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Italy challenges the Western order

The EU is under a lot of strain

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With a massive influx of immigrants from across Africa and the Middle East, and growing poverty, Italy voted in a populist government representing policies which would seem to virtually overturn the postwar European order.

The austerity measures which have been imposed upon the Italian people have pushed more and more of them down into poverty, with the poverty rate doubling over the course of the past decade.

Relative to migration, Italy is one of the Southern European countries taking the brunt of the migrants who are flooding into Europe by the thousands, helped along by various NGOs which seek to alter the demographic makeup and economic and political order of Europe under the guise of humanitarianism.

The present economic metrics tend to perceive the profits of multinational corporations as a gauge of the health of the economy, rather than the economic situation on the ground level, faced by the Italian citizen. All of these and more are things which this new government has a view towards radically changing.

To combat Austerity, which may be tossed out the window, the option on the table is to review treaties to which Italy is partied which impose or advise them. Rather than gutting the population for the money which the government needs in order to cover obligations to multinational financial interests, a proposal was broached of launching a universal basic income, reduction in the pension age, as well as a flat tax system.

And while the migrant policy is still evolving, it has had a view towards repatriating the migrants which are already within Italy’s borders. Italy has already flexed its will on the migrants issue over refusing a ship full of migrants port in Italy, forcing it to set sail for Spain.

Foreign policy aims at softening the approach towards Russia by eliminating sanctions and by putting the focus on improving relations, benefitting Italy both by allowing a resumption of trade, and the perspective of Russia’s will and capacity to help get a handle on the situation in the Middle East, which is part of what prompts the migration issue, due to the region’s instability.

What this could mean is that an already strained relationship between Italy and the EU could be put to the test, or altered in a significant manner if these proposals are put into play after the fashion in which they were introduced during the elections cycle.

Alessandra Bocchi over at First Things observes:

Italy’s new government represents the most radical challenge yet to the order that has dominated Europe since World War II. Comprising the populist-left Five Star Movement and the populist-right League, the coalition is often described as a combination of alt-left and hard-right, but in fact it moves beyond conventional ideological categories. No wonder its members have been darkly described as “barbarians” by the Financial Times and “insurgents” by the Telegraph.

Something in the project of European integration is not working, and the elites who lead it have refused to adjust. The euro is failing miserably in southern Europe, yet the European commission wants to deepen economic and monetary union. The euro has powered German economic growth while saddling countries like Italy and Greece with austerity and debt. According to official government statistics by Istat, absolute poverty in Italy has doubled in the past decade, a few years after the euro was introduced as the country’s currency.

The new government’s eclectic program emphasizes environmentalism, claiming that “man and the environment are two sides of the same coin,” and calls for a reduction of carbon emissions and an end to fossil fuels. The mixed ideological character of the new coalition is illustrated by Alberto Bagnai, a left-wing euroskeptic economist who represents the League in the Italian Senate. His book, The Sunset of the Euro, decries the single currency as a means for Germany to exert its dominance in the Eurozone. Bagnai also strongly opposes mass immigration, calling it a tool to drive down wages and increase exploitation of workers: “It’s no surprise that ‘left-wing’ ‘intellectuals’ don’t care about immigrants’ impact on wages—it’s because they’re not low skilled workers.”

Even more radically, the 31-year-old leader of the Five Star Movement, Luigi Di Maio, has challenged the tyranny of economic metrics. In a speech prior to the election, he said: “The economic indicator for growth will no longer be GDP.” This represents a fundamental challenge to the free-trade post-war order, which has culminated in the rule of multi-national corporations over small businesses and enterprises.

To address Italy’s public debt crisis, the program rejects austerity measures and seeks to revisit EU treaties that recommend them. In place of austerity, the coalition has proposed a minimum salary, a universal basic income, and a lowering of the pension age. What has raised some eyebrows is the League’s proposal for a more libertarian flat-tax system. How can the government increase spending while also decreasing its revenue? The coalition claims that the program will be paid for by eliminating bureaucratic inefficiencies and by subsidies from the EU. And Italy does indeed have a problem with corruption—Five Star built its popularity by campaigning against it.

The new government also has a traditionalist family minister, the League’s Lorenzo Fontana, who opposes abortion and same-sex civil unions. Italy passed a law for same-sex civil unions only last year and is one of the few countries that has not legalized gay marriage. Fontana strongly opposes the civil-unions law, claiming: “They want to dominate us and erase our people.”

In another traditionalist initiative, the Five Star–League program seeks to reverse Italy’s plummeting birth rates. “It’s necessary to provide family welfare,” the program says. The program proposes measures to help women manage their motherly and professional roles by providing free child-care facilities, thus addressing one of the main reasons for the declining birthrate: the financial penalty imposed by childbirth. The case of Valeria Ferrara, a mother who was denied a Sunday per month to spend with her family by the multi-national Calvin Klein, Inc., is exemplary of this crisis. Both Five Star and the League have, in the past few years, proposed to end Sunday labor. Luigi Di Maio, the leader of Five Star, said, “unrestrained liberalization is making us poorer.”

The Five Star–League program also states that it will oversee the deportation of 500,000 illegal migrants currently living in Italy. Matteo Salvini, the head of the League, who holds the strongest position on immigration, will become minister of the interior under the new government. But even Di Maio, the head of Five Star, has indicated his opposition to mass migration. Last summer he said that the center-left government that has ruled Italy for the past five years had transformed the country into “Europe’s biggest port” for migrants. Di Maio also criticized the activities of NGOs operating in the Mediterranean and transporting migrants to Italian shores: “The EU doesn’t care about saving migrant lives, they just want the money.” The Five Star–League program has accordingly promised to “stop the business of smuggling” and take down “criminal organizations responsible for human trafficking,” which have caused “countless deaths in the Mediterranean.” As for financing the deportation of illegal migrants, the government would accomplish this by “directing funds used for hospitality towards repatriations.”

This would be the toughest stance yet taken by an EU member in Western Europe. (It is interesting to note that Switzerland, which is not part of the EU, has maintained very strict immigration controls and received very little criticism for it.) The measures proposed by the coalition prompted the president of the European Commission, Jean-Claude Juncker, to say that the European Commission will now “monitor the rights of African migrants in Italy.” This comment suggests that a collision over migration is imminent, particularly given the EU’s stance toward countries that have taken a tough stance on migration, such as Poland and Hungary.

On foreign policy, the Five Star–League program says it wants to “end sanctions on Russia.” Indeed, the coalition sees Russia as a strategic partner in combating “Islamic terrorism” in the region and in ending the conflicts in Syria, Libya, and Yemen. Despite the great displays of alarm over this fact, it merely reflects a growing consensus in Europe that relationships with Russia must change. “I do think we have to reconnect with Russia,” Juncker said at a conference in Brussels this week. “This Russia-bashing has to be brought to an end.”

Religion also plays a strong role in the program, a role often overlooked by the media. The League has pushed for the registering and monitoring of mosques in Italy. There have also been increasing appeals to a Catholic identity. Di Maio and Salvini have both shown uncommon reverence toward the Catholic Church. In September, Di Maio launched his campaign by observing the old Catholic custom of kissing the vial containing the blood of St. Januarius and bowing before the cardinal of Naples. In 2016, in front of Santa Maria Maggiore in Rome, Di Maio said: “The Church is my home. I am a Catholic.” Leftwing papers have responded by calling him “retrograde.”

Salvini may be even more outspoken about his faith. In March, just before the election, he held up a rosary at one of his rallies, “swearing allegiance to the Gospel and my people.” The chosen prime minister, Giuseppe Conte, a previously unknown figure, is a former leftist who turned to the Five Star Movement. Conte is devoted to Padre Pio, a Catholic saint famous for his stigmata and bilocation.

The Five Star–League program combines euroskepticism, environmentalism, strong borders, protection of families and small businesses against globalization, and respect for religion. It combines elements of left and right in a way that scandalizes well catechized political elites. If it succeeds, it will be the first real sign that we are moving beyond the postwar order.

The EU is under a lot of strain. German Chancellor, Angela Merkel, might be looking at a weaker governing coalition if she isn’t able to get a solid grip on the migration problem in Germany. Britain’s Brexit continues to trek along, albeit at a sluggish pace, without much of a road map as to how it is going to be accomplished, and how the UK’s relationship with the EU will be positioned once the deadline finally comes. Italy here is considering renegotiating its relationship with the EU after a fashion, France is facing internal conflicts over migrants and the economic situation of average citizens, while Poland and Hungary are both defying the Union’s will on the migration matter. And last, but not least, the populace of Greece still isn’t too happy about the austerity measures it is undergoing, while international investors gobble up the nation’s infrastructure at an alarming rate, with a government that is just barely hanging onto power.

Then there are the security and energy issues to be solved. Germany, and some others, are moving forward with a pipeline to import Russian gas, which some Eastern European nations are apathetic about, leading to some disagreement about where Europe’s energy security looks to. To top it all off, there are Trump’s tariffs and secondary sanctions threats relative to commerce conducted with Iran, a necessary component of the JCPOA’s survival, and the Nord Stream 2 pipeline, which puts Germany between the US and its Eastern neighbors over its energy policy.

But Trump, not merely a wild card in the deck, could pose as Europe’s saving grace, serving as a unifying factor for the bloc. While Europeans are facing lots of centrifugal issues which threaten to break it apart, Trump is the one problem which they all have in common, and is one which would offer a rallying point around which the Europeans can gather together to combat, after a fashion. The situation in Europe, therefore, is one which necessitates a revision of its constituent relationships, a common plan to deal with migrants, both those already in Europe and with those yet to arrive, look out for the interests of the common person, a common policy towards the East, and a common political will to oppose unilateralism and extreme nationalism.

 

 

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Gano1tibetan cowboyColinNZJohn Smith Recent comment authors
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Italy, Slovenia, Czech Rep, Hungary, Slovakia, Austria, UK, Germany, France, Greece etc, the populations of these Countries have had enough of the immigration chaos, this will result in more Brexit type referendums, the EU is finished!.

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De-stabilization of EU with massive influx of refugees and immigrants is part of the USA plan to conquer and rule European countries w invasions of the NE and ME. Divided they fall, united they stand.

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The EU in it’s current political & financial elite-driven format is without a doubt collapsing … it just remains to be seen whether anything beneficial to the European populace will be able to rise from the ashes.

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Solid article Frank – I’ve given you a hard time on previous ones, but this one more than makes up for all the weak onescomment image

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Macron pisses off Merkel as he tries to sabotage Nord Stream 2 pipeline (Video)

The Duran – News in Review – Episode 177.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss an EU compromise for Nord Stream 2 where EU member states, the EU Parliament, and its Commission will give the bloc more oversight on gas pipelines, with one caveat…the Nord Stream 2 project with Russia will not be threatened by the new regulations in the agreement.

Macron pushed hard to have the new regulations include (and derail) Nord Stream 2, an action which annoyed Angela Merkel, who eventually got her way and delivered another blow to Macron’s failing French presidency.

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Via The Express UK

Angela Merkel hit back at Emmanuel Macron over Russia and Germany’s pipeline project, declaring it would “not be a one-sided dependency”. The German Chancellor explained that Germany will expand its gas terminals with “liquified gas”. Speaking at a press conference, Ms Merkel declared: “Do we become dependent on Russia because of this second gas pipeline? I say no, if we diversify. Germany will expand its gas terminals with liquefied gas.

“This means that we do not want to depend only on Russia, but Russia was a source of gas in the Cold War and will remain one.

“But it would not be one-sided dependency.”

Via DW

The EU parliament and its Council are set to adopt new regulations on gas pipelines connecting the bloc members with non-EU countries, the EU Commission announced early on Wednesday.

The upcoming directive is based on a compromise between EU member states and EU officials in Brussels. The bloc leaders agreed to tighten Brussels’ oversight of gas delivery and expand its rules to all pipelines plugging into the EU’s gas distribution network.

“The new rules ensure that… everyone interested in selling gas to Europe must respect European energy law,” EU Energy Commissioner Miguel Arias Canete said in a statement.

For example, owners of pipelines linking EU and non-EU countries would also be required to allow access for their competitors. Brussels would also have more power regarding transparency and tariff regulations.

Russian ambassador slams US

Brussels has repeatedly expressed concern over the controversial Nord Stream 2 project which would deliver Russian gas directly to Germany through a pipeline under the Baltic Sea. Many EU states oppose the mammoth project, and the US claims it would allow Moscow to tighten its grip on the EU’s energy policy.

Berlin has insisted that the pipeline is a “purely economic” issue.

Speaking to Neue Osnabrücker Zeitung daily, Russian ambassador to Berlin, Sergey Nechayev, slammed the US’ opposition as an attempt to “push its competition aside” and clear the way for American suppliers of liquefied gas.

“It’s hard to believe that a country that is destroying the rules of free and fair trade, that is imposing import tariffs on its competition, that is flying slogans like ‘America First’ on its flags and often threatens biggest European concerns with illegal sanctions, is now really concerned about European interests,” the Russian envoy said in remarks published in German on Wednesday.

Last week, France unexpectedly rebelled against the project, but Berlin and Paris soon reached a compromise. Thanks to their agreement, the latest deal is not expected to impede the ongoing construction of Nord Stream 2.

Citing sources from negotiators’ circles, German public broadcaster ARD reported that the deal left room for Germany to approve exceptions from the EU-wide rules.

According to the EU Commission, however, exceptions are “only possible under strict procedures in which the Commission plays a decisive role.”

The Gazprom-backed pipeline is set to be completed by the end of the year.

 

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UK Defence Secretary looking for a fight with both China and Russia (Video)

The Duran Quick Take: Episode 87.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss UK Defence Secretary Gavin Williamson’s idea to deploy hard power against China and Russia, starting with plans to send Britain’s new aircraft carrier to the tense sea routes in the South China Sea.

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“Britain’s Gavin Williamson places Russia & China on notice, I’m not joking,” authored by John Wight, via RT

UK Defence Secretary Gavin Williamson is itching for conflict with Russia and China. He’s not mad. Not even slightly. But he is stupid. Very.

Unlike former fireplace salesman Gavin Williamson, I am no military expert. But then you do not need to be one to understand that while Britain going to war with Russia and China might work as a video game, the real thing would be an exceedingly bad idea.

So why then in a speech delivered to the Royal United Services Institute in London, did Mr Williamson’s argument on the feasibility of the real thing elicit applause rather than the shrieks of horror and demands he be sacked forthwith it should have? This is a serious question, by the way. It is one that cuts through British establishment verbiage to reveal a country ruled not by the sober and doughty political heavyweights of years gone by, but by foaming fanatics in expensive suits

Placing to one side for a moment the insanity of the very concept of Britain deploying hard power against Russia and/or China, the prospect of fighting a war against two designated enemies at the same time is a recipe for disaster. Not satisfied with that, though, Mr Williamson is actually contemplating a conflict with three different enemies at the same time – i.e. against Russia, China, and the millions of people in Britain his government is currently waging war against under the rubric of austerity.

“Today, Russia is resurgent,” Mr Williamson said, “rebuilding its military arsenal and seeking to bring the independent countries of the former Soviet Union, like Georgia and Ukraine, back into its orbit.”

For Mr Williamson and his ilk a resurgent Russia is a bad thing. Much better in their eyes if Russia, after the Soviet era in the 1990s, had remained on its knees as a free market desert; its state institutions in a state of near collapse and tens of millions of its citizens in the grip of immiseration. Yes, because in that scenario Western ideologues like him would have had free rein to rampage around the world as they saw fit, setting fire to country after country on the perverse grounds of ‘saving them’ for democracy.

As it is, he and his still managed to squeeze in a considerable amount of carnage and chaos in the years it did take Russia to recover. The indictment reads as follows: Yugoslavia destroyed; Afghanistan turned upside down; Iraq pushed into the abyss; Libya sent to hell.

By the time they turned their attention to Syria, intent on exploiting an Arab Spring that NATO in Libya transformed into an Arab Winter, Russia had recovered and was able to intervene. It did so in concert with the Syrian Arab Army, Iran and Hezbollah to save the day – much to the evident chagrin of those who, like Gavin Williamson, prefer to see countries in ashes rather than independent of Western hegemony.

As to the facile nonsense about Russia trying to bring Georgia and Ukraine back into its orbit, both countries happen to share a border with Russia and both countries, in recent years, have been used by the UK and its allies as cat’s paws with the eastward expansion of NATO in mind.

It gets worse though: “The Alliance must develop its ability to handle the kind of provocations that Russia is throwing at us. Such action from Russia must come at a cost.”

“Provocations,” the man said. Since British troops have been taking part in exercises on Russia’s doorstep, not the other way round, one wonders if Gavin Williamson wrote this speech while inebriated.

It is Russia that has been on the receiving end of repeated provocations from NATO member states such as the UK in recent times, and it is Russia that has been forced to respond to protect its own security and that of its people where necessary. Furthermore, not only in Russia but everywhere, including the UK, people understand that when you have political leaders intoxicated by their own national myths and propaganda to such an extent as Britain’s Defence Secretary, danger ensues.

The most enduring of those national myths where London is concerned is that the British Empire was a force for good rather than a vast criminal enterprise, that Britain and America won the Second World War together alone, that Iraq had WMDs, and that international law and international brigandage really are one and the same thing.

Perhaps the most preposterous section of the speech came when Mr Williamson tried to fashion a connection between Brexit and Britain’s military strength: “Brexit has brought us to a moment. A great moment in our history. A moment when we must strengthen our global presence, enhance our lethality, and increase our mass.”

Reading this, you can almost hear Churchill turning in his grave. Britain’s wartime prime minister had such as Gavin Williamson in mind when he famously said, “He has all the virtues I dislike, and none of the vices I admire.”

Mr Williamson obviously misread the memo talking up not the opportunity for increased conflict with China after Brexit but trade.

This was not a speech it was a linguistic car crash, one that will forever command an honoured place in compendiums of the worst political speeches ever made. As for Gavin Williamson, just as no responsible parent would ever dream of putting an 10-year old behind the wheel of car to drive unsupervised, no responsible British government would ever appoint a man like him as its Defence Secretary.

In years past, he would have struggled to find employment polishing the brass plate outside the building.

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The Birth Of A Monster

The banking establishment welcomed the Fed with open arms. What gives?

The Duran

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Authored by David Howden via The Mises Institute:


The Federal Reserve’s doors have been open for “business” for one hundred years. In explaining the creation of this money-making machine (pun intended – the Fed remits nearly $100 bn. in profits each year to Congress) most people fall into one of two camps.

Those inclined to view the Fed as a helpful institution, fostering financial stability in a world of error-prone capitalists, explain the creation of the Fed as a natural and healthy outgrowth of the troubled National Banking System. How helpful the Fed has been is questionable at best, and in a recent book edited by Joe Salerno and me — The Fed at One Hundred — various contributors outline many (though by no means all) of the Fed’s shortcomings over the past century.

Others, mostly those with a skeptical view of the Fed, treat its creation as an exercise in secretive government meddling (as in G. Edward Griffin’s The Creature from Jekyll Island) or crony capitalism run amok (as in Murray Rothbard’s The Case Against the Fed).

In my own chapter in The Fed at One Hundred I find sympathies with both groups (you can download the chapter pdf here). The actual creation of the Fed is a tragically beautiful case study in closed-door Congressional deals and big banking’s ultimate victory over the American public. Neither of these facts emerged from nowhere, however. The fateful events that transpired in 1910 on Jekyll Island were the evolutionary outcome of over fifty years of government meddling in money. As such, the Fed is a natural (though terribly unfortunate) outgrowth of an ever more flawed and repressive monetary system.

Before the Fed

Allow me to give a brief reverse biographical sketch of the events leading up to the creation of a monster in 1914.

Unlike many controversial laws and policies of the American government — such as the Affordable Care Act, the Troubled Asset Relief Program, or the War on Terror — the Federal Reserve Act passed with very little public outcry. Also strange for an industry effectively cartelized, the banking establishment welcomed the Fed with open arms. What gives?

By the early twentieth century, America’s banking system was in a shambles. Fractional-reserve banks faced with “runs” (which didn’t have to be runs with the pandemonium that usually accompanies them, but rather just banks having insufficient cash to meet daily withdrawal requests) frequently suspended cash redemptions or issued claims to “clearinghouse certificates.” These certificates were a money substitute making use of the whole banking system’s reserves held by large clearinghouses.

Both of these “solutions” to the common bank run were illegal as they allowed a bank to redefine the terms of the original deposit contract. This fact notwithstanding, the US government turned a blind eye as the alternative (widespread bank failures) was perceived to be far worse.

The creation of the Fed, the ensuing centralization of reserves, and the creation of a more elastic money supply was welcomed by the government as a way to eliminate those pesky and illegal (yet permitted) banking activities of redemption suspensions and the issuance of clearinghouse certificates. The Fed returned legitimacy to the laws of the land. That is, it addressed the government’s fear that non-enforcement of a law would raise broader questions about the general rule of law.

The Fed provided a quick fix to depositors by reducing cases of suspensions of their accounts. And the banking industry saw the Fed as a way to serve clients better without incurring a cost (fewer bank runs) and at the same time coordinate their activities to expand credit in unison and maximize their own profits.

In short, the Federal Reserve Act had a solution for everyone.

Taking a central role in this story are the private clearinghouses which provided for many of the Fed’s roles before 1914. Indeed, America’s private clearinghouses were viewed as having as many powers as European central banks of the day, and the creation of the Fed was really just an effort to make the illegal practices of the clearinghouses legal by government institutionalization.

Why Did Clearinghouses Have So Much Power?

Throughout the late nineteenth century, clearinghouses used each new banking crisis to introduce a new type of policy, bringing them ever closer in appearance to a central bank. I wouldn’t go so far as to say these are examples of power grabs by the clearinghouses, but rather rational responses to fundamental problems in a troubled American banking system.

When bank runs occurred, the clearinghouse certificate came into use, first in 1857, but confined to the interbank market to economize on reserves. Transactions could be cleared in specie, but lacking sufficient reserves, a troubled bank could make use of the certificates. These certificates were jointly guaranteed by all banks in the clearinghouse system through their pooled reserves. This joint guarantee was welcomed by unstable banks with poor reserve positions, and imposed a cost on more prudently managed banks (as is the case today with deposit insurance). A prudent bank could complain, but if it wanted to use a clearinghouse’s services and reap the cost advantages it had to comply with the reserve-pooling policy.

As the magnitude of the banking crisis intensified, clearinghouses started permitting banks to issue the certificates directly to the public (starting with the Panic of 1873) to further stymie reserve drains. (These issues to the general public amounted to illegal money substitutes, though they were tolerated, as noted above.)

Fractional-Reserve Free Banking and Bust

The year 1857 is a somewhat strange one for these clearinghouse certificates to make their first appearance. It was, after all, a full twenty years into America’s experiment with fractional-reserve free banking. This banking system was able to function stably, especially compared to more regulated periods or central banking regimes. However, the dislocation between deposit and lending activities set in motion a credit-fueled boom that culminated in the Panic of 1857.

This boom and panic has all the makings of an Austrian business cycle. Banks overextended themselves to finance the booming industries during America’s westward advance, primarily the railways. Land speculation was rampant. As realized profits came in under expectations, investors got skittish and withdrew money from banks. Troubled banks turned to the recently established New York Clearing House to promote stability. Certain rights were voluntarily abrogated in return for a guarantee on their solvency.

The original sin of the free-banking period was its fractional-reserve foundation. Without the ability to fund lending activity with their deposit base, banks never would have financed the boom to the extent that it became a destabilizing factor. Westward expansion and investment would still have occurred, though it would have occurred in a sustainable way funded through equity investments and loans. (These types of financing were used, though as is the case today, this occurred less than would be the case given the fractional-reserve banking system’s essentially cost-free funding source: the deposit base.)

In conclusion, the Fed was not birthed from nothing in 1913. The monster was the natural outgrowth of an increasingly troubled banking system. In searching for the original problem that set in motion the events culminating in the creation of the Fed, one must draw attention to the Panic of 1857 as the spark that set in motion ever more destabilizing policies. The Panic itself is a textbook example of an Austrian business cycle, caused by the lending activities of fractional-reserve banks. This original sin of the banking system concluded with the birth of a monster in 1914: The Federal Reserve.

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