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Murray Rothbard, 1; Jim Willie, 0

Written by Gary North on September 26, 2014

One year ago, Jim Willie made a big mistake. He wrote off Murray Rothbard as a dolt.

He did not mention Rothbard by name. He was too smart for that. He simply dismissed Rothbard’s description of how the Federal Reserve System works. Jim Willie thought he knew better.

I warned him about this. He ignored me. He dismissed me as a dolt. Lots of people have. But it is never wise to write off Murray Rothbard as a dolt.

Who is Jim Willie? He is a statistician. He has a Ph.D. He is a gold bug. He publishes a newsletter with the difficult-to-market name, The Golden Jackass.

Here is how all this started.


On September 25, 2013, he made a startling announcement.

The USTreasury Bond market breakdown is in progress, all part of the general USDollar global rejection that is taking the world by storm. Of course, residents inside the US Dome do not notice, since they only perceive it as the native currency.

He said he had what amounted to inside information.

A recent event has occurred, which was brought to the table by an unexpected corner, but a reliable source, who has a banker friend. The bond market has converted into a Flash Trading arena within the bank syndicate to maintain bond prices. This is an explosive development, indicative of unsustainable sovereign bond prices kept up by round robin marked by internal sales within the Federal Reserve banks themselves.

He is legendary for his use of underlines, bold facing, italics, exclamation points, and capital letters.

He went on.

Two weeks ago, an extraordinary memo was received from a trusted colleague. It could be important in yet unknown ways. The USTBond market is broken, and the USDollar cannot be defended. The memo read as follows. “I spoke with an old banking friend of mine on Saturday who now works as an Executive Officer in the Regulatory Division of the Dallas Federal Reserve. The gist of the conversation was this. There was a panic teleconference among all of the Regional Federal Reserve banks on Thursday afternoon [Sept 5th]. The subject of this emergency teleconference was USTreasury Yields. The perilously low capital of the Federal Reserve was at issue in this meeting, and the fact that they could no longer afford to defend the USDollar at this point. All of the regional Federal Reserve Banks were ordered to unload as many USTreasurys and Mortgage Backed Securities as they could, even though they are selling at a loss, to provide immediate liquidity even at the expense of capital! Eventually, late Friday night a tranche of Treasurys was sold above market price to several Federal Reserve Member banks in order to drive down the yield! You can plainly see this sale on the 10-year USTreasury chart.” Big news! Panic setting in! Unsustainable bond arena! Flash Trading has hit bonds!

This was, as Dr. Willie would put it, Big News!!!

But he was just getting warmed up.

More important, WE HAVE NOW SEEN THE BEGINNING OF FLASH TRADING ON USTREASURY BONDS!! A grand round robin closed circle selling program will be relied upon in desperation to maintain price, just like with NYSE stocks in Algorithm Trading.

On September 27, I responded to this article. I posted it on my site. I wrote the following.

I rarely see anything this obviously wrong. He has the economics of the bond market 100% backwards. The error is total. Consider this.

(For the rest of my article, click the link.)

Continue Reading on www.garynorth.com

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3 thoughts on “Murray Rothbard, 1; Jim Willie, 0

  1. I've read a fair bit of Willie's stuff over the years, and a good bit of it was accurate and correct. However, this example makes me quite glad I never bothered to pay for any of his "insights".

    If you find that you have made an error, it is a thousand times better to admit to the error and accept a correction rather than go ad hominem and destroy your own reputation.

  2. Jim Willie is a fun read, but I never know whether to take him seriously or not. Generally speaking, yes, but specifically, gotta be careful.

  3. Murray Rothbard a dolt? Look whose talking. lol.