'..Massive monetary inflation and fiscal deficits are categorically incompatible with sound money. And unsound money is incompatible with social and political stability.
Inequality, speculative Bubbles and manias, resource misallocation, wealth redistribution and destruction, and deep economic structural impairment are all consequences of years of unsound money. And it’s back to this fundamental flaw I’ve been railing against for too long: it is impossible to resolve Monetary Disorder and the fallout from unsound money through additional monetary inflation. It’s destined for catastrophic failure..''Davidson:
“Right. So, the growth of the Federal Reserve’s balance sheet - you don’t think that has anything to do with the disconnect between Wall Street and Main Street? Let’s just take as an example the confidence people have expressed in bitcoin and other cryptocurrencies and you know well-respected proven investors like Ray Dalio - who said ‘cash is trash’ – isn’t it because the U.S. dollar is being destroyed by fiscal and monetary policy?”Powell:
“It's hard to say that it’s being destroyed. Another way to look at the dollar, you mentioned the dollar, you can ask domestically what can it purchase and that’s a question of inflation. You can also look at it in terms of a basket of other currencies and…”Davidson:
“I understand, but if you look at it, if you look at it, sir… the key to this is the Fed has done a horrible job at predicting asset Bubbles. They have. And if the pensions are going up because the market prices are going up, people with marketable securities have their basket of wealth going up and wages aren’t. Teachers, for example, they have a great pension but their current consumption isn’t going up. So, CPI lags what’s going on in the investment. I think it’s a big concern and I would just implore you and the other members of the Fed to pay attention to monetary inflation, not just price inflation.”Noland comment: It is a disturbing flaw in Powell’s (and conventional) thinking to equate sound money to relatively contained consumer price inflation. After all, asset inflation and Bubbles are this era’s greatest threats to monetary stability and sound money more generally. Unfettered “money” and Credit is the root cause. Massive monetary inflation and fiscal deficits are categorically incompatible with sound money. And unsound money is incompatible with social and political stability.
Inequality, speculative Bubbles and manias, resource misallocation, wealth redistribution and destruction, and deep economic structural impairment are all consequences of years of unsound money. And it’s back to this fundamental flaw I’ve been railing against for too long: it is impossible to resolve Monetary Disorder and the fallout from unsound money through additional monetary inflation. It’s destined for catastrophic failure, and it was another week when inklings of a failing system were observable to those with discerning eyes.
It may be archaic and relegated to the dustbin of history. But one cannot overstate the peril associated with entrenched unsound money. An insidious corruption of price mechanisms over time jeopardizes the very foundation of Capitalism. And as Capitalism decays Democracy flounders. Society frays, while insecurity, animosity, anxiety, and the forces of distrust are left to fill the void. And as we continue to witness, the consequences of unsound money incite only more perilous inflationism.'
- Doug Noland,
Regime Change, February 26, 2021
Context'Current policy and market structures ensure instability and persistent hardship.'(Banking Reform - English/Dutch) '..a truly stable financial and monetary system for the twenty-first century..'