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Why a Navy SEAL Could Help Fix Our Broken Financial System
Central Bankers always seem to do the wrong things at the
wrong times in manners that hurt the citizens of their country in the maximum
amount possible. Not only do they
commit these mistakes, but they commit the same mistakes over and over and over
again with the insane belief that executing the same mistake will produce a
different outcome. So I suggest that the next person US President Obama
appoints to the Board of Governors of the US Federal Reserve should be a US
Navy SEAL. In fact, he should also appoint a SEAL to his Presidential Economic
Advisory Board. At a minimum, by employing SEAL culture to this financial
crisis, we would not have the current crop of buffoons execute the same mistake
over and over again and have them sell us their mistakes as recovery that are
in reality, cover ups for the next imminent collapse.
When I first started training in martial arts, I was very
fortunate to have as my instructor an ex-Navy SEAL for the first four years of
my martial arts life. Though those
that have never trained in martial arts a single day in their life sometimes
belittle such training due to their ignorance of the positive culture of such
training, there is no doubt in my mind that the life lessons I learned from my
training, if applied to our present global monetary crisis, would provide a
clear path towards the development of a sustainable solution. SEALs abide by a certain
warrior culture that make them very different from every other elite division
of the military. Here are three
rules that SEALs could teach Central Banks to abide by that would lead to the
development of sustainable solutions instead of the quick fixes Central Banks design
to fool the people:
RULE #1: Never make the same mistake twice. You are your
best critic. When you make a mistake or do something wrong, take it onboard and
take it seriously. Be hard on yourselves. Do what you have to in order to not
make the same mistake twice.*
Central Banks continuously repeat the same mistake over and
over again and seemingly are incapable of learning from their previous
mistakes. Every time the bubbles and price distortions they create in stock
markets and real estate markets crash, they have engineered the same response
for decades – print more money out of thin air and re-inflate the bubbles again
– though this response always ends in failure. Furthermore, Central Banks’ decisions
to bail one another out to keep the fiat money system alive has never produced
a positive result in the history of mankind, yet we find ourselves heading down
this same path today. Greenspan himself admitted that the Fed Reserve’s actions
to bail out the UK in the 1920s “nearly destroyed the economies of the world,”
yet the Feds insist on repeating these same foolish actions today. If a Navy
SEAL sat on the Board of Governors, without knowing a single thing about
monetary policy or finance, he could still steer them to make wiser
decisions. Employing the rule of
never making the same mistake twice, a SEAL would have stopped Central Banks
from reinflating bubbles decades ago.
Furthermore, given the penchant of Central Banks to
repeatedly engage in the execution of the same mistake, determining the Euro’s
fate more than 2 ½ years ago was fairly transparent. This is why, at the
beginning of 2008, I stated in my book Confessions of a Wall Street Insider, “We
can be assured that in 2008, the destruction of monetary value in both Europe
and the United States will occur...when smart investors finally realize that no
fiat currency is safe, I believe that investors (at least the savvy ones) will
begin to dump the Euro and the Pound as well.” A couple of months after I made
that comment, the Euro plummeted from about 1.58 USD to 1.25 USD. Today, we’re back at 1.27 USD. Despite
(or perhaps better phrased as “As a result of”) a near trillion dollar bailout
of the EU, the Euro remains doomed.
RULE #2: If some part of your platoon’s training is not
working, perhaps it’s a matter of command and control or a gear problem or
tactical maneuver; fix it now!*
Central Banks are notorious for lying to the public and
covering up the truth for the purposes of selling false notions of hope and
economic recovery and fooling the sheeple. Such tactics only delay an
inevitable crash in financial markets, whether that crash arrives in the form
of a melt up in markets denominated in worthless currencies or a deflation of
asset values also accompanied by plummeting currency values. Central Banks never try to fix problems
now but always choose to delay the inevitable for as long as possible as if
delaying the implementation of a real solution and burying their heads in the
sand will make the problem go away. A Navy SEAL would never allow such
dishonest tactics as these types of tactics could cost the life of every member
of his team. Instead, a Navy SEAL would undoubtedly hold all Governors’ feet to
the fire. This is why we should
desire the appointment of a Navy SEAL to the Board of Governors.
*Source: The Finishing School, by Dick Couch
RULE #3: Take your responsibilities seriously and be
accountable for your actions. Don’t cut corners and don’t take the easy way
out. Always do things the right way even if the right way is the hard way.**
Again, if you listen to Central Bankers speak, one would
conclude that they never heard of the concept of personal accountability and
responsibility. Instead of taking blame for the devastating consequences of
their mistakes, Central Bankers always blame outside parties for their mistakes,
claim such consequences can never be predicted even though Austrian economists
repeatedly and accurately predict the consequences of their actions, and lavish
undeserved praise upon themselves. Remember Ben Bernanke’s “we saved the world”
speech that he gave at Jackson Hole, Wyoming last August 21, 2009? Well Ben, it
appears that your declaration was just a little premature. Of course Ben’s
arrogant, self-serving comments back then were a product of not adhering to the
above SEAL rule of fixing problems now. Central Banks always take stop-gap
measures to the emergencies they create that only delay the emergence of a more severe emergency six
to nine months later. If a Navy SEAL were on the Board of Governors, he would
no doubt kick out any team member that deliberately endangered the lives of
team members (all citizens of the Republic of America and the world), refused
to accept responsibility for one’s actions, and refused to fix a problem right
away when identified. Yes, that
means, Helicopter Ben would have been long gone by now.
**Source: The Warrior Elite, by Dick Couch
Central Bankers, it’s time you took a page out of the
playbook of Navy SEALs.
About the author: JS Kim is the Chief Investment Strategist
and Managing Director of SmartKnowledgeU, LLC, a fiercely independent wealth
consultancy company that guides investors in the best ways to build wealth
through the progression of this global financial crisis. His investment
newsletter, Crisis Investment Opportunities, has significantly beat all major
world indexes since its launch in 2007, outperforming the S&P 500 and FTSE
100 by more than 27% in 2007, both
indexes by more than 40% in 2008 and both indexes by more than 51% from January
2009 to May 2010. Special thanks to my mentor, SEAL Alvin Dukes, and author Dick Couch for providing the foundation for this article.
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SEALS have an honor code and love of country, something the corrupt politicans, banksters and lawyers do not have. I think it is safe to say there are many in power who are doing their best to destroy this great nation.
They have the honor, the guts, the bravory, the skills, the patriotisme and all my respect I possible can give them.
But they do follow commands, and sometimes commands are giving by people who don't have these fine qualities and are only interested in personal gain, sacrificing these man of who we will probably never know their names.
Great article except it ignores the fact that Central Banks are criminal enterprises. No real Navy Seal would associate with Central Banks!!!
nice thoughts JS. but since we're playing around in the imaginarium, perhaps what the Fed really needs is Martin Armstrong? his writings honor all 3 rules you listed (the military ain't the only place to learn discipline). plus, i heard his labor comes chinese cheap these days.
SMARTKNOWLEDGEU.....I am looking for summer internship...wandering if you can help me ??
nice post...it all means : discipline ..discipline ..discipline....
Do you really want Erik Prince or Jesse Ventura running a central bank ... ok, maybe Jesse.
I say that with tongue and cheek
Actually, Commander Bremseth, my old skipper from SEAL Team EIGHT, would probably do a great job (I never earned a trident, I was just a Bull Ensign, cross-over from enlisted Army, assistant intel officer support puke on TAD from NMITC for seven months while waiting on my security clearance)
i wouldn't mind jesse ventura being a vice president as long as he's willie nelson's running mate.
Jesse isn't the brightest bulb in the academic shed. But his strong points are his common sense, sense of fair play, and most importantly his integrity.
But maybe we need more people like that than academic bulbs in positions of power. Jesse wouldn't take any shit as head of the FED, in fact, you may see him say enough is enough and send some of his old colleagues to physically take down Goldman Sachs in balaclavas and HK MP5's, shut down the electricity to their Skynet system, and frog march them right out of the building.
That's why he would never be in such a position in the first place and why he threw his hands up in frustration and decided to surf in Mexico for the rest of his life.
absolutely, integrity being the key word here.
I was happy with the vision of someone getting fat ass Larry Summers to drop and do push ups until he passed out or threw up. That's youtube gold right there. Ben Shalom crying like a total nancy trying to do the log lift. Actually you probably couldn't get 4-6 men of finance to do a simple activity in unison. And, god help me, I really did like Sudden Debts rule 4:
Rule 4: If somebody crosses you path and stands between your objective. Shoot him. But try to get a one shot one kill because you will encounter more enemies.
DosZap beats me to the punch...
smartknowledgeu your premise is incorrect. No one has any intention of fixing anything. They are fully intending on bringing the system down.
You assume he wants it fixed, he wants it fuc***.
Wake up dudes.
What jobs has all this money created?...........Gv't jobs.
I am not sure I am comfortable with military people running the markets. However, I recommend martial arts to all.
Here are some words for central bankers:
“If you make an ass out of yourself, there will always be someone to ride you
http://williambanzai7.blogspot.com/2010/05/big-fx-loss.html
Nice post. Made my day.
So name an expert in destruction so that what bankers, who did not benefit from the same upbringing culture of destruction, have countless times failed to achieve, can be carried out: the utter destruction of the economies of the world.
someone please tell me ...should i BUY PUTS for june now...????
Central banking is always messy but nobody has come up with better idea. Central banks have existed for hundreds of years, even before USA was created. There really are no alternatives at the moment because all the alternatives invented so far have been already tested, from total "print your own money" free banking to strict gold based. In the 19th century the free banking system or even gold based variations created almost every decade real wild market gyrations and depressions with banks runs. Robber barons gamed the system even more on top of that.
Central bank acts as central stabilizer but it creates sometimes systemic crisis because of bad or corrupted or stupid or unlucky leadership. So it is either choosing 20 percent of people losing randomly every decade on average their savings totally (bank runs and no CB) or 80 percent of people losing every 30-40 year their savings because of systemic crisis but maybe getting something back from CB. It is easy to choose number one wild run when you are 20 but not so when you are 60...
You cannot create always self-correcting economic systems even with gold based money because humans are not calculating machines, making optimum economic choices every single time AND both for short and longer term at the same time AND for the greater benefit of society and the individual in question.
This is complete bullshit, btw.
Central banking is not a prerequisite to a functioning economy nor a good one.
The wild gyrations were CAUSED by bankers and those trying to be central banks.
Trav is a true believer, that is why Austrian cultists are not taken seriously. Throw few reasoned lines and you guys reply like well, cultists wackos would reply,
"that is BS! Central bank is BAD! Bankers are bad!".
Bankers are PLAYERS in the markets but that is bad? To be a player or big player or market is bad because it has big players or what?
How can you be so dismissive of "Austrian cultists" without the first idea as to what they are talking about?
Because you guys want to abolish central banks and replace fiat money with gold. Then you bitch about big players aka bankers gaming the markets, one way or another. Then you want even governments be weaklings. You cannot have it both ways.
Weak governments would mean the big players would have even more power in your gold based system, just like it is already in the USA (without the gold money). Most free markets would cease to exist because markets do find winners and without rules, winners do take it all. Then they establish monopolies or rigged casinos to lure even more money from the small players. Just like it is already in the USA. Then they would just buy the friggin government. Just like it is already in the USA...
As competition drove them to.
It seems that competition delivered a winner and that people are not happy with the outcome.
Government granted monopoly = competition?
Doublespeak is here.
+1
I thought this was an intelligent comment, and shouldn't have been flagged. I'm guessing the flag(s) are from people that just hate central banks.
I hate central banks too, but admit it's a complicated problem along the spectrum of barter to everyone issues currency to centralized currency control.
IMHO, the current destruction will be so complete that the "20 percent every decade" will seem like a better idea. In contrast to the past, we now have the internet and local credit unions, watchdog groups with better metrics and access to information -- the system in the 1890's would work FAR better today than it did back then, if we were to re-institute it (e.g., life before the Federal Reserve).
I
Second the +1 on the post.
The Navy Seal training is good for a single purpose mission in difficult circumstances but, sometimes, single purpose missions set into motion the "Law of Unintended Consequences”. I was for the bill and will write my two Senators to ask why they voted as they did.
But, if we are routinely auditing the FED, what do we do with that. There may be more benign situations that need intervention. What are the criteria for intervention? What are the regulation rules for banks that will not restrict commerce and loss of the size to stay American in a free market world but will minimize the need for intervention?
Who here would like to set the rules and then be held accountable for the failure of those rules?
Boils down to: What do we do with the information in a routine FED audit in a real world political environment?
It's flagged because it does nothing except propagate myths that are not true.
US CPI in graphical form
The above graph is CPI reconstructed from 1800 to 2007, the last time I constructed such a chart. It's even worse now, of course. The "wild swings" you see in the 19th century are NOTHING compared to the utter, complete, and total debasement of the currency by the central bankers since 1913. And please don't give me the bullshit that you can't compare prices from then to now. You sure can. And don't tell me that we wouldn't have had technical innovation without central bankers. That's not a provable assertion and we had massive innovation in the 19th century without them.
You want to know why the love comment towards central banks got flagged as junk? That chart above is why.
P.S. I personally didn't even flag the guy's comments but I know exactly why he got flagged, so don't bitch at me for his junk flag count.
I don't dispute your assertion that the CPI went nuts because of central bankers, and agree "innovation" is nearly non-existent (we're merely talking about debasement and leverage/changes-in-debt).
In short, I agree central banks should be abolished.
In contrast, there are "efficiencies" associated with using a currency, as compared with barter. This is manifested in economic activity (e.g., transactions occur when they otherwise would not have.) And, there are "efficiencies" possible with a larger economic zone under a common currency. The Euro was a failed idea from the start, but it's convenient to have US dollars the same in each of the fifty states (rather than each US state issue its own dollar with variable conversion).
In reference to central banks, I prefer the idea of fifty separate dollars by the fifty separate states (e.g., regional competing currencies to keep each other honest), rather than a centralized currency from a central bank. However, I concede it will introduce inefficiencies, to achieve the benefit of robustness/stability.
It's that "robustness v. efficiency" that I took to be the intelligent assertion regarding pre/post central banks. The original assertion is that this increasing "centralization" is a natural conclusion as markets mature. Like the winds and the tides, that motivation will always be present.
Rule 6: If you feel horny, it's not a sin to shag her and lose precious time. But make sure she has nice tits, because you'll need a very good excuse why you let your teammembers down.
LAMO!
Rule 5: If you need to sacrifice a team member to get to you goal, remember this: Everybody is expendable, only the mission counts. Unless it's a woman with nice tits.
Rule 4: If somebody crosses you path and stands between your objective. Shoot him. But try to get a one shot one kill because you will encounter more enemies.
Problem is that SEALS have morals and honor.
Wait...
The reason he will not appoint a navy seal is he might battle with the pronunciation:
"corpse-man" http://www.youtube.com/watch?v=ZlKIfzoC8D0
just watched that link. presumably, SEAL is easier to pronounce!
Hmmm/wonder what all the fellows making a killing off the crashes think.........
True. Wall Street loves volatility as they make money on the upside and downside. And we also saw this crash coming. Here is a very brief excerpt from a much lengthier and detailed warning we sent to our Platinum members on May 4th, just 48 hours before the crash:
“Though the S&P 500 has been on an insane run that has ignored fundamentals and seems to be controlled by Wall Street's algorithmic high frequency computerized trading programs as of late, the MACD, as you can see has definitively turned down, foreshadowing a likely correction, and potentially a sizeable correction, soon. As well, if you notice in the chart above [included in my alert to subscribers but not here], the last shaded area I have circled demonstrates high volatility with very large swings up and down in the S&P 500 index as of late. Such large volatility to the downside and upside often signals that a current rally is losing momentum and signals the type of exhaustion indicative that a decent correction is imminent. You will see two similar instances in which similar patterns led to decent corrections in the past year…Thus, [there is] the POSSIBILITY of a steep selloff in the larger US indexes at this time… a possible imminent correction combined with the risk in greater markets make it wise [ ] to use some hedges at this point.”
Still, we would much rather have stability in our financial system as every crash is met with more foolish responses from Central Banks that give rise to the next emergency.
Not every time: "Volcker's Fed is widely credited with ending the United States' stagflation crisis of the 1970s. Inflation, which peaked at 13.5% in 1981, was successfully lowered to 3.2% by 1983.The federal funds rate, which had averaged 11.2% in 1979, was raised by Volcker to a peak of 20% in June 1981. The prime rate rose to 21.5% in 1981 as well." - wiki
More recent: The CB of Sweden raised the overnight interest rate to 500 percent in september 1992 in order to prevent devaluation of Kronor but was unsuccessful. The CB of Finland tried also similar ways. The result was quite bad deflationary recessions in both countries, double digit interest rates and unemployment rates for years and devaluation of currencies by 20-30 percent.