilism

By Wayne Jett June 7, 2019

Select any important aspect of American life: finance, banking, economic policy, politics, environmental policy, religion, education, communications media or entertainment. Examine and you will find it is dominated by the vastly powerful global cabal which seeks the near-term end of every nation. This does not describe a capitalist society. It describes the medieval system of social domination called mercantilism – the mortal enemy of capitalism – as it has existed across much of the world for the past 400+ years.

Counter-Offensive In Progress

The “powerful pecuniary force,” as Henry George described the global cabal in 1880, has aggressively pursued written plans since 1901 to exterminate all self-sufficient people (the “middle class”) and all “people of the abyss” worldwide. We must proceed apace, as President Donald Trump is doing, with other like-minded nations in an all-out counter-offensive against those who so long have been aggressors against us.

Americans cannot live in a national constitutional republic unless and until the global cabal is destroyed in a comprehensive campaign waged to a final conclusion. Such a campaign is presently underway. It is led by President Donald Trump and federal officials of the military, law enforcement, intelligence, diplomatic and justice agencies. Victory is to be achieved using a top-down and bottom-up pincer strategy.

The top-down actions against the global cabal are aimed at neutralizing and recovering vast stores of wealth corruptly gained by the cabal, since their access to that wealth is essential to the cabal’s continued exercise of power. Simultaneously, actions to roll-up the bottom functionaries can be highly beneficial in gathering evidence against higher parts of the power structure and in inhibiting execution of cabal orders.

Targets of Opportunity

Here is a representative list of instruments of mercantilist power in America presently which will or should be terminated or substantially reformed to perform beneficial roles consistent with equal justice under law.

1. Federal Reserve
2. Internal Revenue Service and Income Tax
3. Securities & Exchange Commission
4. Major Media (including major platforms of Alternative Media)
5. Public Education
6. Political Parties and Campaigns
7. Every Federal Executive Department
8. Armed Services Administration
9. Intelligence Services Administration
10. Federal Law Enforcement

Progress in defeating the global cabal and recovering as much of their loot as possible will enable much greater success in reforming the ground floor levels of cabalist operations. Victory will not come overnight, and the battles are not being televised, but we have some indications that progress is being made.

Details will come in time. The important thing presently is to see and understand the big picture. The political scene is likely to change dramatically before the elections of November, 2020, though they are only 18 months from now.

Keynesians, Austrians and Mercantilists

Keynesian economists can find little good to say about the economic turn in America which began in 2017. But why should they? Their work is political influence using hyper-technical arguments designed to confuse and to obfuscate, and to do so in ways which assist the mercantilist cabal. If the cabal is deposed, Keynesians face the happy prospect of re-learning economic analysis by classical principles - an outcome that can benefit them and the rest of us.

Keynesian analytics were designed to achieve mercantilist ends while pretending the recommended policies are all for the good of the common people. The acknowledged expert on mercantilism, Eli Heckscher of Sweden, said nearly as much in 1946 while the debate was still fresh. That was before cabal influence and money swept classical economic analysis out the doors of American academic institutions.

Our friends in the Austrian school of economics do considerably better than Keynesians in applying classical economic analysis to issues involving monetary policy and fiscal policy. However, the Austrian school seems to put blinders on when they explain major events including the Crash of 1929, the Great Depression and other economic crises such as the Tech Crash of 2000-2002 and the financial events of 2008. Economists of the Austrian school rely solely upon “wave theory” to explain why the Great Depression occurred, for example, and reason similarly regarding other economic crises.

“Waves” Of What?

If Austrian school wave theory has any basis in reality, the question ought to be asked whether that reality is connected with reported occult practices of the global cabal. The cabal has allegedly placed great emphasis upon numbers in calendar dates and other such reasons for choosing their timing of planned actions, including such matters as wars, catastrophes and financial crashes. Would such motives and actions explain economically significant events fitting a particular “wave” pattern?

Charting a wave pattern to record anticipated timing of the next antisocial action can be beneficial if the “wave” can be explained by connecting it with conspiratorial human conduct. If, indeed, that is the case, then it seems to call for identifying in advance those motives, actions and actors causing the cataclysmic event. This would give some opportunity for preventing, punishing and ending the wrong-doing.

Perhaps the best way to conclude this discussion of Austrian wave theory is with a question. If the global cabal is finally defeated and its past crimes exposed and punished, will economic “waves” persist, or will they come to an abrupt end?

World News

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Benjamin

Good Day Folks

I opened this account on June 18, 2019. I have recently developed a Forex strategy that if learned and followed will make you very wealthy over the next few years if you qualify. It is you that need to qualify not me deciding that.

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So for just under 1/3 of a month, I was able to net over $8500.00 US dollars or 17% Return On Investment (ROI) The exact amount is $8611.50 US dollars.

From a previous post;
Quoting CKXnlp3R

{quote} Hi, You are definitely right about leaving the positions open. I have encountered such thing numerous times and eventually closed the positions with the loss. I realized that sometimes it is best to analyze the situation like what you have described many many times, before letting the emotion rush make the decisions.
Thanks again for your post, I enjoy reading it a lot! It starts to become part of my reading hobby now, lol

Thank you for the kind words. That is my goal here along with KeepCalmfx. When you learn something then we are happy. I appreciate the feedback and the more that you post with any and all comments then the better.

The last few days were very much fun for me and whether I trade a $50,000 US Funds Demo Account or a REAL FUNDS $50,000 US Funds account you must treat both the same. When I have a DRAW DOWN compared to closing all my positions. I have the same HIGH doing it because for me they are both the same. Of course in my case having traded millions of US Dollars with real funds then I know that I trade the same way. I once thought that my contact at PFG BEST in Chicago , Casey C had a client for me who had $5,000,000 US Dollars for me to manage so he at my request opened a $5.000,000 US Funds Demo Account.

I traded it for exactly 56 days and got my balance over $7,500,000 US Dollars and did 1804 Forex Trades. Looking at the volume of $100,000 US Dollars per open position times 1804 Forex Trades is a lot of Millions traded. I have sent the PDF File of my 1804 Forex Trades to KeepCalmfx to verify my numbers and it can be confirmed. The amount of losses that I had in those 1804 Forex Trades (DEMO) of course was 4 LOSSES.

I doubt anyone can duplicate that MYSELF included. That was 10 years ago and I did not use my Money Flow Trading Method then.

COMMENTS FROM BENJAMINIS: Let us review what we teach and why it works if YOU WORK.

Without your WORK then you are just wasting your time and probably your money.

There is no such thing as Political Correctness here because we are here to teach and share our knowledge ALL FOR FREE until May 15, 2017 and then if you have subscribed to this thread before May 15, 2017, then you will get a FREE LIFETIME PASS to our company website.

SO.... going back to our winning FORMULA for FOREX SUCCESS.

20% of the SUCCESS is yourself the Forex Trader.

20% of the SUCCESS is your EDGE which we teach you and that is Money Flow Trading.

20% of the SUCCESS is control of your RISK (Your hard earned money) Our UNIQUE RISK MANAGEMENT allows you to trade without worry, fear and greed. Of course we want to make sure that you have the right qualities to be a winning Forex Trader so our course is for a period of three months, so we can teach you the right trading methods and we can see your results and make adjustments without your FEAR OF LOSS of Real Money.

20% of the SUCCESS is using and understanding the USE of Technical Indicators which include not only the common ones. It includes the understanding of Supply and Demand. Support and Resistance and the use of Pivot Points which you can see each day on our daily charts that cover ALL our Trade Plans which we also help you develop and explain WHY. These are our Winning Trade Plans that we review every three months or earlier if circumstances in the markets require that.

20% of the SUCCESS is the FUNDAMENTALS, which are much more than Data Releases each day around the world. It includes reports and articles extremely well researched as you can clearly see from this article that explains why the TREND in the Equity Markets especially in North America is DOWN. By understanding the difference between PERCEPTIONS (MARKETS) and REALITY, you then have a good handle on REALITY before the MASSES do and you are not surprised when events eventually unfold.

In order to be able to help you better it is VERY IMPORTANT that you share your thoughts and your QUESTIONS here on our thread.


Benjaminis


BWM
514 247 0775

When you have time, you can see/read my previous posts showing respects for you and for your teachings, I still cannot
Believe it what you said about me, dishonest, flaw in my character, I have greed, ego !!!!!!, let me tell you one last thing,
You miss-judged again.

1. Post 6,829
2. Cleanup
3. Quote
4. Jul 9, 2019 7:17am

1. https://cdn-assets.faireconomy.media...ar392875_2.gif BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 5,799 Posts | Online Now

loveandpeace

I started this thread on December 3, 2016. It has been worthwhile as I was able to prove 100% some Forex traders can be taught how to become winning Forex traders.

However there also has been some discoveries of human nature. I do my best work when there is interaction between the teacher and the trader. I cannot even on two hands count how often I asked readers to register and post. I also learned something given away for FREE is worthless to the person getting the FREE information.

So from here on in until I stop posting on this thread regularly, I have no time to answer questions or prove anything to anyone. I am the real deal.

So anyone wanting to determine if they can be taught how to consistenly make money trading Forex needs to register for my 90 day Forex course.

The cost of registration is $500 US dollars with $250.00 payable via E Transfer and the balance after the 90 days is up only if the pupil got his or her monies worth of which they can decide. So the only cost to start is $250 US Dollars. That gives registered students 24/7 access and all their questions will be answered. If people do that then they can ask me questions in live time or post anytime. My corporate website has been contracted for development and beta testing. Until then I will post and teach from here.

I hope that answers all your questions.


Benjamin
BWM


514 247 0775

https://www.oftwominds.com/blogjuly1...imacy7-19.html



Once "Prosperity" Falters, the Legitimacy of the Status Quo Evaporates

July 26, 2019

All we're doing is waiting for the fake "prosperity" to crumble, and the resulting loss of credibility and legitimacy will follow like night follows day.

The citizenry of corrupt regimes ruled by self-serving elites tolerate this oppressive misrule for one reason and only one reason: increasing prosperity,which we can define as continual improvement in material well-being and financial security.

The legitimacy of every corrupt regime ruled by self-serving elites hangs on this single thread: once prosperity fades, the legitimacy of the regime evaporates, as the citizenry have no reason to tolerate their rapacious, predatory overlords.

A broken, unfair system will be tolerated as long as every participant feels they're getting a few shreds of improvement. This is why there is such an enormous push of propaganda touting "growth"; if the citizenry can be conned into believing that their deteriorating well-being and security are actually "prosperity," then they will continue to grant the status quo some measure of credibility and legitimacy.

When the gap between the propaganda and reality widens to the breaking point, the regime loses its credibility and legitimacy. This manifests in a number of ways:
1. Nobody believes anything the state or its agencies reports as "fact": since it misreported economic well-being and security to benefit the few at the expense of the many, why believe anything official?

2. Increased lawlessness: since the Ruling Elites get away with virtually everything, why we should we obey the laws?

3. Opting out: rather than become a target for the state's oppressive organs of security, the safer path is to opt out: quit supporting a parasitic and predatory Status Quo of corporations and the state with your labor, slip into the shadows of the economy, avoid debt like the plague, get by on a fraction of your former income.

4. Breakdown of Status Quo political parties: since all parties are bands of self-serving thieves, what's the point of even nominal membership?

5. Increasing reliance on anti-depression and anti-anxiety medications, more self-medication/drug use, and other manifestations of social stress and breakdown.

6. Those who can move away from crumbling high-tax cities, essentially giving up civic hope for fair, affordable solutions to rising inequality and social disorder.

7. Increasing defaults and bankruptcies as households and enterprises no longer see any other way out.

8. Increasing mockery of financial/corporate media parroting the propaganda that "prosperity" is real and rising-- S&P 500 hits 3,000, we're all getting better in every way, every day, etc.

Truth is the most essential form of capital, and once it has been squandered to serve insiders, vested interests and Ruling Elites, the nation is morally, spiritually, politically and financially bankrupt. All we're doing is waiting for the fake "prosperity" to crumble, and the resulting loss of credibility and legitimacy will follow like night follows day.

https://www.oftwominds.com/photos2019/cliff-sign2.jpg


Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 ebook, $12 print, $13.08 audiobook): Read the first section for free in PDF format.


My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF)
My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. New benefit for subscribers/patrons: a monthly Q&A where I respond to your questions/topics.

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https://kingworldnews.com/central-pl...-catastrophic/

Central Planners Face A Serious Problem As Looming Crisis Will Be Catastrophic

July 26, 2019

https://kingworldnews.com/wp-content...864x400_c.jpeg

As the world awaits the next round of monetary insanity, central planners face a serious problem as looming crisis will be catastrophic.

Next Recession Will Be Catastrophic
July 26 (King World News) – Peter Schiff: “How do you build a strong economy on a foundation of government and consumer spending, funded by surging budget deficits and consumer credit? The answer is you don’t. When consumer prices and long-term interest rates rise, the foundation will crack, toppling the phony economy!

Peter Schiff continues: “CNBC keeps reporting that consumers rescued the economy. But since consumer spending was driven by credit, who will rescue the consumer when the bills come due? Consumers being this overextend at the end of an economic “expansion” means the next recession will be catastrophic!”

The Trick To Showing A Great GDP Number
Jeroen Blokland: “Wow! US Government spending rose by an annualized 5.0% in Q2, the fastest growth in a decade! (See chart below).

Need A Great GDP Number, Just Ramp Up Government Spending By 5%!

https://kingworldnews.com/wp-content...-I-7262019.jpg

Also, Ramp Up In Consumer Credit Card Debt
Sven Henrich: “As increased government spending and consumers adding 8% to credit card debt in Q2 are the positive drivers of the GDP headline figure one could argue that this print was debt expansion driven. And still it shows slowing.”

“Spend Baby Spend”
Keith McCullough, CEO at Hedgeye Risk Management: “Spend baby spend, the Government Spending # ramped and made up for the entire +30bps we were off by on GDP.”

Strong US Dollar Won’t Be Tolerated
Albert Edwards, Former Global Strategist Societe Generale: “ECB and BoJ have easily outprinted the Fed net of issuance. No wonder the dollar is so strong. Trump won’t tolerate this for much longer.”

China Banking Crisis Alert
Kyle Bass: “China Banking Crisis Alert – reports are circulating that Bank of Jinzhou has failed. There are almost 500 banks in china that are labeled troubled by government itself. First, Baoshang bifurcated the interbank market and now the other banks begin to fall.”

Unsustainable
Danielle DiMartino, CEO & Chief Strategist, Quill Intelligence: “Question: What’s growing at 5% rate over past year outpacing today’s 4.3% growth rate in consumption in GDP report? Answer: Consumer Credit. PS. If you’re keeping that other score, average weekly earnings, aka “paychecks,” growth is 2.8% over past year. Question: SUSTAINABLE?”

Central Planners Face A Serious Problem
Stephanie Pomboy: “The failure of reflexivity to set up (and lower rates sow the seeds of their own reversal) is a powerful testament to the late-cycle, deflationary tendencies of the economy. If 100bp+ drop in market rates in anticipation of fed cut failed to boost inflation growth, why should 25bp??” (See chart below).

Central Planners Face A Serious Problem…Interest Rate Cuts May No Longer Be Effective

https://kingworldnews.com/wp-content...-I-7262019.jpg

25% Of All Sovereign Bonds Trading At Negative Interest Rates
Daniel Lacalle, Chief Economist at Tressis: “25% of all sovereign and corporate bonds outstanding globally trade at negative yields. Governments all over the world think this reflects confidence and support for their policies. Investors all over the world know this reflects concern, disinflation and recession risks. (See chart below).

WHAT AN UPSIDE DOWN WORLD: 25% Of All Sovereign Bonds Trading At Negative Interest Rates

https://kingworldnews.com/wp-content...-I-7262019.jpg

Fed Needs Half Point Cut Now
READ THIS NEXT! One Of The Greats Just Warned The Fed Needs A Half Point Cut Now, And More Soon CLICK HERE TO READ

More articles to follow…

In the meantime, other important releases…

Gold Pulls Back, A Brave New World, Silver Could Go Straight To $20, 1929 All Over Again? CLICK HERE TO READ

This Is What Ignited The Gold Market In Early Trading Before Pulling Back CLICK HERE TO READ

Richard Russell Warned People To Prepare For Something Worse Than 1929-1932, And Will U.S. Seize Gold? CLICK HERE TO READ

The Final Fantasy, Lowest Since 2009, Silver Outpacing Gold, Plus Chart Of The Day: Train Wreck CLICK HERE TO READ

2019 by King World News. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the articles is permitted and encouraged

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Authored Matthew Ehret via The Strategic Culture Foundation,

French Finance Minister Bruno Le Maire has publicly admitted something normally reserved for backroom discussion in the circles of Europe’s governing elite at an event honoring the 75th anniversary of Bretton Woods (the conference which created the foundations for the post WWII world order).

https://zh-prod-1cc738ca-7d3b-4a72-b...7_11-53-50.jpg

At this event, Le Maire stated ever-so candidly that “the Bretton Woods order has reached its limits. Unless we are able to re-invent Bretton Woods, the New Silk Road might become the New World Order”.

He went onto state that “the pillars of that order have been the International Monetary Fund and its sister institution, the World Bank since their inception at the Bretton Woods conference in New Hampshire in 1944.”

Were a radical transformation not undertaken immediately, then Le Maire laments “Chinese standards on state and on access to public procurements, on intellectual property could become global standards”.

The finance minister’s statements reflect the growing awareness that two opposing systems operating on two conflicting sets of principles and standards are currently in conflict, where only one can succeed. Yet as much as he appears to be aware of the forces at play between two systems, Le Maire fails miserably to identify what the Bretton Woods System was meant to accomplish in the first place, or what type of “radical transformation” is needed to save Europe from the collapse of its own speculation-ridden system.

Le Maire dives so deeply out of reality that he actually believes that the radical transformation desperately needed in the west does not involve collaborating with the New Silk Road, but rather to strengthen the power of Brussels, while becoming more technocratic and more green (aka: de-industrialized, de-populated).

The Bretton Woods of 1944 and New Silk Road of Today
Seventy five years of revisionist historians largely funded by the British Roundtable/Chatham House and its American branch (The Council on Foreign Relations) have obstructed the true anti-imperial nature of the founding intention of Bretton Woods and the post war order centered on the United Nations.

Then, much as today, two opposing factions were vying to shape the essence of the world order as the Nazi machine (funded by Wall Street and London’s Bank of International Settlements) was drawing to a close. I am not talking about Capitalism vs. Communism.

This faction fight was between New Deal nationalists led by Franklin Roosevelt vs those racist imperialists represented by Sir Winston Churchill who wished to use the crisis of the war to establish a revived British Empire strengthened by American muscle. FDR’s New Dealers were characterized by their total adherence to the belief that the plague of colonialism had to be undone and a new age of long term development of great infrastructure projects had to characterize the community of sovereign nations for the coming century. These patriots believed in the internationalization of the New Deal, were committed to working with Russia and China as natural allies of America and profoundly distrusted the British.

In the case of Bretton Woods, where representatives from 44 nations convened for two weeks to create a new post war system in July 1944, this fight amounted to a battle between FDR’s trusted economic advisor Harry Dexter White (first director of the IMF and ally of FDR’s vice-president Henry Wallace) and Lord John Maynard Keynes (eugenicist, pedophile and defender of the British Empire).

Churchill and Keynes: Hard Racist/Soft Racist of the Empire
Where Churchill represented the unapologetic conservative proponent of the “White Man’s Burden” to exercise dominion over the “inferior” colored peoples of the earth, Keynes represented the soft cop of the Empire as a “Fabian Society Socialist” (aka: Social Engineer) from the London School of Economics. Where Churchill’s ilk preferred mowing down their enemies with Canons, body counts and torture as seen in the Boer War or opium wars or WWI, Keynes’ Fabian methods preferred attrition and slow subversion. Either way, the result of either pathway was the same.

While many know of the racist and pro-fascist views of Sir Churchill who spoke admiringly of Mussolini and even Hitler in the early days when it was still believed that these fascists and corporatists would act as marcher lords for the financial oligarchy, but most people are unaware that Keynes also supported Hitler and despised FDR.

Contradicting the mythos that FDR was a Keynesian, FDR’s assistant Francis Perkins recorded the 1934 interaction between the two men when Roosevelt told her:
“I saw your friend Keynes. He left a whole rigmarole of figures. He must be a mathematician rather than a political economist.”

In response Keynes, who was then trying to coopt the intellectual narrative of the New Deal stated he had “supposed the President was more literate, economically speaking.”

In his 1936 German edition of his General Theory of Employment, Interest and Money, Keynes wrote:
“For I confess that much of the following book is illustrated and expounded mainly with reference to the conditions existing in the Anglo Saxon countries. Nevertheless, the theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state.”

Keynes Contaminates Bretton Woods
Lord Keynes was deployed to lead the British delegation to Bretton Woods and advance a Delphic plan that called for creating an International Clearing Union controlled by the City of London denominating all payments in a common accounting unit: the Bancor.

The Bancor would be used to measure all nations’ trade or surplus deficits- expropriating surpluses by the end of the year and taxing countries with deficits. The imposition of a “mathematical architecture” upon the physical (non-mathematical) systems of nations was the surest way to keep an invisible cage upon the earth under an ideal of “mathematical equilibrium.” The sadistic fiscal austerity demanded by mathematical economists and other technocrats in Brussels reflect the still active force of Keynes’ spirit haunting the world today.

The Bretton Woods as a Global New Deal
In opposition to Keynes, FDR’s America was represented by his close ally Harry Dexter White in Bretton Woods. White (today slandered as a Soviet agent by CFR historians) fought tooth and nail to ensure that Britain would not be in the driver’s seat of the new emerging economic system or the important mechanisms of the IMF that he would go onto lead, World Bank or monetary policy more generally. White ensured the colonial economic “preference” system Britain used to maintain free trade looting across its empire was destroyed, and the pound sterling did not play a primary role in global trade. Instead a fixed exchange rate system was set up to guarantee that speculation could not run rampant over national growth strategies and the dollar (then backed by a powerful PHYSICAL economic platform) was a backbone for world trade (1).

White, like Franklin Roosevelt, Henry Wallace, and Harry Hopkins believed that the US currency (rather than the pound sterling) had to become the foundation for the world economy as America exited WWII as the most powerful productive, growing nation of the world untouched by the ravages of Eurasian war.

Just as the Reconstruction Finance Corporation (RFC) was used like a national bank to fund thousands of great infrastructure, transport, energy, and water projects during the New Deal and just as Glass-Steagall broke the monopoly of private speculative finance over the productive economy, these New Dealers wished to use the World Bank and IMF to issue long term, low interest productive credit for long term mega infrastructure projects around the world. Not just in Europe’s reconstruction.

FDR’s battle with Churchill on this matter was well documented in his son/assistant Elliot Roosevelt’s book As He Saw It (1946):
“I’ve tried to make it clear … that while we’re [Britain’s] allies and in it to victory by their side, they must never get the idea that we’re in it just to help them hang on to their archaic, medieval empire ideas … I hope they realize they’re not senior partner; that we are not going to sit by and watch their system stultify the growth of every country in Asia and half the countries in Europe to boot.”

FDR continued:
“The colonial system means war. Exploit the resources of an India, a Burma, a Java; take all the wealth out of these countries, but never put anything back into them, things like education, decent standards of living, minimum health requirements–all you’re doing is storing up the kind of trouble that leads to war. All you’re doing is negating the value of any kind of organizational structure for peace before it begins.”

Writing from Washington in a hysteria to Churchill, Foreign Secretary Anthony Eden said that Roosevelt ”contemplates the dismantling of the British and Dutch empires.”

In 1942, FDR sent his close ally Wendell Wilkie on a world tour to meet with international leaders of colonial nations in order to spread the President’s vision for a global new deal. On his return Willkie gave a speech saying:
“In Africa, in the Middle East, throughout the Arab world, as well as in China, and the whole Far East, freedom means the orderly but scheduled abolition of the colonial system. I can assure you that this is true. I can assure you that the rule of people by other people is not freedom and not what we must fight to preserve… Men and women all over the world are on the march, physically, intellectually and spiritually. After centuries of ignorant and dull compliance, hundreds of millions of people in Eastern Europe and Asia have opened the books. Old fears no longer frighten them. They are no longer willing to be eastern slaves for western profits. They are beginning to know that men’s welfare throughout the world is interdependent. They are resolved, as we must be, that there is no more place for imperialism within their own society than in the society of nations.”

This vision was expressed continually by FDR in his hundreds of speeches, as well as by his Vice-President Henry Wallace, in the creation of the Atlantic Charter, and Four Freedoms. It was embedded in the defense of national sovereignty in the UN Constitution (conspicuously non-existent in the British-directed League of Nations earlier). It was meant to be the governing spirit animating the world as mankind entered a matured age of creative reason.

So What happened?
Describing the deep British penetration of the American state department, infested with Rhodes Scholars and Fabians, FDR described his understanding of the problem to his son:
“You know, any number of times the men in the State Department have tried to conceal messages to me, delay them, hold them up somehow, just because some of those career diplomats over there aren’t in accord with what they know I think. They should be working for Winston. As a matter of fact, a lot of the time, they are [working for Churchill]. Stop to think of ’em: any number of ’em are convinced that the way for America to conduct its foreign policy is to find out what the British are doing and then copy that!” I was told… six years ago, to clean out that State Department. It’s like the British Foreign Office….”

As long as FDR was in office, this British-run hive was kept at bay, but as soon as he died, the infestation took over America and immediately began undermining everything good FDR and his allies had created.
Harry Dexter White was ousted from his position as director of the IMF and labelled a communist agent. Henry Wallace was ousted for similar reasons and worked with White on a 1948 presidential bid as third party presidential candidate. William Wilkie (who had discussed creating a new party with FDR) died in October 1944, and FDR’s right hand man Harry Hopkins who did the most to initiate a close bond of friendship with Stalin, died in 1946. Elliot Roosevelt interviewed Stalin a few years later, and recorded that Stalin always believed that Elliot’s father was poisoned “by Churchill’s gang.” By 1946, Churchill ushered in the Cold War setting former allies at each other’s’ throats for the remaining 70 years while dropping nuclear bombs on a defeated Japan. Stalin bemoaned Roosevelt’s death saying “the great dream has died”.

It took the oligarchy another 25 years to dismantle the fixed exchange rate system of the Bretton Woods leading to Nixon’s 1971 floating of the US dollar onto the speculative markets, converting the world ever more into a militarized casino system. Rather than used as instruments for long term growth as they were intended, the IMF and World Bank were used as tools of debt slavery and re-colonialization as outlined in John Perkins’ Confessions of an Economic Hitman.

Today the world has captured a second chance to revive the “great dream”. In the 21st century, this great dream has taken the form of the New Silk Road, led by Russia and China (and joined by a growing chorus of nations yearning to exit the invisible cage of colonialism).

If western nations wish to survive the oncoming collapse, then they would do well to join this new framework rather than drink more of the poison promoted by the likes of Le Maire, Ursula von Leyen and their masters who want to transform the dying remains of Bretton Woods into a “Green New Deal”.


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Appendix: Churchill, Keynes and FDR in their own words…
“Galton’s eccentric, sceptical, observing, flashing, cavalry-leader type of mind led him eventually to become the founder of the most important, significant and, I would add, genuine branch of sociology which exists, namely eugenics.”

-John Maynard Keynes on Galton’s Eugenics, Eugenics Review 1946
“I do not agree that the dog in a manger has the final right to the manger even though he may have lain there for a very long time. I do not admit that right. I do not admit for instance, that a great wrong has been done to the Red Indians of America or the black people of Australia. I do not admit that a wrong has been done to these people by the fact that a stronger race, a higher-grade race, a more worldly wise race to put it that way, has come in and taken their place.”

– Winston Churchill to the Peel Commission, 1937
“There never has been, there isn’t now, and there never will be, any race of people fit to serve as masters over their fellow men… We believe that any nationality, no matter how small, has the inherent right to its own nationhood.”

– Franklin Delano Roosevelt, March 1941
“They who seek to establish systems of government based on the regimentation of all human beings by a handful of individual rulers call this a new order. It is not new and it is not order.”
– Franklin Roosevelt

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