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Five Scary Financial Myths |
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Dear Reader, |
Men spin myths as naturally as spiders spin webs. |
Eve and Adam munched the apple, Noah's Ark stabled all animal species in duplicate, Zeus kinged Earth. |
Washington axed the cherry tree, Abe was honest, Roosevelt saved capitalism from itself. |
Democracy — the theory that the individual may be a dunce but 300 million dunces strung together equal Einstein — is ingenious. |
Examples run and run. |
The subjects of economics and finance are shot through with their own fantastic fictions. |
As the late economics writer Henry Hazlitt styled it: |
"Economics is haunted by more fallacies than any other study known to man." |
Economic Fallacies |
Among these are the fallacies that: |
Wise and learned experts from ivied institutions can repeal the iron laws of economics. |
A body of 12 Federal Reserve functionaries should determine the value of money for hundreds of millions of independent economic actors. |
Deficits do not matter. |
Prosperity springs from the printing press, money and wealth are identical twins, to have money is to have wealth. |
Sinking the nation into debt will raise it up into wealth. |
Negative interest rates are positives. |
To these we may add the fallacy that stocks, like mighty oaks, grow to the sky. |
And that "buy and hold" — through peak, through valley, over hill, over dale — is the everlasting way to wealth. |
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Five Myths About Markets and Finance |
Stock speculator Nick Giambruno founded an outfit named The Financial Underground. |
This fellow has pinpointed five specific financial myths that hagride investors. |
They are these: |
Myth #1: "Risk-Free" Returns |
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For decades, US government bonds were treated as the ultimate safe haven — where investors could stash cash with the promise of stability and zero risk. |
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That all changed in 2022, in 2022, the worst year for Treasuries in American history. The benchmark 10-year Treasury dropped nearly 18%, while the 30-year collapsed over 39%. Many bonds fared even worse… |
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That should have permanently buried the myth that Treasuries are risk-free. Yet many individuals — and nearly every major financial institution — still thoughtlessly cling to this belief… |
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Myth #2: The Lender of Last Resort and Fictional Reserve Banking |
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The idea that central banks act as a backstop during crises — a "lender of last resort" — sounds noble… |
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However, when central banks create money out of thin air to rescue failing institutions, it's really just legalized counterfeiting. |
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And let's be clear: the money you think you have in the bank? It's not actually there. |
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Most banks would collapse if even a tiny portion of depositors tried to withdraw their funds. That's because of fractional reserve banking — a practice that would be considered outright fraud in any other industry… |
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That's why fractional reserve banking is really fictional reserve banking. The reserves don't exist in any meaningful way — the system runs on smoke, mirrors, and a lot of blind trust. The illusion only holds because central banks stand ready with the money printer to bail it out when cracks appear… |
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Myth #3: Policymakers Aren't Central Planners |
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We often hear about "policymakers" adjusting economic levers to keep things stable. But this is really central planning by another name — more in line with top-down command economies than the free markets we're told we live in. |
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Myth #4: Many Elites Create Wealth |
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In many cases, those referred to as "elites" are not wealth creators but wealth extractors — parasites living off the productivity of others through favorable regulations, insider deals, seigniorage, cronyism, and bailouts. They are more accurately called parasites. |
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Myth #5: The Federal Reserve is a Free Market Institution |
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In The Communist Manifesto, Marx's fifth plank calls for the "centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly." That's a spot-on description of the Federal Reserve and other central banks. |
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In reality, the Fed is nothing more than a politburo of bureaucrats attempting to centrally plan the economy by tinkering with the money and interest rates — the most important prices in all of capitalism… |
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Seeing Through the Lies Is no Longer Optional |
Concludes the myth-shattering Mr. Giambruno: |
Many of the foundational beliefs propping up the modern financial system are riddled with contradictions, euphemisms, and carefully crafted illusions. |
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Scratch just beneath the surface, and it becomes clear: this isn't a system rooted in free markets — it's one driven by deception, control, and theft. |
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Seeing through the lies is no longer optional — it's essential. |
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I have alighted upon the identical conclusion. |
That conclusion — in fact — forms the inspiration behind and beneath this publication. |
Does that render us heretic? |
Well, then, let us declare ourselves heretics, raise our infidel flag… and train our cannons on the castle walls of the financial establishment. |
And while we are at it: |
We petition the government to shutter the Federal Reserve — and to direct its members toward productive employment in private industry — should an employer take any on. |
Their services are no longer required. They never were. |
Regards, |
Brian Maher |
for Freedom Financial News |
P.S. One book can't make you rich. We all know that. |
And I'm not necessarily saying that this book released by President Trump and Robert Kiyosaki will automatically make you rich. |
I would never — ever — say that. But… |
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How? |
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