Authored by George Ford Smith via The Mises Institute,

The first thing to know about Dr. Thomas E. Woods, Jr.’s’ book Our Enemy, the Fed is he’s giving it away. Click the link, get your copy and read the whole book. Clearly, such intellectual charity is not only rare but in the educational spirit of Mises.org. The subject matter is light-heavy but Woods, author of the bestseller Meltdown (reviewed here), navigates it with the smooth skill of a master, making the reader experience satisfying from beginning to end.

The title reflects another insight, paralleling as it does Albert Jay Nock’s Our Enemy, the State. Most of us were raised to believe government and its agencies serve our best interests. As libertarian scholarship has shown the truth is the exact opposite, particularly with government’s sleazy relationship with money and banking.

Admittedly, it’s a hard idea to accept since it involves a pernicious breach of trust, but Woods makes it abundantly clear. To our overlords we are easily-duped chattel.

Until Ron Paul decided to run for president and his End the Fed came along in 2009, the general public was mostly blind to the Fed’s existence. Austrians aside, the few who knew something about it — mostly university-trained economists on the take from the Fed — considered it a vital part of an advanced industrial economy. Yet the Fed had been around for 96 years when Dr. Paul’s book emerged. Given that it’s in charge of the money we use how did it remain in the shadows for tax-burdened citizens for nearly a century? What’s up with that?

The Federal Reserve Bank of St. Louis tells us the Fed’s congressional assignment is “to promote maximum employment and price stability.” (Bold in original) For these it talks about interest rates, and its aim is to increase the money supply so that prices rise gently at or around a 2 percent rate. 

How gentle is a two percent rate? After 10 years of two percent monetary inflation, it would take $121.90 to buy what $100 bought in year one. But that’s over a decade, and you might not notice it unless you’re one of the hungry poor not on welfare. The Fed’s inflation of the money supply has been ongoing since it began operations in 1914, draining 96 percent of the dollar’s purchasing power.

On what planet is a 96 percent devaluation considered stability? Its real purpose is to inflate then assure us it makes good sense. Never mind the boom - bust cycle it creates along with the debauchery of our currency. We’re being gaslighted. Where did all the newly-created money go? 

Dr. Paul, who had a long career in Congress whose confrontations with Fed Chairmen Alan Greenspan and Ben Bernanke have become legendary in libertarian circles, tells us:

Law permits this highly secretive, private bank to create credit at will and distribute it as it sees fit.

The chairman of the Federal Reserve can blatantly inject in a public hearing that he has no intention of revealing where the newly created credit goes and who benefits. When asked, he essentially answered, “It’s none of your business,” saying that it would be “counterproductive” to do so. [My italics]

The picture I get is of people in a hideout somewhere — in this case, the FOMC meeting in the Eccles building in Washington, D.C. — cranking out money then injecting it into the economy in some mysterious manner, while telling us in Keynesian doublespeak their operations keep us safe and prosperous.

Is it really hard to fathom that those in charge might be up to no good?

Woods comes out swinging

After defining the Federal Reserve System — the Fed — as the American central bank enjoying “a government-granted monopoly on the creation of legal-tender money,” Woods proceeds to evaluate the Fed from a broad or macro perspective. 

What exactly did the Fed fix? Christina Romer who served under Obama as Chair of his Council of Economic Advisors found that “recessions were in fact not more frequent in the pre-Fed than the post-Fed period.” Even comparing the periods of 1796-1915 to post-WW II — thus omitting the Great Depression of 1930-1945 — “economist Joseph Davis finds no appreciable difference between the length and duration of recessions as compared to the period of the Fed.”

Woods takes us back through American history to see how banking and credit developed. Government, which has no money of its own, befriends ones that have it. During the period between the expiration of the first Bank of the US and the creation of the Second Bank of the US — 1811-1817 — the government granted banks the privilege of expanding credit unsecured by deposits while allowing them to tell depositors attempting to withdraw their money to “come back in a couple of years.” While banks could be charged with legal counterfeiting and embezzlement, Woods does not use the terms. In fact, nowhere in the book does he use the words “counterfeit” or “embezzle.”

When the Second Bank of the US started inflating in 1817 it created the Panic of 1819. He writes:

The lesson of that sorry episode — namely, that the economy gets taken on a wild and unhealthy ride when the money supply is dramatically and artificially increased and then suddenly reduced — was so obvious that even the political class managed to figure it out.

Many inflationists before the panic became hard-money believers after. Condy Raguet and Daniel Raymond, a disciple of Alexander Hamilton, became hard-money advocates and wrote books on economics. John Quincy Adams cited the hard-money Bank of Amsterdam “as a a model to emulate.”

But the inflationists persisted and pushed for more government intervention, and Unit banking in particular:

In the nineteenth century, nearly all American states instituted a regulation known as unit banking, which limited all banks to a single office. No branch banking was allowed, whether intrastate or interstate. The obvious result was a very fragile and undiversified banking system in which banks could be brought to ruin if local conditions turned sour.

Fractional-reserve banking is a major cause of bank panics. But the US went further. Other countries did not “cripple their banking systems” with unit banking laws. Canada, in particular, had no unit banking laws and no banking panics. The Bank of Canada did not emerge until 1934:

As Milton Friedman was fond of pointing out, although the Great Depression claimed over 9,000 American banks, the number of banks that failed in Canada at that time was zero. American bank panics, it turns out, were in large part the result of government intervention — in the form of unit banking — in the first place.

Yet it was the market and the imposed pseudo-gold standard that took the blame, and Americans got Hoover’s meddling then FDR’s New Deal.

Later in the book Woods mentions the hands-off approach to the depression of 1920-1921, “which saw unemployment shoot up to 12.4 percent and production decline by 17 percent. Wholesale prices fell by 56 percent.” And the Fed kept its printing press quiet. According to the National Bureau of Economic Research the depression was over by the summer of 1921.

Falling prices are bad?

One of the strongest parts of Woods’ book is his treatment of deflation — falling prices. It is only in the inflationary world of larcenous economics that falling prices are the “It” to be avoided.

A few of the points he makes:

• Increasing the money supply to support increased production is a fallacy. “Any supply of money can facilitate any number of transactions.”

• The money supply under a hard money system grows “relatively slowly, and the supply of other goods and services increases more rapidly. With these goods and services more abundant with respect to money, their prices fall.”

• The claim that people would stop buying things if they knew prices would fall ignores the fact that people “value goods in the present more highly than they do the same goods in the future. This factor offsets the desire to wait indefinitely for a lower price.”

• If deflation is anticipated entrepreneurs and the firms they deal with would adjust their bids accordingly.

• With the increase in money’s purchasing power people could save simply by hoarding.

• Who’s hurt the most by deflation? The power centers in society — government and Wall Street. We hear hysteria over deflation because it hurts the establishment the most, “and only the mildest concern about inflation, which hurts everyone else.”

Conclusion

Tom Woods has published another gem and is giving it away. The war we’re fighting now depends for its outcome on sound information and, as always, personal integrity. Never forget, the Fed must go. His book provides much of the intellectual ammunition needed to neutralize the enemy and avoid repeating the mistakes that brought us this mess in the first place.

Just as President Biden was signing into effect the newly approved foreign defense package which includes $60 billion for Ukraine, the United Kingdom also rolled out its own massive aid package (though paling in comparison), first unveiled Tuesday.

Britain announced its single largest aid package for Ukraine yet, at the equivalent of $620 million (£500 million). According to UK NATO officials, the arms include Storm Shadow missiles among a total of 1,600 strike and air defense missiles, four million rounds of ammo, 60 boats, and over 400 vehicles.

Even though the White House is busy cautioning that in the coming months Russia is likely to make more gains on the front lines, according to fresh words of Jake Sullivan, British leadership is still talking about "winning".

Head of the UK military, Admiral Sir Tony Radakin, Via The Telegram

Defense Minister Grant Shapps, for example, had this to say about new aid: "This record package of military aid will give President Zelensky and his brave nation more of the kit they need to kick Putin out and restore peace and stability in Europe."

"The UK was the first to provide NLAW missiles, the first to give modern tanks, and the first to send long-range missiles," he added. "Now, we are going even further. We will never let the world forget the existential battle Ukraine is fighting, and with our enduring support, they will win."

Britain's military leadership is also echoing this optimism, with UK defense chief, Admiral Sir Tony Radakin, telling Financial Times that the West's new infusion of military aid will help Ukraine increase its long-range strikes on Russian territory:

Ukraine is set to increase long-range attacks inside Russia as an influx of western military aid aims to help Kyiv shape the war “in much stronger ways”, the head of the UK military has said.

Admiral Sir Tony Radakin acknowledged the downbeat mood surrounding Ukraine’s defence in an interview with the Financial Times, admitting the country was facing a “difficult” fight to repel advancing Russian forces.

But Britain’s chief of defence, a key figure in the west’s military support for Kyiv, stressed that such a gloomy “snapshot” of the war failed to recognise longer trends more in Kyiv’s favour.

Adm. Radakin continued, "As Ukraine gains more capabilities for the long-range fight . . . its ability to continue deep operations will [increasingly] become a feature" of the war. He emphasized of new weapons systems, "they definitely have an effect."

UK leadership has of late put the country's defense industry on a "war footing" in preparation to support Kiev for the long haul. More of Radakin's words point to escalation (and not negotiations) in the following...

"Don’t expect anyone to say publicly ‘this is the plan’ and A, B and C are now going to happen," he told FT. Some aspect of Ukraine's strategy and operations "will be hidden . . . some will be dictated by a tactical or operational advantage, and some also depends on more foundational aspects," he added.

Nowhere in the UK defense chief's interview was acknowledgement that these policies could lead to runaway escalation, and an eventual direct confrontation between nuclear-armed powers. The Kremlin has in response vowed that it will take more territory in Ukraine in order to counteract the longer range of NATO missiles.

Poland says it is ready and willing to help Ukraine with its crisis-level manpower and recruitment problems, as it could be poised to round up Ukrainian military-aged males and return them to their home country. Government officials are now strongly signaling just such a controversial plan.

Polish Defense Minister Wladyslaw Kosiniak-Kamysz issued the words Wednesday, largely in response to Ukraine's new law and policy requiring men between 18 and 59 living abroad to get or renew their passport only at offices inside Ukraine. It is designed to prevent them from leaving in the country and thus avoid military service.

"Poland has suggested in the past helping Ukraine so that those who are subject to military service go back to their country to fulfill their civic obligation, Kosiniak-Kamysz told Polsat News television," according to Reuters.

Getty Images

"I think many Poles are outraged when they see young Ukrainian men in hotels and cafes, and they hear how much effort we have to make to help Ukraine," he said, but without specifying what precise steps Warsaw is set to take.

According to more of the Polish defense minister's words:

"The Ukrainian authorities are doing everything to provide new soldiers to the front, because the needs are huge," Kosiniak-Kamysz said.

The Polish official said that Warsaw had previously offered to help Kiev track down those who dodge their "civic duty," but noted that "the form of assistance depends on the Ukrainian side."

Of course, we should note that such a policy of helping get young Ukrainian men 'off the streets' is highly convenient from a Polish perspective, given the historic anti-Ukrainian sentiment among the Polish population. Simply put, the two nationalities tend to hate each other, and Warsaw will now cast its policies pressuring Ukrainians to leave as somehow noble.

Ukraine's foreign minister Dmytro Kuleba wrote earlier this week on X that he had "ordered measures to restore fair attitudes toward men of conscription age in Ukraine and abroad." Kuleba complained, "How it looks now: A man of conscription age went abroad, showed his state that he does not care about its survival, and then comes and wants to receive services from this state."

Russian media has estimated that almost one million Ukrainians have been given temporary sanctuary in Poland, and that a significant but unknown portion of these are likely eligible for conscription.

As the West agree to send billions more to Ukraine, mass mobilisation gets underway as officers staged a mass raid in a cafe in Uzhgorod.

Eyewitnesses filmed mobilisation and police officers leading men out of the cafe who will no doubt be heading to the front shortly. pic.twitter.com/K2o1InhbTa

Despite Biden's $60 billion for Ukraine's defense having finally been signed into law by the president, the reality remains that Ukraine is fundamentally suffering a severe crisis of manpower. This essentially means that even as US weapons and equipment arrive, there are fewer and fewer troops experienced enough to actually man and operate them.

Via The Epoch Times,

Former British Prime Minister Liz Truss spoke Monday at The Heritage Foundation about how the United States and the United Kingdom are facing very challenging forces in the global left, not just in terms of their extremist activists, but also in the power they hold in our institutions.

She warned that conservatives must create a stronger infrastructure to take on the left—which is well-funded, activist, and has many friends in high places—by recruiting more conservative activists and candidates who can fight in the trenches in the ideological war that we now face.

Excerpts from her remarks are below.

Why am I launching “Ten Years to Save the West” in the United States as well as in the United Kingdom? Well, I like to think of the United States of America as Britain’s greatest invention, albeit a slightly inadvertent invention. And if you look at our history, from Magna Carta to the Bill of Rights to the American Constitution, we have developed and perfected representative democracy.

And if you look at what is going on in our societies, first of all, the Brexit vote back in 2016 and then the election of President Donald Trump later that year, you can see the same desires of our people for change and the same desires for those conservative values and that sovereignty.

And if you look at the battle for conservatism now and the frequency with which we get new prime ministers in the United Kingdom and the frequency with which you get new speakers of the House here in the United States, we can see again that there is a battle for the heart and soul of conservatism on both sides of the Atlantic. And I think that battle is very important. Because, let’s be honest, we have not been winning against the global left.

If you look at the history since the turn of the millennium, the left have had the upper hand. And it’s not the old-fashioned left who used to argue about the means of production and economic inequality. It’s the new left who have insidious ideas that challenge our very way of life.

Whether it’s about climate extremism that doesn’t believe in economic growth, whether it’s about challenging the very idea of a man and a woman and biological sex, whether it’s about the human rights culture that’s been bedded into so much of our society that makes us unable to deal with illegal immigration—those new ideas have been promulgated by the global left and they have been successful in infiltrating quite a large proportion of society and a large part of our institutions.

Let’s just look at the state of economics. I am a supply-sider. I know that it works. We saw it work under [U.S. President Ronald] Reagan and [UK Prime Minister Margaret] Thatcher, and yet we’ve seen the domination of Keynesian economics in recent years, bloated size of government, huge debts in both of our countries.

On the immigration and human rights culture, look at what is going on now on American university campuses where it is not safe anymore to be Jewish, or the streets of London where a Jewish man could not cross the road during yet another appalling protest, or the fact that we can’t seem to deport illegal immigrants either from your southern border or the small boats that are crossing the channel.

Or take wokery, another bad neo-Marxist idea developed from [Michel] Foucault and all those crazy post-modernists in the 1960s, the idea that biological sex is not a reality.

We now have President [Joe] Biden introducing regulations around Title IX, which means that girls could see biological boys in their changing rooms, in their locker rooms, in their school restrooms and not be able to do anything about it. And if they complain about it, they could be the ones guilty of harassment. How on earth can that be happening in our society?

Or the climate extremists who aren’t satisfied with just stopping coal-fired power stations here in America, [liquefied natural gas] terminals being built, fracking in the United Kingdom, but want to go further. Whether it’s imposing electric vehicles or air-source heat pumps or extra taxes on the public. Meanwhile, our adversaries in China are busy building coal-fired power stations every week.

I see that as unilateral economic disarmament in the middle of what is a various, serious threat to the West.

So how has it ended up that after the turn of the millennium, despite the fact that we have many conservative intellectuals and politicians, why have our institutions, why has so much of our public discourse shifted to the left?

Well, first of all, too many conservatives have not been making the argument. Now, I call them conservatives in name only, CINOs. I know in America you call them RINOs. But these conservatives in name only, rather than taking on those ludicrous ideas, instead have tried to appease and meet them halfway.

Why have they done this? Well, first of all, they don’t want to look mean. They don’t want to look like they’re against human rights. They don’t want to look like they’re against the environment. They don’t want to be mean to transgender people. They’ve allowed those arguments to affect their views on what is right and wrong. But it’s also more cynical than that.

If you want to get a good job after politics, if you want to get into the corporate boardroom, there are a group of acceptable views and opinions that you should hold. And most of them are on that list. If you want to be popular and get invited to a lot of dinner parties in Washington, D.C., or London, there are reviews on that list that you should hold. And people have chosen dinner parties over principle.

But the other thing I think we’ve missed on the conservative side of the argument, and I put my hands up to this, is the rising power of the administrative state. The fact that power—which previously lay in the hands of democratically elected politicians, like them or not they can be voted out of office—is now in the hands of so-called independent bodies, whether it’s central banks, whether it’s government agencies, or whether it’s the civil service themselves.

And what we’re seeing in bureaucracy in the United Kingdom, and I think here in the United States as well, is a growing activist class of civil servants who have views on transgender ideology or climate or human rights, which they are keen to promote in their roles.

I saw this firsthand and one of the key points the book is about is my battles that I had with that institutional mindset. And there’s a phrase that we use in Britain called “consent and evade.” Quite often the officials will be very polite on the request, but it will take a very long time to do if it’s something like helping deport illegal immigrants or sort out the Rwanda scheme. If it’s something that they like, like dealing with climate change, that will be expedited.

And I think it’s very difficult for people who haven’t worked in government to understand just how cumbersome and how treacle-like it has become. And I don’t know if that’s a product of the modern era, if it’s a product of the online society, but it is very, very difficult now to deliver conservative policies.

Now, I did many jobs in many different government departments. I was in the justice department, the environment department, the education department, the treasury, I was in trade, I was in the foreign office, and I faced battles against activist lawyers, against environmentalists, against left-wing educationalists.

But what I thought when I ran to be prime minister in 2022 is I thought I had the opportunity to change things because that was surely the apex of power. I hadn’t been able to change it as environment secretary or trade secretary, but as prime minister, surely that was the opportunity for me to be able to really change things.

Now, there’s a bit of a spoiler alert about the book. It didn’t quite work out. I ended up being the shortest-serving British prime minister as a result of trying to take on these forces. And the particular thing that I tried to take them on was the whole issue of our economy.

*   *   *

I come today with a warning to the United States of America. I fear the same forces will be coming for President Donald Trump if he wins the election this November. There is a huge resistance to pro-growth supply-side policies that will deliver economic dynamism and help reduce debt.

What the international institutions and the economic establishment want to see is they want to see higher taxes, higher spending, and more big government, and more regulation. They do not want to see that challenged. And we’ve already heard noises from the Congressional Budget Office and elements of the United States market about the financial stability situation.

So, what have I learned from my experience? What have I learned from my time in office? I have learned that we are facing really quite challenging forces of the global left, not just in terms of their virulent activists making extremist documents, but also the power they hold in our institutions. And that leads me to believe that what conservatives need is what I describe as a bigger bazooka.

Now, what do I mean by a bigger bazooka? Well, first of all, I mean that we need really strong conservative political infrastructure to be able to take on the left. They are well-funded, they are activists, they have many friends in high places. And we need strength and depth in our political operation.

That’s why I’m working on a new political movement in the UK called Popular Conservatism, which is about bringing in more activists, more candidates, more potential legislators, more operators who can actually fight in the trenches against the left in the ideological warfare that we now face.

The second thing we need to do is we need to dismantle the administrative state. And there are lots of people I speak to who say, “It’s just because you ministers aren’t tough enough. If only you were a bit bolder in taking on things, if only you had a bit more political will, you would be able to deliver.”

Those people are not right. Until we actually change the system, we are not going to be able to deliver conservative policy such as the depths of resistance in our institutions and our bureaucracy that we do have to change things first.

And what does that mean? Well, you’re ahead of us in the United States in that the president gets to appoint 3,000 people into the government positions. In Britain it’s only 100 people. And those 100 people are relatively junior. They’re not in charge of departments. So, I believe we need to change that in Britain. We need to properly appoint senior figures in our bureaucracy.

We also need to deal with the proliferation of unaccountable bureaucratic bodies. They have to go. There has to be a real bonfire of the quangos.

But even here in the United States, policies like Schedule F are going to be very, very important in order to be able to deliver a conservative agenda. And the project that Heritage is sponsoring, Project 2025, is another vital part of building that institutional infrastructure that can actually deliver conservative policies. Having seen what I’ve seen on both sides of the Atlantic, I think both of those things are vital in order for conservative policies to deliver.

But we can’t just deal with the administrative state at a national level because what we’ve also got is the global administrative state. We have the United Nations, the World Health Organization, we have the [Conference of the Parties] process.

And one of the things I tried to do was stop Britain hosting COP in Glasgow. I failed. But I want to see us in the future abandon that process. The best people to make decisions are people that are democratically elected in sovereign nations. It is not people sitting on international bodies who are divorced from the concerns of the public.

The final thing conservatives need to do is end appeasement. And by ending appeasement, I’m talking about the appeasement of woke Orwellianism at home as well as the appeasement of totalitarianism abroad. We have to do both of those things because both of those things are threatening our way of life.

Totalitarian regimes like China, Russia, and Iran have to be stood up to, the only thing they understand is strength. And now the military aid budget has been passed through Congress. There needs to be more clarity about how Russia can be defeated and how China and Iran will also be taken on. And in order to achieve that, we are going to need a change in personnel at the White House.

Now, I worked in Cabinet whilst Donald Trump was president and while President Biden was president. And I can assure you, the world felt safer when Donald Trump was in office. 2024 is going to be a vital year, and it’s the reason that I wanted to bring my book out now. Because getting a conservative back in the White House is critical to taking on the global left. And I hate to think what life would be like with another four years of appeasement of the woke left in the United States, as well as continued weakness on the international stage.

But my final message is that winning in 2025 or winning in 2024 and going into government in 2025 is not enough. It’s not enough just to win. It’s not enough just to have those conservative policies. That there will be huge resistance from the administrative state and from a left in politics that has never been more extremist or more virulent.

And that is why it will need all the resources of the American conservative movement, think tanks like Heritage, and hopefully your allies in the United Kingdom to succeed. But you must succeed because the free world needs you.

Reprinted by permission from The Daily Signal, a publication of The Heritage Foundation.