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The fifty-third annual meeting of the World Economic Forum (WEF) brought together fifty-two world leaders, seventeen hundred corporate executives, sundry artists, and other personalities to address “Cooperation in a Fragmented World.” Fragmentation is the nemesis of the World Economic Forum and its United Nations (UN) and corporate partners. “Fragmentation” means that segments of the world population are not adhering to the agenda of climate change catastrophism and the precepts of the Great Reset.

The Great Reset, meanwhile, amounts to a hybrid state-corporate woke cartel administering the global economy (and by extension the world’s political systems) under the direction of the WEF, the UN, the International Monetary Fund (IMF), the European Central Bank (ECB), and the World Health Organization, as well as top corporate decision-makers like BlackRock’s CEO, Larry Fink.

Lest we imagine that the WEF and its meetings merely represent the grandiose delusions of some ineffectual clowns, it should be noted that the WEF’s “stakeholder capitalism”—introduced in 1971 by Klaus Schwab, the WEF founder and chair, and Hein Kroos, in Modern Enterprise Management in Mechanical Engineering—has been embraced by the UN, by most central banks, as well as by the world’s leading corporations, commercial banks, and asset managers. Stakeholder capitalism is now considered to be the modus operandi of the world economic system.

In the 1971 book, Schwab and Kroos suggested that “the management of a modern enterprise must serve not only shareholders but all stakeholders to achieve long-term growth and prosperity.” The stakeholders are the compliant and complicit corporations and governments, not the citizenry.

BlackRock, the world’s largest asset man­ager, holds upwards of $10 trillion in assets under management (AUM), including the pension funds of many US states. In 2019, BlackRock’s CEO, Larry Fink, led the US Business Roundtable on stake­holder capitalism. CEOs from 181 major corpora­tions redefined the common purpose of the corpo­ration in terms of Schwab’s brainchild, stakeholder capitalism, signaling the supposed end of shareholder-driven capitalism. In his 2022 letter to CEOs, Fink made BlackRock’s own position on investment decisions quite clear. “Climate risk is investment risk,” Fink declared. He promised a “tectonic shift in capital,” an increased acceleration of investments going to “sustainability-focused” companies.

Fink warned CEOs: “And because this will have such a dramatic impact on how capital is allocated, every management team and board will need to consider how this will impact their company’s stock”(emphasis mine). According to Fink, stakeholder capitalism is not an aberration. Fink provides evidence of stakeholder capitalism’s woke imperative in his denial of the same: “It is not a social or ideological agenda. It is not ‘woke.’ It is capitalism.” This definition of capitalism would certainly have come as news to Ludwig von Mises.

Fink sits on the board of trustees of the WEF, along with former US vice president Al Gore; IMF managing director Kristalina Georgieva; ECB president Christine Lagarde, and Canadian deputy prime minister and minister of finance Chrystia Freeland, among others.

In his 2023 welcoming remarks and special address, Schwab pointed to the multiple crises facing the world: “the energy transformation, the consequences of covid, the reshaping of supply chains are all serving as catalytic forces for the economic transformation.” Incidentally, these are all factors that the WEF has promoted and/or exacerbated. And together they have added to the “high inflation, increasing interest rates, and growing national debt” that Schwab also decried.

Schwab pointed to the problem of social and geopolitical fragmentation and “a messy patchwork of powers,” alluding to the war in Ukraine. But Schwab also bemoaned “large corporate and social media powers, all competing increasingly for power and influence. As a result, the trend is again moving toward increased fragmentation and confrontation”—no doubt referring, at least in part, to the recent takeover of Twitter by Elon Musk, the loss of a major platform for propaganda and censorship. Naturally, Schwab referred to “climate change” and “viruses” as existential threats that could lead to “the extinction of large parts of our global population.” The question is whether “climate change” and “viruses” or rather the responses to these supposed menaces will be the cause of mass extinctions.

But “the most critical fragmentation” threat, Klaus argued, is posed by those who “go into the negative” and hold a “critical and confrontational attitude” to the Davos agenda—those with the temerity to oppose a global agenda of climate change catastrophism, with its attendant control over production and consumption and the virtual elimination of property and property rights for the vast majority.

A central issue that the fifty-third annual meeting addressed was “the Current Energy and Food Crises in the Context of a New System for Energy, Climate and Nature.” The theme accords with the WEF’s earlier and repeated claims that the agricultural supply chain is too “fragmented” for “sustainable” farming. “A resilient, environmentally-friendly food system will require a shift away from our current fragmented supply chains,” wrote Lindsay Suddon, chief strategy officer of Proagrica, in 2020. In Suddon’s and many other WEF papers, the “fragmentation” refrain is repeated. Sustainable farming cannot be achieved under the “fragmented” agricultural conditions that currently obtain.

One paper—entitled “Can Collective Action Cure What’s Ailing Our Food Systems?,” part of the 2020 WEF annual meet­ing—argued that fragmentation represents the ulti­mate barrier to sustainability:

As the heads of leading multilateral and com­mercial agricultural finance institutions, we are convinced that fragmentation within the current food systems represents the most sig­nificant hurdle to feeding a growing population nutritiously and sustainably.

Written by Wiebe Draijer, then chairman of the managing board at Rabobank, and Gilbert Fossoun Houngbo, the director general–elect of the In­ternational Labour Organization (ILO), the paper was quite telling. It warned that unless fragmentation is addressed, “we will also have no hope of reaching the Sustainable Development Goal of net zero emis­sions by 2050, given that today’s agricultural supply chain, from farm to fork, accounts for around 27% of greenhouse gas (GHG) emissions.”

Rabobank is one of the financial sponsors of the WEF’s Food Action Alliance (discussed below). On its website, Rabobank notes that it operates in the Netherlands, serving retail and corporate clients, and globally, financing the agricultural sector. The ILO is a UN agency that sets labor standards in 187 countries.

What interests could an international bank and a UN international labor agency have in common? According to their jointly authored paper, they have in common a resolve to eliminate fragmentation in agriculture. The banking interest in defragmentation is to gain a controlling interest in fewer and larger farms. The labor union management interest is to have more workers under its supervision and control. The banking and labor interests combined result in large farms worked by organized farm laborers—nonowners—under the controlling interest of the bank. A bonus rationale (more likely the main one) for this “scheme” is that the sustainable development goals (SDGs) of the UN’s Agenda 2030 can thereby more easily be implemented across “agricultural value chains and farming practices.” The authors conclude: “Most critically, we need to aggregate opportunities, resources and complementary expertise into large-scale projects that can unlock investment and deliver impact” (emphasis mine). “Collective action” is the “cure.”

In terms of agriculture, that is, “fragmentation” means too many discrete and disparate farms. The solution to this problem is consolidation, or the ownership of agricultural assets by fewer and fewer entities. Enter Bill Gates in the US. The “large-scale projects” will be owned by those who can afford to abide by the European Commission’s (EC) Farm to Fork Strategy. “The Farm to Fork Strategy is at the heart of the European Green Deal.” The goal of the European Green Deal is “no net emissions of greenhouse gases by 2050.” (More on the Farm to Fork Strategy and its effects on hunger and starvation below.)

The issue of food supply was addressed in a session entitled “Sustainably Served.” The summary caption for the session notes that “nearly 830 million people face food insecurity and more than 3 billion are unable to afford a healthy diet. Challenges to human and planetary health have been further compounded by rising costs, supply chain disruptions and climate change.”

The highlight of the “Sustainably Served” panel, which otherwise amounted to virtue signaling, came in the form of questions posed by an audience member, “Jacob, from America”:

I want to ask a question about food production. Last year the Dutch government announced harsh restrictions on the use of nitrogen fertilizers. Such restrictions forced many farmers to put much of their land out of production. And these policies led to 30,000 Dutch farmers protesting these government policies. And this was being done at a time when food production was already being severely curtailed because of the war in Ukraine. My questions are, one, does the panel support similar policies being implemented throughout the world? And do you support the Dutch farmers who are protesting? Do not such strict policies leading to reduced food production ultimately harm the poorest people of the world and exacerbate the problem of malnutrition?

The questioner was one of four, yet his questions dominated the rest of the session and led the moderator, Tolu Oni, and panelist Hanneke Faber, the president of nutrition at Unilever, which is based in the Netherlands, to become quite defensive. The latter replied:

I am Dutch, and our business is based in Holland. It’s a very difficult situation in Holland. I have a lot of sympathy for the farmers who are protesting, because it’s their livelihoods and their businesses at risk. But I also have a lot of sympathy for what the government is trying to do, because the nitrogen emissions are way too high. . . . So, something needs to be done. . . .

But it’s a very Dutch problem. I don’t think that you have to worry that those same solutions will have to go somewhere else.

This last statement is belied by the fact that the Netherlands is the headquarters of the WEF’s Food Action Alliance program and the site of the Global Coordinating Secretariat (GCS) of the WEF’s Food Innovation Hubs. Launched at the Davos Agen­da meeting in 2021, the Food Innovation Hubs have as their goal alignment with the UN Food Systems Summit: “The role of the GCS will be to coordinate the efforts of the regional Hubs as well as align with global processes and initiatives such as the UN Food Systems Summit.” And the stated goal of the UN Food Systems Summit is to align agricultural production with Agenda 2030’s SDGs: “The UN Food Systems Summit, held during the UN General Assembly in New York on September 23 [2021], set the stage for global food systems transformation to achieve the Sustainable Development Goals by 2030.”

“Sustainability” and “sustainable development” do not mean, as the words seem to suggest, the ability to withstand shocks of various kinds—economic cri­ses, natural disasters, etc. They mean development constrained by utopian, unscientific environmental­ist imperatives, inclusive of reduced production and consumption in the developed world and the thwart­ing of development that would result in the production of additional GHGs in the developing world. In terms of agriculture, this entails a reduction in the use of nitrogen-rich fertilizers and their eventual elimination and the phasing out of methane- and ammo­nia-producing cattle. In the Netherlands, the Food Hubs initiative has already led to the government’s compulsory buyout and closure of as many as three thousand farms, which will lead to dramatically reduced crop yields from the world’s second-largest exporter of agricultural products.

The situation in the Netherlands is also part of the European Commission’s Farm to Fork Strategy. Under the Trump administration, the United States Department of Agriculture (USDA) found that adopting the plan would result in a decline in agricultural production of between 7 percent and 12 percent for the European Union, depending on whether the adoption is EU-wide or global. With EU-only adoption, the decline in EU agricul­tural production was projected to be 12 percent, as opposed to 7 percent should the adoption become global. In the case of global adoption, worldwide agricultural production was projected to drop by 11 percent. Further, the USDA reported:

The decline in agricultural production would tighten the EU food supply, resulting in price increases that impact consumer budgets. Pric­es and per capita food costs would increase the most for the EU, across each of the three sce­narios [a middle scenario of adoption of Farm to Fork by the EU and neighboring nation-states was included in the study]. However, price and food cost increases would be significant for most regions if [Farm to Fork] Strategies are adopted globally. For the United States, price and food costs would remain relatively unchanged except in the case of global adoption.

Production declines in the EU and elsewhere would lead to reduced trade, although some regions would benefit depending on chang­es in import demand. However, if trade is re­stricted as a result of the imposition of the proposed measures, the negative impacts are concentrated in regions with the world’s most food-insecure populations. . . .

Food insecurity, measured as the number of people who lack access to a diet of at least 2,100 calories a day, increases significantly in the 76 low- and middle-income countries covered in our analysis due to increases in food commodi­ty prices and declines in income, particularly in Africa. By 2030, the number of food-insecure people in the case of EU-only adoption would increase by an additional 22 million more than projected without the EC’s proposed Strate­gies. The number would climb to 103 million under the middle scenario and 185 million un­der global adoption. (emphasis mine)

Thus, we see that “sustainably served” means sustainably starved.

Another panel of note was “Stewarding Responsible Capitalism,” which featured Brian T. Moynihan, CEO of Bank of America and chair of the WEF business council, among others. An arch proponent of stakeholder capitalism, Moynihan suggested that companies that do not meet environmental, social, and governance (ESG) criteria will simply be left behind. No one will do business with such companies, he said.

Moynihan’s comments revealed the extent to which stakeholder capitalism and the metric for measuring it, the ESG index, have penetrated commercial banking. In fact, over three hundred major banks are signatories of the UN’s “Principles for Responsible Banking,” “representing almost half of the global banking industry.” Meanwhile, forty-seven hundred asset management firms, as­set owners, and asset service providers have signed the UN’s six “Principles for Responsible Investment.” These principles are entirely focused on ESG compliance and meeting the UN’s Agenda 2030 sustainable development goals. ESG indexing now per­vades every aspect of banking and investment businesses, including what companies they invest in, how they adhere to ESG metrics themselves, and how they cooperate with competitors to pro­mote ESGs. Thus, the goal of the principles is to universalize ESG investing. ESG indexing raises the cost of doing business, starves the noncompliant of capital, and creates a woke cartel of preferred producers.

In the “Philanthropy: A Catalyst for Protecting Our Planet” session, US climate envoy John Kerry suggested that he and the people at Davos were “a select group of human beings, [who], because of whatever touched us at some point in our lives, are able to sit in a room and come together and actually talk about saving the planet.” Betraying the religious, cultlike character of the Davos group, Kerry suggested that his and others’ anointment as saviors of the planet was “almost extraterrestrial.” If you tell them you are interested in saving the planet, “most people,” Kerry continued, “they think you are a tree-hugging leftie liberal do-gooder.” But I submit that “most people” think Kerry and his ilk are not do-gooders at all but rather control freaks and megalomaniacs bent on controlling the world’s population.

On other panels, the speakers stated that eating meat, driving cars, and living outside the bounds of fifteen-minute cities should be disallowed.

In short, with the Davos agenda, we are confronted with a concerted, coordinat­ed campaign to dismantle the productive capabil­ities in energy, manufacturing, and farming. This project, driven by elites and accruing to their benefit, is amounting to the largest Great Leap Backward in recorded history. If it is not stopped and reversed, it will lead to economic disaster, including dramatical­ly reduced consumption and living standards. And it will almost certainly result in more hunger in the developed world and famines in the developing world. WEF chairman Schwab may out­do Chairman Mao. If we let him.

On the dedication page of Ron Paul’s The Revolution: A Manifesto, we find these words:

“To my supporters: I have never been more humbled and honored than by your selfless devotion to freedom and the Constitution.”

The modifier “selfless” is intended as a moral tribute. Imagine instead if he had written “selfish.” How would that go over?

What are the facts? Can we really say that people who fight for freedom are acting in self-denial? Wouldn’t freedom be an infinitely better condition to live under than the controlled society we now have or the totalitarian slave state we’re edging toward? And if this is true, wouldn’t it be correct to say Paul’s supporters act in their conscientious self-interest, and therefore their support should be considered selfish?

So why didn’t he use that word?

As authors Yaron Brook and Don Watkins argue in their stimulating book, Free Market Revolution: How Ayn Rand’s Ideas Can End Big Government, it is the widespread inability to affirm the self that accounts for the continuing decline of freedom. And since political freedom implies economic freedom, traditional selfless morality becomes capitalism’s greatest enemy.

The Triumph of Greed?

When the financial crisis arrived in 2007–2008, capitalism’s enemies had no trouble spotting whom they believed were the culprits: greedy businessmen and speculators. Once again, the government had trusted them with freedom, and once again their insatiable greed brought the economy to its knees. But Brook and Watkins point out what should be obvious, that freedom in economic affairs had been increasingly restricted for decades:

Because the conventional view of selfishness remained entrenched, it was not the “public servants” in Washington who took the blame. . . .

The true lesson of the financial crisis is exactly the opposite of what the pundits concluded. The conventional view is that the free market failed. In fact, it was the unfree market that failed, and it is more freedom that is the solution.

As they tell us later while discussing soaring healthcare costs:

It’s no accident that we don’t have a computer crisis, or a hair salon crisis, or a veterinary crisis. Nor is it an accident that we did have a housing and financial crisis. Along with housing and finance, medicine is one of the most regulated industries in the United States. (emphasis added)

But wait—Bernie Madoff was selfish, was he not? He was trusted and left free to gain as much money as he could, which for him meant cheating his clients through an elaborate Ponzi scheme. Could it not be argued that the combination of freedom and selfishness cost his clients billions?

Ask almost anyone to name an example of a selfish person, and Madoff becomes a prime candidate. “To be selfish is to be like Madoff,” the authors write, “to screw anyone, even family and friends, in order to get more, more, more for me, me, me. Madoff is just the latest poster boy for the evil of selfishness.”

But there’s a problem with this portrayal of selfishness—it includes people who don’t swindle others to get ahead. It includes people who make a lot of money by producing goods that others value. It includes people like Steve Jobs, “who was routinely derided as selfish” and was condemned for focusing on profit rather than philanthropy. A 2006 column in Wired put it more bluntly: Jobs was “nothing more than a greedy capitalist who’s amassed an obscene fortune. It’s shameful,” adding that “he skates away from the responsibilities that come with great wealth and power.”

Brook and Watkins reject this analysis:

Does it really make sense to equate producers like Jobs with criminals like Madoff—to accuse them of the same dark motive and the same moral crime (in spirit, if not in scale)? One creates wealth; the other steals it. One thrives by trading with other people; the other destroys the lives of everyone he touches. One works incredibly hard to build a product or company he can be proud of; the other spends his time trying to cover up the fact that he has nothing to be proud of.

Anyone who takes the time to look at how businesses actually succeed will find, in most cases, “not ruthless exploitation but mutually beneficial production and trade; an Apple economy, not a Madoff economy.”

This view of trade runs counter to the conventional notion of trade as a zero-sum (win/lose) game. Yesterday, I bought groceries at a local supermarket. If trade is a zero-sum game, then one of us lost. I came home with the groceries I wanted, and the supermarket had the money it wanted—a win/win exchange. What we each gave up in trade, we gave up voluntarily. I didn’t have to settle on that supermarket; I could have gone elsewhere. No one forces the supermarket to stay in business; if it can’t make a profit, it will close. Right now, it’s mutually beneficial for me to shop there and for the store to stay open.

In this sense, each of us was pursuing his own rational self-interest, what Ayn Rand defined as selfish. The store doesn’t sell groceries under cost as a matter of charity, nor do I shop there to do it a favor.

Should the supermarket do more than offer goods I want at prices I can afford? Should it be “skating” toward other goals that the “right” people regard as its “social responsibilities”?

To get them to swallow the idea that it’s their duty to serve and sacrifice, the altruistic push for corporate “social responsibility” has taught businessmen that their choice is either some monomaniacal focus on the “bottom line”—one that involves ignoring many of the factors that determine a company’s bottom line—or a mawkish pursuit of a “service” agenda. . . .

Any company that achieves productive success [such as my local supermarket or Apple] should self-confidently reject calls to “give back.” It created wealth—it has nothing to atone for.

As the authors conclude, “the path to profits is paved in principle,” not chicanery or crime—something the skaters of this world will likely never understand.

The US Bureau of Labor Statistics released new Producer Price Index (PPI) data on Wednesday, and it looks like the rate of increase in price inflation is slowing. Nonetheless, year-over-year price inflation in December remained near 40-year highs, and shows the marketplace is still dealing with the nearly six-trillion-dollar surge in the money supply that took place during 2020 and 2021. 

The PPI is a measure of prices at the production phase of goods and services. Prior to 1978, the index was known as the Wholesale Price Index.

In December, year-over-year PPI growth came in at 6.2 percent which was a 21-month low. The PPI had most recently peaked in March of 2022 at 11.6 percent. December’s print was a (seasonally-adjusted) drop of 0.8 percent, month, over month. According to this measure, it does indeed seem that price inflation is slowing.

Of course, if we look at the index overall, and not just at rates of increase, we find wholesale prices are up 17 percent from where they were in early 2020. This generally reflects a similar trend in the CPI index which is up about 15 percent over the same period. Notably, the 17-percent increase in wholesale prices also outpaces the increase in the Dow which is up 14 percent over the same period. 

At appears both workers and businesses need growth of 15 percent or more during this period just to keep up with consumer prices, and 17 percent or more to keep up with wholesale prices. These numbers also belie the popular narrative on the Left that consumer prices are only rising because of “greedflation” or corporate greed. By that narrative, inflation is fueled by sellers arbitrarily marking up their prices to exploit workers and consumers. Yet, if growth in wholesale prices is similar to consumer price growth, it’s hard to see how sellers are enjoying a windfall from rising prices. Rather, one could interpret this is a matter of sellers attempting to keep up with their own rising costs. 

So why are PPI prices slowing now? There’s good reason to believe it reflects a slowing economy. Indeed, the economic data pointing toward a slowing economy and recessions continues to pile up. December’s Leading Economic Indicators measure is flashing recession. Homebuyers are canceling purchases at levels exceeding what we saw in 2008. The New York Fed’s recession modeling shows the highest recession probability since 1982. The yield curve is inverted to a depth not seen in more than 40 years. 

Indeed, once PPI growth takes a sustained downward turn, the US is often already in a recession or headed into one. We can see this pattern in 1982, 1990, 2000, 2008, and 2019. And now in 2022. 

Expect Wholesale Prices to Fall as Easy Money Dries Up

Changes in wholesale prices often are described as an early indicator of where consumer prices are headed. One way to interpret this is to conclude that as wholesale prices change, retailers are forced to respond with higher prices themselves. This isn’t quite right, however. Ultimately, the prices of wholesale or “production goods” are actually determined by the prices of goods at the final retail, consumer stage. That is, it’s the reverse of the usual view of PPI inflation. After all, a retailer wouldn’t pay for materials or wholesale goods at all if he didn’t think he could sell them—or sell goods made with them—at a profit. Thus, beyond the short term, the prices of these production goods cannot be set without regard for the expected prices of retail goods. For example, a producer of wood furniture won’t buy certain woods if the prices of that wood make it impossible to sell furniture as a price consumers are willing to pay. If the furniture maker does make the mistake of paying for wood at unprofitable prices, then he will go out of business, and he will no longer demand any of that wood at all. Thus, those firms that provide unfinished wood wholesale to furniture makers cannot dictate prices to the furniture makers. Ultimately, it is the consumers of the finished furniture who dictate the price. 

On the other hand, in an inflationary environment consumers, flush with cash from money-supply inflation will bid up the prices of furniture while depleting the furniture makers’ inventory. In turn, furniture makers will bid up the prices of wood in order to build more furniture.  We’ll then see increases in both consumer prices and producer prices. It is possible we could observe cases in which changes in producer prices appear to cause changes in consumer prices. Thanks to competition at the retail level, many retailers may attempt to keep down prices to maintain customer loyalty, even while bidding up producer prices.

Nonetheless, given that producer prices are heavily affected by consumer spending, slowing growth in producer prices is exactly what we’d expect to see right now. After all, fundamentals in consumer buying power continue to show growing weakness. Credit card debt is mounting. Disposal income is falling. Real wages have fallen for twenty-one months in a row. 

It appears that consumers are finally reaching their limits in terms of willingness to pay higher prices. The Wall Street Journal reported last week that unit sales of general merchandise fell 7 percent year over year in 2022, even though sales in dollar terms fell only 2 percent. Similarly, unit sales of food and beverage fell 3 percent during the same period, but dollars spent on these items rose ten percent. 

In other words, people paid more money for goods, but bought fewer items. According to the Journal, many retailers now report they can’t afford to keep raising prices. The consumer well is drying up. That’s a recipe for slowing price inflation, both at the producer and consumer levels. 

President Biden is likely to celebrate slowing inflation as some sort of great achievement on the part of the administration. But it’s just what we’d expect from from a weak economy.

In 2022, central banks will have purchased the largest amount of gold in recent history. According to the World Gold Council, central bank purchases of gold have reached a level not seen since 1967. The world’s central banks bought 673 metric tons in one month, and in the third quarter, the figure reached 400 metric tons. This is interesting because the flow from central banks since 2020 had been eminently net sales.

Why are global central banks adding gold to their reserves? There may be different factors.

Most central banks’ largest percentage of reserves are US dollars, which usually come in the form of US Treasury bonds. It would make sense for some of the central banks, especially China, to decide to depend less on the dollar.

China’s high foreign exchange reserves are a key source of stability for the People’s Bank of China. But the high amount of US dollars ($3.1 trillion) may have been a key stabilizing factor in 2022, but it could be too much if the next ten years bring a wave of money devaluation that has never happened before.

Central banks have been talking about the idea of issuing a digital currency, which would completely change the way money works today. By issuing a digital currency directly into a citizen’s account at the central bank, the financial institution would have all access to savers’ information and, more importantly, would be able to accelerate the transmission mechanism of monetary policy by eliminating the channels that prevent higher inflation from happening: the banking channel and the backstop of credit demand. What has kept inflation from going up much more is that the way monetary policy is passed on is always slowed down by the demand for credit in the banking system. This has obviously led to a huge rise in the prices of financial assets and still caused prices to go through the roof when the growth in the money supply was used to pay for government spending and subsidies.

If central banks start issuing digital currencies, the level of purchasing power destruction of currencies seen in the past fifty years will be exceedingly small compared with what can occur with unbridled central bank control.

In such an environment, gold’s status as a reserve of value would be unequalled.

There are more reasons why a central bank might buy gold.

Central banks need gold because they may be preparing for an unprecedented period of monetary devastation.

The Financial Times claims that central banks are already suffering significant losses as a result of the falling value of the bonds they hold on their balance sheets. By the end of the second quarter of 2022, the Federal Reserve had lost $720 billion while the Bank of England had lost £200 billion. The European Central Bank is currently having its finances reviewed, and it is predicted that it will also incur significant losses. The European Central Bank, the US Federal Reserve, the Bank of England, the Swiss National Bank, and the Australian central bank all “now face possible losses of more than $1 trillion altogether, as once-profitable bonds morph into liabilities,” according to Reuters.

If a central bank experiences a loss, it can fill the gap by using any available reserves from prior years or by requesting help from other central banks. Similar to a commercial bank, it may experience significant difficulties; nevertheless, a central bank has the option of turning to governments as a last resort. This implies that the hole will be paid for by taxpayers, and the costs are astronomical.

The wave of monetary destruction that could result from a new record in global debt, enormous losses in the central bank’s assets, and the issuance of digital currencies finds only one true safe haven with centuries of proven status as a reserve of value: Gold. This is because central banks are aware that governments are not cutting deficit spending.

These numbers highlight the enormous issue brought on by the recent overuse of quantitative easing. Because they were unaware of the reality of issuer solvency, central banks switched from purchasing low-risk assets at attractive prices to purchasing any sovereign bond at any price.

Why do central banks increase their gold purchases just as losses appear on their balance sheets? To increase their reserve level, lessen losses, and foresee how newly created digital currencies may affect inflation. Since buying European or North American sovereign bonds doesn’t lower the risk of losing money if inflation stays high, it is very likely that the only real option if to buy more gold.

The central banks of industrialized nations will make an effort to shrink their balance sheets in order to fight inflation, but they will also discover that the assets they own are continuing to depreciate in value. A central bank that is losing money cannot immediately expand its balance sheet or buy more sovereign bonds. A liquidity trap has been set. Quantitative easing and low interest rates are necessary for higher asset values, but further liquidity and financial restraint may prolong inflationary pressures, which would then increase pressure on asset prices.

The idea that printing money wouldn’t lead to inflation served as the foundation for the monetary mirage. The evidence to the contrary now demonstrates that central banks are faced with a serious challenge: they are unable to sustain multiple expansion and asset price inflation, lower consumer prices, and fund government deficit spending at the same time.

So, why do they buy gold? Because a new paradigm in policy will unavoidably emerge as a result of the disastrous economic and monetary effects of years of excessive easing, and neither our real earnings nor our deposit savings benefit from that. When given the choice between “sound money” and “financial repression,” governments have forced central banks to choose “financial repression.”

The only reason central banks buy gold is to protect their balance sheets from their own monetary destruction programs; they have no choice but to do so.

Not that long ago, my grandparents explained to me why they never discussed politics, religion, or sex in mixed company. Politeness was their currency. And why antagonize people or create ill will over private matters?

Fast-forward to 2023, and their advice seems needed more than ever. Today nothing is private; everything is political. And American politics is characterized by a perverse degree of bad faith.

Whether the country really is more divided than any time since the Civil War or this is merely our perception—thanks to social media rancor, nonstop cable news, and rabid political partisanship—scarcely matters. Either way, the psychology is clear. Anger directed toward the “other” delivers the desired dopamine hit. Under conditions of extreme distrust, scapegoating is far easier and more satisfying than cooperation. We see this clearly with attitudes toward Brexit, Hillary versus Trump, covid lockdowns, vaccines, Ukraine, Antifa, January 6, the 2022 midterm elections, and a host of other manufactured issues. Americans are watching at least two different movies.

So does this political polarization cause, or merely reflect, broader social and cultural rifts? The late Andrew Breitbart insisted politics is downstream from culture, which seems broadly correct when we observe the progressive near monopoly over cultural institutions. But there has been a concurrent quiet revolution in law and politics, creating a “rival constitution” and placing politics more squarely at the center of American life. Today we live today in a crass and hyperpoliticized reality where every facet of life—race, sex, sexuality, family, marriage, money, career—is seen as a political statement. This aids and abets the progressive project, which leverages the Leninist/Stalinist “Who, Whom?” distinction as carrot and stick.1

Operating effectively in this environment requires us to be clear eyed and honest about the rules of engagement. Politics is not war, but it suggests violence. People who simply don’t want to fight, or who don’t recognize the fight taking place, are at a tremendous disadvantage. Ideas, debate, logic, and persuasion satisfy our sense of fairness and honor. But they are effective only when widely accepted and their results adhered to. We are not required to delude ourselves about this or to turn the other cheek to retain our humanity.

These rules of engagement may seem obvious and commonsense but nonetheless may be helpful for your family and friends who do not fully grasp the situation.​

Assume bad faith in political matters.

Many politicians, especially at the federal level, have dropped any pretense of working to achieve democratic consensus. Lying, gaslighting, and subterfuge are the operative tools to win elections and vanquish the other side. This is not the simple cynicism of my grandfather’s day, when the whole political charade might well have been viewed as a gang of crooks fighting over spoils. This is not a period scandal like Watergate, Iran-Contra, or Teapot Dome. Today we must entirely rework our understanding of modern US politics, understanding it as a precursor to violence rather than a mechanism for governance and dispute resolution. Americans acutely feel this brutal winner-take-all element in our politics. Consensus has nothing to do with it. “Democracy” is nothing more than a cheap moniker for “when progressives win.” So your default position regarding any political statement or proposal must be disbelief.

Assume institutions are politicized.

Like it or not, the nonmarket, nongovernmental institutions of civil society no longer operate as a buffer between individual and state. They have been almost entirely captured by progressive ideology, from mainline Protestant denominations and Catholic leaders to the American Civil Liberties Union and Boy Scouts of America. We no longer can assume their stated purpose is their actual purpose or that their public stances can be separated from politics. Thus, Robert Conquest’s third law can be updated slightly to reflect bureaucratic control of institutions that not only places them at odds with their original raison d’être but tasks them with an entirely new agenda of serving the progressive project.

Assume business is politicized.

Medicine, education, law, banking, accounting, insurance, pharmaceuticals, arms manufacturing, and much of the tech world have been enormously affected. Firms operating in these industries often resemble what Michael Rectenwald terms “governmentalities,” in which ostensibly private market actors willingly take on the role and imperatives of the state. Add DEI (diversity, equity, and inclusion) and ESG (environmental, social, and governance) to the mix, and virtually all US public companies now at the very least toe the government line when it comes to all manner of political positions. This means heroic smaller and privately held companies must be the true “private sector” drivers of the economy, a bright spot where real win-win social cooperation can take place.

Treat public policy as politics.

Beware of those advancing a particular agenda under the guise of “public policy.” In a hyperpolitical environment, this is simply code for preferred politics. There may have been a time in American history when there actually were nonpartisan policy wonks laboring away in the basements of federal agencies or in think tanks, but that time clearly is past. Politics, not policy, drives federal lawmaking and the administrative state. If Joe Biden manages to enact his student loan forgiveness bill, for example, it won’t have anything to do with some study or statistical analysis provided by the Brookings Institution. It will reflect raw politics and patronage toward younger voters, just as George W. Bush’s Medicare Part D bill pandered to older voters. And remember, we don’t need “policy” at all, whether monetary policy or housing policy or energy policy. We need markets. This is not to say we cannot participate in policy debates or support a particular measure (e.g., an actual tax cut) and oppose another. But we should no longer allow a pseudoprofessional class of people in and around DC to claim an expertise or neutrality they don’t possess. And we should never elevate politics with the window dressing of “policy.”

Assume religiosity, not reason, in public discourse.

We like to think logic rules the day, but every indication says otherwise. Consider Al Gore’s unhinged rant at Davos last week, a fire-and-brimstone homily which would have elicited mirth from attendees had it been delivered by an evangelical preacher. Or consider the religious zeal with which a National Hockey League player was attacked not for any action or statement concerning LGBT (lesbian, gay, bisexual, and transgender) issues, but merely for his forbearance—refusing to wear a rainbow flag jersey before a designated game. Progressives live in an emotional, faith-based universe, every bit as removed from pure reason as the religious observers they mock. Simply appealing to reason rather than hearts and minds is a surefire way to lose in the current environment. This is especially true for young people. Effective argumentation today recognizes and adjusts for this reality without sacrificing principle or truth.

Never confuse the imposers with the imposed upon.

Progressives not only won the twentieth century handily but enjoyed a rout. Now they are winning the culture wars handily while capturing young people for their cause in alarming numbers. And top to bottom, progressives have more money and power than conservatives. Yet still progressives get away with presenting themselves as victims and underdogs fighting some mysterious oppression or nonexistent WASP power structure. It is important to understand the dynamics at play, because any worthwhile concept of justice differentiates between aggression and self-defense.

Take responsibility for your own information gathering.

At this point it scarcely needs to be said that large media organizations promote government narratives almost without exception. Deep skepticism is the order of the day, but with this comes the responsibility to go beyond easy headlines and social media to become informed on the pressing matters of the day. And always remember it is OK not to have opinions on issues that you lack understanding about.

Take responsibility for your own education.

Learning and improving is a lifelong endeavor, and it has never been easier, thanks to digital platforms. Relentless reading is one of the keys to your personal and professional development. You can choose to constantly improve and expand your knowledge using the principles of kaizen, as personified by Robert Luddy.

Application and activism beat debate and theory.

Whether we like it or not, most Americans are not interested in political history or economic theory. They are interested in the what—primarily the material quality of their lives—more than the how or the why. And we won’t counter the activist progressive project with books and philosophy alone. Now is the time to get active in civil society, to make the case for applied theory, and to approach politics at the most local levels. A single voice can reach outsized audiences with the right digital platforms and the right message. And entrepreneurship may be the single best form of activism against state propaganda, demonstrating the win-win alternative to politics on a daily basis.

So how do we even begin to depoliticize America? This is a fundamental question if we hope to improve conditions. All people of goodwill have an obligation to fight the escalation of politics and reduce the likelihood of outright political violence (as we’re seeing this week in Atlanta). Yet as stated many times before, we won’t vote our way out of this and we should not expect help from Washington, DC. The incentives for politicians are all wrong. Division sells. In fact, division makes the very politicians promoting it appear more necessary than ever to a fearful and gullible electorate. So we should turn our backs on DC, work to ignore mainstream media and captured institutions, and build out parallel structures wherever possible. We have new rules of engagement, but they conjure up an old one from economist Herb Stein: “If something cannot go on forever, it will stop.” Better to realize this ahead of time.

1. “Progressive” generally connotes “left wing” today, as most progressive impulses are animated by leftist cultural ambitions. But there are right progressives (neoconservatives) in the broader sense of the word. Both varieties believe mankind can and should be perfected to serve broader state or societal goals.

The spectacular success of Chinese entrepreneurs in multiple regions across the globe has produced a litany of studies. Surprisingly, Chinese immigrants have done remarkably well despite enduring economic constraints and discrimination in foreign countries. Throughout the world, the Chinese are legendary for their prominence in the retail sector and acumen as restaurateurs. From Southeast Asia to Africa, Chinese entrepreneurs are a powerhouse in business.

Due to their eminence in business, the success of the Chinese warrants an investigation. However, explanations are diverse and range from cultural attributes to professional expertise. According to researchers from French Polynesia, the dynamism of Chinese entrepreneurs is a consequence of cultural evolution. Comparing Chinese Tahitians and indigenous Tahitians, these researchers theorized that long winters with annual harvests fostered a culture of long-term planning and saving in China, rather than the sharing culture that inhibits entrepreneurship in French Polynesia.

The researchers concluded that in French Polynesia, the Chinese Tahitians preferred saving to sharing and exhibited a higher rate of entrepreneurship than Tahitians. In contrast, Tahitian culture confers a premium on sharing resources with extended family members to the detriment of entrepreneurial pursuits. Because of the demands imposed on entrepreneurs by family members, the potential for capital formation is more limited in native communities.

Sharing is so ingrained in local culture that entrepreneurs often sever ties with relations to strive toward success in their businesses. People who reject traditional beliefs are condemned by the group and are referred to as “Demi” (mixed people): physically they appear to be Polynesian and speak Tahitian, but in outlook they resemble whites. Now, Chinese culture is also collectivistic. The difference is that in contrast to the Tahitian experience, among the Chinese, entrepreneurial acumen reflects a commitment to the group.

Depending on a group’s cultural values, collectivism can be either positive or negative. Collectivism mandates conformity to communal values, and the Chinese value thrift, entrepreneurship, and financial success. Too often, people think that collectivism must promote low productivity because they forget that collectivism is about conforming to communal values and that invariably some values will encourage entrepreneurship and productivity. In fact, the collectivism of the Chinese has aided entrepreneurship by enabling high rates of savings.

Kenneth Chan and his coauthors proposed in a 2022 paper that due to a collectivistic culture, the Chinese are motivated to save for the future to ensure the success of the wider group. For the group to thrive, individuals must postpone consumption by thinking about the future. Without planning, groups become unviable, and entrepreneurship is one strategy to sustain the viability of groups. Chinese immigrants are hesitant to venture into new terrains without a long-term plan.

As such, ethnic and professional networks have been crucial for the success of diasporic Chinese. After settling in a new country, the Chinese will build benevolent associations, business groups, and schools to educate newcomers. These networks serve to propel the growth of Chinese human capital and entrepreneurship. Moreover, by assiduously studying new markets, within a short time the Chinese succeed in out-competing rivals. Researchers observed that shortly after relocating to Jamaica to work as indentured laborers, the Chinese became the primary players in the retail sector by providing goods at reduced prices and selling larger quantities that compensated for lower profit margins.

This practice was referred to as a “farthing trade” in Jamaica, but Panamanians called it “penny business.” As clever strategists, the Chinese also pursued assimilation to improve their business prospects. Researchers raised this point in a presentation on Chinese entrepreneurship delivered in 2015:

The largely Hakka speaking Chinese in Jamaica in the 19th and early 20th century engaged in creolization or acculturation soon after arrival . . . by taking local women as wives or concubines, learning the local language(s) and adopting local names. . . . This process of creolization clearly at least partially localized Chinese businesses, and likely contributed to their success.

Diasporic Chinese become economic magnates quite quickly because their immigration patterns are strategic rather than random. After scouting out the host country, the Chinese expand operations and recruit peers with the relevant human capital. When enterprises in one country succeed, Chinese venture elsewhere and select other peers to manage the original businesses. The Chinese have secured a comparative advantage in business by catering to niche markets. Due to the payoffs, they are now positioned to provide prospective entrepreneurs with high levels of startup capital.

An advantage of Chinese culture and professional networks is that despite the fact that Chinese are a minority in host countries, they dominate large portions of the economy. Some estimates point out that they control up to 73 percent of the Indonesian economy, and as major players in Asia, Africa, and North America, they occupy an enviable position. The Chinese are a classic example of underdogs thriving despite hostilities.

Hence, lagging groups should be implored to study the achievements of the Chinese so that these groups can replicate this success. Disparities reveal gaps in human capital and productivity, and laggards will only rise by acquiring technical expertise and business acumen. Blaming deficits on racism or on the government will consign laggards to a fate of permanent poverty.