Wednesday, December 22, 2010

Glimpses of the Future

Most of you reading FutureJacked also follow folks like Mish and Karl Denninger, so you are probably familiar with their thoughts on the recent bill submitted by Rep. Kucinich that would wipe out the Fed and return monetary authority to Congress.

Karl looks like he is for it at the moment and Mish is rather vehemently against it.

You can read it here for yourself:

NEED_ACT

Leaving aside the "good" or "bad" of this bill, what we are seeing are the seeds of the future being nurtured, seeds that will blossom when negative-bias mood deepens.

Think about consistent themes you are seeing as we waddle through this delusional rally:

  • Ron Paul, soon to be head of the House Domestic Monetary Policy Subcommittee (overseeing the Federal Reserve), has called for the abolition of the Fed. His bill to audit the Fed gained a lot of traction before this rally kicked back in.
  • Rep. Kucinich is calling for not only the abolition of the Fed with this bill, but the abolition of fractional reserve lending!  (See page 10 line 21, page 28 line 9, and pages 36 and 39 of the bill where ending fractional reserve lending is proposed)

 Talk about a deflationary mind-set - ending fractional reserve lending would aboslutely wipe out the kind of economic growth most business pro formas factor in.  It very well might also match up with the moods of the coming times.

Ending the Fed and ending fractional reserve lending especially, would be revolutionary acts. The kind of revolutionary acts you see in negative-bias times, especially when the bear market we are entering has been centuries in the making.

Look for consistent themes like the "abolish the Fed" stuff. These ideas that get batted around during the good times are the life rings that society will grab at when the current system sinks.

1 comment:

David said...

Glad you caught this development. Ending the Fed has to be proposed and rejected long before it can occur, and now we have "end the fed" from two quarters.

Should the optimism of today give way to another, larger declining phase in asset markets, the Fed is perfectly situated for the title of scapegoat.

Everywhere we look we see efforts that promise to crush credit growth. Surely Peak Credit is fast receding in the rearview mirror.