A financial education from outside the Matrix- with Jeff Berwick

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The collapse of our current fiat currency/central banking economic system is a mathematical inevitability. Never has it been more important to acquire a financial education than in the current global economic context. The problem is that the financial education gleaned from within the Matrix, from the mainstream institutions and educational establishments and from the ‘6 O’clock News’ in your country, is full of lies, deception and Propaganda.

To find out the reality of the global economic situation you must look outside the Matrix. It is essential to distinguish between the facts and the misleading mainstream stories. In this interview with Jeff Berwick from ‘The Dollar Vigilante’ (Episode 52 of “Living outside the Matrix”), you can get an excellent summation of the essentials of what you must know to survive the coming financial storm.

Jeff touches on many inter-related topics that the listener can take note of, and study up on, in the fullness of their own time. Understanding concepts such as central banking, fiat currencies, the Federal Reserve, and hyperinflation, along with why the next financial collapse is mathematically inevitable, is an essential part of your financial education. He also points to two important books (that can be read in a day or so) to help you grasp the basics of economics. These are “Economics in One Lesson – by Harry Hazlitt” and “The Market for Liberty – by Morris Tannehill.

He also refers to the ubiquitous propaganda and lies that are rife within the mainstream narrative and the need to question everything we hear in the ‘News’. He points out the myths about capitalism and anarchy and how the meaning of the words has been hijacked and twisted. It is refreshing to hear the correct definitions from him. I hope you enjoy the interview.

Financial education basics – understanding economics

I use the following definition of economics: “The study of principles of human behaviour concerning the exchange of values (goods, services and money), and the socio-political conditions required for the creation of wealth.”

Over the past 50 years, Keynesian economics has become the basis for all Western economies. Most academics, politicians and economists today are Keynesian. What do they advocate? What are the key ideas of the Keynesian thinking? Well, it is based upon the writings of John Maynard Keynes (1883 – 1946), and broadly speaking, the Keynesians advocate the following…

1. Implicitly, property rights are not universally recognised and respected, only to a degree. You can own what property the state allows you to own, but the state can seize it from you at will either by taxation, compulsory purchase or other arbitrary decrees.
2. A centrally planned economy with an imposed fiat currency. Some semblance of a free market is tolerated yet the concept of central banking and the fixing of interest rates (the price of money) is excluded from the free market. A fiat currency is one issued by decree – that means you have to use it by order of the government. Without a free market in money, strictly speaking, there is no free market. This is why what we have today in the western world is called a mixed economy.
3. Regulation of the economy (a controlled economy – not a free market) by government intervention.
4. A belief in the need to ‘stimulate’ the economy by deficit spending. This means borrowing and increasing the public debt. Although Keynes also advocate reducing taxes to stimulate demand this is like trying to keep your cake and eat it too! The money has to come from somewhere, usually by confiscation in the form of taxes, or these days by creating money out of thin air using the printing press in the form of ‘Quantitative Easing’ (QE).
5. An almost obsessive belief in the necessity of prediction, along with the use of elaborate computer models. In spite of which crashes are not successfully predicted – at least not publicly.
6. Inherent in mainstream economics is the implicit assumption that the interests of the state supersede the interests of the individual. The individual is subordinated to the state. This means that you have no right to live for your own sake and to keep what is rightfully yours. It is important to recognise the implicit philosophical assumptions within the Matrix!

Austrian economic theory – the sane alternative

I have written about Austrian economics previously. I discussed the principles behind it with Dr Mark Thornton in Episode 31 of “Living outside the Matrix“.  ‘Austrian’ economic thinking is the rational solution waiting to be implemented when enough people do some thinking and join all the dots. The main tenets of Austrian Economic thinking are a free market and a respect for property rights.

1. A respect for property rights is the foundation stone for a wealth creation and economic activity. Without property rights no other rights are possible, and without the right to own and keep what we produce there is no incentive to produce anything or offer any services in exchange for personal gain. Without production, there are no goods to exchange and no wealth can be created. Wealth creation rests upon the production of goods. The production of goods rests upon a respect for property rights.
2. A free market is the other essential foundation of a successful economy and wealth creation. Through supply and demand, the free market determines price, the measure of value, and enables the efficient allocation of capital, resources and labour. It allows people to exercise their own independent choices based upon their own unique personal knowledge of their best interests and ensures most efficient production of the goods people want. Prices are knowledge surrogates.
3. Sound money. Austrian economics advocates a gold standard so that the measure of monetary value remains non-inflationary. This means that the yardstick of value remains constant – a self evidently desirable and necessary goal.
4. Austrian economics sees itself as a study of human behaviour and not strictly speaking a science, because human choices cannot be shown to be falsifiable. This means that any individuals choice cannot be shown to be incorrect or wrong. It is simply the choice that they made. Tomorrow they may make a different one, and that one won’t be wrong either.
5. Only individuals choose. Cost and utility are a subjective evaluation of each individual human choice.
6. Markets are spontaneous orders. A product of human action but not of human design. You cannot create and control a market, it is what happens, an evolutionary process that emerges out of the choices of all participating individuals. Markets are self-organizing and adaptive. Austrian economics does not advocate government regulation. It should also be noted that one regulation always leads to another, and another, and another. This is demonstrably inevitable. Regulations always hinder entrepreneurs and wealth creating initiatives.
7. The Austrian school is not so preoccupied with prediction due to the unpredictable nature of human choices. However Austrian economists have successfully predicted all the major economic crashes and downturns from 1929 to 2008.
8. Austrian economics is not a set of policies.

Inevitable collapse

Many commentators have been speaking about the mathematical inevitability of a collapse in the global system of fiat currencies issued and inflated at will by the central banks of nation states. Rob Kirby explained this in Episode 49 of “Living outside the Matrix” and offered his insights into strategies that we can all pursue to protect ourselves accordingly.

Jeff Berwick told me how it was this insight that inspired him to create The Dollar vigilante website and newsletter back in 2010. Many other reliable sources of accurate financial and economic information such as Mike Maloney have been saying the same for years. And as Jeff pointed out in the interview, it is better to be a year or so too early than a day too late!

The message here is self-educate NOW! You need a financial education to evaluate the truth from the deception. It is time to wise up and learn about what is really going on so that you can survive and prosper during the stormy times ahead. You can even make some money along the way if you are prepared to do your homework.

 

Your financial education will not be complete until you take the time to understand Bitcoin and the cryptocurrencies. This cannot be overstated. The Block Chain technology is here to stay, the genie is out of the bottle, and you simply have to find out about it and get interested in it. check out episode 32 of ‘Living outside the Matrix’ with Jeffrey Tucker for more information and also the post “The new evolution of money“.

Financial Education – Resources:

The Ludvig Von Mises Institute at https://www.mises.org

The Foundation for Economic Education at https://fee.org

The American Institute for Economic research at https://www.aier.org

Suggested Reading to further your financial education

“Economics in one lesson“ by Harry Hazlitt. I thoroughly recommend this classic book. It is an excellent read for anyone aspiring to understand economics. Easy to read and easy to understand – it’s brilliant.

“The Market for Liberty” – by Morris Tannehill. A recommendation from Jeff Berwick.

“The failure of the new economics” also by Harry Hazlitt. This is a line by line commentary and refutation of one of the most destructive and convoluted books of the century: John Maynard Keynes’s “General Theory of Employment, Interest and Money”.

“Human Action” by Ludvig Von Mises. A classic summary of sane economics.

It has never been more important to get a finacial education than it is today. I hope this post has helped inspire you to study-up. As always please feel free to join int he conversation and leave a comment below.

Nigel Howitt

Treehouse Farm, July 2018