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Home > Classroom > Gold and Silver > Page 5

A Footnote to the Wolfson Economics Prize Contest

May 17, 2012 by The Gold Standard Institute International

Last year Lord Wolfson announced the Economics Prize Contest of 2012. At stake was the £250,000 Wolfson Economics Prize the richest economic award after the Nobel Prize. The essays were to address the sovereign debt crisis in Europe, in particular, the problem how to ensure the stability of the new European currencies after the possible dissolution of the euro-system. The five essays short listed for the award were published on April 3. The winner will be announced in July.

The present author submitted his essay without the slightest illusion that he may win, or that he may even be on the short list of the 5 hopefuls. His only motivation to participate in the contest has been to test whether the Establishment is now ready to accept the suggestion that it was no accident that the “Big Bang” of debt explosion occurred on the very same day, on August 15, 1971, when gold was exiled from the international monetary system. A glance at the chart of total debt will make the validity of that suggestion plausible.

As witnessed by the tables of contents of the five short-listed essays, only one of them mentions the gold standard explicitly, and that in the voice of disdain. Jonathan Tepper’s essay charges that “the gold standard has recessionary bias” and that “it puts the burden of adjustment on the weak currency country rather than on the strong”. Since the distinction between a ‘weak’ and a ‘strong’ currency under a gold standard is invalid, this can only mean that the gold standard is hereby charged with putting the burden of adjustment on the financially irresponsible instead of the financially responsible country. What is wrong with that? Could it not be that, perhaps, Europe’s and the world’s present troubles originate from the fact that the irredeemable paper currency system has shifted the burden of adjustment to the financially responsible countries, thus providing incentives for financial irresponsibility?

It was Milton Friedman on whose advice Richard Nixon discarded the fixed exchange rate system based on gold in favor of the ‘floating’ exchange rate system based on the irredeemable dollar. Friedman suggested that floating is an effective adjustment-mechanism of international trade. Imbalances are automatically rectified. The currency of the deficit country depreciates while that of the surplus country appreciates. As a consequence imports of the former become dearer and are throttled,meanwhile those of the latter become cheaper and are boosted. The process continues until balance is restored.

There is no need to deny the intellectual seductiveness of this ‘theory’.However, it has a fatal flaw without any redeeming features. It ignores the marginal terms of trade, that is, the ratio of additional imports to additional exports. In other words it ignores the change in additional imports that the unit of exports will buy. Note that it can be negative, as it always is in case of a devaluing country. For example, if the unit of export is one passenger car, then the devaluing country will have to export more cars to maintain the same level of imports.

Rather than restoring trade balance, floating makes the imbalance worse. It makes the terms of trade of the deficit country deteriorate. Whatever ‘benefits’ the deficit country may derive from devaluation are strictly ephemeral. They vanish as soon as the inventory of imported ingredients that go into exports runs out. Thereafter the devaluing country has to pay more, not less, for ingredients essential for exports. It will see its deficits grow rather than contract. In effect, the devaluing country is selling its valuable resources abroad at ‘fire sale prices’.

No wonder that the alleged benefits of devaluation are entirely illusory. History bears out theory. The US has been running a trade deficit vis-à-vis Japan for half a century. Since 1973, following Friedmanite precepts, the dollar’s value was beaten down 5-fold (!) against the yen. Instead of falling, the US trade deficit with Japan has increased 10-fold.

This shows that the system of floating exchange rates based on the irredeemable dollar is no valid substitute for fixed exchange rates based on gold if the goal is to achieve trade balance. Financial profligacy is independent of the monetary system under which it is practiced. It is nature-ordained that the burden of adjustment fall on the profligate country.

History will pass judgment on the prejudice of the jury of the Wolfson Economics Prize Contest 2012. The jury has failed to find a single submission worthy of mention among the 425 received that makes the connection between the sovereign debt crisis and the expulsion of gold from the international monetary system in 1971. In doing so the jury has failed to make a contribution to the solution of the crisis. Most likely it has made a contribution to its prolongation.

Note. The author’s submission to the Wolfson Economic Prize Contest 2012 entitled: How to Ensure the Stability of the New European Currencies? can be accessed on the website: http://www.professorfekete.com/articles/AEFSYNOPSISWolfsonEntry.pdf.

April 9, 2012.


ANNOUNCEMENT

New Austrian School of Economics

Munich, Germany

August 2012 (exact dates will be announced soon)

Title of the course:

CRITIQUE OF MAINSTREAM AUSTRIAN ECONOMICS

Marginalism; Marketability; The Real Bills Doctrine vs. the Quantity Theory of Money; Interest versus Discount; The True Role of the Gold Standard

This course is a seven-day, twenty-lecture session. Its topics are not recycled but new material. Its completion will earn one credit of the four needed towards a Bachelor of Monetary Science (BMSc) degree handed out by Prof. Fekete.

It is meant for those, including beginners, who are interested in the theory of money, credit, and banking, with special emphasis on the current financial and economic crisis. Previous courses are not a prerequisite.

For further information or in order to register for the course you can get in contact with the organizers Ludwig Karl and Wilhelm Rabenstein via mail (nasoe@ kt-solutions.de) or phone ( +49 – 170 – 380 39 48 , before calling please consider a possible time lag).

You might also want to take a look at the New Austrian School of Economics on Facebook: http://www.facebook.com/newasoe

http://professorfekete.com/articles%5CAEFAFootnoteToTheWolfsonEconomicsPrizeContest.pdf

Filed Under: Antal E. Fekete, Gold and Silver, Popular Economics

Hyperinflation Or Hyperdeflation?

April 22, 2012 by The Gold Standard Institute International

http://www.professorfekete.com/articles/AEFPositionPaper1.pdf

The Quantity Theory of Money

James Turk’s article Hyperinflation Looms dated April 20, 2010, is based on Quantity Theory of Money (QTM). It draws an analogy between Weimar Germany of 1923 and the United States of 2010. Both precepts are invalid. As far as the QTM is concerned, it suffices to point to the very fact, admitted by Turk, that it is possible to have a shortage of money simultaneously with the overworking of the printing presses. Hyperinflation is not the same as the ultimate inflation of the money supply. It is the ultimate depreciation of the currency unit. The two concepts are far from being the same, QTM notwithstanding.

The reason why QTM fails is that money is not one-dimensional. It is in fact two-dimensional. Quantity is one, and the velocity of circulation is the other dimension. Central banks control the former, and the market firmly controls the latter. As long as fair weather lasts, velocity may be ignored. But as soon as the weather grows foul, velocity returns with a vengeance. If it increases, we talk about inflation. If it decreases, we talk about deflation. In the extreme case the increase in velocity may start feeding upon itself and velocity could grow beyond any limit. People buy anything they can lay their hands on because they expect prices to rise further. This is hyperinflation, wiping out the value of the currency unit. It is an irreversible process: once fiat currency loses its value, it is lost for good. The pendulum has stopped swinging. If there is a bounce, it is the dead-cat bounce.

But it is also possible that, at the other end of the spectrum, the shrinkage in the velocity of circulation refuses to stop and starts feeding upon itself. People postone buying indefinitely because they expect prices to fall further. This is hyperdeflation. It manifests itself in the ever rising value of the currency unit. It is important to remark that it can happen while some prices are still rising. Other than gold, food and energy are two important exceptions. People have to eat, and they want to keep themselves warm and mobile, no matter what. Paradoxically, this may reinforce deflation. Because of rising food and energy prices people will have that much less to spend on other goods, accelerating price declines in other sectors. This defeats the arguments of Turk and others who try to refute the case for deflation by pointing to high or rising cost of food and energy.

The point in either pathology of money is that the government is helpless. Once the point of no return is reached, there is nothing governments can do to convince people that the process will end – short of opening the Mint to gold and/or silver. As far as people are concerned, the feedback from their experience tells them to expect more of the same.

I am not trying to adjudicate between the two schools of thought, one asserting that hyperinflation and the other asserting that hyperdeflation of the dollar is inevitable and imminent. I am merely trying to point out certain facts about deflation that most people are unaware of, or tend to ignore.

Let me state first that it is not impossible for the dollar to go into hyperinflation during the next 12-month period. For example, consider the case of a shooting war between the U.S. and Iran in the Persian Gulf. After an initial euphoria the American military could start suffering setbacks on the ground, in the sea and in the air, simply because of the longer lines of communication from the home base, and also because of the disadvantage of the aggressor in face of patriotic zeal on the part of the defenders (c.f. Vietnam). In this scenario hyperinflation of the dollar could be a possible outcome. But short of war threatening to destroy supplies and producing facilities the word ‘hyperinflation’ rings hollow in the ear.

Post-World-War I Germany versus Post-Cold-War U.S.

To draw a parallel, as Turk does, between Weimar Germany and present-day U.S. is, to say the least, grotesquely unrealistic. In 1923 the once mighty German army was defeated and disarmed, the navy was scuttled, the territory of the country was badly truncated by the peace treaty of Versailles, the Rhineland was under military occupation while the rest of the country was still under a partial blockade. No speculator would touch the falling Reichsmark, except to short it.

By contrast, the United States in 2010 has an army, navy and air force that can be put on high alert in a matter of minutes. Its military bases pockmark the face of the globe. The over-riding fact is that the whole world is still anxious to sell its wares on the American market, and is happy to lend back to it the proceeds of the sale in order to finance future U.S. purchases. Furthermore, it is a fact that the bond market trading U.S. Treasury debt is still the largest and most liquid in the world. Significantly, it still has room to go up – thus offering speculators juicy profits at a time when the bloom is off the stock and the real estate markets. How can you compare the circumstances of a beggar with those of the emperor – prodigal and bankrupt as though the latter may be?

All the signs around us point to deflation. The money supply is being pumped up on an unprecedented scale, but all it does is pushing on a string. You cannot make a case, as Turk is trying to do, out of the fact that the price of crude oil doubled as compared to its recent low. Another fact, more startling, is that the price of crude oil has declined 45 percent as compared to its all-time high. We must see the general decline in world prices, even though in some cases they may be disguised as a loss of pricing power of the producers. True, list prices have not declined, but nobody trades them. They are for window-dressing only.

Obviously, you need a theory to explain what is happening other than the QTM. I have offered such a theory. I have called it the Black Hole of Zero Interest. When the Federal Reserve (the Fed) is pushing the rate of interest down to zero (insofar as it needs pushing), wholesale destruction of capital is taking place unobtrusively but none the less effectively. Deflation is the measure of wealth in the process of self-destruction – wealth gone for good. The Fed is pouring oil on the fire as it is trying to push long-term rates down after it has succeeded in pushing short term rates to zero. It merely makes more wealth self-destruct, and it makes the pull of the Black Hole irresistible.

But why is it that the inordinate money creation by the Fed is having no lasting effect on prices? It is because the Fed can create all the money it wants, but it cannot command it to flow uphill. The new money flows downhill where the fun is: to the bond market. Bond speculators are having a field day. Their bets are on the house: if they lose, the losses will be picked up by the public purse. But why does the Fed under-write the losses of the bond speculators? What we see is a gigantic Ponzi scheme. The Treasury issues the bonds by the trillions, and promises huge risk-free profits to the bond speculators in order to induce them to buy. Most speculators believe that the Treasury is not bluffing and they buy. Some may believe that the Fed is falsecarding doubts and they sell. But every time they do they only see foregone profits. What we have here is a rare symbiotic relation between the government and the speculators.

When he was forced out of business by the courts, and his customers lost everything they invested, Charles Ponzi declared that he would have paid them to the last cent as contracted if they had let him. There is no reason to doubt his sincerity. Now, 90 years later, Charles Ponzi’s dream has come true. The US government is duplicating Ponzi’s scheme in the bond market. The only difference is that the stake is much higher: it is the national, nay, the world economy! And, most importantly, this time there is absolutely no danger that the courts will stop the racket. The world begs to be fooled.


Antal E. Fekete
May 5, 2010

Filed Under: Antal E. Fekete, Gold and Silver, Popular Economics

Galactic Gold: A Valentine Story

April 22, 2012 by The Gold Standard Institute International

http://www.npr.org/templates/story/story.php?storyId=7397200

Listen to the radio story with Neil deGrasse Tyson, director of New York City’s Hayden Planetarium here.


“Ever wonder where the gold in your wedding ring came from? This Valentine’s Day, we ask Neil deGrasse Tyson, director of New York City’s Hayden Planetarium, to explain the history of the rare element.


In the Beginning

According to Tyson, author of Death by Black Hole and Other Cosmic Quandries, all gold on Earth started out in the center of a star; he says stars are “in the business of cosmic alchemy.”

When the universe began, there were only two kinds of atoms: hydrogen, which has one proton, and helium, which has two protons.

The problem was that hydrogen and helium couldn’t combine to make a new kind of atom of three, four or five protons. The two atoms resisted each other because they were the same charge.

Unless, of course, it got very, very hot. How much heat would it take to get two protons to sit together?

About 10 million degrees, Tyson says. And that’s where stars come in.

Fiery Fusion

Stars like our sun are so hot that protons collide with such force and have no choice but to combine. It’s called fusion. Inside the sun’s furnace, protons turn into heavier and heavier atoms: Hydrogen atoms combine to become helium, and then those helium atoms combine to become carbon.

“It keeps going,” Tyson says. “Carbon and oxygen and nitrogen and silicon, and [fusion] just plows its way up the periodic table of elements.”

Carbon has six protons, nitrogen seven protons, oxygen eight protons. A hot star can cook all the way up to iron, a 26-proton atom. But that’s where it stops.

“When you reach iron, nobody can do anything… It’s dead matter. You can’t fusion it. You can’t fission i”,” Tyson explains.

Once a star has converted all its atoms into iron, it’s out of fuel.

“That’s a bad day for the star,” Tyson says. “And at that moment, the entire star collapses, and in that collapse, the star reaches stratospheric t


Article By Robert Krulwich

Filed Under: Gold and Silver, Popular Economics, Robert Krulwich

The Mind Conspirators

April 22, 2012 by The Gold Standard Institute International

More and more Americans today are coming to understand the terrible truth about our Federal Government — that it seeks to dominate us as citizens, to mold us into a society of dutiful Stepford Wives totally beholden to the wishes of elite politicians, bureaucrats and bankers. Those who study history, independent of the public school system, understand that this state aggrandizement process has been under way for the past 100 years in America in one form or another, and that it is taking place because too many of our citizens sanction such dictatorial usurpation and actually work diligently for its implementation.

This process has resulted in the lion’s share of our earnings being annually confiscated by these governmental elites and then redistributed to despicable projects of waste and war to further their dream of world collectivism. It has led to the shocking debasement of our currency and an endless escalation in the cost of staying alive. It has brought about the degeneration of our economy from a robust engine of industry and personal self-reliance to an effete conglomeration of bloated consumers subsisting on financial gimmickry and debt addiction. As a result, America, once a proud land of muscular factories and productive people, has become a stuporous society of shopping malls and welfare crybabies.

Why this process is taking place is one of the most disheartening questions in all of history. What follows is an attempt to show why and how it is unfolding. There are other reasons as to “why and how” than the ones given here. Tyranny’s evolution is always a complex process with many forces coalescing to bring about freedom’s demise. This essay, however, is a look into the two most important of those forces — ideas and money.

A very popular and frightening science-fiction movie in 1956, called Invasion of the Body Snatchers, is an apt metaphor for what is taking place in our country. In the movie starring Dana Wynter and Kevin McCarthy, a network of aliens is slowly and secretly taking over the bodies of the citizens of a small town by use of mysterious cadaver-like “pods” that are left in their backyards and basements. Once transformed into an alien, each citizen then tries to recruit the rest of his family and friends. It’s absolutely chilling in its impact — one of the great science-fiction movies ever.

Today’s collectivists, working so assiduously to transform America, are like the aliens in that movie. They permeate our entire society and are after not our bodies, but the enslavement of our minds and souls. Ideological fallacies and moral inversions are the mysterious pods that these aliens leave in the cerebral backyards of our lives. They are aliens because they wish to destroy our system of natural liberty and limited government. And even though most of them believe what they are doing is right, they are far from innocent, for they have /chosen to blank out/ on the horrendous ramifications of what they are doing.


Teaching a False Ideal

It begins in the school system. All modern authoritarian political movements have required recruitment of a disciplined, intellectual vanguard to proselytize the masses into accepting the authoritarian rule. This vanguard is recruited from the “best and brightest” minds of the nation involved. History shows how leading intellects of Europe used this strategy starting in the 1880′s and 1890′s to move Germany, Russia, and Italy into authoritarian political systems by the 1917-1930 period.

What history also shows is that the same thing has been going on in America for many decades, only on a more subtle level. The problem is that our media and our scholars lose their objectivity when analyzing their own political system and the ideas used to promote it. Thus, history’s lesson is ignored in order to further the recruitment of the American intelligentsia into promotion of collectivism.

Instead of being objective forums for the transmission of the values of civilization to the young, our colleges and universities have now become fervent breeding grounds for this statist recruitment process, in which the better students get swept up in the “false ideal” of collectivism. These better students then proceed out into the world to positions of intellectual, political and economic leadership, to proselytize the masses into this alleged ideal just as church missionaries used to go out into the world to spread the gospel. The difference being that the missionaries were spreading good, while today’s collectivists are pushing fallacies.

Such a vision very subtly conveys the notion that mankind is capable of achieving an egalitarian world where there will be no poverty, no disparity of wealth, no prejudice, no ignorance, no wars — in short a heaven on earth. The requisites for bringing about such a world are to eradicate the “dangerous workings” of the free-market through centralization of government power in Washington, and then eventually move to some form of world governing body. This is necessary because it is allegedly capitalism and man’s drive for profits that are responsible for the strife, wars and poverty from which the world suffers. Western civilization, having been built upon capitalism and profit, must be razed and replaced with a new civilization that will usher in this heaven on earth.

It is a powerful futuristic vision that is subtly instilled into callow minds who lack the necessary sophistication to resist. Being young and prone to idealism, they perceive “political centralization and a one-world government” to be an ideal just as the students in Marx’s day mistook his “dictatorship of the proletariat” as some sort of ideal. Thousands of highly intelligent students spring forth from this brainwash every year to enter the world and spread their newly learned convictions that capitalism and Western civilization are the “roots of all evil.”

These “best and brightest” of our youth advance over the years into prominent careers as teachers, journalists, publishers, movie directors, ministers, politicians, bankers, and businessmen — all the time working for and promoting the collectivization of our society. Yet they don’t see themselves as working for anything dictatorial. They think the political centralization and Keynesian economics taught to them by their mentors will cure the evils and inequities of the world. When they push for more centralized government, more taxes, more regulations, and more “liquidity injections” from the Fed, they are working for what they think will be a more benign civilization. They think they are working for an “ideal.”

As the great philosophers tell us, it is ideals that are the primary movers of men throughout history. Our tragedy is that we are educating one generation after another with “false ideals,” and the evidence that would expose the falsity of those ideals is not allowed a respectable place in our public schools due to those schools’ control by government bureaucracies and the statist viewpoint.


The New World Order

One of the most influential institutions resulting from this indoctrination process is what is called the Trilateral Commission. This is an international group of about 300 elite intellectuals, statesmen, bankers, and businessmen founded in 1973 by billionaire banker David Rockefeller as a spin off from the older Council on Foreign Relations (CFR). The Council on Foreign Relations is like the Trilateral Commission, only larger; it is composed of about 4,000 prominent leaders in business, government, and education, etc. It was formed in the 1920s by a group of progressive intellectuals of Woodrow Wilson’s era led by the openly acknowledged socialist, Edward Mandell House, who was Wilson’s chief advisor. Its official purpose was to coordinate America’s foreign policy with other nations to create a more peaceful and orderly world.

The group today claims vague educational goals and the fomenting of more international co-operation as its purpose, but numerous public statements from its leaders indicate that its policies are clearly directed toward transforming U.S. sovereignty and national independence into some form of world government. It has, since the days of its inception, been patiently working for this goal, and its spin-off group, the Trilateral Commission, is doing likewise.

In his book, With No Apologies, the late U.S. Senator Barry Goldwater tells us that while David Rockefeller publicly launched the Trilateral Commission, the brains behind its formation was CFR member Zbigniew Brzezinski, whose 1970 book /Between Two Ages/ set the tone for what is now referred to as a “New World Order,” in which the major nations of the world — the U.S., Europe, Japan, etc. — link together to plan and direct the fortunes of the rest of the world. In short, Brzezinski condemns national sovereignty as outdated and unworkable, saying that we need to rewrite the American Constitution, and eliminate our system of federalism in favor of a more centralized government in Washington and eventually subordination to a world government. [1]

Here we have a profound demonstration of how ideas shape the unfolding of history. The Trilateral Commission and its parent, the Council on Foreign Relations, are the end results of many decades of ideological corruption in our colleges and universities beginning as far back as the late 19th century. The men of zeal who are inducted into the Trilateral Commission have been indoctrinated with false philosophical, political and economic theories that declare limited government and laissez-faire capitalism to be “chaotic, unworkable and morally wrong.” These theories have their origin in the works of powerful collectivist thinkers such as Jean Jacques Rousseau, Auguste Comte, Karl Marx, and John Maynard Keynes.

The overwhelming majority of academics throughout the West have bought into these theories and have taught the Trilateral members in their youth this anti-individualistic conception of politics and economics. Is it any wonder then that the Trilateral members — advancing in their careers and armed with the power of such views — are driven to try and move humanity away from the “destructive evils of capitalism and limited government” by centralizing them under one rule. This is the nature of intellectuals; most of them will always attempt to further the cause of what they think to be politically and morally right.

Of course, it doesn’t hurt the Trilateral members’ motivation in all this that they see themselves as part of the leadership elite that is to organize, advise and run this future one-world government. Power has consumed men throughout history, and it is no different today. Its lure makes well-meaning men zealous and arrogant; it makes them believe that the Gargantua of government can be controlled once unchained from the bonds of the Constitution because it is in their “well-meaning hands.”

“In my view,” wrote Goldwater, “the Trilateral Commission represents a skillful, coordinated effort to seize control and consolidate the four centers of power — political, monetary, intellectual and ecclesiastical….What the Trilaterals truly intend is the creation of a worldwide economic power superior to the political governments of the nation-states involved….As managers and creators of the system, they will rule the future.” [2]

Former President Clinton’s Deputy Secretary of State, Strobe Talbot (a Trilateral member), succinctly expressed the organization’s long range goal in the early ’90s in Time magazine: “In the next century,” he declared, “nations as we know it will be obsolete; all states will recognize a single, global authority….National sovereignty wasn’t such a great idea after all.” [3]


Protectors of the Empire

In ancient Rome after the Republic had expanded into Empire, there evolved a super elite of ruthlessly skilled soldiers whose sole job was to look after the Emperor and protect him at all cost; it was called the Praetorian Guard, and its responsibility was to perpetuate the rule of the reigning despot in power, to guard him against all enemies, to use whatever means necessary to extend his power.

Goldwater likened the CFR and Trilateral Commission to a new Praetorian Guard for our age. The job of these highly influential academics, politicians, bankers, and businessmen is to insure the perpetuation of America’s centralized state and pave the path for its merging into a World State by any means. “To accomplish this purpose,” he writes, “they [mobilize] the money power of the Wall Street bankers, the intellectual influence of the academic community…and the media controllers represented in the membership of the CFR and the Trilateral.” [4]

A very apropos analogy indeed. The combine of the CFR and the Trilateral Commission is a modern reincarnation of Caesar’s corps of elite soldiers pledged to protect despotism — not literally in terms of physical prowess as in Caesar’s day, but much more sophisticatedly in terms of intellectual and financial prowess. The New World Order requires a new methodology of usurpation, and these ideological authoritarians have risen up to provide it in spades.

Their methodology has worked well for the past 75 years: Teach a subtle, socialistic serfdom to the more intelligent of our youth under the guise of an “ideal” society in which there will be no more poverty, hardship, and inequality in life if only we will construct a government that has a central bank with the ability to print money at will and is far reaching enough to control all the political-economic endeavors of man. Then sell this mess of pottage by throwing reason, history and the economic facts of reality down the memory hole.

The propagandistic “army of managers” that Aldous Huxley warned us about in Brave New World is now upon us. Such social engineers are the statist intellectuals in our high schools, colleges and grad schools. They have a powerful control over the minds of our best and brightest youth for 12 years, and they’re turning them into the most dutiful of apparatchiks for a new world collectivism.


Sanity and Rationality Give Way

This then is one of the primary reasons for the disintegration of America over the past century. Philosophical fallacies and socialist falsifications of economics and history have gained sway in the school system to poison our citizens’ minds against the American concept of freedom. Such fallacies have created a grossly distorted image for the man in the street about the way the world works. Freedom is now seen as inimical to human dignity. Creative entrepreneurship is portrayed as exploitation of the poor instead of their only hope. Gold is termed a “barbarous relic” instead of history’s proven store of value. Wealth is thought of as a part of nature and static instead of created by free men and infinite.

All the values that sustain civilized life (freedom, strength of will, independence, honor) are endlessly denigrated in our schools and media. We are being conditioned to accept sloth as normalcy, servility as dignity, weakness of will as compassion, and government conveyed privilege as justice. The world of sanity and rationality gives way to regimental nightmares of Orwellian “newspeak” and “political correctness” in order for legions of middle-class sluggards to feel good about themselves while they live out their spiritually squalid lives queuing up to the entitlement troughs of the mega-state.

Pretty bubbleheads preen daily on our financial networks, playing the shill to Wall Street and Washington in order to lure unsuspecting Americans into buying insanely overvalued stocks. The great market exchanges, once prudent arenas of investment where the engine of capitalism traded value for value, have become sham casinos staggering under decades of massive Fed created debt and lurching into oblivion on the greater fool theory.

Mole-like men posture as intellectuals with a perspective that extends no further than the previous decade. We now can have freedom without risk, plenty without work, and hope without heartache. Such are the illusions of modernity’s short range mentalities. Such is the fate of those who believe knowledge is numbers and truth a remnant of primitive times, that technology is a substitute for values and security more precious than liberty.

These are the irrational pretensions of our age. These monstrous absurdities, being promoted today as humane social policies, are the result of deeply flawed theoretical doctrinesthat have slowly permeated our academic community over the past 100 years — doctrines such as Jean Jacques Rousseau’s absolutism of the general will, which leads to majoritarian despotism; Karl Marx’s labor theory of value, which leads to massive wealth redistribution; Auguste Comte’s philosophy of positivism, which leads to moral relativism; Thorstein Veblen’s organic concept of society, which leads to the eradication of individual rights; and John Maynard Keynes’ inflationary monetary policy, which leads to the degenerate bankruptcy of our nation.

Such doctrines have produced what historian, Clarence Carson, calls a “collectivist curvature of the mind.” It is this collectivist intellectual warp that is setting the stage for the coming dictatorship. Once the Mind Conspirators have worked their ideological venom into the brains of our youthful intelligentsia during their formative years, they have recruited in most instances a lifelong apparatchik for their cause. If that apparatchik is brilliant and ruthless, he will attempt to rise in government and banking circles. He will seek to join elite organizations such as the CFR and the Trilaterals. He will strive to move the country toward the “collectivist ideal” of a one-world government.


The Role of Conspiracy

Many people on the political right today subscribe to the idea that not only are the elitist CFR and Trilateral organizations conspiring to establish a world dictatorship, they themselves are orchestrated from behind the scenes by a smaller, more secret conspiracy of mega-bankers. As this article shows, I certainly agree that collectivist elites are working to move us toward a one-world government, that these elites dominate the banking industry and bureaucracies of the nation, and that much of what they do is secret. But the banking / bureaucratic elites of modern collectivism are only part of the problem. The collectivist movement is a multi-faceted phenomenon of many levels and groups all pushing for bigger and bigger government because it furthers their power, status and wealth.

Obviously there are numerous conspiracies that take place within this push for bigger government. For example: The Plunge Protection Team, a crypto faction of the Federal Government’s Working Group on Financial Markets, secretly manipulates both the Dow and the price of gold. [5] The World Trade Center attack was surely more involved than the whitewashed accounting provided by the 9-11 Commission. [6] And the North American Union is not a means to better coordinate trade between Canada, America and Mexico; it is a deceptive scheme to take us toward regional government. [7]

Conspiracies abound throughout the West to expand political control and shrink freedom. It has been this way for thousands of years. Thus it is quite logical to assume that powerful bankers and bureaucrats are conspiring to move America into a one-world government? This is the nature of men in power. Only the naïve and ignorant believe otherwise. But as Ayn Rand pointed out in the 1960s, no country can be moved into a dictatorship simply by a “cabal of insiders.” History does not move on a singular axis. Ideology plays a paramount role. This is why Marx said, “Corrupt the money and the language, and capitalism can be brought down.”

The mega-bankers and bureaucrats are not the only deceivers here. There is another group in America working to destroy our system of freedom that is equally, if not more, important. As I have endeavored to show in this essay, it is the intellectuals in our school system. They have control over the minds of our youth from grade school through graduate school, and they are instilling into them an array of fallacies that is shocking and disgusting. Thus we must not limit our diagnosis of why America is descending into a dictatorship simply to the intrigues of conspiratorial mega-bankers and bureaucrats.

Today’s power elites are moving us into world government not just because of power lust and greed, but because of the ideological worldview that was laid down in their minds in their school years. It powerfully shapes their lives and makes them move in lockstep toward ever-increasing collectivism as they rise in their adult careers.

In other words, society is moved in much the same manner as the stock market. Just as there is a sentiment (i.e., an investor psychology) that moves prices up and down in the stock and commodity markets, there is also a sentiment or zeitgeist that permeates a society in any given era and moves its citizens one way or the other — toward tyranny and corruption, or toward freedom and justice. The 20th century zeitgeist was world collectivism, and we are still mired deep in its thralls.


Financial and Ideological Conspiracy

What has resulted from this zeitgeist is that there are two factions of collectivist elites operating in the world today – “political-financial” and “ideological.” They both wish to bring about the end of national sovereignty and move all nations toward a one-world government to be run by endless streams of fiat money and political regimentation.

The political-financial elites dominate our society by means of a fascist banking cartel and the conveyance of privileges via Congress to large voting factions. The ideological elites dominate our university system by means of persuasive but false doctrines to mold the minds of our youth. Both of these elites believe that the Founders’ constitutional system of free enterprise is unworkable, anachronistic, evil, exploitative, racist, and environmentally devastating. Thus in order to achieve a stable and just world, we must phase into a one-world government.

The political-financial elites do not overtly publicize their goal. They prefer to quietly smuggle our nation into a one-world government because they know there is too strong a tradition of freedom in America for her people to accept such a fate all at once. Thus it is implemented insidiously via deception, and therefore it is “conspiratorial.” After all, these elite bankers, moguls, and bureaucrats do not divulge their true intentions to the people at large, and much of their activity is secret.

Good examples of the insidious and deceptive nature of their activities are found in the following three quotes by Richard N. Gardner, a member of the Kennedy and Carter administrations, and the infamous mega-banker, David Rockefeller:

Richard N. Gardner told the CFR in Foreign Affairs in 1974: “In short, the house of world order will have to be built from the bottom up rather than from the top down. It will look like a great booming, buzzing confusion, to use William James famous description of reality, but an end run around national sovereignty, eroding it piece by piece, will accomplish much more than the old-fashioned frontal assault.” [8]

David Rockefeller had this to say to a Trilateral meeting in Germany in 1991: “We are grateful to The Washington Post, The New York Times, Time magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during those years. But, the work is now much more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national autodetermination practiced in past centuries.” [9]

In addition, Rockefeller wrote in his Memoirs in 2002: “Ideological extremists…attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure — one world, if you will. If that is the charge, I stand guilty, and I am proud of it.” [10]

Our political-financial elites thus have a common objective of world government, which they are very patient and discreet about. This gives them a conspiratorial incarnation. Our ideological elites, are supposed to be open pursuers of the truth constructing Socratic forums for their students; but any rational observer soon realizes that this is not the case. Rabid sophistry abounds in the colleges today. Political correctness dominates. Most scholars openly teach world government as the ideal, but they do it in sophistical form in unison with fellow colleagues. The fact that their sophistry is not consciously promoted does not make it any less deceptive. The youth under their influence are still corrupted. Thus theirs is a tacit conspiracy, rather than formally planned.

What is crucial to grasp from all this is that nefarious elites are indeed working to destroy a free, sovereign America; and the two main powers moving them toward such tyranny are FIAT MONEY and FALSE IDEOLOGY. Our politicians, corporate moguls and mega-bankers are driven toward world government because they lust relentlessly for wealth and power, but also because they have been taught that world government is the ideal for modern times. This agenda of world collectivism didn’t just spring full blown in their heads. It was hatched in the school system. Our political-financial elites are first prepared by collectivist ideology in their formative years by their teachers and professors. Without this ideological preparation, there would be no pervasive political movement toward a New World Order. There was no widespread enthusiasm for world government in America during the 19th century because collectivism was not taught in the schools. Our scholars taught their students philosophical individualism and the legitimacy of national sovereignty.

The powerful banking interests such as the Rothschilds have always been pushing the envelope to acquire more wealth and power. G. Edward Griffin’s book, The Creature from Jekyll Island, shows this. The Rothschilds were manipulating politics 200 years ago in order to gain more than they had a right to gain via free enterprise. But they were only after more wealth and power in their specific societies (as most bankers throughout history have been). They were not after a one-world dictatorship. This is because “national sovereignty” was still part of the prevailing ideology taught in everyone’s formative years. Once the views of Marx had gained sway by the turn of the 19th century, however, this all changed. After 1900, the ideology of the schools was dramatically altered; world collectivism became the ideal for which to strive. The “best and brightest,” who went into banking and politics, now wanted more than just wealth and power in their respective societies. They wanted the ability to govern the world. And the collectivist ideology being taught by the scholars gave them the zealotry and belief that such conquest was vitally necessary.


Who Controls Whom?

Therefore in my opinion, it is a mistake to view the financial / banking conspirators as primary in this drama. Those who hold this view admit that intellectuals teach false ideals in the schools poisoning the minds of the “best and brightest” coming through the system; but in their eyes, our intellectuals long ago were bought off by the powerful corporate and banking elites of the latter 19th and early 20th centuries. Men such as John D. Rockefeller, Andrew Mellon, and Henry Ford established prestigious foundations with billions of dollars to go toward grants to scholars who would teach the collectivist ethos. In this manner, the financial elites control and manipulate the intellectual elites into becoming their lackeys. They mold our scholars into salesmen for world collectivism. Thus the primary source of the evil taking over the world is the mega-bankers and corporate moguls whose reach stretches even into the hallowed halls of the academic arena.

This reasoning doesn’t fly. Anyone who has a working knowledge of scholars knows that the big creative minds among them are moved by an all consuming desire for truth and the ideal. They would no more allow men like Rockefeller and Mellon to dictate that truth than they would allow witch doctors to perform surgery on them. The second line scholars (the popularizers) take their cue from the top scholars and mold their thinking accordingly. Thus it is this leadership of the top scholars that indoctrinates the second line scholars, who then indoctrinate the “best and brightest” students with the one-world ideal of collectivism.

From where do the top scholars get their motivation? From the super-minds of history — the great philosophers, scientists, and economists. And super-minds like Isaac Newton, John Locke, Jean Jacques Rousseau, Adam Smith, Karl Marx, Auguste Comte, Ludwig von Mises, Albert Einstein and John Maynard Keynes do not bow and scrape before mega-bankers and corporate moguls. They revere the ideal of truth and seek it at all costs. They may grossly err in their discovery of it and plunge the world into terribly destructive fallacies (witness Marx and Keynes), but their motivation is cerebral rather than monetary.

Thus financial elites do not mold the intellectuals; the intellectuals mold the financial elites! The major foundations that the elites establish position themselves to be in line with the paradigms formed by the creators and super minds. “Second tier” scholars, of course, will often fashion their studies in ways to avoid biting the foundations’ hands that feed them, but these intellectuals are not the creators, nor the super minds. They are the popularizers; they do not create new paradigms and visions. It is the big-picture thinkers who do that, and they are not for sale.

Refusal to accept this relationship between intellectual elites and financial elites stultifies our cause. Everyone caught up in the fight for freedom directs his efforts to the areas in which he feels most comfortable. Some will fight the ideasthat are poisoning the minds of our youth, and some will fight the bankers who are corrupting the money and politics of our system. But it is crucial to understand the cause and effect process that determines what is really happening. We cannot reach our fellow citizens with the truth if we refuse to accept the “primacy of ideas.” We don’t all have to become experts in history, philosophy and economics to engage in this fight; but we do have to understand that ideological matters come first and learn as much as we can from the scholars of freedom in these fields. Failure to do this concedes the battle to the collectivist enemy who grasps such primacy very well and does not shirk from utilizing it.

The motive power behind history is the force moving all of us — the ideas that are laid down in our minds during the all-important formative years of our youth. Tyranny cannot be brought about by political and monetary elites alone; it can only be brought about by first corrupting the minds and souls of the citizens when they are young. The intellectuals pave the way for the Hitlers and the Lenins.

The intrigues of politics and the conspiracies of elite bankers play a very important role in the torrent of history, but the grand directive of all their action is IDEOLOGY and the guiding ideals that it promotes. When this ideology is false, it leads to tyranny. When it is true, it leads to the Founding Fathers and America’s original concept of freedom.

As the novelist Huxley profoundly put it, “It is in the light of our beliefs about the ultimate nature of reality that we formulate our conceptions of right and wrong; and it is in the light of our conceptions of right and wrong that we frame our conduct, not only in the relations of private life, but also in the sphere of politics and economics. So far from being irrelevant, our metaphysical beliefs are the finally determining factor in all our actions.” [11]


End of America as a Sovereign Nation

To sum all this up, there are “two conspiracies” at work destroying the freedom of the West — ideological and financial. Our drift into collectivist tyranny starts with the big thinkers of civilization such as Rousseau, Hegel, Comte, Marx, Keynes, etc. They create the tyrannical ethos, which then works its way through the academic arena to capture all levels of scholars, where it proceeds to poison each generation’s “best and brightest” who then go out and become society’s new power elites of mega-bankers, bureaucrats, and corporate moguls.

The goal of these intellectuals, and the power elites they spawn, is the cessation of America as a sovereign nation. The end of free enterprise and the Founders’ constitutional system of liberty must naturally follow in order to complete their vision.

We have been overrun by alien Mind Conspirators who are turning America into a nation of sheep. Their nefarious ideas have, over the past 100 years, saturated all our important institutions — from government, to the schools, to the churches, to Hollywood, to the media. These Mind Conspirators preach soothing words about the need for “stability, security and equality,” but it is the same goal of all tyrannical collectivisms throughout history — the enslavement of man justified by irrational ideology and sophistry. The only difference is that it is much bigger in ambition today; its goal is world domination instead of just societal control.

My book, The Conservative Revolution, delves into this ideological stream of collectivism that is corrupting America and puts forth a revolutionary plan for a third political party that will stop the carnage and restore sanity to our country. CLICK HERE to read a review and buy a copy.

A gargantuan crash of prosperity and freedom now looms up ahead as a result of our financial and intellectual corruption. Out of the crash will come a new society. Our only hope for that new society lies in whether we, who have kept the faith of our fathers, can inform enough of our fellow citizens as to what the requisites of freedom truly are. If we can, then a rebirth of America will take place out of the crash. If not, then some variant of Orwell’s nightmare will descend upon the world to enslave and stultify life for the upcoming centuries.


Notes

Barry M. Goldwater, With No Apologies, (New York: Berkely Books, 1980), p. 294.

  1. Ibid., pp. 297-299.
  2. Strobe Talbot, “The Birth of the Global Nation,” Time, July 20, 1992, p. 70.
  3. Goldwater, op. cit., p. 300.
  4. See Bill Murphy and Chris Powell at GATA, the Gold Anti-Trust Action Committee, http://www.gata.org/. Also Nelson Hultberg, “Cornered Rats and the PPT,” http://www.afr.org/Hultberg/cornered.html. And Nelson Hultberg, “Is the PPT an Urban Myth,” http://www.afr.org/Hultberg/urbanmyth.html.
  5. See Architects & Engineers for 9/11 Truth, http://www.ae911truth.org/.
  6. See Eagle Forum’s work on the NAU, www.eagleforum.org/topics/NAU.
  7. Richard N. Gardner, “The Hard Road to World Order,” Foreign Affairs, April 1974, p. 558.
  8. David Rockefeller in an address to a meeting of The Trilateral Commission, Baden-Baden, Germany, June 6-9, 1991.
  9. David Rockefeller, Memoirs (New York: Random House, 2002), p. 405.
  10. Aldous Huxley, Ends And Means: An Inquiry into the Nature of Ideals (New York: Harper and Brothers, 1937), p. 11.

Nelson Hultberg is a freelance writer in Dallas, Texas, a graduate of Beloit College in Wisconsin, and the Director of Americans for a Free Republic http://www.afr.org.

His articles have appeared in such publications as The Dallas Morning News, the San Antonio Express-News, The American Conservative, Insight, The Freeman, and Liberty, as well as on numerous Internet sites such as The Daily Bell, Financial Sense, and World Net Daily.

He is the author of The Conservative Revolution: Why We Must Form a Third Political Party to Win It. And he also has a forthcoming book on political philosophy, The Golden Mean: The Case for Libertarian Politics and Conservative Values.

Email him at: nhultberg@afr.orgv

Filed Under: Gold and Silver, Nelson Hultberg, Popular Economics

The Ancient Port Cities of Tyre and Sidon

April 22, 2012 by The Gold Standard Institute International

Maintaining stability and control in the global financial and monetary systems is, without a doubt, the greatest single challenge facing the leaders of the world today.

This century tells a story of the gradual and progressive debasement of our money from a wealth based gold standard to a valueless debt backed money. The loss of property, family businesses and farms (all the product of honest labour), the loss of jobs, bankruptcies and loss of savings and purchasing power are all the results of today’s debased monetary system.

Throughout the 80 or more years that today’s debt backed money system has been put into place, there have been many vocal opponents. They have pointed out the futility and un-sustainability of a system that would entrap, enslave, control and in-debt it’s participants, and their children, from the cradle to the grave, for the benefit of the few that profit from such a system. These oponents have called for the re-establishment of a gold or Bimetallic standard.

  • IMMEASURABLE WEALTH

The practice of using precious metal as money (especially silver), takes us back over 35 centuries to ancient Mesopotamia and Egypt. Precious Metals were used as a medium of exchange as determined by their weight and purity.
Along the Mediterranean coast north of Palestine lay Phoenicia. Since around 3000BC the Phoenicia port cities of Tyre and Sidon had stood alone as “the doorway to the East”.

Its men were among the richest and greatest merchants and sailors of the ancient world. Its shipping fleets worked the trade routes of the entire Mediterranean Sea. The goods it received from Mediterranean countries would then be taken inland to the Red Sea port where they were shipped east. Conversely the exotic wares from the Far East were brought back and sold throughout the Mediterranean.

This trading hub brought indescribable wealth to these great cities of the ancient world. Phoenicia, for instance, supplied timber, stone and craftsmen for King Solomon’s extensive building programs.

One writer in around 600BC spoke of Tyre’s wealth accordingly;
“Many coastlands were your own special markets. Tarshish trafficked with you because of your great wealth of every kind, silver, iron, tin and lead they exchanged for your wares. Mechesh traded with you, exchanging persons of men (or slaves) and vessels of bronze for your merchandise. Bet – togar – mah exchanged for your wares ; horses, war horses, and mules. The men of Rhodes traded with you bringing you payment in ivory-tusks and ebony.”

“Edom trafficked with you because of your abundant goods; emeralds, purple embroidered work, fine linen, coral and colored marble. Judah traded with you wheat, olives and early figs, honey, oil and balm. Damascus traded with you – wine and white wool for your abundant goods of every kind.”

“Wrought iron, cassia, and calamus were bartered for your merchandise. Dedan traded with you in saddlecloths for riding. Arabia and all the princes of Kedar were you favored dealers in lambs, rams and goats. The traders of Sheba exchanged for your wealth the best of all kinds of spices and all special stones and gold. Eden traded with your in choice garments, in clothes of blue and embroidered work and in carpets of color. The ships of Tarshish travelled for you with all of your merchandise”.

  • MODEL ECONOMIES

The famous Phoenician traders and their age old port cities of Tyre and Sidon stood as monuments to centuries of ‘barter of trade and exchange’. This was your textbook booming economy, boasting of every benefit, technology and luxury affluence could afford. It had diversity in its products range, guarantied markets, established and time proven infrastructure, geographical superiority, and military might. It had a broad customer base, productive labor force, limited government, strategic alliances, high inventories, and high margins of safety.

Yet these famous Phoenician trading cities, that had been for many centuries, the then world “success stories”; that had outlasted kingdoms, rulers and civilizations, eventually fell.

It was the same writer, a young Hebrew priest and prophet called Ezekiel that, while living in Babylonian captivity, spoke about the fall of Tyre. He eluded to the reason why that great center of commerce and trade, that had every thing going for it, would ultimately fail.

“by the multitude of your merchandise, or put another way – in the abundance of your trade you were filled with violence and sinned, and again a bit later “because of the multitude of your iniquities, in the unrighteousness of your trade you profane your sanctuaries”.

In their book “The Silver Bonanza”, authors James Blanchard and Franklin Sanders observe empires rising on a stable silver and gold monetary system and falling on it’s abandonment, a pattern that un-mistakenly weaves its way throughout all of history.

In an age before strict coinage, a system of weights and measures were used to determine value. Merchants and traders engaged in unrighteous trade would “falsify the balances of those scales by deceit”. In other words he would load the scales with incorrect weights to unrightfully profit from the transaction. As we have pointed out in the past, different methods of unrighteous trade have been employed throughout the ages depending on the money of the day.

The book of the Law, on which the ancient Israel State was built, said ; “you shall have just weights amongst you”. In the Hebrew Pentateuch alone there were six separate references to dishonest weights. King Solomon called unjust weights “an abomination”and in contrast said “just weights are the Lord’s delight”. Unjust weights and measures, just like debasing coins or printing valueless paper notes, or like multiplying electronic bank deposits today, all lead to inflation.

Inflation is high theft on the grandest of scales because it erodes the savings and the purchasing power of the masses. As the Hebrew prophet Amos put it “you make the bushel smaller and the shekel larger, swallowing up the needy and the poor of the land”.

Unrighteous trade in all its forms has been condemned at some point in all cultures. Again today it does not take much for the student of history to observe the enslaving effect of this practice.

As I said at the outset, for the best part of 80 years this same inflationary system has progressively been put into place. This debasement, when compared with the rest of history, has taken on all new proportions.

It has led to immeasurable heart break and suffering along the way. The loss of property, family businesses and farms, all the product of honest peoples labor; the loss of jobs, the bankruptcies and loss of savings are all the results of inflation. It exists so that governments and banks can profit by it.

With almost a familiar ring of today, found in the verses surrounding those writings, Ezekiel talks of the pride that came with the dizzy success of those famous Phoenician trading communities. “You have said I sit in the seat of the gods and in the heart of the seas, you consider yourself to be as wise as a god, by your wisdom and understanding you have got great wealth for yourself, and have gathered gold and silver into your treasuries; by your great wisdom in trade you have increased your wealth, and your heart has become proud in your wealth . . . ”

And then : ” therefore I will bring strangers upon you, . . . with the hoofs of his horses he will trample all your streets; he will slay all your people with the sword; and your mighty pillars will fall to the ground. They will make a spoil of your riches and a prey of your merchandise, they will break down your wall and destroy your pleasant houses; your stones and timber and soil they will cast into the midst of the waters. And I will spot the music of your songs and the sound of your lyres shall be heard no more. I will make you a bare rock; you shall be a place for the spreading of nets, you will never be rebuilt”.

To this very day, on that same piece of Mediterranean Coast, on the ground above the ruins of the once great city of Tyre, fishermen can be found mending their nets. Surely this should serve as a profound reminder to the fate of a society, no matter how abundant its trade; when it becomes filled with pride, practices unrighteous trade and falsifies their scales by deceit.

Philip Judge
Anglo Far-East Company


Philip Judge is the 3rd generation of a family that has had substantial involvement in the Precious Metals markets. He has researched, written and spoken on the gold, silver and commodities markets for over a decade. Philip works in the marketing and operations department of The Anglo Far-East Bullion Company, an internationally based Bullion Banking, Investment Management and Financial Services Company

Originally published September 22nd, 2009v

Filed Under: Gold and Silver, Philip Judge, Popular Economics

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