“The Last Testament of Henry Halleck”

In honor of the publication of the August issue of Stupefying Stories, I’m posting my story that was published in the March 2012 issue. Seven points count against your sanity if you can correctly identify the author whose style I attempted to imitate here – an effort I think met with rather less success than the story written in the mode of Guy de Maupassant. If you enjoy fantastic fiction, there are few better values out there than the increasingly well-regarded Stupefying Stories anthologies.

The Last Testament of Henry Halleck
Stupefying Stories, March 2012
Vox Day

At the request of the Cardinal Prefect, I have forwarded this document to you, Cardinal, which according to our records, has been in the possession of the Congregation since 1885. I trust you will find it of some use in your present investigations concerning the historical suppression of Humani Generis Unitas. I should also like to call to your attention the series of files on the Forschungs- und Lehrgemeinschaft das Ahnenerbe, particularly the one concerning a 1939 expedition led by Dr. Otto Huth on U-41, commanded by Kapitänleutnant Gustav-Adolf Mugler, which I believe is already in your possession.

Monsignor Damiano Marzotto Caotorta
Palace of the Holy Office
The Vatican

I have burned the memoirs I once thought to leave to posterity. I have also destroyed my correspondence, public and private, and can only hope that my fellow conspirators will see fit to follow my example and do the same. I have only preserved my books and my translations, which I have concluded are harmless, and I pray that if I am remembered, it will be through them and not for my crimes or the monstrosity I played a part in releasing upon the world. I shall leave behind only this letter, in the hands of Bishop McCloskey, whom I charge with the duty to ensure that it reaches whatever Papist order or society watches over things of this nature, as I have been told exists somewhere in the heart of Rome. For the evil we unleashed half-unwittingly is neither dead nor vanquished, it merely slumbers, waiting patiently for its next awakening.

To Seward must be laid the greater portion of the blame. I do not excuse my own misdeeds in stating this, but state a simple fact. He had long possessed grandiose dreams of world conquest, but they were inflamed by the thought of having another century or two to realize them. This, I did not know until afterward, but when I was living in California in 1860, I saw the man twice, before and after his first fatal trip to Russian America, and upon his return I even remarked to my dear wife upon what a changed man he was. He had always been ambitious and vainglorious, but after his northern excursion, he carried himself with what I can only describe as a Messianic demeanor. I do not hesitate to admit that I fell under his spell, and upon receiving the promised promotion from the California militia to major general in the United States Army, I believed I could trust him implicitly.

I did not know the terrible truth of the reason behind this change in the Secretary of State until the autumn of 1861, after traveling to the city of St. Louis and accepting the command for the Department of the Missouri. Seward met me there and he was much agitated, as the President and the Cabinet were much concerned about the prospective loss of the war following several defeats in Virginia, while I feared that my own career as a Union general would be a short-lived one, since the federal forces for which I was now responsible had been repeatedly defeated by the rebellious State Guard. How foolish our petty fears now appear in light of the events that subsequently took place! It was vanity, nothing more, that led us to meet at the Masonic temple in St. Louis, where Seward promised that he would reveal to us a discovery that would change the course of the war.

There were four of us who met in secret that cold October night; the Secretary of State, myself, a promising young general I had inherited from John Fremont who is presently the President of the United States of America, and the commander of the Department of the Cumberland. Why Seward chose us rather than any of the much better-known generals from the Eastern states, I cannot say, but I assume it was because Grant, Sherman, and myself were all well outside the federal military establishment and any disasters could be safely attributed to our lack of conventional credentials. Perhaps more importantly, our distance from the circles of power in Washington meant that his experiment in occult warfare could proceed without criticism and with little risk to his reputation.

He swore us to secrecy first, and then unveiled the treasure he had discovered in the northern territory. It was a little idol of a fat, seated man wearing an octopine helm, carved from ivory by the Esquimaux people and small enough to fit in a man’s hand. We thought him mad when first he showed it to us, but as he was our benefactor, we gave him the opportunity to explain himself nevertheless. He claimed that the figurine spoke to him, which we did not initially believe, and then said that it would speak to us through him. To our immense surprise and horror, after he placed both hands around it, his eyes lost their focus and he began speaking with a distinctly different voice. It was indescribable, and none of us had any doubts that it did not belong to Seward.

The voice identified itself as a representative of a race of ancient beings. It refused to name itself, but declared itself to be possessed of such powers as would permit the Union to win the war if we would only provide it with the sustenance it required to wake its fellows. It said it came from a planet very far away and assured us that neither it nor its race had any interest in the affairs of Man. We were none of us religious men, but even so, we placed it upon a Bible and Seward immersed it fully in holy water he had obtained for just such purposes, which was sufficient to satisfy myself and Grant, although Sherman still harbored reservations about its nature, particularly when we were told that the sustenance it required was atmospheric, being a psychic substance released by intelligent minds at the moment of their death. Human minds, although apparently somewhat deficient in various ways, would suffice, which was why it was interested in military men like ourselves. Sherman and Grant both examined it closely. I did not touch it, as something about it struck me as unclean, if not unholy. And yet, we were desperate and ambitious men, disinclined to turn our backs on any device that might serve our ends, however strange.

Sherman was troubled by the notion of feeding it death, but Seward pointed out that this incorporeal scavenging was no different than the birds of the air and the insects of the field that fed upon the dead and transformed them back to the dust from whence they came. Therefore, he argued, there was no reason to ascribe either nefarious or beneficial purposes to the idol despite its morbid hungers. When Grant reminded Sherman that our profession was intimately concerned with killing as many men on the other side as possible, Sherman reluctantly relented. It was agreed that we would put the strange device to the test as soon as possible, and Seward left the strange little idol in the possession of Sherman prior to his return to Washington the next day.

The experiment was an unexpected success. I arranged for one of my colonels to carry the idol into battle unbeknownst to him, and much to our surprise, he dealt the State Guard their first defeat of the war at Fredericktown. The men were greatly heartened by this success, as the Missouri rebels had beaten them four times previously. Grant then insisted on taking his turn with it, and with its aid he managed to overrun the Confederate camp at Belmont, killing nearly a thousand rebels at a stroke. He lost nearly six hundred dead himself, the significance of which we did not truly understand until our next meeting, when Sherman picked up the idol and was unable to remove it first from his hand, then, as he struggled frantically to escape it, from his chest.

Sherman lay prostrate and speechless for nearly a month before rising from his sickbed and resuming his duties as if nothing had happened. He would not talk about the device, nor would he permit himself to be approached by doctors, but instead applied himself to his duties with a vengeance. But he told me once that when he slept, he dreamed of swimming through oceans of blood, and climbing over white mountains of lifeless flesh. Grant, too, was affected by the dreams, which thankfully left me untouched. He took to drink to cope with them, but like Sherman, he too began to drive himself and his men relentlessly. The two men became increasingly close, until I was finally forced to assign Sherman to the Army of West Tennessee so he could serve under Grant.

The immediate consequence was Shiloh. Nearly four thousand men died and if there were not oceans of blood, there were at least rivers. Battle followed battle, victory followed victory, and though I did my best to restrain their increasingly erratic behavior and hide their indifference to the fate of their men, others eventually began to notice. One newspaper in Ohio even described the pair of them as a drunkard advised by a lunatic. But they were victorious. I was summoned to Washington by President Lincoln himself and named General-in-Chief over the entire Union; Grant and Sherman too won promotions despite the whispers that followed them everywhere they went. The madness and bloodshed finally culminated in The March to the Sea and the dreadful Wilderness Campaign, where entire cities were burned and Grant sacrificed 55,000 of his own men to our secret god of victory.

I never learned when the idol came into the possession of the President. But I began to suspect something was amiss when I overheard him ordering Grant to begin destroying plantations and even entire villages throughout the Shenandoah. He had become obsessed with the tremendous amount of deaths to which both sides were being subjected and he took to wandering the halls of the White House late at night, looking more than a little like a bearded corpse himself. His eyes burned with the same haunted fire that Sherman’s had after his spell of silent madness and he carried himself with uncharacteristic delicacy. Mrs. Lincoln openly expressed her fears to me one night after he spent the entire evening sitting in a chair, rocking back and forth mumbling to himself, and to my everlasting shame and regret, I had not the courage to share my own doubts with her.

It became clear that we needed to intervene after the meeting at Hampton Roads. The Secretary of State was badly shaken when the President refused to countenance the Confederate offer of surrender, and his concerns deepened when I shared with him a letter from Grant in which he confessed that he had handed over the idol to the President. But our every attempt to broach the subject with Lincoln met with rebuff. And our hopes that the end of the war would have a salubrious effect upon him disappeared when the President came to me and asked me to draw up plans for repopulating the conquered southern States by settling the freemen of the North there. Astonished at his choice of words, I looked into his eyes and saw nothing human there. At that moment, I knew he would die rather than give up the idol, in fact, I began to wonder if the man I had once so admired even existed anymore.

As with so much that had gone before, the assassination was Seward’s plan. He contacted the actor and arranged for the seats at the theater. It all went as anticipated, including the false attack on Seward, except for the escape of the actor. But we had bigger concerns that evening than mere exposure of the plot, for when we brought the President back to the White House, we found that he was still alive despite being shot directly in the head at close range with a large caliber pistol. Imagine our horror when the thing that the President had become opened his eyes and smiled at us. He seemed to know everything we had done, for he rose from couch upon which he had been placed and attacked Seward, and such was the violence of the assault that he very nearly slew the Secretary of State before Phineas Gurley, the Chaplain of the Senate who had been summoned to pray for the President’s soul, drew a strange object from his waistcoat that caused the demon animating the President to desist.

At Gurley’s instruction, I slashed away the President’s coat and shirt, revealing the terrible truth. The idol was embedded into the dead man’s chest like a large, spiderish creature, the octopine tentacles pink and pulsing with parasitic life. It was with some difficulty that we managed to remove the demonic thing, being of course most careful not to touch it. At the very moment we pulled it from his flesh, the alien light faded from the President’s eyes. It was the most peaceful I had seen him in months. I repent of my many sins and confess them freely as I prepare to meet my end, but the assassination of Abraham Lincoln was neither a sin nor an act for which I can repent. Had Lincoln lived, I am certain he would have become one of history’s greatest monsters. Lincoln kept the Union together, but it was Seward who saved the nation.

I arranged for David Farragut to take the chest in which I secreted the idol on his next voyage across the Atlantic Ocean. Somewhere at sea, no one knows where, he weighted it with iron and dropped it into the depths. There, I believe, it will stay, forgotten until the end of time, its rapacious hunger for death unassuaged. You who read this, know there are evils lurking in the deep shadows of this world beyond the comprehension of men, and that it is ever the duty of those who are cursed to look into those shadows to remain vigilant against them.

Henry Halleck
Louisville, Kentucky
January 1, 1872

An atheist critique of Sam Harris

A former Muslim, Theodore Sayeed, writes a long article criticizing Sam Harris and his godless militarism on Mondoweiss:

For a man who likes to badger Muslims about their “reflexive solidarity” with Arab suffering, Harris seems keen to display his own tribal affections for the Jewish state. The virtue of Israel and the wickedness of her enemies are recurring themes in his work. The End of Faith opens with the melodramatic scene of a young man of undetermined nationality boarding a bus with a suicide vest. The bus detonates, innocents die and Harris, with the relish of a schoolmarm passing on the facts of life to her brood, chalks in the question: “Why is it so easy, then, so trivially easy-you-could-almost-bet-your-life-on-it-easy to guess the young man’s religion?”

To which historians will answer: Because it is not….

It occurs to me that as much of a renegade as I am from Islam, I’m not alone in my betrayal. Sam Harris too is an apostate from the intellectual atheist tradition of Russell and Mencken that was built on the twin pillars of anti-mysticism and anti-militarism.

I found it interesting that Sayeed begins with precisely the same quote from The End of Faith that I did, and notes precisely the same blunder which many atheists unsuccessfully attempted to defend back in 2008. One thing Sayeed caught that I did not is Harris’s tribal identification with Israel and his continued attempts to defend Israeli militarism despite his repeated condemnations of tribalism. Readers may recall that in my own email exchange with Harris, he admitted that he was actually attacking tribalism rather than religious faith; the primary danger of religious faith was that it had the potential to create and exacerbate tribalism.

But, as Sayeed demonstrates, despite his atheism, Harris himself appears to be subject to a tribalism that is older than either Christianity or Islam, the two religions he primarily criticizes. And it is potentially significant to note how little he criticizes either Judaism or Israel, despite the fact that there is considerable criticism of the latter from secular Europeans who share his atheism.

Now, I don’t dislike Sam. Unlike Dawkins and Myers, I don’t think he’s an intrinsically dreadful individual. But his primary problem, aside from his apparent tribalism, is that he is simply not sufficiently detail-oriented or logical enough to be capable of successfully addressing the intellectual challenges he sets himself.

The Lizard Queen must rule!

Of course she turned down the offer of Number Two. She must be Number One!

“Up until just a couple of weeks ago the White House was putting out feelers to see if Hillary would accept the vice-presidential nod and replace Joe Biden. Bill Clinton was, I’m told, urging his wife to accept the number two slot. He saw this as a great launching pad for her for running in 2016.”

I note that my prediction of an Obama drop-out is still in play…. I mean, why were the Democratic elders trying to drop Biden if it weren’t for their concerns about the electoral problems of his boss?

TIA: the meme spreads

Courtesy of Scott Atran, the argument that religion does not cause war has now reached both Science and The Chronicle of Higher Education:

it’s not the criticism of ecclesiastical overreach that bothers Wilson and Atran; it’s the conflation of science and advocacy. Wilson supports efforts to destigmatize atheism, like the running feature “Why I Am an Atheist” on Pharyngula, and said so in his anti-Dawkins posts. Atran believes that “attacking obscurantic, cruel, lunatic ideas is always a good idea.” It’s proclaiming that religion is rotten to the core that they think is misguided.

That includes laying the blame for much of human conflict at the feet of the faithful. In a recent Science article, Atran and Jeremy Ginges, an associate professor of psychology at the New School, cite evidence suggesting that “only a small minority of recorded wars” have been mainly motivated by religious disputes (though making distinctions between religious and political causes is notoriously knotty). They complain in the article that the New Atheists are quick to remind everyone how fundamentalism fuels Al Qaeda but neglect to mention the role of churches in the civil-rights movement. The New Atheists are, according to Atran and Ginges, cherry-picking the horrors. “Science produced a nuclear bomb. Therefore we should throw away science,” says Atran, to illustrate the baby-bathwater logic. “Sometimes it can be really noxious, and other times it can be quite helpful.”

The Science article is entitled “Religious and Sacred Imperatives in Human Conflict” and appears in Science 336, 855 (2012). The relevant passage cites The Encylopedia of Wars and states: “In fact, explicit religious issues have motivated only a small minority of recorded wars. There is little religious cause for the internecine Russian and Chinese conflicts and world wars responsible for history’s most lethal century of international conflict.”

Given the absurd assertions by science fetishists who insist that I do not understand science, I find it more than a little ironic that a number of real scientists are not only making use of my ideas, but my methods as well, in publishing professional peer-reviewed science.

John Scalzi justifies sexism

Mr. Scalzi attempts to defend female rejection of men as “creepers”, amusingly without realizing how perfectly it can be turned around and applied to male rejection of women in a manner that he would probably consider sexist:

Acknowledge that you don’t get to define other people’s comfort level with you. Which is to say that you may be trying your hardest to be interesting and engaging and fun to be around — and still come off as a creeperstupid slut to someone else. Yes, that sucks for you. But you know what? It sucks for them even harder, because you’re creepingpissing them outoff and making them profoundly unhappy and uncomfortable. It may not seem fair that “creep”“stupid slut” is their assessment of you, but: Surprise! It doesn’t matter, and if you try to argue with them (or anyone else) that you’re in fact not being a creepstupid slut and the problem is with them not you, then you go from “creep”“stupid slut” to “complete assbag”“complete bitch”. Sometimes people aren’t going to like you or want to be near you. It’s just the way it is.”

Congratulations to John. He has managed to concoct a soundly sexist argument for simply banning women from DEFCON or any other predominantly male gathering. After all, if the dorks there don’t like women or want them near them, it’s just the way it is…. Men have precisely the same right to arbitrarily label women “stupid sluts” and treat them accordingly as women have to arbitrarily label men “creeps” and do the same.

Now, some men are genuinely creepy and I’m certainly not defending anyone’s right to behave in an uncivilized manner. But at the same time, it should be noted that women cannot be granted a right to free association that is denied to men.

UPDATE: Scalzi is either too lazy or too much of a pussy to think through his own arguments. He writes:

You know, I saw in a Google search that you wrote on this piece at your blog, and I thought to myself, “oh, great, now I go have to deal with some dumbass comment from him on the site.” And I was right! For your next trick of bad equivalence, why don’t you put the word “droid” in parentheses and congratulate me for coming up with a valid excuse for banning R2D2 from the Mos Eisley cantina?

If this is really what you’ve come to say, don’t really need to be on this thread, VD. Shoo. Everyone else, best to leave VD uncommented upon.

He also added this:

[Deleted because the point this jackhole was purporting to make was just an excuse for him to call women obnoxious things on my site. Hi there, trolls from VD’s site! Just because you wallow in a feculent miasma of male self-regard over there doesn’t mean you get to port it over here — JS]

It is fascinating to see that John Scalzi has devolved into such an intellectual pussy that he almost immediately concludes those who disagree with him must be trolls. And in support of my earlier charge of his sexism, what a sexist assumption to assume that all of the readers at VP are men! This is what happens when you run an echo chamber, you get sloppy, lazy, and eventually become unable to defend your opinions. It’s particularly embarrassing in this situation, because I am simply pointing out the obvious logical consequences of his statement, which can be easily understood by looking at the word “creep” as a variable rather than being distracted by his “false equivalence” defense.

The equivalence or lack thereof is irrelevant. It doesn’t matter how Scalzi defines “creep” or to whom he applies the term. His argument works just as well for justifying the social stigmatization of “droids”, “negroes”, “homosexuals”, “girls with cooties”, or anything else that might make an individual uncomfortable. That’s not bad logic, and if he genuinely think it is, then I certainly invite him to identify the specific logical error or logical fallacy in it… if he can.

It is amusing to see him talking about “bad logic” as there is a reason I tagged this under “trainwreck” in the first place. Of course, this is the genius who once cited a female professor teaching “Lesbianism in Indian Film” at the University of Minnesota in order to defend the idea of female interest in the hard sciences.

A Christian case against Game

1. Game isn’t what you think it is.

2. Game means more than you think it does.

3. Christians don’t need Game.

My short response: 1) Game certainly isn’t what Cane thinks it is. 2) It most certainly does. 3) Yeah, they do.

A more substantive response is at Alpha Game.

Obama’s bag boy gets off

Corzine is officially deemed above the law:

A criminal investigation into the collapse of the brokerage firm MF Global and the disappearance of about $1 billion in customer money is now heading into its final stage without charges expected against any top executives.

After 10 months of stitching together evidence on the firm’s demise, criminal investigators are concluding that chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear, according to people involved in the case.

Remember that excuse the next time you’re facing an audit. Just tell them it was the result of “chaos and porous risk controls” and that will eliminate any possibility of legal wrongdoing.

The vibrant conundrum

A Cincinnati man violates the Derbyshire Principle and pays the price:

Pat Mahaney was walking home Saturday with a six-pack of beer, looking forward to a quiet evening watching sports, when something hit him in the back of the head.

“The next thing I knew I woke up on my neighbor’s front step and the life squad was there,” the 45-year-old North College Hill resident said Wednesday.

Six teenagers “were just bored and were looking for something to do,” a police report said, when they ambushed Mahaney as he turned off Simpson Avenue onto Dallas Avenue. He was immediately knocked unconscious.

The report says “The first five arrestees were: twin brothers Tyree and Terrell Mizzell, Lamont Champion and Daquan Cain, all 13-year-olds; and Michael E. James, 14.” Remarkably, it is even noted deep within the text that “the suspects are black”.

The problem is that there is simply no easy and politically acceptable solution to the challenge presented by these bored young savages. They are still not civilized after more than 150 years of full immersion in quasi-European civilization and the historical pattern suggests they cannot be for at least another six to eight centuries. It increasingly appears they never will be, given the demographic and economics patterns that indicate European civilization in the Americas is much more likely to collapse than survive in its present form. Partition and segregation is probably the optimal post-collapse outcome at this point.

In the USA, and to a lesser extent in England, European civilization has been noticeably degraded in the last thirty years by African culture. This process can only continue, given the birth demograpics, and a melange of African, Hispanic, and European culture is the most probable outcome if the expected collapse does not occur. Such melanges can be positive, after all, the mix of Celtic, Saxon, Danish, and Norman cultures produced America in its original form. But something on the order of Brazil is probably a best case scenario, which anyone familiar with the South American nation would probably agree is at least a step or two downward, its soccer, supermodels, and samba notwithstanding.

Now, European culture will likely win out again in the North American continent, but after retreating to a post-collapse rump and going through a long revitalization process. We’ve seen both the Germans and the Russians go through the first part of this after WWII and the collapse of the Soviet Union, respectively, and now it appears the American turn is approaching.

Women ruin everything: DEFCON edition

From atheist conferences to hacker conferences, women are complaining about them:

[E]veryone at DEFCON benefits from more women attending. Women “hackers” – in the creative technologist sense – are everywhere, and many of them are brilliant, interesting, and just plain good company (think Limor Fried, Jeri Ellsworth, and Angela Byron). Companies recruiting for talent get access to the full range of qualified applicants, not just the ones who can put up with a brogrammer atmosphere. We get more and better talks on a wider range of subjects. Conversations are more fun. Conferences and everyone at them loses when amazing women don’t attend.

When you say, “Women shouldn’t go to DEFCON if they don’t like it,” you are saying that women shouldn’t have all of the opportunities that come with attending DEFCON: jobs, education, networking, book contracts, speaking opportunities – or else should be willing to undergo sexual harassment and assault to get access to them. Is that really what you believe?

Yes. Absolutely. The conference should do everything it legally can to dissuade “amazing women” from attending. Because what this foolish woman, in her obvious ignorance of cause-and-effect, is asserting that the absolute highest priority of the conference should be that women feel comfortable. The problem is that once that principle is established, the seeds of the conference’s destruction will have been planted, because women will always find a reason to claim they are uncomfortable. No one at DEFCON would benefit in the long term from more women attending, at least not under that principle, because it only creates more opportunities for women to feel uncomfortable. Therefore, more female attendees would eventually eviscerate DEFCON as the small core of male attendees who actually make the conference valuable would stop attending as their activities increasingly infringed upon female comfort. History is very clear on the way women degrade every male institution they successfully invade that they do not succeed in destroying entirely.

Lest you think I exaggerate, consider the policy statement recommended by one of her commenters: “This conference is for everybody and everybody visiting this conference should feel comfortable, regardless of gender, sexual orientation, disability, physical appearance, body size, race, or religion.” That’s not a hacker conference policy, that’s one establishing a comfort conference. The priority defines the purpose.

And lest you think I exaggerate concerning what might be erroneously dismissed as a slippery slope argument: “These guys can rationalize until they’re blue in the face but IT IS NEVER OKAY TO GIVE A LADY THE HEEBIE JEEBIES!”

We’re not even 100 years into the great equalitarian experiment and Western civilization is already on the verge of economic and demographic collapse. This is not a coincidence. Consider that it only took 79 years for the United Kingdom to go from granting all women over the age of 21 the franchise to voluntarily surrendering its national sovereignty in the Lisbon Treaty. When the Sports Guy said “the lesson, as always, is this: women ruin everything”, he spoke nothing but the bitter truth.

The IMF on no-reserve banking

Karl Denninger digs up the document:

In a financial system with little or no reserve backing for deposits, and with government-issued cash having a very small role relative to bank deposits, the creation of a nation’s broad monetary aggregates depends almost entirely on banks’ willingness to supply deposits. Because additional bank deposits can only be created through additional bank loans, sudden changes in the willingness of banks to extend credit must therefore not only lead to credit booms or busts, but also to an instant excess or shortage of money, and therefore of nominal aggregate demand. By contrast, under the Chicago Plan the quantity of money and the quantity of credit would become completely independent of each other. This would enable policy to control these two aggregates independently and therefore more effectively. Money growth could be controlled directly via a money growth rule. The control of credit growth would become much more straightforward because banks would no longer be able, as they are today, to generate their own funding, deposits, in the act of lending, an extraordinary privilege that is not enjoyed by any other type of business. Rather, banks would become what many erroneously believe them to be today, pure intermediaries that depend on obtaining outside funding before being able to lend. Having to obtain outside funding rather than being able to create it themselves would much reduce the ability of banks to cause business cycles due to potentially capricious changes in their attitude towards credit risk.

Read that however many times you need to until it sinks in folks, because this is what I and a few others have been saying now for a long time — and our ideas are not only not really new, they’re also factually correct.

The “extraordinarily privilege” referenced above, were you or I to engage in it, would be called what it is — counterfeiting. “Generating their own funding, deposits”, is exactly that — creating money out of “thin air” though the unbacked emissions of credit. It is exactly identical in form and effect to you running off $100 bills on your office copier. And for every other entity other than a bank, it is a felony.

But it is Congress that has this power according to our Constitution. A commercial institution that operates for profit should never have the right to literally steal from you at its whim, but that is exactly what unbacked credit creation empowers a bank with — the ability to take everything you have by debasing your purchasing power to the point that you are forced to hock, or even sell and abandon, any asset you possess.

This is important if you want to understand the financial crisis and the inflation/deflation issue. Contra what you’ve been taught, loans don’t come from deposits. The loans come first. This is the “credit money” of which Mises wrote and is the reason that the mainstream economists are so confused by their continual focus on M1/M2, which are just a small fraction of the real money supply, which is Z1+M1/M2.

So, the inflationistas are correct in one sense. Inflation has been worse than is reported by the CPI-U. Vastly worse. However, this also shows why the central bank has been talking about the need to fight off deflation via “quantitative easing” despite the fact that M1/M2 have continued to increase; Z1 has been flat for four years despite the heroic efforts on the part of Washington to prop up spending by taking on a larger share of it.

As I showed in RGD, the USA is closer to a no-reserve banking system than the textbook ten percent fractional-reserve one. The credit money is pure digital counterfeiting, but it spends as readily as legal tender.