The Crowning Glory Of Keynesianism

Tyler Durden's picture

Submitted by Jeff Thomas via Doug Casey's,

Readers of this publication will know that for some time, I’ve forecasted the creation of a new monetary system by which governments and banks gain total control over all monetary transactions.

On the surface of it, this may seem an impossible goal, as it would be so all-encompassing and would eliminate economic freedom entirely. Surely, it would not be tolerated. However, I believe that it’s not only relatively easy to create, but it will be sold in such a way that the public will see it as an absolute panacea to their economic woes. Only those who are far-sighted will understand its level of destruction in advance of its implementation.

It might transpire like this:

Part 1: The Currency

  • Any one of a number of triggers (decline of the petrodollar, dumping of US debt back into the US market, Europe defaults on its debt, sanctions backfire, etc.) causes a crash in markets.
  • Deflation kicks in.
  • The Fed creates massive QE to reverse deflation, ending in dramatic inflation and possibly hyperinflation.
  • Government declares a state of economic emergency, states that cash is (and has been) the problem and must be done away with for recovery to occur.
  • A new electronic currency is created, to be issued by banks.
  • All economic transactions of any kind—both debits and credits—are to be done through a currency card (purchases as small as a candy bar or as large as a home; all credits, including wages, dividends, sales of goods, etc.).
  • Entire economic system becomes greatly simplified, as only the currency card (or smart phone) is now needed by anyone.

Part 2: Taxation

  • At this point, every transaction, no matter how small, is on record, so government can assess the cardholder’s income to the penny, without the need to file for income tax each year.
  • Government announces that the tax system is a mess and that it must be simplified to relieve the people of the burden. In future, tax will be taken by direct debit from the currency card account.
  • Government later announces that, as the annual filing is such a hardship on the average person, tax debits will in future be done monthly.

It would be easy to present the above as a boon to all citizens. Indeed, it might well be peddled as “the only possibility for a return to prosperity.” It will take a while for the fact to sink in that citizens have entered into a state of complete economic bondage to their bank and government, and that to operate outside the system is difficult in the extreme.

There can be no doubt that barter would become more common (whether legal or not), but virtually all other transactions would be centrally controlled and audited.

David Stockman, in a recent edition of Zero Hedge, stated,

Harvard economist Kenneth Rogoff even argues in the daily paper FAZ that cash currency should be banned altogether. Central banks could impose negative interest rates more easily that way, he explained. Tax evaders and criminals would also find life more difficult. From this perspective, banknotes and coins appear superfluous, he said at a presentation at the IFO institute in Munich. Measures to spur the economy could be implemented more easily that way.

This, of course, is the concept detailed above, although he adds two nice touches. First, he suggests that negative interest rates are desirable; that cashless currency is the answer. He also adds that a new system will help to eliminate criminal behaviour.

Socialism Foothold

In 1936, John Maynard Keynes published his signature book, The General Theory of Employment, Interest and Money. It was an instant success with both socialists and governments around the world—the latter, because his new “economic principles” stated that governments should control the monetary system—full stop. It was music to their ears, and most governments have been devotees ever since.

Mister Keynes was, first and foremost, a socialist. Although he received his education in economics, right from the start, he treated economics as a philosophy, not a science. By his own admission, he sought to redraft the laws of economics to serve an unrelated end: the advancement of socialism. Like the best socialists, he believed that truth was irrelevant; all that mattered was the objective.

However, in recent years, we’ve seen a small rebirth in the popularity of Classical Economics. More and more people, observing the repeated failures of Keynesian Economics, have been crediting Adam Smith and likeminded economists as having had the right idea all along. After all, economics is the science of how money works, not an art form that may be altered at the whim of the theorist to fit some political preference.

And so, there are many (myself included) who are eager to see what we believe would be the well-deserved downfall of Keynesianism, as the debt-ridden, entitlement-driven economies of the world collapse under their own ponderous weight.

But this hope may well be premature. In my belief, there is a final rabbit in the Keynesian hat, and that rabbit is the electronic currency described above. And if such a currency could be sold to a gullible public in one country, it could be sold just as easily in other jurisdictions.

This being the case, it would not be much of a leap if the concept were to be discussed universally and many governments were to announce that an international electronic currency, issued by the IMF, would solve all the currency problems, including those of currency exchange and international trade.

For at least one hundred years, there have been those who have hoped for and worked toward a one-world currency. There can be no doubt that the push for such a creation would receive support at the highest levels, internationally. If so, daydreams of a return to Adam Smith or a realisation of the dreams of Ludwig von Mises and Friedrich Hayek may, for the foreseeable future, be just that: daydreams.

As to what the overall effect might be, we might consider the words of uber-financier Mayer Rothschild:

“Let me issue and control a nation’s money and I care not who writes the laws.”

Herr Rothschild knew whereof he spoke. This principle led him and his descendants to become immensely wealthy and powerful on an international scale.

An electronic currency leads directly toward the bondage of the people—directly away from freedom. As a hedge against such controls, diversification into hard assets such as precious metals and real estate might be considered. Just as important, assets held outside any country that is increasing its controls might be a positive move.

The ultimate way to diversify your savings internationally is to transfer it out of the immediate reach of your home government and into something tangible. Something that cannot be easily confiscated, nationalized, frozen, or devalued at the drop of a hat or with a couple of taps on the keyboard—while retaining as much privacy as legally possible. Physical gold and silver stored abroad in a non-bank vault fits the bill.

Gold and silver have served as money for centuries and across many different civilizations. They have always been inherently international assets. There is nothing at all particularly American, Chinese, Russian, or European about gold or silver. Buying gold and silver is perhaps the easiest step you can take toward internationalizing your savings. The next step is to store your precious metals in a safe foreign jurisdiction.

Today it is easy and convenient to own physical gold and silver offshore in places like Singapore and Switzerland in a non-bank private vault. Find out how you can internationally diversify your precious metals by downloading this guide.

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Oldwood's picture

Every step on the path to hell is enabled by convenience. If we could only make things easier.

Uchtdorf's picture

"Mister Keynes was, first and foremost, a socialist."


Wrong, he was, first and foremost, a pedophile.

usednabused's picture

Oh, and an asshole above all else.

Captain Debtcrash's picture
Captain Debtcrash (not verified) usednabused Apr 20, 2015 7:38 PM

Here is a concept call the E-Dollar, I could see it being attempted mainly because it fits past monetary shifts, namely the banks and government get stronger. It is a similary but more refined concept than the author is refering to.  Actually if Jeff sees this comment you really should read this. 

It was brought to my attention via a buisness insider story.  It is worth looking over just to know the idea is being tossed around.  I have been writing about it for some time. 

Here is more information.


MonetaryApostate's picture

I've been teaching this subject for years now, simply read my blog post "Preparing For Cashless Societies" that I wrote quite some time ago, you'll see...


The elite are pushing Crypto because that's the system they plan to use & I earnestly believe the RFID implants will have a huge role in the future as well...

(They are even already mandating them in some work places beleive it or not!)

Captain Debtcrash's picture
Captain Debtcrash (not verified) MonetaryApostate Apr 20, 2015 7:56 PM


You should really look at my above posts on the E dollar.  Particularly this:

We're certainly thinking along the same lines. 

Mr. Frosty's picture

An E-dollar is NOT a crypto-currency. Crypto is by definition decentralized, distributed and cryptographically sealed, an E-dollar is none of those things. While I don't disagree with your blog post, you do not understand the concept of crypto-currency.

nailgunnin4you's picture

Only the economically illiterate fear a cashless society. When reason and logic are employed it is obvious that if the state achieved a cashless society today, the people will be bartering tomorrow, with an alternate black market currency created by and for the people being favoured and used the day after that.


Anyone who can't see this has the foresight of an economist.

Captain Debtcrash's picture
Captain Debtcrash (not verified) nailgunnin4you Apr 21, 2015 5:51 AM

Barter is incredibly inefficient. I think you may be projecting what you think would be the obvious reaction onto the rest of society.

LikeyMikey's picture

Efficient in one manner but it is free and without controls of Government!


It is a valid response to an overbearing government control situation and historically it ALWAYS happens!  Germany has a HUGE BLACK MARKET of barter and trade!

Captain Debtcrash's picture
Captain Debtcrash (not verified) LikeyMikey Apr 21, 2015 7:22 AM

LikeyMikey, I agree that barter would be the justified response of some to a cashless society, but not that of the majority.  In addition, the inefficency would prevent those who did partiake in a barter system from gaining power.  

But that is not to say a black market using a secondary medium of exchange could not gain power.  When talking about a barter system and a black market using a secondary medium of exchange we are talking about two different things.  I am interested in how major black market in the US would develop, but I was specifically refering to barter in my response above.

mtl4's picture

The obvious problem is that cash serves as a normalizing factor when transacting so to remove that completely basically takes you back to the inefficient system of barter (ie trying to marry trades with each other).  Moving to a cashless system I'm sure sounds great to all governments but I think this will really set off a dark age period where the opression will be over the top.  It's clear they are really setting up a modern version of the middle age indentured servant system (now just using debt for slavery instead of land).  This is why you are seeing .gov doing all these homeland military exercises and buying up absolutely massive amounts of ammo.  Ironically I think the cashless society will actually encourage lawlessness and illegal activity because where there's a will there's a way.......just like the war on drugs really never did anything except meet the needs of the .gov political agenda.  The problem is that people are used to following the laws and assuming all will be well in the end but often it was those that disregarded them that profited the most throughout history.  We are certainly going into some very interesting times indeed.

nailgunnin4you's picture

Barter is incredibly inefficient.


Thanks for the reply allowing continued debate. I definitely agree with you re inefficiency of barter, which is why I suggest hyperbolically that a people's currency will be created the very next day. Without doubt there will be a black market currency formed if the state ever tries to introduce cashless society. A cashless society sounds likea great idea in a statist technocrat's head, but like most of his ideas, it is overreach and will trigger a backlash, in this case a people's currency is the obvious answer. 


This people's currency would have the backing of 99.9% of society giving it intrinsic value (sorry goldbugs, a currency valued by all IS intrinsic value). The rich will find it attractive for evading taxes- taxes bound to skyrocket in a cashless society- as will the corporate sector. Corporate sector will also appreciate that consumers have something with which to buy their goods, as surely govcoin will be meted out sparingly. The masses will like it for it's practicality and because again, they now have a medium of exchange to buy goods with.


The black marketeers, needless to say, will jump right on it if they do not start it themselves. No one but a myopic technocrat believes that in a cashless society drug users and makers will quit their dealings abruptly (who will fund the CIA?). Life, and the junkie, find a way. Without a people's currency, and with the infeasibility of barter, the black market cannot exist, and it's not going away anytime soon.


I don't know where the banks fit in here if at all, another reason a cashless society is not going to happen, the beneficiaries of the current status quo aren't open to change. The only members of our society who don't fear a cashless society are the sponges who collect a govwage, they don't see the inherent perversity because the gov already does know about every cent they earn. I wish these dullards luck in the execution of a cashless society.


Bemused Observer's picture

And that is why it will never happen. TPTB understand how fragile our dollar is, and they also know that any such move would completely kill off that dollar. They know that the people won't accept a completely electronic currency, and that they would very quickly lose all control over the money.

At best, people will pay their taxes in electronic scrip and use 'real money' for everything else. So government will collect a bunch of worthless credits on a computer screen.

What we will probably get is a new dollar, revalued. Can be used electronically, but they'll also print up enough for general use in day-to-day transactions.

Paper money will continue to be available and used, simply because TPTB must have a means to collect taxes. If large numbers of people are opting out of your electronic money, for say religious reasons (666, mark of the Beast, etc) you'll have to have some means for them to pay you. You can't have a dual-currency economy, because the stronger one will push out the weaker one. So you will have to have the 'hard copy' version of your money for them to use, or they will have to use something else. And I'd bet some of that money on SCOTUS upholding the Christian fundamentalist's right to shun any completely electronic money, and ruling that government MUST continue to print paper money for those who can't or won't use digital money.


Some states have already made gold and silver legal tender within their borders, which gives you an idea of what kind of 'currency' might replace the dollar. TPTB have no desire to pit their fiat against gold and silver, therefore they will NOT introduce electronic-only money, as much as they'd like to.

Captain Debtcrash's picture
Captain Debtcrash (not verified) Mr. Frosty Apr 21, 2015 5:46 AM

Mr. Frosty, 

I think that's your definition of a crypto currency.  When defining a crypto currency I focus more on the encryption techniques used in creating, tracking use or protection.  If you want to define a crypto currency as decentralized, sure the E Dollar not a crypto currency, call it something else, but it has nothing to do with my understanding.  I do understand that todays crypto currencies are decentralized but I also see how that could change in the future. It seems like you think I am ignorant but it appears to me that you are just being narrow minded.  

What would you like to call an electronic currency, using encryption techniques, yet is controlled, distributed, or tracked by a central authority?

What we're arguing about is semantics, I have no problem coming up with a new word to describe such a encrypted currency but using the word crypto in my writing didn't have anything to do with my misunderstanding of the current crypto currencies in use or how they are decentralized. 

Definitions are often given to guide peoples thought, think inflation or economic depression.  Both words that started to be used to change people’s mindset.  

If I am right and bitcoin was developed by the govt to beta test an E Dollar, it would make perfect sense to pretend as if all crypto currencies would be decentralized and tack that on to the definition.  Unfortunately cryptocurrency is just an amalgamation of crypto short for cryptographic and currency.  There is no fundamental reason why a currency with encrypted functions could not be centrally issued and or tracked, the only barrier is in your mind.

MonetaryApostate's picture

It's all about tracking, taxes, and removing street trade, also it will end many jobs, and to the above comment about the public not accepting it...

Well if there are no banks & they in fact ban cash, then what?

In essence the wealthy want to do more (as in get paid more) for less, that's the heart of it all, greed.

Oldwood's picture


A socialist would typically seek to fuck everyone equally, but in his case his preferences tended towards the younger generation?

RaceToTheBottom's picture

A PedoKeynesian, one who sexually assaults a kid and then comes back and financially assaults him for the next 50 years

Chuck Walla's picture

A Fabian Socialist and all the nazi Import that implies.


golden torch's picture
golden torch (not verified) Oldwood Apr 20, 2015 10:16 PM

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do...

disabledvet's picture

Not possible in the USA because there is too much liquidity.


Yes, you can blow up every State and Municipal borrower in the country...and probably give yourself an A+ for being "Chief Cocktard"...but if the last six years let alone last two have taught me anything its that you really can't beat the US money machine.


Its so good the Government itself wants to ban the use of its own fiat money!


You can't get any dumber than that!


" I'm from the Government and I want to ban cash!"


It really is true comedy!

MonetaryApostate's picture

A government big enough to give you everything you need or want is also big enough to take it away, wake up.


Stormtrooper's picture

Couldn't get thru much of this drivel.  So, after pitching my electronic card, I will offer you twenty pounds of corn and ten pounds of beans for that fine chicken.  And I will give you 20 pounds of beef if you make me a pair of shoes.

No recordable transaction, no taxes, no government involved.  The Russians figured out how to bypass the system during the USSR and smart Americans will figure it out too (after their I-Phones go dark).

RaceToTheBottom's picture

Barter will become a terrorist activity.....

MonetaryApostate's picture

I'm glad someone is seeing what I'm seeing here...  (It gets worse, much worse)

Bendromeda Strain's picture

The penalties will start off relatively mild and ratchet up exponentially.

Bemused Observer's picture

Exactly. It amazes me how much hubris goes into these ideas. I've read  things from too many, claiming electrnic money will eliminate crime, because there won't be any more cash to hide it with!


And I immediately think, "What are you, fucking stupid?" And that's really all I can think of to say, because what WOULD be the appropriate rresponse to such a ridiculous statement?

ted41776's picture

we swindled some folks

OC Sure's picture

So the problem with central banking is the interest on the principal and not the organizational structure that makes possible the principal itself?

There are only 2 first principles regarding banking. One embraces morality, the other sacrifices it. 

Here is what the world can have regardless of time and place. 

Either, Mr. Hamilton:

Or, Mr. Jefferson:

It is the world over with respect to banking regardless of country; to monopoly or not to monopoly. 

Don't be surprised when the ends are reached as accorded by their means.

Deathstar's picture

I wish J Edgar Hoover would have went about things a completely different way and just killed all the fuckin commies that infiltrated the demo-commie party and continue to cause headaches today.

Pheonyte's picture

Next time someone asks, your answer should be, "Yes, I really am that fucking stupid."

usednabused's picture

If there were two of those deathstars could they be twice as fucking stupid?

Dame Ednas Possum's picture

Perhaps yes. Einstein said that the difference between human genius and human stupidity is that genius has its limit.

cdm's picture

"an important part of the wealth" ?


by that did you mean the Majority of the wealth;

the Vast Majority of the wealth, or something else ...

which "important part", exactly, were you refering

to Mr. Keynes?

MonetaryApostate's picture

He's talking about decreasing your INCOME & The Value of your Currency!

More Income = More Wealth (not more cash alone)

The Value of your Currency directly effects your income, for if your $900 a month SSI check won't buy you nothing in the stores, then you have become DIRT POOR!

RMolineaux's picture

This item attributes to Keynes a litany of economic failures, few if any of which are the result of the adoption of his ideas.  The article contradicts itself by quoting Keynes on the dangers of inflation, and then attributing to him the very inflation he warns against.  Give me a break.  It was the greed of the Wall Street bankers and their lawlessness that has brought us to our current disasters, not Keynes' opinions and prescriptions.

Oldwood's picture

Evolution has been the "science" behind many a mad murderer. The science of economics is no less abused. Just bullshit theories latched onto by charlatans looking for the next scam.

RaceToTheBottom's picture

Neo Keynesianism.  This is where future growth is stolen and given to present day Banksters.

 Kinda like a countrywide/even worldwide application of "Cash for Clunkers" except the Cash goes directly and only to Banksters and you get to make the car payments but get no car....

Having said that, I have no disagreement that Keynes would not have agreed with what the FED and her Banksters have done in his name...

nmewn's picture

"The theory of aggregate production, which is the point of the following book, nevertheless can be much easier adapted to the conditions of a totalitarian state than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire." Lord John Maynard Keynes

Squirm all you want, they're still teaching this shit in government sanctioned schools and academe without the slightest bit of remorse. Don't come in here talking about "law" or lawlessness when its actually legalized theft.

WhackoWarner's picture making it's way through Canadian court system. Of note the Fed. Gov. did not appeal the last win by COMER so now actually has to come up with a legal defense. Courts just keep agreeing with COMER.And MSM keeps ignoring. And Canadians keep paying trillions in interest to private banks.


BoPeople's picture
BoPeople (not verified) Apr 20, 2015 7:23 PM

"•Entire economic system becomes greatly simplified, as only the currency card (or smart phone) is now needed by anyone."

... or the so called "chip".

My belief is that they will sell the destruction of the Fed as a public outcry. It will be no such thing because even in today's world only a small percentage of the people even know what the Fed is.

The they will again sell the implementation of a global system of slavery as a public outcry for safety and security. It will be nothing of the sort. Once again, virtually no one will know or care what they are doing.

However, there will be a return to God... as always happens in troubled times.

kchrisc's picture

"Are you or have you ever been a Keynesian?"

Liberty is a demand. Tyranny is submission.


See, even Keynes knew that the banksters needed to repay us, and not us them. All they have, and say we owe, is stolen from us, and to us they owe its return. Gold, silver, and heads gladly accepted.

ChacoFunFact's picture

Ithaca hours currency, bichez

Temerity Trader's picture

It has worked beyond their wildest dreams! Look at this foolish idea,

If corporate earnings are cooked, so is the market.

That's how billionaire investor David Einhorn is betting on stocks-a view that has lost his hedge fund firm Greenlight Capital money so far this year.

"All told, there is a good chance earnings will actually shrink this year," Greenlight's most recent letter to investors said. "We think the market is too high if earnings have, in fact, peaked for the cycle, and we have reduced our net exposure by adding more shorts


Go ahead, short those lousy earnings….stock falls for about thirty minutes, then the masses pile on to other “great deal” and “buying opportunity” knowing the Fed will come to the rescue. One nicely timed Fed announcement of more tools available, and even companies that put out statement like, “May not be able to continue as a going concern…” see their stock price soar. Shorts have their faces ripped off again and again.

In the New Normal it is all about psychology…not “earnings”. Remove fear and support greed and there is no limit. Why sell stocks with Fed backing of the markets? Even the worst companies are sure to turn things around quickly with Fed help, and there are stock buybacks to make things look better.

Bad news means more intervention and good news is fantastic. Hard to imagine a scenario where the markets tumble and tumble…and the Fed just does nothing. Rate hikes…never or 25bps next year, then a quick cut as soon as Dow falls at all.

RaceToTheBottom's picture

Eventually ratios and fundamentals matter.

There is no free lunch, no perpetual motion machine...

Niall Of The Nine Hostages's picture

"Lord" Keynes wasn't even a socialist---he was an upper-class kid-fucker mostly interested in preserving a status quo where his sex crimes were easily hushed up and he and his were shielded from economic reality. 

jdtexas's picture

Richard Gere in Arbitrage hints at SDR

Coincidence?  I think not!

R_Dannesjold's picture

They will have to kill Bitcoin before creating such a system. Actually they would have to kill all cryptocurrencies, or rather the concept of cryptocurrencies. And I don't think they can.

The more control they take of the currency, the more incentive people will have to move their wealth and conducting their transactions in Bitcoin. Without cryptos I would be a lot more worried.