In response to a question from a reader I sent this out today:
Yes, I think a run on the dollar is coming. A lot of people are saying this, including a man named Dmitri Orlov who recently came out with a book entitled “Reinventing Collapse” that compares the crash of the Soviet Union in the 1990s with what he believes is coming here within a short period of time. I heard that at the last meeting of the G20 the U.S. asked Russia and China if they would agree to an orderly devaluation of the dollar, and the answer was “Nyet.” So something big is likely to happen. I don’t know what it will be. Continue reading →
After the collapse of the Soviet Union caused it to split up into its components, the newly-established nations each faced an economic crisis. In Russia the crisis lasted for a decade. Inflation had destroyed the currency. There was no banking sector to speak of. And the central government had failed to monetize the nation’s potential production through a functioning monetary system.
The answer? Barter–not only among individuals, but also among businesses and even with the central government. According to a study from the period by Dr. David Woodruff of MIT, “As of early 1998, 50-75 percent of exchange in industry took the form of barter…” With regard to payment of taxes, “In 1997, at least one-quarter of the revenue collected for the federal budget took a non-monetary form.”
Steven Pearlstein, business columnist for the Washington Post, published a column on January 6 entitled, “Recession Over? Not Unless We Make a Major Shift.” The problem is that the “major shift” Pearlstein writes about won’t solve the problem even if it takes place.
So is the recession ending? The professional cheerleaders from Wall Street think so, now that the Dow-Jones has surged past 10,500. Fed Chairman Ben Bernanke is also cautiously optimistic as the Fed begins to dismantle some of the emergency bailout programs it had implemented to help save the financial system from total collapse after the meltdown of 2008.
While Congressman Ron Paul’s Free Competition in Currency Act is not a workable proposal, it points to a deeply serious problem with the Federal Reserve System that must be faced if the U.S. economy is to have a future.
Over the last 40 years the Federal Reserve, with the acquiescence of Congress and the executive branch, has become the primary regulator of the economy. The prevailing philosophy is called monetarism, and it’s based on the raising and lowering of interest rates.
This period has been marked by the successive creation and destruction of several gigantic investment bubbles. After the Federal Reserve brought on the recession of 1979-83 by raising interest rates to over 20 percent, we had a bubble during the Reagan/G.H.W. Bush years based on business mergers and acquisitions. It was then that the fulcrum of the U.S. economy shifted from manufacturing to finance. This bubble collapsed in a recession that brought Bill Clinton to the presidency in 1992.
The crisis of 2008-2009 exposed the U.S. financial system as being unstable, subject to abuse, and tending to favor the rich while putting everyone else deeper into debt.
The housing bubble was based on the biggest credit inflation in history. It raised the prices of homes to unprecedented levels but created the deepest recession in a generation when it collapsed. $6 trillion in wealth has now simply disappeared.
Meanwhile, unregulated global capitalism continues to concentrate wealth, outsource jobs to the cheapest possible labor markets, accelerate U.S. unemployment, and destroy local and regional economies.
The United States does not control its own destiny. Rather it is controlled by an international financial elite, of which the American branch works out of big New York banks like J.P. Morgan Chase, Wall Street investment firms such as Goldman Sachs, and the Federal Reserve System. They in turn control the White House, Congress, the military, the mass media, the intelligence agencies, both political parties, the universities, etc. No one can rise to the top in any of these institutions without the elite’s stamp of approval.
This elite has been around since the nation began, becoming increasingly dominant as the 19th century progressed. A key date was passage of the National Banking Act of 1863, when the system was put into place whereby federal government debt was used to collateralize bank lending. Since then we’ve paid the freight through our taxes for bank control of the economy. The final nails in the coffin came with the passage of the Federal Reserve Act of 1913.
The United States military is engaged in the conquest of the world. This is not a secret. The strategy has been spelled out repeatedly by official Defense Department policy statements (”full-spectrum dominance”), think-tank studies (PNAC), and official government action by the president and Congress (the biggest war budget in human history).
It’s what led to the Reagan Doctrine which was the practice of picking off one small nation at a time. It’s what led George H.W. Bush to invade Panama and Iraq and the Clinton administration to destroy Yugoslavia. 9/11, whoever did it, followed by the Bush Doctrine of preemptive war, was a convenient springboard for the current phase involving Afghanistan, Iraq, and Pakistan. Next up: Obama’s impending assault on Iran, whether done with U.S. forces or Israeli proxies. The showdown with Russia and China is clearly on the agenda, subject to intense planning by thousands of uniformed and civilian analysts who earn a lot of taxpayer money.
If you want to get an idea of what America once was like, read the poems of Walt Whitman. Whitman was born in Long Island in 1819 and grew up in Brooklyn, N.Y. His family was poor, but even though he left school at the age of 11 he gave himself an education by reading and working in the printing shop of a newspaper until he gradually became a published writer. He worked as a teacher and news reporter and owned his own newspaper by the age of 20.
In 1848 Whitman was a delegate to the founding convention of the Free Soil Party. During the Civil War he worked as a nurse in Union military hospitals and held several government jobs, including interviewing Confederate prisoners for pardons. Some of his greatest poems came from his war experiences, including his famous elegy upon the assassination of President Abraham Lincoln, “Oh Captain! My Captain!” His great collection of poems, Leaves of Grass, was self-published. He died a national hero in 1892 in Camden, New Jersey, where thousands of people came to pay their respects. Contrary to the opinion of some, he was not a homosexual.
It’s too late for anyone to pretend that the U.S. government, whether under President Barack Obama or anyone else, can divert our nation from long-term economic decline. The U.S. is increasingly in a state of political, economic, and moral paralysis, caught as it were between the “rock” of protracted recession and the “hard place” of terminal government debt.
Jim Turner, a Washington, D.C., attorney noted for his work on consumer health issues, is filing suit today in federal court to stop all swine flu vaccinations from being given in the United States. The action was reported this morning on the health website NaturalNews.com.
According to NaturalNews.com editor Mike Adams, “The lawsuit charges that the FDA violated the law in its hasty approval of four swine flu vaccines by failing to scientifically determine neither the safety nor efficacy of the vaccines.”
The world’s most important gathering of monetary reformers takes place each year in Chicago at the American Monetary Institute’s annual conference. This year’s event takes place September 24-27 at Roosevelt University. Chairing the conference is Stephen Zarlenga, AMI director and author of the landmark book “The Lost Science of Money.” For information and the list of speakers, including monetary economist Michael Hudson, see the AMI website at http://www.monetary.org/2009schedule.html. While personal matters will prevent me from appearing on-site, I have sent the following remarks. Segments of my six-part DVD, “Credit as a Public Utility,” will also be shown.
The response was overwhelming to the article I published earlier this week criticizing the people who have been protesting the Obama administration’s health care proposals by disrupting town hall meetings, etc. (Click Here)
Using uncharacteristically harsh and personal language I even called them “cowards” and asked where were they when the government was throwing trillions of dollars in bailout money at the crooks responsible for the financial meltdown.
Well, I got an earful. About half the people who wrote to me agreed with what I was saying, including readers from Canada and Australia which have publicly-funded health care systems that seem to work. The other half did not, vociferously so. I got told to move to Russia (I don’t plan to), cursed at, and lectured about the evils of socialized medicine.
Therefore each of us must adopt an attitude of giving in relation to all other men. This attitude must include activities involving the economic life of individuals, nations, and the world. Economics is not just a search for efficiency or profits.
Such are among the lessons to be derived from Pope Benedict XVI’s recent encyclical, Caritas In Veritate, “Charity in Truth.” The Pope writes,
“Charity in truth places man before the astonishing experience of gift. Gratuitousness is present in our lives in many different forms, which often go unrecognized because of a purely consumerist and utilitarian view of life. The human being is made for gift, which expresses and makes present his transcendent dimension.”
Is anyone more than a little curious about where the so-called “populist revolt” against the Obama administration’s health care proposals is coming from and who is paying for it? You know, the revolt where people scream and disrupt town hall meetings, brandish guns outside in the street, accuse the government of planning mass euthanasia, and label a public option that would help some of the 47 million without health insurance get treatment as “socialist”?
My question is where were these brave patriots hiding when the Bush administration launched massive undeclared wars against Iraq and Afghanistan? Where were they when the military/CIA torture and rendition scandals erupted? Where were they when the Bush and later the Obama administrations gave away several trillion dollars in government bailouts, guarantees, and commitments to the financiers who engineered the biggest heist of the people’s money in history?