Pridger's Blog - Pridger vs. The New World Order

July 24, 2010

MAYBE THE FINANCIAL CRISIS ISN'T SO BAD AFTER ALL

Oh, it's plenty bad alright. Widespread financial malfeasance, baling out the mega-crooks, and long-term habitual fiscal irresponsibility on the part of government, can never lead anywhere good. But economic doomsday may not be quite as near as many doomsayers predict. The apparent conventional wisdom among some financial experts that a s overeign debt crisis as experienced by Greece, and threatens other European Union nations, may be somewhat overblown, if not completely inapplicable.

And the dangers of what is called quantitative easing and the threat of hyperinflation is perhaps not as great as it is often made out to be – because so much "wealth" is simply disappearing into black holes, resulting in a deflationary processes.

This said, the quantitative easing (that is, the new money being pumped into the system), is being misapplied to prop up the notorious "too big to fails" and not to stimulate the real economy – that is, it is not being used to encourage the creation of private sector jobs, particularly in production where they are most needed.

The big banks are doing well again, and up to their old shenanigans, but they are not providing credit where it is most needed to stimulate the real economy where it is most needed. In other words, they are, first and foremost, propping up their own bottom lines and the houses of cards around which their universe spins.

Our ace in the hole is the fact that our sovereign debt is denominated in our own bonds and currency, which (incidentally and luckily, in this case), happens to still be the global reserve currency. Even though our money creation is through the privately own Federal Reserve System, at least that system (our central bank), is wed, by virtue of its charter, to our own national destiny.

Since the Federal Reserve sets its own interest rates, which are now about zero, borrowing from it, as our government is obliged to do, is about as cheap as any borrowing can ever get. And, while we owe the central bank the principle on all new money created, we are effectively "self-dealing" – something that is illegal for everybody else.

It occurs to Pridger that, in theory, the Treasury could cease selling bonds to outside investors and foreign central banks entirely, require the Fed to set interest rates to a negative value, and let the Federal Reserve pay interest to the Treasury on all future borrowing! In that way, the Fed could begin to start paying off the national debt!

Such are the possibilities when it comes to Voodoo economics. But we won't hold our breath on this one.

Why not go the simple route and merely issue Treasury paper as currency, as we once did in the form of United States Notes (Lincoln Greenbacks)? Greenbacks had the ability to "pay obligations" without the necessity of having to pay them back, plus interest, to private central bankers such as the Federal Reserve System. Ah, but that would be far too simple, and we are presently in a global debt quagmire which complicates things far more than necessary.

But to the article that inspired this post – according to Ellen Hodgson Brown...

Unlike Greece and other EU members, which are forbidden to issue their own currencies or borrow from their own central banks, the U.S. government can solve its debt crisis by the simple expedient of either printing the money it needs directly, or borrowing it from its own central bank, which prints the money. The current term of art for this maneuver is “quantitative easing,” and Ferguson says it is what has so far “stood between the US and larger bond yields” – that, and China’s massive purchases of U.S. Treasuries. Both are winding down now, he warns, renewing the hazard of a sovereign debt crisis...

Hyperinflation: A Bogus Threat Today

Proposals to solve government budget crises by simply issuing the necessary funds, whether as currency or as bonds, invariably meet with dire warnings that the result will be hyperinflation. But before an economy can be threatened with hyperinflation, it has to pass through simple inflation; and today the world is struggling with deflation. The U.S. money supply has been shrinking at an unprecedented rate. In a May 26 article in The Financial Times titled “US Money Supply Plunges at 1930s Pace as Obama Eyes Fresh Stimulus,” Ambrose Evans-Pritchard observed:

“The stock of money fell from $14.2 trillion to $13.9 trillion in the three months to April, amounting to an annual rate of contraction of 9.6pc. The assets of institutional money market funds fell at a 37pc rate, the sharpest drop ever.”

So long as workers are out of work and resources are sitting idle, as they are today, money can be added to the money supply without driving prices up. Price inflation results when “demand” (money) increases faster than “supply” (goods and services). If the new money is used to create new goods and services, prices will remain stable. That is where “quantitative easing” has gone astray today: the money has not been directed into creating goods, services and jobs but has been steered into the coffers of the banks, cleaning up their balance sheets and providing them with cheap credit that they have not deigned to pass on to the productive economy.

[Read the whole article at: http://www.webofdebt.com/articles/greece_skids.php

What Ms. Brown is telling us is that

JQP

July 16, 2010

A COLLECTIVE SIGH OF RELIEF!

The "Well from Hell" has been successfully capped! For the time being – hopefully. Unfortunately, it's still too soon to tell for sure, but for the now we have ample cause to rejoice – while cautiously keeping our fingers crossed.

If the oil has indeed been stopped from gushing out, the real cleanup can finally begin, and there may be hope that the Gulf Coast will return to almost normal in a matter of years. Of course, a whole lot of lives and livelihoods have already been disrupted, and many permanently destroyed. But with hope restored, many will claw there way back to some sort of normalcy.

Pridger has no great sympathy for giant oil companies, but while it was BP's accident, for which they are certainly culpable, the feat of successfully capping that runaway well-head a mile beneath the surface was nothing short of heroic. It was also historic.

Of course, the story isn't over even if the cap holds. The relief wells have the potential of becoming major problem wells too. We're playing with forces down there that nature had kept bottled up for eons for a reason.

The good news might be that there is plenty of petroleum down there if it can be tapped safely in the future. The bad news is that we still have to work on relieving our oil dependency no matter how much oil is down in the bowels of the earth.

Air quality and environmental health and diversity, and the sustainability of agricultural and industrial production, are the real issues.

Global warming isn't the issue. It certainly isn't the major "crisis" that it is being made out to be. It's a very slow process, and it is becoming increasingly difficult to make the case for the sort of near panic climate change crusaders are attempting to instill.

Whether man-made to any degree or not, there are so many variables, natural forces, and natural cataclysms that render every effort of man to "correct" things almost laughable. Any effort by man to stop global warming or cooling, can be wiped out in the twinkling of an eye. One major volcanic eruption can negate anything man can do literally overnight. Just the Icelandic eruptions did quite a number by itself.

A mere "burp" from the sun, or even from inside the earth, can accomplish more climate change in a day than mankind's "best and brightest" could accomplish in a thousand years.

Man's puny corporate attempts to "cool things down" could easily be co-opted by natural forces bent on another rapidly installed ice-age. In such case, there would be a lot of egg on the faces of whole battalions of high and mighty climate engineers, not to mention the legions of political global warming and climate change alarmists.

Just as in the case of the BP Gulf "Well from Hell" (or mile high skyscrapers), there are some things that perhaps man should not do just because he can.

JQP

July 11, 2010

NATIONAL PRAYER DAY UNCONSTITUTIONAL?

The atheist and agnostics, and a federal judge, strike again. U.S. District Judge Barbara B. Crabb of Wisconsin, has decided the National Day of Prayer is unconstitutional. Her decision came in a case filed by the Freedom From Religion Foundation, a Wisconsin-based atheist and agnostic group that challenged the constitutionality of the 1988 federal law.

Anti-religion spoilers are forever on the prowl in hopes of finishing the job of de-Christianizing the nation – or at least depriving the faithful (of any religion), of any sort of official recognition, no matter how innocuous. Apparently they find it embarrassing to live in a nation that would have a National Day of Prayer.

The "law," of course, doesn't mandate faith or prayer – but even if it did, it doesn't mention to whom or what one would have to pray to. In a sane and tolerant world, even atheists and agnostics would simply remain respectfully silent on the National Day of Prayer. Let the faithful pray and the profane blaspheme in as polite a way as they can.

On the other hand, atheists could pray too! After all, atheists and agnostics can, and do, pray that the courts will rule the National Day of Prayer unconstitutional. That doesn't mean the prayer should necessarily be answered. Remember, the verb "pray" is defined as "to ask (someone) imploringly, or to beseech."

Perhaps it would be okay to have a "National Day to Implore or Beseech." Religious people could interpret it as a good day to pray to God, whereas the rest of us could implore and beseech judges and politicians, and everybody would be happy.

Perhaps we could solve a lot of problems by getting government totally out of the "Day," "Week," and "Month" business – and maybe the "Year" business too. After all, what good are things like Mothers' Day, Fathers Day, or the week, month, or year of this and that? Establishing those extracurricular things are just ways our representatives waste their valuable time.

The solution to a lot of problems would be to get government completely out of the equation.

GAY MARRIAGE CONSTITUTIONAL?

Take the big hubbub presently going on with regard to the constitutionality gay marriage. In the final analysis what does government have to do with marriage? Nothing. We no longer have the eugenics rationale available for regulating marriage – and (aside from just another means of taxing and controlling people), that was the only rationale any government has ever had to condone, control, regulate, or license marriage.

Nothing that is really a human, or constitutional, right can legitimately be licensed. If something has to be licensed, it cannot be construed as a right. Rights are inherent and inalienable, and are not subject to government control or licensing.

On the other hand, we seem to have come up against a crisis that is causing confusion as to the very meaning of marriage. Though the definition has been well understood since the beginnings of civilization, we have become confused. Gender confusion used to be an individual problem. Now the State is getting involved – adding to the problem.

The Constitution, of course, is silent on marriage. The Constitution is limited to outlining the powers and limitations of the federal government and specifically guaranteeing certain important individual and collective rights which cannot be infringed by federal, state, or local governments.

At it's fundamental core, marriage is a social institution that long ago came under the influence of religion aimed at taming raw animal instincts. The raw motivations were the mating and procreation instincts. Cohabitation, child-rearing, and the concept of the nuclear family, were the fundamental things that came to define marriage and family. Oh! And one other thing. Property rights – ownership and inheritance.

When religious organizations became the primary institutions concerned with social issues, marriage became both a religious and moral proposition, and marriage vows were taken "before God."

When the state became involved, it became a way of enforcing and reinforcing religious values upon both the religious and non-religious, in the interests of social order, and the greater public good. Licensing of marriage also served other purposes. There were both the public health and a eugenics issues.

Today, eugenics (attempts to preserve purity of the various races and improve the various racial stocks), has become an exceedingly politically incorrect science. Public health is still supposedly a major issue, but once again rights are beginning to trump public health concerns in the arena of personal relationships. Since religion has declined and public morals have literally fallen through the floor, religion is no longer much of a factor in the debate over marriage rights.

So, with eugenics, public health, and religious morals no longer providing rationales to limit marriage rights, the only other rationales for issuing licenses to marry are administrative control and raising revenue. From a freeman's standpoint, taxing marriage makes at least as much sense as taxing physical labor. It introduces and legitimizes an incremental form of subservience to the State at a fundamental level.

Purchasing a license to engage in any kind of personal relationship or activity is a means of acknowledging subservience to the State.

The real debate over the constitutionality of same sex marriage is nothing more than a debate over the meaning of a single word – marriage. Once, not so long ago, literally everybody knew the meaning of that word. Since the dawn of civilization marriage has been understood to mean the taking of a wife, or wives, by a man, or the union of a man and a woman, or women, for the purposes of procreation and rearing offspring under the institutionalized protections of Church or State.

"Pleasure" and sexual gratification were merely pleasant byproducts of the marriage relationship. Cohabitation and sexual relationships have never been thought to constitute a marriage relationship. Undying love of a partner has never constituted marriage. Favorable tax treatment, and other government and corporate benefits, were likewise only incidental to the marriage the relationship and (until recently), had never been thought of as a "purpose" for entering into a marriage contract.

So, in this age of increasing moral befuddlement, gender confusion, and increasingly politically powerful homosexual men and women, the meaning of the world marriage is simply being changed, whether the rest of us like it or not. Perhaps any sort of union or personal relationship between two or more people will eventually qualify as marriage. In any case, the word marriage is essentially becoming meaningless.

The idea of "licensing" something that is essentially meaningless, seems – well, meaningless and ridiculous. Besides, as we've said, anything construed as a right cannot be justly licensed by any level of government. Let same sex couples call their relationship marriage. In fact, let anybody who forms a household together, for any reason, call their relationship marriage. What difference does it make? Let them share employer insurance if employers will go along with it. Let them have tax advantages if helps their "family."

Get the State out of the licensing any kind of personal relationship, and a host of other things to boot. Either we have a free country or we don't. Right now we don't.

Let the homosexuals have the freedom to call their relationships marriages if they insist. Let the law recognize them if it must, but not license it! The rest of us can call our relationships "opposite-sex-marriages" (OSMs). But let the bigamists and polygamists have their freedom too. And let us not discriminate against platonic friends, or relatives like brothers or spinster sisters, who might live together and like to have their own share of tax favoritism and other perks based on the new marriage concept too.

JQP

July 9, 2010

ON THE ECONOMY AND HOPE

There are all kinds of scare stories going around the Internet with regard to the global economic melt-down, and especially the American economy. But don't be too fearful – there is hope.

Never underestimate the ingenuity and creativity of Voodoo economists. Never fear! With the help our our trusty mis-representatives, they are going to pull us through by both hook and crook!

JQP

INTERNATIONAL MONEY?

Since the Federal Reserve Ponzi scheme has run its inevitable course and been exposed, and the mighty Yankee Dollar is quickly loosing its luster, we're hearing more and more calls for a new international reserve currency. Russia, China, and other nations, and now even the United Nations, are on record calling for the abandonment of the dollar in favor of something new.

Americans seem outraged to think that the dollar might fall from its exalted position as the predominate international reserve currency. But the fact that the dollar became the international reserve currency in the first place is part of the problem that most people seem to miss. The problem was that the dollar became the international reserve currency in the first place.

For those wringing their hands over the advent of a New World Order and the likely emergence global government "if a world currency should come into being," they should ask themselves this question: "What was the intended effect of the U.S. dollar becoming a global currency?" Wasn't that perhaps a stab at global dominance?

But the real effect was that We the People of the United States, together with our mis-representatives, lost control of our own currency and our economic destiny. The initial deed was done in 1913, of course, but it took two world wars, and the abandonment of the gold standard, to bring the hope of a New World Order into full fruition. But corruption seldom leads to worthy ends, and disorder is often the result of the best of even the best of intentions.

There were two other major problems: First, the very nature of the Federal Reserve System itself, and over 50 years of fiscal irresponsibility on the part of Congress and succeeding presidential administrations – particularly from LBJ to BHO.

Of course, the American dollar should never have been allowed to become a global reserve currency in the first place. A nation that purports to provide a currency for the world is doing what no nation can legitimately do, and should not try to do. In doing so, it became inevitable that at some point even the Federal Reserve would loose control of it's primary charge – it's own currency. Thus we see that the global cabal of banking families are willing to help the Federal Reserve out of the fix it's got us into.

As for the American people, Congress had surrendered its control over what passed as their currency back in 1913. It was out of their hands, and was an inflationary currency from the beginning, though held to somewhat strict restraints for the first fifty years of the Federal Reserve's existence by what passed as the "gold standard." With the total demise of the gold standard in 1971-2, the Federal Reserve System became the sole master of the currency, and, in time, Federal Reserve currency became a great burden, if not master, to the people. Inflation was unleashed and the dollar has been in steady inflationary decline ever since.

When the dollar officially became the global reserve currency, as the result of the 1944 Bretton Woods system agreements, the dollar was effectively officially billed as being "as good as gold." Gold was still supposed to be the real global standard – with the dollar merely standing in its stead for accounting convenience. The world was suffering from the chaotic results of World War Two, and the United States stood supreme as an apparent bastion of wealth, power, and stability.

Of course, the dollar was not as good as gold even under the gold standard, and everybody knew it – especially when the Johnson administration began financing the the Vietnam War, the Great Society, and the War on Poverty with smoke and mirror economics (declining to raise taxes to pay for the war). It was illegal for Americans themselves to even own monetary gold, and had been since 1933. But as long as the United States Treasury would honor its promise to redeem dollars with gold when tendered by foreign central banks, the world was happy to go along with the scheme.

Bretton Woods was about a lot more than currency issues. It brought us a lot of other things that many have come to regret, including the International Monetary Fund, World Bank, the General Agreement on Tariffs and Trade (GATT), to name only a few. In short, even more critical than the founding of the United Nations, it launched the financial globalism, and the kind of international market system we are experiencing (and suffering the results of), today.

From the monetary perspective, Bretton Woods came crashing down in 1971 when president Nixon was finally forced to unilaterally slam the gold window on the world. It was quite a shock to the world – America repudiating it's solemn promise that the dollar was good as gold. It was the signal that America's financial and monetary houses were not in order. This caused a long period of monetary disarray from which we have never really recovered. Nevertheless, the world was already hooked on dollars and continued to be hooked. Worse for Americans was that the dollar had become a totally fiat, debt-based, dollar which could not possibly bode well for the nation.

One way of looking at it is that the world's money supply effectively became the American national debt! The entire dollar-denominated global money supply is an interest-bearing liability of the American people. America is no longer a rich nation, unless it can be construed that debt makes us rich. Even worse, the processes that grew from GATT, free trade, and globalism, led to the de-industrialization of the nation, to the extent that, as a nation, we no longer had the wherewithal to pay our way in the world or earn our own living – much less ever hope to honor our debts.

Trade and balance of payments deficits began growing at an increasingly accelerating rate – red lights flashing and warning sirens blaring all along the "Yellow Brick Road." But our representatives refused to heed them, and time and again granted the president fast track to pour more steam on the boilers. To this day they still sing the praises of free trade and tell us that "globalism is good" – and that protecting our own markets, and American interests, is bad.

Their goal was not to protect the interests of the American people, but projecting American commercial interests abroad, and protecting them there! Our national interests were no longer here, but "over there." And just to make sure nobody noticed what was really happening, we have gone over there to fight those who don't see things our way – so we won't have to fight them over here. Meanwhile, things are going from bad to worse over here.

The problem was obvious from the beginning, yet our presidents and representatives marched to the globalist drummers every step of the way though anyone with the least insight and common sense could see that they were committing national suicide on our behalf by steadily increasing degrees. The American economy became like a train barreling down the wrong track, effectively on auto-pilot. Then, when we entered the tunnel and they announced that they saw a light. Naturally, they proclaimed it the light at the end of the tunnel – like the one we saw in Vietnam.

The questions remain, is the light ahead daylight, or is it a mirror propped up against the bedrock of any unfinished tunnel? Or is it daylight beyond which is a gapping precipice opening into a deep un-bridged chasm? Neither option is very good. It would have been better to get back on the right track before entering any tunnels.

We and our globalization had gathered such a head of steam that nobody noticed we were on the wrong track. The great head of steam, of course, generated great financial bubbles of varying descriptions. And as we barrel on, those bubbles are bursting, weakening us as a cancer patient weakens toward the grand climax of his life.

Being in such a weakened state, and on the the brink of another Great Depression to boot, is wrought with incredible dangers. In fact, it's downright scary. Forget the tunnel scenario. The climax may not be that violent. Think protracted hard times in a huge nation that is no longer able to produce sufficient goods for its own survival, and money loosing it's purchasing power like hot gas escaping from a balloon!

Our leaders, with visions of global financial, and "full spectrum" global military, dominance have goofed, to put it lightly. But they have miscalculated and fumbled more than just badly. They have apparently literally forgotten that only production can build wealth or pay off debts.

Voodoo Economics tells us that if you owe the bank a million dollars, the bank owns you. But if you owe the bank a billion dollars, you own the bank. So our trusty leaders thought that if we could contrive to owe the world a few trillions, they must certainly own the world. They felt that was the rightful destiny of the world's only remaining super-power. Just in case it wasn't clear to the world, they intended to prove it on the battle field for everybody to see. But the wars aren't going well. The world isn't being sufficiently impressed.

Meanwhile, China, which has replaced us as the world's greatest industrial power-house, is not only solvent but downright wealthy, and is becoming a military super-power. Actually, it's already a super-power, and it's a big country. Super-power or not, when push comes to shove, it can field four soldiers to our one.

Perhaps worse, China has become our predominate creditor – ironically, loaning us our own money – so we can buy their goods! It loans us money it has earned fair and square, in spite of our claims that it hasn't played fair. We made the initial rules and they not only played by them but grew into a major player – and a game changer. They can now make some of the rules themselves.

China didn't take our market. We gave it to them and made sure they got into it in a big way. "Free Trade" and globalism were our own national policy goals, and our aim was to become dependent on others to provide us with everything we needed.

We would harness China and dominate the world – base on our incredible capacity to incur more debt! But things are not working out so well.

We may owe China a couple of trillion dollars, but we're a long, long, way from owning China. The most that can be said is that we still do have some influence because we are China's major customer. But don't believe that leaves China hopelessly hostage to the American market. China has a domestic market potentially four times the size of our own, which it has only begun to develop!

China has other advantages too. It has a sense of self that we have lost in our quest to be diversified and dominate the world. And China owns its own banks, and it's own money (as well as lots of ours) – and, it undoubtedly has a national plan. We don't believe in central planning, nor in our own Constitution. So we've been adrift for a long time. All of our planning is done in secretive meetings and in corporate boardrooms, and it all focuses on the planners' own bottom line and their positions of power.

The closest thing we have to a central planner is the privately owned, quasi-government, independent power, known as the Federal Reserve – our unaccountable provider of money and debt.

Russia is becoming a world player again too. It has never ceased to be a nuclear super-power. Though we tried, we don't own Russia either. And between Russia and China, and the entire Muslim World (not to mention much of the West and Asia), we don't command the hearts and minds of nearly enough people to even be in the running when it comes to full spectrum domination of the world as planned.

Showering the world with dollars no longer works the kind of wonders it once did. The other big players are getting tired of "depending" on dollars which are declining in value at an increasingly alarming rate. They are getting tired of supporting the American economy and the super-consumptive, super-wasteful, "American way of life" by purchasing American debt. Gratuity, even if based on self-interest, can only go so far.

So now they want to ditch the dollar and establish another global currency. But there are such intractable problems with this proposal that such a change won't be easy. In fact, it appears impossible in the short and intermediate term. Yet, never underestimate the powers and creative flexibility of Voodoo economists and the global bankers!

Any way you look at it, America has overplayed its hand and is now in a very precarious position both at home and abroad. What a change half a century can make!

What the solution will be cannot at this time be imagined. Perhaps there is no solution. The traditional solution would be unlimited war which would permit the fundamental rules to be changed in favor of the victors. Let us hope and pray that our position will not prompt such a desperate attempt to force solutions. Global war will not only change the rules and landscape, but unlike our previous world wars, may cause Americans (along with everybody else), a great deal of inconvenience. This time around, there is a chance we might not be the victors in spite of all our WMDs. Our industrial economy is only slightly better than that of Germany when Hitler came to power. It took him a decade to become a serious threat to continental Europe. Germany became the continental super-power of the era, but Germany lost its great war.

At that time we were not nearly as militarily strong as we are now. But in short order we were armed and ready to go into battle. But we were only able to do that because we already had our industrial ducks in order. The factories where merely waiting for Defense Department orders. Now most of our factories are in China.

Of course our military/industrial complex is in pretty good shape, but the it has lost far too much of it's industrial backup to launch and sustain a protracted major "unlimited" war. Most of America's current industrial capacity is in Mexico and China, and a score of other nations, rather than in the U.S.A. This is a mega-problem.

A new international currency? What would it be, and what should it be? What it is likely to be, and what it should be, are as different as what the dollar is and what it should be.

BACK TO BASICS?

We already have international money. We've always had it. It's called trade goods – commodities and manufactured goods. And certain commodities, such as gold and silver coin and bullion, have served as a convenient means by which to smooth out the rough edges in settling accounts. Credit and trust have been important too, of course, but the real money is comprised of the "real goods."

As primitive and crude as this concept of barter is, it is still as fundamental to international trade as it is to people swapping eggs for butter. Of course, we make a distinction between trade goods and "money." But the international monetary standard has always been gold and silver coin and bullion. That was pretty much settled centuries ago. It should be again. Pure and simple. For those countries that do not have the ability to trade due to a lack of resources or industry, "exchange" has to be earned by other means, such as by exporting labor, or it simply has to be totally self-sufficient at the subsistence level, as most nations were until relatively recently. That's why nationhood has always been contingent on sufficient land and natural and human resources to support a "national economy."

Trade must be balanced. If it isn't balanced, then either somebody is getting cheated, or somebody has to come up with some coin or bullion to pay the difference. And if a trading partner happens to come up shy on either goods or money, that's when both verbal and paper promises come in – trust being the key to validity.

The validity of paper promises to pay is contingent on both honesty and integrity. That's why our present fiat monetary system has failed us. It's very nature is both dishonest and usurious, and its managers self-serving. IMF SDRs, or Special Drawing Rights (once called "paper gold"), as a replacement for America's dishonest debt paper as an international currency standard would not solve the problem. SDRs are backed by a "basket" of flexible, dishonest, fiat debt-paper currencies. All of them are pretty much the same thing as the Federal Reserve dollar. Dishonest promises to pay simply cannot result in an honest and dependable international monetary unit.

The only answer is to recognize, once and for all, that commodities and manufactured goods are the real goods, and gold and silver are the only real money. Credit depends on contract. Use of credit can be necessary, and thus good, to smooth out some of the high land low spots in the perpetual chain of commercial transactions. But good credit and valid contracts always depend on the honesty and integrity of the parties involved.

Ironically, contracts are held inviolable throughout the global commercial system, yet our fiat debt money itself lacks the fundamental attributes of honest contract. The same would be true of any artificial international, banker managed, paper currency used as "promises to pay."

The whole banker bale-out is about enforcing contracts, and making it possible for dishonest institutions to honor their contracts and promises to pay. Yet the entire structure upon which those dishonest institutions exist and thrive is dishonest. Forcing the public to remedy their contractual problems is a sign that government itself has become the major agent of avarice, and has become as rotten at the core as the dishonest financial institutions for which government has become the major agent. To make their fraudulent contracts stick, the basic contract that government has with the people is being grossly being violated.

Gold and silver coin and bullion are not "promises to pay." They are the pay. They are real goods that are universally recognized as having inherent value – and one way or another, we're going to have to get back to dealing internationally strictly in real goods and balanced accounts.

We don't need a global central bank for this. Nor do we need global government. We need honesty that begins at the local level and works its way up from there. Because of this, national monetary systems must essentially be local, or national, not international.

JQP

July 4th, 2010 -- INDEPENDENCE DAY

DO WE CELEBRATE OR MERELY COMMEMORATE?

At this late date of our history we can no longer celebrate our Independence. We can only commemorate it and lament its loss. With the betrayal of independence and the Republic, memorials are about all that is left. We certainly have nothing to celebrate in our present state of dependence, indebtedness, and de facto national bankruptcy.

If we celebrate the Fourth of July, it can only be to memorialize things that have been and might have still been, but no longer are. It's a depressing circumstance to see and hear fireworks going off, and American flags flying, as if we were still an independent republic and proud of it – to pretend that we are still the free and brave in the tradition of our revolutionary founders.

Americans are debt slaves to their government and to foreign creditors now. The great and proudly independent Republic has passed – a victim of willful suicide, executed by our own so-called representatives over a period of four or five short decades. They willfully strove for international economic interdependence – dependence – and a New World Order. And they got it. But it appears that there is a lot more disorder than order in the "Wonderful New World" – this new international economic order – they have fashioned for us and the rest of the world.

Oh Great Republic, Rest in Peace!

But there will be no rest for Americans. Some way will have to be devised to put every one of us to work to pay the national debt – or at least keep up with the interest payments.

May the Great Republic arise from the ashes as a Phoenix reborn, and freedom and liberty, with a government of the people, by the people, and for the people, once again favoring this still great wonderfully endowed land. May there again come a time when we can wholeheartedly, and honestly, wave our flags and celebrate our Independence!

JQP

July 3, 2010

HOW DID WE GET THINGS SO UPSIDE DOWN?

While we hear that the federal and State governments are bankrupt with trillions or billions in debts and deficits, we hear of the first billion dollar basketball player! Sports stars worth a billion dollars ought to be considered a luxury in a extraordinarily solvent and prosperous nation. Yet, while the national government is bankrupt and depression deepens, we've got more than one billion dollar athlete. It would only take the incomes of a baker's dozen of them to solve Illinois' state deficit problem!

How is it that the federal and State governments, with their tremendous powers and taxing abilities can go bankrupt while sports stars can make billions simply by throwing balls through hoops or putting smaller balls into little holes in the ground?

Many movie and media stars are in the same billionaire league, not to mention all the exceptionally well-heeled corporate big-wigs. We have hundreds and hundreds – maybe thousands – of multi-billionaires.

Something is obviously wrong here!

The minimum wage is about $8.00 an hour, and a damned good industrial wage is about $25.00 an hour if you can find one! Working people have to work eight hours a day, five days a week, about 50 weeks a year, to earn their $16,640.00 or $52,000.00 a year. The minimum wage earner would have to work over 60,000 years to earn a billion dollars! A well-paid production worker, making $52,000.00 a year, would only have to work about 19,230 years to earn that much.

Yet we have "stars" who make the billionaire mark while they are still young punks! They don't even have to have a college education to do the things they do. They may be brilliant, but not even that is required. They may "work" hard to gain their vast fortunes, but that isn't the point.

The point is that somehow these billionaires seem to get more than their rightful share – a lot more – regardless of how you value their contribution to society. Meanwhile millions and millions of hard working people are struggling to make ends meet. Millions have lost their jobs, their homes, and their hope.

Government favors the rich in this country. They don't call them the rich and powerful for nothing. Moneyed interests can get the ear of Congress with well-placed campaign contributions, while the people – all the people – who Congress is supposed to represent, continually get the shaft.

The Reagan administration lowered taxes on the richest people in the country in order to give "tickle-down economics" a chance to work. Corporate taxes were also lowered, and were deregulated for the same reason. After all, corporations and rich people are supposedly the ones who provide jobs to workers. Makes sense. We'd all rather work for a rich man or woman than for a poor one.

The theory worked. Millionaires multiplied many fold over the next several years. Millionaires became billionaires. Billionaires became multi-billionaires. But the rich men and corporations fashioned such huge pockets for themselves, that precious little trickled down to the rest of us. In fact, since the corporations were deregulated (and could do just about anything they wanted), they found it was much more profitable to move production to Mexico and China and bypass American workers entirely. Government, thinking it a splendid idea, helped them move.

There are a lot more dollars trickling into the hands of bankers and industrialists than into the hands of hard working people. In fact, it's literally gushing into the hands of the super-rich while the poor working man is called upon to pay the bills. A lot more money trickles down into the hands of Chinese workers than into the hands of American workers. And the Chinese government has become rich while our has become poor in spite of its ability to spend trillions and trillions of tax and credit dollars. So, trickle-down does work.

Mexico, given the advantages of NAFTA, has produced a lot of billionaires too – though it has otherwise remained an extremely poor country. Unfortunately, they tell us Mexico has also become a failed state. Half the population is clamoring to escape to the United States in hopes of getting the jobs Americans can no longer live on.

Soon, Americans may be in such dire straits that they'll want every "undesirable" job in the land. And if you think we have problems with illegal aliens now, wait until the real crunch comes and throws them into direct conflict with hoards of desperate and starving Americans!

China has grown into a rich mega-producer thanks to deregulation, trickle-down, and our leaders' suicidal commitment to international interdependence. It, too, has produced a lot of multi-billionaires. But it isn't a failed state. It's a reinvigorated empire – resurrected, in good part, at the expense of downsized American workers and eager American consumers. It's major problems are in the forms of growing pains, industrial pollution, and "too much savings!" The latter is the cause of a great deal of envy, so our politicians are trying to get the Chinese to shoot themselves in the foot as we have.

So we are becoming a nation of billionaires and paupers. But the government is flat broke and getting flat broker as fast as our politicians can manufacture economic policy and borrow, and/or print, money. Even all the money that we simply "print" is "debt money" that supposedly has to be paid back to the Federal Reserve System. But, oh well, interest rates have never been lower! This is the perfect time to borrow! That's what they always told us, and look how far we've come!

Since we were such a rich and productive nation, we continued to live rather well on a great deal of stored capital for some time. Since that stored capital has been expended, we continued to live high on the hog on mostly foreign credit. But that's almost all gone now too. The new class of billionaires have most of what's left. The rest of us are girding for an extended period of diminishing returns, higher taxation, and micro-regulation. It seems all we can do is watch the development of another great failed state. The great experiment is coming to an ignoble end.

"Government of the people, by the people, and for the people" is perishing, willy-nilly, from the earth. No! It is not perishing – it's already long gone! This, in the land once billed as "the land of the free and home of the brave."

JQP

June 29, 2010

STATES' RIGHTS – A WORD OF CAUTION

While the federal government has made a mess of things, most of the states have played followed the leader. And while Pridger is gratified to see States begin to rediscover the Tenth Amendment, we should never loose sight of the fact that the various States have the very same genes as do all governments. Tyranny is in those genes, whether it's the federal government or State governments.

That's to say, States are as capable of becoming tyrannies as any state. Most of our States are as large or larger than most nation states, and they can become police states just as we fear the federal government is becoming a police state.

So, while it is perhaps healthy for States to revisit the long neglected concept of nullification, and speak more strongly about State's Rights in the face of a long train of increasing federal usurpations and abuses of power, we should not forget that State governments are subject to the very same usurpations and abuses of power against We the People as the federal government follows.

In fact many of our States have already traveled a long way down the wrong paths. They are also guilty of "big government" and reckless deficit spending. Many are becoming police states in their own right, with law enforcement going far beyond what is needed to promote peace and tranquility and the "right to life, liberty, and the pursuit of happiness." States became eager feeders at the federal money trough. They have allowed themselves to be bought off by the federal government with their peoples' own money, making them agents of the central government rather than the reverse, as it should be.

Yet, at the same time, (in spite of their tremendous taxing powers), most states have not been able to balance their budgets and several are facing eminent bankruptcy. Like the federal government, States have effectively forgotten what fiscal responsibility is – and this didn't happen overnight. They have traveled a long and well lighted path toward certain financial perdition. It isn't as if that were not obvious every step of the way.

Additionally, States have too easily, and sometime very eagerly, accepted the federalization and even militarization of law enforcement and police powers. They followed the federal government's lead with regard to levying income taxes and have allowed themselves to be bullied into enforcing unconstitutional federal laws and supporting unconstitutional federal programs along with their own overblown State programs. And they almost always did these things without the slightest complaint. In fact, States began to feel that they gained their own "power" from the federal government rather than from their own sovereign status as States, whether under the Federal Constitution or natural law.

Having become over-willing to accept federal funding for education, highways and bridges, and a host of other things, States were suckered into shouldering "un-funded mandates" from the federal government, forcing them to increase state taxes or borrow funds to fulfill alleged obligations to the federal government. They accepted these mandates as if they thought they were Constitutional and thus unavoidable.

The States became willing supporters of a BIG, and increasingly POWERFUL, federal government because it also gave them even more power over the people. They are only beginning to rethink their relationship with the federal government now that the whole structure is beginning to come unraveled. The economy is collapsing from sixty years of rampant spending excesses and failure to follow the Constitution. The States have been as guilty as the federal government. But now the PEOPLE are beginning to feel uncomfortable, and many of them are even beginning to wake up and call for some sort of action. At least States, being closer to the people, are (or ought to be), more susceptible to the will of the people than is the federal government.

But we have come to the point where any remedial action appears as problematical as inaction. So the States have begun to borrow their way out of the hole they have dug for themselves just as the federal government does. It's far too late for easy solutions. All real solutions will likely be of the gut-wrenching variety.

It's somewhat ironic that as we increasingly look toward State legislators to begin reigning in the over-blown and increasingly authoritarian central government, we still have to depend on the federal Constitution to help reign in errant states which routinely attempt to infringe upon our Constitutional rights.

The recent Supreme Court ruling on Second Amendment rights is a good example. So far, the federal government has protected the people against States that have repeatedly violated their peoples' Second Amendment rights. The federal government has infringed upon gun rights only marginally by comparison, but states and local government have routinely spat upon them. By far, the most restrictive gun laws have been passed by State and local governments.

Pridger's own State of Illinois is a prime example. The State is dominated by Chicago, a megalopolis with restrictive gun laws worthy of a foreign dictatorship. The State itself ignores the Second Amendment of the federal Constitution. According to State law, gun ownership is a privilege strictly subject to the police powers of the State. The State has even put a Police State clause into its own version of the Second Amendment in the State Constitution. It begins with the words, "Subject to the Police power...!"

Thus law-abiding Illinois gun owners must purchase their right to keep and bear arms from the Illinois State Police! If we don't possess a "Fire Arms Owner's Identification Card" (FOID), we simply don't have Second Amendment rights! If we own a firearm and don't have a FOID, and get caught, we are felons! This is clearly unconstitutional, but Illinois has been getting away with it for decades.

Illinois, like most other states, is broke and nearly bankrupt. So, among other things, they were going to have to lay off a lot of State Police to save money. But, we cannot have a Police State without a lot of State Police out there. So the alternative solution being proposed is to keep the police on the State payroll and give the them the ability to raise more money for the State, by raising the basic traffic ticket rate from $75.00 to $120.00! And, of course, pressure the police into stopping and ticketing more people. Of course, other fines and penalties will commensurately be raised too. It's the police state thing to do!

The Illinois legislature is very hesitant to raise taxes to cover the State's habitual spending excesses, so it is going to give the State Police, and all local police, the POWER to raise more money themselves – a typical Police State solution.

Unfortunately, that's apparently a State's Right. So beware of State's Rights!

JQP

June 24, 2010

THE PROTOCOLS ON MONEY

Confusion continues to be the focus when it comes to money and what our monetary policy should be. All we can be certain of is that the present system isn't working – at least for us. It's working for the bankers and the super-rich. Oh, it does still serves as a "medium of exchange" for us – but it is skinning us alive all the while with it's perpetually downward purchasing power and increasing interest demands. The Federal Reserve System is the mother of all inflationary systems, and its currency is the mother of all inflationary currencies.

The alternatives, of course, are either national paper currencies like the greenback, or a return to gold and silver coin – or some combination thereof.

The Ludwig von Mises people, of the Austrian School, advocate a pure "free market" based gold standard, and people like Ron Paul support this and advocate a repeal of legal "legal tender" laws. But, the way Pridger sees it, anybody with any understanding of economics and money would see red light flashing all around this idea.

The truth of the matter is that while gold and silver are wonderful forms of "money" when it comes to real "commodity value." But gold and silver standards naturally favor, first and foremost, those who have the most gold and silver! It's abundantly clear that the gold standard, to the extent that it has existed during the modern era, was always a bankers' game. It was the gold standard, with gold merchants and bankers always having a corner on possession of most of it, that was the father and mother of the kind of fractional reserve banking that finally evolved into the system we have today.

The Federal Reserve System today treats pure debt as if it were pure gold! But Federal Reserve currency is the very antithesis of gold, and the opposite of "money" because Federal Reserve Notes represent debt rather than a positive value. They constitute a negative value – debt – with interest perpetually accruing on them. The fact that they have purchasing power in the hands of consumers constitutes an inherent conflict. While credit, or the availability thereof, might be considered a positive circumstance, it certainly isn't a value in the sense that a gold or silver represent value. This is certainly a most peculiar attribute for our present legal tender currency. It makes the dollar more of a tar baby rather than an asset.

But is a gold standard the way out of this monetary travesty? Pridger doesn't think so. The great masses of ordinary people have never possessed much gold and never will. Silver and copper coin were their lot – along with representative, fractional reserve, paper. It was the fractional reserve paper and credit nominally based on it, rather than gold and silver coin, which always provided the preponderance of monetary liquidity in the markets throughout the industrial era. And that's how it would be again under anything approaching a renewed gold standard. The great preponderance of gold and silver coin and bullion would remain in treasury and bank vaults as was the case in the past, and credit and paper receipts or certificates, said to represent that coin and bullion, would serve as the primary circulating medium of exchange.

A pure "free market" gold and silver coin monetary system, such as the Mises Institute advocates, would bring modern commerce and most of the so-called "free market" economy to a screeching halt – at least in Pridger's uninformed opinion. The wheels of commerce require a great deal of grease to roll smoothly, and if the grease is in short supply, the wheels will soon begin to squeak and grind to a halt.

The Mises Institute has a lot of bases covered with extensive and convincing arguments, of course, and may really have all the answers, but Pridger remains somewhat skeptical. Many others are too, including Stephen Zarlenga, head of the American Monetary Institute and author of The Lost Science of Money, and Ellen Hodgson Brown, author of Web of Debt.

Gold and silver are relatively rare commodities, whereas the demands of modern commerce and increasing populations demand a plentiful and expandable supply of circulating currency. A pure gold and silver monetary standard, at least using coins of the size we are accustomed to, could not provide the liquidity that modern industrialized economies demand. And in any case, "credit," represented by "promise to pay" notes, would undoubtedly continue to be the main currency as it is now.

For this reason, Pridger advocates a legal tender note as a "national currency" (treasury notes, like the greenback), as the primary circulating currency within the United States (and similar systems in other nations), alongside gold and silver coin and bullion (not rigidly pegged to national currencies) – available to the public, for its "value retention" attributes. It would essentially, and primarily, be used by individuals for personal savings purposes rather than circulation – and used internationally for balance of payments accounts between nations as it has done historically.

National currencies should be "discretionary" – that is flexible, in order to accommodate both expanding populations and the demands of expanding commercial activity. Gold and silver are largely non-discretionary, and would serve as the bed-rock international money of account in fluctuating conjunction with all other major tradable commodities.

All tradable commodities are money of sorts in their own right. Commodities are traded between nations and regions, with commodities of one variety "paying" for commodities of another variety of like market value. The same goes for manufactured goods which are traded either for other manufactured goods or for bulk commodities.

In order to keep gold and silver coin and bullion from fleeing the country in too great of volumes, balanced trade would naturally be the common sense goal of trading nations – as it once was. We have fallen from this common sense model of trade to such an appalling degree that regaining any sort of equilibrium in trade, and the balancing of payments, presents very challenging problems. This, of course, complicates things tremendously, and must be addressed and remedied if we are ever to get anything else right with regard to our domestic economy and our monetary system.

Use of Credit is a very desirable option when responsibly utilized. But we've made the deadly mistake of not only over-using it, and in facet, using it for money. We devolved into a credit dollar system that is totally suicidal, as our leaders are presently learning the hard way. What they have actually learned, however, remains to be seen. So far, it appears to be nothing. They are choosing to prop up the house of cards by directing mirrors and blowing more smoke.

Here's a pretty interesting article that tends to reflect Pridger's view on gold and the gold standard. "Gold Revisited":

http://realcurrencies.wordpress.com/2010/02/16/gold-revisited/

And here's another rather surprisingly interesting article that tells of the monetary system the so-called "Learned Elders of Zion" envisioned in their global plan. Surprisingly, they admit that, while gold is their tool, it isn't the basis for the monetary system they would have in their perfected state. Equally surprising, they envision a just and democratic monetary system similar to that of the greenback.

Read the article here:

http://realcurrencies.wordpress.com/2010/02/20/the-protocols-on-money/

A word on the infamous "Protocols." Regardless of who wrote them – whether "learned elders" or insightfully clever forgers – the plan (with allowances for changing times and circumstances), continues to appear to be right on track. But, of course, we're still a long way from their desired "perfect state." We appear to be in something more akin to what might be called Purgatory, if not the gates of Hell itself.

JQP

June 20, 2010

WHEN MAN THINKS HE'S GOD...

THERE ARE PENALTIES FOR SUCH ARROGANCE. There are even more penalties for arrogance compounded by both greed and stupidity. Man may have been created in the image of God, but when he presumes to have outgrown Him – perhaps even displaced Him – he's likely to come due for a sail trimming in the fullness of time.

In fact, it appears that we, in our collective wisdom, are being taken out behind the woodshed right now! The Gulf Oil gusher may be part of our reward for a whole litany of sins. Unfortunately, when governments and whole nations are called onto the carpet, it seems millions of innocent people are the first to pay the penalty.

Depressing is the only description for the news chronicling unfolding events in and around the Gulf of Mexico. It's even more depressing than the ongoing news about the economic melt-down or our miscellaneous wars and planned wars. The news of those things are always bad enough and getting worse, but (barring nuclear cataclysm), the oceans would still be intact after our economic woes and wars have run their course – perhaps the trees will still grow – even if we end up back in the stone age with the target 500 million global population.

But if we have somehow contrived to fumble into a way of killing off the oceans, we've just committed suicide on behalf of earth and most of it's life-forms. Pridger isn't conceding that this is going to happen. Things won't be that bad (at least we hope!), unless we "just keep on going" like the Energizer Bunny – as we seem determined to do.

Whose bright idea was it to drill a super-deep well in 5,000 feet of water into a strata of the earth's crust some 20,000 feet below the sea floor?

"Experimenting" with, and probing into, unknown forces miles beneath the the ocean floor, by way of a comparatively flimsy mile long steel tube suspended between oil-rig and sea bottom, seems like shear madness. It's sort of like a physician attempting experimental deep-heart surgery using fifteen foot long scalpels and forceps, from outside a locked operating room. If the experiment fails, and the patient is in danger of bleeding to death, somebody had better have a key to the operating room real handy and get in there immediately!

There was no key handy in the Gulf after BP's experimental deep well went wrong. Clumsy robotic subs have to be depended upon – and the patient continues to hemorrhage at an alarming rate. And the patient is a big one! It's the earth itself! It's blood is all over the Gulf!

It looks like blood too! What kind of crude oil is this? Some are saying it's a volcanic mineral and gas mix from the very bowels of the earth, and that it might eat us for dinner like the Monster from the Black Lagoon – it could be more dangerous to human health than the H1N1 flu and vaccine combined several times over!

Literal doomsday scenarios are cropping up like wildfire, and a whole new crop of conspiracy theories are being harvested. We can only hope and pray our impending doom is being unduly exaggerated, and that BP can get a handle on this thing and kill the well before Obama kills BP by smothering it under mountains of disaster liability claims. Lawyers are cranking up to harvest another Bonanza while the entire profession may come up totally superfluous.

Both James Carvillel and Spike Lee lit fires under president Obama, telling him to "Go down there and take charge!" Get mad! Kick some a---! Organize the relief brigades! Plug that hole! Look busy! Be a super hero! Start billing BP for the failure of our national energy policy!, etc.

We got a major energy wake-up call in 1973. That was 37 years ago! Now BP is getting the blame, not only for it's own accident, but for our failure to exercise national common sense over a period of four decades.

There is plenty of blame to go around for the Gulf fiasco. BP is getting most of it now, but the lion's share must go to the "permit issuer" and those who approved what can only be seen now, in hind-sight, as extraordinarily arrogant folly. Apparently we are finding out that there are forces down in the earth that are simply too powerful for men to handle. BP, with all of its resources, is having a rough time of it. It's even taxing President Obama's crises management capabilities.

The federal effort in the Gulf reminds us of Katrina. But this is much, much, worse. It puts Pridger in mind of what, in less politically correct times, we used to call a Chinese fire drill. He recalls a cover of a major national news magazine featuring the then Soviet Leader as a fumbling, all thumbs, idiot hopelessly tangled in yarn. The message was, "Why can't the Soviets do anything right?"

Yet the Soviets pioneered deep oil drilling back in those very fumbling days. Apparently they had some pretty catastrophic mishaps along the pioneer trail, and even had to nuke two or three recalcitrant wells.

It seems that the Soviets also discovered something fundamental about oil and the earth's oil-supply that we have yet to (officially), come to grips with. Oil isn't what we thought it was and wasn't formed in the way we thought. It's a deep-earth phenomena – far too deep to be the bio-hydrocarbon science has long assumed. And there's lots of it!

But at least the Soviets had the sense to do their experimental drilling on dry land where they could bring their thumbs and yarn to bear on the problem if something were to go wrong. Now, however, they really seem to know how to do it. But we apparently don't. Yet it seems we felt confident enough to drill into the unknown in mile deep water.

Ironically, here we are all geared up for war and more war, and this happens! Embarrassingly, the Gulf disaster was an accident rather than an act of war. It was a "manmade disaster," as the Obama administration once defined "terrorism," but there probably wasn't a single terrorist involved. There probably wasn't even anybody from the "no fly list" anywhere near the rig. BP may have drilled the hole, but it was an oil-hungry motorized society, and its military/industrial complex, that demanded the drilling.

President Obama, in his capacity of Commander-in-Chief, has characterized the disaster as a war – an invasion of our southern coasts and our homeland. That's an appropriate analogy – yet it's pretty difficult not to reflect that "this war" – a "war" that has the potential of bringing us lower than we ever thought possible – is another one that we started ourselves, this time on ourselves, in the interests of the great benefits that it could bring our nation. Oh well! All wars have unintended consequences.

Arrogance has consequences.

As for the depression people will be feeling in the months as years ahead, it's probably time to legalize marijuana and other recreational drugs. There won't be enough prescription medications available to go around, and they will be far too expensive to treat all the poor and newly destitute who will be needing them.

JQP

June 15, 2010

"This is basically Wile E. Coyote economics, where after he runs off the edge of the cliff, he doesn't start falling until realizes he's walking on thin air." - Doug Casey

That's the assessment of Doug Casey. Doug has provided some very poignant and serious food for thought in this recent interview with the Daily Bell.

Introduction: Doug Casey has appeared on hundreds of radio and TV shows, and has been the subject of articles in People, US, Time, Forbes, The Washington Post, and numerous other publications. For nearly three decades, Doug Casey and his team have been correctly predicting major budding trends in the overall economy and commodity markets. (read the interview on T he Daily Bell)

Mr. Casey, like everybody with their ear to the rail, recommends investing in gold and silver in order to preserved moneyed wealth. This, of course, is merely common sense, though it is somewhat problematical and a little risky for people of limited means. Of course, when he recommends that a good portion of one's gold and silver be kept "outside the country," it is abundantly clear that he is not addressing the common man on Main Street. And what "offshore" haven is safe?

What foreign nation is likely to protect one's wealth any better than our broken one? What safe haven is not threatened by our broken system? The gathering economic collapse is global, and any so-called "money haven's" are under increasing threats of various kinds! If we can't trust our own country, what other country deserves our trust?

In any case, most of us who are not independently wealthy, and are still home-bound Americans hoping to save this country, don't put any of our wealth where we cannot readily get our hands on it as the bills come due and other needs arise.

INVEST IN YOURSELF

Mr. Casey, like most investment advisors, speaks mostly to the well-healed. Most ordinary working class Americans have little or no savings. For those who do not have enough money to invest in gold to "keep it outside the country" or even buried in the back yard, etc., try to accumulate some cash to keep on hand. If you have some savings, perhaps some silver coin or bullion would be appropriate to invest in, and keep on hand.

But, most of all, invest in yourself!

Investing in yourself does not mean in personal jewelry, tattoos, or cosmetic surgery, or dining in style. It means, first and foremost, getting out of debt. It means stocking up on staple storable foods and tools and other assets that one can use to make some sort of a living in hard times. Learn to grow at least some of your food if you have the room, and learn a useful trade of a sort that might be in demand during hard times. These are things that will serve you well even if no really hard times ever come.

Unfortunately, hard times have already arrived for many, and they could come for the rest of us. As we used to say in the Boy Scouts, "Be Prepared."

JQP

June 12, 2010

"Just look at us. Everything is backwards; everything is upside down. Doctors destroy health, lawyers destroy justice, universities destroy knowledge, governments destroy freedom, the major media destroy information and religions destroy spirituality" - Michael Ellner

We're beginning to hear real doomsayer rhetoric with regard to the Gulf oil disaster. Pridger adds a quip:

In the Gulf of Mexico, we may have found more oil in one exploratory well than we ever dreamed existed. Far from being a joyous occasion, perhaps we've found that we have so much oil that it may destroy us in the short term rather than the long term.
     Have we finally discovered the real enemy, and – lo and behold! – he is us? We can't stop deep sea drilling now. We may need a thousand relief wells - NOW - just to relieve the pressure!
     This could be the mother of all oil reservoirs, pressed down and pressurized by the unimaginable weight of the sea-floor itself and sea above it. It's deep below the seabed, and it's hot stuff!
     The "nuclear option"? Let's not even consider it. It might work, of course, but it would be a desperately dangerous undertaking. It might not work at all. We want to cap this thing, not risk blowing the cap off!
      Let's pray that this particular oil reservoir proves disappointing and will run out, or at least run out of pressure, much sooner than expected!   - John Q. Pridger

Meanwhile, some more depressing news – a video for you enjoyment...

MELT DOWN, OR MELT UP!

June 7, 2010

In the following video, Ron Paul Debates a Federal Reserve Governor in 1983 on the "gold standard and discretion." It illustrates how consistent Ron Paul has been in his monetary views over the decades, adhering faithfully to the A ustrian School of Economics supported by Ludwid von Mises and the M ises Institute. It also illustrates how right Ron Paul has always been with regard to the present "discretionary" regime of fiat Federal Reserve currency and its consequences.

Pridger is all for a gold global monetary value standard, and the free use of gold coin as the ultimate basis of monetary wealth and store of value, but differs markedly on the matter when it comes to the use of discretionary "national currencies." As the debate points out, a true gold standard (which we have never had in modern history), is totally non-discretionary and rigid.

That is, if money equals gold, and only gold equals money, the actual physical manipulation of monetary wealth in the world is strictly limited by the availability of existing monetary gold supplies and the rate of on-going production (and, of course, those who own the most of the gold!). There could be no "discretionary expansion of the money supply" as the result of the public will, the needs of commerce, or even expansion of industrial production.

"Discretionary" money is fiat money which can be manipulated by the authorities that issue and control it – increasing and/or decreasing the amount in circulation according to the needs of the state of the economy and economic activity. Discretionary money is what is characterized as "flexible" currency, able to adapt to economic conditions, or the state of the arts in industrial and commercial activities.

The greenback (United State [Treasury] Notes) was a discretionary currency, and so are our present Federal Reserve Notes. The former was a "peoples' currency" while the latter is a "bankers' credit currency" which is both systemically inflationary and usurious.

The Austrians have a lot more faith in pure free market forces, and potential monetary gold supplies, than Pridger does. And, as Pridger sees it, the problem is that no matter what kind of money is used, the rich, or super-rich inevitably gain the upper hand and manipulated markets and market conditions in their own favor. The rich, of course, would always ultimately be able to corner most of the gold and exert inordinate influence over markets, national and international economies, and the people in general. The gold standard, insofar as it has existed, has always been a banker's game, just as our fiat money system has been a bankers' game.

Whereas Ron Paul would like to repeal "legal tender" laws and make gold and silver coin the only recognized money, and does not believe in any kind of "central planning," Pridger believes the "money power" should reside in government, and that there should be some sort of plan or ideal as to how a nation and its economy should be encouraged to develop (that is, for example, people friendly, or corporate friendly). Otherwise, all the planning and development will be done by the private parties with the most monetary or credit resources, for their personal, political, or corporate gain.

Unfortunately, purely "free markets" do not always protect individual liberties, whether on a personal or commercial basis. Government does have an important role to play (if it could only get it right!).

The problem is, of course, whether we're on a gold or fiat money system, everything depends on competent governance and administration. Under a strict gold standard, government's hands would be always be tied, for better or worse. This may be good, of course, as long as others do not become more powerful than the government and take advantage of their power to control government and rob the people.

One of the greatest powers of government is the ability to create its own money. But, seldom have governments exercised that power wisely for very long. But a government of the people, by the people, and for the people, which adheres to the limits placed upon it by the Constitution, ought to be able to do it. But, clearly, we do not have government of the people, by the people, and for the people, and the government we have knows no Constitutional limits. This is our biggest problem.

The United States did administer the greenback "national currency" policy (United States Notes) that originated during the Civil War quite responsibly. After the Civil War, however, (and even during the Civil War), the greenback was increasingly marginalized in favor of banker currency (National Bank Notes), until the greenback was allowed to pass from the scene in favor of Federal Reserve Notes which have supplanted all our forms of currency except our debased coin.

Unlike Federal Reserve money, which monetizes debt and indebtedness, and demands perpetual interest, the greenback was a successful monetary unit that didn't cost us anything just to have. It was opposed and finally defeated by the bankers. The downside of the greenback was that it was born as a contingency of war and conflict rather than peace. It's very "invention" came as the result of war, and it's advent facilitated the brutal and protracted prosecution of that war at the cost of more than half a million men.

If Lincoln had not issued the greenback, and had still been determined to prosecute the war against the southern Confederacy, the nation would have been forced into receivership by and to European bankers. The Union might have been preserved, but the nation nonetheless effectively lost to foreign creditors.

That said, the greenback also demonstrated that a discretionary national currency could be successfully created and controlled, and could serve the commercial needs of the people and the domestic economy. It was well received by the public, and once the excesses of war were eliminated, non-inflationary. Ultimately, when gold redemption was restored in 1878, the greenback became convertible to gold and served as well as gold certificates alongside them. The public had enough faith in the national paper currency, that there was no flight to gold, and a fractional gold standard proved successful at the national level.

While a true gold standard may certainly place strict limits on the powers, activities, and war-making abilities of government (and its ability to spend recklessly during times of peace), there is no reason to believe that a nation under a strict gold standard would otherwise be better. As in the past, government would find ways to make deals with the gold merchants – i.e., the gold merchants would accommodate it by loaning it "money" at every opportunity, or simply buying legislators, and the government and people would become indebted to the gold merchants as in the past. The gold merchants, of course, are the ones who became the "money power" in the first place.

Another seemingly insurmountable problem with going to a gold standard would be "how do we get there from here?" That's a major roadblock. It's almost inconceivable that we could simply go from debt paper to gold overnight, or in a matter of weeks, months, or even just a year or two. So we would have to ease into it by going to an increasing degree of gold backed paper – returning, by degrees, a de facto fictitious gold standard like we had before. Just how this would work during the transition period from Federal Reserve money to gold backed currency is very problematical. It would probably be complicated and confusing, with the necessity of a dual accounting system.

It would, of course, be much simpler to simply go from a banker debt currency, directly to a "par" national currency like the greenback. Then, rather than "monetizing debt" as the Federal Reserve does now, we would be monetizing our national wealth. Like monetizing debt, it would amount to printing money out of thin air, but at least it would not entail "manufacturing public debt" out of thin air as we are presently doing.

Even if too much national currency were printed, and thus inflationary, it wouldn't be nearly as exponentially inflationary and costly as what we are doing now.

Because a conversion to a greenback system would be so comparatively simple, it seems to Pridger to be our most rational option. Once our government, or We the People, have recaptured our currency from the bankers, we could then consider moving to a gold, or other commodity, standard – and do it in a slow and orderly manner over time.

There are two kinds of "gold standards." We'd have to determine which one we would have. One would be the totally "free market" standard, that is apparently advocated by the Mises Institute and Ron Paul, where "the people" and "markets" would own the gold and produce the coins which would circulate. Government would only be very minimally involved, perhaps setting quality control standards for private mintage.

The second kind of gold standard is where the government, or We the People collectively, own, or possesse, all of the monetary gold that backs issues of gold certificates. Gold coin, minted by the United States Mint, would circulate in the marketplace. Perhaps silver would also be used, though the gold/silver value ratio is always problematical in such case. Likely, silver would serve as "token coin" in its relationship with gold without regard to a fixed value relationship.

The problem with the first system is that it would depend on private sources which would "automatically" function in response to "market forces." Who would be these private sources? Perhaps the gold merchants, or erstwhile gold bankers, who would obviously have to sell the money into circulation at a profit.

The problem with the second system is that the government would have to possess enough gold to back its paper currency and provide coinage. Where would it get enough? Go into the market and buy it? With what? Lacking resources to buy with, it might have to borrow it. Borrow it from whom? Perhaps the gold merchants, or erstwhile gold bankers.

In the latter case, gold would have to be somehow fixed in terms of Federal Reserve units of account. Then new gold certificates issued to gradually replace them, as gold coin was re-monetized and gradually found its way into circulation.

One of the greatest obstacles (probably the greatest obstacle), is our massive debtor status and huge negative balance of trade – i.e., our current inability to pay our own way in the world, except through credit. The fact that we can no longer support ourselves economically, means that if we switched to a gold standard today, the gold (and thus our moneyed wealth), would immediately begin to flee the country to pay foreign creditors and buy our necessary imports. This is a problem that was not nearly as serious back in 1983 when the following debate took place. Though our trade balance was already going into the red, we were still a strong manufacturing nation, almost earning our own way in the world. Domestic oil shortages were then our major Achilles heel. Today, almost everything is our Achilles heel!

We couldn't even begin to pay our foreign debts, or cover our trade deficit, with the gold we allegedly still have in Fort Knox. We couldn't prosecute our foreign wars, nor even fund the national government, with all the alleged gold in Fort Knox. And you can't tax gold from the people who do not have any gold. You can only take the gold from those who have it – either through taxation (too slow), or confiscation (to brutal).

We're in the mother of all Catch-22 situations, any way you look at it. So how to we get to a gold standard from where we are today with our funny money, our wars, our disastrous economic situation, and our great lack of productive industrial capital?

JQP

All quotations and excerpts are based on non-profit "fair use" in the greater public interest consistent with the understanding of laws noted at http://www4.law.cornell.edu/uscode/17/107.html.

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John Q. Pridger's COMMENTS ON NATIONAL AND INTERNATIONAL AFFAIRS Politics, economics, and social issues, as seen through Pridger's mud-splattered lenses. Why Pridger writes this Blog

John Q. Pridger's
COMMENTS ON NATIONAL AND INTERNATIONAL AFFAIRS
Politics, economics, and social issues, as seen through Pridger's mud-splattered lenses.
Why Pridger writes this Blog