David Cameron called Gordon Brown today on his ill fated plan to spend his way out of the current economic crisis. He went as far as to call Gordon Browns plan a con trick….and he is exactly correct.

You see, the government have been telling quite a few fibs lately. We have dealt with the central banking fib that is the most closely guarded secret in society. Most people have no idea how money is created, what inflation is, where it comes from, where their tax pounds go and that there are shareholders who directly benefit from those tax pounds eventually.

• But Gordon’s also been caught in a few other fibs. “The business cycle is dead”. Erm….what do you think now Gordon?
• “We don’t need to save any money because there will never be a rainy day”….good call buddy.
• “The banking bailout will work”….jury’s still out…but the past record doesn’t inspire confidence.
• “Selling a big chunk of the UKs gold reserves was a smart move”….not nearly as smart as a long walk off a short peer would have been Gordon.
• “We didn’t see the crisis coming”…but everyone warned you about it. Work on those listening skills.
• “The economy is in safe hands”…completely laughable looking back.
• We will fix the pension system by taking it for £5bn in tax and make it easy to invest in pensions again and ensure workers have some dignity in retirement….yeah.

Mr Brown…you have no one to blame but yourself. We gave New Labour a chance and it turned into Old Labour…complete with Keynesian drivel…before our very eyes. Now we are paying the price for trusting you again. That price looks like a winter of discontent…a return to boom and bust and we have a poorer old age, a huge mountain of debt and less gold than we had before you arrived.

“Things can only get better” – We all really wanted to believe you…but this was a cruel lie. Go and read an economics text book and put down that public relations manual….for once in your political life.

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Tags: Central Banking, David Cameron, Economic Crisis, Gordon Brown, Tax

Let’s start with the first fib Gordon Brown told us to kick off the central bank series of articles…that the business cycle is dead. That mathematically cannot be true as long as there is a central bank which creates money out of debt and charges interest.

This money from debt mechanism, never questioned, is the business cycle. It is also the cause of rising prices and the cause of the slow yet steady devaluation of the currency through monetary inflation.

The central bank is nothing short of a giant ponzi scheme…and the mathematical limits of its ability to perpetuate itself are coming to an end. This is one of the key things that we are seeing right now as this fiat currency system begins to crumble around the world as it’s mathematical limits are approached and the way to fix all fiat currency schemes, which do work for a while, are tried.

 Governments have no other way out than to print more money and borrow until they can’t borrow another penny. This works at the start of a fiat currency scheme, but eventually leads to a hyper inflationary bust.

Now, with all this deflation happening right now, you might think this is odd…but it’s really very simple. The deflationary period comes first, as credit is destroyed after the huge credit bubble. We are seeing the deleveraging of the credit and the ensuing destruction process happening right now as loans and mal investments’ are written off all over the system.

The hyper inflationary element comes as the government attempt out dated Keynesian notions of spending our way out of the current crisis. The huge government spending tries to correct the issue of too much credit with more credit. It’s laughable really to any serious economics student. It can’t work. It has never worked. It created more and bigger problems down the line.  You should be worried about the inflation that Gordon Brown will now create a lot more than if a few banks had failed. It’s a case of the cure killing the patient.

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Tags: Central Banking, Currency, Debt, Gordon Brown, Hyper Inflation, Inflation, Keynesian