SITREP - continued 9/19/08

Continuing this SITREP from a senior citizen of seventy two years and ardent historian of sixty years, the nation is found in another economic crisis, that most noticeably having to do with recent bank bankruptcies like Lehman Brothers, an eighty-five billion dollar bailout of American International Group Insurance company (absurd on its surface – how does a government fifty-three trillions of dollars in debt bail anyone out – but more about that in a minute), and a collapsing stock market leaving everyone on Wall Street having those “issues” we hear about so much today – the issues being in their shorts.

Of course, the propagandist media shilling for the capitol’s criminal gang commonly known as congress, has begun its now patented and patent blizzard of bull issue, that in order to put the public even further in the dark than it already is, and prevent a run on banks and/or the end of investments in the archetypical capitalist swindle known as the stock market.

That’s easy, of further course, because the U.S. public knows next to nothing about economics or money, that due principally things like the fact that nowhere in the nation’s elementary or secondary education system can anyone learn anything about either subject. The only subject concerning which there is a similar prohibition is law. Nowhere in elementary or secondary education can a student learn anything about the law under which he must live. Think about that one.

Why, in a republic, would the government go to such lengths to assure the people are ignorant of the law?

Think about the economic issue – or rather, the lack of issue – where any information at all concerning money or the nation’s economy is concerned. The public is totally ignorant, meaning they must turn to journalists and news media pundits in order to learn what is happening. Some years ago, while touring the nation for the United States Judo Association, I indulged a penchant of mine, that of doing private surveys in order to learn the state of the nation and the public discourse. I have continued the practice here on the Internet. One of my surveys has to do with the public’s knowledge of fiscal matters, economics, and money.

I interviewed during my travels over a period of two years more than five hundred people, to learn that one person in five hundred could say how a dollar comes into being, and why. Ten people in five hundred knew what “national debt” means, and two people in five hundred person identified terms like “futures exchange,” “Bank of International Settlements” (which, by the way, has just ordered the Federal Reserve and the U.S. Treasury to call in all bonds and debt paper issued overseas – an obvious effort to stop the U.S. from taking the rest of the world down the economic toilet with it), “hedge fund,” or the like. Neither did anyone know what the term “derivative” means, nor how derivatives affect money, credit, et cetera. Terms like “swaps,” “forward rate agreements,” “forward contracts,” “credit derivatives” and the like drew shrugs or blank states.

Neither did a single person know how to compute the interest on his car or home loan, or know how to ascertain that he was paying the interest he believed he was paying. Asked how one might compute the payment on a new car purchased while still making payments on his trade-in, people merely laughed as though I were talking about rocket science.

For anyone wondering how we’ve come to be in the economic mess we’re in – especially as respects sub-prime home mortgages – there is no need to look further. The U.S. public has about as much business doing credit business as a high school kid with a learners permit has in the Indianapolis Five Hundred. To expect the U.S. public to know what an eighty-five billion dollar bailout of AIG, or that of the savings and loan institutions some years ago, or of bankrupt creditors in today’s housing market, means is ludicrous – as ludicrous as it is to believe the same people know the merits of what the current presidential candidates are saying concerning any of the supposed political issues.

Had any of the people I interviewed while doing my surveys known anything whatever about money, had their elementary or secondary education taught them anything about money or economics, they would know first that since creation of the Federal Reserve – an act of hocus pocus not unlike the creation by fiat of currently circulating U.S. money – the dollar has lost ninety percent of more of its purchasing power. The dollar’s vanishing purchasing power accelerated when the Nixon Administration repudiated the Bretton-Woods Treaty, the agreement wherein the U.S. promised the world that we would back our money with gold.

“Never trust a capitalist,” says Johanna, the heroine of my novel, “everything is for sale.”

One result of the dollar becoming nothing more than a claim upon the nation’s productive people has been the ruination of anyone’s chances of secure retirement in old age. With the cancerous erosion of individual wealth savings, most of it due staggering inflation by government (things like welfare for the military industrial complex corporations, the latest bailouts, and the like), it is impossible to retire securely and social security has been made a cruel joke, an albatross around the taxpayer’s neck, a political whore bankrupting and bleeding an already scrofulous and tubercular economy to death.

A fiat U.S. dollar backed “by the full faith and credit of the United States” is in fact guaranteed and collateralized by nothing more than the labor, skill, and talent of the productive individual. “Productive” means producing something real - an artisan, a farmer, a rancher, a carpenter, or the like. Lawyers, as a U.S Supreme Court Justice recently observed, are not “productive.” Neither are teachers, policemen, soldiers, and their like. All money is collateralized – given value - by the planet, and what the planet provides. In short, and by inescapable syllogistic logic, fiat money is a form of slavery. It forces someone to work for someone else without compensation by anything of value. The productive get nothing but a dollar whose value is derived from their toil, and together with income taxation, fiat money is the principle tool of government desirous of keeping the poor in poverty and the middle class in constant peril of joining the indigent. Together with income taxation, fiat money is in fact, a principle tool of tyranny, a way to increase the power of government inexorably.

Look around – how else do you explain the Brobdingnagian size of the federal government or its Frankenstein Monster behavior?

That, I should remind us all, is the reason the founding fathers and their. constitution forbid income taxation, fiat money, and the creation of a central bank. Currency collateralized, for instance, by gold or silver is not only always worth something because gold and silver will never be worth nothing, it is a powerful tool by which to restrict the size of government and control it.

Let’s realize, just for one example of that among hundreds, that had our U.S. version of Hitler been obliged to spend something other than fiat money – money behind which there was a quantity of gold and/or silver – he could not have invaded Iraq.

And, parenthetically, persons smart enough to heed my recommendation at the time of the savings and loan crisis in 1990 to buy gold have nearly quadrupled their money. In the future, stalked by government irresponsibility like the Iraq war and other forms of massive welfare for the military industrial complex corporations - things like the S&L bailout, the AIG swindle, and all the rest - gold will reach thousands of dollars an ounce, as a matter of fact.

A couple of days ago, writing on one of the internet websites other than mine, I made the following observation: “Get ready to experience what I experienced more than two decades ago. One morning you will awake, to learn that you have no money. That’s NO money. None! Nada. Nichts. Zip. Bupkis. More, you will lose your house and your car will be repossessed. No bank or lending institution will talk to you (in my case, IRS had called concerning me, and made threats; besides, no one will lend money to someone beset by the government).

There will be no jobs (in my case, the government took effective steps to assure that I would never again be gainfully employed, steps including threat of retaliation against prospective employers).

People who have been indoctrinated in capitalist ideals – meaning that the poor are that way because the want to be or because they are too lazy to be otherwise – will despise you. Friends, probably including your wife (the U.S. female is a venal, material creature, you know), will desert you in droves.

And watch those street people (there’ll be millions more of them, of course, people like you and your neighbors): once their welfare checks have stop coming, and turning to government with street demonstrations and marches avails them of nothing, they’ll be hungry. Hungry bums can be really mean (almost as mean as the super rich industrialists and financiers who made them that way in the first place).

Do I digress? No, not actually – this is a situation report, after all, and that’s the situation. I know because I lived it.

In case, however, I’ve talked anybody into believing that by buying gold and silver he can avoid the loss of everything when the government announces that his money has been devalued to one tenth of its face value (anybody ever read about the Great Depression?), we need to know a few things: first, you may starve to death before being able to use gold or silver as money. The public, you see, is ignorant about such things – the government is very, and obviously, desirous of that, after all – and has no way to know how to transact business in what amounts to barter fashion. You can’t put gold in a coin machine, or buy gas in gold or silver. No one with whom you do business – the clerk at Wal-Mart, for instance – is the person with whom you are actually doing business, and he will have no way or no authority to accept your payment in gold or silver. Indoctrinated and addicted to paper money, too lazy to go through weighing, haggling over the value of the gold or silver, etc, they won’t do business in anything but dollars until having to take a wheelbarrow full of paper money to Wal-Mart becomes too onerous and far too time-consuming for checkout clerks to count it.

Then, too, there is the fact that the government has taken steps to assure that you use their money – and, of course keep them all-powerful. The fiat dollar is legal tender, and must be accepted in all but very few monetary transactions. First, if you have a dispute, contractual or otherwise with someone over a transaction done in gold, silver, or the like, any court you repair to for settlement will settle the matter in Federal Reserve paper. You’ll lose any way you look at it.

Next, people use U.S. currency for the same reason that a person discovering that he has a counterfeit bill either passes it on by buying something or he loses whatever the face amount of the bill is. If he takes it to the police, he loses it – gets nothing in return. If he takes it to the bank, the same thing happens. People use worthless U.S. fiat money because once “stuck” with it, the only alternative is to lose whatever it bought from them or its value, usually their hard work or something they’ve worked hard to in order to acquire. The few people who have enough understanding of economics save only money that says on its face that it is a silver certificate, gold and silver coins whose real value is many times their face value, or the like. Anyone who saves paper money – counterfeit or fiat Federal Reserve notes - is a fool saving something absolutely worthless.

Look up Gresham’s Law. Oh, and by the way again: while you’re thinking about using gold and silver in order to stay off the streets, look up the history of the Commodity Barter Association. These folks were an association of people who not only traded goods, but backed their U.S. fiat money with gold owned by the association (exactly as the founding fathers intended our nation’s economy to run, you may notice). You’ll be interested in what happened. Remember about fiat money and the power it gives government.

Finally, when you go to buy gold or silver, you will be required to pay a sales tax. Think about that one: do you have to pay a tax on the money you get when you cash your paycheck? How about when you break a twenty into two tens or four fives? When you change a dollar for four quarters? On top of all that, you will be required to pay a capital gains tax on the gold you purchase. The increasing value of gold means that the money you’ll use to pay the tax has decreased in value, but you have a capital gain.

Now do you understand the reasoning, for instance, that we’re in Iraq and staying there? How about the way our oil companies are making unprecedented profits, but the price of gas keeps going higher? Good – now you understand how losing money represents a gain in capital, and why a nation of people having been made poor by the rich keep voting the rich into office – so the rich can keep doing . . . oh, never mind!


It’s something right out of Lewis Carroll, and Alice in Wonderland. With a nation nine trillion dollars ($9,000,000,000,000 – I get a kick out of seeing the number) in debt, and a society fifty-three trillion ($53,000,000,000,000) dollars in debt, the nation (our “leaders”) proposes to borrow from the society another eighty-five billion ($85,000,000,000). To get us out of economic trouble.

“’But I don’t want to go among mad people,’ Alice remarked.
“’Oh, you can’t help that,’ said the Cat: ‘we’re all mad here. I’m mad. You’re mad.’
“’How do you know I’m mad?’ said Alice.
“’You must be,’ said the Cat, ‘or you wouldn’t be here.’”

Will somebody please put out that @#$%&! Cat?