Dear
public's experts
Hello.
I
am often reminded by the ancient wisdom of the sages long dead that,
the pen is mightier than the sword. Although, I have yet to
see conclusive evidence of that cliché in modernity where the
pen, along with its surrogate, the press, is effectively used to
mainly augment the sword. The pen today continues to underwrite
inimical laws, induces servitude, and holds the public mind in the
complex web of perception management from which escape has become
well-nigh impossible. Plato captured this dystopic reality in his
fable: The Myth of the Cave, in his book: The Republic,
2500 years ago. Goethe, some two millennia later, echoed that theme
with great panache as follows:
“None
are more hopelessly enslaved than those who falsely believe they are
free. The truth has been kept from the depth of their minds by
masters who rule them with lies. They feed them on falsehoods till
wrong looks like right in their eyes.”
The
creation of money, however, is surely one of those few hard realities
where the pen can perhaps overwhelm the sword if wielded astutely in
opposition to the dystopic forces controlling the world of words and
pens. For, indeed, the control of money is also the first cause
enabler of dystopia, ab initio.
This
one reform, the return to creation of money as a public commons,
genuinely undertaken, solely in the public interest, can make heaven
right here on earth for the vast majority of its untermenschen,
without the need for population reduction under the United Nations'
Agenda 21. Surely, no public's expert in these money
matters, anywhere in the world, can really be unaware of the
dystopian forces long depicted in fables of one kind or another,
actually existing in reality even today, and operating in the name of
public interest, but wilily inimical to the same public's
interest. The power of money creation is that one weak link upon
which the entire pyramid of this dystopian power, the exercise of
oligarchic power from behind the scenes against public interest to
keep us in chains, is constructed. The tables can be turned by the
public just as simply as by knocking out the corner brick of the
tallest pyramid, arguably, with just the righteous flow of the
beatitudinous pen in the public interest!
While
simple in concept, this beautiful theory too, I did not invent. But
in my off days, I tend to believe it in order to maintain my sanity.
And I continue to practice it --- so far to no avail. But that is
perhaps because the “whole” is consistently coming out
less than the sum of its parts!
As
individuals supposedly working in public interest, we have no common
focus except to sell books, make a name for ourselves, and stroke our
egos as lauded “public intellectuals”, some even dreaming
of Nobel peace prize. And I hasten to add that I am most glad this
does not apply to you if you feel you are the exception. I feel that
too. In fact, I won't be surprised if we all feel we are the
exception to that self-serving public intellectual who so
ubiquitously occupy the public podium flaunting their high-morality.
That, we, the exception to the rule and to the rulers, are indeed
most noble, most pious, most humble, and work solely with our
conscience as our guide, with no petty self-interests at stake. This
call goes out to all who claim that.
The
thrust du jour in the name of monetary reform, is to return
the world to some kind of Gold Standard. A lot of well-intentioned
people among the public, and some well-intentioned national leaders,
all of whom appear to be quite innocent of knowledge, have
been clamoring for it. This has even become the holy grail of
reform in some influential institutional quarters. It includes,
not just the well known rebels extraordinaire, former American
Congressman Ron Paul and his zealot followers including author G.
Edward Griffin, but interestingly, even the World Bank. What follows
is my eight years old commonsense analysis of this “reform”
--- and, it demonstrates that it is, in fact, another boondoggle no
different in conferring infinite power to the oligarchy, than the
fiat money that it is supposedly designed to replace. It too does not
place the world of banking and spending, on sound financial footings
anymore than fiat money in the hands of an unaccountable financial
oligarchy ever did.
I
invite you to review this analysis and offer refutation if you
disbelieve it, forward it to your favorite public expert, economics
professor, chief of this or that, or Nobel laureate economist whom
you trust, or, extend it further with your own public wisdom and
intellect so that the whole shall, finally, come out greater than the
sum of each individual's brain-cells' worth.
This
call for an intelligent public to become a public think-tank in the
public's interest, is an open challenge to the financial oligarchy
driving this boondoggle. Perhaps we can finally come to believe in
the wisdom of the sages long dead. I sure would like to see some
proof of its veracity before I am dead.
With
best wishes,
Zahir
Ebrahim
Revised
Letter September 27, 2016
Zahir
Ebrahim | Project
Humanbeingsfirst.org
First
Look November 13, 2008 | Boondoggle Revisited March 26, 2013
[
Author's Preface, March 26, 2013:
I have a feeling that while 'war on terror' and other existential games are being played out in the left-field to continually engage the public's attention, the really significant issues are being decided in the right-field (thanks to the rebel Walter J. Burien, Jr., cafr1.com/BIO.html, for that apt baseball analogy from many years ago). There is very little analytical deconstruction of the Gold Standard that has been advanced over what has been known for ages. This is a seed to create a deeper more scrutinizing debate based on the examination of the five points mentioned towards the end of this article. These five points enable separating the chaff from the wheat.
It has been my sad observation that virtually all monetary reform advocates choose to remain silent on these questions while they trumpet their solutions as the best invention since sliced bread. I am less than impressed. Unfortunately Ron Paul has now departed (or will soon depart as per his statement earlier this year) from Congress but has left the legacy of Gold Standard wannabes as the panacea to world's financial crisis, including my favorite scholar, G. Edward Griffin, from whose books and videos, I will admit with thanks right off the bat, I cut my baby teeth on this monetary knowledge. Now I dare to challenge him as he is the co-exponent of the Gold Standard with Ron Paul, and, no surprise, the World Bank! I hope you can print this on your blog, website, and/or debate it, to put some more meat on this skeleton article. If a non-expert can get this far, the experts can certainly go farther. But where do they go instead?
See what MIT Sloan Professor Simon Johnson named 'public intellectual' of the year says at MIT. [10] And Nobel Laureate economist James Tobin says at Princeton. [11]
Bunch of bullshit is where they collectively take the public mind from America's top Ivy Leagues while the world of elite establishmentarians applaud; precisely where their pious detractors and fabled dissent also invariably take the public mind while the goofy public also applauds. And that is the Ron Paul's legacy on Gold Standard scrutinized below. Please better this almost 5 year old analysis.
The drive towards some kind of Gold Standard is accelerating among establishmentarians in the first world nations, with the sheep among the third world nations also demanding their own slaughter, while none among those learned in economics and financial policy-making in both worlds dare to publicly address the issues highlighted below. I know precisely why. That reason was most ably captured by W. Cleon Skousen in his commentary to Carroll Quigley's momentous work Tragedy and Hope – A history of the World in Our Time, in these perceptive words:
'The real value of Tragedy and Hope ... [is the] bold and boastful admission by Dr. Quigley that there actually exists a relatively small but powerful group which has succeeded in acquiring a choke-hold on the affairs of practically the entire human race. Of course we should be quick to recognize that no small group could wield such gigantic power unless millions of people in all walks of life were “in on the take” and were willing to knuckle down to the iron-clad regimentation of the ruthless bosses behind the scenes. As we shall see, the network has succeeded in building its power structure by using tremendous quantities of money (together with the vast influence it buys) to manipulate, intimidate, or corrupt millions of men and women and their institutions on a world-wide basis.' (W. Cleon Skousen, The Naked Capitalist, pg. 6) ]
I have a feeling that while 'war on terror' and other existential games are being played out in the left-field to continually engage the public's attention, the really significant issues are being decided in the right-field (thanks to the rebel Walter J. Burien, Jr., cafr1.com/BIO.html, for that apt baseball analogy from many years ago). There is very little analytical deconstruction of the Gold Standard that has been advanced over what has been known for ages. This is a seed to create a deeper more scrutinizing debate based on the examination of the five points mentioned towards the end of this article. These five points enable separating the chaff from the wheat.
It has been my sad observation that virtually all monetary reform advocates choose to remain silent on these questions while they trumpet their solutions as the best invention since sliced bread. I am less than impressed. Unfortunately Ron Paul has now departed (or will soon depart as per his statement earlier this year) from Congress but has left the legacy of Gold Standard wannabes as the panacea to world's financial crisis, including my favorite scholar, G. Edward Griffin, from whose books and videos, I will admit with thanks right off the bat, I cut my baby teeth on this monetary knowledge. Now I dare to challenge him as he is the co-exponent of the Gold Standard with Ron Paul, and, no surprise, the World Bank! I hope you can print this on your blog, website, and/or debate it, to put some more meat on this skeleton article. If a non-expert can get this far, the experts can certainly go farther. But where do they go instead?
See what MIT Sloan Professor Simon Johnson named 'public intellectual' of the year says at MIT. [10] And Nobel Laureate economist James Tobin says at Princeton. [11]
Bunch of bullshit is where they collectively take the public mind from America's top Ivy Leagues while the world of elite establishmentarians applaud; precisely where their pious detractors and fabled dissent also invariably take the public mind while the goofy public also applauds. And that is the Ron Paul's legacy on Gold Standard scrutinized below. Please better this almost 5 year old analysis.
The drive towards some kind of Gold Standard is accelerating among establishmentarians in the first world nations, with the sheep among the third world nations also demanding their own slaughter, while none among those learned in economics and financial policy-making in both worlds dare to publicly address the issues highlighted below. I know precisely why. That reason was most ably captured by W. Cleon Skousen in his commentary to Carroll Quigley's momentous work Tragedy and Hope – A history of the World in Our Time, in these perceptive words:
'The real value of Tragedy and Hope ... [is the] bold and boastful admission by Dr. Quigley that there actually exists a relatively small but powerful group which has succeeded in acquiring a choke-hold on the affairs of practically the entire human race. Of course we should be quick to recognize that no small group could wield such gigantic power unless millions of people in all walks of life were “in on the take” and were willing to knuckle down to the iron-clad regimentation of the ruthless bosses behind the scenes. As we shall see, the network has succeeded in building its power structure by using tremendous quantities of money (together with the vast influence it buys) to manipulate, intimidate, or corrupt millions of men and women and their institutions on a world-wide basis.' (W. Cleon Skousen, The Naked Capitalist, pg. 6) ]
This
is Project Humanbeingsfirst's first look at the key issues inherent
in the Gold Standard as the backing commodity for national and
international currency. It is being advocated by Hon. Congressman Ron
Paul of Texas ('The Revolution – A Manifesto', Chapter-6 “Money
The Forbidden Issue in American Politics”). He is inspired by
the Ludwig von Mises Institute (http://mises.org/)
which represents the libertarian political and economic thinking of
the Austrian School of Economics. That in turn, in this scribe's
opinion, can be elegantly captured in a nutshell by the British
economist E. F. Schumacher's Buddhist paradigm of “Man is
small, and, therefore, small is beautiful”. Mises Institute
primarily features the work of Ludwig von Mises ('Human Action –
A Treatise on Economics') where Mises notes: “Economics
deals with society's fundamental problems; it concerns everyone and
belongs to all. It is the main and proper study of every citizen”.
Mises Institute also features the work of his student, Murray N.
Rothbard ('What Has Government Done to Our Money?'), who notes: “On
the free market, everyone earns according to his productive value in
satisfying consumer desires. Under statist distribution, everyone
earns in proportion to the amount he can plunder from the producers.”
Ron
Paul is evidently inspired by these 'Small Is Beautiful'
decentralization principles of sustainable economics, sustainable
government, sustainable development, and the importance and
responsibility of man for his own decision-making and welfare, as
opposed to centralized institutional planning and impersonal
decision-making [1]. Who would not like such 'manly' “Tim
the Toolman Taylor” empowerment? [1980s American sitcom] As
the iconic macho-man Governor of California, Arnold Schwarzenegger,
might have said in some movie – only the “girlie man”!
However,
there surely must also be, somewhere in its verbiage, an implied
balance and harmony in this Buddhist doctrine of governmental
non-interventionism. The extreme at either end is of course, only
bounded by total anarchy on the one side, and total collectivism on
the other, as correctly observed by G. Edward Griffin
(http://realityzone.com).
Both extremes can have undesirable characteristics. The communist
style centralized planning and control is a well known collectivist
extreme – and apparently the world today is indeed headed
towards that characteristics with a global police state in the offing
and a global central banking under construction which will usher in a
global currency managed by private International banksters.
Whereas,
complete deregulation and privatization (in for-profit hands) of
public commons which are held in trust for all peoples, is the other
extreme. As is blatantly apparent, the world today is also
simultaneously headed in that direction too with neo-liberalism. The
twain meet in the corporate boardrooms controlled by the same
gluttonous hands on Wall Street whose principal share holders are
usually the opaque “institutional investors”. It would
perhaps only shock the most naïve to learn that the largest of
these “institutional investors” is the sole superpower on
earth, the United States of America Corporation, at all levels:
local, state, and federal. See the Comprehensive Annual Financial
Report (CAFR) that is produced by each of these governmental
bodies and public agencies (a public report which the public and its
mainstream news media have evidently never heard about, see
http://CAFR1.com
).
And
it is noteworthy for privatization impetus that as a non-predatory
socio-economics system design principle, when there is an infinite
demand for something, and the very life of every man and every woman
may depend on its availability, holding it as a social benefit, in
public trust, is the mark of wisdom; whereas privatizing it in
unaccountable gluttonous hands a mark of predatory social
Darwinianism. All reformers can surely agree that a nation's monetary
system falls into this category, of a public commons, to be managed
in trust, by their government, for the common good of all its
peoples. This is all the more true for a non-predatory international
monetary system which ought to sensibly be held in global trust as a
global public commons.
That
is the one key central platform upon which all monetary reformers are
united, and have always remain united throughout history. It forms
one continuous resistance against aggregated wealth holders who have
hijacked control of any nation's money supply.
This
resistance is profoundly historical, and even today, brings to bear
its entire weight of all historical arguments made against private
monopolistic control of a nation's money – from Julius Caesar
to Cicero to Thomas Jefferson to Andrew Jackson to Abraham Lincoln to
William Jennings Bryan. The latter being the last of the great
challengers to private wealth holders perpetually seeking to make a
precious limited commodity like gold the standard currency, before
the devilish orchestration in 1913, of the present day private
banking cartel of the Federal Reserve System, did one better. Legally
acquired exclusive private monopoly rights over the most common
element, 'thin air'! [2]
Therefore,
in these times, we resume that same thread of resistance – with
a clearer understanding of the devil before us, and with an even
greater force of cumulative arguments – right from where
William Jennings Bryan left off, continuing with his own precise
principled words of 1896: [3]
“We
say in our platform that we believe that the right to coin money and
issue money is a function of government. We believe it. We believe it
is a part of sovereignty and can no more with safety be delegated to
private individuals than can the power to make penal statutes or levy
laws for taxation.”
And
of course, not neglecting to be inspired by America's famous “I
killed the bank” President, Andrew Jackson's own motivating
words: [4]
“You
are a den of vipers. I intend to rout you out, and by God, I will
rout you out.”
The
presumably earnest reformers who believe in the Gold Standard, like
Congressman Ron Paul and the Mises Institute, just as those who
believe in Lincoln's Greenbacks or the Colonial Scrip of the American
colonies, like the American Monetary Institute (http://monetary.org),
and just as those who believe in other systems, like the 'tally
sticks' of the English, or the 'Natural Economic Order' of Silvio
Gesell, all equally share in this fantastically rich inheritance of
principled resistance against the handful of private aggregated
wealth owners squeezing the public in their beguiling lender's
perpetual debt trap.
These
reformers evidently only disagree in the pragmatic matter of which
alternate monetary system to introduce against their common mortal
enemy! And while they disunite amongst themselves as to “who's
the fairest”, without a well-funded foundation backing them, an
influential think-tank writing their policy papers, an effective
political lobby-group pushing it to the Congress, or even a
press-corps of editorial writers to their name to generate public
opinion, their antagonists delight in this incapability of their
rag-tag opposition to form effective coalitions on their own common
grounds. The well-intentioned moral activist of modernity surely must
intimately understand, beyond mindlessly parroting others, that the
banking parasites have, in every epoch, very powerfully, and with
much clever propaganda, attempted to gain control of this essential
government function that President Lincoln called “the
Government's greatest creative opportunity” [5]:
“The
Government should create, issue, and circulate all the currency and
credit needed to satisfy the spending power of the Government and the
buying power of the consumers. The privilege of creating and issuing
money is not only the supreme prerogative of Government, but it is
the Government's greatest creative opportunity. By the adoption of
these principles ... the taxpayers will be saved immense sums of
interest. Money will cease to be master and become the servant of
humanity.”
Therefore,
it is all the more perplexing – given such profound
intellectualism and advocacy for decentralized self-sufficiency on
the one hand in the Austrian School of Economics, and such a rich
historical legacy of resistance against private central banks
controlling a nation's money supply on the other – why the
return to Gold Standard is being so 'religiously' advocated by Ron
Paul and the Mises Institute which only helps fatten the same
“moneychangers”!
The
Gold Standard is being projected by the reformers as the sine qua non
of monetary reform to get the United States, and the world, out of
its misery of debt burden and the imminent danger of financial
collapse. It is surely well understood by Ron Paul, given that he
talks about it a lot, that the collapse would be the pretext to
create from its ashes, the pre-planned supra-national state of the
North American Union, and a new currency called Amero. He also well
understands the agenda for a centralized world government to be
controlled by a cartel of private international central banks as the
top of the ruling pyramid. Such an agenda is already being pursued at
an accelerated pace, and the import of time-criticalness of any
effective resistance to avert such an outcome that ends the
sovereignty of nation-states is surely not lost on Ron Paul.
Therefore, the inability to quickly comprehend the incongruence of
this path of the Gold Standard with respect to their own aims seem
rather Kafkaesque. Is this really rocket science that an ordinary
person cannot think it through? Not according to Ludwig von Mises:
“Economics
deals with society's fundamental problems; it concerns everyone and
belongs to all. It is the main and proper study of every citizen.”
The
Gold Standard advocates seem to think that gold will magically
materialize, in great abundance, in the Fort Knox secure vaults of
the United States as a public property in trust. While a pocket full
of gold and silver coins can be made laudable work-horses for local
trade as local currency – with perhaps a defined
conversion-rate to national-currency – it does not work as a
national currency in modernity. This analysis explains why. Gold's
ability to insure against inflation, as well as against the
inflation-tax when it is a fully-backed reserve rather than a
fractional reserve, is a cleverly planted red herring. Or so it would
appear, given the impracticalities of creating fairness between the
wealthy asset holders who own a large stock of hard assets, and real
producers who are often without such hard property assets, and mainly
have the sweat of their brow, the creativity of their intellect, or
the courage of their arms, as their main production asset and which
remains unprotected by such protection mechanisms of the wealthy. The
unexamined axiom itself, that guarding against inflation must be the
paramount factor to optimize, and all other factors need to be
subservient to this one dominant factor in the design of a rational
and fair monetary system, needs detailed scrutiny. That axiom is not
scrutinized here, but several preliminary arguments can be made to
show that the axiom itself may be mis-constructed based on
assumptions made, or imperatives defined, by powerful landed wealth
owners.
In
addition, as in any system design, whatever be its level of
abstraction, there are always pragmatic tradeoffs. When one balances
the entire system and looks at all the pros and cons of every aspect
of any precious limited commodity based standard for a monetary
system, the directions in which to make reasonable and rational
tradeoffs to construct a well balanced system in the best public
interest, with a rational operating envelop that is resilient to
economic upheavals, become all the more clear. Only 'religion' may
define absolutes without trade-off. Mercifully, heaven did not
stipulate a specific monetary system, but only outlined its
first-principle: don't transact in interest! A hundred viable systems
can be architected with that quality. Jesus banished the
“moneychangers” from the Temple in Jerusalem due to their
fleecing their flock. He did not stipulate which exclusive money
system to use, only what not to do. The needs of the people, and the
times, determine what system to use. And William Jennings Bryan
articulated that very need of the majority “man is small,
and, therefore, small is beautiful” laboring man –
which remains the same today – when he passionately orated at
the 1896 Democratic National Convention:
“Having
behind us the producing masses of this nation and the world,
supported by the commercial interests, the laboring interests and the
toilers everywhere, we will answer their demand for a gold standard
by saying to them: You shall not press down upon the brow of labor
this crown of thorns, you shall not crucify mankind upon a cross of
gold.”
The
preliminary analysis presented here is applicable, as
first-principles, for any precious limited commodity-backed monetary
standard. There is strong motivation brewing among many a
'malcontent' to take the power of coining money 'out of thin air'
away from the Federal Reserve System, and to move the United States
away from 'money as public debt' Hamiltonian principle. For
background reading, please see the bibliographic recommendation at
the end, and the afore-cited books.
The Hamiltonian principle: “The United
States debt, foreign and domestic, was the price of liberty.”,
in action in the Bureau of the Public Debt of the US Department of
Treasury: “Our job is to borrow the money needed to operate
the federal government and to account for the resulting debt.”
(image source)
And
it would be entirely appropriate to begin with these most eloquent
words, as they precisely capture the raison d'être of Project
Humanbeingsfirst's motto: “The Plebeian Antidote To
Hectoring Hegemons”:
“I
would be presumptuous, indeed, to present myself against the
distinguished gentlemen to whom you have listened if this were but a
measuring of ability; but this is not a contest among persons. The
humblest citizen in all the land when clad in the armor of a
righteous cause is stronger than all the whole hosts of error that
they can bring. ... I shall object to bringing this question down to
a level of persons. The individual is but an atom; he is born, he
acts, he dies; but principles are eternal; and this has been a
contest of principle.” (Ibid.)
The
first-principle concerns with any precious commodity based monetary
standard, are three:
1)
Gold is precious, therefore, by definition, it is limited; hence
again by definition, someone has a monopoly over it. Acquiring it in
sufficient quantity ab initio requires a priori assets that must be
exchanged that is valuable to those who have this monopoly. For a
State, this means hawking one's independence to the precious
commodity supplier in perpetuity each time it wishes to expand its
money supply beyond the reserves. Unless of course, by fiat, the
State is able to confiscate that precious commodity in the name of
national security or national interest.
2)
Because the commodity is precious and limited – and even if
initially acquired by whatever bootstrapping means to launch the
standard, including hawking national sovereignty to bankers and
institutional investors who already own a lot of gold, or
confiscating gold from the public as was done by Roosevelt in 1934 –
Gold cannot be used to arbitrarily expand the money supply which it
backs, in order to create extremely large infusions of cash.
In
post-agrarian and fully industrialized societies – such as the
G-7 Western nations – setting up capital intensive
mega-industries and mega-factories, and undertaking
mega-infrastructure national projects, can take billions of dollars.
Even for developing nations where development cost is invariably of
the same order of magnitude as the West for similar projects, if a
nation does not have the equivalent amount of the precious commodity
fully backing its currency, she must either make recourse to
fractional-reserve banking away from the full-reserve banking just by
the practicalities of the matter, and therefore, incur its
concomitant baggage of inflationary-tax once again. Or the poorer
nations must put automatic and entirely artificial breaks on their
national growth and national wealth creation, or otherwise become
borrowers again to the same cartel of banksters! Unless of course one
discovers an endless monopolistic benevolent supplier, like god
planting it in one's backyard and giving one enough smarts and
courage to not lease it out to snake-oil salesmen who will invariably
come calling on F-16s spreading the black-ops cheer blithely claiming
“Hegemony is as old as mankind”!
Both
factors 1) and 2) are a major problem for any nation adopting a
limited precious commodity as a standard. But it is an even greater
problem if it is forcibly created as an International standard. Then
it is especially an unfair standard imposed upon disadvantaged
nations who do not have that commodity in abundance, just as it is an
unfair advantage for those rich nations who do have an abundance of
such commodity, or can acquire it.
Based
on those two first-principles, I do not like any “precious
commodity” based standard that is by definition, limited. Which
brings us to the third first-principle:
3)
If it is not the limitedness of such a commodity, but its abundance,
and its equitable distribution among all nations can be ensured, then
I have no problem whatsoever with such a commodity backed national or
International monetary standard.
Since
fairness, and not 'might makes right', is the quintessential
first-principle touchstone axiom of any rational analysis,
Congressman Ron Paul's Gold penchant suffers from both factors 1) and
2). And it also does not have 3) as a mitigating characteristic. If a
touchstone other than fairness is employed, such as how to fatten the
gluttonous appetite of banksters, then surely the Gold Standard is a
great plan-B in case the private central banks fiat money monopoly
becomes too onerous for the sensibilities of the debt-laden
strangulated public.
Apart
from these three first-principle factors, the many theoretical
advantages of a commodity based standard, as noted by Ron Paul, seem
plausible. Specifically, a fully backed commodity based standard does
not create an inflationary-tax upon the public when money supply is
expanded within its fully-backed reserve limit. Beyond its reserve
limit, fractional reserve mechanics kick-in to artificially inflate
the money-supply which inherently creates the inflationary-tax. If
one does not exceed the backing limit, money retains its value over
long periods of time so long as the backing commodity retains its
value. However, this necessitates the commodity be artificially
protected from market capitalism, and its price not allowed to be
subjected to market forces in order to retain its stability as a
reliable and credible backing standard. The irony of protectionism
being made the foundation of 'free-market capitalism' is surely lost
to its enthusiastic advocates. But that's merely only of theoretical
interest to purists, and of no practical significance to reality,
since genuine free market capitalism also only exists in text books.
No nation can survive its implementation, least of all, the
developing and poor nations rich in natural resources surrounded by
global predators forcing 'free-trade' down their throats to create
banana republics for careful harvesting.
This
price-fixing of gold bullion was the protectionist outcome of the
Gold Equivalence Standard which President Roosevelt ushered into law
in 1934, and which remained in force until 1971 when President Nixon
abolished it. The Gold Equivalence Standard (GES) was not a fully
backed standard, but a fractional reserve standard, and when other
nations and institutional-agents demanded their gold in exchange for
the dollar bill, the United States risked failure to deliver as its
gold bullion reserves were not sufficient. It was the same principle
as any vanilla run on banks by consumers when the banks' liquidity
come into question. The GES was unilaterally abolished by the United
States for fear of default when the gold reserves fell dangerously
low when I believe France made its demand for gold.
In
this GES, gold bullion that comprised it, was priced outside the pale
of market forces, at a fixed value of about $35 an ounce. But more
disturbingly, all gold from the American public was forcibly
confiscated in 1934. The public was given approx. $18 an ounce for
their life's savings, with the price being immediately revised
upwards to almost twice that as the stable value of the new backing
standard. This protectionist value of gold bullion was used in
International money-supply transactions of the dollar which was setup
as the default reserve currency of the world at Bretton Woods
Conference post World War II, based on the currency of the
unparalleled economic and military power of its main victor. Whereas
the price of actual gold continually fluctuated on the open market
across the world. Ownership of gold was also made illegal for
American citizens (except for numismatists and jewelers). So large
institutional multinational investors and banksters with foreign
affiliations could easily purchase the gold bullion from the US
Treasury in foreign names, but not United States citizens. All of
American public's gold was thus made out as a gratuitous gift to the
banksters by the fiat of a simple executive signature by President
Roosevelt. His New Deal ushered in massive deficit spending of paper
money. In his three terms in office he outspent all his predecessors
combined.
There
is no a priori reason to believe that the future of any new proposed
Gold Standard to orchestrate another 'New Deal' – as the remedy
for the next Great Depression which is already upon the world's
doorsteps – does not already have a precedent-setting paved
super highway to travel on. The banksters I am sure are massaging
both their gullet and their stomach with joyous glee as plan-B is
eagerly put before them as the public's own 'desired solution' for
the economic and financial crises of the banksters' own crafty
manufacturing!
Since
neither Congressman Ron Paul, nor does any other establishmentarian
or contrarian exponent of the Gold Standard, address either 1) or 2),
nor does anyone stipulate 3) as a mitigation, that is the Achilles heel
of the Gold Standard mantra. Mises Institute is victim of the
same considerations.
As
the banksters already have a monopoly on Gold – or can soon
monopolize it because they can create, by fiat, all the cash they
need simply out of thin air to purchase what they don't already own –
the Honorable Republican Congressman from Texas, in his well meaning
enthusiasm, but also his apparent profound inability to clearly think
matters through down to their core axioms (see “Open
Letter to Hon. Ron Paul Supporters October 29, 2008”),
makes a great patsy in their globalist conniving hands as the plan-B
enabler already in-place in Congress!
If
the above three factors can be satisfactorily addressed, along with
practicable implementation modalities which do not impose a draconian
burden upon the public as was imposed by President Roosevelt in 1934,
then there is nothing inherently wrong with the Gold Standard.
Clearly, that is merely a tautological statement since those very
innate characteristics of Gold as a limited and precious commodity,
and its hoarding in monopolistic hands, is what's wrong with the Gold
Standard.
The
5 initial touchstone questions laid out in “Towards
a Common Standard Benchmark for evaluating all Monetary Reform
Proposals”
[7] are reproduced below in context of Ron Paul's advocacy. All Gold
Standard exponents must reply to all of these questions
satisfactorily – before one can be sure of their proposals
which are almost always couched in propagandistic sloganeering,
syntactic sugaring over poison pills, prancing around with erudite
gibberish to skirt the core issues, and of course outright bs.
a:
Central Banking in private hands charges the public perpetual
compound-interest for the public's own money. Nationalizing the money
creation function solves this problem of 'money as public debt'.
Ron
Paul's Gold Standard proposal, as did President Lincoln’s
Greenback fiat money, evidently addresses this, by eliminating all
interest on the creation of money.
b:
Private Central Bank is a legalized monopoly behavior that permits
private banks to collude legally for 'price-fixing' the
interest-rate. Thus it helps create the business cycle of expanding
and contracting credit by modulating its availability in legal
collusion – what I call the 'business rape cycle'. Bankers
profit from this by buying up those businesses who can’t cut
it, pennies to the dollar during the bust periods which dutifully
follow upon the heels of boom financing periods.
Nationalizing
this function, by having the government manage the availability of
credit, what Thomas Edison called “the proper ratio” for
money supply – not too much to prevent wild speculation, and
not too little to prevent stagnation – goes to a large extent
in managing this 'price-fixing' of interest-rate and availability of
credit in the greater common good of the public, rather than the
banking cartel's now represented by the Federal Reserve System. But
government management does not entirely eliminate this aspect –
because the private banks can still secretly collude in managing
credit availability as they have always done, since they have the
same powerful handful of owners at the top!
How
does Ron Paul address “the proper ratio” [8] and its
implementation for managing the money supply?
c:
A Central Bank’s arbitrary money creation by fiat –
whether the CB is public or private doesn’t matter, and which
is what Greenbacks were – creates an inflationary tax. Nothing
new here.
There
is no inflationary-tax in a fully backed Gold Standard as proposed by
Ron Paul.
This
tax will inevitably exist however, by definition, if the GS mutates
into a fractional GES and the money supply exceeds the backing gold
reserves.
This
will happen by default as a matter of practicality, because supply of
gold will always be limited in relation to the demand for capital in
modern industrialized nations. Therefore, a full proposal needs to be
made by the Gold Standard advocates which can be scrutinized in the
light of these real-world constraints. Perhaps this is why not a
single advocate of the GS fully addresses this specific point. Nor do
they conveniently address where the Gold will come from to create the
International reserves for such a global world currency, and nor do
they ever focus their pious platitudes on the very real issues
outlined in 1), 2), and 3) in the analysis of the Gold Standard
above. At least, I have not encountered it as of this writing. I am
sure these must have been sorted out in some super-classified
documents at bis.org, or present in the underground vaults of their
execution arm at the World Bank and IMF who will arguably field such
global currency as the buck is passed, in the name of reform, from
the Federal Reserve Bank to their international global money lender
fraternity. See the next item.
d:
In modern industrialized societies where the demand for capital can
be enormous, far more than was prevalent in agrarian or
early-developing industrialized societies, as Richard Cook, the
former U.S. Treasury Department employee and now a monetary reformer,
argues, how can this natural inflationary tax be avoided in such a
fiat money system? In the time of the Greenbacks during the Civil
War, while Lincoln printed around 400 million dollars, or some say
500, that is nothing compared to what is needed today in the capital
intensive public and private mega-projects. For instance, simply to
set up a class-1 semiconductor fab takes a billion+ dollars.
How
does Ron Paul's Gold Standard address this large demand for
mega-capital that would not also pose an inflationary tax? Where does
Ron Paul propose to get all this gold from to fully back his
currency? As he has himself noted, he was the member of the Gold
Commission in the 1980s, and he could not even at that time say how
much of the American public's gold was left in the secure vaults of
Fort Knox – the speculation being that whatever remained after
Nixon abandoned the GES in 1971, was subsequently sold off to private
institutional investors by the United States Treasury, and only empty
vaults today are being guarded in great pretense to hide the legal
heist of what most might believe was a national asset. So many
questions – and no answers by the Gold advocates. Who designs a
system, or advocates it, under such conditions of ambiguous and
incomplete comprehension? Perhaps there is indeed a secret plan to
restock Fort Knox to the ceiling with lead-gold? If that's the case,
do make sure there is a bathtub handy and every shiny gold brick
first takes a dip in it, with someone reliable present to record each
result!
e:
Banking itself, indeed, all of International banking, is based on
fractional reserve lending. This is the real source of any banker’s
continuous and perpetual wealth creation, and hence the source of
their unmatched and unrivaled power.
Ron
Paul's Gold Standard is fully backed at the time of money creation as
a national public commons.
However,
it is not clear how he addresses fractional lending at the
institutional banking level as individual loans and deposits are made
by borrowers.
Can
Ron Paul show a practicable method, and not merely in platitudes,
whereby the private capitalist banks of the world – owned by
powerful trillionaires who also own the majority of lawmakers of the
world not to mention in the United States Congress as just witnessed
by the passage of the trillion dollar banksters bailout bill in
October 2008 despite all the public opposition – can be made to
agree to have a fractional reserve lending ratio of 1?
The
entrenched forces of private banking are pulling in the opposite
direction – towards global private central banking in a world
government. How does Congressman Ron Paul along with his Gold
Standard buddies plan to counter that powerful force in any
efficacious measure?
The
solution to the How Problem – for, the rest, is mere talk, mere
rehashing of knowledge that is as old as hegemony, as old as mankind.
[9]
There
is clearly something awry when the World Bank itself proposes the
Gold Standard as a barometer of the public mind through its official
mouthpiece in sympathy with Ron Paul. The self-explanatory
Reuter's headline of November 08, 2010 reads: World
Bank chief surprises with gold standard idea
(cached
PDF).
Footnotes
[1]
Ron Paul, The Revolution – A Manifesto, April 2008, First
Edition, Grand Central Publishing.
[2]
G. Edward Griffin, The Creature from Jekyll Island – A Second
Look at the Federal Reserve, June 2002, 4th edition, American Media,
book
https://web.archive.org/web/20090202201212/http://realityzone.com/crfrjeiss.html
Audio-only
of talk after the book's release, November 18, 1994 in Los Angeles
CA, 71 minutes
Video
interview which explains the Fed, 'What is the Federal Reserve
System', 42 minutes
[3]
William Jennings Bryan, July 9, 1896, Speech at the Democratic
National Convention in Chicago. http://historymatters.gmu.edu/d/5354/
[4]
Andrew Jackson, cited in The Money Masters – How International
Bankers Gained Control of America, 215 minutes,
http://www.themoneymasters.com/the-money-masters/
[5]
Abraham Lincoln, Ibid.
[6]
The entrenched notion of Public Debt in America – will take a
gestalt shift to overcome! A seeding–prose for Collaboration,
http://print-humanbeingsfirst.blogspot.com/2008/10/monetary-reform-seeding-prose.html
Also
see bibliography of this author's work on analyzing the monetary
reform agenda in Re-visiting Money as Debt and Monetary Reform: The
Secret of Oz,
https://print-humanbeingsfirst.blogspot.com/2010/10/re-visiting-money-as-debt-and-oz.html
[7]
Towards a Common Standard Benchmark for evaluating all Monetary
Reform Proposals,
http://print-humanbeingsfirst.blogspot.com/2008/11/common-monetary-reform-benchmark.html
Questions
initially framed to respond to Ellen Hodgson Brown, before having
acquired her thick book 'Web of Debt', Second Edition, February 2008,
for her monetary proposal: Return To The Greenback Dollar,
https://web.archive.org/web/20090207235200/http://webofdebt.wordpress.com/monetary-proposal/
Also
see inexplicable statements by Ellen Brown to this author: “Of
course the oligarchy is the problem, but that doesn't mean we can't
steer the Fed. Bernanke drives a Ford Falcon. I think he's one of
us!”, and “the U.S. is the last holdout, and the Fed is
what's holding us out. Bernanke is standing up to the Gnomes of
Zurich and Basel”, in: Does Ellen Brown secretly work for
the FED? January 10, 2011,
http://print-humanbeingsfirst.blogspot.com/2011/01/does-ellenbrown-secretly-work-for-feds.html
[8]
For Reference to Thomas Edison's wisdom on monetary system, see its
coverage in the NYT of December 6, 1921, Headlined: “FORD SEES
WEALTH IN MUSCLE SHOALS; Says Development Will Bring Great Prosperity
to That Section of the South. EDISON BACKS HIM UP He Will Urge
Congress to Lease It to Ford as the Logical Man to Carry Out Great
Project. SUPPORTS CURRENCY PLAN Old Way, He Asserts, Compels Us to
Add to the Public Debt to Increase the National Wealth.”,
http://query.nytimes.com/gst/abstract.html?res=9C04E0D7103EEE3ABC4E53DFB467838A639EDE
[9]
For an appreciation of pragmatic difficulties and time-criticalness
of the matter, please see:
[a] Monetary Reform: Who will bell the cat?, http://print-humanbeingsfirst.blogspot.com/2008/10/monetary-reform-who-will-bell-thecat.html ;
[b] The Missing Link of Monetary Reform: How?, http://print-humanbeingsfirst.blogspot.com/2009/09/response-ami-monetary-reform-conf.html
[a] Monetary Reform: Who will bell the cat?, http://print-humanbeingsfirst.blogspot.com/2008/10/monetary-reform-who-will-bell-thecat.html ;
[b] The Missing Link of Monetary Reform: How?, http://print-humanbeingsfirst.blogspot.com/2009/09/response-ami-monetary-reform-conf.html
[11]
http://print-humanbeingsfirst.blogspot.com/2008/11/monetary-conspiracy-world-government.html#Tobin
Addendum:
News Epilogue
G7
sets sights on 'new world economic order', Roland Lloyd
Parry, Agence France-Presse, Saturday, February 14 2009, 11:36 am ET
'ROME
(AFP) – The world's richest nations called Saturday for urgent
reform of global finance to save the world from the economic
devastation that is dragging more and more countries into recession.
Italy's Finance Minister called for a "new world economic
order" as he wrapped up the crisis meeting of finance leaders
from the Group of Seven leading economies over which he presided
here. In a joint declaration, the G7 called for "urgent
reforms" of the international financial system. ... "A
new world economic order might seem rhetorical," he told
reporters. "But it is a true goal we should be aiming towards...
today right here in Rome we've embarked on a very significant
journey, both technical and ethical." ... The global crisis
"has highlighted fundamental weaknesses in the international
financial system and that urgent reforms are needed," the
statement said. US Treasury Secretary Timothy Geithner vowed that his
country, the biggest economy in the world and the source of much of
the financial drama in recent months, would work with other nations
for a consensus on reforms. "We need to begin the process of
comprehensive reform of our financial system and the international
financial system, so the world never again faces a crisis this
severe," Geithner said after the talks. Dominique
Strauss-Kahn, head of the International Monetary Fund (IMF) -- the
body coming to the rescue of some crisis-hit countries -- said
restructuring banks damaged by the credit crunch was the main problem
facing governments. ... The document hailed stimulus actions taken by
other countries, singling out China which it also praised for its
"continued commitment to move to a more flexible exchange rate."
' [1]
The
New World Economic Order as the fundamental building block of a
despotic world government is really pretty much a fait accompli.
Being an ostrich doesn't really serve any function because arsonists
have taken over all the fire brigades in town, and in every town and
city. The hyperinflation of the dollar is an irreversible done deal.
The following Glenn
Beck video
[2] from FOX News graphically shows the official United States debt,
which is the same as the amount of U.S. currency in existence. See it
by each decade from 1900 to 2006 in Van
K. Tharp.
[3]
This
isn't even the tip of the iceberg however of what has deliberately
been orchestrated by the financial houses in New York. The
quadrillion+ dollar (1000 trillion dollars) derivatives paper-debt
that nobody can exactly quantify nor fully comprehend – a
mirage, a contrived and manufactured financial gibberish paper
con-game calculatingly instrumented by the very arsonists who are now
clamoring to lead the fire-brigade to save the world – is what
is being referred to here: “We need to begin the process
of comprehensive reform of our financial system and the international
financial system, so the world never again faces a crisis this
severe”. And their solution is: “A new
world economic order”.
Meanwhile,
the arsonists are crashing the dollar in the guise of fighting that
lighted fire by the various open-ended deficit spending Bills in
trillions, as the new mantra of “stimulus”. This includes
payout of billions for overpriced bank bailouts – up to 10 and
20 times the asset value – in the name of shoring up the equity
side of the equation since, as the financiers argue, nothing may now
be done about the astronomical liability side of the equation
incurred by the derivatives bubble. How convenient! See The
Bank Swindle in Perspective
[4] in order to appreciate the complex looting of the public treasury
in legal guise, sanctioned by the mighty United States Congress, and
then forced across the world as the only solution to the financial
crisis. To acutely comprehend why the “stimulus” is just
another mantra, a Rand/CFR joint production like the “WMD in
Iraq” and “Al Qaeeda” mantras, see “Mr.
Obama's New Deal”.
[5] As Captain Rhett Butler had shrewdly observed in Margaret
Mitchell's famous novel:
“Oh,
yes! What most people don't seem to realize is that there is just as
much money to be made out of the wreckage of a civilization as from
the upbuilding of one.” -- Gone With The Wind
Soon
the arsonists will go back to Congress and lament: 'oops!, the
stimulus didn't work; sorry, the dollar is now worthless, we are in
the middle of the worst depression known to mankind, there are riots
everywhere, food shortages everywhere, global warming is gonna cause
floods, Osama bin Laden has unleashed a bio-terror nuclear attack; so
we need to create a new economic union, a new full spectrum mutual
defense union, and a new world order Constitution for the American
continent to protect our peoples and address the global threats'.
That
baby-step solution for the collapsed dollar will be the North
American Union under a common central bank. It has been under
subversive instrumentation as part of the Trilateralists' agenda for
as long as the European Union, and will be just as rapidly deployed
with an iron fist despite similar popular public opposition, because,
“World government could only be kept in being by force”.
Understand Glenn Beck's and Bill O'Reilly's mocking-chutzpah and
facile double entendres displayed in the video
clip
in “Why
Not Be An Ostrich”.
[6]
And
the most fruitful realization of Captain Rhett Butler's swashbuckling
truism is yet to come, the profiting “from the
upbuilding” of civilization: the new Gold Standard
which will be pitched with Congressman Ron Paul's help as the panacea
demanded by the peoples. Since all the world's gold bullion supply,
and the world's gold mines, are already under monopoly control of the
same arsonists, no problem.
In
the New Economic World Order, with global central banks –
themselves controlled from behind the scenes by the same handful of
private family banks owned by the Rothschilds, the Rockefellers –
managing the world's merged global monetary system as well as all the
world's political governments in a global governance architecture, it
won't be a problem returning to the Gold Standard.
All
the fine gold will have to be purchased from the same private
international banksters in order to back the trillions in new common
currency issued for transacting the entire world's commerce. How
convenient once again!
The
new monetary system will be happily made inflation averse amidst
cheers from the foolish goyem of the world. The new gold based
standard after all, does have to protect the enormous wealth of the
private banksters from inflationary-erosion in a largely serf-world
of the New World Order, wherein, the only real asset owners are the
banks. The new financial empire also has to be stable enough to last
a millennium! Can't have inflation eroding away all its loot as it
did moms and pops meager assets and life savings in the twentieth
century. Why indeed the Gold Standard will now make perfect sense for
the banksters and the handful of real wealth owners of the world, was
so passionately explained over a hundred years ago by William
Jennings Bryan,
[7] that it is best refreshed in the goy's mind directly from the
horse's mouth. The contorted dialectical brilliance of the devilish
banksters is truly unsurpassed!
When
my friends routinely inform me in pious excuse for their own
voluntary servitude: “god is running the world”,
and I retort back: “seems like it's the devil who is”,
they think I am heretical. I say, poor poor god, the most blamed
scapegoat ever! And what an amazing coup d'état of the devil:
it puts mankind in eternal bondage in every new generation, and
calmly cements the voluntary servitude of its hope-dwellers with
fantastic divine dogmas of karma, fate, destiny, and prophecy! None
rise too frequently to overthrow the tyrants! But sometimes, they do!
The
solution to the international banksters 'servicing' their 'dumb goy'
is so straightforward even today that if any political leaders really
wanted to take genuine salvaging action – if the fire brigades
across the world weren't already staffed with arsonists – they
could so trivially do it with a mere signature that there will be no
further updates to the Monetary Reform Bibliography.
It
now appears rather pointless to repeatedly flog a dead horse with
each new proclamation from the pulpits and the ditches. Many a
'psychohistorian' has already foreseen the not so un-subtle future
and already laid it all out. Instead, perhaps it is time to dust out
Henry David Thoreau and nail the only dreaded wrinkle in the final
'Hari Seldon' plan for a millenium of servitude.
Addendum
Footnotes
[1]
http://news.yahoo.com/s/afp/20090214/bs_afp/financeeconomyg7 Also
see:
http://rawstory.com/news/2008/G7_sets_sights_on_new_world_0214.html
[2]
http://www.youtube.com/watch?v=3DPfKxOQGHU
[3]
Van K. Tharp, 2006, Pg. 158, Figure 6.1
http://books.google.com/books?id=Q6XnsJRb7QwC&pg=PA158&lpg=PA157&ots=T60ZNJrqry
Source
URL:
http://print-humanbeingsfirst.blogspot.com/2013/03/the-gold-standard-boondoggle-revisited.html
Original
Source URL:
http://humanbeingsfirst.blogspot.com/2008/11/monetary-reform-firstlook-gold-standard.html
Original
Print URL:
http://print-humanbeingsfirst.blogspot.com/2008/11/monetary-reform-firstlook-gold-standard.html
Addendum
News Epilogue Source URL:
http://print-humanbeingsfirst.blogspot.com/2008/10/monetary-reform-bibliography.html#News-Epilogue
First
Look first published November 13, 2008 | Boondoggle Revisited
published March 26, 2013
Links
fixed, Addendum from First Look 2008 added to sync the two on August
25, 2016 7686
Open
letter to public's experts added as prologue Wednesday, September 28, 2016
06:00 am
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Gold Standard Boondoggle Revisited by Zahir Ebrahim 22/22