Graveyard of Empires

June 30, 2011

(Editor’s Note: There is an old saying in politics: “If your opponent is burying himself with his own words, get out of his way and let him continue.” It’s the same in Washington’s foreign wars and quest for world empire. Washington is bankrupting the nation by prosecuting wars with no stated goal and no end game. And the other major world players are wisely stepping out of the way and allowing…even helping…Washington destroy itself.

Think about it. China is financing DC’s wars by buying Treasury securities. They already own nearly $1 Trillion in Washington debt. Washington is already functionally bankrupt but still borrowing and spending on war. Nations like China and Russia do not need to lift a finger in opposition to Washington’s actions. They are simply patiently waiting for Washington to destroy America and the US Dollar. Meanwhile, they save jillions of dollars in military spending by standing to the side and allowing America piss off the entire world and be its self-proclaimed police force. China can absorb the losses when DC defaults. In the meantime, China and Russia are consolidating their economic positions globally by skillful negotiations on commodities buying and selling. Russia supplies a large percentage of natural gas to Europe, which fills their coffers with capital. China has quietly made staggering deals for raw materials around the world. Meanwhile, Washington dithers and borrows and spends and allows America to become a Third World nation, the largest debtor nation in the history of mankind.

The nations of the world can see the inevitability of American economic collapse. The smart nations are preparing for the worst. But the question arises: are there any smart nations left in the world? The ONLY thing that a smart nation can do right now to prepare for global economic collapse is to switch to a precious metals money system. And any state of the American Union that contemplates secession must begin with hard money.

Here is an article about America’s military end, by my friend Eric Margolis.

Graveyard of Empires

by Eric Margolis

In his majestic poem “Recessional,” Rudyard Kipling was writing of the fading British Empire, but his words are as vivid and pertinent today as a century ago:

Far-called our navies melt away –
On dune and headland sinks the fire –
Lo, all our pomp of yesterday
Is one with Nineveh and Tyre!

The objective of war is to achieve political objectives, not to kill enemies.

Politically, the US has achieved nothing in Afghanistan after ten years of desultory, destruction, and titanic expenditure.

So in this sense, the United States has already lost the Afghan conflict, its longest war. Militarily its forces have been stalemated, meaning that it has lost the all-important military initiative and is now on the strategic defensive. We have seen this before – in Vietnam.

Once more, Afghanistan fulfills its grim title as “graveyard of empires.”

The US has failed to install an obedient regime in Kabul that controls Afghanistan. It has made bitter foes of the nation’s Pashtun majority, and, in pursuing this war, gravely undermined Pakistan. Claims that US forces were only in Afghanistan to hunt the late Osama bin Laden were widely disbelieved.

Last Wednesday, President Barack Obama bowed to public opinion, approaching elections, military reality and financial woes by announcing he would withdraw a third of the 100,000 US troops from Afghanistan by the end of next summer. Pentagon brass growled open opposition. Obama should have smacked them down, but did not, adding to the growing belief that he is weak and overawed by the military chiefs.

US allies France and Germany announced similar troops reductions. All foreign troops are supposed to quit Afghanistan by the end of 2014.

This staggered withdrawal will take the US garrison roughly back to the size it was before President Obama sent 30,000 reinforcements to Afghanistan. This means enough soldiers to hold the main urban centers and connecting roads, but not enough to defeat Taliban guerillas in the field, or to block the Afghan-Pakistan border.

Washington currently spends at least $10 billion monthly on the Afghan war, not counting “black” payments, CIA and NSA operations. The US has poured $18.8 billion in development aid into Afghanistan since 2001 with nothing to show for the effort. Pakistan has been given $20 billion to support the Afghan War. Each US soldier in Afghanistan costs $1 million per annum, not counting full support costs.

None of these costs are covered by taxes; all are piled onto the gargantuan national debt.

The US deficit is heading over $1.4 trillion. The national debt, when unfunded pensions and benefits are added, is likely $100 trillion, according to the chief of PIMCO, the world’s largest bond trader. This means America, top-heavy with unsustainable debt, risks capsizing financially.

Forty-four million Americans now receive food stamps; the national infrastructure of roads, airports, bridges and schools is crumbling from neglect. Unemployment, officially at 9.5%, is probably closer to 20%.

The cry is being heard: “Rebuild America, not Afghanistan.”

In spite of intense pro-war propaganda, over half of Americans now oppose the Afghan War. Even US-installed Afghan president Hamid Karzai calls it, “ineffective, apart from causing civilian casualties.”

So will the US really pull out of Afghanistan? That remains to be seen. There are many contradictory signs.

Mid-level talks between the US and Taliban have been conducted for over a year. Washington’s plan was to try to split Taliban through such talks.

US Afghan supremo Gen. David Petraeus tried to buy off Afghan resistance in the same manner he had bribed Iraq’s Sunni tribes into quiescence. This gambit did not work with Taliban’s hardened warriors, for whom honor holds as much value as money.

The US will probably keep a sizeable number of its remaining 66,000 soldiers in Afghanistan after 2014, rebranding them training troops. The huge US bases at Kandahar and Bagram will be retained as permanent US fortified enclaves.

Billions more will be spent on the Afghan government army and police. They have so far proved ineffective because most are composed of Tajik and Uzbek mercenaries who are hated and distrusted by the Pashtun.

A similar process is underway in Iraq where “withdrawal” means keeping combat brigades in Iraq, renamed “training units” and “counter-terrorism units,” thousands of mercenaries, and mobile US combat forces in neighboring Kuwait and the Gulf.

New US embassies in Baghdad and Kabul – huge, fortified complexes with their own mercenary combat forces – will be the world’s biggest. Kabul will have a staff of 1,000 US personnel. Bin Laden called them “crusader fortresses.” Fortified US consulates are under construction in other parts of Afghanistan.

In addition, the US will still arm and finance allied Tajik and Uzbek militias in Afghanistan, and CIA-run mercenary forces. Financing Pakistan’s US-backed regimes and Uzbekistan, Kyrgyzstan, and Tajikistan must also continue at around $3 billion yearly. What political concessions the US is giving Moscow to allow passage of war supplies through its territory remains a secret.

The US appears to be going and staying at the same time. By contrast, Taliban’s position is clear and simple: it will continue fighting until all foreign troops are withdrawn. US special forces, drones and hit squads have been unable to assassinate enough Taliban commanders to make the mujahidin stop fighting.

Americans never study history, not even their own. We don’t recall founding father, the great Benjamin Franklin, who said, “there is no good war, and no bad peace.” Or that the Pashtun Taliban and its allies are dedicated, undefeated warriors who fight where they live, and have all the time in the world.

I’ve been in combat with Pashtun fighters and remain in awe of their courage and love of combat. The Pashtun mujahidin will keep fighting as long as their ammunition lasts.

America, for all its B-1 heavy bombers, strike fighters, missiles, helicopter gunships and drones, armor, super electronics, spies in the sky and all the other high tech weapons of modern war has failed to defeat some 30,000 tribal fighters armed with nothing more than light weapons and legendary valor.

The US has lost the political war in Afghanistan. It may linger there, but it cannot win.

Eric Margolis is the author of War at the Top of the World and the new book, American Raj: Liberation or Domination?: Resolving the Conflict Between the West and the Muslim World.

Copyright © 2011 Eric Margolis


Robert Kiyosaki: Rich Dad Author Is Now a Prepper

June 29, 2011

from Economic Collapse Blog

Are you familiar with Robert Kiyosaki? He is best known for the “Rich Dad, Poor Dad” series of books. Over 26 million books authored by Kiyosaki have been sold and he is recognized as a financial expert by millions of people across the globe. Well, guess what? Even Robert Kiyosaki is warning that an economic collapse is coming. In fact, Kiyosaki and his team of financial experts are encouraging Americans to stock up on food, guns and precious metals. This is yet another sign of just how close we are to the total collapse of the U.S. Economy. Kiyosaki, who once co-authored a book with Donald Trump entitled Why We Want You To Be Rich is now a full-fledged prepper. As even more prominent Americans start warning that an “economic collapse” is coming do you think that the American people will finally wake up and start paying attention?

The statements that Robert Kiyosaki makes in the video posted below are absolutely jaw-dropping. Once upon a time he was all about teaching people how they could get rich, but now he is talking about storing food, buying guns, investing in precious metals and preparing for the coming crash.

The following are 11 of the best Kiyosaki “sound bites” from the video below….

#1 “when the economy crashes as we predict”

#2 “the crowds come rushing in to buy gold and silver”

#3 “we could either go into a depression or we go to hyperinflation”

#4 “or we could also go to war”

#5 “buy a gun”

#6 “I’m preparing”

#7 “I’m prepared for the worst”

#8 “so come to my house and I’m armed and dangerous and I’ll welcome you”

#9 “we have food, we have water, we have guns, gold and silver, and cash”

#10 “the credit card system shuts down, the world shuts down”

#11 “the supermarkets have less than 3 days supply”

If you have not seen this video yet, it is definitely worth the 8 minutes that it takes to watch it. Robert Kiyosaki seems to be extremely alarmed about the future of the U.S. economy….

It certainly seems as though the entire financial culture in America is changing.

Once upon a time everyone wanted to know how to get rich.

Now everyone wants to know how to survive the collapse that is coming.

As I have written about previously, even people like Tony Robbins and Donald Trump are warning that an economic collapse is coming.

Economic pessimism is seemingly everywhere and almost every recent survey indicates that the American people are losing faith in the U.S. economy.

For example, in a recent article I noted that 48 percent of Americans believe that it is likely that another great Depression will begin within the next 12 months.

According to Gallup, the percentage of Americans that lack confidence in U.S. banks is now at an all-time high of 36%. Back in 2007, just 14% of Americans lacked confidence in U.S. banks.

In order for society to function correctly, people need to be able to trust each other and they need to be able to trust the major institutions that hold society together.

Once confidence in our major societal institutions is gone, it is going to be incredibly difficult to get it back.

Sadly, the reality is that many of our major financial institutions have been untrustworthy for a very long time. It is just that the American people are only just now starting to wake up to that fact.

For example, the Federal Reserve has been at the heart of our economic problems for decades but most Americans have not realized it.

But now that is starting to change. According to one recent poll, only 30% of Americans currently view Federal Reserve Chairman Ben Bernanke favorably.

The American people are becoming increasingly dissatisfied with an economic system where the vast majority of the rewards flow to Wall Street, the big banks, the biggest corporations and the ultra-wealthy.

According to the Washington Post, the top 0.1% of all income earners in the United States took home 2.6% of the nation’s earnings in 1975. By 2008, the top 0.1% were taking home 10.4% of the nation’s earnings.

The Washington Post also says that after adjusting for inflation, the average income of the top 0.1% of all Americans jumped by 385 percent between 1970 and 2008 while the average income for the bottom 90 percent of all Americans actually fell by one percent.

The sad truth is that income inequality in the United States has become a major problem. A very small sliver of the population is reaping almost all of the rewards and the middle class is being ripped to shreds. Conservatives, liberals, Democrats, Republicans and libertarians should all be alarmed by this.

Meanwhile, the national debt continues to explode. Right now, U.S. government debt is expanding at a rate of $40,000 per second.

Every single minute we steal another 2 million dollars away from our children and our grandchildren.

But if we stop this theft it would throw the U.S. economy into a horrible economic crisis that would be far worse than what we are experiencing right now.

That is why the vast majority of our politicians do not have the guts to do it.

We truly are caught between a rock and a hard place.

But people like Robert Kiyosaki can see what is coming, and they are getting prepared.

Are you prepared?

Many of our young people have come up with their own versions of an “economic stimulus plan”. In past articles I have documented many of the signs that society is collapsing, including the disturbing rise of the “mob robbery” phenomenon.

Well, just the other day there was another very shocking mob robbery in the city of Philadelphia.

On Thursday, a mob of 40 teens and young adults invaded a Sears department store on 69th Street, grabbed all of the merchandise that they could carry, and stormed right back out again.

We are starting to see these kinds of large scale crimes happen from coast to coast.

So what is going to happen to America if the economy experiences the kind of full out collapse that Robert Kiyosaki is talking about?

We live in very interesting times.

I hope that you are getting prepared.

Copyright © 2011 Economic Collapse Blog


Homosexual Marriage And Individual Liberty

June 28, 2011

by Russell D. Longcore

We can only hope that in a seceded state, the new lawmakers would have sense enough to stay away from this issue and allow people to live as they choose.

Homosexual marriage, or civil union, has always been kind of a mystery to me.

When I moved to Atlanta from a small town in Michigan in 1992, I had never even met a homosexual. Once I got here in Atlanta, I auditioned and was accepted into the Tenor section of the Atlanta Symphony Orchestra Chorus. Out of about 30 tenors, there were only two or three of us that were not gay men.

Quite a culture shock for me…the conservative Christian who was always told that homosexuals would burn in hell. But I met and became friends with individuals, not a group. They were kind, and warm, and caring, and genuinely wonderful people. My attitude toward homosexuals was forever changed. I don’t ascribe to their lifestyle, but neither do I stand in condemnation. That’s someone else’s job.

I’ve heard comedians say, “The homosexuals should have the right to be as miserable as the rest of us married people.”

Why should homosexuals want the blessing and licensure of the State on their relationships? What’s the big draw… the big benefit?

It doesn’t appear to be that the homosexuals want to be taken too seriously. The folks that march in Gay Pride parades don’t appear to be concerned with the straight world’s acceptance of their chosen lifestyle.

Could it be that they are looking for a legal status that will provide them monetary benefits that they cannot get today? Like Social Security, Medicare, pension and health care benefits?

The LGBT (Lesbian, Gay, Bisexual and Transgender) communities already have the right to have any kind of legal relationship they choose.

The Evangelicals who spend so much time denouncing homosexuals say that licensing homosexual marriage will undermine the “sanctity of marriage.”

Please.

First, if you have a faith or religious tradition you follow that prohibits homosexuality, fine. Practice your own individual behavior within the confines of your own conscience. But the states and the Federal Government of the USA are secular in nature, not Christian. Don’t presume to force your beliefs onto others.

Second, marriage got its start as a religious ceremony. And marriage should remain under the auspices of a religion. The State has no vested interest in marriages per se.

Third, if marriage was as sacred as our society tells us it is, the state legislatures would not have passed laws that made divorce so easy. Besides, why should any state have any licensure of a marriage? Is it only for the easy fees it generates? Is there any real difference between a marriage license and a dog license or business license?

Seems to me that the essence of this issue is the sanctity of contracts, not the sanctity of marriage.

There is nothing I know of that prevents any two or more people from entering into contract with each other. Two people can go to an attorney and have a legal document drafted that deals with: legal duties to each other, community property and the disposition of assets, legal duties to children of the “union,” procedure for dissolution of the agreement (kind of a civil divorce), and any other contractual terms the parties desired.

When the contract was acceptable to all parties, it could be signed and notarized. No preacher or judge would have to officiate…that’s just the romantic myth that accompanies the process. And, there is no license fee for executing a contract.

This should be the normal procedure for two people, regardless of sexual preference, who wish to be married. EVERYONE should draw up contracts for their non-religious civil unions. The prenuptial agreement is just such a contract. Isn’t it amazing that the “pre-nup” seems to be only used by those with considerable assets to protect? This speaks to the ridiculous romanticism surrounding religious marriage. I’m all for romance, but marriage is supposed to be a religious ceremony. What happens in a divorce is the legal part of civil union, and should be planned before the union occurs. Anything else is a denial of reality.

If the partners of a civil union want to have a little ceremony and a celebration following, great! Nothing prevents it but their budget.

You never see two guys, going into business as a remodeling contractor, draw up a partnership agreement, and then go get a pastor or priest to bless their partnership. Homosexuals don’t need it either.

If homosexuals would stop thinking about being slaves of the State, they could actually become leaders to the rest of the population. They could enter into their own legal relationship agreements, and completely forsake the blessing of the State. Tell the bureaucrats to stay out of their relationships, as well as their bedrooms.

Homosexuals, stop trying to curry the politicians’ favors, and show the rest of us a little taste of individual liberty.

Forsake state-approved “marriages” forever! Utilize contract law for civil unions, and enjoy your lives together in whatever form you choose!

DumpDC. Six Letters That Can Change History.

© Copyright 2011, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.


The Criminal Congress Of The USA

June 27, 2011

by Russell D. Longcore

(Editor’s Note: In light of the Congressional impasse on budget, coupled with the impending Presidential election season, I have updated this April 2010 article and am reposting it.)

Today I want to offer a very provocative proposition. Many of you are going to bristle at this article, and I’m pretty confident that the knives are going to be sharpened and pointed in my direction. But, before anyone begins slicing and dicing, I want you to refrain from ad hominem attacks and prove to me exactly where I’m wrong.

Here it is: I submit to you that all persons in Congress are criminals.

Let’s follow the trail of evidence to determine if any individual member of Congress may be exempted from this indictment.

Question 1: Who do you work for?

Answer: If you are a Congress-person, you are a Federal employee. Even though you are elected to Congress from your state to represent your state, your state does not pay your salary. The current salary (2010) for rank-and-file members of the House and Senate is $174,000 per year plus expenses. The paychecks come from the US Treasury and are administered by the US Office of Personnel Management. You get a killer benefits package and a Federal pension, and are fully vested after only five years of participation.

Question 2: What constitutes an unlawful and/or illegal act for a Congress-person?

Answer: If you still believe that the US Constitution is the highest law of the land, then any law passed by Congress that violates the Constitution is a criminal act. It could also be argued that any vote made by any member of Congress that violates the US Constitution is an unlawful act and therefore a crime, regardless if the law passes or not. Compare this to an attempted burglary or attempted murder, which by definition are not successful but are still crimes.

If you believe that the US Constitution is a dead document with no authority, then you will likely believe that Congressionally-legalized plunder and the authorization of murder (deadly force) are crimes against natural law, the rights of individuals and State Constitutions. It could also be argued that any vote made by any member of Congress that violates natural law or the laws of a State Constitution is an unlawful act and therefore a crime, regardless if the law passes or not. Compare this to an attempted burglary or attempted murder, which by definition are not successful but are still crimes.

Either way, ALL members of Congress are guilty, either as an accessory, or as an accomplice, or as both accessory and accomplice.

Question 3: What is the definition of an accessory in criminal activity?

Answer: At law, an accessory is a person who assists in the commission of a crime, but who does not actually participate in the commission of the crime as a joint principal. All Congress-persons may be accessories to the crimes committed in and by Congress as they are all participants in the commission of the crimes as they pass laws. Wouldn’t the members who vote in the majority on any given bill be considered joint principals, and the rest mere accessories?

So, even if your Congress-person abstains from voting on any given bill, or votes ‘No’, he or she is still an accessory, since he or she is a member of a criminal entity engaged in criminal activity.

Question 4: What is the definition of an accomplice in criminal activity?

Answer: At law, an accomplice is a person who actively participates in the commission of a crime, even though they take no part in the actual criminal offense. Unlike an accessory, an accomplice is usually present when the crime is committed. So, the members of Congress who are not present in the chamber during a vote are still an accessory to the crime, since they participate in the process. An accomplice is guilty of the same offense and usually receives the same sentence as the principal.

And now for the compromise part…

To be a politician is to embrace compromise. And compromise can be an acceptable method of societal interaction. However, in Congress, compromise regularly requires forsaking ethics, morals and principles of both law and honor. I have no problem with a member of Congress compromising on procedural issues. But when Congress-persons ignore the law and do what they want, only arguing over the broad details, compromise become a despicable act of cowardice. Is there ever a line that a member of Congress will not cross?

For example, Congress is presently stewing over this year’s budget, future budgets and raising the Federal debt ceiling. Both Republicans and Democrats are in favor of more borrowing, but Republican leadership says that Congress should find a way to slash Federal spending or Republicans will not vote for the bill. As a matter of practicality, this is what Congress is saying:

“We agree that we would like to steal money from some Americans and give it to other Americans. However, at this time, some of us think it would be OK to borrow the money now and then steal the money from you later. A minority of us don’t want to borrow the money, but just want to steal it directly. At no time in our debate will we consider the morality or legality of stealing from you. Our only concern is the method we use for the theft.”

No consideration of the underlying crime is considered…only how to do it.

Conclusion

Some of you will protest loudly about my position. You will try to tell me how your favorite member of Congress is different, a patriot, a lover of liberty…fighting for the Constitution and fighting against special interests. But I still challenge you to prove me wrong. Tell me how your favorite Congressman would escape prosecution if the acts of Congress were ever prosecuted in a court of law. Remember the Nuremburg trials. Ten men found guilty danced at the end of a rope.

All members of Congress are criminals, in the employ of “The United States of America,” a 234 year-old criminal entity that perpetrates theft, plunder, murder and counterfeiting on a worldwide scale.

Secession is the hope for humanity. Who will be first?

DumpDC. Six Letters That Can Change History.

© Copyright 2011, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.


The USA: Too Big NOT To Fail

June 26, 2011

By Russell D. Longcore

Washington DC doesn’t have the “Midas touch,” where everything they touch turns to gold. Washington has the “Merde touch,” where everything they do turns to shit.

Since 2008, we Americans have heard a new meme enter our lexicon. That new phrase is “too big to fail.”

The George W. Bush administration trotted out this phrase with its first stimulus plan and the bailouts of insurance, Wall Street and the car companies. We were all told that these companies were too big to fail, or too big to be allowed to fail.

In economies where the government doesn’t interfere, corporations that mismanage their assets and liabilities declare bankruptcy. The bankruptcy process either liquidates the business and pays off creditors, or allows the corporation to reorganize the company, renegotiate their debt and move forward with a new business plan. But the corporation is allowed to bear the weight of the choices they made and live with the consequences of their failure.

All the companies/entities who got bailout money should have been allowed to experience free-market consequences. All of them. Instead, Washington placed the market risk squarely on the backs of the American taxpayer.

Let’s not forget the $3 Billion “Cash for Clunkers” program, in which over 690,000 new cars were purchased, and about the same number of perfectly serviceable vehicles were destroyed. Once again, America….YOU got stuck with the bill to help your neighbors buy a new car. The destruction of used cars distorted the used car market, driving up used car prices while creating used parts shortages. Thanks, Congress.

All we’ve heard for months…years…even today…is that some business entities and government programs are too big to be allowed to fail. The licitness¹ of an activity is being determined by its scale. But no entity is too big to fail. However I can think of one entity that is too big NOT to fail.

That entity is The United States of America.

All of Washington, regardless of party affiliation, only makes decisions that perpetuate Federal power. If an action doesn’t directly benefit Washington, it does not occur. Washington doesn’t care if it destroys the purchasing power of the Dollar by printing paper money and causing hyperinflation. They just don’t want to have unemployment spike over the bankruptcy and reorganization of big employers.

When the US Constitution was written and enacted, it planted the seeds for massive Federal power. The nation/states of North America were actually better served by the Articles of Confederation. For most of the time between 1777 (A of C drafted and used to govern) and 1789 (new constitution), the New Federal Government was ineffectual and got little accomplished. That is because the nation/states were sovereign and acted based upon their sovereignty.

But even under the inferior US Constitution, the nation/states of North America which comprised the United States of America, could have controlled the new Federal government by nullifying and interposing on behalf of the individual states and The People. But the states and The People allowed themselves to be enslaved by Washington.

At this time in our history, most Americans consider themselves to be Americans, not Virginians or Floridians or Oregonians or the like. Washington has exhibited genius in convincing Americans that they are ruled by Washington, and that their state capitols are inferior and subordinate legislative bodies.

But the US Constitution was never meant to be the organizing document for a nation of 306 million people. Apportionment for Congressional representation, done correctly for our population, would result in thousands of Congressmen in the House of Representatives. Yet we’d still only have 100 Senators. And that would be even more ineffectual than the DC mess we have at present.

A fifty-state confederation, adhering to the strictures of the original Constitution, would be capable of governance on a local level. However, we do not have such a confederation today. The USA is a kingdom with 50 county-like jurisdictions.

So the United States of America exists in a condition that is unsustainable. The founding documents have been…and are presently…merely iconic parchments kept under glass that have no bearing or influence whatsoever upon the machinations of the US Federal Government.

The United States of America is too big NOT to fail. Small government is manageable government.

Secession is the hope for humanity. Who will be first?

DumpDC. Six Letters That Can Change History.

¹“Licit” means authorized, sanctioned or morally permitted, as opposed to “illicit.”

© Copyright 2011, Russell D. Longcore. Permission to reprint in whole or in part is gladly granted, provided full credit is given.


Social Security and Medicare: Ponzi’s Dream Scheme

June 25, 2011

By Russell D. Longcore

Charles Ponzi, the con man of the early-1920s, was the man who perfected the financial “pyramid scheme” that now bears his name. And Washington, the theft and fraud capital of the planet, took the “rob Peter to pay Paul” blueprint and perfected it in the Social Security and Medicare systems.

Ann Barnhardt released two short videos this week about Social Security and Medicare. Her analysis is spot on, but her solution is completely wrong. She correctly states that ALL the politicians who support and want to save or fix the Twin Pillars of Ponzi are criminals.

But then Ann suggests that we all continue to pay into the systems, knowing full well that most of us will never get a dime. She says this is the only chance to “save the Republic.”

Bovine Merde.

First, we here at DumpDC don’t want the Republic saved. We want it to meltdown ASAP. We want secession and states to become nations.

Second, we cannot abide the notion that any of us should continue to fund the greatest system of fraud ever developed by the human mind. Not for one moment.

Ann offers two choices. The first is to “sunset” the two programs by continuing to fund them for a while. The second is to allow the United States economy to implode, thereby destroying ALL Federal spending.

The latter is what is going to happen. There is not enough time…or money…or political will in Congress or America itself to save the Republic.

Still, I want you to watch Ann Barnhardt make her case. Here goes. Enjoy.

PART TWO

DumpDC. Six Letters That Can Change History.


Dreams of the Gold Standard

June 24, 2011

by Linda Brady Traynham

We all have daydreams that aren’t going to come true, ranging from fanciful ones like trying to talk my dear Charles into riding shirtless ten or fifteen minutes a day until he is a rich, mahogany brown so I could photograph a Texas version of my Duke emulating Vladimir Putin, racing down a mountainside like a centaur, his AK-47 held as though it had grown from his right hand, his face alive with sheer animal joy, still brawny bare chest making the Babushkas’ hearts go pit-a-pat. Charles declined, and on his head be it if I start having fantasies about Vladimir. One more appropriate for this site is the dream of a gold-backed currency. I’d do better imaginaing Vladimir coming to visit and riding my horses because it is vaguely possible that could happen. Or buying a tanning bed. A Gold Standard cannot happen under the current political regime, and it couldn’t happen if we threw all the rascals out, rescinded or repealed every law and regulation written since 1913, and elected someone as sensible as I am Empress of the Twin Universes. The story of mankind is colonization, stabilization, rise, empire, decay, fall, dark ages, and repeat–and we’re approaching the fall, having spent ourselves into penury and been regulated into near helplessness. If they are more careful than they have been thus far and lucky the future belongs to BRIC…although I consider worldwide depression and famine more likely.

The political impossibilities are quite enough since overturning the Fed would require revolution a doubtless unpleasant way to change the monetary system. More to the point, we cannot go back on a gold standard because far too much fiat currency has been created, we hold too little gold, and we have far too many debts. If we go look we’ve still got some gold in the ground, but even that isn’t a permanent solution, as Spain discovered when treasures ships in profusion arrived from the new world. Ironically enough, gold and silver themselves in over-abundance functioned exactly the same way today’s Bernankes ($100 bills) do: too much money chasing too few goods. The Fed doesn’t even know how much increasingly useless paper is floating around out there! It is anyone’s guess if there is actually gold stored in Fort Knox. For the purposes of demonstration, and not counting what it would cost to mint those purported gold bricks into coins, let us stipulate that the USA holds…it really doesn’t matter; as Congress said, “Think of a really big number.”–ten million ounces of gold. If we stipulate fancifully that there are only five trillion dollars in USA currency extant, what will an ounce of gold be “worth” in a forced domestic trade? What about gold in private hands, either as coins or jewelry? Do we count that? It doesn’t matter. Go get your calculator if you must and figure out what the exchange rate would have to be to collect all the dirty, worthless paper with little silk threads in it and exchange them for thin disks of gold and silver.

THEN what do we do about our foreign creditors? They are going to want gold for their USD, and they aren’t going to like the exchange rate. Neither would you and I! If it were set at $5,000/ounce, and you make $90K, your new salary would be an ounce and a half of gold a month–and not only would it be a nightmare trying to pay your bills (for two reasons) but the logistics would be disastrous. What could be done about the trillions of “entitlements?” Even by debasing the currency in the swap from USD to gold governments would not make enough to pay the bills. We have already established that if every cent the top 10% makes or has were confiscated it wouldn’t be enough to cover current expenditures and no force short of barbarians through the gates has ever caused governments to reduce expenditures more than very briefly. Bernanke has managed to hold the interest rate at incredible lows for some years, but he isn’t going to be able to do so forever. I’m still astounded he took a second term; a less rash man would have sidled gently out from under. Real disaster would be refinancing at 5-7%.

It doesn’t even help if new currency is issued and exchanged (at great expense) because paper money is only more convenient to carry around. It has no intrinsic value, and we’re back to the “full faith and credit” that the issuing body will actually hand us an ounce of gold in return for the correct paper receipt. Amazing what can be done with paper currency. I still have some silver certificates (worth more as curiosities than they are in silver), and some left over from Hawaii during WWIII which are stamped in red stating that they can only be spent in the Islands, not taken back to the mainland. In theory that was to keep Japanese counterfeit confined to Hawaii, but who knows.

Chuckle…I had a long conversation with a landman today finalizing paperwork so that an oil lease can be activated. She was gleeful over having sold her SLV at $45, as well she might be. Letters of credit and cashier’s cheques are very useful for transporting large sums. In theory, so are digital transfers, but I always wonder what would happen if your electronic money just…disappeared. I had an interesting case about six months ago when I used an on-line form to send about seven thousand dollars, and discovered several months later that the firm had not done what it had been paid to do. They insisted they hadn’t been paid, the computer insisted they had, and the sole saving grace was that my bank agreed the money had not been withdrawn.

I agree completely with all the reasons we should not be using funny money; it is unconstitutional, it permits the “creation” of money and accumulating enormous debts, it is resented increasingly by other nations, it makes possible a culture of “entitlement,” it allows manipulation of figures to present long-term costs as less than they ever turn out to be, it tends to promulgate trade deficits, it can be counterfeited, and so forth. We still cannot go back. It is not possible politically, and an attempt would be roughly like pulling down every dwelling in America and building yurts and cliff dwellings.

I have noted that more and more professionals advice holding cash because stocks and bonds (as purchased by most) are too dangerous, although an expert I usually consider extremely sound is talking about getting back into bonds. Umm…no. Can’t buy that one; a bond is a promise of future payment, not COH. In case of default or the dollar losing the status of the world’s currency reserve, green backs will retain some value perhaps a month, but redeeming bonds will be impossible for anyone without serious connections in international banking.

There aren’t any good solutions, including having every nation on earth agree (hysterical laughter) to default at once. Default on what? What we owe each other? Insane promises the US has made to foreign nations? Disastrous promises made to citizens for political reasons? How do we stop and start over? Will we go through monetary musical chairs? There is no fiscal equivalent of the “no fault” divorce and bankruptcy only works if it gets rid of all debts and allows the person or entity to start clean with basic housing and the ability to earn living expenses.

I knew I should have written about Coronal Mass Ejections! A nice little article on man-made and “act of God” EMP, talking about solar cycles , discussing claims that “a severe solar storm would be much worse than a 9.0 magnitude quake and could leave about two-thirds of the country’s nuclear plants without power for one to two years.” Gee, we could be having fun considering 130M people without power and how next year is the end of an eleven year cycle and we’re about due for the “once in a hundred years” storm. No need to worry; on average we have 18 hours from the time the sun belches an enormous bubble of highly charged gases that can travel up to six million miles an hour. Chances are we’ll do better solving that problem than wriggling out of the financial messes caused by corruption, vote-buying, deliberate waste, and pretty fairy tales that everyone can lead a nice, safe middle class life like the Cunninghams on “Happy Days.”

What we really want is a stable currency along with a stable interest rate, traditionally 4%. What are developing are panics, lengthy recessions, stagflation, and growing fright and anger. I pledged to think of something “nice” that could happen, and I can only think of two. First, I could be wrong. Who am I to think I know better than the self-proclaimed “best and brightest?” Well…to be brutally blunt, I think I’m a very nice lady who has had a long, pretty priveleged life who is concerned about the future and usually calls a pig a pig, although I do know how to concoct sentences such as, “As always, it is not the case that stochastic analysis can compensate for human variability.” Meaning that in a world of random chance and individuals anything could happen.

Second, supposing that nothing drastic occurs politically here or abroad, I think it probable that we have between seventeen and nineteen months during which we can do our best to improve our financial positions and make decisions. For the simple reason that what most of at least America is going to be doing during that time is arguing about politics. Mr. Obama has never gotten off the campaign trail and the pack has been in full bay after Sarah Palin long after the first Tuesday in November, 2008. Times are going to get harder and we’re going to look at our belts wondering where a big nail and a hammer are to punch new holes. My best guess for August 2nd is that the Republicans will geek and raise the debt limit without getting anything of value for that concession. Expect higher prices, lesser quantities and quality, and inspect “special” offers carefully. I have a card on my desk from the local Chrysler-Dodge-Jeep dealer. It exclaims they will provide a free alignment inspection and rotate tires for a mere $14.95. The offer includes rotating four tires (since most of you only have a donut), inspecting them, and measuring the tread depth. That’s nice. However, if you don’t pay whatever else they demand to balance those tires and align the front end you may end up worse off than you were before. Of course I believe in such services. It’s just that I’d go look and see if there were at least one little lead weight attached to one of those wheels afterwards. Buy a fifth tire, too. The dinky donut is only good for a few miles and you might be a long way from nowhere when you had a flat.

It won’t hurt you to make a concerted effort to reduce expenses, pay more attention to your trading, keep an eye on the world around you in terms of social behavior and what is bottoming, and do your best to be in far better financial shape a year and a half from now. That’s a short term goal and you can do it. If there is a miracle and we’re almost over the hump, you’ll be in better shape than most and have learned some useful skills. If not…you’ll have a long headstart on those who did nothing. By the way; Mr. Obama was right. Get yourself a tire gauge and learn how to use it. Pick up an inexpensive device that plugs in to what I think is a cigar lighter and politically correct cars call a port that will air up a tire. Funny how frequently small precautions keep minor trials from becoming major difficulties.

Linda Brady Traynham is a deeply disturbed Texas rancher and writes for The Mesh Report.


A Cross of Gold Part 5 of 5

June 23, 2011

By Dr. Edwin Vieira, Jr., Ph.D., J.D.

NewsWithViews.com

Of course, when the plan was first drafted several years ago, it was accepted that this infusion of gold into the State’s finances and her private economy would take time, and that sufficient time would be available for the reform to move forward at a reasonable pace. Now, however, the urgency of the situation requires that the process be speeded up in the following way:

• The State will hold the gold in her own depository, controlled by a State Militia that will be revitalized in the same statute that provides for use of the alternative gold currency.

• Within 30 to 45 or so days of the enactment of the enabling legislation, all members of the Militia—which will include every able-bodied adult from 16 to 60 years of age—will be required to obtain an electronic gold currency account as part of his or her Militia duty.

• Also within those 30 to 45 days, each and every businessman in the State—each of whom is a member of the Militia, too—will be required to set alternative prices and for his goods and services in both gold and Federal Reserve Notes as part of his Militia duty.

• Except with respect to the payment of particular taxes, no one will be required actually to use gold, rather than Federal Reserve Notes, in their financial transactions. Yet, the State will have enabled her citizens to do so, and will have established an alternative price-structure in gold for both her own financial affairs and for her entire private economy. At that point, the State and her citizens could, to whatever degree they wished, voluntarily go off the Federal Reserve Note standard to a pure gold standard. And, presumably, the State and increasingly large percentages of her citizens would do so, in pursuit of their own rational economic and political self-interests.

Why would implementation of this plan be advantageous?

• First and foremost, adoption of such an alternative gold currency would be an act of foresight. It would recognize that resuscitation of the Federal Reserve System is impossible, and that acceptance of a new global fiat currency and central bank to replace that System would be intolerable.

• Second, and no less important, adoption of an alternative gold currency would be an act of scientific insight, because it would introduce a currency the objective value of which could always be verified or falsified immediately upon inspection. That objective value would be a fixed weight of gold. It would be an objective value, because an ounce of gold is an ounce of gold is an ounce of gold—everywhere throughout the world, no matter what economic, political, or social conditions prevailed. Under this plan, a specific weight of gold, and only that weight of gold, would become the State’s official monetary unit. Thus, the holder of the currency himself would not only own but would actually possess the gold, because gold would be the currency.

Contrast this with a Federal Reserve Note. Even when such a note was “redeemable” in gold, some Federal Reserve regional bank or the United States Government actually owned and possessed the gold that “backed” the note; and the holder of the note had no more than a claim to redemption. Only upon actual redemption did actual title to and possession of the gold change hands. And that right of redemption was eventually cancelled, both domestically and internationally. As to gold, then, Federal Reserve Notes proved to be, as John Exter so well put it, “an I.O.U. nothing currency”, made possible because the “currency” and the gold were separate things, under the control of different people. But with gold as money, nothing is owed and the holder of the currency holds the gold, so no debt of redemption can ever be repudiated.

• Third, also in the scientific spirit, an alternative gold currency would allow for more than one experiment to be conducted—indeed, as many as fifty separate experiments in each of the several States would be possible. If any single experiment should fail, it would do so only locally, not nationally. If it succeeded, it could be expanded quickly and easily enough elsewhere. And by the process of judicious trial and error, constant improvements on any initial success would be possible. Moreover, even if politically influential factions could succeed in stopping the adoption of an alternative currency in one State, they would be unlikely to be able to exercise the political clout necessary to suppress it in every other State as well. And if they did not stop it everywhere, the market would prove the theory somewhere, and then expand its application everywhere.

• Fourth, adoption of an alternative gold currency could be accomplished incrementally and gradually, allowing the market to set and equilibrate prices as more and more people employed the new currency in preference to Federal Reserve Notes. No sudden, economically disorienting jump from Federal Reserve Notes to gold would have to occur.

• Fifth, quite unlike the Federal Reserve System and its bills of credit, an alternative currency consisting of gold would be fully constitutional. The Supreme Court has already ruled that the States are not bound, and constitutionally cannot be bound, to use as their currency a currency emitted by Congress—in particular, that they may choose to employ gold and silver in preference to irredeemable paper currency, even when Congress has declared that paper currency to be “legal tender”.[20] Thus, the adoption of an alternative gold currency would return each State to the rule of constitutional law and federalism with respect to money.

• Sixth, introduction of an alternative gold currency would not depend upon a State’s having any gold in her Treasury at the beginning of the process. Indeed, adoption of such an alternative currency would bring gold into the State’s Treasury right away. Constitutionally, of course, the States cannot coin money.[21] Only Congress enjoys the governmental power “[t]o coin Money”.[22] But, inasmuch as an alternative gold currency could—and initially should—consist of bullion, not coin, no State would be dependent upon the assistance of Congress and the United States Treasury in the adoption of such a currency.

• Seventh, employment of an alternative gold currency would not involve a State in the rat’s nest of central economic planning. A State would not be required to attempt to regulate the supply of money against a so-called “price level”, to fix interest rates, or to engage in any of the other political-cum-economic manipulations characteristic of a central bank. Whatever amount of gold the people desired to use as their alternative currency would become currency; and the free market would then rationally establish and mutually adjust the prices in gold of all goods and services.

• Eighth, adoption of an alternative gold currency would not serve only one set of selfish special-interest groups at the expense of the rest of society. In particular, adoption of such a currency would facilitate the absolute separation of private banking from the government, on a State-by-State basis. No longer would bankers and their clients in “the financial community” enjoy the status of an economically and politically specially privileged class.

• Ninth, although it would bring about the politically radical end of separating private banks from the government—which “the financial community” would vehemently oppose—adoption of an alternative gold currency would not expose America to the economic equivalent of “mutual assured destruction”. At present, any attempt to reform the monetary and banking systems “from the top down” can likely be thwarted by the bankers’ threat to precipitate an economic collapse. “Yes”, the bankers warn, “you can destroy us. But, more importantly, we can destroy you. If we go down, we will take the economy with us. Without us, you will have no currency, no credit, and thereby no means of maintaining a high level of economic activity. So we have you by the throat. There is nothing you can do but to continue to allow us to loot society, and then to bail us out when our schemes threaten to implode or explode.” With an alternative gold currency, however, monetary reform would not come “from the top down”, by attempting to abolish the Federal Reserve System at one fell swoop and thereby throwing the economy into chaos. Rather, reform would come gradually and systematically “from the bottom up”, by introducing a sound currency into the free market on a State-by-State basis, in free competition with the Federal Reserve System. If the banking cartel and its clients should respond aggressively, they would merely hoist themselves on their own pétard, because in any State which had adopted an alternative currency the people would no longer be dependent upon the banks for currency. Whatever the bankers might then do in a destructive vein would only drive the market farther and faster in the direction of the alternative currency. Rather than mutually assured destruction, such actions would bring about the bankers’ assured destruction.

• Tenth, on the other hand, if adoption of an alternative currency on a State-by-State basis showed promise, with more and more people using that currency to the exclusion of Federal Reserve Notes in more and more transactions, the banks would be forced to compete. At least some of them might try to generate a new currency “redeemable” in, or “backed” by, gold. Exactly how they might do this, or even if they could do it, one cannot predict, because such a new bank currency would have to be as secure as the alternative currency, which would require that it not be based on fractional reserves. Yet, if even some of the banks could move in that direction, it would tend to stabilize their system, and perhaps allow for its orderly long-term transformation or liquidation, rather than sudden collapse.

To be sure, the adoption of an alternative gold currency would face political hurdles. For example, adoption of gold as currency at the State level will be complicated by claims of the General Government to tax exchanges of gold for Federal Reserve Notes, and exchanges of gold for goods and services (which are now erroneously treated as some sort of “barter” transactions). In the midst of a nationwide economic breakdown, however, any State which adopted an alternative gold currency would be in an especially favorable bargaining position, and would probably be able to negotiate an accommodation with the United States Treasury.

Even if prudence did not prevail at the bargaining table, the State could sue the President of the United States, the Secretary of the Treasury, and the Board of Governors of the Federal Reserve System, in the original jurisdiction of Supreme Court,[23] for their failures to maintain all forms of United States currency at par—which now should be about $42-2/9 per ounce of gold, not some $1,300.00, $1,400.00, or more.[24] With the publicity such a suit would receive in the context of the present economic crisis, the matter would become a political issue to end all political issues—in comparison to which President Andrew Jackson’s fight with the second Bank of the United States would appear to have been an exchange of pleasantries. Under such circumstances, would the Justices of the Supreme Court dare to rule that the States are not entitled to protect their own people from economic ruin caused by the incompetence or corruption of the politicians, bureaucrats, bankers, and financial manipulators in Washington, D.C., and New York City? Would the Justices dare to deny the people the right to ward off these vampires with “a cross of gold”?

And if the Justices did rule against the States’ attempts to bring about meaningful monetary reform, would not their obstructionism sweep away the very last shred of credibility in Washington, D.C.? In that event, would not the States and their citizens then put into action Nancy Reagan’s dictum—“Just say ‘No!’”—and simply refuse to comply with all demands from the General Government for payments of unconstitutional taxes that hindered the use of the alternative currency—and then back up those refusals in the most effective manner?

Actually, for numerous reasons, the Justices might be expected to rule in favor of the States: First, (as explained above) they could simply fall back on judicial precedents favorable to the States. Second, they would surely recognize their own inability to correct the underlying problem in the course of overruling those precedents and deciding the cases against the States; whereas, in reliance on those precedents, the States could take actions that might have a favorable result. Third, the Justices would be inclined to view the entire matter as constituting a “political question” at the highest constitutional level—that is, between the States and their people, on the one side, and public officials in the General Government and their clients in special-interest groups, on the other side. Ruling for the States would allow the parties to the dispute to settle it by political means, which as a practical matter would provide the only method for resolution of the controversy. Fourth, the Justices would want to avoid the loss of credibility that the Judiciary would suffer amongst the vast mass of Americans if the courts ruled against the States. And fifth, they would fear the severe economic, political, and social consequences which would undoubtedly arise if they denied the States a free hand, the present monetary and banking systems irretrievably collapsed, and no alternative currency were then available for the people’s use.

So why are not more of the champions of sound money, limited government, and free markets actively promoting the adoption of an alternative gold currency?

The present economic crisis presents the best opportunity since 1932 for taking the steps necessary and sufficient to free the American people from their thralldom to the Federal Reserve System and the vicious factions behind it. Under the pressure of this crisis, common people are finally awakening to their predicament, and sensing what needs to be done—because, as Samuel Johnson once observed, nothing focuses a man’s mind more sharply than his impending hanging. Moreover, this may be the last opportunity of its kind for a long time to come. For if “the financial community” can succeed in jury-rigging some supra-national global currency and central bank, the Ponzi scheme of fiat currency can probably be kept inflated for another generation, until a final, utterly catastrophic breakdown sweeps across the entire world.

So, the American people must be convinced now—immediately, if not sooner—ahora mismo, as our Spanish-speaking friends would say—that this country’s economy cannot be restored by mere repair or renovation of the existing edifice of money and banking, but only by its total replacement. The present structure is rotten to its very foundations, and even below. It lacks the capacity to survive—and can claim no right to be saved. A new structure must be built from the ground up, on a new site, according to a different plan, with better workmen. If this can be accomplished, then for the first time in generations Americans, indeed all of mankind, will enjoy honest weights and measures in the monetary field—and with that reform, will have a realistic hope to restore honest commerce and honest politics as well.

Footnotes:

20. Lane County v. Oregon, 74 U.S. (7 Wallace) 71 (1869); Hagar v. Reclamation District No. 108, 111 U.S. 701 (1884).
21. U.S. Const. art. I, § 10, cl. 1.
22. U.S. Const. art. I, § 8, cl. 5; art. I, § 10, cl. 1; and art. VI, cl. 2. Of course, private parties may coin nonfraudulent moneys from gold or silver, and employ those coins as media of exchange in the free market. But as the concern of this study is how to bring the government under control in the monetary domain, details of this matter will not be considered here.
23. See U.S. Const. art. III, § 2, cl. 2: “In all Cases * * * in which a State shall be Party, the supreme Court shall have original Jurisdiction.”
24. See 31 U.S.C. §§ 5119(a) and 5117(b).

Edwin Vieira, Jr., holds four degrees from Harvard: A.B. (Harvard College), A.M. and Ph.D. (Harvard Graduate School of Arts and Sciences), and J.D. (Harvard Law School).

© 2011 Edwin Vieira, Jr. – All Rights Reserved


A Cross of Gold Part 4

June 22, 2011

By Dr. Edwin Vieira, Jr., Ph.D., J.D.

NewsWithViews.com

So, all things considered, a true reform from any of these sources—although sufficient—is extremely unlikely. Instead, any supposed “monetary and banking reform” coming from these sources will almost surely be aimed at erecting a new supra-national currency and central bank. “The financial community’s” mouthpieces are already telling America precisely that.

Even assuming arguendo that the political problem of control of or influence over the General Government and the Federal Reserve System could be solved, intractable practical problems would remain—

• The plan for returning the Federal Reserve System to redemption of its notes in gold depends upon using the gold in the so-called “national gold stock” for the initial round of redemption That, however, leaves open the questions:
(i) How much gold is actually there? And,

(ii) How much of that gold is encumbered in some way—by loans, leases, “currency swaps”, or other like devices—so that it cannot be used for redemption? And,

(iii) If sufficient gold is or could be made available for redemption tomorrow, then why is the Secretary of the Treasury not even now fulfilling his statutory obligation, under 31 U.S.C. § 5119(a), to “redeem gold certificates owned by the Federal reserve banks at times and in amounts the Secretary decides are necessary to maintain the equal purchasing power of each kind of United States currency”, at the statutory valuation of gold with relation to those gold certificates “of 42 and two-ninth dollars a fine troy ounce”, set in 31 U.S.C. § 5117(b)? And,
(iv) Notwithstanding the limitations on executive action and judicial relief set out in 31 U.S.C. § 5118(b and c), will individuals be entitled to enforce their new claims to redemption of Federal Reserve Notes in actual gold, by obtaining from the courts judgements, mandatory injunctions, and other like orders that require the Federal Reserve Banks and the Treasury of the United States to pay out gold in exchange for those notes at some fixed rate? Or will the supposed “right” of redemption be (as it always has been) a toothless paper tiger?

Obviously, these questions must be completely and unequivocally answered before anyone can begin to plan intelligently for, or really even to advocate, a return to redemption of Federal Reserve Notes in gold—or before any holder of those notes takes seriously a reformed Federal Reserve System’s assertion that he will enjoy a true right, in both law and fact, to redemption.

But will these questions be answered? For example, precisely how can the Department of the Treasury and the Federal Reserve System be compelled to disgorge the necessary information? What will it require to compel the Secretary of the Treasury to fulfill his present statutory obligations in the premises, let alone any new ones that may be required? And how can a premanent right of redemption be secured, unless it is somehow explicitly recognized and enforced as constitutional in nature?

• In any event, assuming arguendo that sufficient unencumbered gold exists in the “national gold stock” to start the process of redemption, and that the Secretary of the Treasury and other public officials can be compelled to fulfill their duties, the further question nonetheless remains: “At what rate of exchange should a Federal Reserve Note “dollar”-bill be redeemed with gold?”

Fortunately, 12 U.S.C. § 411 does not fix the rate of exchange at which Federal Reserve Notes “shall be redeemed in lawful money on demand on the Treasury Department * * * or at any Federal Reserve bank”. And § 30 of the Federal Reserve Act of 1913 licenses Congress to establish essentially any rate of exchange. Which is why the original repudiation of redemption of Federal Reserve Notes in gold domestically, and its modification internationally, in 1933 and 1934 was probably constitutional (to the extent the Federal Reserve Act itself is constitutional)—namely, because Congress had explicitly reserved in 1913 the right to make any changes it wanted in the Federal Reserve Act thereafter. So, when the rate of exchange was reduced from $20.67 per ounce to zero domestically, and from $20.67 per ounce to $35.00, and now to $42.22 per ounce as far as the Treasury’s gold certificates are concerned, Congress was merely exercising a right it had retained from the very beginning.

Yet, even given that any rate of exchange is allowable, how would a particular, presumably economically correct, new rate of exchange once set be maintained?

In light of the serial illegalities and duplicities of the past that brought America to this sorry pass, what new “checks and balances” would be necessary and sufficient to convince a doubting nation and world that the same swindle would not be allowed to be perpetrated again? The Federal Reserve Act of 1913 required redemption of Federal Reserve Notes in gold, and set reserve requirements of 40% for Federal Reserve Notes in actual circulation and 35% for the deposits held in Federal Reserve regional banks—yet these limitations were set aside only twenty (20) years later following the banking collapse of 1932. Franklin D. Roosevelt then set an exchange rate of $35.00 per ounce of gold for Federal Reserve Notes—yet, in terms of actual payments, this rate become meaningless after August of 1971, only thirty-seven (37) years after Roosevelt had conjured up the $35.00 per ounce figure. And the Secretary of the Treasury is even now required by statute to maintain the equal purchasing power of all form of United States currency according to the benchmark of $42-2/9 per ounce of gold—yet no such equivalence in purchasing power exists between Federal Reserve Notes and gold. So, critics are entitled to ask—

Are effective economic “checks and balances” possible under present conditions? Assuming good faith and competence in the managers of the plan, can it be made to work at all, even to get back to the situation pre-1971, let alone pre-1933, given the present terrible burden of public and private debt throughout America, the gutting of this nation’s real productive capacity, and her over-extension around the world in military imperialism and adventurism? Then, too,

Are effective political “checks and balances” possible under present conditions? What if the managers who happen to be chosen to oversee the Federal Reserve System and the Treasury in years to come prove incompetent or act in bad faith, or both? What if they simply continue to do the bidding of the racketeering enterprises and other criminal conspiracies that pass for “political parties” in Washington, D.C., and “financial institutions” in New York City?

The plan for returning the Federal Reserve System to redemption of its notes in gold does not in and of itself limit such rogue public officials, bankers, and financial plungers from manipulating currency and credit as the means to grab power and wealth, any more than did the old “gold standard” from 1913 to 1933 (or to 1971). And the precedents do not augur well. For nothing that has ever been done since 1913 with an eye towards controlling the Federal Reserve System in the interests of common Americans has ever worked, or perhaps was ever capable of working—or America would not find herself where she is today, being importuned to cede ever more and ever-more-abusive powers to the System’s bosses, with no adequate provision for either reviewability or accountability.

Obviously, implementing a so-called “price rule” is not even a simplistic answer. Such was the basis of the original Federal Reserve Act—the “price rule” being $20.67 per ounce of gold—and everyone knows how well that worked.

Without an absolutely enforceable constitutional guarantee—and by that is meant a guarantee enforceable directly by the people themselves, because they either hold their gold in their own hands or themselves physically control the depositories in which their gold is secured—rogue public officials and their clients in the banking cartel and “the financial community” can be expected to ferret out one means or another to change to their special advantage the rate of redemption(as it was serially altered after 1933) or even to eliminate it entirely (as it was in 1933 domestically and 1971 internationally).

• Even if all of the foregoing problems could be solved, what would be the point?

The plan for returning the Federal Reserve System to redemption of its notes in gold would not provide a truly sound currency, any more than the original Federal Reserve System ever did. It would merely give America the currency of pre-1933, or (worse) post-1933 and pre-1971, both of which have been experimentally proven to be unsound.

• The plan for returning the Federal Reserve System to redemption of its notes in gold would perpetuate the fallacy of “redeemable currency”—namely, that the Federal Reserve Note is the “dollar”, and some amount of gold is its “backing”. But—

A “George Washington” Federal Reserve Note is not a “dollar”. It is a mere promise to pay a “dollar”, which has been utterly dishonored by both the banks and the Treasury since 1933 (as to gold domestically) and 1971 (as to gold internationally), even unto this very day.[17]

And sound, honest, and constitutional “Money” has NO “backing” consisting of or based on something else. It needs no “backing”, because it has substance in and of itself. It is ACTUAL GOLD, not a mere promise to deliver gold. Sound, honest, and constitutional “Money” cannot be repudiated, because it does not need to and cannot be “redeemed”. It is the ABSENCE of “redeemability”—the LACK OF NECESSITY OR DESIRABILITY for “redeemability”—that constitutes the essence and provides the strength of sound, honest, and constitutional “Money”.

• As a further demerit, the plan for returning the Federal Reserve System to redemption of its notes in gold would retain the institutions, and attempt to validate the false ideas, that were the instrumental causes of all of America’s problems. Under this plan, the merry-go-round of financial looting would not be permanently shut down, only temporarily slowed down—and not for a fundamental redesign, but only for repairs and repainting. Then it would be returned to operation under the same old management (at least in type), running in the same old direction, for the same old purposes. And inevitably with the same old results—because a merry-go-round cannot be straightened out.

• Most distressing to one’s sense of justice, the plan for returning the Federal Reserve System to redemption of its notes in gold also would reward the very class of people who caused or allowed nearly a century of monetary and banking problems to beset this country. By bailing them out of the mess they have caused—without punishment, without even censure, but with protection and payoffs, present and future—it would perpetuate their system, their power, their wealth, their status, their prestige. It would maintain them in positions from which—if they operated in the future as they have in the past, as history and a knowledge of human nature premonish America that they would—they could despoil this country once again, just as they did with the original Federal Reserve System.

• The plan for returning the Federal Reserve System to redemption of its notes in gold would require not only perhaps more perspicacity than Americans probably could muster, but above all more patience. It would take a long time to implement. Therefore, it would demand the people’s acceptance—really, the imposition—of political and economic discipline. Yet where would such patience and discipline be found, when this country is riven by contending factions for which après moi le déluge are the watchwords?

In particular, who would impose that discipline against all of the economically and politically powerful factions that want “funny money” and the Ponzi pyramids it facilitates? And how could such discipline be maintained, in the face of the monumental, arguably unpayable debt of the General Government? Would it not require the intervention of the Armed Forces—“government by junta” in the sorry style of Argentina and other Latin-American republics? One must presume so. For the Department of Homeland Security and the Pentagon are even now preparing, in anticipation of massive civil unrest when the monetary and banking systems finally melt down, to involve the Armed Forces in domestic peacekeeping.[18]

• As if all these shortcomings were not enough, the plan for returning the Federal Reserve System to redemption of its notes in gold would put all of this country’s monetary eggs in one political-cum-economic basket. If the plan did not work, all would likely be lost. This would be equivalent to playing Russian roulette with a semi-automatic pistol.

In sum, the return-to-redemption plan is an act of self-deception, if not desperation, which does not take advantage even of hindsight. For it proposes to reverse American monetary history on the basis of the very principles and practices which that history has already proven to be unworkable.

[3] An alternative gold currency.

Which brings this survey to the third plan for monetary reform—the adoption on a State-by-State basis of a new, sound, honest, and constitutional alternative currency consisting of actual gold as an—and ultimately the only—currency officially recognized by the State.

In the plan I have proposed, and which has been submitted—albeit, so far, unsuccessfully—to several State legislatures:

• The State adopts as its alternative currency so-called “electronic gold currency”.[19]

• Actual gold bullion is held for depositors in personal bailment accounts by an electronic gold currency provider (which could be a private organization or the State’s own Treasury). So no “fractional reserves” are involved.

• Title to the gold on deposit can be transferred among depositors electronically or by more traditional means, such as checks.

• The process begins when the State collects some of her taxes in gold, and offers to pay her creditors with gold, on a first-come, first-served basis, from the gold tax fund.

• As more and more creditors request such payment, depleting the fund of gold secured by those taxes initially collected in gold, the State expands the taxes required to be paid in gold, until the State’s finances are largely, if not completely, on the gold standard.

In the initial plan I drafted,

• Those who were required to deal with the State in electronic gold currency in order to pay taxes, and those who chose to be paid in gold by the States were the only parties, in addition to the State herself, who were required to maintain electronic-gold-currency accounts.

• But, parties who were required to pay their taxes in gold were expected to find it useful to seek payment from their own debtors in gold, and the State’s creditors who sought payment in gold were expected to offer to pay gold to their creditors, too, so that the use of gold would percolate through the private economy in gradual, but inexorable competition with Federal Reserve Notes.

Footnotes:

17. See 31 U.S.C. § 5118 (b and c).
18. See the present author’s commentary on this issue, “Going to the Roots of the Problem”
19. Of the type available in the free market through, e.g.,

Edwin Vieira, Jr., holds four degrees from Harvard: A.B. (Harvard College), A.M. and Ph.D. (Harvard Graduate School of Arts and Sciences), and J.D. (Harvard Law School).

© 2011 Edwin Vieira, Jr. – All Rights Reserved


A Cross of Gold, Part 3

June 21, 2011

By Dr. Edwin Vieira, Jr., Ph.D., J.D.

NewsWithViews.com

A plan of this type offers no more than a cruelly delusive hope. Consider some of the demerits of this type of plan (the new world currency)-

• First and foremost, the goal is not constitutional in any event, because every form of “redeemable currency” put out through the Federal Reserve System is, by definition, a governmental “bill of credit”, which Congress has no authority to emit, directly or indirectly.

Moreover, the Federal Reserve System is a corporative-state banking cartel indistinguishable from the very types of cartels set up under the National Industrial Recovery and Bituminous Coal Conservation Acts, which the Supreme Court declared unconstitutional, without dissenting voice, in the Schechter and Carter cases in the mid-1930s.[13] Except that the Federal Reserve System is arguably worse, because the monetary and banking cartel influences every form of production and delivery of all goods and services throughout the country, so that the confusion and corruption it injects into the free market is pervasive in a manner in which even the National Industrial Recovery Act was not and could never have been.

The question of constitutionality the key to the whole problem, because, if the Constitution had been faithfully executed all along, America would not be treading water in a monetary septic tank today. And only by returning to the Constitution can Americans hope to extricate themselves completely in the long run. Yet vanishingly few people take much notice, or appear to be at all worried, that, as far as the constitutional aspects of money and banking in America are concerned, Mussolini won the political and economic war—that, in truth, this country now suffers under the Fascist Reserve System.

• Leaving aside questions of constitutionality, and turning to matters of fact, the plan for returning the Federal Reserve System to redemption of its notes in gold retains the fascistic Federal Reserve System’s banking cartel, which will perpetuate factionalism at the heart of America’s economy. In The Federalist No. 10, James Madison pointed out that

[a]mong the numerous advantages promised by a well constructed Union, none deserve to be more accurately developed than its tendency to break and control the violence of faction. The friend of popular governments never finds himself so much alarmed for their character and fate as when he contemplates their propensity to this dangerous vice. * * * The instability, injustice, and confusion introduced into the public councils have, in truth, been the mortal diseases under which popular governments have everywhere perished, as they continue to be the favorite and fruitful topics from which the adversaries to liberty derive their most specious declamations. * * *

By a faction, I understand a number of citizens, whether amounting to a majority or minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community.

Madison then went on to point out what he considered egregious forms of factionalism, starting with “[a] rage for paper money”.

This passage seems to have been penned for the Federal Reserve System and “the financial community” of which it is the cornerstone. For no one can possibly deny that this edifice of financial chicanery serves one very narrow set of very special, very selfish interest groups, largely at the expense of everyone else in society. Neither is it deniable that, together with its satellites and clients, the Federal Reserve System holds the entire country hostage to “the financial community’s” negligence, incompetence, venality, corruption, and even criminality. For, if the System is not exonerated and “bailed out” repetitively from the consequences of its managers’ and clients’ own blunders and sordid excesses—as it has been, serially and under conditions of increasing severity and cost, since 1933—its managers and clients threaten, either implicitly or even volubly as they did before the TARP “bail out”, to take down the entire national economy, and with it this country as a whole, bringing about untold political and social dislocations, disturbances, distress, and destruction. This is the essence of malignant factionalism.

• The plan for returning the Federal Reserve System to redemption of its notes in gold is also economically psychotic: It does not propose to rein in fractional-reserve banking and the destructive Ponzi schemes fractional-reserve practices foster. Rather, it presumes that fractional-reserve banking will continue to operate indefinitely, just as it has in the past, supposedly to be “stabilized” by the Federal Reserve System and a resurrected pseudo-“gold standard”. But, as both theory and history attest, it is primarily fractional-reserve banking that has made a stable “gold standard” of the traditional type unworkable if not impossible.[14]
So the plan is bottomed on the self-contradictions that a system antithetical to a “gold standard” can be stabilized by a “gold standard”, and that a “gold standard” will long remain an integral component of a system the most profitable (albeit economically and socially destablizing) operations of which a “gold standard” constrains!

• The plan for returning the Federal Reserve System to redemption of its notes in gold does not separate fractional-reserve banking from the government, but accepts and even hopes to cement their integration permanently. Because fractional-reserve banking is inherently unstable, this arrangement is triply unsatisfactory: (i) This unnatural coupling destabilizes the government’s finances. (ii) By misusing the government’s monopoly of force in what will inevitably prove a vain attempt to stabilize the banking cartel, it destabilizes this country’s economic and political systems in their entireties. And (iii) it destabilizes even the banking cartel itself, because the protection the cartel receives from the consequences of its own excesses, perforce of its special relationship with the government, encourages and facilitates the bankers’ and their clients’ perpetration of further and more egregious excesses.

• The plan for returning the Federal Reserve System to redemption of its notes in gold, and thereafter administering the national stock of currency and credit on that basis, is in the final analysis a scheme of central economic planning—employing bureaucratic managers to maintain a fixed rate of redemption of paper currency in gold in the face of both ever-changing conditions in the free market, and the tendency to Ponzification of fractional-reserve banks and the rapacious “financial community” allied therewith. But is not the salient economic lesson of the Twentieth Century that central economic planning does not work, no matter how many computers and information-technology gurus are put to the task?

Would anyone in his right mind advocate the establishment of a Federal Bread Board to manage the production and distribution of bread throughout America? If every sensible person would reject this notion for one simple commodity such as bread (which anyone with a cookbook can learn how to bake in an afternoon), let alone for all categories of production in the most complex economy the world has ever known, then on what reasoning should it be accepted for the very special commodity—money—the soundness or unsoundness of which affects the production and distribution of all goods and services throughout the economy, because it is the commodity in which the mutual exchange rates among all goods and services are measured?

On the other hand, if the Federal Reserve System has proven to be such a good idea since 1913, or 1933, or 1971, or perhaps even the last several years, then why should its marvelous principles of organization, control, and concern for the welfare of average Americans not be extended to all other necessary commodities, such as food, clothing, shelter, personal transportation, and health care, to name just a few? Why should not America resurrect and reinstitute the National Industrial Recovery Act?

Why not, indeed? For this is exactly what is going to happen—in fact, if not perforce of some statute—because the tail (the Federal Reserve System) will end up wagging the dog (the rest of the economy). And if the tail is fascistic, so will the dog eventually become fascistic. Central fascistic control of the pricing system through manipulation of currency and credit must eventually lead to central fascistic control of the entire productive system. Which will require para-military police-state repression to keep the bulk of the population in line, as common Americans’ standards of living decline towards second- and even third-world levels.

• The plan for returning the Federal Reserve System to redemption of its notes in gold is politically impractical, if not wholly implausible, because any such reform has to be accomplished at the level of the Federal Reserve System through the General Government.

Now, for various reasons of institutional incompetence, this plan cannot be put into effect through the Judiciary. The Judiciary may be able—although one must doubt that it would ever be willing—to declare some or all of the Federal Reserve System to be unconstitutional or otherwise unlawful; but it cannot prescribe to Congress the substance of new statutes necessary to correct the situation, and certainly cannot compel Congress to enact such legislation. Thus, the Judiciary can suddenly cause chaos within the monetary and banking systems, by throwing a legal monkey-wrench into their gears, but can do next to nothing to repair the damage its own actions would bring about. Knowing that limitation on their powers, judges would likely do everything possible to avoid deciding a case that raises such issues.

Therefore, to be successful, the proponents of the plan for returning the Federal Reserve System to redemption of its notes in gold would need to gain control of or decisive influence over the Executive Branch, so as to be able to use (say) the authority granted in 12 U.S.C. § 95(a)[15] and 31 U.S.C. § 5119(a)[16]—as well as the ability effectively to veto any contrary legislation emanating from Congress.

Or, of greatest value, the proponents of this plan would need to gain control of or decisive influence over Congress, in order to enact new laws that the Executive Branch and the Federal Reserve System would then follow—and, of course, along with this, the ability to override any veto of those new bills, as well as to punish any failure or foot-dragging by the Executive Branch in the execution of these laws.

Furthermore, the proponents of this plan would also, perhaps especially, need to gain control of or to assert decisive influence over the Federal Reserve System itself and its allies in “the financial community”—which and who otherwise could effectively veto or paralyze the execution of any proposed reforms by threatening to create chaos in the markets. Unless, of course, those threats were deterred with credible promises that any such interference would immediately be met with severe punishments—such as are mandated in 12 U.S.C. § 95(a).

Footnotes:

13. A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935); Carter v. Carter Coal Co., 298 U.S. 238 (1936).
14. In conjunction with fractional-reserve central banking, the suppression of common use of so-called “real bills” in commerce must be identified as another major cause of the problem, which would need to be addressed in any comprehensive plan for monetary and banking reform. On this point, the work of Professor Antal Fekete should be consulted.
15. 12 U.S.C. § 95(a) provides that “[i]n order to provide for the safer and more effective operation of the national Banking System and the Federal Reserve System, to preserve for the people the full benefits of the currency provided for by the Congress through the national banking system and the Federal reserve system, and to relieve interstate commerce of the burdens and obstructions resulting from the receipt on an unsound or unsafe basis of deposits subject to withdrawal by check, during such emergency period as the President of the United States by proclamation may prescribe, no member bank of the Federal reserve system shall transact any banking business except to such extent and subject to such regulations, limitations and restrictions as may be prescribed by the Secretary of the Treasury, with the approval of the President. Any individual, partnership, corporation, or association, or any director, officer or employee thereof, violating any of the provisions of this section shall be deemed guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $10,000 or, if a natural person, may, in addition to such fine, be imprisoned for a term not exceeding ten years. Each day that any such violation continues shall be deemed a separate offense.”
16. 31 U.S.C. § 5119(a) provides that “[e]xcept to the extent authorized in regulations the Secretary of the Treasury prescribes with the approval of the President, the Secretary may not redeem United States currency (including Federal reserve notes and circulating notes of Federal reserve banks) in gold.”

Presumably, this would allow redemption in gold bullion only. See 31 U.S.C. § 5118(b): “The United States Government may not pay out any gold coin. A person lawfully holding United States coins and currency may present the coins and currency to the Secretary of the Treasury in exchange (dollar for dollar) for other United States coins and currency (other than gold and silver coins) that may be lawfully held.” And 31 U.S.C. § 5119(a): “When redemption in gold is authorized, the redemption may be made only in gold bullion * * * in an amount equal at the time of redemption to the currency presented for redemption.”

Edwin Vieira, Jr., holds four degrees from Harvard: A.B. (Harvard College), A.M. and Ph.D. (Harvard Graduate School of Arts and Sciences), and J.D. (Harvard Law School).

© 2011 Edwin Vieira, Jr. – All Rights Reserved