Moodys Report Blasts China Solvency

07/09/2011

 

http://www.thedailybell.com/2621/Moodys-Report-Blasts-China-Solvency

by Staff Report

Here comes Moody’s with a blockbuster which may put China’s “White Knight” status, at least as far as Europe is concerned, in grave danger. In a report just released, the rating agency not only warns that China’s debt problem is “bigger than stated” (i.e., China is hiding a ton of ugly stuff off the books), but goes ahead to quantify it: “Of the RMB 10.7 trillion (about $1.6 trillion) of local government debt examined by the Chinese audit agency, RMB 8.5 trillion ($1.3 trillion) was funded by banks. However, Moody’s has identified another potential RMB 3.5 trillion ($540 billion) of such loans that the Chinese auditors did not discuss in their report….we find that the Chinese audit agency could be understating banks’ exposures to local governments by as much as RMB 3.5 trillion.” – ZeroHedge

Dominant Social Theme: China has done a splendid job of turning a communist system into a free-market one. Its prosperity is a result. Just look at the numbers.

Free-Market Analysis: Tyler Durden at the popular ZeroHedge website just came out with an article regarding the untrustworthiness of China’s financial numbers (see excerpt above). It’s taken from a Moody’s release that has found nearly US$1.5 trillion of Chinese loans may be under water. This corresponds to what we’ve been reporting (with increasing urgency) over the past two years. You can see our most recent article here, The Coming Chinese Depression. Below is an excerpt from what we wrote:

Of course, the success in our view has been initiated by printing fiat dollars – money from nothing. It is the same “success” that the Western central banks had prior to 2008 and look at how that ended. One cannot grow an economy year after year at nine percent per quarter and expect anything at the end of it but an inflationary depression. Chinese economic statistics are a case of “garbage in and garbage out.” And Western power elitesmust be quite aware of what is going to happen in China eventually. In our view it is a kind journalistic criminality that the mainstream media does not do more to alert the West about what is in store. When the Chinese economy crashes, the rest of the world will not be immune.

How did we know Chinese numbers were junk even before the latest startling revelations? Because China is currently the world’s biggest “planned” economy and government numbers ALWAYS lie. China’s Western public perception is built on the lie that its communist masters have suddenly become capitalist converts. They have not.

The Chinese economy at its lower levels is one of competitive vibrancy but at the top of the system, power and control is concentrated as always in the hands of only a few. This is analogous to systems in South America (and increasingly in the West, unfortunately), where the masses are free to sell cell phones to each other for vanishing margins all day long. But the larger entities of control, the banks, power stations and big box merchandising outlets are in the hands of a few powerful families, many of them with connections to Anglosphere elites.

It is in fact a kind of dominant social theme – that capitalism has won the day in China and its billions are converts tofree-market thinking. They are not. The purpose of proposing this meme in our view is to reinforce the kind of structure that the ChiComs have developed.

If China is seen as a “capitalist” success, then its system is worth emulating. And it is a most authoritarian system. It is one in which a handful of basically unelected, powerful men are gathered together under a stated (incomprehensible) ideology to use the levers of government power to enrich themselves and others around them.

It is a mafia-like approach to the markets. Government generally IS mafia like. It extracts protection money (taxes) to keep people safe from non-existent threats. As threats are not available, those in government usually make them up.

What is not often understood is that one’s own government is culpable but so is the government on the other side. The ruling classes inevitably have more in common with each other than they do with the ruled. China’s command-and-control economy is most attractive to Western elites that are continually undermining what is left of the West’s free-market structure and intellectual history.

Within this context, Western elites and the mainstream media they control have every incentive to cover up the real nature of the Chinese economy for as long as they can. It is something of a propaganda effort. The idea is to instill in people around the world the idea that a command-and-control economy run by a few wise men is a viable and preferable sociopolitical circumstance.

The Moody’s China release and Tyler Durden’s following commentary provide us with an antidote. Durden believes the rating agencies have found “religion” after being so spectacularly wrong about the economic crisis of 2008 when almost every blue-chip banking entity foundered and fell.

“Of China’s $5.8 trillion GDP,” Durden writes, “(or whatever imaginary number the Polit Bureau is happy with throwing around for mass consumption), $540 billion is debt that is ‘unaccounted for’, most likely due to being, well, bad.”

Durden also puts it in a US context. “That would be equivalent to saying that $1.4 trillion of US corporate debt is delinquent. And lest anything is lost in translation, Moody’s drives the stake through the Dragon’s heart: ‘Since these loans to local governments are not covered by the NAO report, this means they are not considered by the audit agency as real claims on local governments.'”

And what does that mean? “This indicates that these loans are most likely poorly documented and may pose the greatest risk of delinquency. So let’s get this straight: a country which has 10% of its GDP in the form of bad debt, is somehow expected to be credible enough to buy not only Greek debt, but the EURUSD each and every day? Mmmmk.”

As we have pointed out many times and with increasingly elevated volume, the Chinese system at the top, where it counts, is a sham. It is a promotion that is being run for a number of reasons, and the Western elites are seemingly complicit.

China is increasingly cast as an enemy of the West, but this is a fairly ludicrous portrayal. China owns more American debt than any other country; and now it has begun propping up Europe as well. Without active Chinese involvement it is safe to say that both Europe and the US would be in considerably worse circumstances (and that’s saying a lot).

China’s price inflation is stubborn and terrible. Real-estate prices apparently remain basically out-of-control. Prices for basic food items have appreciated dramatically. There is considerable civil unrest now, across the entire country,. though China continually covers it up and the Western mainstream media (of course) does not cover it.

The full weight of Chinese mendacity as regards its economy came clear with its building of so many empty cities, its many empty 10-lane highways and its trans-continental high-speed rail system (now cancelled). The many empty cities are being built, from what we can tell, to “house” excess Chinese population; actually they satisfy the economic goals of local officials who dread missing the economic growth targets that the politburo has set.

On the most mundane level, we think the Chinese promotion was supposed to act like Western ones, drawing in Western cash and resources to enrich the pockets of those behind them. Perhaps the downturn, whenever it comes, is supposed to further increase the grip of the Chinese communist party.

We’ve often predicted that a Chinese recession/depression will have exactly the opposite effect and may put an end to the current system, though whether it will result in a more energetic free-market system is certainly an open question.

None of the Chinese growth and inflation numbers can be counted on at this point. Inherent in Chinese culture is the need to “save face” and with a boom that has been going on as long as this one, we can only imagine the amount of lies that have been told.

The other day, we pointed out that Western mainstream media is complicit in the meme of the Chinese miracle. Sad to say, the Moody’s release did not receive a great deal of play outside of the alternative media. This is in line with what we expected.

At this point, the great Chinese expansion is evidently and obviously a kind of dominant social theme propounded by both Chinese and American elites. The two systems seem increasingly intertwined, with China propping up both America and the European Union.

What’s going on in China doesn’t seem logical, nor does the mainstream media’s response, which still for the most part seems to revolve around a deafening silence. If-and-when the West is blindsided by a Chinese “hard landing,” the results around the world will likely be seen as catastrophic.

The Moody’s report is just one more piece of evidence that shows us just how questionable and over-optimistic the Chinese story really is. Much of what is reported about China in the West’s mainstream press is a kind of fantasy based on over-stimulation of China’s economy with torrents of paper money.

Conclusion: China – the entire continent it seems – is in the grip of a gigantic growth bubble. Tomorrow’s reality may see that bubble punctured, and the Moody’s report is certainly a needle. Likely, it will not be the only one.

 


The Essential Rules Of Liberty

07/07/2011

http://www.alt-market.com/articles/164-the-essential-rules-of-liberty

By Brandon Smith

There is nothing worse in this world than an enslaved man who naively believes himself free, except, perhaps, trying to explain to that same man his predicament. You can lay truth after truth before his feet. You can qualify your every position with cold hard irrefutable data. You can plead and scream and raise veritable hell, but before he will ever listen, he must first become aware of his own dire circumstances. As long as he views himself as “safe and secure”, as long as he imagines his chains to be wings, he will see no reason to question the validity of the world around him, and he will certainly never invest himself into changing his own deluded destiny.

Unfortunately, there are many such men crawling and scraping about here in what was once a land graced with a self sufficient and independently minded public majority. The great lie that has been perpetuated in this country over the past several decades is that we can defer our responsibilities of vigilance and place our well being and our futures into the hands of others for the sake of “collective efficiency”, or leisure. We have been conditioned to live in a state of constant indifference, a society which prizes compromise over principle and steadfast resolve. Those who refuse to compromise that which is honorable for the sake of ease and comfort are indicted as “extremist” or even criminal. The idea of personal revolution is treated with discomfort, and all we claim to stand for becomes muddled in a fog of inaction and cynicism. As Americans, we have forgotten what it means to earn and protect our own freedoms. We have forgotten that in liberty, there are standards that must be defended.

This, however, does not mean we cannot yet again remember ourselves. The desire for freedom is as inborn and natural as our own heartbeat, as our own breath. It is instinct. It cannot be erased from within, only oppressed from without. The tide has always been against tyranny, always, though we may find that hard to believe. If liberty was not ingrained into our very DNA, humanity would have succumbed to bondage and self destructed long ago. This is not the case. Stretching under the surface of our superficial force-fed mainstream culture are the roots of something real, and honest. Simmering beneath our so called “civilized” veneer, many Americans are finally rediscovering their wild and defiant origins. In the recent past we have been taught to feel ashamed of our rebelliousness. Now, we are learning to hold it quite dear.

For those of us who are awake, and for those who are on the verge of understanding, certain rules come into play that strengthen our stance and shield us from folly. Liberty is not a self perpetuating social condition. It requires guidelines, and effort, and sacrifice. Liberty will not survive without our willingness to maintain it. If you are not ready and willing to fight for your own independence, then you are not truly free.

Let’s examine some of the inherent laws and guidelines of free will and free action that will allow us to not only win back our self determination, but to keep it for generations to come. You want liberty? This is what it takes…

Rule #1: Never Take Anything For Granted

A lot of people today seem to have serious issues with expectation and assumption; what we in the alternative media often refer to as “normalcy bias”. We have grown used to the idea of abundance and relative safety. So much so, that we fail to notice when our abundance and safety begin to disappear.We assume that the condition of the world today will be the condition of the world tomorrow, and for all time. In the U.S., we have even come to expect not only that our prosperity and our freedom are inevitable, but that they will also increase exponentially with each passing generation. This is a relatively new and narrow cultural mindset likely caused by the explosion in industrial growth after WWII which seemed to erase all memory of the Great Depression in our society, leaving us with the belief that surely, our circumstances would never become so desperate again.

Those who are truly independent realize that nations, no matter how affluent, can self destruct at a moment’s notice, especially when they fail to recognize their own weaknesses and confront their own demons. Never suppose that that which is good and just will remain without your own initiative. Never wait for others to fix those problems which you could just as easily solve yourself. Never expect that freedoms won cannot also be easily lost. Always prepare for the worst outcome, and strive for the best outcome.

Rule #2: Educate Yourself

Never become a useful idiot, or a waste of oxygen. Being a part of the herd is nothing to be proud of.Strive for knowledge, and thirst for the truth every moment of every day. Many of the things we deem “important” in modern society are in the grand scheme hollow attempts to fill our lives with distraction, only wasting time until we finally bite the dust filled with regret. Pretending to further the depth of one’s life is not the same as actually doing so. I can’t think of anything more horrifying than becoming a man who rushes around frantically every waking moment, but ultimately accomplishes nothing.

Do not assume that you already have a tangible grasp of the truth, especially if all your knowledge has been handed to you. Instead, research that knowledge for yourself. Put that which you have been taught to the test. Only in this way will you finally learn. Expand your horizons. Learn something useful.Remove unnecessary distractions for at least part of your day and focus on increasing your awareness of the environment you live in. There are very few things in this world more important than this, and self education should take precedence over everything else except your family. “Lack of time” is no excuse for ignorance. Make time! The ignorant are led. The knowledgeable lead themselves.

Rule #3: Don’t Be A Pansy

Liberty is not for the faint of heart. Emotional courage is paramount to freedom, and it can be expressed to incredible effect by even the most unlikely heroes. I’ve seen children with more courage and tenacity than some full grown men.

If one recognizes the gravity of the situation we face as a people, if one understands the considerable danger involved in the fall of a Republic to the depths of fear and autocracy, but still does nothing, that person has not only failed the world, he has also failed himself. “Making waves”, or drawing the ire of “authority”, is the least of our worries. If you have utilized an objective eye, and know you are right in your position, then there is no reason to fear criticism from anyone.

Sociopolitical action, nonconformity, noncompliance, and self defense, are unavoidable aspects of a society that wishes to maintain its freedoms. There is no way around it. If you are not willing to stick your neck out and expose yourself to risk, you remove all chance of possible gain. If you are a self proclaimed activist that refuses to sacrifice, that refuses to struggle, then you have failed before you even began. Talk must lead to balanced action. Never thumb your nose at the devil without being ready to trade punches as well, or all is lost.

Rule #4: Stop Waiting For Others To Tell You What To Do

Independent people not only consider and implement the solutions of others, they also work on their own. Complaints abound lately in the Liberty Movement;

“When is someone going to do something!? What are YOU going to do about our predicament!?”

This is the question of a slave, not a free man. A free man asks, “What am I going to do about this predicament? What is MY solution to the problem?” Therein is the key to liberty; decentralized leadership and movements based on fluidity and spontaneity of action, instead of a great mass of people standing around stiffly waiting for orders on high, or a self styled messiah to engineer their world view. As soon as you place your very initiative under the control of others, you have lost the fight.Always consider the solid strategies of intelligent people, and adopt them if they are useful, but do not remain idle because you are too frightened to exert the effort to solve problems bigger than yourself.Spectators only witness history, they do not make history.

Rule #5: Cast Off What Is Unnecessary, Keep What Is Effective

Yes, I stole this rule from Bruce Lee, but it is just as applicable to social movements and economic stability as it is to the martial arts. Invasive debt creation, for instance, is a tool for subversion, and no people forced to bear the burden of liabilities they can never repay is free. Therefore, exorbitant debt must be avoided, or cast off completely.

In our personal lives, how many useless goods do we accumulate on a daily basis, instead of useful items that we may one day desperately need? How much of our life is spent accumulating garbage in order to keep up with “socially acceptable” levels of consumer behavior? How many of us cling to careers we hate in order to service our needless consumption? The ability to prioritize must become a virtue once again, and, we all need to shut off the cable television…

This rule also applies to governments. If a government no longer fulfills its sworn duties to the people, and no longer serves the purposes to which it was originally intended, then it too must be cast off and replaced with one that does serve the people, or, it must be forced to return to its inherent foundations.Today, this kind of talk is often referred to as “extremism”, or insurgency, no matter how correct it might be, which brings us to our next rule…

Rule #6: Ignore Establishment Labels

Tactical name calling is only effective if we actually care what other people think of us. Labels like “homegrown terrorist”, “extremist”, “doomer”, or “conspiracy theorist”, are designed to shame people into self censorship. That is to say, they pigeonhole movements and their participants into categories of public shame, causing said movements to fear social reprisal. They are also meant to forcefully assign “outsider” or “fringe” status to particular political positions in order to marginalize and weaken the resolve of those who hold them. Never mind that almost every powerful and honorable cultural movement in history once started out as “fringe”.

Early in our lives, we are taught that it is far better to be accepted, and to avoid standing out, even at the expense of our individualism. Unfortunately, many adults never outgrow this childish belief, and thus become vulnerable to tactics as absurd as simple ridicule. At bottom, being slandered by a thieving bureaucracy infested with soulless parasites bent on centralization at the expense of innocent human life is a bit laughable (this goes for you too, SPLC). Globalists, along with their media cronies and their think-tank sock puppets, will say ANYTHING to get what they want. Empty words and false labels cannot stop the truth, or a movement driven by the truth.

Rule #7: Cynicism Is The Path To Defeat

It is good to be critical, but not to the point of nihilism. America’s past is riddled with mistakes, bad judgments, horrible crimes, and downright stupidity; that doesn’t mean that the principles on which this country was founded are any less vital. We hear often from cynics that humanity has become too stupid and complacent to do what is right. However, stupidity and complacency are not inherent qualities. That’s an elitist fantasy with no basis in fact. Stupidity and complacency are learned behaviors, and they can be unlearned. What IS inherent is our ability to choose what path we will take.For adherents of liberty, we need only remind people that they have this choice. We can whine and cry all day long about how nobody pays attention and how there is no hope, or, we can exhaust all options before throwing in the proverbial towel. We don’t need to “like” society the way it is, but we do need to recognize the underlying potential of all people to become something much more than what they currently are (I can’t stand blind ignorance either, but I’m certainly not ready to accept it as a fact of American life). Remember, no fight is over until it is over.

Rule #8: True Authority Is Derived From Respect That Is Earned, Not Bought, Or Taken

A corrupt politician is just a criminal conman in a nice suit. A law enforcement officer who refuses to follow Constitutional Law is just a petty little tyrant in a black uniform. An economist who knowingly skews data to fit his own political bias or to serve the political biases of men above him is just a liar or an inept buffoon with an embossed piece of paper from an expensive university. A lab scientist or doctor who flubs experimentation to support the interests of the corporate world rather than the needs of the public is just a quack in a white coat. All too often, though, we find ourselves taking these cretins seriously all because they talk the talk and wear the costume. They are just people, and if they cannot do their jobs honestly, then they are useless people, who deserve our disdain, not our respect. We should never allow such men to wield positions of authority over us.

Rule #9: Take It Personally

When someone tries to steal from you, hurt you, or enslave you, unless you are some kind of nut, you take it pretty personally, right? Why should it be any different when a government commits the same grievances? Americans should be furious over the destruction of their economy, their currency, their infrastructure, and their Constitutional freedoms! They should be enraged over the endless wars overseas that are bankrupting the nation. They should be bellowing to the rooftops over the cooption of their political system by a slimy brood of corporate bankers. Is this “extremist” behavior? Who cares!?If your anger is not visible then it is not worth a damn. Don’t just get active, get emotional! This is about your life, and the lives of those you love. That’s not to say that we should take out our frustrations randomly and haphazardly, but if we can’t at least make known our anger over the misdeeds of government, then what the hell is the point of calling ourselves free?

Rule #10: You Are The First And Last Line Of Defense

Like it our not, this is our job. We have inherited a country on the verge of disaster, and we are tasked with cleaning it up, otherwise, there will be little left to pass on. We do not get to bask in illusory prosperity for the rest of our days. We do not get to feed off the entitlement program trough until we are fat and contented. We are not going to retain our rights without blood, sweat, and tears. We will not be building magical floating cities in the clouds or skyscrapers on Mars. We will NOT be remembered fondly as members of some fantastical “golden era”.

We have been thrust into the muck and the mire. We are being molded as the lost children of an age better forgotten. We have been slapped in the face with a dilemma so volatile and so incredible it may one day be called the greatest crisis of all time. We have drawn the short straw.

This could be viewed as some terrible doom. It could be held as a star crossed act of ferocious fate.We could fall to our knees and lament with despair, overcome with woe at our unbearable lot. But, this would be in violation of rule #3, and nobody wants to be a sobbing pansy. On the contrary, every “bad luck generation” is only so if they refuse to see the great fortune at their fingertips; if they refuse to seize the moment and conquer the giants of their day. The greater the hardship, the greater the enemy, the greater the heroes. We are faced with possibly the most unrelenting antagonists and the most treacherous obstacles in recent memory, or even distant memory. In the same spark of confrontation, we are also presented with unparalleled opportunity to change the course of the world forever. Whether or not we succeed, is entirely up to us.

You can contact Brandon Smith at:  brandon@alt-market.com

Join Alt-Market today, find a barter network in your area, or start your own. Insulate yourself and your family from economic collapse before it is too late.


The Declaration of Independence For Secessionists

07/05/2011

 

The Declaration of Independence For Secessionists

OLDDOGS COMMENTS

Clearly Mr. Longcore is among the kind of men needed to lead a new State, and help construct a new form of government. He may not be a Thomas Jefferson, but he is close enough to get my vote, which would be a new experience for me, as I have never, and will never, vote in this present tyrannical system.

 

July 3, 2011

By Thomas Jefferson and Russell D. Longcore

(Editor’s Note: First posted in 2009, this article is one of my most requested articles.)

I recently began contemplating the imminent collapse of the US Federal Government. In light of the insane, unconstitutional spending of the Congress and Presidents (Bush and Obama will spend the same ways), the recession/depression that the nation is presently experiencing, and the simultaneous devaluation and inflation of the nation’s currency, collapse is the only consequence that makes sense.

Ask the Soviet Union. Oh…excuse me…they’re gone! The USSR collapsed from identical causes in 1991, and the Soviet states once again became sovereign nations.

So, what will individuals and states do? Will they preemptively forsake the Union, or wait to react once the Federal Government collapses? Common sense should dictate the serious debate of secession prior to collapse. However, I do remember that the legislatures of the States are filled with politicians. Reaction seems more likely than forward planning, especially from those who have long suckled at the Federal teat.

I took the original Declaration of Independence, written by Thomas Jefferson, and added wording to customize it for the present day. Please read it carefully and contemplate its meaning and its ramifications. My new version still needs more work, but it is a place to start.

**********************

When, in the course of human events, it becomes necessary for a people to dissolve the political and governmental institutions under which they have governed themselves, and institute new government deriving its just powers from the consent of the governed, the separate and equal station to which the laws of nature and of nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the institution of the new form of government.

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. To secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. 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 liberty, safety and happiness.

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.

Such has been the patient sufferance of these free citizens and sovereign states; and such is now the necessity which constrains them to alter their former systems of government. The history of the present United States Federal Government is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute tyranny over these free citizens and sovereign states. To prove this, let facts be submitted to a candid world.

In 1861, the United States declared war upon the Confederate States of America, a confederation of sovereign states that lawfully seceded from the Union and formed a government to provide new guards for their future security. The CSA was defeated in that war by the armies of the United States and the Union was unlawfully maintained:

The US Federal Government has enacted unconstitutional laws and authorized unconstitutional spending and the creation and funding of unconstitutional Federal agencies. It has erected a multitude of new offices, and sent hither swarms of officers to harass our people, and eat out their substance. It has imposed taxes on us without our consent:

The US Federal Government has borrowed so many trillions of dollars that the amount can never be repaid.

The US Federal Government created the Central Intelligence Agency, the Federal Bureau of Investigation, the National Security Agency, the Bureau of Alcohol, Tobacco and Firearms, and the Homeland Security Administration, which are unconstitutional usurpations of the powers of the people and the states guaranteed in the 10th Amendment:

The US Federal Government created the Transportation Security Administration, which is a clear violation of the 10th Amendment to the US Constitution. The actions of the TSA violate the 4th Amendment, which protects citizens from illegal search and seizure without warrant based upon probable cause:

The US Federal Government created the Internal Revenue Service to enforce the gigantic Federal Income Tax Code, violating Article I of the Constitution:

The US Federal Government has violated Article I, Section 8 of the Constitution in which Congress may raise and support an army, but no appropriation to that use shall be more than two years. The US Federal Government has established hundreds of military bases on American soil, quartering large bodies of armed troops among us, violating the 3rdAmendment. Additionally, it has established over one hundred military bases in other sovereign nations around the world:

The US Federal Government is at this time retaining large armies of domestic and foreign mercenaries to complete the works of death, desolation and tyranny, already begun with circumstances of cruelty and perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the lawful government of a civilized nation:

The US Federal Government has deprived certain individuals of the benefits of trial by jury by transporting certain individuals beyond seas to be jailed and tortured for pretended offenses, violating the principle of Habeas Corpus and the 5th Amendment of the Constitution:

The US Federal Government has enacted laws infringing upon the right of the people to keep and bear arms, an overt violation of the 2nd Amendment to the Constitution:

The US Federal Government, through enacting the Patriot Act of 2001, has violated the 4th Amendment’s strictures on privacy and protection against illegal search and seizure. It has violated the 5th Amendment guarantees that no person shall be deprived of life, liberty or property without due process of law:

The US Federal Government, through enacting the Patriot Act of 2001, has violated the 6th Amendment guarantees that in criminal prosecutions, the accused shall the right to a speedy and public trial, be informed of the nature and cause of the accusation, and be confronted by the witnesses against him:

The National Security and Homeland Security Presidential Directive, signed on May 9, 2007, places all governmental power in the hands of the President and effectively abolishes the checks and balances in the Constitution:

The US Federal Government established the Federal Reserve, a consortium of private banks, to manage and manipulate the currency of the United States. This violates Article I, Section 8 of the Constitution which provides Congress authority to coin money and regulate its value. The Federal Reserve is unconstitutional:

The Federal Reserve has created massive inflation since its inception in 1913 by issuing paper money that has no underlying value in gold and silver. Because of the attempts of the Federal Reserve to manipulate the American economy, it created an abnormal cycle of boom and recession:

In 2008, the US Federal Government approved trillion-dollar financial bailouts to financial institutions and private companies, a clear violation of Article I, Section 8 and the 10th Amendment of the Constitution:

The US Federal Government has prosecuted unlawful and unconstitutional wars, including wars in Korea, Vietnam, Grenada, Panama, Bosnia, Kuwait, Iraq and Afghanistan, violating Article I, Section 8, which grants the power to declare war only to Congress:

The US Federal Government created the Social Security Administration in 1935, a clear violation of the Article I, Section 8, and the 10th Amendment:

The US Federal Government, though its Judicial Branch, has altered legislation and created law, in violation of Article III of the Constitution:

The US Federal Government has obligated the United States to membership in the United Nations, and combined with other nations to subject us to a jurisdiction foreign to our Constitution, and superior by treaty to our laws; giving its assent to their acts of pretended legislation:

The US Federal Government has usurped the powers reserved to the States in the 10th Amendment as it relates to immigration and naturalization. It has obstructed the laws for naturalization of foreigners, refusing to pass others to encourage their migration hither, and altered the conditions of lawful immigration of foreign persons:

The US Federal Government has altered fundamentally the forms of our government guaranteed to the free citizens and states by the Constitution of the united States of America.

In every stage of these oppressions we have petitioned for redress in the most humble terms: our repeated petitions have been answered only by repeated injury. An institution of government, whose character is thus marked by every act which may define tyranny, is unfit to be the designated and chosen government of a free people.

Nor have we been wanting in attention to the Legislative, Executive and Judicial Branches of the United States Federal Government. We have warned them from time to time of attempts by their actions to extend an unwarrantable jurisdiction over us. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common citizenship to disavow these usurpations, which would inevitably interrupt the quiet enjoyment of our citizenship and liberty. They have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our separation, and hold them, as we hold the rest of mankind, enemies in war, in peace friends.

We, therefore, the free citizens of the several, sovereign and united States of America, appealing to the Supreme Judge of the world for the rectitude of our intentions, do solemnly publish and declare, that these States are, and of right ought to be free and independent states; that they are absolved from all allegiance to the presently established United States Federal Government, and that all political connection between them and the United States Federal Government, is and ought to be totally dissolved; and that as free and independent States, they have full power to levy war, conclude peace, contract alliances, establish commerce, and to do all other acts and things which independent States may of right do. The free citizens of the several, sovereign states reject and absolve themselves from any and all bonds between themselves and any other sovereign state under the Constitution of the United States. Those free citizens and their representatives in the sovereign States do now and should immediately cease collecting and forwarding all Federal taxes, tariffs or fees of any and every kind to the United States Federal Government.

And for the support of this declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our lives, our fortunes and our sacred honor.

End.



DOES RAGE JUSTIFY MURDER?

07/05/2011

ALSO POSTED AT ANATIONBEGUILED.COM

By James P. Harvey (aka OldDog)

One can safely assume that in many cases rage and murder our joined at the hip, and in some cases, the reason for the rage provides justification for the murder. In other cases, murder is committed with no rage at all, just a cold calculation that it will result in profit of some kind. Without the moral roadblock of Christianity the traffic in murder becomes epidemic. One needs only to read the daily paper to confirm this statement.

As I write this the United States Government is killing thousands of people under the orders of their Banker masters for no other reason than monetary profit, and has been since the get go. Yet we peons celebrate these atrocities as if it was the direct instructions of God. So much for, “Thou shalt not kill”.

If you counter that God has instructed past leaders to kill, and sometimes in the most barbaric fashion, you would be correct, but to assume that God is talking directly to any of Americas leaders is really stretching cognition to the breaking point.

What has contributed to this acceptance of government murder among the peons, besides a lifetime association with murder as entertainment? One can only wonder how Americans can dare show their face in worship, while consistently supporting murderers in government. One can also wonder how any preacher can be theologically obtuse enough to fan the flames of government murder.

Unless someone has committed an atrocity that begets rage, and the evidence is unmistakable, I contend that absent direct orders from God, there is no justification for murder, and even what appears to be unmistakable evidence, or direct orders from God, must be thoroughly examined.

This is why God established governments among men, so that truth will prevail, and justice be served. What kind of lunatic would justify a government that murders for profit, even when the supporting majority is intellectually underdeveloped? Has humanity lost the basic instinct of compassion? Have American’s lost all common sense?

Did Jesus say “go and spread democracy over the whole earth? IT DOESN’T IN MY BIBLE’S, and I have all the translations. So, any Christian acceptance of government murder is lacking any biblical support, and only government manipulated RAGE must be the cause of Christian involvement.

This can only mean that American’s are intellectually incapable of inspecting the evidence, or there is evil in their soul, and probably both. Another great tragedy that confounds me is, why do Americans, especially Christians need some National Hero to serve as their leader? What is wrong with being served by an intellectually superior group of History scholars? Erudite Men and Women who can articulate lessons learned from history, and present alternatives to those mistakes of past governments. Why have American’s not demanded that all government leaders must first publish their comprehension of the laws and morals they will adhere to? Since the oath of office has become meaningless, why don’t we insist that all government leaders sign a contractual oath of performance, with clearly defined objectives, rewards, and penalties? If a man or woman cannot clearly articulate in writing and speaking how they perceive the Nation’s needs, and also clearly explain their proposed solutions to Problems, why would any thinking person support them? I conclude that America is sorely short of thinkers, and has a pandemic of self-serving ignoramuses’.

One can also construct a convincing argument that the learning disabilities so prevalent in America are the result of government planning. Ignorant people are so much easier to manage and control. But then again, what kind of intelligence is needed to perceive danger? Do people need to be educated to perceive personal danger, or is it a natural intellectual attribute? If people who borrow money from a loan shark with no intension of paying the debt need an education to prevent that mistake, then God help us. If people need an education to prevent them from strolling on a busy interstate highway, then God help them. What the hell has happened to the American comprehension of danger? Continuing to support this federal rogue government is ludicrous!

We have abandoned God, logic, and common sense in our pursuit of profit.

Money is not the only, or even a justified objective of labor, investment, or any other pursuit. Personal safety is, or should be our instinctual objective.

Now back to RAGE, and its necessity for justification of murder.

Can any learned person object to the murder of all of the international bankers, when their exploits are so well documented? Does their exploits not justify Rage? Where is there a Grand Jury that will investigate the banker’s atrocities and indict them for crimes against humanity? There is no other group of people in all of history more deserving of murder than these scumbags, and the entire population of America is sitting on their ass and allowing it to escalate. With each passing second we the people are being murdered by this evil leviathan called central banking. Its monstrosities are legendary and the most putrid example of human action. Yet, where is the cry for revenge? Where is the person who will stand up and shout “YOU ARE FOUL AND DESERVING OF DEATH“?Even Present Kennedy did not have the good sense to construct a grand jury, and instead tried to beat them at their own game and print our own money. Like Lincoln, he paid with his life for that mistake, and the cover-up that followed should have ignited a raging storm of protest, but Americans sat on their ass and accepted the bankers sovereign right to murder. If they can do it, why the hell can’t our government murder them, unless of course our government is controlled by them? Go ahead sheeple, and vote for another hero, and I guarantee you the world will not forget, or forgive our cowardly acceptance of this tyranny. We personally will suffer the consequences of our blind acceptance of these scumbags as our leaders.

Unless a hundred million Americans understand that, and become enraged enough to take action that will result in the International Bankers being indicted, prosecuted, and murdered for their global genocide, then we are the dumbest of humanity and deserving of the coming destruction.

America, the land of the free, and the home of the brave, my ass!

OldDog


Is the U N stealing control of our water and Republic right out from under us?

07/04/2011

http://ppjg.wordpress.com/2011/07/04/is-the-u-n-stealing-control-of-our-water-and-republic-right-out-from-under-us/

 ”IWRM is the (planning) process which promotes the co-ordinated development and management of water, land and related resources, in order to maximize the resultant economic and social welfare in an equitable manner without compromising the sustainability of vital ecosystems.”

__________________________________________________

At water rights hearings at the Nevada Department of Water Resources, farmers and ranchers of Eureka, Nevada seem to be caught between a rock and a hard place.  Several articles have been written about their plight (links below).

But it seems like something “bigger” is happening.  It is, and it’s probably happening to you, too.

After the most recent hearing, I saw a flyer on a bulletin board in the hallway.  On it, the American Water Resources Association (AWRA) described a conference about Integrated Water Resources Management (IWRM).  The flyer linked IWRM to the Global Water Partnership and the 2002 World Summit on Sustainable Development in Johannesburg.

Does this sound as “American” as apple pie to you?  Or does it sound multi-national and make you wonder how this might relate not only to our water rights, but to our constitutional rights here in the U.S.A.?

The conference aims were to explore IWRM in detail from both “US and international perspectives” and ask questions like “Can the USA implement IWRM?” and “How can IWRM best be implemented?”

However, the bigger question should be, do you want your property (and our United States) to be governed by  international laws?

So what exactly is INTEGRATED WATER RESOURCES MANAGEMENT (IWRM)?

On the AWRA website, it states “Participants in the national collaboration process spearheaded by the U.S. Army Corps of Engineers defined IWRM in this manner: ‘IWRM aims to develop and manage water, land, and related resources, while considering multiple viewpoints of how water should be managed (i.e. planned, designed and constructed, managed, evaluated, and regulated). It is a goal-directed process for controlling the development and use of river, lake, ocean, wetland, and other water assets in ways that integrate and balance stakeholder interests, objectives, and desired outcomes across levels of governance and water sectors for the sustainable use of the earth’s resources’.” 

So, it’s also about managing the land and “related resources?”  Does this mean ALL land and ALL resources?  And who exactly will be offering the “multiple viewpoints” that IWRM aims to consider while CONTROLLING the development and use of river, lake, ocean, wetland and other water assets?  Who are the stakeholders?  Does the “stakeholder” group include PROPERTY OWNERS?  What exactly are the “desired outcomes” of earth’s resources and who is desiring these outcomes?

Whatever it is, IWRM wants everybody to do it:  The American Water Resources Association calls on policy makers, planners and managers at national, tribal, interstate, state and local levels to encourage collaborations, policies, programs and plans that embrace Integrated Water Resources Management.”

February, 2010, Secretary of the Department of the Interior, Ken Salazar, (the BP disaster in the Gulf happened with his oversight) signed an Executive Order establishing a water sustainability strategy for the United States calledWaterSMART.

What a coincidence!  The United Nations has a WaterSMART campaign, and this campaign includes Integrated Water Resources Management.

Doesn’t this seem like something that should’ve been run by Congress before Salazar just declared it a policy?  Our tax dollars are paying for U.N. programs to be implemented in the United States.  Are we paying for the demise of our Constitution?

A couple of reasons that United Nations programs are dangerous to our Republic is because our U.S. laws could be superceded by international laws, and also because other governments (“members”) and organizations (“partners”) including multi-national corporations (including private water companies) influence and form United Nations policies.

AGENDA 21  

The U.N.’s Agenda 21 (Chapter 38) states: “All agencies of the United Nations system have a key role to play in the implementation of Agenda 21.”

It seems that while Americans debate whether global warming and climate change are real or not, and while the U.N. fools people into believing its programs are about protecting the environment, there is one fact that is true for all Americans: Michael Shaw of www.freedomadvocates.com notes that the U.N. programs are about individual rights vs. community rights.  The U.S. Declaration of Independence protects the unalienable rights of each individual, but the U.N Declaration of Human Rights states that “Rights and freedoms may in no case be exercised contrary to the purposes and principles of the United Nations…”

ICLEI

One of the most important organizations to watch is ICLEI (also called Local Governments for Sustainability), established at the U.N.  It’s an international association of local governments pushing U.N.’s Agenda 21 (also called Local 21) into many U.S. local governments.  ICLEI has a water program.  In Nevada, ICLEI USA members include Las Vegas, North Las Vegas, Henderson, Clark County and Washoe County.   ICLEI has “Cool Mayors.”  In fact, the mayor of Las Vegas is on the Board of Directors of ICLEI USA.  Do you think this is “cool” or do you think this is unconstitutional?

On ICLEI’s website, it states that its International Goals are to promote:

Do you think the “Cool Mayors” have read all of the documents relating to all of this?

THE U.S. ARMY CORPS OF ENGINEERS

You might also want to keep an eye on whatever the Army Corps of Engineers is spearheading.  The U.S. Army Engineer Institute for Water Resources has aMemorandum of Understanding with the Global Water Partnership.

The Sept. 12, 2008 Federal Register states that Sec. 2031 of Water Resources Development Act of 2007 requires that the Corps use the Integrated Water Resources Management (IWRM).  And “There are many definitions of IWRM.  One of the most accepted is that of the Global Water Partnership.  IWRM is the (planning) process which promotes the co-ordinated development and management of water, land and related resources, in order to maximize the resultant economic and social welfare in an equitable manner without compromising the sustainability of vital ecosystems.”

“Equitable”for whom?  Who would benefit from this “economic and social welfare?”  Could “related resources” be your property?

The U.S. Army  Corps of Engineers is a “COLLABORATING SUPPORTER” and “IN-KIND SPONSOR” of the American Water Resourses Association Conference mentioned in the 3rd paragraph of this article.  This conference issponsored by UNESCO (United Nations Educational, Scientific and Cultural Organization) and ICIWaRM (International Center for Integrated Water Resources Management under the auspices of UNESCO).

GLOBAL WATER PARTNERSHIP

The Global Water Partnership was founded with the support of the United Nations Development Program and the World Bank, to foster Integrated Water Resources Management

NEVADA’S STATE ENGINEER

Getting back to Nevada, Jason King, Nevada’s State Engineer, is on the Board of Directors of the Nevada Water Resources Association (a non-profit corporation).  Other Board members include representatives of several mining companies (Barrick, Newmont & Kinross) and the Southern Nevada Water Authority (SNWA).  The Southern Nevada Water Authority will be  presenting aWaterSMART Innovations Conference in Las Vegas in October, 2011.

When I called the Nevada Water Resources Association to ask if it was a subsidiary of or associated with the American Water Resources Association, the woman who answered the phone told me it wasn’t.  But guess what?  If you go to the Nevada Water Resources Association website, they provide a link to the American Water Resources Association (which then leads you back to IWRM and the U.N.).

Nevada Assembly Bill 419 further threatens the water rights of farmers and ranchers by giving the State Engineer even more authority.  Marti Oakley of the PPJ Gazette noted that in A.B. 419, in Section 2, #4: If the State Engineer “believes” the water has been abandoned, he does not have to have evidence or proof.  He can end vested water rights. Sec. 3, #7 (b) “says that even private domestic wells can be targeted if they are using too much water.  Compared to what?  Industrialization?”

TO LEARN MORE

About ICLEI and Agenda 21, http://morphcity.com/agenda-21/iclei for excellent articles written by Cassandra Anderson

Read these two (also excellent) articles by Marti Oakley of the PPJ Gazette:

http://ppjg.wordpress.com/2011/06/19/just-another-brick-in-the-wall-un-agenda-21-in-us-law/#more-16780

http://ppjg.wordpress.com/2011/05/30/epa-and-corps-plan-to-seize-control-of-all-water/#more-16645

About the farmers and ranchers in Eureka, Nevada:

http://ppjg.wordpress.com/2010/12/07/chinese-government-money-is-buying-one-of-u-s-a-%E2%80%99s-biggest-mines/

http://ppjg.wordpress.com/2011/01/01/general-moly%E2%80%99s-mt-hope-mine-let%E2%80%99s-hope-the-%E2%80%9Ceureka-moment%E2%80%9D-doesn%E2%80%99t-spell-disaster/

http://ppjg.wordpress.com/2011/05/03/is-a-mining-company-giving-the-shaft-to-farmers-and-ranchers/

SOURCES:

http://awra.org/policy-statements.html

http://www.nvwra.org/links/

http://www.nvwra.org/directorsstaff/

Nevada A.B. 419 –http://www.leg.state.nv.us/Session/76th2011/Bills/AB/AB419_R1.pdf

http://www.doi.gov/news/pressreleases/2010_02_22_release.cfm/index.cfm

http://www.doi.gov/news/pressreleases/upload/WaterSMARTOrder.pdf

http://www.doi.gov/budget/2011/11Hilites/DH019.pdf

http://www.un.org/waterforlifedecade/watersmart.html

http://www.un.org/waterforlifedecade/iwrm.html

http://www.unwater.org/members.html

http://www.watersmartinnovations.com/index.php

http://www.icleiusa.org/

http://www.un.org/esa/dsd/agenda21/

www.iclei.org

http://local2012.iclei.org/

http://www.usace.army.mil/CECW/Documents/pgr/15Oct2008_PaulKirshen.pdf

http://www.gwp.org/en/Our-approach/Strategic-Allies/Institute-for-Water-Resources-of-the-US-Army-Corps-of-Engineers-IWR/

http://www.gwp.org/en/About-GWP/History/

http://www.freedomadvocates.org/articles/private_property/

 


Why is Gold Important to the World’s Economy?

07/02/2011

http://ppjg.wordpress.com/2011/07/02/why-is-gold-important-to-the-world%E2%80%99s-economy/

                                 

Just like the Internet outed the global warmers who were set to run a global CO2 tax scam to siphon wealth for The Chosen again.  The crooks in Washington, unable to get congress to pass such a scheme, are currently trying to force it upon the American public with unconstitutional EPA “regulations” and “laws.”

Hugo Salinas Price Counts the Ways in His Classic Article below this one.

Hugo Salinas Price’s article that compares the gold standard and the creation and preservation of jobs and local production versus a fiat world reserve currency system dominated by one country that uprooted jobs, destroyed local production, and caused devastating trade imbalances is a must read for anyone who wants to understand how the world got to where it is economically.

His article is an accurate picture of how a small group of international bankers control the majority of the world’s wealth from The City —a square mile financial center in the middle of London where money and global economies are manipulated for profit and control—and the Bank of International Settlements (BIS) in Basil, Switzerland, which funds The City’s central banks that print and control national currencies in strategic countries throughout the world, including the U.S..

Both The City and the BIS are sovereign “countries” with their own “laws” and police forces—answerable to no one and no nation.

Both are controlled and owned by the same bankers.

The City’s bankers have the knowledge, financial expertise, experience, and trillions to orchestrate—as they have been doing for decades—the big monetary picture that unfolds in Price’s article.

A couple of minor things that Price doesn’t expand on. One is that Nixon decoupled the dollar from gold and took the U.S. (and by extension, the world) off the gold standard in 1971.  He did that, but in reality was just the person who happened to be President at the time to sign the papers.  Nixon, a member of the Council on Foreign Relations (CFR), was instructed to do this by the CFR—a U.S. based confederate, like Goldman Sachs, for the Rothschild global financial cabal that’s headquartered in The City.

Price also mentions the “. . . international corporations were forced to find cheap labor in order to compete.”  That was what they told the public, but in reality they coordinated the off-shoring of America’s industry because if you could make a $20 shirt that cost $10 to produce in the U.S. for 50 cents in China, and sell it back to the U.S. for the same $20, your profit handsomely; the millions of American jobs associated with the manufacture of that shirt and similar goods such as television sets and computers be damned. America’s unemployment—somewhere north of 15 million with no hope of getting better—is in reality beyond 22 % . The 9% number bantered about by government shills is a lie.

No, the multi-national corporations had their sights first on Mexico, then on Chinaand Bangladeshand other slave labor “resources” way back. That’s why they set about writing laws for their paid congress to pass, such as the removal of U.S. tariffs (which previously protected them from the 50 cent foreign shirt makers) before they began shipping their key manufacturing operations to overseas sweat shops “. . .in order to compete.”

In his essay, Salinas Price talks about the monetary schemes that have been set in motion as a result of all this, their effects on the world’s economy, and their relationship to the gold standard.

The City established banking and financial operations in theU.S.because the dollar was set up to be the reserve currency for nations following WWII (which the London bankers had financed—both sides), with the gold standard as the dollar’s anchor.

These international bankers were already planning then how to use the dollar—through the U.S. Fed (America’s central bank) which they also own—at no cost to themselves, collect interest on the dollars they sold to the U.S. through the Fed, and use the dollar to literally put nations in financial double binds with their dollar-funded IMF and World Bank.

The bankers approached corrupt politicians in these nations to put up their country’s resources as collateral to bail themselves out of their own spending orgies, and from which there is no financial escape once the financial trap is sprung.  Upon default of their IMF/World bank loans, the bankers simply take control the country’s resources (collateral)—toll roads, food, fiber, water, minerals, mines, manufacturing facilities, banks. In this manner, The City has, over the last century, gained financial control of nations.

Currently, this classic financial gambit is underway worldwide, and is most visible in Greece, Portugal, Ireland, Italy, Spain, the U.S., and Middle East countries that have (or had) their own central banks independent of The City’s. These banksters also attempted to bankrupt and “claim” Iceland, but the Icelandic people bowed their necks, threw the bankers out, and started sending local bankers responsible for the country’s deliberate bankruptcy to prison.

Imagine that.

By the international banking cabal’s strategic log, it appears it’s time to take the dollar and U.S. Constitution down to make way for their appointed world government and currency.

Which they plan to control.

Salinas Price lays out their strategic currency plan to accomplish this.

But. . .there’s this thing called the Internet and its instant disbursement of knowledge to humanity.  All along this information superhighway there lies wreckage of the international bankers’ attempts to pull the wool over the public’s eyes as to their true intentions.  It has shined—is shinning—a light on these psychopathic bilge rats that create “wars” for profit and plunge humanity into economic abysses to enrich themselves.

No,  they’ve been outed; just like Internet outed the global warmers who were set to run a global CO2 tax scam to siphon wealth for The Chosen again.  The crooks in Washington, unable to get congress to pass such a scheme, are currently trying to force it upon the American public with unconstitutional EPA “regulations” and “laws.”

If the financial Wizards of Oz who operate behind the curtain can somehow neutralize the Internet, they’re home free.

If they fail, they may find themselves looking for asylum—if they can find a country that will take them.

Read the article (Master Piece) by Hugo Salinas Price below.


The gold standard: generator and protector of jobs

07/02/2011

http://www.plata.com.mx/mplata/articulos/articlesFilt.asp?fiidarticulo=161

 

By Hugo Salinas Price

The abandonment of the gold standard in 1971 is closely tied to the massive unemployment the industrialized world has suffered in recent years; Mexico, even with a lower level of industrialization than the developed countries, has also lost jobs due to the closing of industries; in recent years, the creation of new jobs in productive activities has been anemic at best.

The world’s financial press, in which leading economists and analysts publish their work, never examines the relationship between the abandonment of the gold standard and unemployment, de-industrialization, and the huge chronic export deficits of the Western world powers. Might it be due to ignorance? We are reluctant to think so, given that the articles appearing in the world’s leading financial publications are written by quite intelligent analysts. Rather, in our opinion, it is an act of self-censorship to avoid incurring the displeasure of the important financial and geopolitical interests that are behind the financial press.

In this article we discuss the relationship between loss of the gold standard and the present financial chaos, which is accompanied by severe “structural imbalances” between the historically dominant industrial powers and their new rivals in Asia.

World trade before 1971

From the end of World War II through the 1960s, all well-governed nations in the world sought to maintain a constant balance between their exports and imports. They all wanted to maintain a situation where they exported more than they imported, so that they could accumulate growing Treasury reserves of gold, or in its defect dollars, which, under the terms of the United States (US) promise in the Bretton Woods Agreements of 1944, could be redeemed by any Central Bank that requested gold in exchange for its dollars.

To be precise, we cannot fail to mention one exception. The exception to the rule was none other than the US. All well-governed countries sought to export more than they imported, except the US.

The US was not overly concerned with maintaining a balance between exports and imports, because – according to Bretton Woods – the US could pay its export deficits by the simple expedient of sending more dollars to pay its creditors. As the sole source of dollars, the US had a clear advantage over the rest of the world; they could pay their debts in (redeemable) dollars that they themselves printed.

Economists of the day warned of the danger of this practice, which resulted in a constant loss of American gold. From over 20,000 tons at the end of World War II, US gold reserves dropped year by year as certain countries, notably France, insisted on redeeming their dollars for gold at a rate of 35 dollars per ounce of gold. France incurred intense displeasure in Washington and New York due to its demands for gold in exchange for dollars; some analysts attribute the unrest in France in the spring of 1968 to covert operations by the US intelligence services, in a show of America’s disapproval of the behavior of France, led at the time by General Charles de Gaulle.

The US did nothing to slow the loss of gold. In the early months of 1971, Henry Hazlitt, a solid classical economist, predicted that the dollar would have to be devalued; he said it would be necessary to increase the number of dollars that would be needed to obtain an ounce of gold from the United States Treasury. Only months after his warning, the dam burst, and in August 1971 the US was forced to devalue its currency, because the amount of gold in its reserves had fallen to a dangerous level. (Today, many doubt that the US has the 8,000 tons of gold it claims to have in its vaults at Fort Knox and the US Military Academy at West Point, N.Y.)

What Henry Hazlitt never imagined was that instead of devaluing the currency – the recommendation of Paul Samuelson, Nobel Prize Winner in Economics, published the week before August 15, 1971 – President Nixon took the advice of Milton Friedman and declared that from that time forward the US would no longer redeem dollars held by the world’s central banks at any price. The US unilaterally violated the terms of Bretton Woods. In effect, it was actually financial bankruptcy.

Since then, all world trade – or most of it, as the euro, the pound sterling, and to a lesser extent the yen all compete with the dollar – is conducted using dollars that are nothing more than fiat money, fake money. Because all the world’s other currencies were bound to gold through the dollar, the immediate consequence was that simultaneously they also became fiat money, fake money with no backing.

Consequences of abandoning the gold standard

The consequences of that fateful day have overthrown all order and harmony in economic relations among the nations of the world, while facilitating and expediting the global expansion of credit because part of the dollars exported by the US ended up in the reserves of Central Banks around the world.

Countries began to accumulate dollars as the expansion of credit in the US advanced inexorably, now free of the restraint formerly imposed by Bretton Woods. The rest of the world was forced to accumulate dollars in reserves, because having insufficient dollar reserves, or having reserves that did not grow, or worse, having falling reserves, was a clear sign for monetary speculators to attack a country’s currency and destroy it with devaluation.

As the loss of gold ceased to be a limiting factor, the last restrictions on the expansion of credit were stripped away. A heavy flow of dollars to all parts of the world spurred the expansion of global credit, which did not stop until 2007. The international banking elite always strive to obtain greater profits and to that end always seek to expand credit. Starting in 1971, freed of the restraint of being required to pay international accounts in gold, or with dollars redeemable for gold, the constant unfettered creation of credit and still more credit ensued. It was boom time in the US.

The US, which paid the rest of the world with its own irredeemable dollars of no intrinsic value, lauded the adoption of “free trade” and “globalization”. The US could buy whatever it wanted, anywhere in the world, in any quantity, and at any price. Starting in the 1990s, its export deficits became alarming, but nothing was done to reduce them; on the contrary, they grew year by year.

Mexico, following the US example, joined NAFTA – the North American Free Trade Association. Down with import tariffs! Free trade with the world! The new vision offered the enthralling, seductive picture of a globalized world without borders, where everyone could buy and sell where they liked, with no limits. The 90’s were years of unbridled optimism for globalization!

Free Trade is unquestionably beneficial for humanity at large. It is good to be able to buy goods where they are cheapest; some countries enjoy conditions that favor them in production of certain things; each country should produce those things in which it has an advantage over other countries. Thus, the whole world can benefit from the good things each country has to offer. It is an appealing and sound doctrine, but… there is a crucial catch: the doctrine of Free Trade was conceived for a world where the sole means of payment was gold. When the doctrines of “Free Trade” and the “Comparative Advantages of Nations” were developed, the economists of the day could not imagine a world that did not use gold, but instead relied on a fiat money that could be created at will by a single country.

The “globalization” of the 1980s and 1990s and to date is based on the ideas of “Free Trade”. However, in the absence of the gold standard that existed when the doctrine was conceived, “globalization” had completely destructive results, which have caused the de-industrialization of the West and the rise to power of Asia.

In the decades prior to 2007 a massive fleet of cargo ships was created, which sailed for the US and Europe – the West in general, Mexico included – bearing all kinds of inexpensive, quality products made  in Asia. The flood was so great that local factories in the Western World were forced to move to Asia, to employ cheaper labor and continue to sell their products in the West.

My readers will know how many industries, large and small, have ceased to exist in the US and the West in general, because Chinese competition killed them. They will know as well how hard it is to find a product that can be produced at a profit in the developed countries. It is very difficult to find a niche for any product to be manufactured locally. The flight of factories to Asia to take advantage of lower wages caused unemployment where local factories were closed. For the same reason job creation is slow or non-existent.

A taxi driver in Barcelona told us: “Spain is a service economy. Industry is no longer our foundation. If tourists stop coming, we’ll die.” By the same token, it has been said of Greece: “It produces olive oil and tourism, and nothing more.” The US, industrial colossus of the post-war world, has been de-industrialized. Now, what are developed countries to do to create jobs?

Diagnosis of the evils of de-industrialization and unemployment

These evils appeared because gold was eliminated as a) a constraint on the expansion of credit and the creation of money, and b) the only form of payment of international debt.

Under the gold standard all players in international trade knew that it was only possible to sell to a country that sold something else in turn. It was not possible to buy from a country that did not buy in turn. Trade was naturally balanced by this restriction. The “structural imbalances” so commonplace today were unheard of.

For example, in 1900, Mexico could export coffee to Germany because Germany, in turn, exported machinery to Mexico. Germany could buy coffee from Mexico because Mexico, in turn, bought machinery from Germany. Each transaction was denominated in gold, and as a result there was a balance based on an economic reality. Because there was balance in world commercial relationships, a relatively small amount of gold sufficed to adjust the international balance. The world financial center which acted as a “Global Clearing House” was London. A few hundred tons of gold were sufficient to meet the needs of that Clearing House. For further reading on the function of London as a clearing centre for world commerce, see “Real Bills” and associated articles by Antal E. Fekete at http://www.professorfekete.com

Another example: In 1930, the US could sell very little to China, because the Chinese were poor and lacked purchasing power. Because the US sold very little to China, at the same time it could buy very little from China. Although prices of Chinese products were very low, the US could not buy much from China, because China did not buy from the US – China was poor and could not afford American products. Thus, trade between China and the US was balanced by the need to pay the balance of their transactions in gold. Balance was imperative. There was no chance of “structural imbalance”.

Under Free Trade with the gold standard, the great majority of transactions did not require movement of gold to complete the exchange. The goods exchanged paid for each other. Only small remainders had to be paid in gold. Consequently, international trade was limited by the volume of mutual purchases between parties; for example, Chinese silk paid for imports of American machinery, and vice-versa.

The gold standard imposed order and harmony. If President Nixon had not “closed the gold window” in 1971, the world would be radically different today. China would have taken a century or more to reach its present level. China could not buy much from the US, because it was poor; therefore, China could not sell much to the US.

All this changed radically with the abolition of the gold standard.

Everything changed because the United States, having removed gold from the world monetary system, could “pay” everything in dollars, and without the gold standard as a limiting institution, it could print dollars ad libitum – without limit. Thus, in the 1970s the United States started to buy huge amounts of high quality products from Japan, while the Japanese boasted: “Japan sells; Japan does not buy.” A situation that was impossible under the gold standard became perfectly possible under the fiat dollar standard. The Japanese became gigantic producers, their country an island transformed into a factory. Japan accumulated vast reserves of dollars sent from the US in exchange for Japanese products. This in turn triggered the de-industrialization of the US.

Take for example the US manufacturers of T.V. Some of the famous US factories that built TV receivers by the millions were “Philco”, “Admiral”, “Zenith”, and “Motorola”. The Japanese had better and cheaper products, and since the abandonment of the gold standard allowed Japan to sell without buying in turn, and allowed the US to buy without selling in turn, the result was that all the huge factories producing these TV’s in the US were closed down. That’s how “going off gold” closed down US industry.

Unlimited purchases from Japan flowed to the US and the world, because they were paid in dollars, which could be created in unlimited quantities. The balance the gold standard had imposed disappeared and imbalance took its place.

After 1971, the US embarked on a protracted, large-scale expansion of credit. As the nation was de-industrialized and high-paying jobs in industry disappeared, a lack of disposable income for the population was replaced with easy and cheap credit, to conceal the stagnation in per capita income. Consumer credit drove imports from Asia and furthered de-industrialization even more. The great expansion of American credit was made possible because the gold standard, which restrained the expansion of credit by the banking system, had been abandoned. It is no coincidence that some analysts have observed that in real terms, American workers have had no real increase in their income since 1970.

All mainstream economists consider the elimination of the gold standard perfectly acceptable. They still do not see, or do not want to see, that the “Law of Unforeseen Consequences” is at work: the enormous advantage the US gained by being able to pay unlimited amounts in irredeemable dollars has become the fatal cause of the industrial destruction of the US – and of the West in general. A Mexican saying applies: en el pecado llevas la penitencia – “sin brings with it its own punishment”.

The current malaise: financial crisis, industrial crisis, crisis of unemployment

Today the situation is far worse. China, with a population of 1.3 billion, has become a formidable power. No one can compete with China in price. China sells vast quantities of goods to the rest of the world, without the rest of the world having any chance of selling similar quantities to China, and China can do so, because today trade deficits are “paid” not in gold, but in dollars or euros or pounds sterling or yen, which will never be scarce: they are created at will by the USA, the European Central Bank, the Bank of England, or the Bank of Japan.

A fearful monster has been created as a consequence of the elimination of the gold standard, which imposed a limit: “You can only sell to those who sell to you; you can only buy from those who buy from you.” This limit no longer applies; everything is disarray, inequality, imbalance; “structural imbalance” prevails because we no longer have the gold standard.

The credit expansion boom has ended, and in its place we have a global financial crisis.  Today the problem of “structural imbalance” and the de-industrialization and unemployment it has produced in formerly industrialized countries acquires greater relevance with every passing day. What is to be done with the masses of jobless men and women? No one knows the answer, because the answer is not acceptable to the thinkers of today: the correction of “structural imbalances” and re-industrialization, in other words the creation of new jobs, lies in restoring the gold standard worldwide.

The “globalization” so highly praised by the financial press in recent years, has become the worst imaginable nightmare. It is no longer possible to support the unemployed with government handouts. The Sovereign State is close to bankruptcy. Thus, nature takes its revenge on those who dared violate its laws by seeking to impose false money on the world.

Richard Nixon’s elimination of the gold standard has proven to be the US’s best possible strategic gift to China and the rest of Asia. Today, China has a colossal industrial base that might have taken centuries to build, while the US is to a great extent devoid of factories and incapable of reclaiming its former glory. How tragic a fate for the US!

International and National Commerce

The word “commerce” is defined in the Concise Oxford English Dictionary as “Exchange of merchandise or services, esp. on a large scale [ French or from Latin COM(mercium frommerx mercis merchandise)]

Note that the “exchange of merchandise or services” cannot include as a complement to that exchange a fictitious payment with fiat money, which is neither merchandise nor a service, but rather a paper note or digital entry denoting a debt payable in nothing. In the case of the dollar, the debt is a debt of the Federal Reserve and registered accordingly on its balance sheet. A debt cannot be settled by tendering a debt instrument (which is payable in nothing in any case) and in effect, Balance of Payments debts have not, by any means, been settled in international commerce since 1971.

The non-settlement of international balance of payments debts has produced the accumulation of huge fictitious dollar reserves on the part of exporting countries, since 1971. The same holds for fictitious payments of export deficit debts with euros, pounds, yen or any other present-day currency. See the following graph:

Gold, up until the Bretton Woods Agreements of 1944, figured as the complement to the international exchange of merchandise or services and did settle outstanding balance of payments deficits, because it was a merchandise or commodity used as money.

According to the Bretton Woods Agreements, the fiduciary dollar was accepted as being as good as gold, with trust on the part of Central Banks upon the ability to redeem the dollar into gold. From 1944 up until 1971 then, these fiduciary dollars were held in Central Bank reserves as a credit call upon US gold; the final payment had not been effected and was delayed as a credit granted to the US until the dollars held in reserves were to be cashed in for gold at some future date.

As it turned out, the “fiducia” or “trust” was misplaced, for in 1971 the US reneged on the Bretton Woods Agreements of 1944, “closed the gold window” and stiffed the creditor countries. No final settlement of international commerce debts took place in 1971, nor has any taken place since thenthe truth of this statement is obscured by the mistaken idea that tendering a fiat currency in payment of an international debt constitutes settlement of that debt.

Once that false idea – that fiat money can settle a debt – is accepted as valid, then the problem of the enormous “imbalances” in world trade becomes an insoluble enigma. The best and brightest of today’s accredited economists attempt in vain to find a solution to a problem that cannot be solved except by the renewed use of gold as the international medium of commerce.

Regarding national commerce, the same reasoning applies. In reality, no one engaging in commerce in any country in the world today is actually paying for purchases, that is to say, there is no actual settlement of any debt. All individuals, corporations and government entities are merely shuffling debts (payable in nothing) between themselves, in the form of either paper bills or digital banking money, whether in dollars or any other currency in the world.

For internal national commerce the smaller value of the silver coin was convenient for day-to-day transactions at the popular level and did constitute settlement of debt when tendered in payment, for silver is a merchandise or commodity which, like gold, can participate in commercial exchange.

Today, China and the other great Asian exporters have belatedly realized that the dollars they received as “payment” for their mass exports are nothing more than digits in American computers. If the Chinese do not cooperate, the bankers in New York can erase those digits in half an hour, and leave China with no reserves. For this reason, the Chinese and Asians in general are buying gold, and will continue to buy it indefinitely: computers cannot erase gold reserves.

The awful truth about China is that the Chinese acquired their formidable industrial power in the short span of thirty years at a tremendous cost: for thirty years they worked for nothing. China has $2.5 Trillion of reserves; China does not have any use for these reserves, they have no intrinsic value and China does not know how to get rid of them in exchange for something tangible of value; these reserves are nothing more than digits in computers in the Western world. Net, net, net: China worked for thirty years to provide the world with a vast quantity of merchandise, in return for: nothing! Thirty years of slavery, to build an industrial empire!

Mexico: forced to use the protectionist “Band-Aid”

Mexico has its oil, perhaps more than we are told. Let’s hope so! Our economy is less complex, less sophisticated, than the US’s. According to a Mexican Treasury study carried out in 2007, 85% of Mexicans have no bank accounts – a good sign that they can get by on paper money and are not getting into trouble with credit card debt. The Mexican economy, as we see it, is like a broad, low pyramid. It is more stable than the American “skyscraper” economy, a highly complex economy. Mexico is better equipped to survive the present crisis than the USA.

In today’s great world financial crisis of false money, we are likely to see countries around the world resort to protectionism: the leaders will be the same countries that so recently sang the praises of “globalization”. In this probable case, Mexico will have to do the same. It is a far from ideal scenario, but it is imperative for lack of the gold standard. Protectionism limits productive efficiency in any country because it limits the market for its protected products to its own national market. A limited market hampers efficiency. The supply of goods available to the population will be more limited and probably of lower quality at higher prices. (Protectionism will have similar effects in the US.)

Mexico will have to restrict imports in the near future. Otherwise, we will suffer serial currency devaluations. Protectionism is not the best policy, but Mexico will probably be forced to resort to it, for lack of the gold standard, which would be the best means of creating jobs in the US, in the rest of the “developed” world and here.

The effective cure

If Mexico aspires to anything more, we shall have to wait for the restoration of the gold standard worldwide. In the meantime, neither demagogy nor Socialism will solve our problems. Only the gold standard can do that.

For our industrial capacity to gain access to international markets – and for Mexicans to gain access to products from international markets – it will be necessary to restore the gold standard. Bilateral trade agreements are not optimum. The optimum is to have the world as a market, where payment for exports is balanced by imports and residual balances are paid in gold. Payment in gold of export deficits and collection in gold of export surpluses is sine qua non. Under the gold standard, Mexico would achieve sustainable prosperity and full employment for our admirable workforce.

Products from China and Asia in general, which today undermine our industrial capacity and create unemployment because we cannot compete with the extremely low wages of the Asian countries, would cease to be a problem under the gold standard; if the Asian countries, which today invade our markets, do not buy similar quantities of Mexican products – which today they do not – they would not be able to export their products to Mexico. The gold standard would fairly balance exports with imports; it would prevent the strategic destruction of our industry and protect us naturally, without the need for protectionist barriers.

The same therapy Mexico needs – the restoration of the gold standard – is what the world requires to regain economic health and sustainable prosperity.

Under a restored gold standard, Americans will not be able to purchase goods from China, unless China purchases American goods with a similar value. If the Chinese find nothing of value to purchase in the US, then Americans will be unable to purchase Chinese goods. It’s as simple as that! To continue selling to the West, China will have to open wide its doors to imports!

If Americans find they simply cannot purchase Chinese goods, Americans will manufacture those goods themselves. Industries and new jobs will spring up like mushrooms immediately, to satisfy American demand. International balance will be restored, unemployment will disappear.

Protectionism is not a cure, it is a Band-Aid. Mexico will not achieve the prosperity of which it is capable through protectionism nor by resorting to Socialist measures that crush the creative spirit of the individual. Nor can we succumb to renouncing our nationality and accepting absorption by the US, imitating all the (very costly) measures the current US administration imposes on its citizens. The ideal combination for Mexico includes a moderate dose of nationalism, a government that does not incur deficits, the institution of a monetized one-ounce silver coin, the “Libertad”, to stimulate and protect savings, and eventual participation in a new global gold standard, in which our nation can find the opportunity to fulfill its destiny.

“The gold standard is the generator and protector of jobs.”

e-mail: plata@plata.com.mx