We are seeing the fascist state unravel right before our eyes.  The collapses of financial markets including investment banks, commercial banks, the stock market, and securities markets are going to prove to be some of the most significant events in American history. 

   Once we realize how the state perpetuates itself, we can see that the failing of these banking institutions as the ultimate bankruptcy of the state.  The con-job system of fractional reserve banking will bankrupt every western nation that has promised the world to voters and believed that deficits were nominal.  In our own country the bankruptors are the Federal Reserve Board members and “guns and butter” politicians that squander our wealth on risky government programs and national security threatening foreign wars.  The plane of the state is now heading directly toward the mountain and to the eventual benefit of the American people.

   Ironically it has always been the right that has been labeled as the fascists in this country and the leftists are indeed correct in their assessment.  This line of thinking can be seen on every prime time news outlet and in our own President’s agenda.  Mr. Obama has indicted the republicans at every opportunity afforded to him and this indictment was large in part his means to get elected.   He is simply an honest public servant cleaning up after the greedy fascist conservatives right?  The problem is that anybody who believes in the government-business-alliance is a fascist whether you are on the left or right.   It doesn’t matter if we are talking about an industry that is deemed by many “too large to fail.”   There is no such thing.

  We can assess the Feds actions only by understanding whom the Fed wishes to appease.  So begs the question, whom does the Fed wish to please with its twisted take on monetary policy?  It is certainly not the American people, as Bernanke and Obama would have you believe.  This is because the Fed is in fact a banking cartel that serves only the agenda of Washington and government in general.  Washington and the whole political structure in America are dependent upon the solvency of the large banking industry.  If the Fed raised the reserve requirements to thwart the immorality of the fractional-reserve system then nearly every bank in the country would go under.  Mises and Rothbard had predicted the collapse of these institutions, as well as the collapse of the dollar, but even still they are not credited by mainstream academics with understanding what has caused the collapse.  The mainstream believes greedy Wall Street bankers and asleep-at-the-wheel government regulators caused this collapse.  But what the Austrians and true free-marketers understand is that fractional-reserve banking was a lousy business model to begin with and was destined to collapse despite the immoral Federal Reserve System.

   Politically nothing can be done to stop this for only the market can heal the wounds of mal-investments even those made by government.  The banks need ever growing bailout money and the Treasury Department relies on fiat money to do everything that it does.  Although as Gary North, a prominent Austrian economist candidly put it “…this time it’s different. This time the fractional-reserve banking system has shot its wad.”  There will be more regulation and nationalization and inflation before all is said and done though.  The reoccurring doubling of the monetary base will lead to nothing but monetary disaster not only for government but also for Americans in general.  If we double the monetary base, and production and output of goods and services does not by and large double, prices will.  There is no need to ever test this scenario.  By definition the trillions being pumped into the economy by government will cause massive inflation and deplete wealth.  Voters are slowly catching on to how they are getting screwed as we sink deeper into the cold muck of recession. 

   But the bigger they are the harder they will fall.  With all eyes on our anointed  President, coupled with overwhelming unpopularity of his predecessor, people  will get to see the extreme follies of the left and the right back-to-    back.  Hopefully this disaster undermines the institution of American politics so  greatly that it reverses the present trend of placing blame on one side of the  aisle to people actually boycotting the institution as a whole.  This would not be  unlike what happened when we talk of the collapse of the Soviet Union, limited  bloodshed but rotting from the inside out.  Things are indeed different this time  around and we will leave it to Obama to administer the final socialist deathblow  that is the bailout.

            The Austrian school of thought could not be more accurate in its ideas on cause and effect in terms of the business cycle.  The problem is that matters will be decidedly worse long before they get better.  The Austro-Libertarian view on our system of government is of such disgust that any undermining of the state is deemed a great thing.  Gary North proclaimed in his article “Economic Fascism and the Bailout Economy” that he doesn’t view this as a threat to freedom as I would see it but rather as an end to the fascist state.  But this view suggests that the state won’t dig its nails into the wall before it falls down the stairs.  The collapse of the fascist state is indeed a victory for liberty, but it will be a long and drawn out battle.  The fight won’t end until we witness the complete collapse of the dollar or we see a massive shift in the views every American holds on government and economics.  There will be much more regulation, taxation, and inflation-which translates to further unemployment, slowed production, and misery- before this battle of ideas is finally won.  With every apparent failure of the state our job of educating voters becomes easier but it is still quite a long fight.  I fear that we won’t educate enough people to make the radical changes we desperately need before the state rips us of our freedoms both economically and socially.