Damon Vrabel

[don]

In the second half of the show, Max interviews post-neoclassical economic philosopher Damon Vrabel about the European bailout, the financial empire and the IMF, and how the right kind of republic can provide some solutions.

[don]

Re: Damon Vrabel

from Jesse's Cafe Americain....

Jim Rickards on the May 12 IMF Meeting:SDR as World Reserve Currency

Rickards has a target of $2,000 for gold in the near term, and $5,000 for the intermediate term.

ECB has capitulated on the monetization of debt and joined the Fed, but it is hard to see how this will really solve the problem.

Europeans are running to buy physical bullion, rather than paper pledges in a kind of a 'run on the bank' over fears of the future of the Euro.

The subject of the meeting in Zurich yesterday was for the G20 to discuss the composition and role of SDR's as a reserve currency.

Triffin's dilemma: need for a 'liquidity pump' to drive world trade, someone who is able to sustain deficits without going broke. Now that the US is going broke, a new source of liquidity has to be found.

Rickard views SDR's as pure fiat on a pro rata basis. He does not see any accountability on the part of the IMF or any sort of external control.

While I see some of his points, I think Jim is confused about the notion that the SDR is a 'basket of currencies,' that already exist, unless they are changing the basis of the SDR to debt of their own issuance. I was not at all clear on this, and I would be a little surprised if that is the case.

What the IMF has been proposing with the support of the BRIC countries, is to put the SDR forward as a 'clearing mechanism' for international trade. They are also actively lobbying for a recomposition of the SDR to shift some of the monetary authority from the west to the east.

If the SDR is a 'basket of currencies,' each with their own debt balance sheet, and the SDR is not intended to replace or supplant domestic currencies, and especially if the SDR contains some element of gold and silver, then I view it as a natural development from the Bretton Woods system, and the failure of the US Federal Reserve to responsibly manage its currency 'like it was a gold standard.'

The IMF is attempting to replace the US dollar as the world's reserve currency with a portfolio of major fiat currencies, with the notion that the result will be more stable, more diversely based. Again, an element of gold and silver would further strengthen it.

I could be mistaken in what the IMF intends. But I have seen nothing to indicate that yet, and I think for now that Jim Rickards is mistaken in the assumptions underlying some of his statements.

IF the IMF decides to create a fiat currency of its own, and call it the SDR, and base it solely on its own balance sheet, with an arbitrary ability to expand and distribute it, then it really is the beginning of a new world order, and a one world government. But for now I do not see that to be the case. I can find no statement on the IMF homepage to this effect.

Why not go directly to a gold and silver standard? The greatest obstacle is that the Anglo American nations, or more properly their central banks and politicians, would not accept it. It would be inimical to their monetary power and financial engineering. The US Federal Reserve will not even agree to be audited by its own government! And do you think they would agree to the constraint of an external gold standard? This is a highly political as well as economic topic, and to ignore that is to completely misunderstand what is happening.

An evolutionary path to something less arbitrary than the dollar, but not quite as strict as gold, is most likely. This is being driven by China and Russia and the developing countries, and on the other side of the table are the Anglo-American banks, and to a less extent, Europe, after having been whipped into place by assaults on its monetary union.

It is an interesting interview. I only caution that more details need to be given from the IMF on what they are doing before conclusion can be drawn. I have been expecting this for a long time, and it is a development that the BRIC countries have been lobbying to obtain. The Anglo-Americans exert considerable influence over the IMF. This is a classic struggle for power between the old world powers and the developing world.

This is not to say that I am comfortable with the IMF. I have attempted to lay out the parameters to assess what they are doing with respect to a basket and clearing house versus a completely new global currency. Since the US and UK hold inordinate sway over the IMF, we have to be aware of the possibility that the IMF could merely become a much larger successor to the Federal Reserve, and owned and controlled by the Anglo-American banking interests. This is why gold and silver are the ultimate solution, and why the status quo will oppose them with all their power.

http://jessescrossroadscafe.blogspot...eeting-to.html

[ThePythonicCow]

Re: Damon Vrabel

I suspect Jesse is the one confused here, not Jim Rickards.

You can hear Rickards interview with Eric King at Explosive Gold Catalyst II.

You can read a related article via the iTulip post Take on SDR/IMF by Jim Rickards.

Jesse seems to be saying that the IMF SDR's are just a basket of national (and Euro) currencies, so therefore they would be just a multi-national variation on the single-nation Dollar as the world's reserve currency. He's saying that such a basket of currency is not that different than the basket of one currency we have now from Bretton Woods. It's just pro-rated (pro rata) over multiple currencies.

But Rickards points out a key additional step that the IMF is taking with SDR's. The IMF is issuing debt denominated in SDR's. This is the essential manner in which the major central banks of the world create money these days, as the consequence of two balanced bookkeeping entries for debt and new money.

The Federal Reserve is doing much the same thing these days with currency swaps, issuing Dollars in exchange for, not for debt, but for other nations currencies (which in turn were issued against the debt of those other nations.)

That is the essence of civilization's monetary system these days, money issued for collateral. Sometimes this is as simple as the Fed issuing the money and the U.S. Treasury issuing the collateral, though the powers that be usually try to keep the magic slightly more subtle than that.

The IMF is becoming for the top 20 or 25 nations of the world what the Fed is for the U.S., the bank of banks, the ultimate issuer of debt-based money, namely SDR's.

In the audio interview with Eric King, Rickards seems to overstate the immediacy of this a little. In his Concluding Remarks following last weekends IMF High Level Conference (Zurich, May 11, 2010), Dominique Strauss-Kahn speaks in the subjunctive future tense of the possibility to seek a more prominent role for SDR's:

Another option could be to seek a more prominent role for the IMF’s Special Drawing Right (SDR). With a value determined in terms of a basket, the SDR diversifies the currency and interest rate risks of its constituent parts. Thus, it has more stable store of value and unit of account attributes. Moving to a more SDR-based system would require: (i) increased supply, (ii) greater liquidity, and (iii) transparent, automatic rules for determination of the currency composition of the SDR basket, which are essential for wider private sector use. In addition, issuance by governments of SDR-denominated bonds or activation of a substitution account could promote theuse of the SDR basket.

Finally, in principle, a new global currency issued by a global central bank, with robust governance and institutional features, could provide a nominal anchor and risk-free asset for the system independent of national currencies. This global central bank could also serve as a lender of last resort. But any such step requires considerably more debate on its merits, including on the need for a safety valve for the system given errors that might inevitably occur, as well as of its feasibility, given the very substantial multilateral effort required. I fear we are still very far from that level of global collaboration.

But these are possible future directions, not present realities, and these words are Strauss-Kahn's "Concluding Remarks", not an IMF "Press Release" as Rickards termed them.

The question is not the possible direction. That direction is more than Jesse admits; it is considering making the IMF a major source of debt-based money which could become the new Reserve Currency of the world. The question is if and when. That the Strauss-Kahn would speak so openly and specifically of this potential is a definite shift from before; but that still leaves such a shift in the basis of the world's Reserve Currency in the future (though not all that far in the future, given the IMF's role in this last weekends bailout of Greece.)

We will not see, we will not see in my view, a fundamental unraveling or massive re-ordering of the world's monetary system until and unless this effort, now rather plainly visible, to "kick the problem upstairs" fails. That could be a few decades. For now, it is about resolving Triffin's Dilemma, by evolving the world's Reserve Currency basis from a currency backed by the debt of a single nation (the Dollar of the U.S., backed by U.S. Treasury debt) to a separate construct in which all major nations participate, creating the dual bookkeeping entries of debt and money, in quantities pro-rated to those nations by their size and influence, which form the basis for a modern "fiat" currency.

"Fiat" is a bit of a misnomer here; we don't just print it as does Zimbabwe. Nor do we back it with gold nor do we issue it in return for goods and services that benefit the common good. Rather we issue it against debt. There is thus some limit to how much such currency is issued, though given the quantity (high) and quality (low) of debt paper issued these last few decades, that is a rather "soft" limit.

As a famous Rothschild once noted, it matters not who rules a country, so long as one can control their money supply. The current events are about destroying the independence of the national currencies, making them depend on a world central bank, the IMF, which is responsible not to the citizens of any nation, but to the wealthiest, most powerful bankers and families largely behind the scenes.

[ThePythonicCow]

Re: Damon Vrabel

In other news, the IMF is proposing a global tax on financial activities (a FAT, for Financial Activities Tax.) See further New global 'FAT' tax to rein in banks. One controls profit making corporations by taxing them. One controls governments by funding their debt. If one can control both the institutions (i.e., the banks) which fund the debt of individuals and businesses, and the political bodies that govern them, then one can control them (i.e., us) as well.

[ThePythonicCow]

Re: Damon Vrabel

I suspect Jesse is the one confused here, not Jim Rickards.

You can hear Rickards interview with Eric King at Explosive Gold Catalyst II.

Rickards speaks as of Strauss-Kahn's anticipation of a global currency was something new. But this is not so. In March and April of 2009, over a year ago, there was similar discussion from Zhou Xiaochuan, Governor of the People’s Bank of China. See China challenges power of the dollar as it flexes its economic muscles. There has been a considerable history of such comments, as described in The Financial New World Order: Towards a Global Currency and World Government (April 6, 2009).

[Rajiv]

Re: Damon Vrabel

Here was Vrabel's article alluded to in the video - The Coming Crash: Usury and the Irrelevant Church

I wrote an article attacking debt-based money from a different angle--morality, the evil of usury. I figure it might have a chance of bringing more people to the cause. It's written specifically to incite strong feelings and convict the church. If the institutional church doesn't step up to this issue, I hope dialogue like this will call individuals inside the church to do so.

For those of you who want nothing to do with religion, please note I make the secular argument against usury first and then call the church out..."put up or shutup" basically. We need to avoid dialectical conflict...left vs. right, religion vs. non-religion, black vs. white, immigrant vs. citizen, etc. We need to come together to fight the monetary powers that are bringing us all down together.

http://canadafreepress.com/index.php/article/23067

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It’s been a wild couple of weeks—increasing unemployment, Greek debt crisis, yet another ridiculous bailout, pressure on Goldman Sachs, accusations of commodities manipulation by JP Morgan Chase, and new freakish levels of market volatility that might be signaling the next phase of market collapse. The many day-to-day issues can leave us dazed and confused, so most people ignore them. Huge mistake.

They are all related to the most powerful force on earth that controls our lives because it is the very foundation of our society—usury. We are ruled not by governments anymore but by financial powers that use interest-bearing debt to exert control over governments, corporations, and people. Almost all other political issues with which we concern ourselves are secondary symptoms of or purposeful distractions from this larger narrative that is never reported by the Wall-Street-funded media. Sadly the church has remained silent as well.

Explaining the details can be extremely complicated, but the basic core to understand is that the US government issues no money. Instead all money comes from private banking institutions with interest attached. At times in the past the US government issued real money for people to use—US notes and coins. But today all money comes from the Federal Reserve’s private banking system by putting the US government, i.e. 308,000,000 Americans, in debt. If the US government were not in debt to the banking system, the American people would have no money.

More technically, the Fed and its Wall Street cartel banks like JP Morgan Chase and Goldman Sachs make billions by doing nothing but controlling our money. They have the monopoly license to create the core money in our system from holding US Treasury bonds on their balance sheets. These bonds represent the debt of the United States. Thanks to interest, the bonds pull a large portion of our wages to the banks. The primary purpose of the IRS is to take your wages to pay the interest back to the banks. In effect, Wall Street owns a good bit of your labor. And the more bonds they hold, i.e. the more debt the population is in, the more money they make thanks to the interest flows and the profits from gambling on your debt. The system is very much one of “us vs. them.” Such is the nature of monopoly power and usury.

Economics and Morality

Controlling others and living off their backs by forcing them to borrow with interest in order to have any money is called usury (this does not include standard, self-liquidating bank loans to businesses to fund production). It is a system that ensures everything we do, whether in the public or private sector, feeds Wall Street and the controllers above it. It creates a two-tiered societal pyramid of money pushers on top vs. money users on bottom. The power differential is huge. Everyone is hostage. In doing something as simple as buying food to survive, we contribute to usury because we only have usury-based money, not real money. Like the slaves who built the Egyptian pyramids, today we are stuck building an invisible pyramid of monetary power.

In such a system there is never enough money to pay back all the interest to the money pushers. The only solution is for the money users—government, corporations, individuals—to borrow more. This is the reason our debt continues skyrocketing to increasingly insane levels. It isn’t about politics, but the fundamental exponential math underlying the system—the users must borrow more and more to pay back interest and keep the system afloat.
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[sishya]

Re: Damon Vrabel

Rajiv,
Thank you. A powerful article for people who still look up to the church. This does sow confusion in minds.

[Rajiv]

Re: Damon Vrabel

A Series of Video lectures by Damon Vrabel

This is what he has to say about himself

I have had two fairly different lives—one as an addicted overachiever serving the financial empire, and another as a hopeful advocate for the victims of the empire: local community, indigenous population, the American republic, and the individual heart. I graduated from the United States Military Academy, served as an officer in the US Army, then went to Harvard Business School, took a short detour on Wall Street, and had a career in Silicon Valley. Since leaving empire service, I spent a lot of time trekking and mountaineering, attended Mars Hill Graduate School, and now work toward redemption as a writer and post-neoclassical economic philosopher (just a title to differentiate myself from economists, a profession so hopelessly stuck in abstruse mathematical models that it's become wildly disconnected from truth and life).

This is the first lesson -- you can click on to the second and subsequent lessons when the first finishes

[ThePythonicCow]

Re: Damon Vrabel

A Series of Video lectures by Damon Vrabel

This is what he has to say about himself

Outstanding. He nails it. Go to the link that Rajiv (subtly) provided Council on SPE Renewal's Youtube Channel Uploads to view a list of his videos. He has not completed the series yet, but still seems to be actively adding to it, having uploaded 12 videos in the last 4 weeks.

Damon Vrabel's website is at Canada Free Press: Damon Vrabel. He has links there to recent articles he has written for Canada Free Press (unfortunately the pop-ups and ads on that site are annoying.)

I haven't read his articles yet, but I have just viewed the 12 Youtube videos in his "Renaissance 2.0" series. It's perhaps the best balanced explanation of our global economic (et al.) situation that I've seen.