My Interview with MMNews, Germany

Lars Schall of MMNews Germany has recently interviewed many outspoken critics of the inner workings of our global financial system including former Federal Housing Commissioner and Solari Inc. President Catherine Austin Fitts and Associate Professor of Economics and Law at the University of Missouri, Kansas City (UMKC) William K. Black. Below is my recent interview with Mr. Schall.

"We Don't Need Central Banks," By Lars Schall

Mr.
Kim, in your point of view our current fiat money system does not only belong
to the root causes for the financial/economic crisis we’re going through, but
also that it is fraudulent per se. Why so?

Well, the reason I believe it’s fraudulent
is because our current money system is a system that creates money as debt. If
we had no debts in our global monetary system, no money could exist. That’s a
fairly ludicrous concept if you think about it. It’s also a system in which
central banks are allowed to print money – and when I say “print money” I use
this term very loosely, because the predominant amount of money today is
created as digital debits and credits. So when we think of fiat money, most
people think of paper money, but in reality most paper money doesn’t even
exist. It’s just digital credits credited from central bank to regional banks
to commercial banks and then to the various creditors and debtors in the
system. So there’s virtually zero labour that’s being performed and banks
charge consumers interest on this absence of labour. Centuries ago, we used to
call that usury and fraud. Today we just accept it as the way the system works.

Do
you believe that a gold standard could have worked given the real economic
growth?

I don’t see why not. The arguments against
a gold standard are mostly propelled by bankers that want the status quo and
fraud to continue. There’s nothing about a gold standard that would hold back
economic growth. In my opinion a gold standard would keep money honest. If we
look at some of the most prominent central bankers in the past, for example,
Alan Greenspan – he said a gold standard would set interest rates in the
economy on its own at a proper rate and regulate economic growth to contribute
to steady growth without the boom-and-bust cycles that we experience every few
years. I definitely believe that it could work.

Is
actual the “fraudulent monetary system” the problem or rather the “fraudulent
money men”?

That’s a very interesting question and
I’ve heard arguments on both sides. There are people who say it doesn’t matter
if money is sound or unsound if criminals run the system as they do today. I
disagree with that. Under a sound monetary system, people will ultimately
control the value of money. With the unsound system, that we have today, “the
money masters”, “the money men” or whatever you want to call them, they control
the value of money.

For example if people look to Bretton
Woods and say that it is an example of the gold standard not working, that’s
simply not true. Under Bretton Woods, a true gold standard never existed.
That’s what happened: the bankers were basically lying to the people about
maintaining a true gold standard. France called the US bankers’ bluff in not
maintaining the gold standard and that’s why it fell apart. So this is an
instance where we had a relatively sound monetary system and even though the
bankers were committing fraudulent practices under this system, the people
ultimately were still able to control the value of money. That’s why President
Nixon had to close the gold window – because the people were forcing the
bankers to lose money when they committed fraud. And that’s why the financial
oligarchs do not want a sound monetary system because they lose control over
the value of money.

Why
do you think that central banks do “more harm than good”?http://www.mmnews.de/index.php/english-news/5555-we-dont-need-central-banks
- _edn1

Because they prevent free-markets from
operating. What they do is that they set interest rates at either artificially
too high or artificially too low rates, to create booms or busts. In reality, a
boom is not really a boom, but it’s a distortion of free-market prices above
and beyond what the free-market would set. And then they create the busts which
are not really busts, but just collapses of distorted prices returning to their
free-market equilibrium.

Central banks create these booms and busts
in part because commercial banks profit from them. The Goldman Sachses, the JP
Morgans of the world, they make tremendous amounts of money on the upside and
downside of the boom-bust cycles they help create. That’s why I say Central
Banks do more harm than good. If they would just get out of the way and let
free-markets operate, then the free-markets would set the interest rates. We
don’t need central banks.

But the reason why the majority of people
think that the absence of Central Banks would lead to chaos is because we’ve
been taught this lie by bankers for hundreds of years. Did economies not
function before we had Central Banks? Of course they did, and they would
function with more stability without them.

What
was/is the Federal Reserve’s contribution to this crisis?

I think everything, although of course the
media and the Federal Reserve always state that they did not contribute to this
crisis at all. But I think that the Federal Reserve –  not just by itself,
though it is the most powerful central bank of the world – but I would say that
central banks contributed to this crisis.

In America in particular, the Federal
Reserve helped to destroy the Glass-Steagall regulations. It was Alan
Greenspan, who catered to the agents of JPMorgan, Goldman Sachs, Citigroup, and
the behemoths of the banking world and allowed the creation of all kinds of
financial derivative products that were not well understood. In the process, he
destroyed almost all of the regulations that protected the consumer.

And in fact, Citigroup, which was the
merger of the Traveler Group and Citicorp, was created before the entity was
even legal. If you investigate how that happened, you will find out that
Citigroup CEO Sandy Weill basically had access to a direct line to Alan
Greenspan and he was assured that legislation would pass that would make
Citigroup legal even as Sandy formed this new company during a time it was not.
The Federal Reserve always says: “We protect the people.” But the whole
creation of Citigroup is much more an act of Fascism than that of a Democracy
or a Republic.

Are
you supporting the House Resolution 1207 Federal
Reserve Transparency Act of 2009?

One hundred per cent I support it, but I
have extreme reservations of the potency of the final iteration of the bill if
and when it finally passes. The bill still has to pass through the Senate as
Senate bill 64, and Senate is much more closely aligned with bankers than the
House of Representatives. It’s in the Senate where a lot of it will be
destroyed. I would hope that it get passed in its original format but I have
grave reservations that it will.

Do
you believe that the current legislative initiative by President Obama and the
Democrats are enough to prevent future crises? Or is it just the same as with
the Audit the Fed bill?

Yes, I think it’s the same. It’s lip
service. I mean, when you look at Obama’s cabinet, it is even more Wall Street
than Bush’s. Almost everyone that occupies his cabinet and his Economic
Advisory Council are from the highest echelons of Wall Street. In my opinion,
when you look at history, when has government ever produced any real change?
Real change, in my estimation, always comes from individuals like Gandhi,
Nelson Mandela and Aung Sang Suu Kyi, but a government will always revert back
to what it knows best, which is corruption. Corruption is the natural state of
equilibrium for all governments. If we believe otherwise, we are not being
cynical, but we are being self-delusional.

If the choice was yours,
what would you do in order to prevent a deflationary collapse?

Actually, I don’t think that we’ll have a
deflationary collapse. We’ll have deflation in the short-term when markets
crash and derivative contracts have to be settled at their true market value,
but long-term I believe that we’ll have severe inflation.

In the short-term we’ll probably
experience the worst of both worlds, meaning devaluing currency and devaluing
assets.If you look at what happened in the Weimar Republic, at the very
beginning of this crisis in Germany, the top economists were arguing that a
deflationary collapse was going to be the outcome of Germany’s economic
policies. But eventually hyper-inflation arose.

If you look at the bailouts that Central
Banks passed in response to the market crash on Thursday, May 6, you had almost a trillion euros pledged
to the EU. I think that central banks have already shown the world that their
plan is to devalue all major world currencies into oblivion. You can have a
short-term deflationary collapse, but I think eventually a very significant
inflation and much higher interest rates are in our future.

One part of the
fraudulent environment in which finance / economics have to operate is since
the Executive Order 12631 of March 18, 1988 the “Working Group on Financial
Markets” a.k.a. the Plunge Protection Team (PPT).http://www.mmnews.de/index.php/english-news/5555-we-dont-need-central-banks
- _edn2 This order says that the main task of the PPT is to stabilize the financial markets – but not in a way that is
obvious for everyone. Is the modus operandi of the PPT in general a kind of
modified version of Adam Smith’s “invisible hand”, Mr. Kim?

To my understanding the “invisible hand” always
implied free-markets and that there were these invisible forces that would
basically set the equilibrium between supply and demand for various goods and
services by helping to set interest rates. However, as long as we have central
banks, we cannot have free-markets. So in the absence of free-markets, I don’t
believe we can have an “invisible hand.” To say that the PPT works as this
“invisible hand” is only correct in the sense of the word “invisible” –
 that we don’t see its workings. But the PPT is manipulating supply and demand
for various goods and services. The PPT, in fact, is un-American and against
the very principles of a Republic in that it prevents the existence of
free-markets.

You noted in an
article from January 25, 2010 the following:

“Almost 100% of
the gains in the US stock market since September 14th have been manufactured in
after-hours trading with enormous purchase of market futures. Strong
circumstantial evidence points to this large buyer’s identity as the Plunge
Protection Team.”http://www.mmnews.de/index.php/english-news/5555-we-dont-need-central-banks
- _edn3

I have asked
investment manager Marshall Auerback (RAB Capital Plc) if he agrees on that
observation. He replied:

“I
certainly agree that the market has been subject to some very odd trading
activity and that there is a lot of circumstantial evidence to suggest official
manipulation.”http://www.mmnews.de/index.php/english-news/5555-we-dont-need-central-banks
- _edn4

My question for
you: how do this “circumstantial evidence” look like?

We could probably talk for an hour on this subject
alone. It’s actually everywhere, you just have to dig to find it. At least in
US-markets, we’ve had enormous rallies in finance stocks in the last ten
minutes of trading on numerous days, enormous spikes in volume in the last half
hour of trading when volume has been flat for the whole trading session, and so
on. These types of actions indicate that someone wants to prime the marks
higher for the following day.

During the rally of US markets for the first half of
2010, almost every single dip below technically important support points, which
technical traders follow like the Bible, were bought to push indexes back above
certain important technical points that would have triggered the black boxes
and automatic selling. For the first six months of 2010, almost every single
important failure in technical support levels were immediately reversed. I’ve
never seen that happen before in 20 years of following the markets.
Furthermore, at times during this rally, there were enormous amounts of S&P
500 futures contracts purchased by unknown entities after market close and
before market open the next day. The only institution being capable of this
kind of enormous buying is the Plunge Protection Team directed by the Fed and
the US Treasury. Whether or not Goldman Sachs and JP Morgan were involved in
this activity remains unknown.

Even last year, between September 14^, 2009
and January 2010, 100% of the gains of the US-market basically occurred in
after hours trading when markets are illiquid and very easy to manipulate. I
can also think of multiple days for multiple weeks on end when you would have
40% of the New York Stock Exchange composite volume comprised of just four
stocks! From the top of my head, I believe these stocks were Citigroup, AIG,
Fannie Mae, Freddie Mac and maybe Bank of America alternatively replacing one
of those previous four at times. How can you have 40% of the composite volume
of the New York Stock Exchange contain trading in just four stocks? That’s
ludicrous! So I would say that this is very, very strong circumstantial evidence that markets are being manipulated.

Will the Plunge
Protection Team soon reach the limits of its
capability to manipulate the stock market?

Yes, I think it will, because these
“recoveries” that are being sold to the world, in my estimation, are only a
recovery of stock markets. For instance in the US you still have a very high
rate of unemployment, you really don’t have any strong economic growth, job
creation or manufacturing growth. What is happening is just a re-inflation of the
stock market bubble. You had that pattern over decades – boom, bust, boom, bust
– and every time it busts, the PPT will step in and re-inflate the bubble.

Each time it re-inflates it, it has less
and less tools at its disposal to re-inflate it, because typically they cut
interest rates to re-inflate it, so now, because interest rates are still next
to zero in the United States, the only way they can re-inflate it is by
injecting trillions and trillions of dollars into the system. But eventually
it’s building to become the mother of all bubbles. When it bursts next time, I
don’t think they will have the tools and mechanisms at their disposal to
re-inflate it anymore.

What
does the existence of the PPT and its kind of business mean in its inner core
for the reality of the “free-markets”?

I really think there are no free-markets.
That’s always been my contention that all markets are rigged - whether you look
at commodity markets, currency markets, stock markets, and even real estate
markets in some capacity because they depend on interest rates that central
banks set and not the free-markets. Basically, I think until we get a sound
monetary system in place and perhaps even dismantle central banks, that we will
have no free-markets anywhere in the world.

Another
“playground” for the PPT in combination with bullion banks such as Goldman
Sachs, JPMorgan Chase and the Deutsche Bank is the gold market. Do you have any
doubts that the gold price is highly manipulated since the mid-1990’s?

Again, all these things are very, very
hard to prove. There are just Everest-sized mountains of very strong
circumstantial evidence. But I would argue that the gold price has been highly
manipulated even before the gold-window was closed in 1973, and even in the
decades prior to the mid-1990’s, because gold has forever been the kryptonite
of central bankers. As gold rises it’s a weathervane for inflation and an
indicator of the lack of integrity of fiat currencies.

So central bankers always have had an
interest to suppress the price of gold since bankers existed. One of their main
mechanisms in the past was actually to sell-off physical gold reserves. But now
since they’ve depleted much of their physical reserves, their main mechanism to
manipulate gold and silver prices is through the futures-market and basic
propaganda they plant in the media. They basically committed reversed alchemy:
they turned physical gold and silver into paper on the futures-market.

Do
you see a connection between the suppressed gold price and the “strong dollar
policy”?

Yes, I know Tim Geithner and every
Treasury Secretary before him says: “We have a strong dollar policy.” But it’s
almost laughable. When he has gone to China, even university students in China
laughed at him when he has mentioned the “strong dollar policy.” How can we
have a “strong dollar policy”, when the dollar has lost 96% – 98% of its value
since 1913? I think in that sense the bankers have learned from Hitler’s
Propaganda-Minister Joseph Goebbels a good lesson as Goebbels said something to
the effect of, “You tell a big enough lie often enough it becomes the truth.”
That’s why people believe that the US has a “strong dollar policy.” We’ve never had a “strong dollar policy” since
the birth of the Federal Reserve.

Is
the manipulated gold price an immensely underrated feature of the current
crisis?

Yes, I think it is. It is hard to predict
where the gold and silver price will go but I think if U.S. regulators stepped
in and said Goldman Sachs, HSBC and JPMorgan couldn’t participate in the gold
and silver futures-market for three weeks – I really think you would see the
gold and silver price more than double in that time. I mean, it’s immensely
manipulated.

As
you know, one organization that tries to expose the rigging of the gold market
for years, the Gold Anti-Trust Action Committee (GATA), faces huge problems to
get “air time” since its founding in 1999. Why do you think that especially the
US and British media is so silent about what GATA has to say? Isn’t it an
indicator among others that journalism itself is in a profound crisis of its
own?

Yes, I believe it is. I believe that
investigative journalism is almost dead. You have better investigative
journalism regarding the financial markets on financial blogs today and in
independent newspapers than you ever would receive in the mass media. I think
that’s an indictment of how far mass media journalism has fallen from its once
lofty perch.

I should know more about media outside the
United States, but I know within in the United States, the bankers have always
made an effort to control the media. I know that the Rockefellers, for example,
have in the past thanked Time Magazine for its silence about some of their
financial initiatives, stating had it not been for their silence, that they
wouldn’t have been able to accomplish the vast majority of their financial
objectives. And in the US, I do know as well that there are only a handful of
companies that control 90% of all media -that’s all TV, radio and newspapers.

So I think either the truth is outright
censored or there is actually a concept in journalism that is called
self-censorship.  Journalists learn by the pattern of promotion within the
newspaper, the Radio station, or TV station they work for, what they can or
cannot say. They actually self-censor themselves over time as well, which is a
shame, but that’s just the way it is.

GATA
claims the central banks have less than 15,000 tonnes of gold left in their
vaults versus the gold establishment, which claims they have 30,000 tonnes. The
point of Bill Murphy & Co. is none of them take the gold into the account
fed into the physical market to suppress the price over the past 15 years. What
do say to this?

I think it’s definitely less. To tell you
the truth, I’m not aware of how GATA has come up with that figure of 15.000
tonnes, but I would agree that there is less than what the central banks say
they posses. If we review the history of bankers, we have Alan Blinder, a
former vice-chairman of the Federal Reserve, that said: “The last duty of a
central banker is to tell the public the truth.” So why anyone in their right
mind would ever believe anything that bankers have to say, I have no idea.

Even when we look to China, in 2009, they
announced that they virtually doubled their gold reserves from the figure they
had given in 2003. So they basically lied to the world for six years regarding
their gold reserves. There is a pattern here. In China’s instance it made sense
for bankers to conceal the truth, because they didn’t want to reveal their gold
purchases as this very revelation would have driven the price of their gold
purchases higher.

On the opposite side of this equation, if
you were trying to sustain a fraudulent monetary system in which you have the
power to arbitrarily revalue everyone’s money at will, then would you lie about
the amount of gold you really possessed? People have faith in the solvency of
their governments because of the amount of gold they own. But what if these
governments, under direction of their banker masters, sold this gold off over
the past few decades to suppress the price of gold? Then would you lie about
how much gold you had? Of course you would.

To understand these criminals, you have to
think like a criminal. I would definitely say that there probably is less gold
on hand than central banks claim they have or the IMF claims it has as well. If
they have nothing to hide, let an independent auditor appointed by the people
(not selected by them) audit their reserves. They could end all the controversy
about their gold reserves with one simple independent audit.

GATA
has its supporters and many critics. Yet GATA has been right about the
direction of the gold price for TEN years while most of the gold establishment
and the Wall Street analysts have been neutral to bearish - and still are. What
do you make of that?

It’s easy to know why Wall Street is
neutral to bearish most of the time, because they don’t make any money if
people buy gold. These firms make their money primarily from fee based
management, that’s what they direct their clients into – fee-based products.
There are still old school wealth managers that still churn accounts to earn
money from commissions, but either way they don’t make money when people just
buy gold and it sits there.

That’s why HSBC ordered their smaller
private clients to move their gold out of their vaults in New York at their own
expense, because it’s not a profitable business for them though it’s very
profitable for their owners. They want people to buy stocks and any assets the
can charge an annual fee for. I think that’s why they are neutral to bearish
and still are, even as the world’s major currencies move closer and closer to
collapse.

Mr.
Kim, I know that you follow closely GATA’s “battle royal” with the Commodity
Futures Trading Commission. Why is this important?

To expose, I suppose, the whole fraud of
the financial system from top to bottom. The financial system is corrupt at its
core all the way through. When you look at the CFTC or any regulatory
commission like the SEC, they have not just one huge glaring failure in
protecting the consumer, but have suffered numerous huge failures. We’ve had
the same fight with rating agencies that failed miserably to protect the
consumer, like Standard & Poor’s and Moody’s. Their battle is important
just to expose corruption and just to expose the fact that our regulators are
not really on the side of the consumers. It’s important for consumers to
understand that. The fact that all of their failures have hardly resulted in
any firings, let alone any jail time, just proves to the consumer, how
collusive is the fraud of the financial industry.

One factor that
let the gold price rise is that mining supply is decreasing. Do you think we’ve
passed peak gold?

I would say that if any monster deposits are to be
discovered in the future, that it will take a long time for those large
discoveries to be mined out of the earth. I say this because it seems that all
significant open pit gold deposits, the rich veins of gold that are easily
accessible, have already been discovered. Even if there is a large discovery in
the future, normally it will take, on average, about ten years for those
deposits to move into production, because they’re so deep underground, in not
easily accessible geographic locations, or in politically unstable regions. Any
large discovery today is not going to increase the supply of gold overnight.
And this will keep gold supplies very tight for a long while.

From peak gold
to peak oil. What are your thoughts on this issue? Is peak oil real? And how
does it influence your investment choices?

Whether peak oil is real or not to me is irrelevant.
What I mean by that is trying to understand if peak oil is real or not is like
trying to figure out who shot President Kennedy. We’ll probably never know,
because we’re not in the category of “need to know”. Only a few people in the
world fall into that category. Possibly all the leaders of the OPEC nations
know if peak oil is real or not. But all I try to understand are how markets
are rigged, whether those markets are oil, gold, silver, stock markets, etc.

If I can understand these rigging games, then I can
understand if oil prices will move up or down regardless of whether peak oil is
real or not. We can have all the reports about production levels in Mexico and
other oil producing countries drastically falling, but the integrity of these
reports are only as good as the people producing them. That’s what most people
tend to forget. If you can’t really trust the people producing the reports,
then you shouldn’t trust the reports. That’s all I need to understand. I don’t
need to understand if peak oil is real or not to make money in the market.

Steven Kolpits,
head of the New York office of Douglas-Westwood, gave last September the
following percentage calculation for the U.S.:

”The US has
experienced six recessions since 1972. At least five of these were associated
with oil prices. In every case, when oil consumption in the US reached 4%
percent of GDP, the US went into recession. Right now, 4% of GDP is $80 oil. So
that’s my current view: If the oil price exceeds $80, then expect the US to
fall back into recession.”http://www.mmnews.de/index.php/english-news/5555-we-dont-need-central-banks
- _edn5

What are your
thoughts on this, especially since the oil price is about to exceed $80? Will
this be the end of “the road to recovery”?

The more important point to address in all of this is
that I for one don’t really subscribe to these past historical equations like:
4% of GDP, then we go into recession or more than 200% of GDP in debt, then we
have a currency crisis, etc. etc. Because when you really look at it you have
to consider, “What is true GDP?” We know it’s certainly not the figures our
governments tell us. Everyone knows that every government in the world lies
about these statistics, they massage them, they manipulate them and they’re not
the real statistics. When you try to measure something as a per cent of a lie,
then you have to figure out how much or each statistic is a lie.

The fact is that if you look over time most
governments have changed those equations for GDP, the components of what goes
into GDP, the components of what goes into inflation. So you’re not comparing
apples to apples anymore. You’re comparing apples to oranges. The key economic
indicators and statistics produced by the government today are produced with
equations that are vastly different than the equations used to determine them
just 20 years ago. Thus, unless you take the time to revert to calculating
these key economic indicators using the same equation, all of these comparisons
ring false and are an utter waste of time.

I would ask instead: Have we recovered? Are we even
out of recession? Well, that would be news to me. I think all government
statistics are distorted, so you try to look at what the true statistics are.
Are you familiar with Shadowstats?

Yes.

For instance in the U.S., Shadowstats will take the
pre-Clinton years equation for inflation and then try to figure out what
inflation really is today. That is more important, because when we start
looking at percents and statistics, the equations have to be constant between
differing time periods; otherwise, you’re not really comparing apples to
apples.

But given that
energy is the basis for growth it will be hard to make a recovery happen, isn’t
it?

Yes, with rising energy prices any recovery will be
difficult. But in the same aspect what is a large component of the price
increases in energy, food and other costs of living? It’s the devaluation of
currencies. So they go hand in hand.

Food production
and prices are closely intertwined with oil and natural gas.http://www.mmnews.de/index.php/english-news/5555-we-dont-need-central-banks
- _edn6  What do you see coming in that
respect?

If we see an extended period of collapses in stock
markets and other financial markets, we’ll get a short period of deflation, but
that will be replaced by inflation eventually as all governments try to inflate
away their debt and print their currencies into oblivion. Eventually although
you may see a deflation in food prices and energy if we get a stock market
crash, down the road, I’m quite convinced that there will be an explosion
higher in food prices.

Tensions
between the U.S. and China are growing – not least because of the energy
situation around the globe and their dependency on hydrocarbons. What can be
done to end this collision course?

That’s a very good question. I don’t buy the fact that
we can’t figure out an alternative to hydrocarbons and the internal combustion
engine. We’ve been smart enough to send manned missions to the moon and maybe
in the future even to Mars. I’m certain we can find alternative solutions to
our energy crisis.

But I think the problem underlying everything is how
corrupt even our political system is today. Politics are directly tied into the
problem of the economic world, because lobbyists work so hard and they’re so
well funded. For example, the lobbyists of the oil industry work hard to kill
the introduction or development of technology that threatens the profits of the
oil industry, even if those technologies will benefit society as a whole.

It’s such a massive problem. We have to restructure
first of all how our political system works and hopefully try to install the
principles of Republics instead of the current structure of empires and
plutocracies, which is all we have today. And if we can restructure our
political system, then perhaps we’ll rid ourselves of Machiavellian lobbyists
and perhaps begin to reward innovation that benefits society instead of
rewarding the greed of corporations.

Is the Chinese
financial / economical system by now on an inevitable crash course – a ticking
time bomb?

I think so, though you have a lot of people who still
believe that Asia will be okay, even when the second phase of this crisis hits.
When I look at it, I’m not an expert on China by any means, but when I look
into their banking system, I see that their risk management is atrocious. There
was a point not too long ago that Chinese banks were lending to nearly every
and any business that asked for a loan. That’s not smart monetary policy. Sure
there are profits to be made, but we saw the excesses of that type of greed in
the US subprime mortgage market. The unwinding of this greed in China, when it
happens, will not be a pretty exercise.

Furthermore, China’s banking system is based on fiat
money just like every other monetary system in the world. They re-inflated
their stock market bubble like everyone else. So certainly they’re not immune
from the consequences of implementing unsound monetary policies, which they
have. They’ve been selling the short-term results of this unsound monetary
policy as growth and recovery just like every other government, when every
single problem that created the first phase of this crisis has neither been
addressed nor fixed.

May I also ask
for your thoughts related to the crisis of the European monetary union? Is the
euro already dead? And what would be the outcome of this agony?

The euro will either die or we’ll get massive
inflation in the EU. But the same applies to the Japanese yen, the British
pound sterling, and the US dollar. We have only the corrupt and the more
corrupt running our countries. Though it’s a cliché, due to foolish, foolish
monetary policies implemented by Central Bankers worldwide, all leading
economies are between a rock and a hard place today. So what outcome can we
choose? It’s only worse or worst.

One final
question. Isn’t it true that one has to be a bit of a “conspiracy theorist“ these
days in order to make good successful investments?

Not at all. I don’t engage in conspiracy theories. I
would say that our modus operandi is rooted in fact, and that the “reality”
that most people believe today is rooted in lies. This is how twisted the
financial world has become. At my company, SmartKnowledgeU, we dig deep to
uncover facts that help us work our way through government deceit and the muck
of the commercial investment industry. Then we draw intelligent deductions from
these facts.

As I said, there is more deceit and falsehood out
there than truth. By nature, when you start trying to propagate the truth,
those in power will always be eager to discredit the truth by labelling them as
conspiracy theories. These commercial investment firms, global banks and Wall
Street cabals cannot make money if people know the truth. This is why they hire
and delegate so much money to PR and to controlling media and image. They
cannot afford to have people know the truth. Ignorance is the key to their profits.

But there’s nothing I have said or propagated that is
not one- hundred percent logic, intelligent deduction, or rooted in fact.

Thank you very much for taking your
time, Mr. Kim!

SOURCES:

---

http://www.mmnews.de/index.php/english-news/5555-we-dont-need-central-banks
- _ednref1compare J.S. Kim. “Central Banks: More Harm than Good?”, published at Seeking Alpha on September 24, 2009
under:

http://seekingalpha.com

http://www.mmnews.de/index.php/english-news/5555-we-dont-need-central-banks
- _ednref2Executive Order 12631 -- Working Group on Financial Markets

By virtue of the authority vested in me as President by the
Constitution and laws of the United States of America, and in order to
establish a Working Group on Financial Markets, it is hereby ordered as
follows:

Section 1. Establishment. (a) There is hereby established a
Working Group on Financial Markets (Working Group). The Working Group shall be
composed of:

(1) the Secretary of the Treasury, or his designee;

(2) the Chairman of the Board of Governors of the Federal
Reserve System, or his designee;

(3) the Chairman of the Securities and Exchange Commission,
or his designee; and

(4) the Chairman of the Commodity Futures Trading
Commission, or her designee.

(b) The Secretary of the Treasury, or his designee, shall be
the Chairman of the Working Group.

Sec. 2. Purposes and Functions. (a) Recognizing the goals of
enhancing the integrity, efficiency, orderliness, and competitiveness of our
Nation's financial markets and maintaining investor confidence, the Working
Group shall identify and consider:

(1) the major issues raised by the numerous studies on the
events in the financial markets surrounding October 19, 1987, and any of those
recommendations that have the potential to achieve the goals noted above; and

(2) the actions, including governmental actions under
existing laws and regulations (such as policy coordination and contingency
planning), that are appropriate to carry out these recommendations.

(b) The Working Group shall consult, as appropriate, with
representatives of the various exchanges, clearinghouses, self-regulatory
bodies, and with major market participants to determine private sector
solutions wherever possible.

(c) The Working Group shall report to the President
initially within 60 days (and periodically thereafter) on its progress and, if
appropriate, its views on any recommended legislative changes.

Sec. 3. Administration. (a) The heads of Executive
departments, agencies, and independent instrumentalities shall, to the extent
permitted by law, provide the Working Group such information as it may require
for the purpose of carrying out this Order.

(b) Members of the Working Group shall serve without
additional compensation for their work on the Working Group.

(c) To the extent permitted by law and subject to the
availability of funds therefore, the Department of the Treasury shall provide
the Working Group with such administrative and support services as may be
necessary for the performance of its functions.

Ronald Reagan

The White House, March 18, 1988.

published on the website of the Presidential Library
of Ronald Reagan under: http://www.reagan.utexas.edu/

http://www.mmnews.de/index.php/english-news/5555-we-dont-need-central-banks
- _ednref3J. S. Kim: “ The Second Phase of the Global Economic Crisis Is at Our
Doorstep”, published at Seeking Alpha
on January 25, 2010 under: http://seekingalpha.com/

http://www.mmnews.de/index.php/english-news/5555-we-dont-need-central-banks
- _ednref4compare Lars Schall: „Bis hierher lief’s noch ganz gut...“, published at
MMNews on January 31, 2010 under: http://www.mmnews.de.
See also Joe Weisenthal: “TrimTabs CEO Biderman: I Think The Government Is Buying Up The Stock
Market, Though I Have No Evidence”, published at Business Insider on February 4, 2010 under: http://www.businessinsider.com/

http://www.mmnews.de/index.php/english-news/5555-we-dont-need-central-banks
- _ednref5Steve Andrews: “The first peak oil recession”, Interview with Steven
Kopits, published at Energy Bulletin on
September 14, 2009 under: http://www.energybulletin.net/node/50109#

http://www.mmnews.de/index.php/english-news/5555-we-dont-need-central-banks
- _ednref6compare Dale Allen Pfeiffer: “Eating Fossil Fuels”,
published at From the Wilderness on
October 3 , 2003 under:

http://www.fromthewilderness.com/

Comments

[lins216]

JS Kim = smartknowledgeu

[Invisible Hand]

I think Primefool makes an excellent point.

All freedom flows from economic freedom.  All rights flow from property rights.

The three most significant events in the last two years: 1) 250 years of bankruptcy laws were overturned to benefit political allies (GM & Chrysler bonds) 2) federal protection/subsidy of failed companies/banks to ensure political donations 3) Federal govt forcing individuals to enter private contracts (insurance mandate).

The first two were obviously pure fascism (corporatism).  The third is a precursor of our loss of individual freedom (next, will we be forced to buy GM autos, stock in windmill companies, etc.).

Our only hope (and it seems almost delusional to cling to it) is the Federal govt must be forced back 100 years in power and its role in society.  Can that happen? Can the Fed, the Dept of Energy, Education Dept, etc., etc. be destroyed and 100 years of creeping socialism be reversed?  It will be either by an act of will of the people or by the collapse of our society.

No easy choices, no easy tasks.

[trichotil]

great stuff but again i say "foolish monetary policies"= profit for some so not so foolish, more like premeditated fraud and malevolence hiding once again behind the incompetence mask.

[theprofromdover]

Sorry, who are you Mr Kim?

For us amateurs in this battle, we don't know all the soldiers on the field.

[aleph0]

Excellent interview .. good work.

[Stormdancer]

Down through history it seems that those who have ears to hear are always provided with a "voice crying in the wilderness" at critical junctures....someone straightening the crooked paths.  Thanks Mr. Kim.

[primefool]

I would further add that the most critical crisis facing us at the moment is abreakdown in trust . Laws need to be enforced - and fairly. Property rights need to be enforced. Govts cannot have carte blanche over people's private property through arbitrary and arcane tax laws. The corrupt money also contributes to the unlawful taking of prudent savers' assets.

If this situation is allowed to spiral down - there is no hope for prosperity. There have been many economics books written - about why poor countries in Africa and Asia stay poor - a lack of trust, no property rights and no rule of law. Simple. Only now we better apply this to ourselves.

[Trial of the Pyx]

nice summary, the return to constitutional republics would certainly be welcome

[Double down]

Good stuff

[Mitchman]

Excellent interview.  It is refreshing to hear someone say it out loud.  Kudos especially for the interviewer giving his guest plenty of running room to display his knowledge.

[tony bonn]

as always, outstanding.....

morality and sound money go together like a horse and carriage.....dad was told by mother, you can't have one without the other ....

[primefool]

I would add that corruption of the "language" goes hand in hand with corruption of the "money".

Language - the most human of all skills - has been stripped of its power. Do you trust what people say? Do people say what they really believe to be true? If language is stripped of meaning and power - humans lose their most powerful tool for collective strategy/action.

[tony bonn]

actually your comment is far more important than many may realize. language corruption takes many forms such as political correctness, spin, and the claim to infallibility.

just watch forensic files to see how many times the courts refuse to reconsider cases where new exculpating evidence is discovered. there is always a reason why an innocent person needs to rot in jail. and it takes an army of lies to keep an innocent man incarcerated.

the language is corrupted before the money is corrupted. but once the money is corrupted the whole of society is ruined.

[primefool]

Yes - language corrupted then money corupted - so with no more fine tools for strategy/action humans then revert to brute force -

[onlooker]

My re-education process continues. So much to learn, so little time. Staggering.

[Rusty_Shackleford]

Strong work.

Fantastic stuff.