Rather than rambling on on the precious metals thread about this subject I place this here as it really follows the theme "What the Hell Happened"/
The important thing to understand and never forget in the Richard Russell article is: “This is the result of 96 years of Federal Reserve propaganda regarding their Federal Reserve Notes (we still call them dollars) being superior to Constitutional money – gold. It’s a testament to the power of mass brain-washing. Why do the Fed and the banks denigrate gold? Simple, they survive and make their living through dealing with and creating fiat currency.”
Trying to understand what the hell is going on with regards to gold I will comment further soon. Is gold the best bet at this price level? This is an extremely complicated issue and to me the concept and timing is most elusive.
I was forced into retirement at age 60 two years ago by the Federal Government, (yes there are age discrimination laws, but in America, you see, these things don’t apply equally to all.) My health was and still is excellent, my skill and proficiency level at my job was at its peak, and my passion for my job was intact. Only problem was I turned 60.
The result of the entire debacle is, I have been denied the ability to earn over $1 million in additional income. Lost $2.2 million in retirement from my defined benefit program. and likely lost another $95,000 in the distribution of funds recovered from a bankruptcy. (I may recover a portion of that depending on the outcome of a class action lawsuit which goes to trial next month).
Anyway, over the last two years I have tried to understand how the hell I got into this position. I am far from total understanding but you can bet I have done lots of research from technical analysis of markets, study of cycles, and history. The history part has been particularly enlightening and although what happened to my career is all about recent history the mechanisms for this mischief were put into place long before I was born.
Trying to understand why our founding fathers would insist in the Constitution to define money as gold or silver being the only form of legal payment, I read from many sources. Why would these very wise people not want to use paper money? Gold, silver and other metals are bulky and really cause many problems for settlement of debts both foreign and domestic. The transportation cost of sending such a thing any distance to settle debts would be prohibitive and there is always the risk of loss of such a cargo.
Creation and coinage of “money”, and for that matter what money is, can be quite interesting. A “thing” can only be what one perceives it to be. So perception to the human is paramount and what people accept as money can only perform as money as long as the general population perceives it to be a thing of value. Once they discover that it has no value, is when things turn ugly.
I can only assume the founders of our great REPUBLIC had only to be witness to all the paper money issues by other countries in the past and realize that it had always ended in failure of the currency due to inflation and wanted no part of it for our new nation.
To reinforce this attitude, Thomas Jefferson and Ben Franklin had spent lots of time in France in the late 1700s and I am sure, they knew and understood the results of John Law’s paper money and the Mississippi Company. Law, a Scotsman, was a banker who fled Scotland after killing a man in a duel found the French receptive to his paper money scheme and led to the ruin of the French monetary system. After the revolution in France the government needed money to pay for all the wars. They came up with an idea. Guess what more paper money in the form of the Assignat. There was great debate, and the proponents argued that this would only be one issue and it would stimulate the economy and put people to back to work. (sound familiar). The government confiscated all the church lands in France, (which were vast) and this real estate was the collateral for the Assignat. The argument for the Assignat was it was land. So the sales pitch to the people was, The Assignat represents something of value. The land of France. So a real estate bubble (once again) was given birth.
There were some wise politicians who argued against the issue of the Assignat.
Quotes from debates on issue of the French Assigant
“That infamous word, paper money, ought to be banished from our language.” – Anson
Anson also suggested the issue of paper money was “a loan to an armed robber”
The great French orator, Mirabeau speaks of paper money as “A nursery of tyranny, corruption and delusion; a veritable debauch of authority in delirium.”
In the end, the assignat was issued and though things went well for a while, they soon were running out of money in the government. So why not issue some more Assignats. Which they did after more great debate and sales pitch to the public.
Jean Anthelme Brillat-Savarin,who is remembered as perhaps, the best chef ever, should be more recognized for his insight and understanding of paper money. As he tried to call the attention of the French Assembly to the fact that the first issue of assignats had already felt the effects of depreciation and predicted that if they made this new issue there would be a depreciation of thirty per cent.
They then voted for the second issue of Assignats, declaring there was a difference between paper money which John Law had issued and caused great suffering in the nation. That Deceptive subtleties can no longer mislead patriots and men of sense in this matter. How sad.
A very good Treatise on this subject if the 77 page “Fiat Money Inflation In France” By Andrew Dickson White written in 1933. Link Below.
http://mises.org/books/inflationinfrance.pdfAll this occurred around 1790. Things went along just fine in the USA until the disagreement between the North and South in the mid 1800s. At this point I will have to blame Lincoln for everything that occurred which led to a war that slaughtered 600, 000 Americans.
It is far too complicated to put on these pages but you can read for yourself, provided you approach it as an unbiased student. Because Lincoln has been placed on a pedestal for so many years and we have all been taught what a wonderful man he was, It can almost be hazardous to denigrate the man in any way. I would though suggest one start by reading some of Thomas DiLorenzo’s articles if not some of his many books on this subject. Below is a link to an Archive of DiLorenzo articles. There are many articles listed there for your enjoyment. All are good but especially read the ones about Abraham Lincoln for a better understanding as it concerns the currency. There was plenty of underhanded dealings going on in the civil war era, and Mr. Lincoln was no saint.
http://www.lewrockwell.com/dilorenzo/dilorenzo-arch.htmlAt this point I would have to say the problem of slavery which we have always been brought to believe was the cause of the civil war, could have been solved as it had been in many nations, peacefully. And that the South would have ended slavery without a doubt if the political situation had been handled in a more forthright manner. There was no reason for that war. See Article on Lysander Spooner.
http://www.lewrockwell.com/dilorenzo/dilorenzo87.htmlI have more to say on this subject but will see if I have time this weekend to put it here. Comments are as always welcome. I could be all wet here as I rarely have an original thought
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