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During the latter part of 2018 the Treasury yield curve started to invert as economists call it. The shorter term maturities, 1 month (1M), 3 month (3M), and 1 year (1Y) yields were all higher than the 2Y, 3Y, 4Y, 5Y, 7Y and 10Y Treasury yields. Only the 20Y and 30Y maturities remain higher. As you can see, with the two prior years, the yields of the various maturities were normal in that the short term Treasury yields were lower then the longer term Treasury yields, which is the way they should be in a good and/or normal market.
So what is the significance and importance of the partial inversion of the Treasury yield curve? 1. It means the Federal Government is having to pay more interest to investors who buy the Treasuries that fund the $1 trillion+ annual deficits the U.S. is now consistently having to borrow to fund our government. 2. Historically, in every single occasion this has occurred, the U.S. was soon in a recession. Today now only is the U.S. economy slowing, so is most of the rest of the world, according to numerous indicators and high profile sources.
It is important to understand, that the debts of both the private and public sector are much higher today indicating that the recesssion will most likely be deeper or longer than the great recession of 2008, potentially even another great Depression.
Men don’t treat women as equals and women don’t treat men as equals because we’re not. If two male engineers are not equal in their abilities and motivations, neither are any two women. Whether right or wrong, men and women discriminate against one another and women in various situations even discriminate against other women. Why because we’re different. Scientifically there are at least 50 differences between men and women and a lot of it is genetic. We know the obvious ones. Women can multitask, take fewer risks, verbally communicate better and are often more focused than men and men are generally physically stronger, take more risks and can create and build just about anything. We’ve developed defined roles between men and women but that’s where our differences often create conflict, especially in leadership roles. Of course, everyone wants to be the boss because they generally make more money, have more power and control and are granted more privileges and accolades. You are not likely to see a woman beat Tiger Woods in a round of golf and you are not likely to ever find many men who can care for a young child like a woman can. Women like pictures of kitty cats and babies of every species and men like trucks and weapons. These are the roles we have been forced to take, in part, by nature itself.
We surely do not like to see the repressive discrimination and sexual predation by either gender. Women use their sexuality if they can to manipulate their world just like men use their money and strengths. I think it’s the unethical practices by both genders that is most disheartening. Men using their money and power to manipulate women and women using their sexuality or psychological manipulations such as making false accusations against men they are trying to harm socially or in their relationships. We all know how unethical both genders can be so let’s stop pretending there are saints among us.
I often write that humans are not as ethical as our rule of law requires and until we can improve upon both our institutions and integrity, I’m afraid our human weaknesses seem to have causes perhaps even a digression in our evolution. It appears as if we are stuck on a plateau with some points in time better than others and some worse. We made a huge leap in the development of mankind late in the 1700s when we overthrew the Monarchs of Europe and much of the world and abolished slavery within 75 years later, both of which had been going on for millenniums.
Can we really say or prove that suffrage or any of the other political mandates after that have made our world better since the abolition of slavery? Scientists have now proven that we are an oligarchy, providing the evidence our experiment as a democratic republic, which Benjamin Franklin questioned upon its ratification, has failed. The majority have little or no influence over the social policies being created and we are being ruled over by a relatively small group of people; that’s what an oligarchy is.
Yes, the power, controls and unethical activities within our society are subtle but increasingly blatant as the oligarchy keeps gaining more and more powerful. Sadly, the majority is stuck in the middle of two dominant warring factions fighting over political power and money. Suggesting that if either of these two factions prevails the world will be better off, is logically weak if not totally false. The problem is systemic. An oligarchy cannot possibly take us to the next level in any progressive evolutionary manner. How is it that a Constitution and Bill of Rights created to restrain the size and scope of government has failed and provided just the opposite? We can of course experiment with a direct democracy but the working mechanisms and problematic issues of that are perhaps even more difficult to overcome. I do not want my neighbor to be able to vote against my liberties any more than I do of elected representatives.
History tells us that our world progressed the most when governments had the least power and after the defeat of the European Monarchs and our founding fathers tried to politically institutionalize our newfound liberties with a Constitution and Bill of Rights as did many societies around the world. It hasn’t worked very well though. The governments today are equally as powerful, with many of the same systemic problems the monarchies offered. We’re very close in many situations, considering the diminished individual liberties, as those defeated by our revolutionary forefathers, but it has been very subtle and took almost our entire history to come full circle; dominated by an oligarchy but now tiered even higher with international organizations such as the World Bank, INF and United Nations giving military and financial support to the many oligarchies ruling our world.
The English Tories were the primary adversaries of the founding fathers. Those entrenched in the political, religious and commercial interests of the church and crown. We thankfully eliminated the religious persecution by protecting religious liberties with the 1st Amendment. What we have failed to protect, are the economic liberties. As the government has gotten more powerful, so has the required revenue increased through a plethora of taxes and regulatory fees. We may have religious liberty, but the State (now an oligarchy) has taken all our economic liberties. Those who are well off, as were the Tories of old, under our current system vote for its maintenance, stifling any major changes as those who are not well off, are finding it increasingly difficult to survive.
If the 1st Great Revolutions failed to protect the individual liberties essential to the majorities prosperity, another revolution will over time result in the same losses of liberty and resultant problems. Another revolution is obviously not the solution until such time as we can come up with a superior way in which to protect our economic liberties. Does anyone with a brain really want to try socialism with eventual communism again? Look at all the problems all the social policies enacted just over the last 100+ years have caused. Right now, millions of people cannot earn enough money to even feed themselves and thus require government assistance. Our economic system is badly broken, and it is simply because we have allowed the government to tax our incomes, property, sale of goods and services, exports and a plethora of over 110 different taxes and regulatory schemes.
It’s a systemic problem; it’s the system itself. We need to create a system that truly protects the individual’s rights to property and our earnings. Who is going to build the roads? If the rights to property and income are protected from taxation the oligarchs will be forced to pay for them if they want us to travel to their businesses and to buy the good and services, they produce. Taxation is truly the power to destroy and it is destroying the middle class. So how do you force the oligarchs, those in power to pay for anything? They are greedy and they are going to pay for whatever it takes, including any infrastructure, to be able to get you to buy the goods and services they produce. There is more than enough money in society to pay for those things that are beneficial and necessary for the majority to prosper. If you take money and property from those that cannot afford it, it takes away their ability to survive. The oligarchs dangle the proverbial carrot in front of the majorities noses to motivate them, why not dangle the carrots in front of their noses. History tells us that when taxes were low or non-existent, the wealthy did, in fact, build much of the infrastructure of their day. Just think with all the technologies today, what could be, if the government did not tax and misallocate so much of our financial and material resources. So, I don’t want or really even care about equality. I know that there are going to be people who do better and worse in life than I do. I just want equal justice under the law and my rights to my justly earned property protected. If we kill this systemic problem, perhaps other systemic problems will also be alleviated. Power has the ability to corrupt and political power is the worst, because it is not earned; it is most often achieved by force, coercion, cronyism or fraud.
Many people did not see the 2008 debt collapse coming yet many others did. We don’t like to think that a nation with this much prosperity can have such problems. Much of the prosperity however has been financed. The greatest credit collapse in American history occurred because we had to much debt, and now we even have much more debt, both private and public. It is estimated to be $37 trillion total with over $22 trillion being Federal Government debt.
In 1973, the rest of the oil producing nations forced the U.S. off the fixed gold price of $35.00 per ounce and over the next decade with saw consumer prices more than double. A barrel of Oil was $3.00 and now it is >$60.00 per barrel. Gasoline has gone from about 40¢ a gallon in the early 1970s to nearly $3.00 today.
What most people do not really understand is the severity of the credit collapse in 2008 because of how quick and successful they were in solving the problems. Of course, we still have tons of home foreclosures in process and numerous indicators are suggesting another recession is imminent. The economy is not doing as well as is being reported by the mainstream media, perhaps not wanting to scare the public even more. The facts are prices continue to rise and any real wage improvement is minimal. And those in positions of power have not done anything significant to solve the debt crisis and it is a crisis because it has more than doubled since then.
@ H. Skip Robinson 04/01/2019
It is not hard to acknowledge that when Judges are chosen politically, the Judges will become as much a politician as those selecting them. The confirmation hearings of Judges have become a political battle so adverse and contentious, that they are partially being fought through the legal system itself.
Of course, this is the worst thing that could ever occur in any society, but it has been the rule throughout human history. The Judges have always been a rubber stamp for the ruling class and the various factions want their candidate to be the one confirmed. The should give you an indication of just how arbitrary judicial decisions have been and can be.
“With Justice for None” is also the title of a book by the best-selling author and prominent defence Attorney Gerry Spence, now deceased, who wrote a highly critical review of our legal system.
“A scathing indictment of how law is taught, practiced, and
administered in this country . . . One of the best books ever written on the
law.”—The Denver Post
“Renowned trial lawyer Gerry Spence takes an in-depth look at the American justice system and reveals a terrible truth: If you don’t have power or money, then you likely won’t receive justice either. The wealthy buy their way out of trouble, while the poor are punished. In an effort to combat this corruption, the author devises a number of reforms, tackling issues in every area of the system from law school to the courtroom.”
This is the truth about our legal system, and I have read and heard hundreds of stories over the years providing additional evidence. If you have the money to pay the extravagant prices the average Attorneys charges, and many of them are “poor to average” at best in their abilities to acquire justice, you will get better treatment that those that don’t have the money. Many of them are highly unscrupulous and will take your money and then do hardly anything to help you. And God forbid, having to use a Public Defender who is an indirect drain on the pension funds of the Judges and other government employees that work the justice system, I call Courthouse Vultures.
IMHO, with the States and American BAR Associations, they have created a quasi power cartel full of individuals with highly questionable integrity. In 1820, Thomas Jefferson apparently agreed when he wrote; “The Judiciary of the United States is the subtle corps of sappers and miners constantly working underground to undermine the foundation of our confederated fabric.… the Federal Judiciary; an irresponsible body (for impeachment is scarcely a scarecrow) working like gravity by night and by day, gaining a little today and a little tomorrow and advance it’s noiseless step like a thief over the field of jurisdiction, until all shall be usurped from the States, and the government of all be consolidated into one…. when all government….in little as in great things, shall be drawn to Washington as the centre of all power, it will render powerless the checks provided of one government on another and will become as venal and oppressive as the government from which we separated.
Our Judiciary, has allowed, until just this week of 3/15/2019 the “extraordinary” excessive confiscation of money and property through unconstitutional Asset Forfeiture actions protected by the 8Th Amendment to be standard operations by local, state and Federal Law enforcement agencies. Finally, after decades perhaps even a century or so, of unlawful confiscations of property and money from the Citizens by government prosecutors and law enforcement, the Supreme Count finally has upheld and protected one of out constitutional rights, in a case Timbs v Indiana after the appellate determination by the Indiana Supreme Court, affirmed an action so unconscionable that it boggles the imagination.
We all know our political system is inherently flawed because of the effects of money on the system but unless you follow some of the lower and Supreme Court decisions carefully you are not necessarily cognizant of the Courts poor behavior.
I think they got Roe vs Wade right and many others but when it comes to the governments taxing and other confiscatory powers to fine, penalize and imprison, it is as if it is a profitable business to them.
I’ll give you one example. During the foreclosure epidemic, the South Florida Courts literally became a purely arbitrary system with a “rocket docket” mentality as it was being called by Attorneys, forgoing most of the rules of law and this was a determination from the top down, with the Senior Judges telling their subordinates to clear their docket, ruling against the homeowners almost 100% of the time. Come to find out the Judges have their own pension fund and they had invested in some of the mortgage loans sold be Wall Street and the banks.
Despite the various frauds initiated by the banks and mortgage lenders, homeowners lost their homes almost 100% of the time unless the banks made some sort of deal with the homeowners. Here in So. Florida we still have huge numbers of foreclosures still on the dockets and it is often the banks themselves slowing the process. As a Realtor, I think they are trying to slowly bring these properties on the market so that the keep the inventories low and prices remain high but that’s another issue for another day.
The rocket docket mentality still exists as far as the Judges siding with the banks, but the legal processes have normalized. If you think justice is being served, it is not. We even have found family members of the Judges being owners of banks or major shareholders.
In the State of Florida, a jury trial is prohibited for foreclosure proceeding by Florida Statute allowing only the Judges to reside, called a Judicial Hearing over the determination of the cases. How can this even be constitutional?
What is amazing is that Thomas Jefferson warned us about this so many years ago. He stated: “The opinion which gives to the Judges the right to decide what laws are Constitutional and what not, not only for themselves in their own sphere of action, but for the legislature and executive also in their spheres, would make the Judiciary a Despotic branch. The new Constitution has secured these (individual rights) in the Executive and Legislative departments; but not in the Judiciary. It should have established trials by the people themselves, that is to say by jury.” Understand that he was writing about the jury being the final arbiter at the Appellate levels just as it is most often at the Circuit Court level.
In one case We The People v. United States, 485 F.3D 140 (2007), one Judge made the initial decision in the lawsuit to deny the right to petition the government for redress of grievances under the 1st Amendment, a group of 62 questions relating to the Federal individual Income Tax, the U.S. Government would not answer. A three Judge panel, including the now Supreme Court Justice Brett Kavanaugh upheld the usurpation and the SCOTUS refused to hear the case. https://openjurist.org/485/f3d/140/we-the-people-foundation-inc-v-united-states So, we had in this case, just “four” people determining if Citizens have the Right to petition the Government for Redress of Grievances under the 1st Amendment and expect honest answers to those questions. Siding with Kavanaugh was Ruth Bader Ginsberg, Chief Justice and District of Columbia Circuit Court Justice, Judith W. Rogers. The initial Judge in the lawsuit at the DC Circuit was Judge Emmet G. Sullivan. I call them the four henchmen for usurping one of the most necessary rights of all. Our founding fathers petitioned King George as well and with the same results.
The proverbial question is why have a right to petition the government for redress of grievances, if the Government doesn’t have to honestly respond to questions pertaining especially to the tax laws of our nation? If they cannot answer such questions, how are they able to assess and enforce them?
It was the single most influential action taken by those in the U.S. Government that made me come to the very sad but honest realization, as those from Princeton University and other academics have concluded. That we are an oligarchy and not a democratic republic any more, quashing the entire notion of any possibility of representative democracy under our current leadership and system. IMHO, it is the judiciary that provides the legal precedence that has slowly allowed the expanded size and scope of powers beyond the constitutional limitations set force in our rules of law. There are legal and proper ways to amend our Constitution, yet the judiciary has ignored them on many occasions, legislating from the Bench as each political Party contends the other is doing. In all three of the above situations noted above, it was the Judiciary single handedly that was the final arbiter fostering the usurpation of rights protected by the Bill of Rights.
Here are the 62 Questions posed in the formal petition for redress of grievances under the 1st Amendment presented to the IRS Department of the Treasury, The President of the United States and all 535 members of Congress. https://jurists4justice.com/essays/62-questions-the-irs-government-refuses-to-answer/
It simply comes down to just nine people determining the laws for a nation of 325 million people; two much power in the hands of too few individuals. With the negation of the right to petition for redress of grievances, they have now blocked all of the Citizens ability of any method(s) of direct oversight over those in judicial power, as Thomas Jefferson warned so very long ago. You can vote your little hearts out and it will have little bearing, these justices are nominated and confirmed by the most politically powerful in our system. The President and 100 Senators now decide our judicial fate.
Then we wonder why the Government has grown from having just one tax, a luxury import tax, to taxing everyone and everything we do with Gestapo like tactics, WWII Germany would be proud of. Total government spending at all levels is now at $7.4 trillion “annually” and we must borrow $1 trillion of that annually, now placing every household in debt to the turn of about $175,000.00 with a total of just the Federal Government debt now surpassing $22 trillion.
We are literally indebting the future generations beyond their potential of paying it back without debasing our currency even more. Inflation has only been curbed by the poor economic conditions felt by everyone but the wealthy who appear to be oblivious to the effects placed on the middle to lower socio-economic spectrum.
Unitarianism is unique amongst religions because it is not derived by a superior authority. No one has ever told Unitarians they’re God’s chosen people nor do they believe God would chose one group of people over another. They believe the all of mankind are God’s chosen people and it is each of our choices to be within the grace of God or not.
They take the intelligence that God or nature has given us and use it to be the wisest and best people they can be. They recognize there is no material evidence except life itself that God even exists thus their belief in God is purely that; a belief. That hearsay passed down by whatever means does not constitute material evidence. They acknowledge that it is impossible to prove God exists, but they also understand that you cannot prove God doesn’t exists either, dethroning both the atheists and dogmatic religious arguments.
It is interesting to note that Gnosticism as practiced by many during the time of Jesus or some suggest Gnostic Christianity, that Jesus was actually a gnostic, have many of the same ideologies as unitarians.
They do not believe in the type of miracle’s that have no scientific foundation such as gathering up all the living creature on the planet and putting them on a large Ark for over a year, while the earth totally floods and recedes beneath them. Why would God kill all the species of land creatures except two of each to seek revenge against man for his wickedness when he can simply turn them to stone?
As Thomas Paine pointed out in his best seller Age of Reason, all the dogmatic religions suffer from the same problem of being created by political authority that were unscrupulous in their practices and authority. Each calling the others non-believers to justify their positions of superiority and power to rule over others.
He wrote “I believe in one God, and no more; and I hope for happiness beyond this life.
“I do not believe in the creed professed by the Jewish church, by the Roman church, by the Greek church, by the Turkish church, by the Protestant church, nor by any church that I know of. My own mind is my own church.
All national institutions of churches, whether Jewish, Christian or Turkish, appear to me no other than human inventions, set up to terrify and enslave mankind, and monopolize power and profit.”
“Each of those churches show certain books, which they call revelation, or the word of God. The Jews say, that their word of God was given by God to Moses, face to face; the Christians say, that their word of God came by divine inspiration: and the Turks say, that their word of God (the Koran) was brought by an angel from Heaven. Each of those churches accuse the other of unbelief; and for my own part, I disbelieve them all.”
Today, the remnants of these same churches are still at physical or psychological war with one another and each still claims to be the group chosen by God to have that authority.
Monopolies can exist in several situations but as you will come to understand, the detrimental effects are usually minimal when they do exist, except under very specific situations. Sadly, the political system and mainstream media have misled the American people into believing the government can and must be there to break these monopolies up when they do happen. We will review some very costly mistake initiated under corrupt motivations, of course, hidden by the passing of time.
Even though what I am writing here is well documented, I’m going to use simple economic principles and good old common sense to help prove these contentions. Just remember though, the studies have been done by academics supporting everything I write here. Two examples: https://goo.gl/5ASD6Q https://www.cobdencentre.org/2018/08/the-case-against-antitrust/
The most common “true” monopolies occur under two potential scenarios.
- The small-town monopoly. This is when you have such a small number of consumers in an area that having two stores supplying similar products or services would just not be able to be financially supported enough for both to be profitable. The small mining town hardware store is an example. The store may have to even charge higher prices to account for the extra costs in getting the goods transported to the remote location. The more remote the higher the transportation costs. You can go to many small towns in America and see this with even my small town as an example. We have one hardware store (a monopoly) but because we are not that remote, the prices have remained very competitive. Common sense tells us if you only have a small number of miners that can and will buy pickaxes and shovels from a supplier, why would somebody go through the expense of opening up another store to also sell the same things. Plus, some of the miners are going to bring tools with them, knowing that they would have to pay higher prices from the monopoly hardware store if they don’t, so these remote monopolies are not total monopolies, because they still have competition from the miners bringing in their own supplies.
- The New-Product/New Company Monopoly. The most famous case of a New Product Monopoly is the history of Alcoa Aluminum but there are many others. AIcoa was the company that invented the process for making aluminum, so initially, there wasn’t anybody competing with them, because nobody knew how to make aluminum before Alcoa started making it. It was by technological innovation, a monopoly.
Not surprisingly, Alcoa was able to make huge profits prior to other competitors entering the market. We saw this same thing with cell phones and calculators in their infancy as new products. They were very expensive when they first came out and today some companies are given them away for free, as marketing incentives.
Of course, the government jumped into the picture telling the public they needed to do something. What do you do with a new product monopoly, however, was the question? If you break up a company and nobody else can make the product, who is going to make the product or how do you break it up? Now, here is the really interesting part of this story and why Free Market monopolies, discussed below, don’t last very long. Whenever you have excess money being created by a business, i.e. profit, somebody is going to figure out how to compete against that company to get a part of it. In the case of Alcoa, a group of employees from within the company itself, broke off and formed a new company, obviously quitting Alcoa to compete for the excess profits. Soon others also entered the market as the uses for this very light metal increased. Today, much of an airplane and many products are made out of aluminum, so many companies around the world, now compete in this market. This story shows that true monopolies will disappear on their own accord as profits rise in any industry and others come in to compete. How much market share a company has, can get or may lose in the future is one major issue that every company must constantly evaluate for their specific market.
The most important elements or factor(s) involving monopolies; is if and when they harm consumers, workers or when they try to stifle competition, neither of which New-Product or Small-Town monopolies, can really accomplish. There are just not enough people affected to be of any significance, as we have already learned, someone will usually enter into the marketplace, if large enough, when there are price gouging and excess profits. This is common sense, right?
With New Products monopolies, the government also provides patent or copy write protections as an incentive to spend the time, energy and money to invent and create new products. This can create a problem as we are seeing in the pharmaceutical drug industry. Because of the tremendous amounts of money involved, the industry is pushing politicians and even Judges to extend the patent protection periods beyond the original guidelines established by law. Then we wonder why drug costs are so high. Obviously, those in government are allowing big business and money to manipulate and influence society to the detriment of the majority. This happened with anti-trust legislation as well.
- Government Granted Monopolies
This brings up and allows me to segue into another form of monopoly, those granted by legislative Acts at the various levels of government. It can be as simple as a garbage company getting from a local municipality exclusive territory for garbage collections or a central bank like the Federal Reserve Bank enacted into law in 1913 by an Act of Congress. These are potentially the most dangerous type of monopoly because the competition is prohibited and exclusive operating power is granted. Common sense tells us that granting a monopoly to one group or company is exacted what the Sherman Anti-trust Act was supposed to do, protect the public from Robber Barron’s overcharging. How does the government justify granting a true monopoly to a very financially powerful group of bankers and investors?
Why those in government think it’s good to have a monopoly in a public setting and a bad idea for a privately-owned company is interesting. Or are the wealthy special interests just able to manipulate the political system to gain special benefits and privileges? It is hard to know since no competition is legally allowed to see if one entity would do a better job at a cheaper price than the ones granted the monopoly.
Once again, history tells us different stories as to how monopolies have affected our lives. The government and mainstream media tell us one thing and academics and common sense often tell us another.
As an example, within just 16 years of the Federal Reserve Act of 1913 (FRA), our society was in the deepest and longer Depression in U.S. history, exactly what the FRA was supposed to stop from happening. Bank runs, another situation the Federal Reserve Bank was supposed to stop, put many banks out of business with vast numbers of depositors losing their money under bankruptcy protection and the allowance by the Federal Reserve Bank (FRB), to fractional lend; lending out more money by using existing deposits as collateral to borrow money from the FRB. We’re not really told that it was the FRB’s own policies of allowing fractional lending is what caused millions of Americans to lose all of their money held by the FRB’s member banks.
Is it just coincident that this happened? I always ask myself, why would a society grant a monopoly to some of the wealthiest banking families in the U.S. and world? The Warburg family as an example, with one of the three sons Paul, who helped plan the Federal Reserve Bank is from Germany and the family still operates their today. He had worked with bankers in England France and Germany before coming to the U.S. https://en.wikipedia.org/wiki/Paul_Warburg
One of the more recent best-selling books on the subject is The Creature From Jekyll Island, the non-fiction story about how Paul Warburg, other banking interests and U.S. Government officials met at Jekyll Island, GA, the hunting estate then owned by J.P. Morgan, to plan for the enactment of the Federal Reserve Act. Why was it secretly orchestrated and thus kept from most of the public eyes is a huge question? Some employees involved did leak it, but conspiratorial news back then travels at much slower speeds. Is it coincidental that the XVI Amendment allowing direct taxation on income without apportionment as well as the Revenue Tax Act of 1913 also passed that every year? That an income tax is the 2nd platform, and a central bank the 5th platform of communism and that the Zionist movement supporting these social policies was being financed by major world banking and corporate interests?
Then ask yourself, why would bankers and other corporate interests want a banking monopoly under their control and an income tax?
It is both more devious and brilliant than you can imagine. Corporate welfare long a favored social policy for wealthy special interest, started in the early 1800s with the western railroad expansion, expanded under the guise of the general welfare, for both more infrastructure and defense spending. The bankers were, of course, guaranteed their interest payment on the loans they gave these companies by the U.S. taxpayers who paid for all the government spending. The central banking monopoly guaranteed their participation in the creating of money, lending guidelines and the determination of interest rates. Now, this is where it’s good to know a little about finance and economics. A central bank can slow down economic activity by simply raising interest rates and requiring more reserves from the member banks as they have done multiple times through history. Individual and businesses are less likely to borrow money when interest rates are high and more likely to borrow when interest rates are lower. Common sense, right? Additionally, the member banks cannot borrow as much themselves when they must put up more reserves as collateral, thus they have less money to lend.
These two abilities give the Federal Reserve Bank the ability to literally slow down the entire economy or speed it up by lowering or increasing interest rates and reserve requirements.
Another huge question is, do they do it for themselves and other wealthy special interests or for what is in the best interests of the majority.
Free Market Monopolies
So far, we have only reviewed those monopolies that do exist most often in society but have minimal effects as do Small Town or New Product monopolies or can have profound effects if they are Government Granted ones.
As was previously briefly noted, true free market monopolies are very rare and if and when they exist, they are short-lived but here’s the problem. A true free market hasn’t really existed for very long, giving way to greater and greater government interventions after the overthrow of the European Monarchs in the late 1700s and early 1800s. Many smaller countries were still gaining their independence, well into the 20th century. Governments do not give up their powers and interventions easily.
The U.S. Federal Government started out with very few interventionists social policies with the entire Federal Government being paid for by only luxury import taxes. Not one single penny was paid by a Citizen of the United States to the Federal Government and what minimal taxes there was were assessed and collected by the State Governments. Consider that the best way of telling how capitalistic a nation is, by determining the total taxes and redistribution of wealth social policies. The less the size and scope of government through redistributive taxes, the more capitalistic and vice versa, they more taxes and redistribution of wealth programs the more “socialistic” your society is considered. In the generalized context, this is my favored method of looking at the effects socio-economics has on society and how we define them.
One could surely argue, that there are always various interests trying to manipulate the market for greater profits. how people do it is the key. If a company gets a local municipality to give it a garbage collection contract, they have just gotten a government granted a monopoly to pick up the trash from all the Citizens in that community. That’s obviously not a free market monopoly nor is generally the local sewer plant, unless it is a private sector company with no government restriction on who they can do business with and consumers are free to contract with others or have their own sewer system, both of which occur in our society. There are many smaller privately owned communities that own their own sewer treatment plants and people agree when they buy into the community to utilize the utility or provide their own. These are usually enforced with property covenants and restrictions as part of the deed when you purchase a property and the homeowners exercise management and financial control over the operations of the sewer plant. The point I’m trying to make is there is often two way to skin a cat and it doesn’t have to be by the government. However, government and special interest will often try to intervene, such as the local garbage company noted above despite constitutional prohibitions legally prohibited Municipalities from granting monopolies to private companies.