Darrell Castle talks about the recently released Economic Freedom Index.
Darrell Castle talks about a recent article in Small Wars Journal and the ongoing trend of U.S. military action inside the United States.
Darrell Castle talks about unavoidable economic troubles ahead.
In this podcast, Darrell Castle discusses bailouts and their consequences:
Last night President Obama addressed a joint session of Congress and the nation on the subject of jobs. The result was a proposed bill he called “The American Jobs Act,” which he repeatedly urged Congress to pass right away.
The president summarized his proposal in a pre-speech announcement by describing it as a series of bipartisan proposals that allow Congress to take immediate action to rebuild the American economy. He went on to say that his proposal would strengthen small businesses, help get Americans back to work, and put more money in the paychecks of the middle class and working American. His proposal would do all this while still reducing the deficit and getting our fiscal house in order.
The meat of the president’s proposal could be summarized as follows:
- spending $447 billion on infrastructure,
- tax incentives to increase hiring,
- a reduction in the employer portion of the payroll tax,
- and a few other changes.
The President has a very difficult situation on his hands. The 2012 presidential campaign has already started; his approval rating is the lowest since such records have been kept; and he is facing 9.1% unemployment.
He knows that no president since FDR has been re-elected with unemployment above 7.2%. He must, therefore, bring down unemployment; he must do it quickly; and he must do it without offending any particular voting constituency.
His very difficult situation is made close to impossible by the fact that he has only a set of failed economic theories to work with. The Keynesian Theory of how to revive a faltering economy has been tried several times in the last four years with no lasting effect. The trillions spent to prop up failing financial institutions, Cash for Clunkers, $8000 home purchase incentives – are all gone, all disappeared into the black hole of debt as if they were never there.
The President is right about one thing, though. This fiscal disaster we are facing has been built by a joint effort of Democrats and Republicans. After all, one-half of the Federal Reserve’s mandate is to maintain full employment. It usually attempts to fulfill its mandate through a bipartisan formula of debt and more debt.
What then is the problem?
The problem is several decades of the Keynesian approach of debt and inflation. During the 98-year existence of the Federal Reserve, the dollar has lost more than 95% of its value and the national debt has passed 15 trillion dollars. The deep fiscal problems – perhaps unsolvable without serious pain – which we now face are the inevitable result of America’s severing the last connection of the dollar to gold in August 1971. That act, in effect, changed the world’s reserve currency from gold to paper and now the paper is returning to its intrinsic value.
The other problem is the relentless transferring of American jobs, especially the high paying ones, to foreign countries. This process was brought about through trade agreements like NAFTA, CAFTA, WTO and GATT. President Obama made a campaign promise to revisit NAFTA but he has not done so.
The President recognized that unemployment was a serious problem shortly after his inauguration, and he created a position commonly referred to as Jobs Czar, to deal with it. That position is currently held by Jeffrey Immelt, C.E.O. of General Electric. Congressman Dennis Kucinich (D – OH) recently issued a statement calling for Mr. Immelt to resign or be removed because of G.E.’s transference of vital technology to Chinese state-owned companies. Mr. Immelt, it seems, has created a lot of new jobs – in China. A problem caused by profligate spending, high inflation, and the resulting unsustainable debt, along with transferring jobs to foreign countries cannot be solved by more profligate spending and more job transfers.
What then is the solution?
There is no solution that will not bring with it at least temporary pain. Change our monetary system from one based on debt and inflation – which lead inevitably to recession or depression – to one based on sound money. Sound money would quickly return America to fiscal sanity after a period in which debt in the system is flushed out through repayment or default. Abolish the Federal Reserve and with it the policy of never-ending debt and inflation. Withdraw from international agreements such as NAFTA which encourage the transferring of American jobs and technology to foreign countries.
Perhaps President Obama’s “American Jobs Act” will be passed by Congress, and will delay the inevitable long enough to allow him to survive the 2012 election. Time will tell, but should the things I have proposed be enacted, I have no doubt that America would quickly become the most prosperous and dynamic nation on earth again.
- Darrell Castle
In this podcast, Darrell Castle addresses the state of the economy – specifically mortgage backed securities and trade deficits.
Listen as Darrell Castle addresses the latest presidential approval polls and mob violence in America.
In this podcast, Darrell Castle discusses how violence is brewing on our southern border with Mexico, and how the United States is involved:
In this podcast, Darrell Castle talks about what will happen if the United States defaults on its debts.
Currently headquartered in Washington DC, the International Monetary Fund (IMF) was formed in 1944 and finalized in 1945 as part of the Bretton Woods agreement made by the victorious Allied Powers at the end of WWII.
The IMF’s stated purposes are as follows:
- To promote exchange rate stability;
- To facilitate and manage the growth and balance of international trade;
- To provide resources to member countries experiencing balance of payments problems;
- To help maintain a multilateral system of payments;
- And finally, to promote international monetary cooperation.
Despite its stated purposes, many people believe that the real purpose of the IMF is to bring poorer, less-industrialized countries into the orbit of global government and multinational corporations.
According to John Perkins in his book Confessions of an Economic Hit Man, third world countries have been threatened with CIA destabilization and regime change unless they accept IMF loans. The loans are made with draconian repayment provisions like cutting social services, renegotiating union contracts and privatizing public services, which then allow foreign multinational corporations access to the country’s resources. Since these target countries often have their credit ratings downgraded, the loans also carry a very high interest rate.
Who funds the IMF or where does the “fund” in the IMF come from?
There are currently 187 IMF members, but the G-20 countries, meaning the top 20 economies, fund 71.21% of its revenue and the other 166 countries fund the other 28.79%. The United States share is 17.09% of the total. And Japan is second with 6.12%. Major decisions require an 85% super-majority to pass, and that makes the United States the only country that can block a super-majority on its own, because votes are commensurate with percentage of participation. The United States’ 17.09% allows it final veto over any major decision.
As most people know by now, the current head of the IMF – current at least until his recent resignation – French politician Dominique Strauss-Kahn, was placed in a New York City jail after being charged with sexually assaulting a maid at his $3000 a night suite in the Midtown Manhattan Sofitel. Could DSK, as he is affectionately known by his friends, make do with a $600-per-night room at the Ritz? No way, nothing but the best will do for the head of the IMF and the most likely candidate to replace Nicholas Sarkozy as President of France.
The maid who has accused DSK of rape is a West African immigrant with a 15-year-old daughter. Perhaps DSK reasoned that since the IMF has been raping her former continent for decades, what difference could one more rape make?
This sordid mess is made worse by the fact that the IMF, like most of its member states, usually runs a negative balance sheet, leaving in doubt which party will pay for the damage. In 2009, the IMF sold 200 tons of gold to close a deficit in the amount of hundreds of millions of dollars. Who will pay for DSK’s latest (alleged) debauchery besides himself?
Who will pay for DSK’s legal defense? The IMF has announced that it will sell some gold to cover that. The maid has a lawyer in addition to the NYC prosecutor’s office. I trust it will also sell enough gold to cover the several million that a NYC jury is likely to eventually award his victim.
The taxpayers of the United States should not be on the hook for one penny of his defense, damages, or even his $3000 per night hotel suite. In fact, if the political leadership of the United States had an ounce of decency left, it would announce the immediate withdrawal of the United States from the IMF. Tragically, they do not and thus will not.
- Darrell Castle