Bill Denman is one of the most urbane and intelligent gentlemen I have ever met. When I lived in north Idaho before I moved down to the other border, he and I had occasional conversations and his knowledge was vast and erudite. He may be one of those unheralded national treasures in the field of Austrian economics and straight thinking which do the great expanse of the country. My assistant editor in Idaho, Mike O., another brilliant libertarian scholar laboring in the wilds of Idaho brought this to my attention. This is required reading.
The Austrian School has a tremendous intellectual advantage in its methodology of explication of complex systems (the economic activity of a society both rigged and black market). It employs a subjectivist orientation using qualitative argumentation instead of mathematical gimmickry. There is modicum of math in the essay but none the Keynesian nonsense used by the usual suspects to obfuscate and deceive.
I have attached a sample below and the entire text of 18 pages can be accessed in my ScribD files on the main page.
I especially liked this gem from near the end of the essay:
“Obama’s “stimulus” package is nothing more than an accelerated slave raid and the burden of our chains will become more than we can bear. Society will collapse into another dark age, many will perish along the way, and those who survive will live in misery.”
Please enjoy and I welcome all barbs and arrows. I repeat: the government is comprised of the tax farmers and we are the cattle in the feed lot living at their pleasure. -BB
The Ultimate Floor Value of ALL Fiat Currency
Bank bail-outs are undoubtedly the biggest scam in the history of the world. The
process is simply this:
1. The FED creates fraudulent money and gives it to banks and real estate investment
agencies such as Fanny Mae and Freddie Mac who make real estate loans.
2. The federal government instructs lending agencies to lower their requirements so that
people with low income can buy homes.
3. Predictably, a real estate boom is created and lots of people buy homes which they
commit to pay off with Adjustable Rate Mortgages (ARMS) they cannot afford.
4. When the automatic mortgage rates begin to adjust upward, many of these people can
not keep up their payments and default on their loan.
5. The banks repossess the homes and a real estate panic develops which spreads to other
areas of the economy.
6. Real estate prices plummet and other home owners find that the value of their home
is less than they owe on it. The home can no longer be used as an ATM to fund other
purchases and demand for other products declines.
7. The decline in demand leads to closed factories and rising unemployment.
8. Banks have mountains of real estate mortgages that are almost worthless and begin to
9. The specter of unemployment and bank failures begin to haunt those who are still
employed and they cut back on spending and begin to save – in their mattresses. They
also stop accumulating debt and since issuing debt is the method used by the FED to
create money (see Appendix C), there is a major reduction in the rate of fraudulent
money creation. This leads to a further reduction in demand and more
10. The FED, with the cooperation of the U.S. Treasury Department, begins to bail-out the
banks with massive injections of newly created fraudulent money.
11. President Obama begins his magic cure by dramatically expanding government
spending and applying a technique learned in earlier associations with ACORN.
ACORN (Association of Community Organizers for Reform Now) has been organizing
what it calls “homesteading” efforts in a half-dozen major U.S. cities. This means that
people move into homes that banks have repossessed. They don’t own the homes but
they occupy them and the banks apparently are not evicting them. This should come
as no surprise since ACORN was one of Obama’s pet projects before becoming
President. Is it likely that the banks will oppose a project supported by a man who
now holds the purse strings to the bank bail-outs? (Additional information about
ACORN was presented by Will Grigg during a radio station KBGN 1060 broadcast in
Caldwell, Idaho, on February 24, 2009). These activities removes homes from the glut
on the market and this creates the false appearance of a rebound in the real-estate
market. This paves the way for profitable real estate investments when the economic
stimulus package begins to take effect.
12. The FED bails out the banks to compensate for their losses in the real estate business
so why should they worry about ACORN activities.
13. Who will pay for these bail-outs? Taxpayers! The new money created by the FED and
loaned to the government for bank bail-outs is legally counterfeited money that causes
prices to rise. Thus in addition to paying off the government’s debt, the public pays
the higher prices caused by the newly created money to fund the government’s
The FED creates money by book-keeping entries which causes a boom/bust in real estate. People who bought homes using this easy money lose the homes and the money invested in them. The banks repossess the homes. The FED creates more money to bailout the banks. The ACORN people move into the vacant homes without any money invested and simply occupy them. This reduces the number of homes on the market and moves the real estate industry closer to a profitable market. Taxpayers pay the debt incurred because of the money loaned to government by the FED. Isn’t this a nice scam for everyone — except taxpayers!