lewrockwell--2020-04-20--The Destructive Force of Bank Credit

The Destructive Force of Bank Credit

Commentators routinely confuse the deflationary effects of a contraction of bank credit with the inflationary effects of central bank policies designed to offset it .
Central banks always ensure their stimulus is greater , so inflation , not deflation , is always the outcome .
In order to understand bank credit , we must enter the mind of a banker and understand how it is created , why it is expanded and why expansion is always followed by a sharp contraction .
But we have now moved on from a simplistic credit cycle model , given the global economy was @ @ @ @ @ @ @ to contract before the coronavirus drove supply chains into the greatest global payment crisis in history .
The problem is now so large that to maintain both economic stability and price levels for financial assets the central banks , led by the Fed , will have to issue so much base currency that fiat currencies will become almost worthless .
In these conditions the banks that survive the next several months will then begin to expand bank credit anew to buy up physical assets instead of their normal financial fare , sealing the @ @ @ @ @ @ @ expansion of bank credit as the banks themselves dump worthless currencies for real assets .
Pale Rider : The Spanis ... Spinney , Laura Best Price : $ 24.05 Buy New $ 15.49 Never has it been more important to understand the psychology and motivation behind changes in the level of bank credit at a time when governments and central banks are relying on commercial banks to transmit Keynesian stimuli to distressed borrowers .
And never has it been more important for analysts to differentiate between deflationary forces that come entirely from the @ @ @ @ @ @ @ that arise from central banks ’ monetary policy .
Whether policies to rescue economies from the financial and economic effects of the coronavirus will actually get to the intended businesses depends largely on the transmission mechanisms for base money .
While special powers for direct funding of large corporations may be implemented and the extension of public ownership to prevent bankruptcies of large players is very likely , commercial banks will be expected to play a central role in distributing monetary stimuli to businesses of all sizes .
But since they regard small @ @ @ @ @ @ @ risky or not worth bothering with , it will be a struggle to get them to deliver the financial support intended .
[ i ] In any advanced economy , a Pareto 80 % of GDP is provided by small and medium-size enterprises .
In a highly centralised banking system , for the banks that have access to the Fed through prime broker subsidiaries , SMEs are simply not worth bothering with .
It leaves the majority of enterprises providing goods and services to the public out in the cold .
Bankers looking @ @ @ @ @ @ @ more profitable relationships with large corporations and reduce their exposure to risky , expensive-to-administer smaller loans .
Despite the central banks ’ generous intentions , the majority of businesses that rely on bank lending for working capital will therefore find finance frozen by bankers now driven by fear of risk instead of grasping lending opportunities underwritten by government support .
Businesses with cash will learn that they are taxed by the debauchment of their money to subsidise failing competitors .
Investors who are used to getting positive returns solely on the back of @ @ @ @ @ @ @ the authorities to spend , spend and spend one more time .
Penson funds and insurance companies in particular will now discover they are being lumbered with the cost of monetary expansion by an increasing depreciation of the currency , which escalates future liabilities .
Ever since the investment industry pandered to the inflationary policies of central banks this outcome was inevitable , because both logic and sound economic theory tell us you can not continually inflate your way out of trouble .
That end point is where we have now arrived .
@ @ @ @ @ @ @ on inflationary stimulation .
The helicopters have warmed up and are ready to distribute monetary largess created by the magic of central banking , not just to individuals , but to their employers as well .
What Has Government Do ... Murray N. Rothbard Best Price : $ 7.04 Buy New $ 6.50 Mission impossible is to restore economic activity to where it was before the coronavirus shutdown .
Politicians assume is can be achieved by deploying military precision .
They have taken for themselves a mandate to sweep aside all bureaucracy and @ @ @ @ @ @ @ state .
All it requires is for the banks as well as other critical actors to submit to their authority .
The credit cycle was turning down before the virus hit It ignores the impact of the credit cycle , which was already turning down in the second half of last year .
In response , the Fed first stalled its attempt to restore its balance sheet to normality and from September onwards was forced to publicly intervene to inject massive amounts of liquidity into the banking system through the repo market .
@ @ @ @ @ @ @ markets at least five months before the virus hit , so the problem is more complex than a simple return to normality when the virus passes .
Furthermore , the authorities trying to keep the economy from imploding are out of their depth , so much so that individuals in the private sector are gradually realising it as well .
Financial risk has escalated considerably , which has one effect : bankers will use every opportunity to reduce the size of their balance sheets .
The authorities will struggle to get banks to @ @ @ @ @ @ @ to producers and consumers alike .
Attempts at rescuing the global economy and supporting financial asset values upon which bank collateral is based will require massive inflation of base money , as outlined later in this article .
But these attempts will have to fight bankers trying to control their lending risk in order to protect their shareholders ’ capital from being wiped out .
Their motivation to deflate bank credit will be greater than ever before .
An appreciation of the deflationary implications of the current phase of the credit cycle requires @ @ @ @ @ @ @ and the predominantly psychological factors that drive it .
The general public is not aware that there are two separate sources of money .
The central banks are empowered to issue money , but commercial banks do so as well .
One way they do this is by taking in deposits and then lending them to borrowers for an interest rate turn .
When the borrower draws down the loan to make payments , more deposits are created as the payments are made .
A second course of money creation is simply by @ @ @ @ @ @ @ case , the loan is created first , and as it is drawn down , deposits are created .
This is regarded as the more usual practice , hence the description of the process being the expansion of bank credit .
Any imbalances that arise between banks are resolved through the interbank market .
By these means a bank ’ s own capital becomes a fraction of the bank ’ s expanded liabilities , hence the term fractional reserve banking .
Figure 1 shows the barebones of fractional reserve banking , with a @ @ @ @ @ @ @ monetary units ( mu ) , early in a phase of credit expansion .
This balance sheet reflects a cautious approach to bank lending .
Shareholders ’ equity is valued at one third of customers ’ deposits and is covered twice by government bonds , which will all be less than five years to maturity and is regarded in the banking system as the risk-free investment standard .
At this stage of the credit cycle and with the banking community generally risk-averse , lending margins are profitable .
The ratio of total assets @ @ @ @ @ @ @ .
Put another way , profits and losses from changes in asset values are multiplied five times at the shareholder level .
Figure 2 shows the same bank ’ s balance sheet towards the end of the expansion phase of the credit cycle .
The economy has responded to both monetary stimulation from the government ’ s deficit spending and interest rate suppression by the central bank .
The cohort of bankers has seen a lessening of lending risk and has responded by actively seeking lending opportunities among large corporations .
Bankers are @ @ @ @ @ @ @ as well as investment grade rated borrowers where the margins are better .
Falling unemployment and growing economic confidence decreases lending risk for credit card and other consumer debt , and the bank has extended additional credit for creditworthy customers .
Liquidity from government bonds and bills has been drawn down in order to increase allocation to higher-yielding corporate debt .
The balance sheet has expanded to give an overall gearing on shareholders ’ equity of 12.5 to 1 .
Systems Health : The Ma ... Ayyadurai , V. A. Shiva Buy New @ @ @ @ @ @ @ cent margin averaged across total assets yields a 25 % profit on share capital .
But by the time this snapshot is taken , competition from other banks will have likely reduced lending margins generally , and the bank has responded by taking an even more aggressive lending stance , so lending margins overall are likely to be less generous than at the start of the credit cycle and loan quality will have deteriorated .
While shareholders are enjoying excellent returns , it has become a highly risky situation for the bank .
@ @ @ @ @ @ @ , whether it be from interest rates being raised by the central bank attempting to control the boom , or perhaps an exogenous factor , such as trade tariffs being raised between the bank ’ s jurisdiction and a major trading partner , will cause the directors of our bank to switch from greed to fear in a heartbeat .
In our example , all it takes is losses of 12.5 % of the bank ’ s assets to wipe out shareholders ’ equity .
If one bank suspects there may be a @ @ @ @ @ @ @ certain that others will as well , because they have similar business information .
Due to the dangers of balance sheet gearing , bankers are exceedingly prone to groupthink .
When it happens , the switch from greed to fear travels like wildfire .
But some banks are likely to be caught out , having been aggressive lenders trying to increase the size of their bank , often with a chief executive on an ego trip .
Fred Goodwin at Royal Bank of Scotland was a recent example .
Ignoring all signs of @ @ @ @ @ @ @ expansion , Goodwin pushed through a consortium takeover of ABN-AMRO in October 2007 , with RBS ’ s portion funded by debt .
The bank ’ s balance sheet gearing became twenty-four to one .
With gearing of that sort very little needs to go wrong to wipe out shareholders equity , which is what happened .
Failures of this type are an acute risk when the banking cohort has been lulled into a false sense of lending risk by a prolonged period of business stability combining with the siren ’ s beckoning @ @ @ @ @ @ @ balance sheets without creating economic instability is virtually impossible .
Driven by their groupthink , frightened bankers will seek to reverse credit expansion all at the same time .
They sell corporate bonds in a market with no buyers .
Spreads , the difference in yield between government bonds and riskier corporate debt , blow out , catastrophic for book values .
Business and personal loan facilities are capped and withdrawn , driving many companies into the hands of insolvency practitioners .
It can become a race between bankers to reduce the size @ @ @ @ @ @ @ , as the rapid withdrawal of bank credit triggers bankruptcies and unemployment .
It has happened repeatedly for the last two hundred years .
The economic effect was summed up by economist Irving Fisher in the 1930s , who is forever associated with the theory of debt deflation .
As the oxygen of credit is withdrawn , businesses get into trouble and banks begin to liquidate collateral .
Liquidation of collateral drives their values even lower , exposing additional formally secured lending as no longer secured .
Further collateral sales follow , driving @ @ @ @ @ @ @ so on .
That was in the depression years , and Fisher ’ s point was to link the collapse of businesses , asset values and also the failure of banks themselves with the contraction of bank credit .
Subsequently , central bank policy has focused on trying to anticipate and stop the deflation of bank credit in the first place , always ready to turn on the money spigot .
The government then subsidises the economy by increasing its spending without raising taxes .
By using the stimulus of unfunded government spending @ @ @ @ @ @ @ government and its central bank are following the Keynesian economic playbook , which now sets the relationship between the state and private sectors .
Despite everything attempted by statist intervention , we still have periodic bouts of bank credit deflation .
But matters have evolved from the simple model illustrated in Figures 1 and 2 above .
Banking has become highly regulated , and banks now lend on a formulaic basis , set globally by the Basel Committee ( we are on rules version 3 ) and by local regulators .
Earlier versions @ @ @ @ @ @ @ take the RBS balance sheet gearing to credit hyperspace .
They say lessons were learned , but the only lessons learned by the regulators were new ways to keep their eyes shut and ears plugged .
Stress testing of bank balance sheets assumes little more than a moderate recession and denies the likely consequences of anything worse .
The economic crisis starts with a change in banking cohort groupthink , and not , as regulators with their useless stress tests assume , a decline in GDP , a rise in unemployment , a @ @ @ @ @ @ @ forfend , an unexpected financial crisis .
And if you think extreme bank leverage would have been controlled following the Fred Goodwin episode , think again .
Figure 3 shows current balance sheet to equity ratios for a selection of major banks .
Through the magic of modern accounting practice , they are almost certainly higher than reported .
From the few examples in Figure 3 we can anticipate bank failures to originate in Europe in the event of a general contraction of bank credit .
Despite reducing its balance sheet significantly in @ @ @ @ @ @ @ Fred Goodwin territory , closely followed by BNP and Barclays .
And the credit cycle has very obviously turned down again .
The regulators persist in behaving like the three wise monkeys , wholly unaware there is a credit cycle and what these ratios indicate .
The large American banks are not so heavily geared , but that will not protect them from the global credit contraction that will now intensify .
We have made the important point that before the coronavirus lockdown , the credit cycle was already turning down .
Liquidity @ @ @ @ @ @ @ the Fed routinely supplying tens of billions of dollars of liquidity through the repo market .
The monetary base , which represents the quantity of money in public circulation created by the Fed , is now growing at the fastest pace on record .
But since January , a new problem arose : the disruption to production supply chains from the virtual shutdown of Chinese production due to the coronavirus .
The manufacture of anything requires multiple inputs , commonly referred to as supply chains .
The concept of a supply chain suggests @ @ @ @ @ @ @ of production steps that go towards a single product .
This is not the case .
Supply chains are multidimensional and involve supplies from many sources in many jurisdictions at every production stage .
The sequential shutdown of China , South Korea and much of South East Asia was followed by Europe , Britain and America .
During these shutdowns almost all production and sales of non-food goods and non-essentials ceased .
While the assembly of a product progresses in one direction , payments flow backwards down the chain as each production step @ @ @ @ @ @ @ payments involved is far greater than the value of the final product .
The global payment disruption is therefore significantly greater than the GDP number , which only consists of the sum total of final products bought by consumers .
In the case of the US , an approximation of domestic payment disruption is contained in the gross output statistic , which is $ 38 trillion compared with a GDP of $ 21 trillion .
The US economy is significantly services-driven , with shorter supply chains on average than an equivalent manufacturing-based economy @ @ @ @ @ @ @ If you add together supply chain payments abroad that feed into final goods sold in America , total payments for intermediate production stages in dollar-driven production probably add up to more than $ 50 trillion , the majority of which are now frozen .
To understand the impact of this new factor on bank credit , we must divide business customers into two classes ; those with cash and those that depend on bank loans for working capital .
Both categories have establishment and other costs that continue despite the collapse in production @ @ @ @ @ @ @ down to make payments , reducing bank deposits , which are recycled into other deposits which may or may not be with the same bank .
When those deposits reduce existing overdrafts , bank credit contracts reflecting a loan repayment .
When they amount to a simple transfer of deposit ownership , they do not .
The greater problem is with businesses that need loan cover for missed payments .
There are so many of them with payment failures , bankers are being overwhelmed .
Whether they realise it or not , they @ @ @ @ @ @ @ demands for credit because Irving Fisher ’ s debt deflation problem is so urgent that to deny loan requests would likely end up wiping out the banks ’ own shareholders ’ capital and then some .
Supply chain payment failures are becoming a banking problem many times larger than the banking cohort shareholders ’ capital .
The ratio of US gross output to total equity capital for commercial banks in the US is nineteen times .
In other words , unless the Fed can increase base money by at least that and somewhat @ @ @ @ @ @ @ bank credit contraction , the economy and the banking system will almost certainly crash .
In Germany , where the two major private banks shown in Figure 3 have balance sheet to equity ratios of 15.1 and 22.6 , supply chain disruptions seem certain to lumber them with a fatal combination of dramatically widening commercial bond spreads and payment failures from the mittelstand .
Everywhere else , the problem is the same .
The Fed has responded by reducing the cost of drawing down established central bank liquidity swaps lines , but they @ @ @ @ @ @ @ the Bank of Japan , The Bank of England , Bank of Canada and the Swiss National Bank .
Recognising the wider problem , on 19 March the Fed extended swap lines temporarily to the central banks of Korea , Australia , Brazil , Denmark , Mexico , New Zealand , Norway , Singapore and Sweden for six months .
A notable absentee from the list is China , which one would have thought is the most important user of dollar liquidity based on trade .
Politics trumps the delivery of monetary policy @ @ @ @ @ @ @ of the crisis .
The problems facing the whole banking system have never been greater .
Individually , commercial banks are bound to take every opportunity to reduce their risk exposure before the market values of collateral , particularly equities , corporate debt and both residential and commercial property categories fall further in value .
Banks will attempt to reduce their interbank exposure , particularly to European banks .
Eurozone banks are likely to be the first to fail , needing state bail outs .
Counterparty risk in over-the-counter derivatives becomes a major @ @ @ @ @ @ @ are on a wing and a prayer if they think commercial banks will simply ensure liquidity gets to the right places in time to prevent a financial crisis .
The Fed and other central banks can only blag solutions to a rapidly debasing currency , but the commitment to maintain financial asset values by printing money in the manner of John Law three hundred years ago will require such enormous amounts of base money as to bring forward the destruction of the fiat dollar and all the other fiat currencies .
Banks will @ @ @ @ @ @ @ world , with many of them succumbing to public ownership .
In this rapidly deteriorating environment , it won ’ t be long before the smarter bankers realise that they can deploy the expansion of bank credit to acquire not financial assets , which will become worthless being priced in worthless currency , but real assets .
The model adopted is likely to be that of Hugo Stinnes , who in 1920-Germany was known as the inflation king .
Stinnes borrowed rapidly depreciating marks to buy up factories and property , amassing an @ @ @ @ @ @ @ plants .
Stinnes died in 1924 , the year after the great inflation , and his empire subsequently collapsed .
Banks emulating Stinnes have an additional advantage .
They can make acquisitions as principals by expanding bank credit again when they are confident that repayments when falling due will be worth significantly less .
Bankers under the cover of nationalised banks might even direct the expansion of bank credit into newly created vehicles in which they have personal interests .
This behaviour is atypical and might even have the support of a hapless @ @ @ @ @ @ @ stability .
This last act , the restoration of bank credit in its relationship with base money will add a rising multiple of the trillions of central bank base money scheduled to be issued in the coming months and will be a vital component of the crack-up boom with which all currency collapses end .
The role of the banks as the medium with which the state seeks to tame free markets will ultimately hasten the end of the fiat currencies from which they have profited so much , and the end of @ @ @ @ @ @ @ ] This was even confirmed in a Zerohedge report this morning ( 9 April ) that JP Morgan halts all non-government guaranteed small business loans The views and opinions expressed in this article are those of the author ( s ) and do not reflect those of Goldmoney , unless expressly stated The Best of Alasdair Macleod

Commentators routinely confuse the deflationary effects of a contraction of bank credit with the inflationary effects of central bank policies designed to offset it. Central banks always ensure their stimulus is greater, so inflation, not deflation, is always the outcome.
In order to understand bank credit, we must enter the mind of a banker and understand how it is created, why it is expanded and why expansion is always followed by a sharp contraction.
But we have now moved on from a simplistic credit cycle model, given the global economy was already facing a tendency for bank credit to contract before the coronavirus drove supply chains into the greatest global payment crisis in history. The problem is now so large that to maintain both economic stability and price levels for financial assets the central banks, led by the Fed, will have to issue so much base currency that fiat currencies will become almost worthless.
In these conditions the banks that survive the next several months will then begin to expand bank credit anew to buy up physical assets instead of their normal financial fare, sealing the fate of fiat currencies with a final expansion of bank credit as the banks themselves dump worthless currencies for real assets. Pale Rider: The Spanis... Spinney, Laura Best Price: $24.05 Buy New $15.49 (as of 04:12 UTC - Details)
Introduction
Never has it been more important to understand the psychology and motivation behind changes in the level of bank credit at a time when governments and central banks are relying on commercial banks to transmit Keynesian stimuli to distressed borrowers. And never has it been more important for analysts to differentiate between deflationary forces that come entirely from the contraction of bank credit and inflationary forces that arise from central banks’ monetary policy.
Whether policies to rescue economies from the financial and economic effects of the coronavirus will actually get to the intended businesses depends largely on the transmission mechanisms for base money. While special powers for direct funding of large corporations may be implemented and the extension of public ownership to prevent bankruptcies of large players is very likely, commercial banks will be expected to play a central role in distributing monetary stimuli to businesses of all sizes. But since they regard small and medium size businesses as either too risky or not worth bothering with, it will be a struggle to get them to deliver the financial support intended.[i]
In any advanced economy, a Pareto 80% of GDP is provided by small and medium-size enterprises. In a highly centralised banking system, for the banks that have access to the Fed through prime broker subsidiaries, SMEs are simply not worth bothering with. It leaves the majority of enterprises providing goods and services to the public out in the cold. Bankers looking through the dip will want to preserve more profitable relationships with large corporations and reduce their exposure to risky, expensive-to-administer smaller loans.
Despite the central banks’ generous intentions, the majority of businesses that rely on bank lending for working capital will therefore find finance frozen by bankers now driven by fear of risk instead of grasping lending opportunities underwritten by government support. Businesses with cash will learn that they are taxed by the debauchment of their money to subsidise failing competitors.
Investors who are used to getting positive returns solely on the back of expansionary monetary policies are now egging on the authorities to spend, spend and spend one more time. Penson funds and insurance companies in particular will now discover they are being lumbered with the cost of monetary expansion by an increasing depreciation of the currency, which escalates future liabilities. Ever since the investment industry pandered to the inflationary policies of central banks this outcome was inevitable, because both logic and sound economic theory tell us you cannot continually inflate your way out of trouble.
That end point is where we have now arrived. The state has come to rely completely on inflationary stimulation. The helicopters have warmed up and are ready to distribute monetary largess created by the magic of central banking, not just to individuals, but to their employers as well. What Has Government Do... Murray N. Rothbard Best Price: $7.04 Buy New $6.50 (as of 05:50 UTC - Details)
Mission impossible is to restore economic activity to where it was before the coronavirus shutdown. Politicians assume is can be achieved by deploying military precision. They have taken for themselves a mandate to sweep aside all bureaucracy and all objections to the role of the state. All it requires is for the banks as well as other critical actors to submit to their authority.
The credit cycle was turning down before the virus hit
It ignores the impact of the credit cycle, which was already turning down in the second half of last year. In response, the Fed first stalled its attempt to restore its balance sheet to normality and from September onwards was forced to publicly intervene to inject massive amounts of liquidity into the banking system through the repo market.
All was not well in wholesale dollar markets at least five months before the virus hit, so the problem is more complex than a simple return to normality when the virus passes. Furthermore, the authorities trying to keep the economy from imploding are out of their depth, so much so that individuals in the private sector are gradually realising it as well. Financial risk has escalated considerably, which has one effect: bankers will use every opportunity to reduce the size of their balance sheets. The authorities will struggle to get banks to hold fast, let alone distribute subsidies to producers and consumers alike.
Attempts at rescuing the global economy and supporting financial asset values upon which bank collateral is based will require massive inflation of base money, as outlined later in this article. But these attempts will have to fight bankers trying to control their lending risk in order to protect their shareholders’ capital from being wiped out. Their motivation to deflate bank credit will be greater than ever before.
An appreciation of the deflationary implications of the current phase of the credit cycle requires an understanding of how bank credit fluctuates and the predominantly psychological factors that drive it.
The origins of bank credit
The general public is not aware that there are two separate sources of money. The central banks are empowered to issue money, but commercial banks do so as well. One way they do this is by taking in deposits and then lending them to borrowers for an interest rate turn. When the borrower draws down the loan to make payments, more deposits are created as the payments are made.
A second course of money creation is simply by lending money into existence. In this case, the loan is created first, and as it is drawn down, deposits are created. This is regarded as the more usual practice, hence the description of the process being the expansion of bank credit. Any imbalances that arise between banks are resolved through the interbank market.
By these means a bank’s own capital becomes a fraction of the bank’s expanded liabilities, hence the term fractional reserve banking. Figure 1 shows the barebones of fractional reserve banking, with a bank’s balance sheet measured in monetary units (mu), early in a phase of credit expansion.
This balance sheet reflects a cautious approach to bank lending. Shareholders’ equity is valued at one third of customers’ deposits and is covered twice by government bonds, which will all be less than five years to maturity and is regarded in the banking system as the risk-free investment standard. At this stage of the credit cycle and with the banking community generally risk-averse, lending margins are profitable. The ratio of total assets to shareholders’ equity is five times. Put another way, profits and losses from changes in asset values are multiplied five times at the shareholder level.
Figure 2 shows the same bank’s balance sheet towards the end of the expansion phase of the credit cycle.
The economy has responded to both monetary stimulation from the government’s deficit spending and interest rate suppression by the central bank. The cohort of bankers has seen a lessening of lending risk and has responded by actively seeking lending opportunities among large corporations. Bankers are now lending increasingly to medium size corporations as well as investment grade rated borrowers where the margins are better. Falling unemployment and growing economic confidence decreases lending risk for credit card and other consumer debt, and the bank has extended additional credit for creditworthy customers. Liquidity from government bonds and bills has been drawn down in order to increase allocation to higher-yielding corporate debt. The balance sheet has expanded to give an overall gearing on shareholders’ equity of 12.5 to 1. Systems Health: The Ma... Ayyadurai, V. A. Shiva Buy New $17.96 (as of 03:24 UTC - Details)
This means a two per cent margin averaged across total assets yields a 25% profit on share capital. But by the time this snapshot is taken, competition from other banks will have likely reduced lending margins generally, and the bank has responded by taking an even more aggressive lending stance, so lending margins overall are likely to be less generous than at the start of the credit cycle and loan quality will have deteriorated.
While shareholders are enjoying excellent returns, it has become a highly risky situation for the bank. The slightest pause in the economic outlook, whether it be from interest rates being raised by the central bank attempting to control the boom, or perhaps an exogenous factor, such as trade tariffs being raised between the bank’s jurisdiction and a major trading partner, will cause the directors of our bank to switch from greed to fear in a heartbeat. In our example, all it takes is losses of 12.5% of the bank’s assets to wipe out shareholders’ equity.
If one bank suspects there may be a deterioration in trade conditions, it is certain that others will as well, because they have similar business information. Due to the dangers of balance sheet gearing, bankers are exceedingly prone to groupthink.
When it happens, the switch from greed to fear travels like wildfire. But some banks are likely to be caught out, having been aggressive lenders trying to increase the size of their bank, often with a chief executive on an ego trip. Fred Goodwin at Royal Bank of Scotland was a recent example. Ignoring all signs of the ending of a cycle of credit expansion, Goodwin pushed through a consortium takeover of ABN-AMRO in October 2007, with RBS’s portion funded by debt. The bank’s balance sheet gearing became twenty-four to one.
With gearing of that sort very little needs to go wrong to wipe out shareholders equity, which is what happened. Failures of this type are an acute risk when the banking cohort has been lulled into a false sense of lending risk by a prolonged period of business stability combining with the siren’s beckoning of a financial bubble.
Reducing bank balance sheets without creating economic instability is virtually impossible. Driven by their groupthink, frightened bankers will seek to reverse credit expansion all at the same time. They sell corporate bonds in a market with no buyers. Spreads, the difference in yield between government bonds and riskier corporate debt, blow out, catastrophic for book values. Business and personal loan facilities are capped and withdrawn, driving many companies into the hands of insolvency practitioners. It can become a race between bankers to reduce the size of their balance sheets before their competitors, as the rapid withdrawal of bank credit triggers bankruptcies and unemployment. It has happened repeatedly for the last two hundred years.
The economic effect was summed up by economist Irving Fisher in the 1930s, who is forever associated with the theory of debt deflation. As the oxygen of credit is withdrawn, businesses get into trouble and banks begin to liquidate collateral. Liquidation of collateral drives their values even lower, exposing additional formally secured lending as no longer secured. Further collateral sales follow, driving collateral values down even further. And so on.
That was in the depression years, and Fisher’s point was to link the collapse of businesses, asset values and also the failure of banks themselves with the contraction of bank credit. Subsequently, central bank policy has focused on trying to anticipate and stop the deflation of bank credit in the first place, always ready to turn on the money spigot. The government then subsidises the economy by increasing its spending without raising taxes. By using the stimulus of unfunded government spending and central bank money creation, the government and its central bank are following the Keynesian economic playbook, which now sets the relationship between the state and private sectors.
Despite everything attempted by statist intervention, we still have periodic bouts of bank credit deflation. But matters have evolved from the simple model illustrated in Figures 1 and 2 above. Banking has become highly regulated, and banks now lend on a formulaic basis, set globally by the Basel Committee (we are on rules version 3) and by local regulators.
Earlier versions of these controls permitted Fred Goodwin to take the RBS balance sheet gearing to credit hyperspace. They say lessons were learned, but the only lessons learned by the regulators were new ways to keep their eyes shut and ears plugged. Stress testing of bank balance sheets assumes little more than a moderate recession and denies the likely consequences of anything worse. The economic crisis starts with a change in banking cohort groupthink, and not, as regulators with their useless stress tests assume, a decline in GDP, a rise in unemployment, a rise in price inflation, or Heaven forfend, an unexpected financial crisis. And if you think extreme bank leverage would have been controlled following the Fred Goodwin episode, think again. Figure 3 shows current balance sheet to equity ratios for a selection of major banks. Through the magic of modern accounting practice, they are almost certainly higher than reported.
From the few examples in Figure 3 we can anticipate bank failures to originate in Europe in the event of a general contraction of bank credit. Despite reducing its balance sheet significantly in recent years, Deutsche Bank is in Fred Goodwin territory, closely followed by BNP and Barclays. And the credit cycle has very obviously turned down again. The regulators persist in behaving like the three wise monkeys, wholly unaware there is a credit cycle and what these ratios indicate.
The large American banks are not so heavily geared, but that will not protect them from the global credit contraction that will now intensify.
Enter the coronavirus
We have made the important point that before the coronavirus lockdown, the credit cycle was already turning down. Liquidity strains had surfaced last September, with the Fed routinely supplying tens of billions of dollars of liquidity through the repo market.
The monetary base, which represents the quantity of money in public circulation created by the Fed, is now growing at the fastest pace on record. But since January, a new problem arose: the disruption to production supply chains from the virtual shutdown of Chinese production due to the coronavirus.
The manufacture of anything requires multiple inputs, commonly referred to as supply chains. The concept of a supply chain suggests they are one dimensional: a series of production steps that go towards a single product. This is not the case. Supply chains are multidimensional and involve supplies from many sources in many jurisdictions at every production stage. The sequential shutdown of China, South Korea and much of South East Asia was followed by Europe, Britain and America. During these shutdowns almost all production and sales of non-food goods and non-essentials ceased.
While the assembly of a product progresses in one direction, payments flow backwards down the chain as each production step is delivered. The sum of the payments involved is far greater than the value of the final product. The global payment disruption is therefore significantly greater than the GDP number, which only consists of the sum total of final products bought by consumers. In the case of the US, an approximation of domestic payment disruption is contained in the gross output statistic, which is $38 trillion compared with a GDP of $21 trillion.
The US economy is significantly services-driven, with shorter supply chains on average than an equivalent manufacturing-based economy, such as China or Germany. If you add together supply chain payments abroad that feed into final goods sold in America, total payments for intermediate production stages in dollar-driven production probably add up to more than $50 trillion, the majority of which are now frozen.
To understand the impact of this new factor on bank credit, we must divide business customers into two classes; those with cash and those that depend on bank loans for working capital.
Both categories have establishment and other costs that continue despite the collapse in production. Those with cash liquidity draw it down to make payments, reducing bank deposits, which are recycled into other deposits which may or may not be with the same bank. When those deposits reduce existing overdrafts, bank credit contracts reflecting a loan repayment. When they amount to a simple transfer of deposit ownership, they do not.
The greater problem is with businesses that need loan cover for missed payments. There are so many of them with payment failures, bankers are being overwhelmed. Whether they realise it or not, they cannot afford to say no to demands for credit because Irving Fisher’s debt deflation problem is so urgent that to deny loan requests would likely end up wiping out the banks’ own shareholders’ capital and then some.
Supply chain payment failures are becoming a banking problem many times larger than the banking cohort shareholders’ capital. The ratio of US gross output to total equity capital for commercial banks in the US is nineteen times. In other words, unless the Fed can increase base money by at least that and somewhat more to compensate for a degree of bank credit contraction, the economy and the banking system will almost certainly crash.
In Germany, where the two major private banks shown in Figure 3 have balance sheet to equity ratios of 15.1 and 22.6, supply chain disruptions seem certain to lumber them with a fatal combination of dramatically widening commercial bond spreads and payment failures from the mittelstand.
Everywhere else, the problem is the same. The Fed has responded by reducing the cost of drawing down established central bank liquidity swaps lines, but they were only available to the ECB, the Bank of Japan, The Bank of England, Bank of Canada and the Swiss National Bank. Recognising the wider problem, on 19 March the Fed extended swap lines temporarily to the central banks of Korea, Australia, Brazil, Denmark, Mexico, New Zealand, Norway, Singapore and Sweden for six months. A notable absentee from the list is China, which one would have thought is the most important user of dollar liquidity based on trade. Politics trumps the delivery of monetary policy in defiance of the scale and urgency of the crisis.
The problems facing the whole banking system have never been greater. Individually, commercial banks are bound to take every opportunity to reduce their risk exposure before the market values of collateral, particularly equities, corporate debt and both residential and commercial property categories fall further in value. Banks will attempt to reduce their interbank exposure, particularly to European banks. Eurozone banks are likely to be the first to fail, needing state bail outs. Counterparty risk in over-the-counter derivatives becomes a major concern for all. And central banks are on a wing and a prayer if they think commercial banks will simply ensure liquidity gets to the right places in time to prevent a financial crisis.
The final crack-up boom
The Fed and other central banks can only blag solutions to a rapidly debasing currency, but the commitment to maintain financial asset values by printing money in the manner of John Law three hundred years ago will require such enormous amounts of base money as to bring forward the destruction of the fiat dollar and all the other fiat currencies. Banks will have fought for survival in this changed world, with many of them succumbing to public ownership.
In this rapidly deteriorating environment, it won’t be long before the smarter bankers realise that they can deploy the expansion of bank credit to acquire not financial assets, which will become worthless being priced in worthless currency, but real assets. The model adopted is likely to be that of Hugo Stinnes, who in 1920-Germany was known as the inflation king. Stinnes borrowed rapidly depreciating marks to buy up factories and property, amassing an empire of 4,500 companies and 3,000 manufacturing plants. Stinnes died in 1924, the year after the great inflation, and his empire subsequently collapsed.
Banks emulating Stinnes have an additional advantage. They can make acquisitions as principals by expanding bank credit again when they are confident that repayments when falling due will be worth significantly less. Bankers under the cover of nationalised banks might even direct the expansion of bank credit into newly created vehicles in which they have personal interests. This behaviour is atypical and might even have the support of a hapless state desperate for any form of financial stability.
This last act, the restoration of bank credit in its relationship with base money will add a rising multiple of the trillions of central bank base money scheduled to be issued in the coming months and will be a vital component of the crack-up boom with which all currency collapses end. The role of the banks as the medium with which the state seeks to tame free markets will ultimately hasten the end of the fiat currencies from which they have profited so much, and the end of central banking as well.
[i] This was even confirmed in a Zerohedge report this morning (9 April) that JP Morgan halts all non-government guaranteed small business loans
The views and opinions expressed in this article are those of the author(s) and do not reflect those of Goldmoney, unless expressly stated
Reprinted with permission from Goldmoney.
The Best of Alasdair Macleod


lewrockwell--2020-04-20--AD 950: ‘Viking Sailing Ships Return to Port; Violation of Social Distancing’

Takeover of the culture by fake science and its wormy foul front men ; fairy tales about togetherness ; expansion of that oily fungus called democratic government ; billions of amnesiacs thinking : IT ’ S NOT REALLY SO BAD , WE CAN LIVE WITH THIS .
How do they like it now ?
Rockefeller-type Globalists want human and structural wreckage .
They couldn ’ t care less about a virus .
They ’ re using the IDEA of it to scare the population .
They ’ ve found their magic key : medical dictatorship .
The latest garbage pronouncement @ @ @ @ @ @ @ .
Which means living can transmit death .
Which means every human is the enemy and needs to be locked up .
Nice and neat .
Hitler , Stalin , Lenin , Mao—if they could have dreamed that one up and enforced it… Mega-corporate tough-guy CEOs give up doing business in a flash—and send their lobbyists to the head of the line in Washington with their hands out , to collect billions in payoffs .
“ Today , we ’ ll be flying at an altitude of 30,000 feet with three passengers , @ @ @ @ @ @ @ ’ re good .
We ’ re covered.
” At Our Wits ’ End ... Woodley of Menie Yr. , ... Best Price : $ 22.52 Buy New $ 20.62 There ’ s a new religion in the land .
It ’ s called IT MUST BE THE VIRUS .
The members of this church are barely awake enough to say , “ It has to be the virus , because why else did three doctors die on Mars last week ?
What about the seven flying saucers that crashed in Antarctica ?
@ @ @ @ @ @ @ out by COVID .
And the cruise ship .
And Italy.
” Virus , virus , virus .
The collection plates in this church are popping and clinking and making the Vatican apoplectic with envy .
People scared by an invisible IDEA .
Backing away .
Shutting their doors .
And you thought primitive tribes worshiping totems was ridiculous ?
Or lines of penitents flagellating themselves with little whips ?
Let ’ s revisit those glory days and do it all over again .
We ’ ll call it SCIENCE .
“ Can @ @ @ @ @ @ @ “ No .
The virus is right outside the front door .
And I ’ m calling the cops on you , you little infector.
” Scene two : “ Hello , Dr. Fauci , this is Death calling .
How are we doing ?
” “ With COVID specifically ?
As you know , we ’ re faking it for all we ’ re worth.
” “ Faking was all I ever asked for .
In many ways it ’ s as good as the real thing.
” “ We ’ ve @ @ @ @ @ @ @ can think of into the COVID category.
” Scene three : “ Hello , I ’ m conducting a survey for the CDC .
Did you wear your medical mask while you were in the shower today ?
” “ Water , tile , mats , soap , shampoo , conditioner , toothpaste , after-shave , slippers , towels , everything except toilet paper , which is a dispensation from God.
” Pale Rider : The Spanis ... Spinney , Laura Best Price : $ 24.05 Buy New $ 15.49 Scene four : @ @ @ @ @ @ @ your captain , Magellan .
The circumnavigation of the globe is off .
We need to rescue three people in Guam who have a cold.
” Scene five : Atlas , holding up the world , announces : “ OK , I ’ m going to remove one hand now and put on the first of two surgeon ’ s gloves .
I think I can manage it… ” George Carlin , 1999 : “ What we have now is a completely neurotic population… Where did this sudden fear of germs come from @ @ @ @ @ @ @ this ?
The media , constantly running stories about all the latest infections – salmonella , e-coli , hanta virus , bird flu – and Americans , they panic easily so now everybody ’ s running around , scrubbing this and spraying that and overcooking their food and repeatedly washing their hands , trying to avoid all contact with germs .
It ’ s ridiculous and it goes to ridiculous lengths… bunch of goddamn pussies !
Besides , what do you think you have an immune system for ?
It ’ s for @ @ @ @ @ @ @ you a true story about immunization okay ?
When I was a little boy in New York City in the 1940s , we swam in the Hudson River and it was filled with raw sewage okay ?
We swam in raw sewage !
You know… to cool off !
And at that time , the big fear was polio ; thousands of kids died from polio every year but you know something ?
In my neighbourhood , no one ever got polio !
No one !
Ever !
You know why ?
Cause @ @ @ @ @ @ @ strengthened our immune systems !
The polio never had a prayer ; we were tempered in raw shit !
So personally , I never take any special precautions against germs .
I don ’ t shy away from people that sneeze and cough , I don ’ t wipe off the telephone , I don ’ t cover the toilet seat , and if I drop food on the floor , I pick it up and eat it !
Yes I do .
Even if I ’ m at a sidewalk café !
@ @ @ @ @ @ @ On New Year ’ s morning during a soccer riot !
And you know something ?
In spite of all that so-called risky behaviour , I never get infections , I don ’ t get them , I don ’ t get colds , I don ’ t get flu , I don ’ t get headaches , I don ’ t get upset stomach , you know why ?
Cause I got a good strong immune system and it gets a lot of practice… ” The Best of Jon Rappoport

Takeover of the culture by fake science and its wormy foul front men; fairy tales about togetherness; expansion of that oily fungus called democratic government; billions of amnesiacs thinking: IT’S NOT REALLY SO BAD, WE CAN LIVE WITH THIS.
How do they like it now?
Rockefeller-type Globalists want human and structural wreckage. They couldn’t care less about a virus. They’re using the IDEA of it to scare the population. They’ve found their magic key: medical dictatorship.
The latest garbage pronouncement is, breathing can transmit the virus. Which means living can transmit death. Which means every human is the enemy and needs to be locked up. Nice and neat. Hitler, Stalin, Lenin, Mao—if they could have dreamed that one up and enforced it…
Mega-corporate tough-guy CEOs give up doing business in a flash—and send their lobbyists to the head of the line in Washington with their hands out, to collect billions in payoffs. “Today, we’ll be flying at an altitude of 30,000 feet with three passengers, but don’t worry, we’re good. We’re covered.” At Our Wits’ End... Woodley of Menie Yr., ... Best Price: $22.52 Buy New $20.62 (as of 07:25 UTC - Details)
There’s a new religion in the land. It’s called IT MUST BE THE VIRUS. The members of this church are barely awake enough to say, “It has to be the virus, because why else did three doctors die on Mars last week? What about the seven flying saucers that crashed in Antarctica? The pilots must have been suddenly taken out by COVID. And the cruise ship. And Italy.” Virus, virus, virus. The collection plates in this church are popping and clinking and making the Vatican apoplectic with envy.
People scared by an invisible IDEA. Backing away. Shutting their doors. And you thought primitive tribes worshiping totems was ridiculous? Or lines of penitents flagellating themselves with little whips? Let’s revisit those glory days and do it all over again. We’ll call it SCIENCE.
“Can Jimmy come out to play?”
“No. The virus is right outside the front door. And I’m calling the cops on you, you little infector.”
Scene two: “Hello, Dr. Fauci, this is Death calling. How are we doing?”
“With COVID specifically? As you know, we’re faking it for all we’re worth.”
“Faking was all I ever asked for. In many ways it’s as good as the real thing.”
“We’ve imported flu, pneumonia, everything we can think of into the COVID category.”
“Nice job.”
Scene three: “Hello, I’m conducting a survey for the CDC. Did you wear your medical mask while you were in the shower today?”
“Why? Does water carry the virus?”
“Water, tile, mats, soap, shampoo, conditioner, toothpaste, after-shave, slippers, towels, everything except toilet paper, which is a dispensation from God.” Pale Rider: The Spanis... Spinney, Laura Best Price: $24.05 Buy New $15.49 (as of 04:12 UTC - Details)
Scene four: “Hello, crew. This is your captain, Magellan. The circumnavigation of the globe is off. We need to rescue three people in Guam who have a cold.”
Scene five: Atlas, holding up the world, announces: “OK, I’m going to remove one hand now and put on the first of two surgeon’s gloves. I think I can manage it…”
George Carlin, 1999: “What we have now is a completely neurotic population… Where did this sudden fear of germs come from in this country? Have you noticed this? The media, constantly running stories about all the latest infections – salmonella, e-coli, hanta virus, bird flu – and Americans, they panic easily so now everybody’s running around, scrubbing this and spraying that and overcooking their food and repeatedly washing their hands, trying to avoid all contact with germs. It’s ridiculous and it goes to ridiculous lengths… bunch of goddamn pussies! Besides, what do you think you have an immune system for? It’s for killing germs!… Let me tell you a true story about immunization okay? When I was a little boy in New York City in the 1940s, we swam in the Hudson River and it was filled with raw sewage okay? We swam in raw sewage! You know… to cool off! And at that time, the big fear was polio; thousands of kids died from polio every year but you know something? In my neighbourhood, no one ever got polio! No one! Ever! You know why? Cause we swam in raw sewage! It strengthened our immune systems! The polio never had a prayer; we were tempered in raw shit! So personally, I never take any special precautions against germs. I don’t shy away from people that sneeze and cough, I don’t wipe off the telephone, I don’t cover the toilet seat, and if I drop food on the floor, I pick it up and eat it! Yes I do. Even if I’m at a sidewalk café! In Calcutta! The poor section! On New Year’s morning during a soccer riot! And you know something? In spite of all that so-called risky behaviour, I never get infections, I don’t get them, I don’t get colds, I don’t get flu, I don’t get headaches, I don’t get upset stomach, you know why? Cause I got a good strong immune system and it gets a lot of practice…”
Reprinted with permission from Jon Rappoport’s blog.
The Best of Jon Rappoport


lewrockwell--2020-04-20--Systems Biologist Speaks Out About COVID-19 Response

Today , we continue to provide you information about the COVID-19 pandemic .
At the time of this recording , April 6 , 2020 , there are more than 1.4 million cases worldwide and 370,000 confirmed cases in the U.S. , with New York City being one of the hotspots.1,2 Here , I interview Shiva Ayyadurai , who has a Ph.D. in systems biology from MIT .
His academic background gives Ayyadurai a slightly different perspective on this outbreak , as it focuses on the foundational causes of disease rather than the conventional medical paradigm that tends to focus on @ @ @ @ @ @ @ project Ayyadurai took on for his Ph.D. thesis was to mathematically model the whole human cell .
His work led to the creation of a platform called CytoSolve “ cyto ” standing for “ cell.
” This approach is different from biology , computer science and chemistry .
Anti-Inflammatory Oxyg ... Mark Sircus Best Price : $ 9.81 Buy New $ 10.09 As noted by Ayyadurai , the COVID-19 pandemic is not only highlighting our immune health but also our economic health .
We ’ re seeing the integration of medical policy and @ @ @ @ @ @ @ , the economic collapse is “ a result of precisely engineered governmental policies , ” even though those policies , superficially , appear to be in the public ’ s best interest .
EZ Melts Lutein Plus w ... Buy New $ 23.99 ( $ 0.40 / Count ) COVID-19 meets the technical definition of a pandemic , and the World Health Organization did declare it a pandemic .
However , the death toll is nowhere near that of earlier serious pandemics that would legitimately justify the extraordinary measures being deployed by the @ @ @ @ @ @ @ 1918 infected 500 million people worldwide , killing between 20 million and 50 million .
The bubonic plague also killed 50 million people , wiping out a shocking 60 % of the European population .
This is typically what people think of when they hear the word “ pandemic.
” COVID-19 presently affects a tiny fraction of the global population — about 1.4 million cases out of a global population of 7.78 billion3 — and even with a death toll of 81,000 worldwide,4 COVID-19 has had a miniscule impact , having killed a @ @ @ @ @ @ @ Don ’ t get me wrong .
Any death is tragic .
But any given individual ’ s risk of dying from the epidemics of diabetes , heart disease or cancer , for example , is greater than their risk of dying from COVID-19 .
Why is death from lifestyle-induced disease and environmental toxicity more preferable and acceptable than death from an infectious disease ?
Dying from a preventable medical mistake is also a greater risk , as that kills up to 440,000 Americans every year .
Where ’ s the panic about @ @ @ @ @ @ @ that conventional medicine kills 440,000 people a year terrifying ?
!
1 in 5 elderly patients are also injured by medical care .
Where are the calls to protect our aging loved ones from this threat ?
Were health policies more aligned with truth , we wouldn ’ t have these chronic disease epidemics and far fewer people would die from preventable medical mistakes .
More people would lead healthy lives were they properly informed about what ’ s harmful and what ’ s healthy .
Similarly , when it comes to COVID-19 @ @ @ @ @ @ @ we can address this infection that does not require collapsing the global economy , creating unheard of unemployment and isolating everyone from human contact for weeks on end .
You can find many articles detailing such strategies on my Coronavirus Resource Page .
As noted by Ayyadurai , systems biology tells us that one size does not fit all .
“ We need to move to the right medicine for the right person at the right time , ” he says .
But this knowledge has not been applied in this pandemic .
@ @ @ @ @ @ @ though they ’ re high risk for severe infection and death and therefore need to take identical precautions .
So , what ’ s really going on here ?
Like Ayyadurai , I believe the fearmongering is being used to suppress dissent , to crash the economy and to issue medical mandates .
“ If you look broadly , there were massive uprisings , antiestablishment uprisings [ in different countries ] .
Well , they ’ re all gone now .
We don ’ t even hear anything about them , ” Ayyadurai @ @ @ @ @ @ @ M ... Jeffers , Nancy Best Price : null Buy New $ 6.98 He also believes this fearmongering and social isolation mandates will be used as a way to acclimatize people to accept state wants or what a few people deem is good for everyone .
“ That , I think , is the milieu being set up , ” he says .
“ That ’ s being teed up.
” Indeed , it simply doesn ’ t add up when you look at mortality rates .
Interestingly , this epidemic is taking @ @ @ @ @ @ @ began censoring holistic health news .
So , people searching for sound nutritional strategies can no longer find them .
Instead , they ’ re directed to Big Pharma-backed sites promoting conventional medicine .
The censorship isn ’ t even about squashing nonscientific views anymore .
Educated health professionals are being banned left and right simply for posting peer-reviewed studies showing nutraceuticals work , or that drugs or vaccines don ’ t work — including Ayyadurai himself , who got kicked off Twitter the day this interview was recorded over a vitamin D @ @ @ @ @ @ @ to Protect Free Communications To summarize , the three-pronged agenda is : Power , profit and control .
To counteract that three-pronged threat , we need academic freedom and the freedom to discourse and debate .
From that freedom , we get truth , and from truth , we ’ re able to understand health , not only physical health but also in the broadest sense the health of our systems , our infrastructure and environment .
With health , we gain the strength to fight for even more freedoms .
Decentralization Is @ @ @ @ @ @ @ many additional issues and goes far deeper than I can summarize here , so please , listen to the interview in its entirety .
He has many fascinating insights , ideas and solutions .
For example , about 50 minutes in , he discusses how federally funded research systems can be improved to ensure scientific integrity and prevent scientific fraud .
“ We need to take power away from the academics , ” he says , “ and one way to do that is to force decentralization .
That ’ s a common @ @ @ @ @ @ @ health care model , and discusses how health care , as a system , can be improved while simultaneously being made far less expensive .
The Best of Joseph Mercola

Today, we continue to provide you information about the COVID-19 pandemic. At the time of this recording, April 6, 2020, there are more than 1.4 million cases worldwide and 370,000 confirmed cases in the U.S., with New York City being one of the hotspots.1,2 Here, I interview Shiva Ayyadurai, who has a Ph.D. in systems biology from MIT.
What Is Systems Biology?
His academic background gives Ayyadurai a slightly different perspective on this outbreak, as it focuses on the foundational causes of disease rather than the conventional medical paradigm that tends to focus on pharmaceutical remedies. Ayyadurai explains:
“The MIT department of biological engineering was created in 2003. The notion was … that you needed an engineering approach to biology as new advances or new discoveries were coming out in biology. That created the department of biological engineering …
Fear Itself: The Cause... Gordon, Ann Best Price: $23.69 Buy New $16.90 (as of 04:13 UTC - Details) One of the big things that took place in 2003 that led to the formation of that department was, in an ironic way, what occurred with the human genome project starting in 1993. We went into the genome project with a reductionist view of biology.
Biologists essentially thought that the number of parts meant complexity. We knew in 1993, a worm had around 20,000 genes. So, we said, OK, we’re going to start mapping out the human genome. We were at least 25 times more complex. The notion was we had about a half a million genes.
By 2003, they only found 20,000 protein coding genes. That flipped biology on its head because it said, wait a minute, we have the same number of parts, and they thought genes were a reflection of complexity. That led to systems biology starting around 2003, which said, look, genes create proteins and these proteins interact. So, it’s about all these interactions …
Today, that has led to this field called epigenetics, in which we know that the external environment, what we interact with, can turn on and turn off genes. I came back to MIT in 2003. I did four degrees at MIT in electrical engineering, mechanical engineering. My Master’s was in design, but I always was fascinated with medicine.”

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The Cytosol Platform
The project Ayyadurai took on for his Ph.D. thesis was to mathematically model the whole human cell. His work led to the creation of a platform called CytoSolve “cyto” standing for “cell.” This approach is different from biology, computer science and chemistry. Anti-Inflammatory Oxyg... Mark Sircus Best Price: $9.81 Buy New $10.09 (as of 10:37 UTC - Details)
“Biologists are essentially distributed knowledge engineers,” he says, “and the thing they’re trying to understand is this thing called the body. No different than aeronautical engineers trying to build the airplane. The difference is when we build an airplane, we actually know what we want to build. And we know the parts in biology, we’re finding the parts, that’s what they’re doing.
Some biologists can win a Nobel prize just for looking at how two proteins interact. So, they’re very focused on understanding these parts. So, imagine if we could create a technology where we could take those parts, integrate them, and then essentially let them be sort of focused in their silos.
But there wouldn’t be this framework that you could integrate, where you could integrate these molecular pathways. And that really created cytosol. To me, it was a big circling back because I grew up in India where my grandmother practiced traditional systems of medicine.
In that system of medicine, they had diagnosis methods, they looked at you, they figured out your body type and they would figure out the right types of foods and medicines, herbs or even body work to get you back into balance. That was always seen as a ‘black art’ from a Western medicine [perspective].
[CytoSolve] lets us decipher what they were doing and actually understand these synergies. So that’s what systems biology is about. It’s taking an engineering systems approach to the body … It’s literally understanding how to diagnose and assess and identify what the problem is, and then how to administer a prescription within a few minutes. It’s essentially an ‘AI’-type model.”
COVID-19 — Health and Economic Perspectives
As noted by Ayyadurai, the COVID-19 pandemic is not only highlighting our immune health but also our economic health. We’re seeing the integration of medical policy and economic policy.
“I had a very interesting discussion with a leading economist,” Ayyadurai says, “and he had a serious concern about the fact that economists are being forced to backfill in a misguided health policy, which is occurring. What he meant by that is, [they’re being told to] just use quantitative easing, which is basically printing money, and that will solve the problem.
Now that entire process does two things. First of all, we have I think 10 million unemployment claims in March alone. In addition to that, you have the fact that we’re going to print money, which … if you look, since 2008 and 2009, when quantitative easing started … that has essentially been the biggest transfer of wealth — to the 0.01%, again.
It is essentially a weakened earning power and the [weakened value] of the dollar. So that’s what’s occurred. Now we have this COVID-19, and we have this economic overreaction, in my opinion, from the fear-mongering. In many ways, it reflects the immune system.
The immune system fundamentally wants to operate well for you and maintain homeostasis, and it’s the overreaction of a weakened and dysfunctional immune system that causes harm. Similarly, when you look at it from the economic standpoint, we have this unbridled overreaction, in my view. [We’re] not looking at what modern medicine is saying — that we should take a personalized medicine approach, right?
One size doesn’t fit all. This is basically flatten the curve: Kick the can down the street. We’re just going to wait until, when? Until the vaccine is produced or until a drug comes out. The assumption is that the immune system of all of us is equally weak. That’s what this is based on. The assumption is that all of us are going to get it and all of us will suffer from it.
It’s a very interesting model. Look at the person leading this health policy, Dr. Fauci. His background is from the pharmaceutical world … [and] when you look at the NIH and the CDC, these organizations are heavily, heavily influenced by pharmaceutical companies.
In that environment, the model has always been never to discuss immune health, what we can do to support the immune system. It’s always under the assumption that there’s this big boogeyman, that the virus harms your body. Most medical doctors, again, they’re victims of this education.
Many of them are taught the virus literally comes and attacks your body, and that a vaccine or a pharmaceutical intervention blocks it. It’s not taught broadly that [the problem is that] the dysfunctional, weakened immune system is not running on all cylinders.
One part of it can overreact, and that overreaction is what goes in and attacks your own tissues. So, the issue is, we’re not having a discussion at all in the media about ‘How do you modulate that overreaction and support people’s immune health?’”
Similarly, Ayyadurai notes, the economic collapse is “a result of precisely engineered governmental policies,” even though those policies, superficially, appear to be in the public’s best interest. EZ Melts Lutein Plus w... Buy New $23.99 ($0.40 / Count) (as of 04:13 UTC - Details)
Is COVID-19 a Real Pandemic?
COVID-19 meets the technical definition of a pandemic, and the World Health Organization did declare it a pandemic. However, the death toll is nowhere near that of earlier serious pandemics that would legitimately justify the extraordinary measures being deployed by the U.S. government.
The Spanish flu in 1918 infected 500 million people worldwide, killing between 20 million and 50 million. The bubonic plague also killed 50 million people, wiping out a shocking 60% of the European population. This is typically what people think of when they hear the word “pandemic.”
COVID-19 presently affects a tiny fraction of the global population — about 1.4 million cases out of a global population of 7.78 billion3 — and even with a death toll of 81,000 worldwide,4 COVID-19 has had a miniscule impact, having killed a mere 0.00001% of the population.
Don’t get me wrong. Any death is tragic. But any given individual’s risk of dying from the epidemics of diabetes, heart disease or cancer, for example, is greater than their risk of dying from COVID-19. Why is death from lifestyle-induced disease and environmental toxicity more preferable and acceptable than death from an infectious disease?
Dying from a preventable medical mistake is also a greater risk, as that kills up to 440,000 Americans every year. Where’s the panic about that? Isn’t the idea that conventional medicine kills 440,000 people a year terrifying?! 1 in 5 elderly patients are also injured by medical care. Where are the calls to protect our aging loved ones from this threat?
Were health policies more aligned with truth, we wouldn’t have these chronic disease epidemics and far fewer people would die from preventable medical mistakes. More people would lead healthy lives were they properly informed about what’s harmful and what’s healthy.
Similarly, when it comes to COVID-19, there are simple strategies with which we can address this infection that does not require collapsing the global economy, creating unheard of unemployment and isolating everyone from human contact for weeks on end. You can find many articles detailing such strategies on my Coronavirus Resource Page.
As noted by Ayyadurai, systems biology tells us that one size does not fit all. “We need to move to the right medicine for the right person at the right time,” he says. But this knowledge has not been applied in this pandemic. Instead, everyone is being treated as though they’re high risk for severe infection and death and therefore need to take identical precautions. So, what’s really going on here?
“We have not said, ‘Hey, let’s shut down the economy to address the fact that we have skyrocketing obesity taking place, skyrocketing diabetes,” Ayyadurai says. “So, the level of contradiction, the level of hypocrisy should wake up everyone to understand that there is another agenda.
There is another agenda afoot. I repeat what my mentor said: ‘When things don’t add up, take a step back and ask, what is the other agenda?’ And the only thing in a common-sense way that reveals itself to me is power, profit and control. Power, profit and control.”
The Power, Profit and Control Agenda
Like Ayyadurai, I believe the fearmongering is being used to suppress dissent, to crash the economy and to issue medical mandates. “If you look broadly, there were massive uprisings, antiestablishment uprisings [in different countries]. Well, they’re all gone now. We don’t even hear anything about them,” Ayyadurai says. Vitamin D3, Zinc and M... Jeffers, Nancy Buy New $6.98 (as of 03:40 UTC - Details)
He also believes this fearmongering and social isolation mandates will be used as a way to acclimatize people to accept state wants or what a few people deem is good for everyone. “That, I think, is the milieu being set up,” he says. “That’s being teed up.” Indeed, it simply doesn’t add up when you look at mortality rates.
“There’s another agenda,” Ayyadurai says. “That’s what I see, because it doesn’t make any rational sense [to crash the economy over COVID-19]. I think that’s why a number of the videos, the tweets I’ve done have gone viral, because to everyday working people, it doesn’t make sense either. They’re trying to sort this out.”
Interestingly, this epidemic is taking place just a few months after Google began censoring holistic health news. So, people searching for sound nutritional strategies can no longer find them. Instead, they’re directed to Big Pharma-backed sites promoting conventional medicine.
The censorship isn’t even about squashing nonscientific views anymore. Educated health professionals are being banned left and right simply for posting peer-reviewed studies showing nutraceuticals work, or that drugs or vaccines don’t work — including Ayyadurai himself, who got kicked off Twitter the day this interview was recorded over a vitamin D post.
“It has essentially moved to a model of a finite set of people serving the interests of another finite set of people,” Ayyadurai says. “That’s what’s fundamentally going on. When we really look back at the history of ‘infectious diseases,’ what actually caused the real decline in infectious disease? …
That came from sanitation, vitamin A, nutrition, elimination of child labor, refrigeration [and] infrastructure at the political level … Well, how did we get that? This is one layer people need to understand from a human standpoint. It came about because in the late 1800s, there was a massive force of the American working class who were militant, and they fought for those rights.
People lived in squalor. No one cared for them. It was the uprising of those people and very, very powerful independently self-organizing systems, all over this country, that forced the elites to give them these basic infrastructures …
So, what I see is the ability for people to organize and demand their rights and get them. That is what occurred in the late 1900s, and we got massive gains. Now look at infrastructure today. Dirty water, dirty air, dirty food … and we look at them in synergy, how they affect our body. None of that’s discussed, none of that.
I think the United States has a D+ in infrastructure. The roads, the bridges and the water systems [are all crumbling]. And when you don’t fix these things in time, they affect all types of environmental things. The elite in this country do not want to address that. They want to always create a fake problem and a fake solution to consolidate power.
And that’s why when you look at this [COVID-19] phenomenon that’s taking place, it’s a penultimate of it … You create massive amounts of fear so people will be willing — because they’re under economic stress, under what they think is a health [threat] — to give up their rights.
And that’s where I see this headed. So, this is an interesting convergence of … economic attack, attack on people’s health, [and attack on] people’s autonomy and freedom. Truth, freedom and health are all under attack …
They do not want any discussion about indigenous people’s medicines that have worked for centuries. They don’t want to talk about simple solutions … so, they suppress discourse, suppress debate, suppress freedom, and move everything away from the scientific method — which is a process where you actually have to prove stuff, which is what they claim they want to do to scientific consensus.
Freedom gets suppressed and now you can move truth to scientific consensus. So, you go from suppression of freedom to fake science or outdated science at best. And then that is used to create a fake problem and a fake solution.
And then, if you go to the health part, what that means is you diminish people’s health, you control people’s health, and now you have a populace which is so controlled, they don’t have the strength to fight for their freedom. So, you have the attack on freedom, the attack on truth, and the attack on health.
All of those are interconnected. They too are a system from a systems perspective. Without freedom, you can’t have truth. Without truth, you can’t have health. And without health we don’t have the strength to fight for our freedom. And the way that truth actually is discovered should be through the scientific method. That’s what’s really been compromised, starting, I would say, in the late ‘50s.”
Postal Service Could Be Used to Protect Free Communications
To summarize, the three-pronged agenda is: Power, profit and control. To counteract that three-pronged threat, we need academic freedom and the freedom to discourse and debate.
From that freedom, we get truth, and from truth, we’re able to understand health, not only physical health but also in the broadest sense the health of our systems, our infrastructure and environment. With health, we gain the strength to fight for even more freedoms.
“For each one of those, there’s a solution. For example, when you go to freedom, if you look at communication, right now we are heavily relying on Google, Facebook and three major telecom companies. So, basically, five CEOs control our communication. One phone call to them, and you can essentially shut down communication …
What is the solution? Well, it’s going to sound weird, but … the founding fathers of this country created an institution called the United States Postal Service. Why did they create that? Because the crown was not allowing each individual to communicate. So, the notion of ‘the press’ was all of us. There was no New York Times. Each one of us were supposed to be the press …
If anyone interfered with your communications, [they got a] 20-year prison sentence. It was criminal. So, the entire postal service system was a decentralized environment enabling every American to communicate for pennies …
In 1997 is when email volume overtook postal mail volume. I met with the executives of the postal service. I said, look, you guys should be living up to what you were chartered to do, which is to protect free communications. Why don’t you offer a public email service and public social media services … that would be protected by the laws of the Constitution? No one, including the government, could interfere.
They thought it was a ridiculous idea … In 2011, the postal services were going out of business. Why? Because all the best parts of the postal service were privatized into DHL and FedEx. So, I again hit them really hard. The inspector general, Dave Williams, called me up.
He goes, ‘Shiva, why are you attacking us?’ I said, ‘Look, you guys are not doing your job. You’re not in the postal mail business. You were supposed to be in the communications business. You are set up as a quasi-organization to protect our rights. So anyway, I did two chartered reports for them.
My point is we need a digital rights act, and there is an institution [that can supply us with that]. It is the postal service, in my view. All these postal service locations could be converted to a mesh network. So, there is an opportunity to have a network by the people for the people. Now if someone wants to go use Google and Facebook and you can, but there needs to be a public common.
Those few elite would object to this and have the power and control to prevent that from being implemented. Definitely. That’s why I believe we need to have a mass movement. Nothing has ever been given to us. People think slavery ends one day and we have freedom the next. Every point in human history has always been people chipping away at slavery to get freedom from the elite.”
Decentralization Is the Name of the Game
Ayyadurai discusses many additional issues and goes far deeper than I can summarize here, so please, listen to the interview in its entirety. He has many fascinating insights, ideas and solutions. For example, about 50 minutes in, he discusses how federally funded research systems can be improved to ensure scientific integrity and prevent scientific fraud.
“We need to take power away from the academics,” he says, “and one way to do that is to force decentralization. That’s a common theme here.” He also analyzes the health care model, and discusses how health care, as a system, can be improved while simultaneously being made far less expensive.
“Broadly, we need to decentralize health care. The concept of centralized health care — which is what the purpose of this [COVID-19 pandemic is] — is that next year everyone’s going to be mandated vaccines,” he says.
“For them to crash the economy, to drive it into a depression, for them it’s a relatively great return on investment. You make the fed print $6 trillion, but you’re going to make $7 trillion to $8 trillion recurring revenue [by way of mandated, annual vaccinations] … So, we have to do whatever it takes to decentralize health care …
When you look at these things I’ve said, it comes down to one word: Decentralization … I think the opportunity here is to start educating people. It is supposed to be We the People, and this does not mean it’s going to happen without struggle.
We may have to rise up and fight in ways that we haven’t done before, just like those people did in the late 1800s, and the idea is to compel the thing. We need to build a broad-based movement bottom-up … And I think it begins with taking care of your health.”
Sources and References
The Best of Dr. Joseph Mercola


lewrockwell--2020-04-21--What If the Lockdown Was All a Big Mistake?

From California to New Jersey , Americans are protesting in the streets .
They are demanding an end to house arrest orders given by government officials over a virus outbreak that even according to the latest US government numbers will claim fewer lives than the seasonal flu outbreak of 2017-2018 .
Across the US , millions of businesses have been shut down by “ executive order ” and the unemployment rate has skyrocketed to levels not seen since the Great Depression .
Americans , who have seen their real wages decline thanks to Federal Reserve monetary malpractice , are finding @ @ @ @ @ @ @ breadlines .
It is like a horror movie , but it ’ s real .
Last week the UN Secretary General warned that a global recession resulting from the worldwide coronavirus lockdown could cause “ hundreds of thousands of additional child deaths per year.
” As of this writing , less than 170,000 have been reported to have died from the coronavirus worldwide .
Magnesium : Reversing D ... Levy , MD Jd Best Price : $ 23.53 Buy New $ 24.58 Many Americans have also died this past month because they were @ @ @ @ @ @ @ they needed .
Cancer treatments have been indefinitely postponed .
Life-saving surgeries have been put off to make room for coronavirus cases .
Meanwhile hospitals are laying off thousands because the expected coronavirus cases have not come and the hospitals are partially empty .
What if the “ cure ” is worse than the disease ?
Countries like Sweden that did not lock down their economy and place the population under house arrest are faring no worse than countries that did .
Sweden ’ s deaths-per-million from coronavirus is lower than in many @ @ @ @ @ @ @ ... Mark Sircus Best Price : $ 7.25 Buy New $ 10.32 Likewise , US states that did not arrest citizens for merely walking on the beach are not doing worse than those that did .
South Dakota governor Kristi Noem said last week , “ we ’ ve been able to keep our businesses open and allow people to take on some personal responsibility.
” South Dakota has recorded a total of seven coronavirus deaths .
Kentucky , a strict lockdown state , is five times more populated than South Dakota , @ @ @ @ @ @ @ coronavirus deaths .
If lockdown and house arrest are the answer , shouldn ’ t those numbers be reversed , with South Dakota seeing mass death while Kentucky dodges the coronavirus bullet ?
When Anthony Fauci first warned that two million would die , there was a race among federal , state , and local officials to see who could rip up the Constitution fastest .
Then Fauci told us if we do what he says only a quarter of a million would die .
They locked America down even harder .
Then @ @ @ @ @ @ @ of the shoulders , they announced that a maximum of 60,000 would die , but maybe less .
That is certainly terrible , but it ’ s just a high-average flu season .
Imagine if we had used even a fraction of the resources spent to lock down the entire population and focused on providing assistance and protection to the most vulnerable – the elderly and those with serious medical conditions .
We could have protected these people and still had an economy to go back to when the virus had run its @ @ @ @ @ @ @ have cost us six trillion dollars either .
Governments have no right or authority to tell us what business or other activity is “ essential.
” Only in totalitarian states does the government claim this authority .
We should encourage all those who are standing up peacefully and demanding an accounting from their elected leaders .
They should not be able to get away with this .
How Not To Die With Tr ... Henriques , Tiago Best Price : $ 18.23 Buy New $ 17.97 Vitamin D3 , Zinc and M ... @ @ @ @ @ @ @ Buy New $ 6.98 The Best of Ron Paul

From California to New Jersey, Americans are protesting in the streets. They are demanding an end to house arrest orders given by government officials over a virus outbreak that even according to the latest US government numbers will claim fewer lives than the seasonal flu outbreak of 2017-2018.
Across the US, millions of businesses have been shut down by “executive order” and the unemployment rate has skyrocketed to levels not seen since the Great Depression. Americans, who have seen their real wages decline thanks to Federal Reserve monetary malpractice, are finding themselves thrust into poverty and standing in breadlines. It is like a horror movie, but it’s real.
Last week the UN Secretary General warned that a global recession resulting from the worldwide coronavirus lockdown could cause “hundreds of thousands of additional child deaths per year.” As of this writing, less than 170,000 have been reported to have died from the coronavirus worldwide. Magnesium: Reversing D... Levy, MD Jd Best Price: $23.53 Buy New $24.58 (as of 02:51 UTC - Details)
Many Americans have also died this past month because they were not able to get the medical care they needed. Cancer treatments have been indefinitely postponed. Life-saving surgeries have been put off to make room for coronavirus cases. Meanwhile hospitals are laying off thousands because the expected coronavirus cases have not come and the hospitals are partially empty.
What if the “cure” is worse than the disease?
Countries like Sweden that did not lock down their economy and place the population under house arrest are faring no worse than countries that did. Sweden’s deaths-per-million from coronavirus is lower than in many lockdown countries.
Sodium Bicarbonate: Na... Mark Sircus Best Price: $7.25 Buy New $10.32 (as of 10:37 UTC - Details) Likewise, US states that did not arrest citizens for merely walking on the beach are not doing worse than those that did. South Dakota governor Kristi Noem said last week, “we’ve been able to keep our businesses open and allow people to take on some personal responsibility.” South Dakota has recorded a total of seven coronavirus deaths.
Kentucky, a strict lockdown state, is five times more populated than South Dakota, yet it has some 20 times more coronavirus deaths. If lockdown and house arrest are the answer, shouldn’t those numbers be reversed, with South Dakota seeing mass death while Kentucky dodges the coronavirus bullet?
When Anthony Fauci first warned that two million would die, there was a race among federal, state, and local officials to see who could rip up the Constitution fastest. Then Fauci told us if we do what he says only a quarter of a million would die. They locked America down even harder. Then, with little more than a shrug of the shoulders, they announced that a maximum of 60,000 would die, but maybe less. That is certainly terrible, but it’s just a high-average flu season.
Imagine if we had used even a fraction of the resources spent to lock down the entire population and focused on providing assistance and protection to the most vulnerable – the elderly and those with serious medical conditions. We could have protected these people and still had an economy to go back to when the virus had run its course. And it wouldn’t have cost us six trillion dollars either.
Governments have no right or authority to tell us what business or other activity is “essential.” Only in totalitarian states does the government claim this authority. We should encourage all those who are standing up peacefully and demanding an accounting from their elected leaders. They should not be able to get away with this.
How Not To Die With Tr... Henriques, Tiago Best Price: $18.23 Buy New $17.97 (as of 08:00 UTC - Details) Vitamin D3, Zinc and M... Jeffers, Nancy Buy New $6.98 (as of 03:40 UTC - Details)
The Best of Ron Paul, MD


lewrockwell--2020-04-21--How Buckley’s Anti-Communism Morphed Into Neoconservatism

Political magazines have long relied on donors to ensure their continued existence .
This is true of Chronicles , but it ’ s also been true of mainstream organs of conservatism such as the National Review .
William F. Buckley , Jr. , would often pen letters to donors which asserted that the magazine was “ dead broke.
” In one such letter from 1966 , Buckley noted that it became clear every February that the magazine “ failed to pay our way.
” This was due not to mismanagement , he said , but rising production costs .
“ @ @ @ @ @ @ @ drastically in excess of the general price level set by such as ‘ Look , ’ ‘ Life , ’ ‘ Time , ’ ‘ Newsweek , ’ etc.
, which absorb the extra costs by levying on their munificent benefactors , ” he wrote .
I recently got a copy of this letter forwarded to me from the widow of a friend , Wes McDonald , who was an ardent Buckleyite , as I was for a while many years ago .
Reading the beginning of Buckley ’ s plea , both @ @ @ @ @ @ @ out our checkbooks to support his failing enterprise .
But there was something different about this 1966 letter , and if Wes and I had read on , we would have learned that the National Review editors were facing a new financial “ threat.
” Fascism : The Career of ... Gottfried , Paul Best Price : $ 41.28 Buy New $ 40.07 Buckley disclosed that a Dr. Linus Pauling was suing National Review for $ 1 million .
The magazine ’ s senior editor James Burnham had gone after Pauling as a @ @ @ @ @ @ @ in the decade , and the magazine was now engaged in preparation for the trial by collecting documents to substantiate its charges .
These activities , explained Buckley , were costly .
It was necessary to appeal to readers to help pay for “ this judicial sizzler for the cause of anti-Communism.
” Up until then , National Review had coughed up “ an incredible fifty thousand dollars , which was dutifully done in the cause of anti-Communism but which we can not ourselves conceivably afford.
” Reading this letter , I was @ @ @ @ @ @ @ , particularly “ the cause of anti-Communism ” and “ fellow traveler.
” Accusations of “ collaborationism ” were laid on Nobel Prize-winner Dr. Pauling , who—one might gather from the letter and related pieces in National Review—was a major threat to America ’ s defense against Soviet Communism .
Although there is no need to justify Pauling ’ s naïve call to Americans not to resume nuclear testing after the Soviets had taken that step in 1962 , no proof was offered that this renowned physical chemist felt any affection for communism @ @ @ @ @ @ @ Paul Gottfried Best Price : $ 5.20 Buy New $ 5.60 In any case I am underwhelmed by the evidence of Pauling ’ s “ collaborationism.
” When I read Buckley in the 1960s , I generally ignored his anti-communist ebullitions , starting with his eagerness to throw nuclear weapons against the commies .
Although the social and constitutional conservatism expounded in National Review pleased me , I could have done happily without the anti-communist grandstanding .
For example , I shared Burnham ’ s cynical attitude about liberal internationalists and his interest @ @ @ @ @ @ @ Western world .
But Burnham ’ s call for brinksmanship in dealing with other countries fell on mostly deaf ears in my case .
I relished most of the magazine ’ s other regulars , especially Russell Kirk , Will Herberg , Jeffrey Hart , and Willmoore Kendall .
Still I noticed these figures managed to write on topics other than Burnham ’ s “ protracted conflict.
” Years later when I became friendly with Kirk and Herberg , it became apparent that these longtime National Review contributors read past those tirades that @ @ @ @ @ @ @ in Americ ... Gottfried , P. Best Price : $ 9.95 Buy New $ 58.37 The Strange Death of M ... Gottfried , Paul Edward Best Price : $ 54.95 Buy New $ 205.87 Multiculturalism and t ... Gottfried , Paul Best Price : $ 27.23 Buy New $ 50.00 The Best of Paul Gottfried

Political magazines have long relied on donors to ensure their continued existence. This is true of Chronicles, but it’s also been true of mainstream organs of conservatism such as the National Review. William F. Buckley, Jr., would often pen letters to donors which asserted that the magazine was “dead broke.” In one such letter from 1966, Buckley noted that it became clear every February that the magazine “failed to pay our way.” This was due not to mismanagement, he said, but rising production costs. “A magazine cannot charge a price drastically in excess of the general price level set by such as ‘Look,’ ‘Life,’ ‘Time,’ ‘Newsweek,’ etc., which absorb the extra costs by levying on their munificent benefactors,” he wrote.
I recently got a copy of this letter forwarded to me from the widow of a friend, Wes McDonald, who was an ardent Buckleyite, as I was for a while many years ago. Reading the beginning of Buckley’s plea, both Wes and I would have immediately dug out our checkbooks to support his failing enterprise. But there was something different about this 1966 letter, and if Wes and I had read on, we would have learned that the National Review editors were facing a new financial “threat.” Fascism: The Career of... Gottfried, Paul Best Price: $41.28 Buy New $40.07 (as of 03:55 UTC - Details)
Buckley disclosed that a Dr. Linus Pauling was suing National Review for $1 million. The magazine’s senior editor James Burnham had gone after Pauling as a Soviet collaborator in two editorials published earlier in the decade, and the magazine was now engaged in preparation for the trial by collecting documents to substantiate its charges. These activities, explained Buckley, were costly. It was necessary to appeal to readers to help pay for “this judicial sizzler for the cause of anti-Communism.” Up until then, National Review had coughed up “an incredible fifty thousand dollars, which was dutifully done in the cause of anti-Communism but which we cannot ourselves conceivably afford.”
Reading this letter, I was struck by the repetition of certain phrases, particularly “the cause of anti-Communism” and “fellow traveler.” Accusations of “collaborationism” were laid on Nobel Prize-winner Dr. Pauling, who—one might gather from the letter and related pieces in National Review—was a major threat to America’s defense against Soviet Communism. Although there is no need to justify Pauling’s naïve call to Americans not to resume nuclear testing after the Soviets had taken that step in 1962, no proof was offered that this renowned physical chemist felt any affection for communism.
Encounters: My Life wi... Paul Gottfried Best Price: $5.20 Buy New $5.60 (as of 08:10 UTC - Details) In any case I am underwhelmed by the evidence of Pauling’s “collaborationism.” When I read Buckley in the 1960s, I generally ignored his anti-communist ebullitions, starting with his eagerness to throw nuclear weapons against the commies. Although the social and constitutional conservatism expounded in National Review pleased me, I could have done happily without the anti-communist grandstanding. For example, I shared Burnham’s cynical attitude about liberal internationalists and his interest in the continuing managerial revolution in the Western world. But Burnham’s call for brinksmanship in dealing with other countries fell on mostly deaf ears in my case.
I relished most of the magazine’s other regulars, especially Russell Kirk, Will Herberg, Jeffrey Hart, and Willmoore Kendall. Still I noticed these figures managed to write on topics other than Burnham’s “protracted conflict.” Years later when I became friendly with Kirk and Herberg, it became apparent that these longtime National Review contributors read past those tirades that I found so inexpressibly tiresome.
Read the Whole Article
Conservatism in Americ... Gottfried, P. Best Price: $9.95 Buy New $58.37 (as of 03:50 UTC - Details) The Strange Death of M... Gottfried, Paul Edward Best Price: $54.95 Buy New $205.87 (as of 03:40 UTC - Details) Multiculturalism and t... Gottfried, Paul Best Price: $27.23 Buy New $50.00 (as of 03:40 UTC - Details)
The Best of Paul Gottfried