Thoughts, essays, and writings on Liberty. Written by the heirs of Patrick Henry.

“My definition of a free society is a society where it is safe to be unpopular.”     Adlai E. Stevenson

July 8, 2008

The Emporer’s New Clothes

by Brad Warbiany

Looks like the “reveal” may be a few short years away. Maybe it will finally be understood just how deeply the rottenness and fraud has gone:

to imagine the IMF investigating the US financial system is unthinkable, or was. But, at the weekend, Der Spiegel reported that the IMF would conduct a full investigation into virtually every aspect of it.

Der Spiegel wrote that the IMF had “informed” Federal Reserve chairman Ben Bernanke of plans that would have been unheard of in the past: a general examination of the US financial system. The IMF’s board of directors has ruled that a so-called Financial Sector Assessment Program is to be carried out in the US.

This, Der Spiegel wrote, “is nothing less than an X-ray of the entire US financial system”, adding that “no Fed chief in US history has been forced to submit to the kind of humiliation that Ben Bernanke is facing”.

The fact that the IMF is knocking on the very doors of its parents and waving legal papers about who lost the house, the car and the kids will, if the past is anything to go by, be buried in the US by pom-pom waving on CNBC telling all what a great time it is to buy.

A little over a year ago– in one of my pessimistic phases– as the subprime mess was just starting to become apparent to the masses, I penned a post about the potential end of the American financial empire. I pointed out that the dollar as the world’s reserve currency and the petrodollar allows the US to inflate without experiencing the pain that should follow. I said that as alternative currencies gain momentum, there was the chance that other nations might ditch the dollar, and send them all back here for that visible inflation to occur in rapid form.

This action by the IMF may be the catalyst. There’s already a lack of faith in the American financial position. Nobody has been willing to publicly acknowledge, though, that the emporer is naked. Once that happens, it makes it much more likely that other nations will act to protect their interests from being hurt by our economic collapse.

In the long run, fixing our economic system will be a positive event. But in the long run, we’ll all be dead. There may be a lot of pain in the interim.

Hat Tip: Billy Beck

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3 Comments

  1. It’s becoming quite the perfect storm. The Democrats and Republicans have been enjoying the benefits that accrue in the short term from systematically debasing the currency for the better part of a century. Now, just as they need to really increase the speed of the printing presses to keep up with the guns and butter spending, the negative effects are startign to hit home.

    This audit could publicize information that prompts people to start ditching the dollar overseas, and thus force a much needed reform of the monetary system.

    Ah, who am I kidding. The politicians, media and intellectuals will blame foreigners or internal saboteurs and we whatever revolution results from a collapse of the present system will be worse.

    Comment by tarran — July 8, 2008 @ 1:47 pm
  2. When I finish business school in two years I will most definitely be trying to work overseas.

    As for your pessimism tarran, I have to believe that if its all over the news and the whole world is yelling at us about what is wrong, that a better and more stable monetary system will be implemented. And then we’ll start throwing the leeches in office out.

    Comment by Ben — July 8, 2008 @ 2:58 pm
  3. Ben,

    That may or may not help you any. Even if you work overseas, you still owe taxes here. There may be some benefits to moving and working overseas, but getting the fed’s hands out of your pocket isn’t one of them.

    Comment by Brad Warbiany — July 8, 2008 @ 3:08 pm

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