If she tries to defend herself by saying, "This is consistent with what I have always said," then she is dumber than dirt, or else she thinks her followers are dumber than dirt.
She responded on November 24 with a long article saying that this was no defection.
Gary North, who purports to be an expert on the errors in my book "Web of Debt," has evidently not actually read it. In an article posted on the Market Oracle on November 23, he says that in calling QE2 a "bold precedent," I have switched sides. He apparently missed the chapter I wrote on this subject, first published in "Web of Debt" in 2007, saying exactly what I am saying now.
The Federal Reserve is finally using its "quantitative easing" (QE) tool to good purpose, and I'm endorsing that, not just for our central bank but for any central bank anywhere that would be so bold.
We are back to these two choices: (1) she is dumber than dirt; (2) she thinks her followers are dumber than dirt. I really can't decide whether it's #2 or both #1 and #2.
I have never before argued publicly with anyone this intellectually ill-equipped. I have been at this for 45 years, and Ellen Brown is really, truly defenseless intellectually. Anyone who goes through my 52 original criticisms and my 30 responses to her responses will see why I make this judgment.
At this point, it is time for me to move to my next phase of criticism. My articles smoked her out. She finally came clean. She is -- and says she always has been -- a supporter of mass monetary inflation, no matter who prints the money. If the central bank does this, that's fine with her.
Having smoked her out, I now go to the next stage of my criticism. Ellen Brown is the Pied Piper of Greenbackism. Her goal now is to lead the Greenback faithful back into the camp of the Federal Reserve System.
She positioned Web of Debt as an anti-FED book. The cover pictures the FED as a spider.
If we are to believe her now, this was fake from day one. She never cared who does the inflating, she now says. If Bernanke will do it, that's fine with her, she now says.
In all my years of reading leftists -- and she is a leftist -- I have never seen anything like this. She built a following on this theme: "The Federal Reserve System is evil, because it is part of the fractional reserve banking system. The FED is privately owned. It does not issue real money. Real money is issued only by Congress." Then, in the space of four days, she tells her followers that the Federal Reserve is doing the right thing. It is in fact the model for all other central banks.
When you click through to the page where her latest article is posted, you will also find a posting by a reader who calls her on QE2's inflation. He cites TANSTAAFL: there ain't no such thing as a free lunch. Here is her answer -- the monetary theory of her book, as I explained from the beginning.
We're not getting something for nothing. The government gets goods and services and pays for them with dollars, which represent claims on the American people for an equivalent sum in goods and services. The American people have received value and acknowledge that they owe value in return. That's what money is, and it should originate with the government, not with banks. It should, but our government won't do it, so the next best thing is to borrow from our own central bank, which creates the money and lends it interest-free. Rolled over indefinitely, that amounts to the same thing.
I have never seen anything like this. She built a large following with her book. Her following came to her because she was a forthright critic of the Federal Reserve System. Now she says that, while it is best to have Congress print the fiat money, "our government won't do it, so the next best thing is to borrow from our own central bank, which creates the money and lends it interest-free. Rolled over indefinitely, that amounts to the same thing."
Got that? The Federal Reserve System is "the next best thing."
It does no good to pursue her on this. Ellen Brown is beyond my powers of psychological analysis.
But what about her followers? They joined her because she was the most visible opponent of the Federal Reserve who was not a gold coin standard person, i.e., not an Austrian School critic of the FED. She seemed to have all the answers. She had that neat book cover, with the FED as a spider. But now, in just four days, she says there is no big difference between the FED's fiat money and Congress's fiat money (Greenbacks). The seeming differences, she says, "amount to the same thing."
They do? You mean the book cover was a huge fraud? You mean that the FED is not the evil spider? That is exactly what she means.
This is betrayal. I have never seen anything like this.
I have seen people switch. When Chicago School economist-judge Richard Posner went Keynesian in 2009 at the age of 70, overturning all of the work of a lifetime, he set the standard. But he has now been eclipsed by Ellen Brown. She switched, yet says she hasn't. This says, loud and clear, "I sucked you in, you dumb clucks!."
My guess is that most of her followers will not bat an eye. "We're with you, Ellen!" They are, indeed. They are now neutralized. They will say no more in criticism of the Federal Reserve System. The FED has now been baptized by the high priestess of fiat money. It is now sacrosanct -- second only to Congress in the Holy of Holies.
This is fate of every crackpot movement. It attracts people who are upset with the world. They don't know exactly what is wrong, but something is. Then the crackpot comes with THE ONE TRUE ANALYSIS and the inevitable ONE TRUE ANSWER. Implement this solution, and the nightmare will end: no muss, no fuss.
There are always naive, trusting people who will join the ranks of the "liberated" hard core. They feel that they are part of SOMETHING REALLY BIG. They are part of THE WAVE OF THE FUTURE. The Communists attracted such people for over a century. Their brave new world went down in less than a year. It left them high and dry.
The Greenback movement has always been led by crackpots offering THE BIG SOLUTION. It has attracted people who want a leader. They don't care what the creed of the "church" is. They just want leadership. They want to follow.
Ellen Brown gave them hope: hope in fiat money issued by Congress. Now she has announced a bait-and-switch. She brought them into her circle by positioning herself as the FED's #1 critic. Then, three years later -- 72 hours after I finish answering all 30 of her responses -- she announced that the FED is the next best thing.
What does a person do who has been attracted to her by her forthright stand in The Web of Debt? She has just called him a fool. How? By calling me a fool.
He apparently missed the chapter I wrote on this subject, first published in "Web of Debt" in 2007, saying exactly what I am saying now.
He also failed to see this. He committed himself intellectually and emotionally to her, and now she calls him a fool, a chump, a rube. She calls all of her followers chumps.
"Stick with me, chumps. You have no idea where I'll lead you next. But you will follow. All of you will follow. I have led all of you into the land of Oz. I, in fact, am the Wizard. I can turn night into day. I can turn opposition to the FED into support of the FED. Above all, I can turn paper money into wealth. I said that from day one. You swallowed that, chumps. There is no limit to what you people will swallow."
She is right. There is no limit.
Here is my fantasy interview with her over QE2.
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