The Fed Is Dead… Long Live The Fed

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jumblies's picture
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The Fed Is Dead… Long Live The Fed

In celebration of the Independence Day, Dave has an important announcement to make about the future.  Dave has reason to believe a decision has been made to fundamentally restructure the finances of the United States in a formal consolidation with the European Union via the elimination of the Federal Reserve and the introduction of a new “divorced” currency system.  How does Dave know this you ask?  Take a look at the evidence.

Saw a link to this article in a user comment on ZeroHedge and I thought it was quite interesting, something worth reviewing perhaps. Does his idea make sense? What would be the impact in terms of food/gas/PM prices, social stability etc?


Damnthematrix's picture
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links'd be nice....?

jumblies's picture
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The link to the comment in

The link to the comment in the ZeroHedge article is here. The article to which the comment linked was the one at the start of my original posting but it's here if scrolling isn't your thing :)

I've not seen the site before and now having read a number of his posts I'm finding it rather compelling writing.


hucklejohn's picture
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A coming "divorced" currency?

Just to recap, so that there is no misunderstanding.  Dave’s making a bold claim.  The Fed is toast.  Not because of some libertarian movement, but because it no longer serves it’s purpose as a tool for financial leverage.  Sure, Ron Paul is a player in this, but his Von Mises plan has been co-opted and become the Von Sunstein (read Sheryl Sandberg) plan for behavioral economics.  When the likes of Ron Paul and Ralph Nader agree on the plan you know something is up.  What’s up is something known as libertarian paternalism.  What does it mean?  That’s simple.  It means that someone else claims to know what is best for you and your family.

In this case, that thing that they have decided is best for you and your family is to swap sovereignty in exchange for the elimination or at least the significant curtailment of systemic risk.  From a business perspective that makes perfect sense.  However, I don’t recall the last time (Fukushima withstanding) where people said they were willing to go to war and die for their business.  Then again, we have Blackwater and drones for that.  Those who have lost family members in the defense of the freedoms of our country (and Greece for that matter) should be in an uproar over this plan.  The sovereignty of nations is being bought and sold like so many playing cards.  The fact that the United States is the consolidator rather than the consolidatee doesn’t make this any less of a tragedy and a dimunition of the sacrifices made for those who believe(d) they were fighting for our country. 

Fortunately for most of the grandmother’s out there who have photographs of their grandsons sitting atop their mantles who gave their lives in defense of liberty, they’ll never know what hit the currency.  You see in the new “divorced” currency system, the top layer will still be dollars, but the pension money will be tied up in the new gold-backed SDR’s (Special Drawing Rights) that you don’t see.  It’s like having your sovereign cake and eating it too.   Which is worse?  Continuing to penalize grandma with a zero interest rate on her savings or boosting interest rates along with the stock market.  There’s something for everybody in the new plan, just don’t ask the new Treasury Secretary if  “In God We Trust” is printed on the SDR’s.   

The above was excerpted from

This could use a lot more discussion.  The "heavy hitters" are out there in the press trying get on record ahead of the curve because they know -- or think they know -- what's coming next.  I would emphasize the point that Bernanke admits he cannot explain what's going on in the economy.  This is a big deal. For years the Federal Reserve's policies have been a disaster for the economy, thinking they can override the business cycle.  The Fed has always maintained, relying upon mainstream economics, that they have the ability to finetune the economy. Also, that 2008 crisis just happened out of the blue, that no one could have predicted it, and the Fed now has "everything under control."  Except that QE1 didn't work,  Nor did QE2.  So what's next? A stealth QE3?  Who knows?   Many folks believe the Fed's propaganda (although not regular readers of this site).  Maybe even Bernanke believes what he says.  He is either a liar or a fool or both.  Now whether the Fed is toast as Dave says I'm not sure.  But I've got to believe as a minimum that Bernanke is toast & will not likely finished his current term.

Dave gave only a one line sentence description of this coming "divorced" currency: "You see in the new “divorced” currency system, the top layer will still be dollars, but the pension money will be tied up in the new gold-backed SDR’s (Special Drawing Rights) that you don’t see."

So how does this "divorced" currency this work?  This needs a lot more explanation.  Maybe someone can explain it.  Maybe if we can get ahold of Dave he can explain it!


jumblies's picture
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So how does this "divorced"

So how does this "divorced" currency this work? This needs a lot more explanation. Maybe someone can explain it. Maybe if we can get ahold of Dave he can explain it!

Dave does explain this, and a number of other issues, in other postings. His Chancellor Plays Hide The Trojan is where he explains that:

Dave has written on this blog many times before about the ingenuous proposal of one Sir Mervyn King, Governor of the Bank of England. You see Mervyn has proposed the same thing that so many people believe will solve their financial problems… divorce. Mervyn has suggested that we need to divorce our currency into two halves. If you’ve been reading Dave, then you know already that money is designed to serve two distinct purposes; a) to streamline the the double coincidence required to satisfy our needs and wants, and b) as a form of wealth storage.

Mervyn’s plan is to simply separate those two functions into two entirely separate currencies. His argument is based on the fact that it is impossible for banks to engage in fractional reserve lending while simultaneously insulating themselves from a global bank run. This has gotten to be a much bigger problem now that hedge funds have a global footprint and the capability to unload massive pain upon sovereign governments in a matter of minutes. Even with a global fiat cartel centrally managed out of Basel’s BIS, the privateers are able to outrun the private central banks and capitalize on the fear of local populations no matter how quickly Ben’s helicopter drops of liquidity are deployed.

The answer to this problem is quite simple. Completely remove the fractional reserve aspects of part (a) of the currency. If you think this would be impossible, then there’s something that you don’t understand about money and rich people in particular. Rich people, as a general rule, don’t spend much money. I realize you may have been watching television, but trust Dave on this one, most wealth is in the hands of little old ladies and little ladies by and large are the penny pinchingest people on the planet. So, what’s my point.

He goes on to explain about the second half but I suggest you read his full posting which I won't copy 'n paste here.


dshields's picture
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Joined: Oct 24 2009
Posts: 599
not any time soon

I do not think something like this is going to happen any time soon.  There are way too many vested interests in the current monetary system.  It would end up a massive haircut for the richest and most powerful.  They are not going to take to kindly to that.


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