Bill Bonner

The God Particle has been discovered!

Yesterday, the saints at central banks in China, Europe and the UK said they would perform what could only be a miracle. The world economy wheezes, rattles and shakes because it has been poisoned by too much debt. The central bankers offer a cure — more debt!

“Central banks take action,” is the headline in today’s Financial Times. “Moves to stimulate global economy,” the FT described them.

But what really got our attention was the ‘god particle’ story. Without it, say the scientists who tracked it down, we wouldn’t exist.

Of course, you could say that about a lot of things. Without air, we wouldn’t exist. Or water. Or sunlight.

Could we exist without Homeland Security? Without Twitter? Without rap music?

Apparently so. We did…for many thousands of years. Happily.

Could we exist without a central bank? Many people would reply ‘no’…

Some would say so because they are ignorant. Others would say so because they are just stupid. But any sensible person would admit that human life could exist without a central bank.

The US had no central bank before 1913. It had higher rates of GDP growth back then. It had a stronger currency too — the dollar of 1913 was worth about the same as a dollar of one hundred years earlier. Now, it’s worth about 3 cents…and disappearing fast. On the surface of the argument, it would appear that America’s central bank has actually made things worse. Maybe that is a coincidence; post hoc ergo propter hoc…and all that. But maybe there is a cause and effect relationship. Maybe a central bank CAUSES the economy to produce less wealth…and CAUSES the currency to lose value.

But central bank apologists insist that times have changed. Modern economies can’t exist without them, they claim.

Maybe. All we can say for sure, without benefit of a giant particle collider, or a know-it-all economist, is that the Fed is not the same as the God Particle; the former is a fairly recent innovation…but the latter has always been with us.

The Higgs-Boson particle is very small. And very short-lived. No one has ever actually seen it. However, the scientists who get paid to do this sort of thing assure us that it is a big deal, despite what The Financial Times may think. The FT put the ‘god particle’ below the Libor story yesterday, which perhaps shows that the paper has its priorities wrong…or that finance now IS actually more important than God.

According to the reports, Higgs-Boson is the thing that gives mass to other things. For us, this just raises more questions than it answers. It does not explain why other things need mass…nor why they didn’t have it in the past…nor where Higgs-Boson got it…nor what the recipients plan to do with it. The giving of mass, again…we suppose…based on what we read in the paper…and our experience of actually going to mass in the Catholic church…is what makes the particle godlike.

Which merely deepens the mystery for us. God himself would not seem to require mass. He is not like a block of wood, after all. He is more a part of the spirit world…which sounds a bit like the world Higgs-Boson inhabits.

And while we accept that He can do what he wants, we also feel justified in assuming that He’s not out to get us with some nasty trick…or merely looking out for NUMERO UNO.

Which makes this very different from the Libor story or the central bank story. In the Libor scandal we found Barclay’s bank insiders setting interest rates to suit themselves…rather than letting willing buyers and sellers set rates for themselves. This is, of course, more or less what we’d expected them to be up to…manipulating interest rates, lower, for their own benefit. Both the Chairman of Barclay’s and its chief executive have been forced out as a result.

But wait…isn’t manipulating interest rates lower exactly the subject of the central bank story too? The BoE, the BoC and the ECB are pushing down rates, just like the Barclay boys. They think they have the right. They say it will help stimulate growth.

Could the universe still exist without these interest rate manipulators? We don’t know; but we’d like to find out!

Regards,

Bill Bonner,
for The Daily Reckoning

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily ReckoningDice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill's daily reckonings from more than a decade: 1999-2010. 

  • http://www.investorsfriend.com The InvestorsFriend

    The Good Old Days?

    Oh to return 1912 when the U.S. was not yet burdened witha central bank…

    Such good times…

    ‘Course many houses were not yet burdened with indoor toilets yet, nor electricity.

    Human life expectancy was a lot shorter.

    Getting killed in a war was pretty common. Dieing young of some disease was pretty popular.

    People worked a LOT harder adn had lower standards of livings. They had less debt though. House may have been a shack, but their was usually no huge mortgage.

    Ah, and smell the aroma of horse manure in the streets and not a few open sewers. Those were the days!

    Well you can can have 1912. I’m a LOT happier to live in 2012.

  • Dave

    The Fed invented indoor plumbing, cleaned up the horse sh!t, and closed the open sewers. Got it.
    And I thought all they did was tinker with the money supply.

  • Linda

    “Getting killed in a war was pretty common.”
    Hahaha! If the gov’t actually had to pay for going to war before the first soldier left home, there would be a whole lot more peace.

  • http://www.investorsfriend.com The InvestorsFriend

    GOOD ONE, DAVE!

    That was funny. The point is though that life in 2012 is one heck of a lot better than it was in 1912.

    I’m not sure the Fed has harmed much but at least it did not prevent the vast bounty we enjoy today.

    Would a Gold standard have done better? I doubt it.

  • Hugh

    How does an intellectual person like Bill Bonner actually believe there is a man in the sky who keeps track of everything we do?

    Really?

  • Boris

    Would the gold standard have done better? Why not ask the Europeans? Their central bank never heard of a standard let alone a golden one.

  • Bennet Cecil

    The fed issues dollar coupons to finance political schemes. The wars, crony capitalism and vote buying would be impossible without dollar coupons. Workers can pull the plug whenever they like. Exchange your coupons for gold, silver, real estate, stocks immediately. Get rid of those banana dollars quickly before they spoil.

  • Richard

    Thank you Linda — You nailed it !!

    You have encapsulated in one sentence the totality of our perverse political money system.
    You know something. You should comment further.

    BB and his band of smarties can speak against the baffoonary of central banks but I challenge anyone to step forward and articulate the money concept. Don’t preach against the system which is killing us but rather provide the ideas which will save us.

    The people who create the wealth shall determine the means by which they will exchange their wealth. What does that have to do with a central bank, or gold?

    Tell us Mr Bonner, how would you maintain the purchasing power of our last 3 cents over the next 100 years?

  • Andrew B.

    Genius writing! This is something that I might read over and over, just for research purposes (don’t ask what research).

  • reeyaz

    Bill, Not only can the universe exist without these central banks but the entire universe can exist without any interest.With no interest, no fancy banks would exist;leave alone any bank manipulating the interest rate.Everything beautiful,simple and perfect.

  • imdaad

    It would be interesting to know and graphically see the value of the dollar from time immemorial to its present value of 3 cents.I have a feeling that it lost its value exponentially after the gold window was closed.

  • http://www/investorsfriend.com The Investoestorsfriend

    imdaad

    Go to investorsfriend.com search for the world gold and click on that articlea dn there is agraph that shows what you seek.

  • CT

    Good writing Bill. For some reason many read what they are looking for so a lot of times your writings turn people into gold bugs instead of taking up the issue of central banker robbers. Keep it up.

  • Rusty Fish

    Though rigid and clumsy, gold defines the demarcation. It will forever open to abuse in the absence of borderline or buffer zone. An additional 1 inch doesn’t matter. That ends up in an endless loop.

  • gman

    “Could we exist without a central bank? Many people would reply ‘no’…”

    if 1% is “many” ….

  • Longnine009

    The golden boy’s CEO once said they were doing
    God’s work. Are they going to sell particle derivatives?

  • ken

    I never lived in 1912 so how could I or for that matter anyone say living today is better or worse?

  • Me

    Central bankers through usury is the biggest disease ever known to man. Phuck interest, income tax and all the other schemes they devise. Police are here as the muscle for their hustle so Phuck them too. And I can say that bcuz all the laws are made so they can maintain their wealth and power. Turn off your tv. Grow a garden.

  • Longnine009

    1912: “Here be black- ice Captain Ben.”

    “Damn the icebergs man, all ahead flank.”

  • gman

    “I never lived in 1912 so how could I or for that matter anyone say living today is better or worse?”

    small pox. tuberculosis. outhouses. horse crap in the streets. no internet. school rooms and offices with no air conditioning. coal smoke. “everything but the oink.”

  • Seagull

    Thank you for this article. You’re spot on, as always!

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