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Interview with James Patrick: The Great Taking

As many of my clients, friends and regular readers know well, I’ve spent the better part of the last decade criticizing all the great evils and trespasses of the State and its crony capitalist accomplices. I’ve written extensive analyses and gave many speeches warning fellow citizens about the dangers that lie in government power grabs and authoritarian transgressions. The most important of these risks can, without fail, be found in monetary matters and in the banking system. After all, whoever controls the money, controls the world.

By now, those of us who have studied monetary history and who carefully observe how the current system operates, are fully aware of the fact that fiat currencies are devoid of any real value. Whatever perceived value they have is totally dependent on the State and even the very notion of ownership over one’s savings is illusory. Savers can just wake up one day and find that they no longer have access to their bank accounts, as we saw in Canada, or even that part of their savings is simply gone, as we saw in Cyprus.

What might come as a much more disturbing surprise, however, is that this risk and this uncertainty over one’s property rights extends to securities too. In the interview that follows, James Patrick talks about the subject of his new documentary, “STOP IT! The Great Taking”, which shines a much-needed light on a little-known but deeply consequential transformation in global securities law. He exposes the shocking shift that occurred through a series of legislative changes in the US and the EU that very quietly transferred legal rights from investors to large financial institutions. This resulted in the legal redefinition of ownership rights over stocks, bonds, and other assets that investors believe they fully own, when they practically, effectively and legally don’t.

—————

Claudio Grass (CG): Nice speaking with you again James. Many people have heard of the term “The Great Taking” put forth by David Webb but could you briefly summarize the issue.

James Patrick (JP): Sure. The story involves a fraudulent practice that developed within the financial services industry of surreptitiously using client securities as collateral on their own trades and lending them to other firms for use as collateral on speculative bets. This practice became widespread in the 1970s, but changes in law to legalize this fraud were established in the US in the 1990s and harmonized into EU law in the 2000s.

CG: So, whose securities are being used exactly? Is it the stocks and bonds that retail investors buy through their broker?

JP: Unfortunately, this is being done to all securities in the market. All investors in securities, big and small, even sophisticated and institutional investors, are exposed to the risk of the failure of their brokers and the financial intermediaries above them in the system. Even when clients are told their accounts are “segregated,” they in fact are not. All client securities are kept in pooled accounts, and from there are pledged as collateral. This is done over and over again in rehypothecated “collateral chains.”

When any of these firms using client assets fail, clients are only entitled to “pro rata share” (a proportional share) of what is left over of the firm’s assets, and have a subordinate legal claim to recover their property behind secured creditors of the contracts their securities were posted as collateral to.

CG: That is quite surprising. How is that even legal?

JP: In answer to your question, this is how it became legal. The fraudulent use of client collateral began as an illegal act and developed into a widespread industry practice. This led to a concerted multi-decade lobbying effort to make significant changes within securities and bankruptcy law to legalize the practice. These changes to law expose all holders of securities to total risk of loss should the firms using their securities go bankrupt.

The first big legal change made was in the US in the 1994 revision of Article 8 of the Uniform Commercial Code, which is the primary section dealing with securities. This UCC amendment introduced two novel legal concepts. The first was, direct title to a security was substituted with a contractual claim on a security called a “Securities Entitlement.” The significance of this being a contractual claim is very weak in a bankruptcy proceeding.

The second novel legal concept was, in the event of bankruptcy, priority to the client’s securities was given to the secured creditor of the derivatives contract using the client securities as collateral ahead of the client (entitlement holder). The 1994 revision of Article 8 was used as a model for harmonizing these changes into EU law between the years 2004 and 2014, as evidenced by documents between the “Legal Certainty Group”, (the working group tasked with implementing these changes in securities law in the EU), and lawyers at Federal Reserve Bank of NY.

CG: So, clients are at risk of total loss at any time should the firms using their assets go bankrupt, correct? And who are the secured creditors exactly?

JP: Client securities are posted as initial margin on derivatives contracts and if the market moves against their positions, they have to put up more collateral or their initial margin gets wiped out. Each derivatives contract has a secured creditor, that takes control of the collateral pledged. The problem the industry faced, is that when client securities are posted as collateral many times, on multiple derivatives contracts, and these contracts fail, the secured creditors of those failed contracts get to take the collateral. But there is not just one, there are many and a priority contest ensues between multiple secured creditors. Industry needed legal certainty that the secured creditors would come ahead of the clients. Client’s claims to their property needed to be eliminated for the derivatives industry to function at such leveraged levels.

Another significant legal obstacle the industry faced was bankruptcy law. Prior to changes in bankruptcy law, if a client’s securities were seized on the eve of bankruptcy, this would be constructive fraud or a fraudulent transfer. So, changes in bankruptcy law were enacted federally in the United States in 2005 and 2006, that amended the “Safe Harbor” provisions and established the 546(e) exemptions which specifically exempted fraud. They actually carved out exemptions for the very criteria of constructive fraud and fraudulent transfer. I know all this sounds fantastical, but it’s true and in black and white in the law.

These changes to law have led to wild speculation in the derivatives market, which is now estimated to be valued at around 2 quadrillion dollars. The underlying value of all securities held at the Depository Trust and Clearing Corporation (DTCC) in NY and at Euroclear in Belgium are around 130T. Given not all the 130T are being used as collateral, we are talking about a system wide leverage rate of over 20X, with US treasury bonds sometimes exceeding 150X leverage.

CG: How come the average investor is totally in the dark about this issue? Even seasoned professionals are most likely not entirely aware of the risk they are exposed to in the markets. How did such incredibly important and game-changing legal shifts occur without any public disclosure, let alone debate?

JP: These changes were snuck in under the radar but in plain sight. Although the broader banking, repo, and derivatives industry benefitted from them, very few people within the industry understand the big picture and broader risks this created… And big institutional investors have no idea, let alone a retail customer, even if he has hundreds of millions of dollars in the markets.

Alongside these changes, the repo market, that was really cultivated by JPMorgan, has become the primary money market between banks. These repurchase agreement contracts are inherently prone to cause systemic illiquidity should there be downturns in the market. The BIS has written many reports warning of “margin spirals” in such a scenario.

CG: Wow, so what can be done about this?

JP: Well, within the EU not much to be honest, as a lot of this has been enacted in EU code that supersedes national governments. So, short of dismantling the EU itself, I don’t see a clear legal strategy to change any of that. National governments within the EU need to assert their sovereignty, exit the EU and protect their citizens.

But in the US, because the foundational legal change was enacted on the state level and can be undone on the state level by striking a few exceptions in 1994 Article 8 revision. This would unravel the legal structure industry put in place to encumber client securities. If these bills to amend Article 8 are passed in any one state, that would allow large firms to rewrite their custodial contracts to be under that state’s laws, giving them priority to their securities if their broker or other financial intermediaries pledging their securities went bankrupt.

If we don’t make these changes, we will own nothing and be unhappy.

CG: Can you elaborate a bit more on that last point? If nothing changes, what do you anticipate will happen next? How would you expect the worst-case scenario to play out and what “dominoes” would have to fall to get there?

JP: In the worst-case scenario, we see a decline in prices within the derivatives market that causes a cascade of collateral calls. As this occurs collateral gets sold, irregardless of the price fetched on the market, and the entire collateral market freezes up and everyone’s securities get transformed to US treasuries and taken by secured creditors.

In the end, this would end up being the “too big to fail” banks that suck up all the collateral. Everyone would lose their savings and the wealth of society would be transferred into the hands of the few and no one would legally be able to dispute it, short of an armed revolution. We would then live in a much poorer world outlined by UN initiatives such as the C40.org where meat and dairy, long distance travel and cars would be out of reach of common people who would live in “15 minutes cities.”

CG: How did you get involved with this issue?

JP: Well, I’m from Washington, DC… don’t hold that against me… and I was always researching who is really in control of our ‘out of control’ government. I concluded the banking interests behind the Federal Reserve were really the ones in charge. So, I searched for best analysis of how the Fed works and this led me to Austrian economics. They provided the best analysis of the business cycle and the problems arising from fractional reserve banking. The 300-year-old practice of banks lending out their client’s deposits as loans, with the interest on those loans being profit of the bank, is a strikingly similar to the current industry practice of pledging and lending out client’s securities, with the return from those trades being the profit of the firm.

I was finishing up a doctorate on monetary and banking reform and the threat of CBDCs to civil liberties when the covid episode began. This widespread violation of our civil rights angered me so I decided to do something about it and embarked on the largest international documentary on the subject called Planet Lockdown, which you contributed greatly too Claudio. 18 months ago, I met David Webb at a conference in Sweden we were both speaking at. I approached him about making a film on the issue and we decided to make a documentary. He and several other bankers, some of whom worked in the Eurodollar market, helped me to understand this securities issue and bring my understanding of the financial markets up to date from where Austrian analysis left off. Within 3 months of starting the film, some lawyers who read his book in South Dakota began introducing laws at the state level to amend Article 8 of the UCC that would restore priority to clients to their own securities, ahead of the secured creditors. We were interviewing G Edward Griffin when David and I first heard about these efforts and the film quickly became about the legislative efforts of 2024 to amend article 8, and the rest is history. G Edward Griffin was the one who suggested the film be titled “STOP IT!”. The film came out in late January and can be seen for free at TheGreatTakingReport.com.

CG: Can you talk a bit about your experience making the film? And did you encounter any pushback during the production or after its release?

JP: If you mean harassment, no I did not. Still very few people know about this issue and those that do know parts of it do not understand the broader implications. It’s because of interviews like this one that more can find out about it and put pressure on their legislators to strike these laws legalizing theft and fraud.

CG: Quite the story. Is there anything else you’d like to end with?

JP: Everyone can see the film at TheGreatTakingReport.com. I am publishing a technical report for sophisticated investors and fund managers to better understand the inherent risks in the securities market. My report reviews the relevant changes in law in US and EU that have undermined property rights to securities and outline the unrecognized risk faced by all investors.

I would also like to encourage any US citizens to contact their state legislators to amend article 8. This is a realistic goal and the first step to restoring our property rights and peacefully deflating a 2 quadrillion dollar derivatives bubble that threatens to bring down the world economy.

Anyone can contact me with questions at [email protected]

The post Interview With James Patrick: The Great Taking appeared first on LewRockwell.

Thanks, Jerome Barber. 

How Tech Giants are Perfecting The Hidden Architecture of Subjugation

 

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Thanks, Johnny  Kramer 

His grandfather was 63 when his father was born, and his father was 75 when he was born.

President John Tyler’s grandson dies at 96, 180 years after he left White House

 

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Thanks, Saleh Abdullah. 

Notice how we didn’t hear much if anything about DOGE cleaning house in the Pentagon, the CIA etc..

See here.

 

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Thanks, Saleh Abdullah. 

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Technocracy

 

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Thanks, Saleh Abdullah.

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Thanks, Saleh Abdullah. 

Independent Sentinel

 

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Thanks,  John Smith. 

The New York Times

 

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Consortium News

 

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Mondoweiss

 

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CNBC News

 

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Thanks, Jesse Trentadue.

Blaze Media

 

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Thanks, John Smith. 

The Chris Hedges Report

 

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Ricordo a tutti i lettori che su Amazon potete acquistare il mio nuovo libro, “Il Grande Default”: https://www.amazon.it/dp/B0DJK1J4K9 

Il manoscritto fornisce un grimaldello al lettore, una chiave di lettura semplificata, del mondo finanziario e non che sembra essere andato "fuori controllo" negli ultimi quattro anni in particolare. Questa è una storia di cartelli, a livello sovrastatale e sovranazionale, la cui pianificazione centrale ha raggiunto un punto in cui deve essere riformata radicalmente e questa riforma radicale non può avvenire senza una dose di dolore economico che potrebbe mettere a repentaglio la loro autorità. Da qui la risposta al Grande Default attraverso il Grande Reset. Questa è la storia di un coyote, che quando non riesce a sfamarsi all'esterno ricorre all'autofagocitazione. Lo stesso è accaduto ai membri del G7, dove i sei membri restanti hanno iniziato a fagocitare il settimo: gli Stati Uniti.

____________________________________________________________________________________

di Mark Jeftovic

(Versione audio della traduzione disponibile qui: https://open.substack.com/pub/fsimoncelli/p/il-mantra-per-ogni-ciclo-allocare)

Ogni ciclo di Bitcoin ha un tema e un motore centrale, e a volte siamo così vicini a esso che non riusciamo a capire esattamente di cosa si tratta (o di cosa si è trattato) finché non lo abbiamo ormai superato.

Nel 2013 furono i bail-in a Cipro e la consapevolezza che il sistema bancario stava andando in una direzione dove l'espressione “sicuro come il denaro in banca” non sarebbe stata più del tutto vera. Il motore principale fu l'ascesa degli exchange centralizzati, anche se uno di questi, Mt. Gox, implose su sé stesso e le macerie sono ancora fumanti oggi.

Il ciclo del 2017 segnò l'esplosione del settore delle criptovalute come classe di asset a sé stante: Ethereum fece il suo ingresso sulla scena con la specifica del token ERC-20, innescando la mania di “tokenizzare tutto”. Il boom delle ICO alimentò lo slancio e l'avvento di stablecoin come Tether fornì il lubrificante per immettere capitali nel settore degli asset digitali.

Per il ciclo del 2020 fu l'arrivo dei primi miliardari anticonformisti (Paul Tudor Jones, Stan Druckenmiller, Elon Musk, Michael Saylor), in un momento in cui il loro ingresso era erroneamente interpretato come il segnale che “le istituzioni stanno entrando” in Bitcoin come classe di asset.

Nemmeno lontanamente. Ma quello che è successo è che molti hedge fund e investitori di alto livello, che erano all'avanguardia e miravano a catturare l'alfa, iniziarono a investire in quello che all'epoca veniva chiamato “l'arbitraggio GBTC” – una lunga storia, spiegata in dettaglio qui, ma che in sostanza significava che i trading desk potevano registrare profitti consistenti prima ancora che venissero effettivamente realizzati, al costo di bloccare il capitale per sei mesi.

Quando infine si disgregò (ovvero il ciclo terminò), il premio di GBTC si trasformò in uno sconto sul NAV e quando le cose andarono davvero male (LUNA, 3AC, Celsius... FTX) la stessa entità madre di GBTC, DCG, andò in bancarotta e GBTC divenne un'isola di capitale intrappolato, del valore di oltre $30 miliardi.

Ora siamo in un nuovo ciclo di Bitcoin...

Abbiamo un nuovo tema e un nuovo catalizzatore. GBTC entra di nuovo in gioco, perché è la ragione per cui il prezzo di Bitcoin è rimasto un po' smorzato dopo l'arrivo del nuovo catalizzatore.

Ricordate quello che diciamo da un anno, forse più: nel prossimo ciclo le istituzioni si faranno avanti e, a causa dell'enorme asimmetria nell'ecosistema di Bitcoin, troveranno la situazione abbastanza interessante da assegnargli una piccola percentuale del loro portafoglio.

Ho previsto un nuovo mantra di investimento per i gestori di fondi istituzionali: “L'allocazione dell'1%”.

Cominciamo con i dati: Fidelity, con $12.600 miliardi di asset in gestione e uno dei fornitori di ETF spot (l'unico ad aver creato un proprio depositario per gestirli), ha aggiunto un'allocazione di “criptovalute” come suo fiore all'occhiello, “All-In-One Conservative ETF”, autoproclamato “una soluzione unica diversificata per regioni, capitalizzazioni di mercato e stili/fattori di investimento, con il vantaggio di una gestione professionale”.

L'allocazione dell'1% risale ad anni fa: la prima volta che l'ho vista era in un documento di lavoro della Banca centrale delle Barbados, redatto da una coppia di economisti del posto che raccomandava alla banca centrale del Paese di detenere l'1% delle sue riserve estere in Bitcoin; era il 2015.

Nel 2022 anche il Comitato di Basilea per la vigilanza bancaria stava definendo delle linee guida sulle allocazioni “crypto” per le attività di riserva di livello 1:

Limite di esposizione del Gruppo 2: l' esposizione totale di una banca alle criptovalute del Gruppo 2 non deve superare il 2% del capitale di livello 1 della banca e dovrebbe generalmente essere inferiore all'1%.(Quel documento della BRI non faceva distinzione tra  Bitcoin  e “crypto”, sebbene avesse dovuto farlo...)

E questo articolo di Motley Fool, che parla principalmente dell'aumento della quota di Cathy Woods in ARK Funds al 19%, cita l'allocazione dell'1% come una prassi piuttosto convenzionale:

Fino a quest'anno l'opinione prevalente era che Bitcoin dovesse rappresentare solo una piccola parte del portafoglio complessivo. Come regola generale, l'1% era la norma, e qualsiasi percentuale superiore al 5% era considerata ultra-aggressiva.

La nuova regola dell'1%: comprate Bitcoin

Conosciamo tutti il vecchio adagio “Nessuno è stato licenziato per aver comprato azioni di IBM”, un mantra ai tempi dei “Nifty Fifty” (poi ci sono state le iterazioni successive: sostituite IBM con Microsoft, Google, Apple, ecc.).

Ecco cosa penso che succeda ora: mentre oggi nessuno potrebbe essere licenziato per aver comprato, per esempio, una delle Magnifiche Sette, domani potreste benissimo essere licenziati per non aver investito, come minimo, l'1% su Bitcoin. Sì, davvero.

Che effetto avrà sul valore di Bitcoin un'allocazione dell'1% dell'intero spettro della ricchezza istituzionale? Il mio modello mentale, risalente al The Crypto Capitalist Manifesto, è sempre stato quello di considerare la dimensione totale del mercato obbligazionario, confrontandola con Bitcoin e metalli preziosi.

Basically, this: pic.twitter.com/FhwvjUxYOq

— Mark E. Jeftovic (@MarkJeftovic) February 11, 2024

Da lì, ipotizzo cosa accadrebbe se solo l'1% di quel “rendimento senza rischi” (obbligazioni) si trasferisse su Bitcoin. Considerando che quest'ultimo ha riconquistato solo di recente la capitalizzazione di mercato di $1.000 miliardi, e che ci sono tra i $150.000 e i $300.000 miliardi in obbligazioni globali (a seconda di cosa si include), un solo 1% di uscita dalle obbligazioni raddoppierebbe come minimo la capitalizzazione di mercato di Bitcoin.

Siamo appena entrati in questa nuova era in cui Bitcoin è disponibile come strategia di allocazione istituzionale e ci sono già i primi segnali che indicano che gli allocatori di capitale stanno addirittura scegliendo Bitcoin rispetto all'oro, cosa che, lo ammetto, mi ha sorpreso.

Can someone do a wellness check on @PeterSchiff? pic.twitter.com/mUc2xGwK2j

— Jameson Lopp (@lopp) February 14, 2024

Pensavo che coloro che avevano già investito in oro sarebbero rimasti fermi e avrebbero aggiunto Bitcoin, ma ora sembra che i gestori di fondi istituzionali che avevano investito in oro come copertura abbiano perso la pazienza con i ripetuti crolli dell'oro dai massimi storici.

L'oro ha fatto registrare un nuovo massimo storico a dicembre, ma come ho osservato, dal precedente massimo del 2020, un nuovo massimo storico per l'oro potrebbe significare un calo pluriennale piuttosto che un imminente massimo più alto.

Al contrario, Bitcoin sembra destinato a dar vita a una nuova serie di criptovalute, almeno per i prossimi due anni.

Quindi ora vi presento umilmente “Il Tema” di questo ciclo:

Il tema è: Le istituzioni stanno arrivando.

Il motore principale è: gli ETF spot di Bitcoin.

Il mantra sarà: allocare come minimo l'1% su Bitcoin.

[*] traduzione di Francesco Simoncelli: https://www.francescosimoncelli.com/

Supporta Francesco Simoncelli's Freedonia lasciando una “mancia” in satoshi di bitcoin scannerizzando il QR seguente.

Thanks, David Martin.

ADL Calls For MASS CENSORSHIP Online To Protect Israel

 

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Aside from economic collapse scenarios, many countries are in the process of eliminating physical cash and coins. Instead, everyone has an account that holds their money. You cannot purchase goods or services without access to government-based cryptocurrency. Even if the currency itself is still backed by faith in the government, you have to use this electronic system.

The result is multiple problems that could leave you in a situation where you have the money in the bank to pay your bills and purchase goods and services, yet you cannot do so.

These threats include:

Attacks Sponsored by Foreign Governments

These hacks usually affect the bank or primary clearinghouse rather than a specific person’s account. You may be unable to purchase goods or services for hours or days. While this is inconvenient, it isn’t as bad as a full collapse, where the banks close for good.

There’s only so much you can do about this kind of hack other than make sure you can go two weeks without buying anything at any given time. It is also essential to keep a paper-based address book with phone numbers and account information so that you can contact utility companies or others who may be expecting payments from you while the bank or clearinghouse is down.

Let’s say you can connect to Wi-Fi independently of the SIM Card. Your phone app may not work with Wi-Fi. This is why I recommend having an app on your phone that doesn’t use the SIM card to dial out on Wi-Fi so that you can make the necessary calls.

Attacks Sponsored by Non-government Groups

If the hacker was able to steal money from your accounts, it could take weeks to years before you recover the money. In the short term, you will have to shut down credit cards and so on, then wait for new ones to come in the mail. You may also have to manage restoring devices and regaining access to your accounts.

Here again, make sure you can go at least 2 weeks without buying anything so that you can manage your basic necessities.

Merchant Category Codes are unique identifiers that put different products into separate categories. For example, food has one set of numeric identifiers, while clothing has other identifiers.

Even without looking at your receipt, the bank and transaction clearinghouse may have some ideas about what you bought. The transaction cost can then give some estimates about quantity and item type. One day, data from all banks and clearinghouses may pool into a central government computer.

Social credit scores work like your financial-based credit scores. Consider how your financial credit score enables businesses to “reward” you with credit or better interest rates if you pay your bills on time and have an optimal debt-to-income ratio. Your social credit score looks at how you act in society. For example, China has a system that rewards things like donating blood.

This same system “punishes” people who drive drunk or engage in other activities that aren’t “beneficial to society.” People with good social credit scores may get tax breaks, an increased chance of getting a promotion, or other benefits.

When vaccines became available for COVID-19, governments worldwide were concerned because people hesitated to embrace mRNA vaccines. This led to people not complying with recommendations to get vaccinated. Social credit scores can be paired with cashless systems that will block purchasing from specific merchant category codes. It could become possible to deny people the ability to buy food, gas, and other essentials if they aren’t vaccinated.

When you can’t use cash, pressure campaigns like this will be almost 100% effective because you will have to comply or do without the necessities of life.

The only way to outlast a pressure campaign like this is to have a stockpile of food and other essentials that will last until the pressure tactics are stopped.

Moving Away From Hard Cash to Fiat Cryptocurrency

At first, you might think merchant credit codes will only come into play when the government seeks to limit, slow down, or prevent purchasing certain goods and services. The problem is that modern networks aren’t safe from hackers, including those who seek to disrupt trade for ethical reasons.

For example, the Internet Archive was recently targeted by a hacktivist group, Blackmeta. They claim they attacked this non-profit library site because it is based in the USA and, therefore, is aligned with Israeli activities. Ironically, the Internet Archive has been locked in multiple court battles with publishers that may be far more aligned with Israel. These publishers, in turn, are trying to shut down the Internet Archive because when people don’t buy from the publisher, it cuts into their profits.

Now imagine this kind of situation happening with the information stolen from the Heritage Foundation, and then used to target more granular data in banks and merchant clearinghouse systems. You could very easily see transactions declined for what appears to be “government” or other legislative curbs, when in fact, it’s some group attacking you because of a “social credit score” known only to them.

If you want to buy something right now, you can just put your credit card away and use cash. This won’t be possible once the only fiat currency available is electronic in nature. No matter how much you want to look at the potential for excess government imposition, the fact remains any group with sufficient skills and interest can cause serious problems.

Read the Whole Article

The post Here’s How a Cashless Society Will Impact the World appeared first on LewRockwell.

On Sunday’s podcast, Peter dissects another rough stretch for American financial markets, spotlighting mounting selloffs across sectors and another breakout moment for gold. He breaks down why US treasuries are now riskier than ever, the structural problems with fiscal and monetary policy, and how tariffs are hitting American consumers harder than politicians care to admit.

The week’s headlines were dominated by red ink, but Peter points out that there’s still one clear winner:

Anyway, it was a big week in the markets and it was a bad week for US financial markets across the board. It was another ‘sell America’ week, and I think we’re going to have a lot more weeks like this one. In fact, if you remember when Trump first won and everybody was talking about the Trump trade being ‘buy America,’ I was one of the few people that said, ‘No, the Trump trade was sell America’ because I understood the ramifications of the policies that Trump would be pursuing, and the markets are reacting exactly as I had expected them to react. The star of the week was gold. Gold rose more than 5% on the week.

Peter doesn’t mince words when discussing the supposed safety of US government bonds. He urges investors to stop pretending that treasuries are a safe haven, especially given America’s ballooning obligations:

Again, as far as I’m concerned, it’s all junk bonds. If you buy U.S. treasuries, you have no chance of making any money; you will lose for sure. The only question is how you’re going to lose. You’re either going to lose because the Treasury defaults and that is a real possibility. I’d say it’s a lower possibility, although if you happen to be in China and you own U.S. treasuries, I’d say it’s a pretty high possibility. … But either the government defaults and they don’t pay you, or they pay you by printing a lot of money. 

This shift in perception, from risk-free to risky, marks a fundamental change in global markets. Peter revisits how even after major geopolitical shocks, what used to be the “go-to” assets are looking shaky:

One of the most significant developments really this year is that treasuries have moved from a safe haven to a risk asset. That was evident after the Liberation Day announcement when treasuries got killed along with stocks. I’ve said this for a long time that eventually the only safe haven left standing was going to be gold. Gold is the only thing that really rallied during that initial week or so of collapse. Investors went into gold.

On the policy front, Peter calls out both major parties, arguing that regardless of who’s steering the ship, America’s debt trajectory is accelerating:

But so this big, beautiful bill not only doesn’t put us on a different course when it comes to the debt. We stay on the same course: we’ve just stepped on the gas. So we were on a path to a debt crisis and a dollar crisis. We’re staying on that path. We’re just driving faster, so we’re just going to get to that destination quicker because we elected Trump. Now, of course, had we elected Kamala Harris, I’m sure that whatever budget they’d have come up with– assuming the Democrats came in with her and she had both houses of Congress– I’m sure their deficits might have been even bigger.

The real-world impact hits consumers hardest, Peter explains, especially as tariffs bite and the dollar’s weakness amplifies the pain at the checkout counter:

Anyway, the bottom line is Walmart’s got to raise prices. Everybody’s got to raise prices. And as Trump realizes this, maybe that’s what’s happening; he realizes that it’s not external revenue. It’s internal revenue– that the people who pay the tariffs are the American consumers, especially with the weakness of the dollar. Because remember, one of the things that a lot of these so-called experts were saying was that the tariffs were going to strengthen the dollar and the stronger dollar was going to help offset the tariffs because we were going to import cheaper because of the strong dollar. Well, it has actually had the opposite effect.

This article was originally published on SchiffGold.com.

The post Traders Are ‘Selling America’ appeared first on LewRockwell.

In a recent executive order President Trump called for an end to taxpayer funding of NPR and “public” television (PBS), created by Congress in 1967 to laughingly create an “independent” news source.  Yes, they have always been independent of the free market and of the hapless American taxpayers, but certainly not independent of the deep state Washington establishment.  NPR has always been a government-subsidized propaganda organ.  If Americans want even more government propaganda thrown at them than what they already get from the “mainstream media,” Hollywood, the universities, Google, Facebook, and dozens of television networks, NPR and “public” television should have no problem at all at attracting investors and viewers for a very profitable private business.

NPR’s lawsuit claims that President Trump’s executive order deprives the employees at NPR of freedom of speech, with the implicit assumption that only government subsidies allow them to have freedom of speech and that that freedom will be abolished if the subsidies are ended.  As the president of the private, nonprofit Mises Institute I can attest that it is indeed possible to speak freely and even criticize the government without a single red cent of taxpayers’ money.

NPR claims that depriving it of taxpayer-financed subsidies is unconstitutional when in fact it is the existence of NPR and PBS that is unconstitutional.  There is no mention of government-subsidized statist propaganda – or of any other kind of taxpayer-subsidized propaganda – in the delegated powers of the Constitution’s Article 1, Section 8.  The existence of “public” radio and television is consistent, however, with the sixth plank of the ten planks of The Communist Manifesto:  “Centralization of the means of communication . . . in the hands of the state.”  NPR, along with the Federal Communications Commission (FCC), do nothing if not centralizing more communication in the hands of the state.  During the FDR administration the FCC essentially abolished criticism of FDR over the radio by denying or eliminating broadcasting licenses of his critics.  Other radio stations got the message and kept silent.

Government-funded statist propaganda is also immoral, tyrannical, and un-American for as Thomas Jefferson once said, “It is sinful and tyrannical to compel a man to contribute to ideas with which he disagrees.”  At least half of adult Americans disagree with NPR/PBS leftist propaganda.

Executive orders can indeed by tyrannical but in this case President Trump is doing what many of his predecessors did before it was established by the Civil War that five federal government lawyers with lifetime tenure (the majority of the supreme court) will have a monopoly on constitutional interpretation.  Before that time it was understood by everyone that the president, the Congress, and the people of the free and independent states had equal rights of constitutional interpretation.  When the supreme court “ruled” that the Bank of the United States, a precursor of the Fed, was constitutional, for example, President Andrew Jackson responded by essentially saying thank you for your opinion by my opinion as president is different and equally valid.  He then vetoed the recharter of the Bank of the United States which then went out of business.

President Trump probably is unaware that this is what he is doing despite having a portrait of Andrew Jackson in the White House.  His instincts are right in that there should be no role in a free society for government-funded state propaganda.  That was a hallmark of the Soviet Union and of all other oppressive, totalitarian regimes in history.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.

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