Constitutional Crisis In Argentina? President At War With Central Bank.

Well, what a surprise. More rats in the emerging market closet. So I log in and see one of my feeds has this story out of Argentina involving central banksters and seizure of unconstitutional power. And the senior editor to the Buenos Aires Herald is writing an article defending the independence of central bankers. Defending ideology.

I have no idea what the root cause of Argentina's problem is, and really, at this point I don't care. But then isn't that really the general feeling of most everyone in developed countries? That we have our own problems to deal with and these countries are going to have to deal with their own crises? Exactly what we wrote would happen years ago when everyone, and I do mean everyone, was telling us how profligate the U.S. was and how emerging markets were currency and investment safe havens?

There are so many things I could write about on here if I had more time and were so inclined. But, let's use this situation as an example to make a quick point you likely won't read anywhere else. That is because the vast majority of the media is substantially undereducated in monetary policy as are the vast majority of financial professionals. And the vast majority of bears are ideologically-driven to believe banking should be in private hands because they ideologically view all government as incompetent.

So here's the deal. The Buenos Aires Herald editor is defending something he clearly knows nothing about. Not that I advocate the dynamics of what is happening in Argentina because I don't understand the dynamics. But he is defending a private monetary system which incents and perpetuates fraud and lack of access to capital for the vast majority of Argentinians. ie, The banking system is designed for the fortunate few.

The separation of central banking independence from Congress he refers to is a ruse as we have said time and time again. Let's go a step further than I have in my prior commentary of this topic and leak out a little more interesting information. Something I doubt you will read elsewhere. The independence of central banks is not to protect monetary policy from the government's profligate hands as is so often remarked. It is really to protect the bondholders of government debt from the people, the sovereign, ie government. To keep the people from monetizing the profligate debts benefiting the rich and ultimately held by the rich in the form of government bonds. To ensure the masses are forced to instead pay their enslaved debts to society's elite - the bondholders. The Herald editor unintentionally supports his master rather than a democratic institution by supporting private banking and the independence of its central bank. The rule of law has been hijacked by fraudulent elements through the incorporation of a private central bank in Argentina. To see it go would be a great victory for the sovereign of Argentina.

We need a new banking system. The problem is not the Federal Reserve - something most ideologues simply do not grasp. Public banking is the only true form of democratic banking. Private banking is the scourge of humanity. And that is why our founding fathers told us that private banking would destroy America and her ideals. And indeed it has. And in more ways than almost anyone could ever imagine from trade to economic development of underprivileged people to employment opportunities for all Americans to creating a chronic welfare environment for many to the perpetuation of racism to threatening Social Security to threatening our currency and on and on and on.

By the way, we have had our own Presidents at war with private banksters in our history as well.

More volatility, especially in emerging markets, dead ahead.

Link to the Buenos Aires editorial.

Subscriber-only Wall Street Journal article here.