The collapse of global financial markets is caused by an evolving paradigm shift that is reshaping our world.

The return to parity between the East and West is part and parcel of a greater paradigm shift now underway - a shift that is rebalancing fundamental polarities on a global scale, a shift that is affecting not only global economic and political alliances but gender as well.

- Page 98, How to Survive the Crisis And Prosper In The Process

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Inverse Lin-omena, the inverse of the Jeremy Lin phenomena where the unknown and previously discounted suddenly rise to prominence; here, the powerful and previously secure suddenly fall.

Today, central bankers, the mandarins of capitalism, are in disarray. Their attempts to contain capitalism’s current crisis increasingly resemble the tactics of a defeated army in retreat. Like Napoleon and Hitler’s respective “Moscow moments”, the 21st century economic crisis has brought to an end the bankers’ spectacular 300 year run at the table of power and wealth. 

The credit boom is built on the sands of banknotes and deposits. It must collapse… If the credit expansion is not stopped in time, the boom turns into the crack-up boom; the flight into real values begins, and the whole monetary system founders.
Ludwig von Mises, Human Action, 1949

I first attended the Canton Trade Fair in October 1976. All Chinese men and women were dressed in blue shirts and blue pants, bicycles were China’s main mode of transportation, Chairman Mao had just died and China’s mantra, “We will continue to support the policies of Chairman Mao Tse-Tung and criticize the policies of Deng Xiao-Ping”, was heard everywhere.

But three years later when I received White House invitations to attend the Washington DC reception for the Vice-Premier of the Peoples’ Republic of China, it was Deng Xiao-Ping who arrived; not a hard-line inheritor of Chairman Mao’s revolutionary precepts.  

On August 21, 2007, Darryl Robert Schoon delivered a talk before Session II of Gold Standard University Live (GSUL) in Szombathely, Hungary. Session II of Gold Standard University Live focused on the economic theories of the Austrian School of Economics, a school of economic thought based on free markets. Professor Fekete is a strong believer in these ideas. Darryl Robert Schoon's talk, Where We Are, How We Got Here, & Where We're Going" is available to you here as an audio download. - Click here.

DRSCHOON.COM features the articles of Professor A. E. Fekete of the Gold Standard University, a leading expert on gold and its role in financial markets and the economy.

There Is No Business Like Bond Business. Still.

In 2010 I published an article under the title There Is No Business Like Bond Business (www.professorfekete.com, January 18). In it I argued that the widely expected collapse of the U.S. Treasury bond (hereafter T-bond) market just would not happen. I also gave my reasons why analysts have failed to understand this. They missed the fact that the 30 year old bull market in T-bonds has been fuelled by risk-free bond speculation. Speculators buy the bonds in the open market, turn around to drop them in the lap of the Fed at a profit. They ‘front-run’ the well-advertised and widely anticipated ‘open-market operations’ of the central bank. The strategy to pre-empt the Fed’s open market purchases of bonds works especially well when the printing presses are revved up in an effort to fend off (real or imaginary) deflation.

Gary North gave me the honor of commenting at length on my errors, see: Antal Fekete’s Fantasy-Land Monetary Theory of Hyperinflation That Creates a Bonds Boom and Falling CPI, www.marketoracle.co.uk, February 12, 2010. I have not offered a rejoinder to North’s malicious comments as it is my policy never to dignify my detractors that way. But since other comments on my thoughts have also appeared that observe the rules of diplomatic intercourse and common courtesy, I thought that an update on the inflationary/deflationary debate and my take on the future of the dollar might be timely.