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Gold and Economic Freedom, Reinterpreted for the 21st Century, by JS Kim

smartknowledgeu's picture




 

I do not profess that the main structural arguments of the following essay are mine. Rather they belong to a rather famous former Chairman of the US Federal Reserve named Alan Greenspan as noted in his rather seminal 1966 essay titled “Gold and Economic Freedom”.  However, I have taken the specific arguments of that very prescient essay and modified and reinterpreted them to fit into the contemporary situation of our current global and financial crisis (that it its core, is a monetary crisis).  It is clear that at some point after his appointment to the Chairman of the US Federal Reserve in 1987, Alan Greenspan turned his back on the very structural beliefs about gold’s inextricable connection to freedom that he championed some twenty years earlier. However, Greenspan’s failure to uphold the ideals he once championed does not invalidate their keen insight and validity. Today, these very ideals are especially pertinent to the impending economic catastrophe we face today, despite the continued three-ring circus of government, Central Bankers, & corporate executives that continually tell us that the financial crisis has bottomed.

Today, due to the proliferation of fragile and confusing financial instruments called derivatives and the fraudulent nature of our fractional reserve banking system, hundreds of billions, and more likely, trillions of more dollars exist than claims on real assets and goods.  The comparable analogy would be if, as an Apple store owner, I sold the same 100 Apple desktop computers to 10,000 clients.  As long as no more than 10 of my customers required delivery in any given year, then my business could operate for many years without this fraudulent scheme ever being exposed. However, the instant my clients collectively decided they wanted to take delivery of all 10,000 computers in the same month, my ruse would be exposed and my business sentenced to a fate of bankruptcy. Almost all of us would agree that this would be an insane way to run a business yet we readily accept the fact that all major banks in every modern, developed nation run their businesses in this very manner. However, the development of such a situation would be next to impossible with the institution of a true gold standard and this is why Alan Greenspan once made the timeless statement that economic freedom and gold are inseparable.

A true gold standard would operate as follows. The introduction of any new supplies of money into the global economy would necessitate the equivalent purchase of gold to be stored as reserves to back them. Thus, if the power to print money was returned to the US government as explicitly stated in the US Constitution, Article 1, Section 8, and the US Treasury wished to print $1 trillion new US dollars, such an action would require the purchase of an additional $1 trillion of gold to back the new dollar supply. Of course there is not enough gold in the world to back all the trillions of dollars that exist in our current monetary supply unless gold were to be revalued somewhere in the vicinity of USD $10,000 an ounce, or perhaps even north of this figure. Or perhaps the standard would have to be a silver standard or a hybrid gold/silver standard.  For the sake of a hypothetical argument, however, let's examine how a gold standard keeps money “honest”. Once a new supply of $1 trillion was printed, every new dollar would be a claim on a portion of the US Treasury’s gold reserves, not just an empty piece of paper backed by the “full faith and credit” of the US government, as is the case today.

Because there is a cost to printing new supplies of dollars under a gold standard, the primary driver of monetary supply expansion would consequently become the sustainable expansion of real goods and services, NOT the speculative whims of a few powerful banking families that wish to drive up prices of unsustainable assets such as subprime mortgages, derivatives, dangerously overvalued stock markets, and rigged commodity markets for their own benefit. Inevitably, under our current fraudulent monetary system, such actions occur and lead to what the media erroneously terms as “bubbles” and which financial “experts” misinterpret as natural economic cycles. In reality, “bubbles” are grossly distorted unsustainable valuations of assets driven by the speculation and the monetary policies of the financial oligarchs that control the US Federal Reserve, the Bank of England, and the European Central Bank. This is why “bubbles” always burst. By the purposeful creation of bubbles, the financial oligarchs that create them increase their riches, and then plunder the wealth of their fellow citizens when these bubbles inevitably burst.  This accomplishes two important goals for the financial oligarchs.

(1) Since they create every capital market bubble in every major economy, inevitably, they understand exactly how to profit from these markets, and they increase their wealth and power substantially as these bubbles grow;

(2) Since most citizens don’t understand the extreme fragility of the bubbles the financial oligarchs create and instead interpret the bubbles as bull markets that cannot end, when the bubbles inevitably burst, this action conveniently strips wealth and power from the classes that reside below the financial oligarchs and stifles any chance for real opposition and dissent to their power.

It is the perfect con game.

A monetary system that is backed by a true gold standard, however, would never sustain an expansion of monetary supply to fund risky assets that have a high risk of blowing up and becoming worthless, because in doing so, the financial oligarchs undermine their own assets.  This is why they killed the gold standard in 1971. Under a true gold standard, it would have been impossible for this current global financial and monetary crisis to materialize, and here’s why. If banks continue to print new dollars backed by gold to support the purchases of risky assets, bank loans are inevitably paid back either slowly over time or not at all. Consequently, under a gold standard, banks curtail new lending by raising interest rates because they understand that the dollars they currently hold have greatly increased in risk in comparison to the real gold that backs them. Thus a gold standard successfully limits the greed driven behavior of banks and actually successfully stops further creation of ticking time bomb financial assets such as subprime loans. In the case where a bank refuses to curtail its risky behavior and continues to finance new loans for the purchase of risky assets, then a gold standard allows for their bluff to be called by any dollar owner. In other words, if a bank continues to expand the monetary supply to such an extent that many more dollars exist than claims on real goods, as people realize that banks are creating new money to finance risky assets that are likely to blow-up, people will either

(1) Demand gold in exchange for their dollars, or presuming that all other major global currencies are also backed by a gold standard;

(2) Exchange their dollars for another currency that they deem has not been diluted by the gold standard upon which that particular currency operates.

If scenario one materializes, and people demand gold in return for their dollars, the bankers realize that they will be granting a real asset to the people in return for receiving a devaluing asset that they are helping to devalue.  Under this scenario, banks will do everything in their power to retain their gold reserves and thus will increase interest rates to contract monetary supply and renew the currency’s strength. Such actions would then serve to stop the run on their gold reserves. 

If scenario two materializes, and people flood the market with US dollars by selling them to purchase other currencies that have maintained an honest gold standard, then again, banks would combat the devaluation of their own dollar holdings by raising interest rates, contracting the US dollar supply, and ensuring that the dollar’s strength returns to the equivalent strength of its rival currencies.
 
Thus, a gold standard automatically regulates monetary supply and monetary strength and there is absolutely no reason for Central Banks to exist and to allow Central Bankers to artificially deflate and inflate money for their own self-interests to the detriment of all other citizens. If one can understand that gold helps establish a free market where growth in sustainable goods and services drives monetary expansion, and not greed and speculation as is the case today, then it is easy to realize that not only is gold is linked to economic freedom as Alan Greenspan stated, but that it is also inseparable from the much broader concept of freedom itself.

However, a true gold standard is not even necessary to regulate integrity and honesty in the global monetary system.  The world gold standard that existed before it was ended by President Nixon in 1971 under the advice of then deputy  under-secretary of monetary affairs Paul Volcker and US Treasury Secretary John Connally, win fact, not a true gold standard, but a “pseudo” gold standard.  It was a “pseudo” gold standard because banks were allowed to create more dollars than the value of their gold reserves.  However, even under a “pseudo” gold standard, the above principles I described above would still automatically regulate free markets with little need for monetary policy decisions from Central Banks.  In the event that banks attempted to execute fraudulent schemes under a gold standard, their scramble not to lose their gold reserves could still cause sharp recessions, but these recessions, due to the self-regulatory nature of such a monetary system, would likely be very short in nature and consequent economic recovery quick.  Thus, a “pseudo” gold standard or “pseudo” gold/silver standard, though far from being perfect, is still much more preferable than the fraudulent monetary system we currently utilize today that allows financial oligarchs to create prolonged deep depressions and to destroy the wealth of the middle class.

People, ignorant of gold’s long history as a store of money, still erroneously believe gold to be a barbarous relic with zero intrinsic value. Today, hundreds of millions of people still ask, “What makes gold so valuable that it should back our monetary system?” Again, the lack of understanding about gold’s role in creating a free and honest monetary system is due to the fact that gold can call the bluff of the financial oligarchs, and they have done everything in their power, including the purposeful spread of misinformation about gold to prevent people from calling their bluff.  The spread of this knowledge threatens the very power of the financial oligarchs so they ensure that people do not understand the basic tenets of Greenspan's "Gold and Economic Freedom" essay.  It is not by mistake that gold has been used as a form of money for centuries and that, as a form of money, it has outlasted numerous other forms of paper money and even numerous other commodities once employed as money. Whereby ancient civilizations have used many different commodities over time such as corn, wheat, beads, clothes, etc. and instituted them as a means to barter for goods and services, it is by no mistake that ancient Egypt and the Roman Empire, civilizations that endured for long periods of time and required a more efficient form of money, eventually settled upon gold.

Gold has many qualities that make it ideal for use as money that other valuable commodities such as diamonds, platinum, rhodium, wheat, rice and oil all lack. Gold is a sufficiently rare enough metal to command a high value, it is extremely malleable and therefore easily divisible for use as money, it is uniform in quality, it is durable so retains its quality over time, and it has very little industrial use and thus is not consumed in any significant quantity over time. Though gold’s detractors continually spread misinformation about gold having zero intrinsic value and the US dollar as the only valid form of money, this argument is actually backwards. It is the dollar that has zero intrinsic value while the intrinsic value of gold has been well defined for centuries. All fiat money, whether the US dollar, the Japanese yen, the Euro, the Pound Sterling, the Icelandic Krona, or the Brazilian real, only has value because it is backed by the full faith and credit of their respective governments. Today, we know that the counterparty risk of all major global currencies is tremendous. Gold, however, has zero counterparty risk.

Ever since the financial oligarchs convinced US President Nixon to end the pseudo gold standard in 1971, there have been no limitations on any Central Bank in the world in regard to their ability to increase monetary supply, and to deflate and inflate currencies at will.  Translated another way, this means that there is no way for any citizen of the world to ensure that their Central Bank does not enact monetary policies that unfairly tax and devalue their savings. Quite literally, our modern monetary system allows no means for citizens to prevent the theft of their savings by Central Banks.  If one had $1,000,000 in their bank account in 2001, and today, in 2009, could only purchase half of the goods and services that he could have purchased with that money in 2001, it matters not if:

(1) the $1,000,000 retained the same purchasing power up until now but half the purchasing power was lost as a result of a 50% tax imposed by the government today, or

(2) if the 50% loss in purchasing power was a result of a 50% devaluation of the US dollar during the last 9 years. 

Central Banks don’t want you to understand that their devaluation policies are equivalent to robbing citizens of their wealth. Alan Greenspan himself stated in 1997 US Congressional testimony that "price increases are really the same thing as depreciation of the currency.”

Various arguments that have been levied against gold’s relevancy as a form of money, such as gold is worthless because one cannot eat gold if one is hungry, or Warren Buffet’s infamous statement that gold is a terrible asset because “it won’t do anything between now and then except look at you” are arguments devoid of any logic. One cannot eat US dollars either if one is hungry, and diamonds won’t due anything other than glitter and look at you either.  I imagine that Buffet’s statement about gold is a jab at gold’s extremely limited usefulness in industrial applications, yet it is this very “limitation” that has led multiple civilizations over many centuries to adopt gold as a form of money.  To the very contrary of Buffet’s core argument against holding gold, why would anyone would want to own a fiat monetary asset that has a value not determined by the sustainable growth of societal goods and services, but a value determined by the whims of financial oligarchs that can deflate and inflate it at will? Maintaining your hard earned money in the form of dollars, pounds and Euros and allowing Central Banks to devalue them day after day, year after year, is truly an argument devoid of all logic.

When considering the recent International Monetary Fund (IMF) request to Asian Central Banks to flood their markets with liquidity, the heads of Asian Central Banks would be well served to become a student of the Great Depression before making any decision to do so. After World War I, Great Britain began to lose excessive amounts of its gold reserves due to the Bank of England’s refusal to revalue the British pound - gold conversion rate despite greatly expanding British pound monetary supplies during the war.  Explained simply, in order to finance the war, the Bank of England had printed massive supplies of British Pounds without an equivalent increase in their gold reserves. Consequently, when the war ended, Britain had the same amount of gold backing a greatly increased supply of British pounds.

Simple math dictated that Britain had to devalue their pound or commit fraud by maintaining the same British pound-gold conversion ratio that existed pre-WW I. The Bank of England chose fraud over honesty, and citizens in turn, called the Bank of England’s bluff and began to convert their pounds into gold. When this happened, the Bank of England called on their sister Central Bank, the US Federal Reserve for assistance.  Rather than raising interest rates to contract their own monetary supply and strengthen the British Pound in this manner to restore the pre-WWI British pound-gold conversion ratio, the Bank of England call upon the US Federal Reserve to flood the United States with dollars, much as the IMF is now calling upon Asian countries to do. According to Alan Greenspan, “The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain's gold loss and avoid the political embarrassment of having to raise interest rates. The Fed succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process.”

Today, if the Asian Central Banks comply with the IMF's request, since we are not on a gold standard and there are no runs on a country’s gold reserves to prevent, the IMF’s request is meant to stop the rapid devaluation of the Euro, the British Pound and primarily the US dollar.  If the Asian Central Banks foolishly comply with the IMF’s request, they should be forewarned that the end result of their actions will be to destroy their own economies as well.

In 1998, Mr. Greenspan stated, “You don’t have a free market.  Central banks determine the money supply, not the market…We are not on a gold standard because leaders of the 20th and 21st centuries don’t want a market that functions in that manner.” The IMF’s request is driven by the desire of the world’s financial oligarchs to keep a fraudulent monetary system alive so that they can retain their power. Were the world to return to a gold standard or a combined gold/silver standard today, increases in global supplies of major currencies would be dictated by real sustainable economic growth of global economies and claims on currencies would be backed by real assets, not the untrustworthy empty promises of governments today. If we educate millions of people regarding gold’s central role to freedom, Central Banks cannot continue to keep financing bailout plans that ultimately steal significant wealth from their citizens. In fact, because there is no gold to lose under our current unsound monetary system, this is precisely the reason why large US banks had no problem continuing to feed growing bubbles of fraudulent assets such as subprime mortgages, asset backed commercial paper, etc.  In the end, they knew that they would be bailed out with taxpayer money, and there was no "house gold" to lose. Thus, billions of profits could be made by risking not their own assets, as would be the case under a gold standard, but by risking only the assets of the people.

French philosopher Voltaire once said that as long as people believe in absurdities, they will continue to commit atrocities.  Belief that freedom and an unsound fiat monetary system can coexist is one such absurdity. As result of this absurd belief, atrocities, such as the ongoing global hunger crisis from rising food prices that are a direct result of devaluing currencies, can develop.

Under our current fiat monetary system, the financial oligarchs that control the world’s central banks will continue to feed speculative bubbles because there is no way for the people to call their bluff other than exchanging one form of fraudulent money for another form of fraudulent money. The IMF Special Drawing Rights (SDRs) of a basket of fiat currencies is another absurd proposed "solution." What makes a basket of four or five fiat currencies backed by nothing fundamentally better than one fiat currency backed by nothing? In reality, when commentators say that the US dollar is backed by the "full faith and credit of the US government", do you know who is the "government"? Look in the mirror and you will know. In reality, when the Feds say "government", they mean you, for if they need to print more money so the government doesn't go bankrupt, the government will increase your taxes to raise more money for government transfer payments and to pay the interest on the money the Feds print. People that tried to protect themselves from dollar devaluation through the use of currency hedges discovered the futility of doing so at the end of last year and the beginning of this year when Euros, British Pounds, and Australian all plummeted by 25% to 30% in a matter of weeks.  If the World Series of Poker operated under the same rules as our current monetary system, the richest man or woman to enter the tournament would win every single tournament. No matter his hand, if there was no way to call his bluff, he could raise the pot every round to such rich levels that he could force all other players to fold even under the occasions when he held the weakest hand. Even a poker game is more honest than our monetary system for it allows other players to expose bluffs and walk away victorious. 

Under our current monetary system, there is no means to call the bluff of Central Bankers by using other forms of fiat money. The only way to call the Central Bank’s bluff is to buy gold and silver. Understanding this, it is easy to deduce why Central Banks, despite holding loads of gold in their own private reserves, continually attack gold, discredit its role in our monetary system, and seek to drive its price down. If masses of people were to discover and understand the true value of gold in a sound monetary system, then calling the bluff of our current fiat monetary system and causing it to collapse would be possible.

 

About the author: JS Kim is the Chief Investment Strategist for the independent investment research & consulting firm, SmartKnowledgeU,LLC. For more information, visit http://www.smartknowledgeu.com

 

 

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Fri, 10/09/2009 - 13:13 | 94171 Prophet of Wise
Prophet of Wise's picture

Our money is not our own. Our wealth is not our own. It is a means to an end. A loan against our potential. We enter into the world with nothing and we leave with nothing. Prosperity is not money. The worst use of money is found in the accumulation of property strictly for the purpose of seeking your neighbor's admiration and prestige. I live for my own standard; not man's. We all shall be judged by what we did with what we had rather than what we ended up with.

Fri, 10/09/2009 - 09:22 | 93998 MinnesotaNice
MinnesotaNice's picture

Very good read... nice to see you on this website...

Fri, 10/09/2009 - 09:13 | 93993 Anonymous
Anonymous's picture

Pizza delivery for Mr. Goldbug.

Your bill is 15.95.

No sir, I do not accept gold.

Perhaps if you invest in livestock. I don't accept that either, but in case you get lonely you can fuck that!

Fri, 10/09/2009 - 09:11 | 93991 Anonymous
Anonymous's picture

Pizza delivery for Mr. Goldbug!

Your bill is 15.95.

No, sir; I do not accept gold for payment.

Perhaps you should invest in live-stock. I don't accept that either, but if you get lonely at least you can fuck that!

Fri, 10/09/2009 - 08:54 | 93978 Anonymous
Anonymous's picture

GG, CB and SWR,

I had given up hope that people like you existed.

We will definitely win because following things:
1. Freedom of speech
2. Internet
3. Ayn Rand’s books

In Richard Dawkin’s book “The selfish gene”, he describes how good genes find each other and increase in population.

Invention of printing press made possible spread of knowledge and it ended the dark ages. We are at the beginning of similar movement because of internet. And now we have loophole-free Ayn Rand’s philosophy.

Avi

Fri, 10/09/2009 - 08:31 | 93949 Chumly
Chumly's picture

"If the World Series of Poker operated under the same rules as our current monetary system, the richest man or woman to enter the tournament would win every single tournament. No matter his hand, if there was no way to call his bluff, he could raise the pot every round to such rich levels that he could force all other players to fold even under the occasions when he held the weakest hand. Even a poker game is more honest than our monetary system for it allows other players to expose bluffs and walk away victorious. "

Need there need to be anything else stated about those who control the world banks?  The gold argument is not a monetary argument, it is a moral argument.  While noble, any form of gold standard is only as good as it is airtight against the immoral whims (greed) of its custodians.  Unfortunately, the custodians of modern "democracies" are the whims of the plurocracy, the dumbed-down vote of the majority that has always proven to be placated by bread and circus at the end of each "golden age" of (insert empire).

Western Civilization's grand experiment has come to its end and has proven to be no greater than any other in its end.  Gold is a moral form of currency only when its custodians are noble.  One cannot come before the other.

 

Fri, 10/09/2009 - 05:35 | 93906 Gordon_Gekko
Gordon_Gekko's picture

Great article, as usual, Mr. Kim.

Fri, 10/09/2009 - 02:28 | 93875 London Banker
London Banker's picture

Alan Greenspan stopped being an advocate for freedom when he was given the absolute authority to impose slavery (via increasing indebtedness) on the American - and ultimately the world's - citizenry. 

A slavemaster will not speak for or promote freedom to his slaves.

Fri, 10/09/2009 - 15:41 | 94448 texpat
texpat's picture

Hear! Hear!

The worm is starting to think about turning.

Fri, 10/09/2009 - 05:17 | 93902 Anonymous
Anonymous's picture

Is this the old London Banker we all remember and love?

Fri, 10/09/2009 - 02:23 | 93873 Hephasteus
Hephasteus's picture

Great article. I like the Voltaire comment piece.

It goes along with religion. "With God anything is possible"

When the impossible becomes possible it's often at the expense of the absurdly easy. We spend our days trying to live with and perfect the black rose. The black rose is a symbol for something not obtainable in nature. As long as we are focused on the black rose the other roses symbolism and meanings amount to nothing.

Thu, 10/08/2009 - 23:07 | 93777 Anonymous
Anonymous's picture

Outstanding, concise, ringing with the sound of truth. When the advice of wise elders is ignored because "times have changed and we know better", when arrogance supplants humility, when narrow interests overrule broader interests, when the lessons of history are ignored or forgotten, when fairness and compassion are consumed by greed and lust for power, fiat currencies thrive. And grow in size until there is nothing left to consume at which point they cease to exist. The Bullion (gold/silver) standard is the only known means of preventing Black Hole formation. Thus it was that wise elders, knowing their history, framed the US Constitution. Yet today, those in charge of the banks and financial institutions, along with their supporters daily pervert it. They should not be honored as fine, upstanding citizens but should be charged with treason - NOW - for they know what they are doing and care not one hoot.

Thu, 10/08/2009 - 23:06 | 93776 Anonymous
Anonymous's picture

...such an action would require the *purchase* of an additional $1 trillion of gold to back the new dollar supply

"PURCHASE" with what? Gold, Dollars, Euros?...

Thu, 10/08/2009 - 21:56 | 93721 Jay
Jay's picture

This is another fine article by JS Kim. Thanks.

Thu, 10/08/2009 - 21:48 | 93714 Apocalypse Now
Apocalypse Now's picture

Mr. Kim- Greenspan was probably chosen as Fed Chairman with the logic to keep your friends close and your enemies closer.

Thank you for the fine post, the strength and conviction of your writing reminds me of Ron Paul - another honest man that believes in honest money.

Your analogy of the poker game is perfect - like I always say, the guy with a printing press will always win in the end under this system.  It would also be like playing monopoly with an individual that just started printing his own currency and started buying up all the properties (fed is buying MBS).

Thu, 10/08/2009 - 21:24 | 93692 Anonymous
Anonymous's picture

Denninger does a good job deconstucting the gold standard argument. Put simply, there are many ways to represent value. Gold is one of them.

As Denninger explains, the issue with the meltdown was not lack of gold... it was lack of collateral.

http://market-ticker.denninger.net/archives/1490-Mish-Hard-Money-Goes-Of...

Fri, 10/09/2009 - 15:40 | 94443 texpat
texpat's picture

How much does it cost to mine an ounce of gold, because that's really what its underlying value is?

cf. 1 ct diamond is now worth about $200, cost to grow perfect diamond in lab.

 

Thu, 10/08/2009 - 22:10 | 93739 Anonymous
Anonymous's picture

denninger doesn't get it....value can be represented
by other methods but they all lack the grace of
nature which safeguards gold....and they also lack
some or all of the properties which money requires...

the money politburo debased the currency and regulators
conspired with the foxes to guard the henhouse.....
lots of mediate factors but the root cause returns
to dishonest money....

so although lack of collateral is a piece of the puzzle
root cause analysis would ask why there was a lack
of collateral....

whether anyone understands or not we have an implicit
gold standard through the gold exchanges and it
supports a vast superstructure of derivative wealth....
once that gold goes, everything above collapse
just like the world trade center

Thu, 10/08/2009 - 21:19 | 93690 Anonymous
Anonymous's picture

Excellent Article !

Truth has a certain unmistakable ring to it & this article rings true.

Thu, 10/08/2009 - 19:20 | 93603 Stevm30
Stevm30's picture

Enjoyed it - thanks for posting this.

Thu, 10/08/2009 - 17:15 | 93457 Pondmaster
Pondmaster's picture

Excellent arguments and points made . Bravo ! Encore !!

Thu, 10/08/2009 - 16:57 | 93434 Anonymous
Anonymous's picture

i only read the last paragraph and could tell that this article is must reading....bravo cy'est

rise up against the evil wicked bankster financial terrorist pigs and buy gold and take physical posession....this is the battle the suckass pigfarts cannot win....buy early and buy often...

Thu, 10/08/2009 - 16:55 | 93429 SWRichmond
SWRichmond's picture

It's gonna hurt really bad, but we're gonna win.

Thu, 10/08/2009 - 21:35 | 93701 Cheeky Bastard
Cheeky Bastard's picture

You have to understand, SW, that it is not you ( as in the USA ) who need to " win ". The victory needs to be global, it needs to include a better social, political, et.al. environment for all the people, from the smallest child in the backwards of Kandahar, to the almighty CEO of a WS powerhouse; a time in which a victory of one side was sufficient is long gone. Unity under a certain goal is the name of the game; every victory, which is not a victory by all and to all is just an event with a short term beneficial outcome. It is not the USA vs. the rest of the world; it is the World against those who wish to destroy it. There is no need for global re-territorialization of ideologies. This is a fight for freedom ( yes, even if that freedom includes NOT to accept the dominance of Anglo-Saxon model ), self-determinacy and for every individual and state to decide upon their own fate without the almighty repressive USA. Basically we are fighting for a freedom of choice, to chose and not to be forced.

Fri, 10/09/2009 - 14:57 | 94335 Anonymous
Anonymous's picture

Here I'm often reminded of Thomas Jefferson, who has been misrepresented far to often to be quoted specifically by me.

Needless to say, the American dream is alive and well, but I have a significant suspicion that it will take the utter demise of the current state known as America to realize that freedom and liberty once again.

America, as a socio-political economic system, has outlived its usefulness.

Well played, I completely agree.

Fri, 10/09/2009 - 08:50 | 93976 Anonymous
Anonymous's picture

GG, CB and SWR,

I had given up hope that people like you existed.

We will definitely win because following things:
1. Freedom of speech
2. Internet
3. Ayn Rand’s books

In Richard Dawkin’s book “The selfish gene”, he describes how good genes find each other and increase in population.

Invention of printing press made possible spread of knowledge and it ended the dark ages. We are at the beginning of similar movement because of internet. And now we have loophole-free Ayn Rand’s philosophy.

Avi

Thu, 10/08/2009 - 16:25 | 93377 lookma
lookma's picture

This was excellent.  Thank you.

Under our current monetary system, there is no means to call the bluff of Central Bankers by using other forms of fiat money. The only way to call the Central Bank’s bluff is to buy gold and silver. Understanding this, it is easy to deduce why Central Banks, despite holding loads of gold in their own private reserves, continually attack gold, discredit its role in our monetary system, and seek to drive its price down. If masses of people were to discover and understand the true value of gold in a sound monetary system, then calling the bluff of our current fiat monetary system and causing it to collapse would be possible.

Sounds a lot like Freegold emerging.

 


Fri, 10/09/2009 - 14:40 | 94292 Anonymous
Anonymous's picture

Interesting analogy, though gold is a completely arbitrary choice and it would never work today.

This argument, however is sound on two grounds. Namely that a fundamental backing by transferable assets is necessary and such a backing is required of most companies by backs in almost every credit transaction.

I've seen a number of these, and banks almost always require base collateralization (personal guarantee) AND typically calculate a borrowing base on 70%-80% of net inventories.

Why should our currency be treated differently? I say the value of our currency is against a weighted basket worth 70% of stockpiled (consumable) commodity inventories.

This still requires the initial creation of wealth out of thin air, but is not subjected to the same fundamental problems of either a fiat system or one based purely on precious metals.

Thu, 10/08/2009 - 19:15 | 93601 VegasBD
VegasBD's picture

Bring it on.

While its probably true that one could never be enough ready, me and mine are positioned for it now. Had this started a few years ago before I decided to take a year off of work for no reason and move to florida to split time between the beach and obsessing over economics, well, thats just a scary thought.

Fri, 10/09/2009 - 00:59 | 93836 Gordon_Gekko
Gordon_Gekko's picture

<rant begin>Somehow these insights have a habit of coming when you take some length of time off from work (i.e. slavery really, IMHO), which I think is the whole purpose of the whole 9-5 regime - to not give you enough time to THINK. BTW, those who think a 9-5 workday is just the natural order of things - NEWS FLASH - it's NOT (but I reserve that rant for another day). It happened to me during one of these time-off's as well. But I think you need at least an year of research and immersion in independent sources of information on the (non-state/corporate-controlled) internet to peel away all the layers that government propaganda has enmeshed us in. Our education system is in shambles right now.</rant over>

Fri, 10/09/2009 - 02:24 | 93872 Cheeky Bastard
Cheeky Bastard's picture

That's why i only work an hour and a half a day, 3 days a week ( OK i was fortunate enough to make that happen rather early in my life ) and spend the rest of my time ( some 20 hrs a day ) just thinking and practicing highly DIFFICULT disciplines in the spectre of human knowledge. And i do so fully emerged into what is real, as opposed to what i am being told that is real. Also 9-5 regime is a re-introduced slavery in the form of a Marxist anthropology and it is only widely accepted since the beginning of the 20th century. The one and only goal of 9-5 is to DISTRACT YOU and reduce you capabilities to think clearly and involve oneself into exploration of the fundamentals that constitute YOUR reality. There is no ultimate truth, but there are methods to bring you as close as possible to it. And 4,8,12 years of college education gets one barely started into it ( of course provided one is not indoctrinated by all the propaganda one has been exposed to during their years in the " educational system " ). BTW, nice post man. Also, the time one spends in the solitude of its own thoughts is the most precious gift given to a Man in his path to differentiating what is and what is not.

Fri, 10/09/2009 - 05:33 | 93905 Gordon_Gekko
Gordon_Gekko's picture
Thanks and f--king excellent comment Cheeky. Couldn't agree more. I have stopped "working" (in the traditional sense of the word as in I am going to do something for a fixed number of hours a day that I just have to do even though I hate it in order to survive) altogether and now my life is just one complete whole of doing whatever I want and like such as for example exploring the real world, how it works, why it works, etc. Money, I have found, takes care of itself. Just eliminate fear - the biggest tool of control used by our rulers, I might add - from your life. I used to part of the 9-5 "workforce" but one fine day my brain completely revolted. I just stopped going. There was something wrong with the structure of life presented to me by society and I knew it deep down inside even though I couldn't pin-point what it was. I just couldn't bring myself to enter the goddamn cube-farm again.
" just thinking and practicing highly DIFFICULT disciplines in the spectre of human knowledge."
I am definitely intrigued.
Fri, 10/09/2009 - 15:36 | 94438 texpat
texpat's picture

I won't go back in the cube farm. You guys have it right.

I have $30k to fit up a boat, and a small income that should be sufficient. I need a bigger income to support the wife though. Working on that now.

Dmitry Orlov lives on a boat, and he's a pretty smart guy. Also, James Baldwin is worth a read. 

Fri, 10/09/2009 - 05:50 | 93907 Cheeky Bastard
Cheeky Bastard's picture

welcome to the club my friend; now that the fear is eliminated, freedom will open its arms and give you its best ....

 

i think this sums up pretty good most of Humanity

 

We are like roses that have never bothered to
bloom when we should have bloomed and
it is as if
the sun has become disgusted with
waiting

 

 

 

 

 

Fri, 10/09/2009 - 10:35 | 94068 DrPsycho
DrPsycho's picture

CB do you have a reference for this beautiful and poignant little bit of poetry, or is it your own ?

Fri, 10/09/2009 - 13:18 | 94177 Cheeky Bastard
Cheeky Bastard's picture

Charles Bukowski; and here you can find out more of his poems http://plagiarist.com/poetry/poets/11/

Fri, 10/09/2009 - 09:18 | 93995 MinnesotaNice
MinnesotaNice's picture

Very interesting thread you guys... enjoyed your insights...

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