The USA Is Already Bankrupt!



YOU are the last generation living in the twilight near the edge of the abyss!No Empire has EVER lasted forever, not even the mighty Roman’s!Congress is marching us all down a similar political and ideological path asthe Roman’s once took.

Governments backed only with military force as theironly true source of revenue and power soon fall. We have become such an empire.The end with be tyrannical, violent, maybe vicious!

IF you are one of the lucky fewcitizens with any valuables left you will have to defend them from seizure not onlyfrom an increasingly aggressive government taxation force but also from yourfellow citizens that have already hit rock bottom and are homeless by the millions.

If you can afford to leave the USA make plans now!Havens for the wealthy are sprouting up like weedsall over the world NOW! The exodus of the wealthyfrom Europe, Japan and the USA is well underway!If you stay here be sure to hide your assets very well!!! Do not keep your money inthe bank!!!

Do not hide cash under the mattress either as inflation can turn thatinto a pile of worthless paper in only a few BAD years. Invest in durable goodsand non-perishable inventory. Hide it well from the prying eyes of both governmentand citizen thieves alike!

With these assets your family can barter for food, medicineand any of the other basic necessities of life in the turbulent years to come.


Imagine for a moment that someone inherits a farm. Let’s say that the farm has good topsoil, a good well, good breeding stock, good seed, and excellent farm equipment in good repair. Prior to passing into the control of the present owner the farm did a good business selling vegetables, meat,     and dairy products to the local market, and it made a small profit.

But let us suppose for a moment that the present owner of the farm does not understand farming, or isn’t even really interested in learning. The present owner has no objection to standing around looking good, so he stays at the farm, standing in front of it, looking good to passers by.

Of course, the bills still come in, so our farmer puts them on his credit card. When that bill comes due he uses another credit card, Then another. Pretty soon the interest payments alone are higher than his bills and the banks get nervous and call him. No problem. Our farmer sells the tractor, takes the money around to the various credit cards, the food store, the utilities, and pays off all his bills. Then he stands around in front of the farm looking good to passers-by, the lord of his domain.

Will, the bills still come in. Again the credit cards get loaded up. So, this time our farmer sells the harvester. Then later on, the cattle, then the chickens, then the seeds, then he leases the well to his neighbor and finally sells the top soil from his farm to another farm down the road whose soil is getting tired. The cash is taken around to the various creditors, the food store, the utilities, etc.

Now at this point, our farmer thinks everything is okay. The bills are paid, he has a little cash in his pocket, and everything is fine.

Of course, you know better. The farm simply does not exist any more; it’s just an empty lot with a few buildings, and soon they will be gone as well. The path from the farmer’s present condition to seizure of the property for unpaid taxes is a foregone conclusion, even if the farmer doesn’t look far enough ahead to see it. Poor, dumb, stupid farmer.

That farmer is our government, and our business leaders.

Just as our hypothetical farm has lost its soil, livestock, seed, and farm equipment, America has lost its manufacturing ability. Short sighted business leaders, with as little interest in manufacturing as our farmer had in farming, decided their own personal bonuses would be higher if they simply sold their factories rather that ran them. After WW2, the 27 American TV companies including Zenith, Emerson, RCA, GE, etc. led the world in TV technology. Then, the owners of the patents on TV technology decided they didn’t need to dirty their hands by actually making the TV sets themselves any more, and they started selling licenses to manufacture, which the Japanese bought.

By 1987, the only remaining American TV company is Zenith. The patent holders get their money, but the American products which can be sold overseas are gone, along with the jobs to make them.

The same happened in high-tech electronics. The integrated circuit was invented in the United States. But rather than focus on selling integrated circuits, the companies that owned that technology sold the machines to MAKE integrated circuits around the world, and now America sells very few chips anywhere. The patent holders have their money, but the cash flow from sales of manufactured goods, and the jobs that go with them, are gone. When Seymour Cray needed custom chips for his supercomputers, he had to order them from Japan.

The same thing has been happening in aviation. The airplane was invented in the United States, and through the 60s, we sold a lot of them around the world. But lately, all aircraft sales to foreign countries involve “offsets”, a portion of the core technology that gets licensed to the purchasing nation and gets manufactured there. Bit by bit, the core technology gets bled off, taking with it jobs, and cash flow from the sale of those manufactured products. Along the way, the rights to manufacture American inventions outside America leak away on a steadily increasing basis. Even the mighty F-16 is now being manufactured overseas, under license.

To cover the loss of manufacturing jobs, our government has invented the catch phrase “service economy”. This is the idiotic notion that we don’t need to actually sell manufactured products; that we can grow and prosper our nation by doing each other’s laundry. To conceal the loss of manufacturing jobs, the government has legislated into existence thousands upon thousands of useless paper-shuffling jobs, and declared their necessity by fiat. The most obvious is the income tax which has been so obfuscated by the government that half of you had to rely on an outside expert to figure out just what all those incomprehensible words really meant. By this device, the government has replaced those jobs that made products to sell with an equal number of jobs that produce nothing whatsoever of any worth, except to keep the unemployment figures down. This over-burdening of the American people with gratuitous regulations and paperwork has accomplished nothing except to obfuscate the loss of manufacturing jobs, and to transform the American character from innovators and inventors creating new products to that of minor clerks, peeking under each other’s seat cushions for lost change.

So, with most of our manufacturing now gone, just what DOES America make? Trouble, mostly. With 4% of the world’s population and 18% of the economy, we have 50% of all the lawyers, all looking to make a killing by looting those few industries that still call America home (like Microsoft). Kids don’t want to be scientists and engineers; they’ve seen how little such people are valued in our country. Based on recent history, kids see the “big bucks” are in corporate law, specifically investment banking, leveraged buyouts, greenmail, junk bonds, in short what other countries describe as “trying to make money grow by shaking it side to side”.

With America’s ability to actually produce products that can compete on the open world market in decline, it’s no wonder that the balance of trade is the problem it is. Nobody buys our export products because we just don’t make that many any more, and like or not, we have to buy our appliances from the people who make them, which are NOT Americans. (When Ampex invented the VCR, they didn’t even bother trying to find an American company to make it, they immediately sold the rights to Japan).

So, what do all these countries on the plus side of the trade imbalance do with their surplus billions? Well, they have been loaning it right back to us!

Our government engages in a practice politely called “deficit spending”. Other terms which would aptly describe the practice include “counterfeiting” and “check kiting”, but it all comes down to the same thing; spending money one does not actually have.

What would be a jailable offense for a normal citizen was rendered legal for the government by the Federal Reserve Act. This was not a popular piece of legislation. In fact the Democrats had campaigned in 1912 on a platform of rejection of the creation of a private bank in charge of a fiat money system. Nevertheless, on December 23, 1913, taking advantage of the absence of congressmen opposed to the creation of a fiat monetary system during the Christmas break, the Federal Reserve Act was passed.

Years later, during the great depression, Congressman Louis T. McFadden (who served twelve years as Chairman of the Committee on Banking and Currency) asked for congressional investigations of criminal conspiracy to establish the privately owned ‘Federal Reserve System’. He requested impeachment of Federal officers who had violated oaths of office both in establishing and directing the Federal Reserve — imploring Congress to investigate an incredible scope of overt criminal acts by the Federal Reserve Board and Federal Reserve Banks. McFadden even suggested that the Federal Reserve deliberately triggered the great stock market crash of 1929, in order to eventually force the passage of the Emergency Banking Act of March 9, 1933, which suspended the gold standard.

In describing the FED, McFadden remarked in the Congressional Record, House pages 1295 and 1296 on June 10, 1932:

“Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal reserve banks. The Federal Reserve Board, a Government Board, has cheated the Government of the United States and he people of the United States out of enough money to pay the national debt. The depredations and the iniquities of the Federal Reserve Board and the Federal reserve banks acting together have cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our Government. It has done this through the misadministration of that law by which the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it”.

Why all the fuss over the gold standard?

Well it goes back to the original Founding Fathers and the meaning of the word “dollar”. “Dollar” is actually a weight measure of silver, 371.25 grains, to be exact. Our American silver dollars are actually heavier, since other metals were added for durability. But that 371.25 grains of silver WAS the dollar, matching in weight an unbroken chain of accepted monetary units that reached back through the Spanish Milled Dollar, the Dutch Daller, back to the German Thaler; the product of a silver mine which sold it’s product in coins of an exact weight. The Coinage Act of 1792 defined our dollar to exactly match in weight the silver dollars in use around the world, and then defined the gold dollar to be that amount of gold which would equal the worth of silver in a silver dollar, 24.75 grains, 1/15 the weight of the silver in a silver dollar.

So, what’s wrong with this? Nothing really. When you, as a citizen, hold a silver dollar or a gold dollar in our hand, you hold that actual worth of metal. Nothing the government can do can change the worth of the money in your control.

Take the Roman Silver Denarius pictured above. The Roman Empire is long gone, but the money that Rome issued still has worth because the coins themselves had inherent worth. Long after the collapse of the empire, Roman silver coins were still used as money, because the silver in the coin itself did not depend on the issuing government for its worth.

Of course, carrying around too much coin can be bothersome, so many nation, including our own, issued paper notes as a convenience. But that paper currency of the nation was just a convenience. The gold and silver certificates were merely “claim checks” for the equivalent weight of gold or silver held in the treasury, and which would be produced on demand when the certificate was presented. But in the end, the lawful dollar of the United States was 371.25 in silver, or 24.75 grains of gold.

The problem with this system from the point of view of the government or the banks is that it limits the amount of money they can work with. When the bank runs out of silver or gold (or the equivalent certificates) it can no longer lend any more money with which to earn interest. When the government runs out of gold or silver (or the equivalent certificates) it can no longer spend money (just like the rest of us).

The immediate effect of ending the gold standard was that with the paper dollar no longer legally dependent on 371.25 in silver or 24.75 grains of gold, more paper dollars (now called “Federal Reserve Notes”) could be printed, their worth no longer under the control of the citizens but under the control of the issuing central bank, based on the total number of dollars printed (or created as credit lines). The more dollars which are created out of thin air, the less each one is worth.

A federal Reserve Note.

The swindle of the system is simple. The Federal Reserve Bank hires the US Treasury to print up some money. The Federal Reserve only actually pays the treasury for the cost of the printing, they do NOT pay $1 for each 1$ printed. But the Federal Reserve turns around and loans out that money (or credit line) to banks at full face value, those banks which have exhausted their deposits then loan that Federal Reserve fiat money to you, and you must repay it in the full dollar value (plus interest) in work product, even though the Federal Reserve printed that money for pennies, or created it out of thin air in a computer.

As the Federal Reserve overprints more money, the money supply inflates, and too much money starts chasing too few goods and services, which means prices go up. But contrary to the charade put on by the Federal Reserve, inflation doesn’t just come and go due to some arcane sorcery. The Federal Reserve can halt inflation any time it wants to by simply shutting down those printing presses. It therefore follows that both inflation and recession are fully under the control of the Federal Reserve.

Over time, that excess of printing has destroyed the value of that dollar you think you have. If you want to know by just how much, go out and try to purchase 371.25 grains of silver right now. Usually, the deterioration is gradual. Sometimes, it has to be obvious, such as the 1985 devaluation (done to halt the trade imbalance) which triggered the Japanese real-estate grab in this country.

Many politicians have attempted to reverse this process.


John F. Kennedy issued an Executive Order 11110, requiring the Treasury Department to start printing and issuing silver certificates for the silver then remaining in the US Treasury.

Kennedy decided that by returning to the constitution, which states that only Congress shall coin and regulate money, the soaring national debt could be reduced by not paying interest to the bankers of the Federal Reserve System, who print paper money then loan it to the government at interest. This was the reason he signed Executive Order 11110 which called for the issuance of $4,292,893,815 in United States Notes through the U.S. Treasury rather than the traditional Federal Reserve System.

John F. Kennedy’s United States Note.

That same day, Kennedy signed a bill changing the backing of one and two dollar bills from silver to gold, adding strength to the weakened U.S. currency.


Kennedy’s comptroller of the currency, James J. Saxon, had been at odds with the powerful Federal Reserve Board for some time, encouraging broader investment and lending powers for banks that were not part of the Federal Reserve system. Saxon also had decided that non-Reserve banks could underwrite state and local general obligation bonds, again weakening the dominant Federal Reserve banks”.


Kennedy’s E.O. was never implemented following his assassination, and shortly afterwards, United States silver coins were taken out of circulation and replaced with the copper clad slugs in use today. These two events, the failure to print new silver certificates, and the substitution of worthless slugs for our silver coins, may explain why the Warren Commission included on its panel John J. McCloy, a man with no experience in crime, law enforcement, or national security, but who had been the President of the Chase Manhattan Bank.


It should be noted that the banks themselves are still using the gold standard. Accounts are still settled between major national banks by the transfer of gold bullion.

So here we are with a bank that legally counterfeits the money you borrow but expects a full value (plus interest) repayment. But what’s good for the Federal Reserve is good for the government itself, and this is where we get back into that funny word “deficit spending”. The government spends more money than it takes in. It has for many years now. The Federal Reserve, being the only lawful source of this fiat money, prints up the excess cash the government needs (or manufactures a credit line in a computer). This extra cash is treated as a loan, in order to keep the government overspending from further eroding the worth of the dollar in the world market. The government (meaning the taxpayers) is on the hook for the full face value, plus interest.

But there’s another problem. The government is borrowing so much money that it drives the interest rates up! You pay MORE interest on your mortgage, car loan, and credit cards, because the government cannot balance its books. That extra interest you pay is therefore another hidden tax. The government, in its “generosity”, gives you a tax credit on mortgage interest that is higher because of their own borrowing!

During the 80s, as exports dropped, and jobs moved from manufacturing to lower paying “service sector” jobs, the US tax base declined. In order to keep the jobless rate from rising, a massive defense program called the Strategic Defense Initiative was cranked up, but since this program produced no exportable product, it produced no taxable sales revenues, and hence the money poured into the project accelerated the government decline into debt. Because manufacturing was on the decline, fewer start-up companies were approaching the lending institutions, so the government loosened up the rules (while increasing the insurable deposit limit) to allow “investments” in more high risk ventures, most of which turned out to be frauds, or worse, money laundering operations for drug criminals.

This includes Whitewater, Flowerwood, and Castle Grande. Despite shifting the S&L loss primarily onto the taxpayers (to reassure foreign investors that the taxpayers still made America a safe place to park their surplus cash) the government plunged further into debt.

In the 12 years of the Reagan/Bush administrations, the United States went from being the world’s largest creditor nation to the world’s largest debtor. Many of those nations which had enjoyed huge trade surpluses started loaning that profit back to the United States with the stipulation that we work on our manufacturing, clean up our infrastructure, raise taxes, in short, clean up our act, so that investment in America makes sense! However, we didn’t quite do that.

There has been some shuffling around to try to conceal the real scope of the problem. Over the last several years, the Federal Government has been sending less tax money back to the states than it takes in in taxes. This means that the states have to borrow MORE money to cover their obligations. The net result is that the debt is being transferred to the states, to conceal its true size. The government will easily admit to a $3 trillion “publicly held” debt, grudgingly concede that it’s “unfunded liability” brings that number to almost $7 trillion, but the real hard truth is that total government debt, state and federal, is now over $14 trillion dollars, or about 50,000 for every man, woman, and child inside the United States. Since 1960, the taxpayers have shelled out $15 trillion in interest payments alone, while the principal continues to rise.

Yet another stunt the government has pulled is to “borrow” from the various trust funds under its control. Some $2 billion has vanished from the trust accounts of Native Americans (presently suing the Departments of the Interior and Treasury), and nearly ¾ of a TRILLION dollars has been removed from your Social Security retirement trust fund and spent in the last 8 years.

If the government has to borrow your retirement money when things are supposed to be so good, under what conditions can it repay the money? Or is that government IOU in your retirement account merely a promise to either tax you a second time or stiff you on the benefits you thought you were paying for?

In the last 8 years, during what are supposed to be record setting good times, the Federal government has nearly DOUBLED its debt load. The estimated interest on the debt equals all the personal income tax paid by all Americans. Our government is so deep in debt that it cannot get out.

This brings us to the issue of collateral. We’ve borrowed so much money the lenders are getting nervous. Back during the Johnson administration Charles DeGaulle demanded the United States collateralize the loans owed to France in gold and started carting out the bullion from the treasury. This caused several other nations to demand the same and President Nixon had to slam the gold window closed or the treasury would have been emptied, since the United States was even then in debt for more money than the treasury could cover in gold.

But Nixon had to collateralize that debt somehow, and he hit upon the plan of quietly setting aside huge tracts of American land with their mineral rights in reserve to cover the outstanding debts. But since the American people were already angered over the war in Vietnam, Nixon couldn’t very well admit that he was apportioning off chunks of the United States to the holders of foreign debt. So, Nixon invented the Environmental Protection Agency and passed draconian environmental laws which served to grab land with vast natural resources away from the owners and lock it away, and even more, prove to the holders of the foreign debt that US citizens were not drilling. mining, or otherwise developing those resources. From that day to this, as the government sinks deeper into debt, the government grabs more and more land, declares it a wilderness or “roadless area” or “heritage river” or “wetlands” or any one of over a dozen other such obfuscated labels, but in the end the result is the same. We The People may not use the land, in many cases are not even allowed to enter the land.

This is not about conservation, it is about collateral. YOUR land is being stolen by the government and used to secure loans the government really had no business taking out in the first place. Given that the government cannot get out of debt, and is collateralizing more and more land to avoid foreclosure, the day is not long off when the people of the United States will one day wake up and discover they are no longer citizens, but tenants.

The following map shows the current extent of all lands grabbed by the government under the guise of environmentalism.

In short, the United States is in deep trouble. We have lost a huge amount of our manufacturing capacity, and those products we still make do not compete well on the world market, despite the steady devaluation of the dollar. In short we have vast debts to pay and little to pay them with. Like the foolish Farmer we have sold the machinery that allowed us to prosper, and we stand around shaking our investment portfolios back and forth in the hopes that the money inside will somehow grow all by itself. It won’t. It never has. The very best that can be said is that money gets moved from one person to the other.

Those nations and banks to whom we owe money have been very patient indeed with us. They know that our economies are so tightly entwined that what hurts America will hurt them. But sooner or later, possibly after a market crash, someone, in order to pay their own debts, will demand their loans to the United States be paid. Rather than get caught with “bad paper”, there will be a run on the United States government.

In addition to the government debt of $14 trillion, our businesses are home to trillions more in foreign investment, kept here by the promise that the American taxpayer will be made to cover all losses. But with our manufacturing in decline and our schools producing far more lawyers than anything else, it should be obvious to the prudent observer that the American taxpayer, even if so inclined, may not be able to cover the losses of their own government, let alone a foreign investor. That has to be making them nervous as well.

This brings us to the “equities markets”, most notably the stock market. Over the last several years a constant media harangue has assured us that the soaring numbers of the stock market are the sole measure of how good our economy is. But close examination of those high-priced stocks reveals that most are heavily over-valued; their price the result of market forces rather than underlying worth (earnings ability)., as one example, has had a terrific run-up of its stock price, even though the company itself has yet to show a profit.

The government has admitted to using covert means to prevent a market downturn; to keep the stock prices at an artificially high and overvalued level, in order to wave those impressive numbers about as “proof” that everything is okay so that the taxpayers go back to work and pay more taxes. But in order to keep those stock prices up above their actual worth, demand must be maintained to keep the prices high. In other words, NEW investors must constantly be brought into the bottom of the pyramid to keep the prices of the stocks at the top from dropping. Hence the onslaught of commercials luring neophyte investors into the stock market via “online trading”. Like any Ponzi scheme, the stock market will collapse when no more new buyers can be dragged in at the bottom. As the market starts to stutter, governments (most recently Britain) have moved to dump huge reserves of gold onto the world market to depress gold prices and deter investors from deserting the stock market for gold.

Some years back I worked on the film version of “The Day The Bubble Burst”, and in between playing a stock broker, I got to spend some time with the show’s consultant, Mr. William Hupt, who had been on the trading floor in 1929 as it all fell apart. He still had, framed, that last strip of ticker tape that ushered in the Great Depression, and he shared some stories which have a bearing on what is going on today.

The first story Bill shared is that there had been early indications of a dangerously over-valued market, running to deep on margin, and like the Plunge Protection Team, the largest investment houses, in particular the House of Morgan, attempted to reverse the early corrections by purchasing large blocks of stock in order to create market demand and drive the prices back up. It worked all but the last time.

The second story Bill shared was that a friend of his, riding up to his office in September of 1929, overheard the elevator operator chatting about his own stock portfolio, and his investments. Something about that image of an elevator operator playing the market set off warning signals, and Bill’s friend immediately liquidated his entire portfolio, just in time to miss the great crash. Many people, including the actor Charlie Chaplin, had recognized the “recruitment” of that segment of society that did NOT have risk capital as new investors as a desperate attempt to prop up an overvalued market, and got out in time to save their own personal fortunes.

In the end, there is no such thing as a free lunch. You cannot make money grow in value by shaking it back and forth from one bank to another. You cannot prosper a nation by doing each other’s laundry, or filling out their government mandated and greatly obfuscated paperwork, or flinging stock certificates around which may have as little real worth as Federal Reserve Notes. To make money, to show a profit, you must make products that somebody else wants to buy, and sadly, that is a capability the United States has allowed to slip away in great measure. The “service economy” was political propaganda to make the public believe that the decline of our manufacturing ability was a good thing.

Our nation is broke, bankrupt, and having sold much of its machinery and technology (or given it away to political donors), is unable to easily return to those endeavors which once made our nation great. Our infrastructure is in decay (the percentage of roads in the US with major damage doubled last year alone), our public schools unable to produce a workforce able to function in a high-tech manufacturing environment, and those managers end engineers with manufacturing experience have in great part been lured away to other nations. The severity of our total government debt has reached a point where the promise that the taxpayers can be made to cover any foreign investment loss rings hollow, because we can no longer pay the debts our government has now.

Our nation is in trouble. We don’t make many of the products we used to make. Consequently we don’t have the products to sell that we used to. We don’t even make most of the products we need ourselves (like that computer you’re staring at this very moment). Result: we have a massive trade imbalance. Cash is flowing out of the nation, and it’s not coming back in anywhere near as fast. There’s no way to spin it; that is a major problem. Our nation is becoming poorer, it is hopelessly in debt, and all the artificial escalation of stock prices cannot conceal that.

And as the artificially pumped up stock market continues to decline, the true scale of the economic horror which is the product of decades of government corruption, will become apparent to all. At that point you the average American citizen could become the terrorist’s and your activities will need to be tagged and tracked with your new micro chipped ID card.

This assures your obedience to an out of control taxation policy and possibly even discourage citizens against any type of organized rebellion to enforce the US Constitution.

30 Signs That The U S Economy Is About To Go Into The Toilet


September 19, 2011

By Michael Snyder – BLN Contributing Writer

If you think the U.S. economy is bad now, just wait for a few months.  Things are about to become absolutely nightmarish.  None of the long-term economic trends that are hollowing out our economy have been addressed and more bad economic news seems to come out virtually every single day.  Now there is constant talk of the “next recession” in the mainstream media.  But did the last recession ever truly end?  The number of good jobs continues to decline, more stores are closing, incomes continue to go down, credit card debt and student loan debt are soaring, the housing market resembles a corpse, the number of Americans living in poverty continues to rise and government debt is at unprecedented levels.  We are losing blood fast, and almost all of our leaders are either too corrupt or too incompetent to be able to do anything about it.  The U.S. economy really and truly is about to go into the toilet, and if something is not done very quickly we are going to experience a complete and total economic disaster in this nation.

Americans have been promised over and over that this economic downturn is just “temporary” and that things will return to normal soon.  During this upcoming election cycle, the Democrats will swear that they have all the answers and that if we just elect them everything will be okay.  The Republicans will also swear that they have all the answers and that if we just elect them everything will be okay.

Well, both sides are lying.  The economic plans of both major political parties are a joke.  Neither of them can restore economic prosperity to this nation.

Our politicians could delay the coming economic collapse by borrowing gigantic piles of money and pumping all of that cash into the economy.  But stealing from our children and our grandchildren is not exactly sound economic policy.

Yes, the U.S. economy is in bad shape right now, but things are about to get even worse.  The long-term problems that are destroying our economy have not been fixed, and the leaks in our ship are going to continue to grow.

The following are 30 signs that the U.S. economy is about to go into the toilet….

#1 An increasing number of unemployed Americans have become so desperate that they have started to look for work overseas.  For example, the number of Americans that are submitting applications for temporary work visas in Canada has approximately doubled since 2008.  Other Americans are willing to learn foreign languages and travel to the other side of the world if that is what it takes to land a decent job.  Just consider the following quote from a recent USA Today report….

Job placement firms are reporting a surge in American worker interest in booming economies such as Hong Kong, Singapore, China and, increasingly, India. Hunt Partners, an executive search firm, estimates that it’s getting 50% to 100% more unsolicited résumés from Americans looking for Asia-based positions today than before the recession.

#2 When Barack Obama first took office, the official U.S. unemployment rate was 7.6 percent.  Today it is 9.1 percent.

#3 The number of Americans that are concerned that they will lose their jobs continues to hover near record highs.  According to Gallup, 30 percent of all employed Americans are worried that they will soon be laid off.

#4 After three straight years of very high unemployment, you can feel frustration and desperation in the air almost everywhere that you go.  Many unemployed Americans are now at the end of their ropes.  The following is from a testimonial that was recently posted on The Atlantic….

The most difficult part of the job search is:

1. that I don’t live near a factory or outsource outlet in China, India, or Malaysia.

2. trying not to appear desperate for a job when I am, in fact, quite desperate for a job.

3. that I am subject to everyone’s advice on how to get a job, but no real job leads.

4. that I am reminded that having a good job is not an entitlement.

5. that when I become depressed from my job search, I’m told told to cheer up or else give a bad vibe to prospective employers … yet when I become happy through non-search related activities, I am reminded that I should be looking for work

7. that when I confide to friends and family that I have “given up” to pursue more fruitful interests,  it elicits a crushing look of disbelief, disappointment, and disgust

8. waiting for permission to give up.

#5 The percentage of American men that are employed continues to plummet.  In July, only63.5 percent of all men in the United States had a job.  Since 1948, that number has only been lower one time (63.3 percent in December 2009).

#6 Back in the 1950s, manufacturing accounted for about 28 percent of U.S. GDP.  Last year, it accounted for just 11.7 percent.  Meanwhile, manufacturing now accounts for about 25 percentof GDP in China and they now actually have more factory production each year than we do.  Sadly, Barack Obama is pushing for even more trade agreements that will send millions more of our jobs overseas.

#7 The percentage of Americans that are working low paying jobs continues to relentlessly march upwards.  Back in 1980, less than 30% of all jobs in the United States were low income jobs.  Today, more than 40% of all jobs in the United States are low income jobs.

#8 According to John Williams of, after you add in all short-term discouraged workers, all long-term discouraged workers and all Americans that are working part-time because they cannot find full-time employment, the real unemployment rate should be approximately 23 percent.

#9 We are starting to see another huge wave of store closings and layoffs.  For example, the parent company of Payless stores has announced that it will be permanently closing 475 stores.  Borders is in the process of closing every single one of its 399 stores.  Also, Bank of America has just announced that it will be closing about 600 branches, and that could result in the loss of about 30,000 good jobs.

#10 Median household income has fallen for three years in a row.

#11 Americans are really starting to rack up consumer debt once again.  According to Time Magazine, U.S. consumers are on pace to collectively add 54 billion dollars in credit card debt in 2011.

#12 Student loan defaults are rising very sharply. Just consider the following excerpt from a recent New York Times article….

The share of federal student loan defaults rose sharply last year, especially at for-profit colleges and universities, where 15 percent of borrowers defaulted in the first two years of repayment, up from 11.6 percent the previous year.

#13 According to a chart in The Economist, whenever the number of newspaper articles in the Financial Times and the Wall Street Journal that mention the word “recession” goes over 1,500 in a particular quarter, the U.S. economy almost always goes into a recession.

#14 The U.S. housing crash just continues to get worse.  The index of home builder sentiment put out by the National Association of Home Builders fell once again during the month of September.  With such a glut of unsold foreclosed homes on the market, it is making things really hard of home builders.  Things have gotten so bad that even the U.S. government now owns nearly a quarter of a million foreclosed homes.  The impact of this housing nightmare on families has been absolutely devastating.  Just check out what a recent Time Magazine articlehad to say about what has been going on in California….

The impact on children has been brutal: since 2007, 7% of the state’s children have had a foreclosure process started on their homes, the fourth-highest level in the nation, according to a study released this month by the Annie E. Casey Foundation.

#15 Many believe that due to much tighter lending standards, it is now harder to be approved for a mortgage than at any other time since World War II.  This is absolutely crushing the housing market.

#16 Most Americans don’t seem to expect housing prices to recover for an extended period of time.  One recent survey found that 54 percent of Americans believe that there will not be a housing recovery until “2014 or later“.

#17 The combined debt of the largest GSEs (Fannie Mae, Freddie Mac and Sallie Mae) has increased from 3.2 trillion in 2008 to a whopping 6.4 trillion in 2011.  If that debt goes bad, U.S. taxpayers will be left holding the bill.

#18 There are now nearly 50 million Americans that do not have health insurance, and the percentage of Americans covered by employer-based health plans has fallen for 11 years in a row.  Meanwhile, Americans now spend about 3 times as much on health care as they did back in 1990.

#19 The Postal Service has publicly announced that it is “on the verge” of financial collapse.

#20 The number of small businesses continues to fall.  I recently noted this fact on The American Dream Blog….

The number of “self-employed” Americans continues to rapidly shrink.  According the Bureau of Labor Statistics, 16.6 million Americans were self-employed back in December 2006.  Today, that number has shrunk to 14.5 million.  Even though we have 14 million unemployed people in this country and jobs are incredibly difficult to come by, the number of people trying to work for themselves continues to decrease because the environment for small businesses in this country has become so incredibly toxic.

#21 American consumers have become tremendously pessimistic.  According to one recent survey, 61 percent of all Americans believe that they will not return to their “pre-recession” lifestyles until at least 2014.  According to a different recent survey, 39 percent of Americansactually believe that the U.S. economy has now entered a “permanent decline”.

#22 Many U.S. investors certainly seem to believe that trouble is coming.  According to CNN, last month the number of bets against the S&P 500 was the highest that we have seen in about a year.

#23 The number of U.S. households that are “doubling up” continues to grow.  According to the U.S. Census Bureau, the number of combined households has increased by 10.7 percent since 2007.

#24 When Barack Obama moved into the White House, the average price of a gallon of gasoline in the United States was $1.83.  Today it is $3.58.

#25 The number of Americans living in poverty grew by 2.6 million last year.  That was thelargest increase since the U.S. government began calculating poverty figures back in 1959.

#26 Back in the year 2000, 11.3% of all Americans were living in poverty.  Today, 15.1% of all Americans are living in poverty.

#27 On Barack Obama’s first day on the job, there were about 32 million Americans on food stamps.  Today, there are more than 45 million Americans on food stamps.

#28 If there is a financial collapse in Europe, that will definitely plunge us into another recession.  Right now, things do not look promising.  At this point, headlines all over the world are proclaiming that Greece is dangerously close to defaulting.

#29 At some point soon, investors all over the globe may decide that it is time to start dumping U.S. government debt.  For example, Chinese officials are now openly talking about the need to “liquidate” their holdings of U.S. Treasuries.

#30 The U.S. national debt continues to explode in size and spiral out of control.  According to Professor Laurence J. Kotlikoff, the U.S. “fiscal gap” increased by about 6 trillion dollars last year.  In fact, Kotlikoff makes a compelling argument that Greece is actually in better shape financially than the United States is.

Do you now understand how much trouble we are in?

The long-term trends that are destroying us continue to get worse.

The United States is steamrolling directly toward an economic collapse.

When this economy hits bottom and splatters all over the place, it is not going to be easy to fix.

The America that we know today is going to be wiped out by a gigantic mountain of debt and by the consequences of decades of really bad decisions.

We were handed the keys to the greatest economic machine in the history of the world and we have wrecked it.

So prepare for really, really hard times ahead.

The era of endless prosperity is ending.

Next comes the pain.


Are the Tribes of Europe Ready to Explode?




Monday, September 26, 2011 – by Staff Report


The Greek tragedy: no money, no hope … Despairing middle classes could be the biggest threat to Greece’s future, writes Paul Mason in Athens … Dmitris Andreou made the last sale out of his small estate agents business in June. His wife Mary, makes her living preparing high-school students for English exams. But her living has dried up. Their savings are exhausted, their disposable income has dropped by about 50 per cent in two years, and they are angry. – UK Telegraph

Dominant Social Theme: Once the Greeks – and the PIGS generally – get used to austerity, the Eurozone will rebound.

Free-Market Analysis: This story is interesting because it is written by a mainstream journalist and actually tells the truth about Greece – that Greece, or its citizens, are ready to explode. One can extrapolate from Greece to the rest of the EU, or at least its Southern half. Push “austerity” a little further, as a solution to the “sovereign debt” crisis and all Europe may begin to detonate.

It is not just the Southern PIGS which are reeling. It is Northern Europe, too. The Northerners, especially Germany, do not want to pay for Southern profligacy. And Southern Europeans are well aware the fault does not lie with them, especially, but with elite political and financial interests. It was not the average Greek or Spaniard who borrowed the money that has put the South in debt. The analyses of the European situation make it sound as if each individual was guilty. Not true. The Anglosphere banks arranged the lines of credit that are throttling the PIGS now.

The politicians and private interests accepted the money and buried it in Swiss bank accounts; today, everyone else has to pay. And Mary and Dmitris are well aware of who profited from the explosion of leverage in the 2000s, and who has been tasked with the clean-up.

It is even worse. What is unsaid in the article, despite its bluntness, is that the leverage was calculated to do exactly what it has done. The political and financial classes were in a sense tasked with creating what is now called the “sovereign” debt crisis and they did so deliberately. This is never mentioned in analyses of the situation. We only read glib vignettes about austerity and predictable IMFsolutions having to do with higher taxes, reduced public benefits, a shrinking public sector and lower compensation all around, for those who still have jobs or businesses anyway.

While we often cover the unraveling EU and euro as if it is a kind of force of economic nature, we’ve also been careful on many occasions to point out that what occurred in Europe was instigated by financial powers at the highest level. And for years, Eurocrats have been talking about how a financial crisis was bound to occur, and that it would be used as a pretext to build a political union out of an economic one.

Just the other day, we reported on an article in the UK Telegraph that presented the latest meme – that the “guilty men” of Europe and Britain – the ones that had backed the EU project most enthusiastically – were going to walk away from the mess without ramifications.

Our problem with the article was that it didn’t go far enough. There is an Anglosphere elite and it has coldly and forcefully built the EU from the ground up. These great central banking families that want one-world government are behind the current mess, but as is always the case, those who are really in charge will not be written about, or not by the mainstream media.

We did find, in roaming the Internet, this interesting article by one of our favorite mainstream reporters, Ambrose Evans-Pritchard, written way back in 2000. He makes it clear that Washington and its spy agencies were behind the EU project.

Neither the CIA nor other US intel agencies – at the very top – report to Washington. They actually likely report to London’s “City,” and to the great banking families and their political, military, religious and monetary enablers. That’s why we’ve written on numerous occasions that blaming the EU on Germany or the “Nazis” is just so much misdirection. Here’s an excerpt from Ambrose Evans-Pritchard’s UK Telegraph article, circa September 2000:

Euro-federalists financed by US spy chiefs … DECLASSIFIED … American government documents show that the US intelligence community ran a campaign in the Fifties and Sixties to build momentum for a united Europe. It funded and directed the European federalist movement. The documents confirm suspicions voiced at the time that America was working aggressively behind the scenes to push Britain into a European state.

One memorandum, dated July 26, 1950, gives instructions for a campaign to promote a fully fledged European parliament. It is signed by Gen William J Donovan, head of the American wartime Office of Strategic Services, precursor of the CIA. The documents were found by Joshua Paul, a researcher at Georgetown University in Washington. They include files released by the US National Archives. Washington’s main tool for shaping the European agenda was the American Committee for a United Europe, created in 1948.

The chairman was Donovan, ostensibly a private lawyer by then. The vice-chairman was Allen Dulles, the CIA director in the Fifties. The board included Walter Bedell Smith, the CIA’s first director, and a roster of ex-OSS figures and officials who moved in and out of the CIA. The documents show that ACUE financed the European Movement, the most important federalist organization in the post-war years.

In 1958, for example, it provided 53.5 per cent of the movement’s funds. The European Youth Campaign, an arm of the European Movement, was wholly funded and controlled by Washington. The Belgian director, Baron Boel, received monthly payments into a special account. When the head of the European Movement, Polish-born Joseph Retinger, bridled at this degree of American control and tried to raise money in Europe, he was quickly reprimanded …

These days Evans-Pritchard sticks more or less to the larger UK Telegraph “party line,” which has to do with the unraveling of the EU rather than who was behind the thing to begin with. But understanding the reality of the EU’s formation is important, too. It was set up as a building block of world government and it was likely designed to fail in order to create the impetus for a political union.

The article about Greece – with which we began our analysis (see above) – shows clearly how the elite centralizing strategy is being implemented. But there has been a miscalculation. The Internet was not considered within these plans, which go back decades, perhaps even a century or longer.

Pre-Internet, what’s happening in the EU would have been buried under mainstream media misdirection. People might not have understood the larger forces at work. But the EU unraveling along with much else has played out under the merciless glare of the alternative press, and the European tribes are aware of the manipulations that are taking place.

It is realization of these manipulations that informs the article, which is a surprisingly good piece of reporting. It is written by Paul Mason, BBC Newsnight’s Economics Editor, who is broadcasting regularly from Greece, and it seems to have concentrated his mind, at least for a while, on what’s actually happening.

The article is derived from an interview with a middle class Greek couple that is falling into poverty along with, it seems, the entire Greek middle class. They are furious. “We would like to see the politicians executed,” says the woman, Maria, “not smiling.”

This article also confirms our past analyses. So much nonsense has been written about Greece and Europe and appears in the mainstream media every day. The generalizations are vast and depersonalize the problem but what’s happening in Europe is affecting individuals.

We’ve written that once the “new normal” became fully evident, once it was clear that the good times of the 20th Century were not going to return, the tribes of Europe – who are far more violent than they have seemed to be, post World War II – would not put up with it. We predicted that “Europe” – the EU – might not survive (neither the currency, nor the union).

The problems are happening to people, individual people, and it is these people, ultimately, who will formulate a response, not “Greece,” not politicians, not “working groups” – not even the IMF or ECB. Here’s some more from Mason’s article:

“Some days we only buy the basics and a few days lately we were not able to buy even those. We have to count our cents to decide between buying bread, milk or butter,” says Mary. “Some days are better, but some are difficult. We don’t buy clothes any more. People don’t go out. There is simply no money around out there. “But what’s happening in living rooms like theirs presents the bigger danger to the future of Greece. People are switching off: from politics, from the mass media, from social life. “We would like to see the politicians executed,” says Maria, not smiling as she delivers the joke. “Most people are saying this: politicians deserve capital punishment – at the Greek equivalent of Traitors’ Gate. It would be a nice time for politicians to be heroes, to stand up and defend the people. But they’re not.”

“We can’t watch the television news any more,” says Dmitris, shaking his head. “If you watch it, with the constant uncertainty, it can make your psychology very low. It’s like a nightmare we can’t wake up from. Perhaps it’s fortunate that we’ve had to cancel our cable TV subscription. I don’t trust the media any more: I get all my news from the internet.”

Mason writes that that the helplessness that Mary and Dmitris evince can easily turn to rage, giving rise to violence. “As a result Greek politicians have started to worry about something called ‘anomie’ – a pervasive listlessness, low-level social conflict and the erosion of bonds between the country’s citizens and the state. “Mason, to his credit, makes the linkage between that helplessness and what may be yet to come. “Over the past six months,” he writes, “I’ve stood in the middle of Athenian crowds so furious that they will withstand tear gas and endure near-lethal stampedes to make their point …

“What’s been obvious, each time, is the ordinariness of the people involved – bank clerks, interior designers, even a concert pianist once, their faces painted with alkaline liquid against the sting of the gas. But it is this seething anger of those who have never been on a demo that is really frightening – because we have no model for what happens if the middle class of a developed country simply switches off from politics and gives up hope. Not since the 1930s, anyway.”

None of this was accidental. How could it be? The EU was not an accident. Central banking is not happenstance. The “crisis” that now affects the EU was long anticipated and was intended to build a closer political union. What was NOT anticipated, however, was the spread of electronic communication and the eventual rise of what we now call the Internet Reformation.

Conclusion: The knowledge of the manipulations by the elite and their enablers are bound to have ramifications beyond what has yet been seen. This is the crux issue of what is occurring. The manipulations that raised the EU, and have now brought it down, were supposed to be secret. But what happens if everyone knows?


Those of you who have been following this site and reading the articles should know by now that America is just a spoke in the wheel of destruction that is rolling over the globe. Nation after Nation is in the same path of destruction that we and Europe are in, Complements of our friendly International Bankers. Tuesday may be an extraordinary day, be carefull!




Part 1-2-3



By Timothy N. Baldwin, JD.
September 13, 2011


Most people do not relate politics to philosophy, but that is exactly what they should be doing if they care to know the roots of the fruit growing from the trees of society and government. If they did, more could be done to communicate effectively to both citizen and politician. History tends to prove that public awareness regarding political philosophy grows out of mere circumstances which force basic reaction instead of intellectual response. Fortunately, it appears the United States is due for an awakening of freedom as the philosophy leading us down the road of slavery is at a natural end. But to hasten its end, this series of articles is written to educate the political student and concerned citizen about the origins of philosophy used to get the United States to where it is today.

You have likely heard the American Declaration of Independence described as an expression of new concepts relating to man, politics, and government. Some have gone so far as to describe it as “God-inspired.” Historically, this description is not true. The Declaration of Independence was a reflection of ideas presented by philosophers of the Enlightenment Period (approx. 1630-1800) and in particular, John Locke (1632-1704). Some of the verbiage used by Thomas Jefferson in the Declaration of Independence was all but direct quotes from John Locke’s An Essay Concerning The True Original Extend and End of Civil Government. Some have even accused Thomas Jefferson of plagiarism given its similarities. Their comparisons in the endnote below prove this.[1]

The foundational concepts the American Colonies used to secede from Great Britain were not new. They were specific ideologies expressed and expounded by philosophers for at least 150 years. Ironically, a 150 year period of development of ideology which created the renowned “freest nation on earth” suffocated just after the birth of the United States. No sooner had Enlightenment philosophy created the United States of America in 1776, a new philosophy had infiltrated and eventually revolutionized the politics of the United States. It destroyed the foundational concepts of the “State.” This new philosophy began by a person known as “the Aristotle of the Modern Age”:

Georg Wilheim Friedrich Hegel (1770–1831).

Hegel and his like attempted to prove through the science of philosophy that the STATE was the only way through which subjective freedom is realized. Instead of the State existing for the people, the people existed for the State. Hegel used the word “freedom” often in his work and uplifted its importance. That sounds nice—until you realize his definition of “freedom” meant something entirely different than it did to Enlightenment philosophers and the United States’ founding generation. Likewise, when politicians today use words such as “freedom,” “liberty,” “equality,” etc., their use of these words have a fundamental difference from those who sowed the seeds of liberty from 1630 to 1787.

For those who do not know, Hegel’s work was Karl Marx’ text book. Marx studied Hegel intently and used his philosophy as a basis and justification for his political works on communism. Adolf Hitler likewise used many of Hegel’s ideologies to justify his reign in Germany and the extermination of the Jews who threatened his goals of a strong nation of patriotic Germans.

Before you discount the significance of Hegel’s philosophical work on our own nation’s political philosophy, consider: it is a fact that the public education system in American has been shaped and determined by those who purposely incorporated Hegelian philosophy.[2] In particular, an ardent student and follower of Hegel was William Torrey Harris, who literally changed the landscape of education in the United States. In 1889, Harris was appointed U.S. Commissioner of Education, a position he held until 1906. Since Hegel’s Philosophy of Right was published, “top educators” have incorporated his principles into all of American public education, including the highest learning institutions. It has been deeply woven into the fabric of U.S. society and government ever since.

When one compares and contrasts the ideology of the Enlightenment Period with Hegel’s work, the why’s and how’s of societal, political, and constitutional development become very plain to see. We continually hear the questions from concerned Americans, “how do we take our country back?” and the like. I say, look no further than the comparison of philosophies adopted by the United States higher political and educational institutions during its existence. From 1787 to mid-1800, theEnlightenment philosophy prevailed. From late 1800s to today, the Hegelian prevails.

If you are serious about “getting our country back” to the values that made the United States what it was—the principles which formed the Declaration of Independence, Articles of Confederation, and United States Constitution—you must start with the higher thoughts of cognition: philosophy.

In the forthcoming parts of this article, we will compare and contrast the concepts advanced by Hegel with Enlightenment philosophy. At the conclusion of the article series, we should have an understanding of how to approach politicians and require them to answer these vital questions of philosophy. Whether they realize it or not, they likely fall into one or the other. They should be held accountable to which philosophy their actions and beliefs adhere. And the people are the ones to highlight and expose this. For part two click below.

We will explore the following topics:

  1. A.  Individual Freedom and State Supremacy
    B. Formation and Purpose of the State
    C. Interpreting and Applying the Constitution
    D. Republicanism and Democracy
    E. The People’s Right of Revolution
    F. Religion/Church
    G. War


Individual Freedom and State Supremacy

One of the most fundamental issues concerning the formation of society, government, and federations is the lines of individual freedom verses government power. For the States and United States, there are no two philosophical schools of thought more influential on this matter than the philosophies of the Enlightenment period and Georg Hegel. As shown inPart 1, the United States was emphatically founded on Enlightenment philosophy; but in the late 1800s, Hegel’s philosophy greatly influenced and controlled the minds and actions of American law, politics, and education. However, the two philosophies are hardly compatible and form completely different structures of governance. When both are used by American politicians, collision is inevitable.

Hegel Philosophy

According to Hegel, the existence of “freedom” has its foundation in the “origin in the will” (Georg Hegel, Philosophy of Right, Ed. University of Chicago, Trnsl. T.M. Knox, [Encyclopedia Britannica, Oxford University Press, 1952], 12). The will goes through a process leading to self-consciousness; thus, to “posit any content in himself by his own effort” (13). Hegel calls the destination of this process “individuality” (14). From this individuality, the will creates specific determinations and seeks to realize them (15). In short, the individual attempts to accomplish in real life what his will desires.

Hegel claims that for the individual to objectify his will, his subjective determinations must be made “universal” through an objective forum (17-18), or else, his will remains in a non-rational condition—like an animal. Hegel says, “the absolute goal…of free mind is to make its freedom its object, i.e. to make freedom objective as much in the sense that freedom shall be the rational system of mind, as in the sense that this system shall be the world of immediate actuality” (18). In a word, subjective freedom must have a rational method through which to objectify or make real his freedom. Hegel calls this kind of freedom, Moral Freedom, Idea of Freedom, and Ethical Life.

Hegel determines that this individual realizes this moral freedom through the State. Hegel says, “[t]he State is the actuality of the ethical Idea.” (80). To Hegel, the State is the only means through which individual freedom has any objectivity in individual freedom. He reasons in this manner, “Whoever wills to act in this world of actuality has eo ipso [by the thing itself] submitted himself to its laws and recognized the right of objectivity…In this objective field, the right of [objective] insight is valid as insight into the legal or illegal” (46). Hegel further reasons, “the nature of man consists precisely in the fact that he is essentially something universal, not a being whose knowledge is an abstractly momentary and piecemeal affair” (Ibid). Hegel means, exercising objective Moral Freedom is only accomplished by complying with the laws of the State.

Hegel sets forth premises to justify his position regarding “objective freedom”, stating, “the origin of evil in general is to be found in the mystery of [individual] freedom” (48). In other words, evil arises out of the subjective will without the State’s laws to determine whether those actions comply with objective freedom (i.e. legal or illegal). All individual freedom without the State amounts to irrationality, absurdity, and contradiction. In particular, Hegel is extremely sensitive about people in society who might claim their actions comport to a higher law than man’s law (i.e. natural and divine law). In mocking these positions, Hegel touts, “You actually accept a law…and respect it as absolute. So do I, but I go further than you, because I am beyond this law and can make it to suit myself” (54). Of course, this higher law Hegel mocks is the same law upon which the Enlightenment philosophy is based—the foundation of American jurisprudence.

Hegel’s disdain for the Enlightenment philosophy is clear when he states in part, “this babble has made reasonable men just as sick of the words ‘reason,’ ‘enlightenment,’ and ‘right,’ &c., as of the words ‘constitution’ and ‘freedom’.” Hegel believes the Enlightenment philosophy is incredible because it is based upon reason and logic, and not upon the “concept of the State.” Hegel presupposes that since logic is based upon interpretations deduced by human mind, logic will interfere with the concept of the State, which is to objectify subjective freedom. Thus, Hegel believes the Enlightenment philosophy of America’s independence is not only unreasonable and contradictory, but evil because logic cannot and must not get in the way of the “concept of the State.”

To prevent this “evil” in society where people claim a higher law than man’s law, thus abusing their freedom, Hegel concludes, “the ethical order is freedom or the absolute will as what is objective, a circle of necessity whose moments are the ethical powers which regulate the life of individuals” (55, emphasis added). “Ethical freedom” is the STATE, to determine all objective freedom for the individual. Notice as well that Hegel equates “freedom” with the “absolute will” of the State. Thus, to a Hegelian, society is free where the State has absolute control over individuals.

Hegel further states, the State’s power “is an absolute authority and power infinitely more firmly established than the being in nature” (55). Since the power of the State is absolute and its power is infinite, it follows that “these laws and institutions are duties binding on the will of the individual” regardless of logic, reason, and the purposes and ends of society and government (56). The STATE is the end unto itself because only it is reality.

Even more than the individual having a duty to submit to this absolute State authority, Hegel declares that the individual’s destiny “is fulfilledwhen they belong to an actual ethical order [i.e. State], because their conviction of their freedom finds its truth in such an objective order, and it is in an ethical order [i.e. State] that they are actually in possession of their own essence or their own inner universality” (57, emphasis added). Hegel means, an individual is destined to be a subject of a State and his essence as a human is fulfilled by being subject to the absolute will of the State. Upon these premises, Hegel ultimately finds that individual rights are found not in nature or God, but in the State. He says, “by being in the ethical order [i.e. State] a man has rights” (57).

Hegel finds that individuals are completely inferior to the State in all regards: in life, liberty, and property. A “patriot” of the State is one who sees his interests as subservient to the interests of the State; he must act in accordance with all state laws and institutions. Hegel says,

“[a]s the substance of the individual subject, it is his political sentiment [patriotism];…as the substance of the objective world, it is the organism of the state. The political sentiment, patriotism pure and simple, is assured conviction with truth as its basis…In this sense it is simply a product of the institutions subsisting in the state, since rationality is actuallypresent in the state, while action in conformity with these institutions gives rationality its practical proof.” (84, brackets not added).

Clearly stated, Hegel determines that patriotism equates to obedience to the State in all regards. More than a person being patriotic by recognizing his objective freedom through the State, the individual must sacrifice his life, liberty, and property to and for the State. Hegel determines, “[the individual’s] relation [to the State] and the recognition of it is therefore the individual’s substantive duty, the duty to maintain this substantive individuality, i.e. the independence and sovereignty of the state, at the risk and the sacrifice of property and life” (107). Hegel further states that “[s]acrifice on behalf of the individuality of the state is the substantial tie between the state and all its members and so is a universal duty.” (107). Were a person to invoke natural rights granted by God to protect his life, liberty, and property against the State, or were a person to even question the actions or authority of government, Hegel would find that person to be ipso facto unpatriotic.

Quite clearly, under Hegel’s philosophy, the State is absolutely and infinitely supreme; and the individual has a duty to sacrifice his life and property for the State because the individuals’ “objective freedom” cannot exist except by the State. The individual exists for the State; not the State for the individual. This duty to sacrifice one’s life, liberty, and property for the State is universal in time and conditions regardless of whether the State is in a state of war or peace and regardless of constitution. If the State requires the sacrifice, the individual must make the sacrifice; and the State is the sole determiner of its own needs. Put inversely, the State is the sole determiner of which individuals need to sacrifice for the State; and this determination has nothing to do with reason or logic, but only with the “concept of the State.”

By Hegel’s own admission, these ideas contrast sharply to the ones which founded and birthed the United States of America and its constitutions: the Enlightenment Period.

Enlightenment Philosophy

The American Declaration of Independence mirrors Enlightenment philosophy. Even someone who is only vaguely familiar with the Declaration would recognize its principles are incompatible with Hegel’s philosophy. The Declaration recognizes the inalienable rights of life, liberty, and pursuit of happiness. Hegel recognizes no such right. In the Declaration, the State is not the method of obtaining objectivity of freedom, but is the protector of freedom and is ultimately under the control of the people for whose benefit it was created.

These concepts were specifically advanced by Enlightenment philosophy and were described as immutable. Samuel Pufendorf says, “the fundamental laws of nature [are] truth and necessity aris[ing] directly from the very character of human nature; and [are] conclusions…deduced from these principles” (Pufendorf, Two Books of the Elements of Universal Jurisprudence, Ed. Knud Haakonssen, [Liberty Fund, Indianapolis, IN, 2009], 218). Thus expressed in the Declaration, “We hold these truths to be self-evident”. For the American colonies, the belief that God judged the actions of mankind equipped them to secede from Great Britain, given the truth of individual freedom and limitations of State power.

To Hegel, there was no “immutable truths” of right and wrong relative to the State’s judgments and actions. There was only the power of the State. To Hegel, the ultimate judge is not God, as the Declaration declares (“the Supreme Judge of the world for the rectitude of our intentions”). Rather, the “history of the world [is] the world’s court of judgement” (Hegel, Philosophy of Right, 110). As will be seen in this article’s subsequent parts, this Hegelian concept of “history” has a fundamental bearing on how those in political power control the State.

As a fundamental premise of understanding human nature, society, and government, John Locke explains that individual freedom is found in the laws of Nature created by God. Individual freedom is a natural, inherit right granted by the Creator of life and matter. He states that political power (i.e. the State) is founded not upon the “concept of the State” but rather upon this: “all men are naturally in…a state of perfect freedom to order their actions, and dispose of their possessions and persons as they think fit, within the bounds of the law of Nature” (Locke, Concerning Civil Government, 25). Civil liberty was substantively a matter of “life, liberty, health, and indolency of body; and the possession of outward things such as money, houses, furniture, and the like” (Locke, A Letter Concerning Toleration, Ed. Charles Sherman, [D. Appleton-Century Company, 1937], 3). It was a matter of individual freedom. Thus, “no one ought to harm another in his life, health, liberty or possessions” (John Locke,Concerning Civil Government, Ed. Alexander Campbell Fraser, [Oxford University Press, 1952], 26). This law of nature restricts government as well, for at least “they are subject to the Divine sovereignty and the law of nature” (Samuel Pufendorf, Two Books of the Elements of Universal Jurisprudence, 34).

Upon the recognition that God created man, individual freedom contains the right to use the grants of God for the individual’s benefit. Locke states, “for men being all the workmanship of one omnipotent and infinitely wise Maker; all the servants of one sovereign Master, sent into the world by His order and about His business; they are His property, whose workmanship they are made to last during His, not another’s pleasure.” (Locke,Concerning Civil Government, 26). By definition, the State is not the objective form of individual freedom. Enlightenment philosophers acknowledged that the individual, as a workmanship of God, is a moral being, answerable to God primarily and man secondarily. This philosophy acknowledges that God equips individuals with certain rights independent of society and government. The State is not the objectivity of rights, as Hegel proposes. God is.

With this individual freedom, God grants to him certain authority respective of his rights. Samuel Pufendorf recognizes that “[a]uthority over persons and actions which are one’s own is called liberty” (Two Books on the Elements of Universal Jurisprudence, 89). Where no individual authority exists, no individual liberty exists. Thus, were individual freedom to exist only through the power of the State, no liberty would exist at all; it would depend entirely on the State’s arbitrary control or otherwise. To the Enlightenment, individual liberty is a matter of individual ownership sanctioned by God and is not subject to arbitrary control of the State.

Individual freedom, or as referenced in philosophical terms, individual morality, is something imposed upon individuals by God, not the State as Hegel proposes. This individual morality and freedom exists independently of the State. Samuel Pufendorf puts it this way, “[morality] does not derive its origin from the arbitrary imposition of men [i.e. government], but only from the disposition of God himself, who has so formed the nature of man that particular actions of necessity are or are not congruent with this nature” (Two Books of the Elements of Universal Jurisprudence, 24).

So, while government may unjustly interfere with individual freedom, we suffer only while evils are sufferable. At some point, individuals may invoke their right and command of freedom and may do as the Declaration states, “alter or — abolish it, and — institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness.” Without the concept of individual freedom and rights, there is hardly room for John Locke’s definition of tyranny: “tyranny is the exercising of power beyond right” (Concerning Civil Government, 71). Of course, Hegel does not recognize such a definition of tyranny because he does not recognize natural rights of the individual outside of the power of the State. How can the State exceed powers when it is the realization of the individual’s freedom?

This concept of unilaterally executing individual freedom was not new. John Locke stated it clearly in his works as noted in part 1 of this series. Samuel Pufendorf stated the same thing before Thomas Jefferson, saying, “since he to whom sovereignty is given possesses otherwise no right over me, and therefore holds by my mere free will whatever authority he has over me, it is assuredly patent that it rests with me how far I care to admit his sovereignty over me” (Two Books on the Elements of Universal Jurisprudence, 89). Were it not for the supremacy of individual freedom, this right to change, abolish, or secede from government would not be possible. Quite obviously, Enlightenment philosophy rejected what Hegel advocated and placed significant value on the individual as a creation of God with individual freedom.

Tragically, from the late 1800s until today in America, many in the highest levels of education and politics have adopted the principles advocated by Hegel. Many of them have openly admitted this; others not so bold hide their Hegelian beliefs in Enlightenment terminology. These Hegelians have largely influenced the direction of constitutional law and political direction of the United States. Even a shallow study would reveal this, and these subsequent articles will reveal more of this truth.

As a result, the United States has undergone a change in character to the point that it is unrecognizable as the same country. Instead of wanting individual freedom, many Americans prefer government intervention, management, and control—just as Hegel (and Marx) envisioned—in contradiction to foundationsl principles of constitutional republicanism and democracy.

To return to true American principles, citizens and their representatives must reject the Hegelian supposition of State power and authority relative to individual freedom, and once again place preeminence on the value of God’s creation of the individual, who has the right to life, liberty, and pursuit of happiness independent of government.

Furthermore, we must question authority as it has been told to us. We must require our agents to reconcile their positions of constitutional law and politics with the fundamental notion of individual freedom. If their positions do not reconcile with this fundament tenet of American jurisprudence and philosophy, they may be a Hegelian in disguise.

Subsequent articles are forthcoming on the remaining topics, and will be designed to offer the political student with more tools to judge actions with philosophy.



Formation and Purpose of the State

Hegel Philosophy

As discussed in Part 2 of this article series, the State is the objectivity of individual freedom, in Hegel’s view. The State’s power is absolute and supreme in all regards. This objectivity of individual freedom is simultaneously the purpose of the State, because as Hegel puts it, the individual’s destiny is fulfilled by being subject to the State. There is no defined “purpose” of the State as it relates to natural law, constitution, logic, or reason. Rather, to Hegel, the real question is not for what purpose was the State created; but rather, what is the “concept of the State.” It matters not why a State is formed; it only matters that it exist. Once it exists, its purpose is accomplished by whatever actions it executes. The State’s purpose and power are thus coterminous.

Upon this supposition, Hegel rejects sentiments that the State is not “doing its job” or is “violating the social compact” to which it must adhere to be considered legitimate authority. To Hegel, the State’s authority exists independent of any purposes of formation whether in natural or constitutional law. “The people” as the creator of society and government is not even a factor in determining government power (a subject to be addressed in detail in a subsequent article series). The State’s subjects only need to consider what the State determines to be law at that time and obey. As Hegel puts it, this is the individual’s universal duty to the State (see, Part 2).

Hegel rejects the Enlightenment philosophy that society and government are formed on principles of social compact. Hegel states, “the notion of a contractual relation between him [i.e. government] and his people…stands opposed to the Idea of ethical life” (Georg Hegel, Philosophy of Right, Ed. University of Chicago, Trnsl. T.M. Knox, [Encyclopedia Britannica, Oxford University Press, 1952], 95). This term “Idea of ethical life” means, to Hegel, the absolute power of the State as supreme over the individuals in society; so, the idea of a social compact stands opposed to the power of the State. Natural and constitutional limitations upon the State do not exist. By definition, there is no such thing as the “purpose” for forming society and government. There is only the “Idea of ethical life”—that is, the State’s absolute power.

When considering the position held by Enlightenment philosophers, as used for the foundation of the United States of America, one sees that Hegel’s views of the formation and purpose of government stands in sharp contrast and contradiction to original American ideals. It certainly plays a significant role in how politicians see their powers relative to the constitution and citizens of the State, all the while claiming we are “free.” Let us consider now the Enlightenment view of the purpose of the State.

Enlightenment Philosophy

Throughout Enlightenment philosophy, there was a consistent theme regarding the formation of society and government. This theme was, there is a defined purpose for forming a State and that purpose is a lens through which to judge government actions. This purpose is found in both nature and constitution. The rationale and basis rest on this: (1) God created man with inherit, inalienable rights and the authority to enforce and protect those rights, and (2) an oath is implicitly or expressly imposed upon every person serving in public capacity for the good of the people (See, Ezekiel 17:16; Ecclesiastes 8:2-5; Psalm 55:20; Amos 1:9).

Since being in a state of nature poses problems with individuals being able to protect their God-given freedom and rights, people form government to serve as their common will and force of protecting those rights from within and without. The people’s rights are original, and government’s power is fiduciary. Locke explains that in a state of nature, since men have a right to judge their own cause without control or appeal, it may be that justice will not be served systematically given our nature of self-preference. Complete individual sovereignty (as in a state of nature) would render each person capable of defining when he is “hurt” and thus is entitled to enforce his right absolutely. Not much speculation is needed to see how such a state of complete individual sovereignty would render that society chaotic.

Ironically, complete, unfettered individual freedom would render that society at constant war, ultimately to be controlled by those with enough power and resources to buy the loyalty of those less capable. Eventually, tribal wars overcome those people, and a dictatorship results, as history shows. For this cause, “civil government is the proper remedy for the inconveniences of the state of Nature” (John Locke,Concerning Civil Government, Ed. Alexander Campbell Fraser, [Oxford University Press, 1952], 28). Concepts such as damage, hurt, obligation, duty, liability, etc. are thus defined in law so the people may know how to conduct their behavior and may enforce their rights through civil, peaceful means.

Neither complete individual sovereignty nor complete state sovereignty complies with the state of human nature and experience, according to Enlightenment philosophy. Government is needed; but it needs be limited by constitution and purpose. Individual freedom is a right, but the absolute and indiscriminate exercise of it is (partially) surrendered in exchange for the common will through the State. Thus, government regulates the people of that society by the constitution they create and through laws passed pursuant thereto; but the people watch and check the government for violations of that constitution created to protect their rights and enjoy the utility of their common will. This is an Enlightenment principle of the State.

Locke declares the State’s general purpose as “the preservation of property” (43), which he describes as one’s life, liberty, and pursuit of happiness as well as lands, houses, &c. The importance and preeminence of private property is the pillar of freedom: to enjoy the fruits of one’s labor; to supply income and sustenance; to provide for one’s family; and to promote industry and improvement of lifestyle—this being done not in state of nature form, but rather in state of society, constitutional form. In like vein, Emer de Vattel explains that the State is formed “to protect and defend” the citizen, and it must “lay[] the foundation of its own preservation, safety, perfection, and happiness” (Law of Nations, [Indianapolis, IN, Liberty Fund, 2008], 86). Thus, the State’s constitution empowers government to protect private property through passing and enforcing laws.

The State cannot violate these purposes and still be considered legitimate. The people have a right to hold the State accountable to their natural and constitutional purposes. Just as an individual has a right to protect his freedom against an individual in a state of nature, he also has a right to be free from the force of laws to which he has not consented in a state of society. Locke explains that men possess natural liberty “to be free from any superior power on earth…[and] to be under no other legislative power but that established by consent in a commonwealth, nor under the dominion of any will, or restraint of any law, but what that legislative shall enact according to the trust put in it.” (Concerning Civil Government, 29, emphasis added).

One’s consent relates directly to the “trust” (i.e. fiduciary) purpose of the State and its natural and constitutional limitations. Government force creating submission of individuals can never equate to consent. Thus, Hegel’s notion of “the concept of the State” equating to absolute power over its subjects contradicts the Enlightenment understanding that legitimate authority comes by way of the State fulfilling its purpose and not usurping the authority individuals possess.

The Declaration of Independence mirrors these Enlightenment sentiments. Namely, it reiterates: “all men are created equal, [and] are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed”. Upon this foundation, the colonies seceded from Great Britain because each Colony determined for itself that being political, constitutionally, and legally connected to their government (of hundreds of years) no longer satisfied the purpose for which Great Britain was established and for which the Colonies were formed; namely, to preserve and protect property (i.e. life, liberty, pursuit of happiness, &c). Ultimately, this is the question each society (i.e. county, state, or region) of each generation must answer for itself.

Observation and Conclusion

The consequences of these two philosophies should be obvious and indeed are significant in all regards of one’s daily life. Where Hegel presents no purpose of the State but only its “concept” and thus absolute power, those subjects are destined for either slavery or to fight their way to positions of political power so they can escape the chains placed upon subject status. Insider favors and corruption are rampant in that State. Loving one’s neighbor as himself is hardly a “Golden Rule.”

Autocratic control, police and military force are the “rule of law.” Education is propaganda, controlled, and centralized; it indoctrinates all students to be good State patriots. The State has little to no incentive to limit its actions to standards of justice and decency. It seeks to expand itself and limit or destroy competition against its power. It only commands and expects obedience. When a subject invokes individual rights over the laws of the State, that subject is ignored or trampled by the State—and to Hegel, rightfully so.

In contrast, where a society understands the natural and expressed purpose of forming the State and its education develops the notions of natural and constitutional law, as did the Enlightenment, the people quite willingly serve as the watchman and overseers of government. The people hold the power of the State and its direction. They are intent to ensure that the laws comply with the constitution of the State to meet its purposes and to ensure their happiness and protection of individual rights and property. The people are ever vigilant in demanding their rights be not usurped by government power. Education emphasizes individual responsibility, character, honesty, and authority. The Golden Rule is happily followed for each knows that if a neighbor’s rights can be usurped by government, so can his. The State has much incentive to limit its actions to the standards of justice and decency, knowing the people will not accept corruption and tyranny. Government regulates in good faith compliance with the natural and expressed purposes of that State. Politicians are students of political philosophy and protectors of individual freedom; they are not seekers of personal gain and aggrandizement.

When the Enlightenment philosophy is abandoned, the vacuum is quickly filled with Hegelian concepts, like what happened in the United States soon after its formation. Understanding the formation and purpose of the State is crucial to understanding the next article series, which is “Interpreting and Applying the Constitution.” As will be seen, not defining the purpose of the State translates into the lack of constitutional limitations and actually creates a disdain for constitutional limitations as originally created by the people of the State.

From this Hegelian notion of no purpose comes the notion of the “living constitution” we have heard in the United States for over 100 years. Some have attempted to make the “living constitution” an American constitutional principle. In truth, it is a Hegelian principle. It is this Hegelian “concept of the State” (i.e. absolute power of the State) that has equipped less-than-honorable politicians and others with intent of subterfuge to convince the people that their actions are “constitutional” while at the same time they accomplish their goals as a Hegelian.


1. A) John Locke: “Man [are] born…with a title to perfect freedom and uncontrolled enjoyment of all the rights and privileges of the law of Nature, equally with any other man, or number of men in the world, hath by nature a power…to preserve his property—that is, his life, liberty, and estate, against the injuries and attempts of other men”.

Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.”

B) John Locke: “The commonwealth [is] a society of men constituted only for the procuring, preserving, and advancing their own civil interests. Civil interests I call life, liberty, health, and indolency of body; and the possession of outward things, such as money, lands, houses, furniture, and the like.”

Declaration of Independence: “That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.”

C) John Locke: “When [he who has the supreme executive power neglects and abandons his charge to contrary to the consent and interest of the people], the people are at liberty to provide for themselves by erecting new legislative differing from the other by the change of persons, of form, or both, as they shall find it most for their safety and good.”

Declaration of Independence: “That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness.”

D) John Locke: “I answer, such revolutions happen not upon every little mismanagement in public affairs. Great mistakes in the ruling part, many wrong and inconvenient laws, and all the slips of human frailty will be borne by the people without mutiny or murmur. But if a long train of abuses, prevarications, and artifices, all tending the same way, make the design visible to the people, and they cannot but feel what they lie under, and see whither they are going, it is not to be wondered that they should then rouse themselves, and endeavor to put the rule into such hands which may secure to them the end for which government was at first erected.”

Declaration of Independence: “Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security.”
2. See, William Torrey Harris and the Hegelian Philosophy of Education.

© 2011 Timothy N. Baldwin, JD – All Rights Reserved

Timothy Baldwin is an attorney licensed to practice law in Montana (and Florida) and focuses on constitutional issues. Baldwin graduated from the University of West Florida in 2001 with a Bachelor of Arts (BA) degree in English and Political Science. In 2004, Baldwin graduated from Cumberland School of Law in Birmingham, AL with a Juris Doctorate (JD) degree. From there, Baldwin became an Assistant State Attorney in Florida. For 2 1/2 years, Baldwin prosecuted criminal actions and tried nearly 60 jury trials. In 2006, Baldwin started his private law practice and has maintained it since.

Baldwin is a published author, public speaker and student of political philosophy. Baldwin is the author of Freedom For A ChangeRomans 13-The True Meaning of Submission, and Political Discussions for People of States–all of which are available for purchase through Liberty Defense League. Baldwin has also authored hundreds of political science articles relative to liberty in the United States of America. Baldwin has been the guest of scores of radio shows and public events and continues to exposit principles which the people in America will need to determine its direction for the future.

Web site: LibertyDefenseLeague


What Is The Hegelian Dialectic?
by Niki F. Raapana and Nordica M. Friedrich

This article was originally published online in December 2002. For years it has been available to the public for free, as an educational resource. As a result it has been widely distributed with and without our permission. Now we would like to ask that you do not reproduce this work, as it is copyrighted.

The entire text of What Is The Hegelian Dialectic? has a permanent home in our new book, 2020: Our Common Destiny/The Anti Communitarian Manifesto (two books in one), available in mass-market paperback or an affordable, downloadable e-book.

The introduction entitled Why study Hegel? is still available here to read for free, for educational purposes.

Introduction: Why study Hegel?

Pay no attention to the man behind the curtain…

“… the State ‘has the supreme right against the individual, whose supreme duty is to be a member of the State… for the right of the world spirit is above all special priveleges.'” — Author/historian William Shirer, quoting Hegel in The Rise and Fall of the Third Reich(1959)

Georg Wilhelm Friedrich Hegel (1770-1831) was a 19th century German philosopher and theologist who wrote The Science of Logic in 1812. For many historians, Hegel is “perhaps the greatest of the German idealist philosophers.”

In 1847 the London Communist League (Karl Marx and Friedrich Engels) used Hegel’s theory of the dialectic to back up their economic theory of communism. Now, in the 21st century, Hegelian-Marxist thinking affects our entire social and political structure.

The Hegelian dialectic is the framework for guiding our thoughts and actions into conflicts that lead us to a predetermined solution. If we do not understand how the Hegelian dialectic shapes our perceptions of the world, then we do not know how we are helping to implement the vision for the future.

Hegel’s dialectic is the tool which manipulates us into a frenzied circular pattern of thought and action. Every time we fight for or defend against an ideology we are playing a necessary role in Marx and Engels’ grand design to advance humanity into a dictatorship of the proletariat. The synthetic Hegelian solution to all these conflicts can’t be introduced unless we all take a side that will advance the agenda.

The Marxist’s global agenda is moving along at breakneck speed. The only way to stop land grabs, privacy invasions, expanded domestic police powers, insane wars against inanimate objects (and transient verbs), covert actions, and outright assaults on individual liberty, is to step outside the dialectic. Only then can we be released from the limitations of controlled and guided thought.

When we understand what motivated Hegel, we can see his influence on all of our destinies. Then we become real players in the very real game that has been going on for at least 224 years.

Hegelian conflicts steer every political arena on the planet, from the United Nations to the major American politicalparties, all the way down to local school boards and community councils. Dialogues and consensus-building are primary tools of the dialectic, and terror and intimidation are also acceptable formats for obtaining the goal.

The ultimate Third Way agenda is world government. Once we get what’s really going on, we can cut the strings and move our lives in original directions outside the confines of the dialectical madness. Focusing on Hegel’s and Engel’s ultimate agenda, and avoiding getting caught up in their impenetrable theories of social evolution, gives us the opportunity to think and act our way toward freedom, justice, and genuine liberty for all.

Today the dialectic is active in every political issue that encourages taking sides. We can see it in environmentalists instigating conflicts against private property owners, in democrats against republicans, in greens against libertarians, in communists against socialists, in neo-cons against traditional conservatives, in community activists against individuals, in pro-choice versus pro-life, in Christians against Muslims, in isolationists versus interventionists, in peace activists against war hawks.

No matter what the issue, the invisible dialectic aims to control both the conflict and the resolution of differences, and leads everyone involved into a new cycle of conflicts. We’re definitely not in Kansas anymore.


To read the rest of What Is The Hegelian Dialectic?, get 2020: Our Common Destiny/The Anti Communitarian Manifesto. Two great books combined into one mass-market paperback! It is also available as an affordable, downloadable e-book.

You will learn….

The origins of deductive and inductive reasoning
2. Webster’s definition of the Hegelian dialectic
3. How the Hegelian dialectic changed the formula for deductive reasoning
4. Why it is almost impossible for a layman to understand the dialectic
5. The communitarian purpose for the Hegelian dialectic
6. How we interpret the history of the Hegelian dialectic
7. The Anti Communitarian League’s conclusion
8. Four examples of the power of the semantics in the dialectic
9. Four different impressions of the modern Hegelian dialectic theory


I have been working an average of 80 hours a week for several years now searching the internet for the most concise sources of educational material so the average intellect could obtain the fastest possible education on how America was destroyed from within and without, and what to do about it.

Please give some consideration to the expertise of the two authors above and read their work several times. In Niki’s case, I recommend buying both forms of her book so you can have it on your computer and loan out the hard copy to non computer friends. Knowledge is power, and words are the ultimate power on earth. Please consider that everything that exists, be it known or unknown, was brought into existence by words.

Ambassador Lee E Wanta reveals huge gold scam by USA Government


Ambassador Lee E Wanta reveals huge gold scam by USA Government

(The following is an attempt to present in a compact form the alleged claims made by Dick Eastman, Tom Flocco, Vina K. Durham, Karl Schwarz and put together in an the article by E.P. Heidner dated 28th June 2008 to the effect that the September 11th attacks were intended to cover-up the clearing of the 1991 issuance of $240 billion in covert securities to fund an economic war against the Soviet Union during which “unknown” western investors bought up much of the Soviet industry. A crime presented by official sources as a “terrorist attack” and used as an excuse to attack Iraq.)

September 11

Initially the official designation of “terrorist attacks” made it difficult to discern a pattern. However if the destruction of the World Trade Centre, a segment of the Pentagon, four commercial aircraft and the loss of 2,993 lives is not considered as a “terrorist attack” but rather as a crime with specific objectives, there is a compelling logic to the pattern of destruction, not only of the buildings but of specific offices within each building.

If the attack on the Office of Naval Intelligence in the Pentagon was not random it is reasonable to assume that the planes that hit the World Trade Centre, and the bombs reported by various witnesses to have been set off inside the buildings 1, 6, 7, the basement of the Towers, the vault in the basement of the World Trade Centre were also deliberately targeted. Why? What was it that linked these targets? The destruction of the contents of the basement of the World Trade Centre – less than a billion in gold, but hundreds of billions of dollars of government securities? In addition why were specific brokers from the major government security brokerages in the Twin Towers eliminated? To create chaos in the government securities market? To create a situation wherein $240 billion dollars of covert securities could be electronically “cleared” without anyone asking questions? Which happened when the Federal Reserve declared an emergency and invoked its “emergency powers” that afternoon.

There were three major securities brokers in the World Trade Center: Cantor Fitzgerald, Eurobrokers and Garbon Inter Capital. On the morning of September 11, Flight 11 hit the North Tower at 8:46 right below the floors on which Cantor Fitzgerald was situated. Cantor Fitzgerald as the largest securities dealer in the US was probably the primary target. Shortly thereafter a massive explosion went off under the FBI offices in the North Tower on the 23rd floor, Garbon Inter Capital on the 25th floor, and in the basement of Tower 1. The explosion caused the 22nd through 25th floors above to collapse into an inferno. Fires were reported on the 22nd floor at 8:47. Shortly, thereafter, at 9:03, Flight 175 hit the South Tower right below the floors on which Euro Brokers was situated. In all three cases, the explosive, fiery destruction consumed the offices in the several floors above. At 9:37 Flight 77 hit the Pentagon, targeting one of the few offices that had been moved in the newly remodeled section of the Pentagon: the Office of Naval Intelligence, which had been investigating the financial transactions linked to the securities being managed by those security dealers in the World Trade Center that were targeted. 41% of the fatalities in the Twin Towers came from two companies that managed U.S. government securities: Cantor Fitzgerald and Eurobrokers. 31% of the 125 fatalities in the Pentagon were from the Naval Command Center that housed the Office of Naval Intelligence. 39 of 40 Office of Naval Intelligence employees died. In the vaults beneath the World Trade Center Towers, any certificates for bonds were destroyed.

Building 7 was evacuated somewhere between 9:00 and 9:30. Fires and explosions spontaneously began at multiple locations inside the building prior to the collapse of either Tower. This observation contradicts the official explanation that the fire started when objects from the collapsing towers caused the fires to ignite. The Building ultimately was destroyed in what many unofficial observers now believe was a controlled demolition. Building Seven housed several agencies critical to investigation of financial crimes.

In the midst of all this, Building 6 was destroyed by explosions from within. Building 6 was home to the U.S. Customs agency and the El Dorado Task force, which was responsible for coordinating all major money-laundering investigations in the U.S. In the immediate aftermath of September 11, these groups would be redirected to investigate terrorist financing.

The Office of Naval Intelligence in the Pentagon, which sustained a direct hit from an airliner that day, was without a doubt, a target pinpointed for destruction. The attacking aircraft went through intricate manoeuvres in order to hit the west side of the Pentagon, The flight path approach shows that the attacking aircraft passed almost directly over the White House, bypassing what should be considered a primary target for a “terrorist attack” instead of a supposedly empty section of the Pentagon. The planes that hit the South Tower also manoeuvered in the last moments to hit their exact target.

On the same day, (September 11) the Securities and Exchange Commission declared a national emergency and for the first time in U.S. history invoked its emergency powers under Securities Exchange Act Section 12(k) and eased regulatory restrictions for clearing and settling security trades for the next 15 days. These changes would allow an estimated $240 billion in covert government securities to be cleared upon maturity (September 12th) without the standard regulatory controls around identification of ownership.

While most media reports defer to the U.S. government contention that Osama Bin Laden was behind these attacks, foreign media provided reports suggesting that the “real power” behind Al Qaeda was unknown. As shall be seen, the financial power behind the attack is the same power that created these securities, and the same power as that which founded Al Qaeda.

The Background

In order to understand why the ongoing Federal investigations into the crimes funded by those securities needed to be ended or disrupted by destroying evidence in Buildings 6, 7 and 1, it is necessary to understand how the $240 billion in covert, and possibly illegal government funding, could have been created in September 1991 and also to know the background of 50 years of history of key financial organizations in the United States, where U.S. Intelligence became a key source of their off-balance sheet accounts.

The covert securities used to accomplish the original national security objective had ended up in the vaults of the brokers in the World Trade Centre, were destroyed on September 11, 2001, the day before they came due for settlement and clearing. Either a key group of senior National Security officials, who had participated in the victory of the economic cold war in 1991, considered the deaths and destruction as ‘collateral” damage to hide the existence of the covert activities or the destruction constituted a cover-up of continued lawlessness by a fraternity or brotherhood of businessmen and criminals that has remained in the shadows ever since.

The Origins of the World Trade Centre Attack

Most historians track the history of September 11th to 1998 when Osama Bin Laden declared a fatwa or jihad against the U.S., and the terrorist “Hamburg Group” led by Mohammed Atta reportedly “offered” it’s services to Al Qaeda. However, the history which defines the motives for the September 11 attacks goes much further back. The answers to the questions surrounding the cause of the WTC attack will be found in events during the presidency of George H.W. Bush and earlier. Insight into the activities of that period are cloaked by the Executive Order of George H.W. Bush’s son, President George W. Bush, who on November 1, 2001 issued Executive Order 13233. As a result public records which might have shed light on the activities of 1990 and 1991 remain shielded from public access. Consequently the reconstruction of events from the late 1980s and early 1990s is based on news reports, books and articles.

What the public record suggests is that with the beginning of the first Bush Presidency in 1989, George H.W. Bush initiated a programme of covert economic warfare to bring about the collapse of the Soviet Union. The name of this programme appears to be Project Hammer – a multi-billion dollar covert operation, whose investments remain shielded.

There is reason to believe that the plan was initially formulated by Reagan’s CIA Director, William Casey. Many of the programme operatives were probably engaged through official CIA and National Security channels. However, as a result of the experience gained by the Bush cabinet and its private sector counterparts during the secretive Iran-Contra and Ferdinand Marcos gold operations, the execution of that programme would be accompanied by a new assumption that the use of covert and illegal funding for a policy not approved by Congress would remain acceptable.

The Source of the Funds

Numerous sources have documented that at the end of World War II, the treasury of the Japanese Empire was discovered in the Philippines by Edward Lansdale a member of the staff of General Charles Willoughby, who was General MacArthur’s chief of Intelligence. Lansdale and Severino Garcia Diaz Santa Romana tortured Major Kojima Kashii, General Yamashita Tomoyuki’s driver, until he revealed the sites of the gold. Then known as the “Golden Lily Treasure”, this mass of wealth had been accumulated by the Japanese over fifty years from the pillaging of Southeast Asia and China by its army and had been deposited in the Philippines due to the U.S. submarine blockade of Japan. Reports vary, but documents in the public domain suggest the recovered treasure was in excess of 280,000 metric tonnes of gold.

Lansdale briefed Assistant Secretary of War John J. McCloy about the findings, and a U.S. Cabinet-level decision was made to confiscate the gold and cover-up its discovery. The gold would be added to the Black Eagle Trust fund which took its name from the Nazi Black Eagle stamped on the gold bars confiscated from the Reich and was the original source of funding for the trust. Over the years, the significance of the Nazi gold would pale in comparison to the confiscated Japanese treasure. As the fund grew, it was distributed in private accounts across the globe in over 100 banks, and administered by General Earle Cocke.

Lansdale and Santa Romana were made responsible for recovery of the treasure. They fabricated a “Communist Revolution” by the Hukbalahak rebels in order to confiscate the land where much of the gold was buried, and proceeded to mine it.

The Yamashita gold would become the cornerstone of the Black Eagle Fund, from which many covert operations of the U.S. intelligence would be funded. Under international law the gold should have been either returned to the countries from which it was stolen (as was done with the Nazi gold), or should have been incorporated into the U.S. Treasury. The U.S. Government’s continued efforts to stifle news on this matter provides prima facie evidence that the confiscation of this gold was illegal.

The men responsible for initiating and executing the confiscation of Nazi and Japanese treasury gold represent the most senior Intelligence officers in the U.S. and Britain at the end of World War II, and the Cabinet of the President of the United States. The financial institutions represented by these individuals would become the major financial banks in the world, along with the Swiss-German banks where they hid their gold.

Lansdale’s operation in the Philippines gave birth to most of the common features of modern covert operations for the U.S.Intelligence and initiated a bond between the US intelligence organizations and the Israeli intelligence. He also set precedents for the Intelligence community to retain the services of organized crime on U.S. soil and to use drug running as a way of financing activities,

The covert operations funded by the Black Eagle Trust in the 1960s and 1970s became visible stains on the global image of the U.S. despite all efforts to keep them under cover. In an effort to clean house, President Jimmy Carter would order the retirement of over 800 covert operatives. Many of these operatives would move into private consulting and security firms and be employed as subcontractors for covert operations. Thus began a loose association of private operatives that would be referred to as “the Enterprise” in the years to come. George H.W. Bush, having been CIA Director, had many acquaintances in this group, and would work with them to restore their influence and control over U.S. foreign policy and the foreign investment opportunities it created for their benefit.

Meantime Ferdinand Marcos, the pro-U.S. dictator of the Philippines, continued to discover even more of the buried treasure. and had started to sell it on the market during the 1970s with the assistance of Adnan Khashoggi. US Intelligence operations had been siphoning off the gold for three decades. However in 1986 Vice President George Bush took over the gold from Marcos and the gold was removed to a series of banks, notably Citibank, Chase Manhattan, Hong Kong Shanghai Banking Corporation, UBS and Banker’s Trust, and held in a depository in Kloten Switzerland. What happened to the Marcos gold after it was confiscated by U.S. agents in 1986 has never been reported, but throughout the early 1990s, the world gold market would be befuddled by the mysterious appearance of thousands of tonnes of gold which appeared to suppress the price of gold.

In South east Asia operations were financed through Nugan Hand Bank in Australia which would be one of the many banks used for transferring the Marcos gold from the Philippines into covert operations. Frank Nugan’s family ran the primary supply shipping operation between the U.S. Navy base in the Philippines and Australia. Frank Nugan’s business partner, Peter Abeles, and Henry Keswick, together with Canadian businessman Peter Munk, would link with Adnan Kashoggi, Sheikh Kamal and Edgar Bronfmann in a series of operations which ultimately would evolve into Barrick Gold.

In 1992, George H.W. Bush served on the Advisory Board of Barrick Gold. The Barrick operation would create billions of dollars of paper gold by creating ‘gold derivatives’. A major distribution channel for the sale of Barrick’s gold futures would be Enron. Enron would also become the vehicle by which oil and gas contracts from the former Soviet Union (vehicles for Soviet money-laundering) were processed. Barrick, which has no mining operations in Europe, used two refineries in Switzerland: MKS Finance S.A. and Argor-Heraeus S.A. – both on the Italian border near Milan, a few hours away from the gold depository in Zurich. The question that Barrick and other banks needed to avoid answering is: what gold was Barrick refining in Switzerland, as they have no mines in that region?

Barrick would become a quiet gold producing partner for a number of major banks, and its activities became subject to an FBI investigation into gold-price-fixing. The records on this investigation were kept in the FBI office on the 23rd floor of the North Tower which was destroyed by bomb blasts shortly before the Tower collapsed. The ultimate destination of the “Golden Lily Treasure”, and the source of the ‘loaned’ gold that flooded the market for 10 years has never been officially explained.

The records of many of those transactions disappeared when Enron collapsed and the trading operation and all its records were taken over by UBS, another major recipient of Marcos gold. The FBI was reportedly conducting an investigation into those transactions, and the investigation files were kept on the 23rd floor of the North Tower of the WTC. A review of the personal accounts of September 11 now suggests that office was deliberately targeted with explosives prior to the collapse of the WTC.

Another key player in the Marcos gold was Banker’s Trust, which was taken over by Alex Brown & Sons, after Banker’s Trust floundered financially on its Russian loans in the mid 1990s. These Russian loans were facilitated by Enron, starting in August of 1993, and very possibly were part of the Project Hammer takeover of Soviet industry.

Amongst those brought into the picture by the involvement of Alex Brown was J. Carter Beese who was Executive Director of the CIA at the time of September 11. He was appointed by George H.W. Bush to the board of directors of the Overseas Private Investment Corporation in 1992. Since 1992, OPIC has provided more than $4.5 billion in finance and insurance to more than 140 projects in Russia. He was also Chairman of Riggs Bank and also President of Riggs Capital Partners. Riggs controlled the famous Riggs-Valmet consultants who set up the international financial apparatus for the Russian oligarchs and rogue KGB allowing them to steal the Soviet treasury and destroy the Russian economy. Carter Beese’s death was reported as a suicide in 2006.

It appears that in September 1991, George H.W. Bush and Alan Greenspan did indeed finance $240 billion in bonds in a buy-out of the Soviet Union as part of a broader programme to attack the economy of the Soviet Union. In addition President George H.W. Bush had initiated a number of related covert operations to take over certain sectors of the Soviet economy,

The covert business dealings with the Iranians and Israelis which originated with Kashoggi and Kimche in July 1980 in Hamburg under the October Surprise arrangement, would provide an opening to the Soviet KGB that would allow the U.S. to fund a coup against Gorbachev in 1991. It would grow into a larger covert operation over the years, and be overshadowed by the larger Iran-Contra operation. Members of Bush’s covert intelligence cadre sold weapons to Iran, an avowed enemy of the U.S., and illegally used the profits to continue funding anti-Communist rebels, the Contras, in Nicaragua.

The entire Iran-Contra operation almost fell apart in 1986 and became public when the Nicaraguan government shot down a U.S. plane carrying weapons to the Contra rebels However the Iran-Contra team continued to violate the law even while being investigated by Congress.

Emboldened by the lack of consequences for subverting the U.S. constitution and breaking international law during the Iran-Contra scandal, the Bush administration group known as “the Vulcans” planned a bigger drive to crush Soviet Russia.

The programme also seems to have lined the pockets of the individuals that executed this policy, at US taxpayer expense. This was done to the tune of the $240 billion dollars in covert and allegedly illegal bonds, which appear to have been replaced with Treasury notes backed by U.S. taxpayers in the aftermath of September 11.

The Vulcan’s Covert Economic War on the Soviet Union

In 1988, Riggs Bank, under the direction of Jonathan Bush and J Carter Beese, would purchase controlling interest in a Swiss company named Valmet. In early 1989, the new subsidiary of Riggs called Riggs-Valmet would initiate contact with a group of KGB officers and their front-men to start setting up an international network for moving money out of the former Soviet block countries.

In the first phase of the economic attack on the Soviet Union, George Bush authorized Leo Wanta and others to destabilize the ruble and facilitate the theft of the Soviet/Russian treasury. This would result in draining the Russian treasury of between 2,000 to 3,000 tonnes of gold bullion, ($35 billion at the time). This step would prevent a monetary defence of the ruble and thus destabilize the currency. The gold was ‘released to Singapore’ in March of 1991, as facilitated and purchased by Leo Wanta, and signed off by Boris Yeltsin’s right hand man. The majority of the leaked reports from the CIA and FBI suggest the theft of the Russian treasury was a KGB and Communist party operation, but what those reports omitted was the extensive involvement of Boris Yeltsin, the U.S. CIA and the U.S. banking industry.

In November 1989 George H.W. Bush appears to have arranged for Alton G. Keel Jr, a minor player in the Iran-Contra scandal to go to work at Riggs Bank, which would become the controlling owner of a small Swiss bank operation known as Valmet. The Riggs-Valmet operation, would become the ‘consultants’ to the World Bank and to several KGB front operations run by future Russian oligarchs Khordokovsky, Konanykhine, Berezovsky and Abromovich. These soon-to-be Russian oligarchs had been set-up as front men by KGB Generals Aleksey (Alexei) Kondaurov; and Fillipp Bobkov, who previously reported to Victor Cherbrikov, who worked with Robert Maxwell, a British financial mogul, an Israeli secret service agent, and a representative of U.S. intelligence interests, who had been introduced to George Bush in 1976 by Senator Tower for the sole purpose of using Maxwell as an intermediary between Bush and the Soviet Intelligence. Maxwell assisted Cherbrikov in selling military weaponry to Iran and the Nicaraguan Contras during the course of the Iran Contra deals, and made hundreds of millions of dollars available to Cherbrikov’s Russian banks. These two would bring a previously unknown politician and construction foreman named Boris Yeltsin from the hinterlands of Russia to the forefront of Russian politics through providing 50% of Yeltsin’s campaign funding.

In the second phase, there were two major operations: the largest was coordinated by Alan Greenspan, Oliver North, and implemented by Leo Wanta, George Soros and a group of Bush appointees who began to destabilize the ruble. They are accused of fronting $240 billion in covert securities to support the various aspects of this plan.These bonds were created (in part or in whole) from a secretive Durham Trust, managed by ex-OSS/CIA officer, Colonel Russell Hermann. This war chest had been created with the Marcos gold.

Shortly before the attempted coup of 1991, Maxwell met Kruchkov on Maxwell’s private yacht. Shortly afterwards, Maxwell died mysteriously on his yacht while Senator Tower died in a plane crash under suspicious circumstances in April of 1991.

In the meantime, Riggs Bank was quickly solidifying banking relations with two of the old Iran-Contra scandal participants: Swiss bankers Bruce Rappaport, and Alfred Hartmann. Through this group George Soros opened a second front assault on the ruble. It is at this stage of the operation that three more groups would be brought into the plan by Rappaport and Hartmann: The Russian Mafiya, the Israeli Mossad, and the Rothschild family interests represented by Jacob Rothschild.

Soros and Rappaport would ensure that the Rothschild financial interests would be the silent backers for a number of the undisclosed deals. The Rothschild interests would also be seen on the board of directors of Barrick Gold.

In the fourth phase of the secret war, the Enterprise worked on several fronts to take over key energy industries. On the Caspian front of this economic war, James Giffen was sent to Kazakhstan to work with President Nazarbayev in various legal and illegal efforts to gain control of what was estimated to be the world’s largest untapped oil reserves – Kazak oil in the Caspian. The illegal flow of money from the various oil companies would reach a number of banks. These same oil interests would engage March Rich and the Israeli Eisenberg Group, owned by one of the Mossad’s key operatives, Shaul Eisenberg, to move the oil. (The Eisenberg Group would at some point own almost 50% of Zim Shipping, which mysteriously and inexplicably moved out of the World Trade Center a few weeks before the September 11 attacks.)

Like the other events linked with Project Hammer, the coup was all about the money. The coup began the dissolution of the Soviet Union and the beginning of the reign of Boris Yeltsin and his ‘family’ of Russian Mafiya Oligarchs, and President Nursultan Nazarbayev of Kazakhstan. In the final phase, a series of operatives assigned by President George H.W. Bush would begin the takeover of prized Russian and CIS industrial assets in oil, metals and defence. This was done by financing and managing the money-laundering for the Russian oligarchs through the Bank of New York, AEB and Riggs Bank.

A closer look at other activities leading up to these phases makes it clear that is was a U.S. orchestrated intelligence effort from the beginning. The economic war involved Gerald Corrigan of the NY Federal Reserve Bank, George Soros, an international currency speculator who was responsible for crashing the British pound a few years earlier, former Ambassador to Germany R. Mark Palmer, and Ronald Lauder-financier and heir to the Estee Lauder estate. Palmer and Lauder would lead a group of American investors in an Operation called the Central European Development Corporation, and combine forces with George Soros and the NM Rothschild Continuation Trust. This group ending up controlling Gazprom, the Russian natural gas giant, while the Riggs group ended up controlling Yukos, the oil giant. Ownership for both remains largely ‘hidden’ today, while its front men endure the hardships of the Russian wrath by spending time in prison.

Meanwhile, across the Caspian Sea, Bush had assigned a wide array of former Iran-Contra operatives to take a role in Azerbaijan. Initially, he sent in the covert operatives Richard Armitage and Richard Secord who worked with their old colleague from the Mossad, David Kimche, and their old arms running colleagues Adnan Kashoggi and Farhad Azima to hire, transport, and train several thousand Al Qaeda mercenaries to fight on behalf of the Azeri freedom fighters! Osama Bin Laden was reported to have been part of this mercenary force.

The September 11th Cover-up of the Black Eagle Trust and Project Hammer

Ten years later in 2001, these programmes had finally come back to haunt the U.S. policy makers. Most, if not all of these programmes appear to have stepped outside of the boundaries of the law. As a result, investigative agencies from Britain, Switzerland, Russia, Kazakhstan and the Philippines were putting pressure on Congress and the U.S. Department of Justice to open up the accounts in the banks used to finance these covert activities. Pressure was being put on the Swiss banking cartel to open its bullion records to public scrutiny. Full disclosure by these banks during an investigation would have resulted in a major exposure of U.S. Government complicity in some of the greatest financial frauds of the 1980s and early 1990s as well as 50 years of gold bullion theft by numerous U.S. and British government agencies. Moreover, investigation into these accounts would disclose a National Security secret known as the Black Eagle fund, and virtually every covert operation since World War II. Bringing an end to these investigations and preventing this disclosure was the sole objective for the destruction of the WTC and Pentagon.

These investigative and legal pressures began to accumulate in 1997, and in February 1998, Osama Bin Laden declared his fatwa, and Atta started planning the September 11 attacks.

With the bonds out in the market, they had sat for ten years, like a ticking time bomb. At some point, they had to be settled – or cashed in, on September 12, 2001. The two firms in the U.S. most likely to be handling them would be Cantor Fitzgerald and Eurobrokers – the two largest government securities firms in the U.S. The federal agency mostly involved in investigating those transactions was the Office of Naval Intelligence. On September 11 those same three organizations: the two largest government securities brokers and the Office of Naval Intelligence in the US took near direct hits.

What happened inside the buildings of the World Trade on September 11 is difficult, but not impossible to discern. The government has put a seal on the testimony gathered by the investigating 911 Commission, and instructed government employees to not speak on the matter or suffer severe penalties, but there are a number of personal testimonies posted on the internet as to what happened in those buildings that day. Careful reconstruction from those testimonies indicates the deliberate destruction of evidence not only by a targeted assault on the buildings, but also by targeted fires and explosions. In the event that either the hijacking failed, or the buildings were not brought down, the evidence would be destroyed by fires.

Even more revealing would be the actions of the Federal Reserve Bank and the Securities and Exchange Commission on that day, and in the immediate aftermath. As one of many coincidences on September 11, the Federal Reserve Bank was operating its information system from its remote back-up site rather than it’s downtown headquarters. The SEC and Federal Reserve system remained unfazed by the attack on September 11. All of their systems continued to operate. The two major security trading firms had their trade data backed up on remote systems. Nevertheless, the Commission for the first time invoked its emergency powers under Securities Exchange Act Section 12(k) and issued several orders to ease certain regulatory restrictions temporarily.

On the first day of the crisis, the SEC lifted “Rule 15c3-3 -Customer Protection–Reserves and Custody of Securities,” which set trading rules for the certain processes. Simply GSCC was allowed to substitute securities for the physical securities destroyed during the attack.

Subsequent to that ruling, the GSCC issued another memo expanding blind broker settlements. A “blind broker” is a mechanism for inter-dealer transactions that maintains the anonymity of both parties to the trade. The broker serves as the agent to the principals’ transactions.

Thus the Federal Reserve and its GSCC had created a settlement environment totally void of controls and reporting – where it could substitute valid, new government securities for the mature, illegal securities, and not have to record where the bad securities came from, or where the new securities went – all because the paper for the primary brokers for US securities had been eliminated.

This act alone, however was inadequate to resolve the problem, because the Federal Reserve did not have enough “takers” of the new 10 year notes. Rather than simply having to match buy and sell orders, which was the essence of resolving the “fail” problem, it appears the Fed was doing more than just matching and balancing – it was pushing new notes on the market with a special auction.

If the Federal Reserve had to cover-up the clearance of $240 Billion in covert securities, they could not let the volume of capital shrink by that much in the time of a monetary crisis. They would have had to push excess liquidity into the market, and then phase it out for a soft landing, which is exactly what appears to have happened. In about two months, the money supply was back to where it was prior to 9/11.

It was the rapid rotation of the securities settlement fails in the aftermath of September 11th that appears to have allowed the Bank of New York and the Federal Reserve to engage in a securities refinancing that resulted in the American taxpayer refinancing the $240 billion originally used for the Great Ruble Scam.

The reports published by the Federal Reserve argue that the Federal Reserve’s actions increasing the monetary supply by over $300 billion were justified to overcome operational difficulties in the financial sector.

What appears to be the case is that the Federal Reserve imbalances reported on three consecutive days in the aftermath were largely concentrated at the Bank of New York, which is reported to represent over 90% of the imbalance, suggesting the Bank had been the recipient of massive fund transfers, and unable to send out transfers.This supposedly was due to major communication and system failures.In fact, none of the Bank of New York’s systems failed or went non-operational.

The Wall Street Journal reported:

“There is every reason to believe activities in the Bank of New York in the aftermath of September 11th are worthy of suspicion….. At one point during the week after September 11, the Bank of New York publicly reported to be overdue on $100 billion in payments.”

It suggests that certain key unknown figures in the Federal Reserve may have been in collusion with key unknown figures at the Bank of New York to create a situation where $240 billion in off balance sheet securities created in 1991 as part of an official covert operation to overthrow the Soviet Union, could be cleared without publicly acknowledging their existence.These securities, originally managed by Cantor Fitzgerald, were cleared and settled in the aftermath of September 11th through the Bank of New York. The $100 billion account balance bubble reported by the Wall Street Journal as being experienced by the Bank of New York was the tip of a three-day operation, when these securities were moved from off-balance-sheet to the balance sheet.

The above gives an idea of the intricate activities both to perpetrate and then to cover the crime, which was then used under its “terrorist attack” label as an excuse for the attack on Iraq.




By Kelleigh Nelson
September 22, 2011

“I have also repeatedly given my opinion that there is no effective way to limit or muzzle the actions of a Constitution Convention. The Convention could make its own rules and set its own agenda. Congressmen might try to limit the Convention to one amendment or to one issue, but there is no way to assure that the Convention would obey it.” -Chief Justice of the United States Supreme Court, Warren E. Burger

“Having witnessed the difficulties and dangers experienced by the first Convention, I would tremble for the result of the second.” -James Madison, Father of the Constitution and fourth President of the United States

Tea Party Patriots and the Constitutional-Convention

Only two days after submitting my article on theTea Parties, Part 3 and 4, I received a shocking e-mail. I immediately called Paul Walter at News With Views and asked him what I should do.
He said, “Write another article just on this subject.” The reason I called was because the article on the Tea Parties included an expose of Tea Party Patriots and the e-mail I received was entitled, “Tea Party Group to Convene Conference …at Harvard.” Yes, Tea Party Patriots (TPP) are going to Harvard on September 24th and 25th to discuss with legal experts the different ways to amend the Constitution and how feasible it would be to hold a Constitutional Convention (Con-Con).

According to several articles on this Conference, The Tea Party Patriots and Harvard Law School are co-sponsoring and co-hosting this event. In the Tea Party Insider, it states this is being held to address potentially changing the Constitution. There are an expected 400 attendees who will be there seeking reform on various issues and this will provide the forum for whether a Constitutional Convention should be organized. David Segal, a former Democratic State representative from Rhode Island said that a Constitutional Convention could be just what the country needs! Segal claims that the purpose of a federal Con-Con is to give states powers to propose amendments similar to the power imparted on Congress, but the states already have that power. The states have had that power all along, it is just that they have not made use of it for so long it has atrophied. So to say they need a Con-Con for this has to be a Trojan horse for a far more nefarious plan.

In an article in The Daily, co-founder and national coordinator of TPP Mark Meckler states, “The founders included the amendment process for the states to resist federal overreach and a convention would give states the chance to exert their authority and overturn unconstitutional laws,” He said the group isn’t yet supporting the idea of a convention, but is interested in exploring it.

When TPP co-founder, Jenny Beth Martin was asked about this Con-Con Conference in an e-mail from a TPP member who had been questioned regarding same, she commented by return e-mail,“She probably does not understand that Mark is attending the ConConCon not in support or against a Constitutional Convention, but rather as information and debate on it. We are not taking a stand on a Constitutional Convention one way or other.”

Mark Meckler answered another question in an e-mail, “Tea Party Patriots is co-sponsoring this event. We will be present along with many others from the conservative movement to protect and defend the Constitution and the vision of the Founders.”

Meckler also stated in e-mail correspondence with a questioning member that the approval for attending came from State and Local Coordinators on their Monday night National calls. He said, “To make sure we are clear, TPP is not expressing an organizational opinion on the advisability of an Article V Convention (with the exception of my personal opinion that this is not the time for such a convention). We are going to Harvard to fight for the Constitution and the Framers’ intent.”Sounds good, right? But then he muddies the water….

In the next to last paragraph Meckler says, “I understand your fear of people messing with the Constitution. It is not irrational, and not wrong to feel protective of the document. But we must also remember what many of the founders and especially Thomas Jefferson said to us, “Some men look at constitutions with sanctimonious reverence and deem them like the ark of the covenant, too sacred to be touched. They ascribe to the men of a preceding age a wisdom more than human and suppose what they did to be beyond amendment…” Again, he did not think it good to change them frequently or for small reason. But he would have been vehemently opposed to the idea that amendments should not be considered nor discussed openly.” Thomas Jefferson did not attend the 1787 Convention, he was the Ambassador to France at the time. He wished the Constitution had contained term limits for all politicians so they would not make it a lifelong position.

When I read these words in this forwarded e-mail I was shocked that these two leaders and their members do not understand the dangers of a Constitutional Convention, nor do they understand we do not need a Con-Con for amendments to the Constitution. In my opinion, they are either part of the “controlled” opposition or they are so ignorant of the dangers, they should never be in leadership roles.

The John Birch Society will be in attendance to present the dangers of a Constitutional Convention and what could happen to us. The JBS understands there are newly written constitutions waiting in the wings for just this opportunity. Here is a look at one of them written over a period of 10 years at a cost of $25 million by the Ford and Rockefeller Foundations. It is called, The New States Constitution. It is written in an “obverse” style which means “forming a counterpart.” As an example, Article I, Section 11 states, “Education shall be provided at public expense for those who meet appropriate test of eligibility.” The “obverse” of this statement is just as important as the statement itself and means, “All education shall be at public expense.” In other words, all education will be government controlled and funded by taxpayer dollars, there will be no private schools that are not controlled by the federal government.

Section V of Article I states, “There shall be no discrimination because of race, creed, color, origin or sex.” This opens the door to pedophilia and bestiality.

Section X of Article I states, “Those who cannot contribute to the productivity shall be entitled to a share of the national product. But distribution shall be fair, and the total may not exceed the amount for this purpose held in the National Sharing Fund.” Talk about a communist government!

Of course we’ve allowed our country to get to a stage similar to this and we simply must force these Congressional criminals to obey the Constitution we have.

Origins of the Con-Con

Back in the early 80s, the same excuse was used then as is being used now to push for a Constitutional Convention — a Balanced Budget Amendment (BBA). We fought then with prayer and hard work. Unfortunately, this BBA and Con-Con rhetoric once again sounds good and seems plausible to so many of the uneducated electorate who only want to save their country from the out-of-control abusive politicians, but who are ignorant of the ramifications of such an action. Along with this danger, we must remember too, that a “false friend” is more dangerous than an open enemy. In many of my articles I’ve exposed how the Republicans and the phony rightwing have been in bed with the left for decades. So, when I name names that are alleged conservatives, do not think for one minute they are ill informed or do not know what they’re doing.

Over the years, the pro-Con-Con lobbyists and politicians have attempted to dismiss the concerns about what they call a runaway Convention. But the above words of James Madison and Warren Burger, former Chief Justice of the Supreme Court, who was an expert Constitutional scholar, and scores of others equally qualified make it plain that opening a Con-Con is very dangerous business.

When the gavel fell on the first and only Constitutional Convention which took place in 1787, the delegates proceeded to disregard Congress’ preset agenda, a limited agenda that was given to them calling for modification only of the Articles of Confederation which were in force at that time. They threw out the Articles of Confederation, i.e. they threw out the existing government at that time, and they wrote a whole new Constitution. About 50 of the 55 delegates at that Constitutional Convention were practicing Christians, so the Constitution they wrote was rooted squarely in the Word of God and the Ten Commandments. It maximized individual liberty while at the same time limiting government power.[1]

To ensure the new Constitution was adopted, the delegates simply ignored the existing ratification rules and wrote new ones which they used to get their new Constitution ratified. It was a gift of God for sure, but there are absolutely no Constitutional guarantees that the legal precedent of the first Convention will not be repeated by the second one with the result being a new Constitution, but you can rest assured that this one will not be from Godly Christian men. Back in the early 80s, many of the states that called for a one-item Convention like the BBA and wrote limiting language into their calls (thinking they could indeed control the agenda they stated they would secede from the Convention if it overstepped the bounds), but the precedent of the first Convention is the basis for American jurisprudence.[2]

A Con-Con is not just the amendment that is at issue. The entire document is taken down from its pedestal and is put on the table and people go to work on it, tearing it apart. We no longer have statesmen like our founders. Can you imagine the delegates from each state and those who would work on our law-of-the-land document today? For part two click below.


Who is Behind the Con-Con Push

The Constitution has been a target from its very inception. In the mid 1800s, the American Fabian Society wrote in its journal that the Constitution was too highly individualist to allow for the gradual implementation of socialism. In the 1950s, the World Constitution and Parliamentary Association was calling for a world constitutional convention. They’ve been at it ever since and one of the Constitutions slated for inclusion in the Convention is theirs and it would help introduce a world constitution.

Henry Hazlitt, formerly the economic advisor to pro Constitutional Convention James Dale Davidson’s National Taxpayer’s Union, was a renowned conservative and he wrote a book which he republished in 1974 called, “A New Constitution Now.” This book is extremely dangerous inasmuch as he states things like, “an amendment could be proposed that would strike out everything after “We the people,” and that of course includes the Bill of Rights. He was of course suggesting that everything after “We the people” on down be scrapped and rewritten, which is amazing as this document has provided more human dignity and freedom for more people than any other in recorded history.[3]

The one purpose of the Con-Con is to eliminate the allegiance of this nation to God, family and country. To do that, the elimination of inalienable, permanent rights from God must happen.


James Dale Davidson has been at the forefront in pushing for a Con-Con for decades and used to give $100,000 per year towards that cause. He was also one of the initial board members on Newsmax along with CFR members Alexander Haig and Arnaud de Borchgrave. Newsmax is Christopher Ruddy’s organization and was funded by Richard Mellon Scaife who funds both sides of the aisle much like the Koch brothers and Soros. Scaife is pro-abortion and strongly believes in taxpayer funding of Planned Parenthood.

In 1980, the committee on the constitutional System (the CCS) came together in D.C. It was comprised of globalists, internationalists and career politicians. The CCS was founded by members of the Council on Foreign Relations and Trilateral Commission (TC) and funded by Ford, Rockefeller, American Express and Hewlett Foundations Their directors were nearly all CFR and TC members. Those involved included former Attorney General Thornburgh, former Secretary of the Treasury Brady, sitting Senators like Kassebaum, Moynihan and Hollings, and the wealthy and influential Robert McNamara, William Fulbright and Douglas Dillon, among others.

Career elitist politicians from both the Republican and Democrat camps have been strong proponents of a Con-Con, including 3rd party advocates like Ross Perot (CFR), President Clinton (CFR), President G.H.W. Bush. Today of course the majority of both parties would love a Con-Con. The State Legislative Lobbyists are some of the worst however and this includes the rightwing American Legislative Exchange Council (ALEC) who has been pushing a Con-Con for decades. Part 4 of The Phony Right Wing speaks to the efforts of ALEC and their corporate members wishing to rewrite the Constitution.

All of the One-Worlders want and need a Constitutional Convention despite taking an oath to uphold the original document. The majority are CFR members, globalists, New World Order planners, Trilateralists, Order of Skull and Bones, Transnationalists, Bilderbergers, Geopoliticians, Club of Rome and Bohemian Club Members.[4]Other partners are the likes of Judge Anthony Napolitano who started pushing a Con-Con on the Glenn Beck show May 1, 2009, after the very first Tea Party on April 15th, 2009.

The attack on our Constitution has never come from some fringe element, but from powerful and ostensibly upstanding people on both the right and the left. Nearly always those in the “white hats” or “our guys” are the ones pushing a Con-Con to the conservatives and making it sound oh-so-wonderful to the electorate who haven’t a clue of the protections from government which the Constitution gives them.[5]

What is Required to Add an Amendment

An amendment to the constitution is first proposed by the Congress with a two-thirds majority vote in both the House of Representatives and the Senate or by a Constitutional Convention called for by two-thirds of the State legislatures. None of the 27 amendments to the Constitution have been proposed by Constitutional Convention. This is the way we’ve ratified amendments since the Bill of Rights. It is then sent to the states for their votes. If 38 of the states ratify the amendment, it will be added to the Constitution.

A proposed amendment becomes part of the Constitution as soon as it is ratified by three-fourths of the States (38 of 50 states). When the Office of the Federal Register (OFR) verifies that it has received the required number of authenticated ratification documents, it drafts a formal proclamation for the Archivist to certify that the amendment is valid and has become part of the Constitution. This certification is published in the Federal Register and U.S. Statutes at Large and serves as official notice to the Congress and to the Nation that the amendment process has been completed. [Link]

The other way is to have two-thirds of the states, that is thirty-four states of our fifty states petitioning Congress for a Constitutional Convention. With an amendment, the only thing that is examined, dissected, reviewed, and surgically changed is the amendment itself. But a Constitutional Convention is not just the amendment that is at issue. The whole document is taken down from its pedestal and is put on the table and the people go to work on it. This is fertile ground for someone to step in and say, “Here is a new modern Constitution which has been developed by the great brains of the world today.” These are not statesmen with the God given rights of the people in their hearts and minds, but globalists and internationalists seeking to control every single breath we take and dying when they deem it necessary.[6]

Today’s Balanced Budget Amendment Ruse

Today’s Balanced Budget Amendment (BBA) is a hoax and a huge trap. Again, the politicians are selling this to the people because it has such a great sounding name, just like it did a couple decades ago when we fought the push for a Con-Con then. The problem with this Amendment (which quite obviously all 47 Republican Senators and most of the Republican Representatives don’t understand because they never read the Constitution) is that the Constitution LIMITS what the federal government is allowed to spend with taxpayer dollars. It is so limited that the funding of outrageous items today would fill an encyclopedia. Our Constitution does not authorize foreign aid, or museums about rock stars, or studying of the blue lizard, or Chinese prostitutes, or unconstitutional wars, etc. ad nauseum. We have a majority of Republicans in congress today…so why in heaven’s name aren’t they balancing the budget now without an amendment?

This BBA that all these folks absolutely love and want passed and talk so openly about to the dumbed down electorate would actually LEGALIZE CONSTITUTIONALLY ILLEGAL SPENDING, and give them a free hand to spend whatever they want to on any frivolous item that floats past their desks. The Constitution limits CONGRESS alone to the spending of money! “The BBA will usher in a totalitarian dictatorship. Pursuant to the unconstitutional Budget Act of 1921, the President has been preparing the budget. Since the Budget Act is unconstitutional, the President’s preparation of the budget has been likewise unconstitutional. Section 3 of the BBA would legalize what is now unconstitutional and unlawful. But Section 3 of the BBA does more than merely legalize the unlawful. It actually transfers the Constitutional power to make the appropriations and to determine taxes to the President. Congress will become a rubber stamp.”

Please read Publius Huldah’s, “Why the BBA is a Hoax” on this diabolical change to our constitution planned by the rightwing who have long been in bed with the left. Senators Jim DeMint and Mike Lee (neo-cons) are determined to jam this down our throats along with Congressional creatures like Michelle Bachmann. Don’t tell me they don’t understand fully what they’re doing because nearly every one of these people are lawyers and they’ve certainly studied the law. In the July 7, 2011, WSJ, Jim DeMint joined with that bastion of conservative politics, Olympia Snowe of Maine to push the BBA stating it is The Only Reform That Will Restrain Spending. Liars and thieves!

Another huge danger with this proposed BBA is the Constitutional Convention. Those of us who have written about the Con-Con call have grave concerns that this BBA could easily turn into an Article V convention. Should the BBA fail to get 38 or three-fourths of the states to ratify, the Republicans (who seem to be pushing this for both parties) could easily tell the electorate they can’t get the Democrats to go along with balancing the budget, so we need to get these same states to put out a call for a Constitutional Convention where we can open the constitution for one reason only and that’s to balance the budget.

They only need two-thirds or 34 states to put out a call for a Constitutional Convention to open one. I wrote about this in detail in my article, Wolves in Sheep’s Clothing?, and Tom DeWeese of American Policy Center has written about it extensively as has the John Birch Society, and Bernadine Smith of the Second Amendment Committee, as well as many others.


Hard work and a great deal of prayer went into fighting off the first big call for a Constitutional Convention when we came within two states of seeing it happen. The effort has regained new speed with a new generation that knows nothing of the dangers of a Con-Con, nor the history of our founders and the document itself. I pray people will come to the realization that our freedoms are disappearing at a rapid rate by degrees every single day and will wake up in time to save the one protection we have left. We need to be forceful and vigilant in demanding our representatives obey their oaths of office to the Constitution rather than allowing them to rewrite the very document that is our last protection against total annihilation of our God given unalienable rights. It is only the voices of the people, the grass roots, with everything to lose, who can stop this. It was Thomas Jefferson who said, “the price of freedom is eternal vigilance.”


1. Constitution in Crisis, Kenneth C. Hill and Joan Collins.
2. Ibid, page 12
3. Ibid, page 13
4. Ibid, page 30
5. Ibid, page 13
6. Ibid, page 17

© 2010 Kelleigh Nelson – All Rights Reserved

Kelleigh Nelson has been researching the Christian right and their connections to the left, the new age, and cults since 1975. Formerly an executive producer for three different national radio talk show hosts, she was adept at finding and scheduling a variety of wonderful guests for her radio hosts. She and her husband live in Knoxville, TN, and she has owned her own wholesale commercial bakery since 1990. Prior to moving to Tennessee, Kelleigh was marketing communications and advertising manager for a fortune 100 company in Ohio. Born and raised in Chicago, Illinois, she was a Goldwater girl with high school classmate, Hillary Rodham, in Park Ridge, Illinois. Kelleigh is well acquainted with Chicago politics and was working in downtown Chicago during the 1968 Democratic convention riots.



China: American Financial Colony or Mercantilist Predator?


The perverse effects of the world dollar standard.


How To Run A Central Bank With A Gold Standard

By Lewis E. Lehrma

China is an important trading partner of America. But it may also be a mortal threat. And not for the conventional reasons usually cited in the press. Ironically, it is a threat because China is in fact a financial colony of the United States; a colony subsidized and sustained by the pegged, undervalued, yuan-dollar exchange rate. Neither the United States nor its economic colony seems to understand the long-term destructive consequences of the dollarization not only of the Chinese economy but also of the world monetary system.

While the Chinese financial system has been corrupted primarily by tyranny, deceit, and reckless expansionism, it is also destabilized by the workings of the world dollar standard. Neither the United States nor China has come to grips with the perverse effects of the world dollar standard

The social and economic pathology of 19thcentury colonialism is well studied, but the monetary pathology of its successor, the neo-colonial reserve currency system of the dollar, is less transparent. In order to remedy this pathological defect, the United States must rid itself of its enormous Chinese financial colony, whose exports are subsidized by the undervalued yuan in return for Chinese financing of the U.S. twin deficits.

Both China and the United States must also free themselves from the increasing malignancy of the dollar reserve currency system, the primary cause of inflation in both China and the United States. In the end, only monetary reform, including an end to the reserve currency system, can permanently separate the dollar host from its yuan colony.

Without monetary reform, the perverse effects of the dollar reserve currency system will surely metastasize into one financial and political crisis after another—even on the scale of the 2007–2009 crisis. It is, of course, a counter intuitive fact that China has been financially colonized by the United States. But why is this a fact?

Simply because China has chained itself to the world dollar standard at a pegged undervalued exchange rate, choosing therefore to hold the exchange value of its trade surplus—that is, its official national savings—in U.S. dollar securities.

It is true that the dollar-yuan strategy of America’s Chinese colony has helped to finance a generation of extraordinary Chinese growth. But China now holds more than 3 trillion dollars of official reserves and more than a trillion dollars in U.S. government securities. These Chinese dollar reserves directly finance the deficits of the American colonial center.

This arrangement clearly resembles the imperial system of the late 19th century. The value of a British colony’s reserves were often held in the currency of the imperial center, then invested in the London money market. Thus, the colony’s reserves were entirely dependent on the stability of the currency of the colonial center.

While China is America’s largest financial colony, most other developing countries are also bound to neo-colonial status within the reserve currency hegemony of the dollarized world trading system. China’s dollarized monetary system reminds us of nothing so much as the historic colonial financial arrangements imposed by the later British Empire on India before World War I—India actually remaining a financial colony of England long after its independence in 1947.

How did the sterling financial empire work?

The imperial colony of India, beginning in the late 19th century, held its official Indian currency reserves (savings) in British pounds deposited in the English money market; independent developed nations at that time, like France and Germany, held their reserves in gold.  That is, France, Germany, and the United States settled their international payment imbalances in gold, a non-national, common, monetary standard, holding their official reserves, too, in gold.

But the London-based reserves of colonial India were held not primarily in gold, but in British currency, helping to finance not only the imperial economic system, but also the imperial banking system, imperial debts, imperial wars, and British welfare programs. Eventually, as we know, both the debt-burdened British Empire and its official reserve currency system collapsed.

For more than a generation now, a similar process has been at work in China. China is America’s chief colonial appendage. The Chinese work hard and produce goods. Subsidized by an undervalued yuan, they export much of their surplus production to America. But, like the Indians who were paid in sterling, the exports of Chinese colonials are substantially paid in dollars, not yuan, because bilateral and world trade, and the world commodities market, have been dollarized. And thus, it may be said that the world financial system is today an unstable neocolonial appendage of the unstable dollar.

China, like its predecessor the British colony of India, has chosen to hold a significant fraction of what it is paid in the form of official dollar reserves (or savings). These dollars are promptly re-deposited in the U.S. dollar market, where they are used to finance U.S. deficits.

Every Thursday night, the Federal Reserve publishes its balance sheet, and there we now read that more than $2.5 trillion of U.S. government securities are held in custody for foreign monetary authorities, 40 percent of which is held for the account of America’s chief financial colony, Communist China.

It is clear that without financial colonies to finance and sustain the immense U.S. balance of payments and budget deficits, the U.S. paper dollar standard and the growth of U.S. government spending would be unsustainable. It is often overlooked that these enormous official dollar reserves held by China are a massive mortgage on the work and income of present and future American private citizens.

This Chinese mortgage on the American economy has grown rapidly since the suspension of dollar convertibility to gold in 1971. China—poor and undeveloped in 1971, was at that time very jealous of its sovereign independence, sufficiently so to reject its alliance with the Soviet Union, even earlier to attack U.S. armies on the Chinese border during the Korean War.

In an ironic twist of fate, China surrendered its former independence and, as a U.S. financial colony, joined the dollar-dominated world financial system. China’s monetary policy is anything but independent. It is determined primarily by the Federal Reserve Board in America, the pegged yuan-dollar exchange rate serving as the transmission mechanism of Fed-created excess dollars pouring into the Chinese economic system. Perennial U.S. balance of payments deficits send the dollar flood not only into China but also into all emerging countries. The Chinese central bank buys up these excess dollars by issuing new yuan, thereby holding up the overvalued dollar, and holding down the undervalued yuan.

Much of these Chinese official dollar purchases are then invested in U.S. government debt securities. So even though America exports excess dollars to China, China sends them back to finance the U.S. budget deficit, much like marionettes walking off one side of the stage, merely to reappear unchanged on the other side.

This is the little-understood arbitrage mechanism of the pegged exchange rate system by which Fed-created excess dollars are bought and held as reserves by the Chinese central bank, in exchange for which newly created yuan are issued, thereby supercharging inflation in China.

The Chinese dollar reserves, which are reinvested in the United States, help to ignite inflation in the United States. It is clear that the workings of the official dollar reserve currency system cause purchasing power to be multiplied, or at least doubled, in both countries. But these central bank issues of new money are unassociated with the production of new goods and services during the same market period. Thus total spending, or purchasing power, exceeds the total value of goods and services at prevailing prices.

When total demand exceeds total supply, the price level must rise, but just as the subservient colonial Indians were constrained not to sell their sterling reserves too quickly, so the Chinese are constrained, by politics, diplomacy, and self-interest, not to dump their depreciating American dollars.

The Indians had to consult their imperial bankers, even though the English were debtors to their Indian colony, because the Indians did not wish to anger the colonial center, nor to precipitate a sterling crisis. From time immemorial, creditors with too large a stake in an over-sized debtor often beg leave of their debtor to get their money back.

China is frustrated by circumstances similar to those of a colony of imperial Britain. Hostility has arisen in the debtor, the United States. Fear of setting off a dollar slide haunts the hostile creditor, China. The difficulty of finding a suitable portfolio of alternatives for a trillion dollars in U.S. government debt annoys the outspoken Chinese financial colony, as it calls for a new world monetary system. But there seems to be no genuine alternative to the very liquid dollar market. De facto illiquidity of official Chinese dollar reserves is enforced by political sensitivities, not by market salability.

The debtor, as the saying goes, is “too big to fail.” Thus arises an unstable stalemate, a yuan-dollar pegged exchange rate regime constantly on the edge of a crisis. The “exorbitant privilege” of the dollar is matched by the insupportable burden of America’s overvalued reserve currency role, which has tended to de-industrialize the colonizer, gradually increasing social inequality by reducing the standard of living of lower- and middle-income American families. The reserve currency country then feels compelled, as the Fed does today, to depreciate the dollar in the vain hope of eliminating the trade deficit and the balance of payments deficit, by becoming more competitive abroad as it becomes poorer at home.

The perversity of the official reserve currency system is endless as China now endures high inflation engendered by its colonial status in the world dollar system. The floating, pegged exchange rate system based on the dollar has been slowly decaying since the end of World War II. But the dollar-based reserve currency system, because of the unmatched scale and liquidity of the dollar markets, could last another generation. When it will collapse cannot be predicted. That it will collapse, without systemic reform, I think inevitable. Few predicted the timing of the collapse of the pegged dollar system of Bretton Woods, but it did collapse in August of 1971, followed by America’s worst decade since the Great Depression.

Ultimately, America, the leader of the unstable world financial system, must choose between two options.(1). The United States can wait for the eventual demise of the world dollar standard under chaotic conditions, similar to the final sterling collapse and the subsequent collapse of Bretton Woods in 1971. This option is analogous to the intrepid daredevil who leaps from his 10th floor window, secure in the fact that he is still unhurt two floors from the street level.(2). Or, America could take the lead in reforming the official reserve currency system based on the dollar. Such a monetary reform program would entail a careful windup, by agreement, of the world dollar standard. At the same time America would reestablish by statute a dollar convertible to gold, i.e., a dollar defined in law as a weight unit of gold.

Gold would replace the dollar as the world’s reserve currency. The reform would, first and foremost, establish a tested, non-national, neutral monetary standard as the basis of a stable dollar, one which reasonable sovereign trading partners could accept. Gold would become the international settlements currency and thus would replace the dollar as the basis of world trade and finance. Inasmuch as monetary history shows that no unstable national currency can permanently serve as the crucial world reserve currency, it follows that neither can an unstable basket of national currencies, nor can a fiction such as the SDR, the reserve asset created by the International Monetary Fund to supplement member countries’ reserves. But we are left with the question: what does the evidence of American history suggest as the basis for a stable dollar?

The stability of the U.S. dollar has varied widely in its history. This variation is explained by two factors: the monetary standard chosen for the dollar, and whether other countries have simultaneously used cash and securities payable in dollars as their own reserves, even as their monetary standard itself (i.e., official reserve currencies in place of gold).The United States has alternated between two kinds of standard money: inconvertible paper money and some precious metal (first silver, then gold).

The dollar was an inconvertible paper money during and after the Revolutionary War (1776–92), the War of 1812 (1812–17), the Civil War and Reconstruction (1862–79), and again from 1971 to the present. The dollar was effectively defined as a weight of silver (and gold) in 1792–1812 and 1817–34, and as a weight of gold in 1834–61 and 1879–1971. The minted gold eagle, set equal to 10 dollars, and subsidiaries thereof, was provided for in the Coinage Act of 1792.

The dollar was not used by foreign monetary authorities as an official monetary reserve asset before 1913, but the dollar has been an official “reserve currency” for many countries since World War I (along with the pound sterling). The dollar has been the primary official reserve currency for most countries since 1944. Applying two criteria divides the monetary history of the United States into distinct phases.

We can compare the stability of these monetary regimes by examining the variation in the Consumer Price Index (as reconstructed back to 1800) by two simple measures: long-term CPI stability (measured by the annual average change from beginning to end of the period of each monetary standard) and short-term CPI volatility (measured by the standard deviation of annual CPI changes during the period).

Weighting these criteria equally, the classical gold standard from 1879–1914 was the most stable of all U.S. monetary regimes

After the failures of several generations of unhinged paper currencies, pegged and floating exchange rates, America should embrace a stable monetary system tested in the laboratory of human history, the cornerstone of which the elites have rejected for a century. It is now time to restore the economic pathology of official reserve currencies. Now is the time to restore the American monetary standard authorized by the Founders in the Constitution, Article I, Sections 8 and 10. Now is the historical moment for America to take the lead and again give the world a real money, the Founders’ gold dollar of the Coinage Act of 1792. What the Founders learned from the paper money inflation of the Revolution, the recent past has taught us again. America and the world need a monetary standard which, unlike the paper-credit dollar, cannot be created at zero marginal cost with which to dispossess the prudent and to subsidize the U.S. government and insolvent financial institutions at near zero interest rates.

For America to establish the gold standard would provide the least imperfect monetary solution to the problems of a century of financial disorder, engendered over and over by central bank-manipulated paper money, official reserve currencies, and floating pegged exchange rates. Only a stable dollar, a dollar unit of gold, can pin down the long-term price level, restoring the incentive to save and ruling out extreme inflation and deflation.

Such a dollar convertible to gold would reopen the road to confidence in the long-term value of the U.S. monetary standard. This is the durable road to economic growth and prosperity, financed by increased long-term savings, increased long-term investment, and rising demand for labor at rising real wages.

How To Run A Central Bank With A Gold Standard

 Written by Nathan Lewis          – Forbes

Friday, September 16, 2011

The Keynesians are usually quick to insist that “central banking” is not possible with a gold standard system. They think that they invented it.

The Bank of England is normally credited with creating the processes known today as “central banking.” This took place over a long period of time, but the Bank’s first great success as a “lender of last resort” is generally considered to be during a crisis in 1866, during which the Bank made loans from its discount window at a penalty rate of 10%, thus defusing the crisis.

John Maynard Keynes was born in 1883.

During the 19th century, the Bank of England was also the world’s leading gold-standard institution, and served as the center of a monetary system that not only encompassed Britain but much of the world. The Bank served these two roles – maintaining the British pound’s gold link and also serving as a central bank – up until 1914. You could call this “19th century central banking.”

The Federal Reserve was created in 1913, to serve a role somewhat like the Bank of England had in Britain. The Fed indeed served this role, alongside the gold standard, for another 58 years until the U.S. left the gold standard in 1971. It’s true that the reason the U.S. gold standard failed in 1971 was in large part due to the Fed’s mismanagement and adoption of Keynesian ideology. However, it was also due to a personnel change – William McChesney Martin, who had led the Fed since 1951 and was, in 1969, defending the gold standard, was replaced in 1970 by Arthur Burns, hand-picked by Nixon to rev up the economy with “easy money.”

The Bank of England too was overrun by Keynes’ followers. In the late 1940s, it attempted to keep short-term lending rates at 0.5%. This led to a devaluation of the pound in September 1949, and the end of any remaining stature the British pound had as an international currency.

Central banks became the avenue by which the Keynesians could operate one of their two big tricks: “easy money” as a solution to virtually every sort of economic difficulty. (Their other trick is government spending.) You could call this “20th century central banking.” This was completely antithetical to the principles of a gold standard, which is to create stable, reliable, secure and predictable money free of willful human intervention. The consequence of this “easy money” ideology is the floating currency system we have today, which dates from 1971.


The one thing these great minds never touch on is, just who, is going to be given the authority to establish the value per ounce of gold? Who is going to establish a banking and electronic transfer system of the divisions of gold to accommodate lower and higher denominations for normal commerce? Who is going to have the authority on a global scale to enforce the price stability of gold? Who is going to have the authority to prevent manipulation of the new monetary system on a global scale? If the price per ounce is not stabilized globally, tyranny will still reign, and even if our military was to reduce the global bankers to ashes, do you think new tyrants would not come into power through massive wealth? If we wanted a global power to stabilize our currency, why are we rejecting the present oligarchs? As much as I respect intelligence, I’m afraid our present intellectual elites do not have the system perfected, and are ready to start the race without having fed the horse, or demanding that CONGRESS do their job.