Author: Alasdair Macleod

It seems extraordinary that in defiance of all factual history and philosophical knowledge anyone should celebrate the bicentenary of the birth of Karl Marx. More than anyone, through wrong-headed ideas, he bears responsibility, indirectly admittedly, for the deaths of an estimated one hundred million people in the last century, and the severe suppression though economic and social servitude of fully one third of the world’s population. And if you also include those who have suffered under the yoke of Marxist-inspired modern socialism, the philosophy that says the state is more important than the individual, you could argue nearly the whole … Continue reading →

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Anyone who thinks democracy doesn’t matter may be in for a rude shock later this year, when we know the result of America’s mid-term elections. The Deep State is on course to take control of Congress. If this happens, it will be the next step in a global trend of side-lining democracy in the West, driven in large part by American foreign policy. It has led to governments everywhere increasing control over their people, in an inversion of democratic principles. It affects us all. Since the Twin Towers tragedy, American foreign policy has taken the lead in extending personal surveillance … Continue reading →

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The latest consequence of economic mismanagement in Europe was the failed attempt at constitutional reform in Italy this week. The Italian people have had enough of their government’s economic failure and is refusing to give it more power. The EU and the euro project have been an economic disaster for all participants, including Germany, which will eventually be forced to write off the hard-earned savings she has lent to other Eurozone members. We know, with absolute certainty, that the euro will self-destruct and the Eurozone will disintegrate. We know this for one reason above all. The political class and the … Continue reading →

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Since the 1980s, markets have had to adapt to a world of infinite credit. Of course, this credit has not been available to everyone: it has been principally deployed in favour of governments, financial markets, and big business. It amounts to a cartel, planned or unplanned, a partnership between banks and government that dominates and controls previously free markets. The justification for this arrangement is based on anti-market macroeconomic theories, always sympathetic to central planning. The partnership is between governments, their central banks and the commercial banks, granting them a licence to operate by expanding credit out of thin air. … Continue reading →

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We think we know that gold is no longer money, because Keynesians and monetarists insist it is so. Furthermore, it has been replaced by government currencies, which we use to buy and sell, do our accounts and pay our taxes. While it is undoubtedly true that gold is no longer used for transactions in all but a few places in Asia, this common assumption has no basis in fact. It is one thing for macroeconomists of all veins to theorise about the contents of the dustbin of history, but the choice people make is what really matters. Humanity has an … Continue reading →

In the early days of central banking, one primary objective of the new system was to take ownership of the public’s gold, so that in a crisis the public would be unable to withdraw it. Gold was to be replaced by fiat cash which could be issued by the central bank at will. This removed from the public the power to bring a bank down by withdrawing their property. A primary, if unspoken, objective of modern central banking is to do the same with fiat cash itself. There are of course other reasons for this course of action. Governments insist … Continue reading →

This month has seen something that happens not very often: it appears to be the early stages of a global stock market crash. For the moment investors are in shock, seeking reassurance and keenly intent on preserving their diminishing assets, instead of reflecting on the broader economic reasons behind it. To mainstream financial commentators, blame for a crash is always placed on remote factors, such as China’s financial crisis, and has little to do with events closer to home. Analysis of this sort is selective and badly misplaced. The purpose of this article is to provide an overview of the … Continue reading →

Interest rates in the US, Europe and the UK were reduced to close to zero in the wake of the Lehman crisis nearly seven years ago. Initially zero interest rate policy (ZIRP) was a temporary measure to counter the price deflation that immediately followed the crisis, but since then interest rates have been kept suppressed at the zero bound. It had been hoped that the stimulus of close-to-zero interest rates would also guarantee economic recovery. It has failed in this respect and the low bond yields that result have only encouraged the rapid expansion of government debt. It is clear … Continue reading →

Make no mistake; the Greek crisis is a euro crisis that threatens the solvency of the ECB itself, and therefore confidence in the currency. Before going into why, a few comments on Greece will set the scene. Last weekend it became clear that Greece is heading for both a default on its government debt and also a failure of its banking system. With the benefit of hindsight it appears that the Greek government was unwilling to pretend that it was solvent and extend its financial support as if it was. The other Eurozone finance ministers and the troika were not … Continue reading →

When interest rates are zero and it costs a bank to look after your money it becomes an unattractive asset. Banks in some jurisdictions (such as Switzerland, Denmark and Sweden) are even charging customers interest on cash and deposits. And if you go to your bank and withdraw large amounts in the form of folding notes to avoid these charges you will be lucky if you are not treated as a sort of pariah. For the moment, at least, these problems do not extend to sound money, in other words gold. There are two distinct issues involved with government-issued currency: … Continue reading →

The US dollar continued to lose ground this week, contributing to a firmer trend for precious metals. Gold rose over $40 to $1223, and silver by $1.13 to $17.45, though prices initially opened a little lower in early European trading this morning, perhaps anticipating some pre-weekend profit-taking. Gold has now risen over 3% on the year, marginally beating the S&P 500 Index, which is up 2.5%, but far better than bonds, the US 10-year Treasury price being down about 4%. On the Comex futures market there appears to be increasing demand for gold and silver, with both volumes and open … Continue reading →

China and Russia have taken the lead in establishing the Asian Infrastructure Investment Bank (AIIB), seen as a rival organisation to the World Bank and the Asian Development Bank, which are dominated by the United States with Europe and Japan. These banks do business at the behest of the old Bretton Woods* order. The AIIB will dance to China and Russia’s tune instead. The geopolitical importance was immediately evident from the US’s negative reaction to the UK’s announcement this week that it would join the AIIB. And very shortly afterwards France, Germany and Italy also defied the US and announced … Continue reading →