Anyone Who Goes To Work For A Central Bank Coin Is A Traitor

There’s a time and place for just about everything, and this is a time to be blunt:

Anyone who takes a job for a central bank or any similar entity, building a cryptocurrency, quasi-cryptocurrency or kind-of-blockchain-thing, is a traitor.

Not just a traitor to Satoshi (though that’s very certainly true), and not just to the crypto community, but a traitor to mankind.

This is how rulers enslave us. When we build some great new thing, they try to get rid of it. And if they can’t, they just hire us, build a version that suits them, and order everyone to use it. If compliance isn’t immediate they post a few heads on pikes.

It has happened over and over, but we can’t fall for it this time.

Anyone who builds a central bank coin will be forging the chains of mankind for mere paychecks.

Say it loud and say it proud.

Banning Cash: Serfdom in Our Time

Over the last few months a stream of articles have crossed my screen, all proclaiming the need of governments and banks to eliminate cash. I’m sure you’ve noticed them too.
It is terrorists and other assorted madmen, we are told, who use cash. And so, to protect us from being blown up and dismembered on our very own street corners, governments will have to ban it.

BanningCash

Over the last few months a stream of articles have crossed my screen, all proclaiming the need of governments and banks to eliminate cash. I’m sure you’ve noticed them too.

It is terrorists and other assorted madmen, we are told, who use cash. And so, to protect us from being blown up and dismembered on our very own street corners, governments will have to ban it.

It would actually take some effort to imagine a more obvious, naked attempt at fearmongering. Cash – in daily use for centuries if not millennia – is now, suddenly, the agent of spring-loaded, instant death? And we’re supposed to just accept that line?

But there are good reasons why the insiders are promoting these stories now. The first of them, perhaps, is simply that they can: After 9/11, a massive wave of compliance surged through the West. It may not last forever, but it’s still rolling, and if the entertainment corporations can pump enough fear into minds that want to believe, they may just get them to buy it.

The second reason, however, is the real driver:

Negative Interest Rates

The urgency of their move to ban one of the longest-lasting pillars of daily life means that the backroom elites think it will be necessary soon. It would appear that the central banks, the IMF, the World Bank, the BIS, and all their backers, see the elimination of cash as a central survival strategy.

The reason is simple: cash would allow people to escape from the one thing that could save their larcenous currency system: negative interest rates.

To make this clear, I like to paraphrase a famous (and good) quote from Alan Greenspan, back from 1966, during his Ayn Randian days: The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

That was a true statement, and with a slight modification, it succinctly explains the new war on cash:

The preservation of an insolvent currency system requires that the owners of currency have no way to protect it.

Cash is currency that you hold in your own hands, that stands more or less alone. It is primarily external to bank control. Electronic money – bank balances, credit, etc. – remains inside the banking system and fully subject to bank control.

A combination of no cash and negative interest rates would be a quiet, permanent version of what was done in Cyprus, where the government simply shut down everything, allowed only the smallest deductions via ATMs, and then stole money from thousands of bank accounts at once.

The Cypriot spectacle was fairly large, however, and that tends to undermine the legitimacy of rulership. So, it is much better to have no ATMs and no cash at all. There would be no lines of angry people talking to each other, only isolated losers with no recourse, licking their wounds while the talking heads on television tell them to stay calm and watch the flashing images.

Negative interest rates would give the banks 100% control over your purchases. They could, even in the worst pinch, allow you to purchase food while freezing the rest of your money. The average person would have no recourse and would simply be robbed… but very smoothly and with no human face to blame on.

Negative interest rates mean that your bank account shrinks day by day, automatically. Your $1000 in January becomes $950 by December. And where does that money go? To the banks, of course, and to the government. They syphon your money away, drip by drip, and there’s nothing you can do about it. This accomplishes several things for them at once:

  • It finances government, limitlessly and automatically. Forget tax filings; they can just take as they please.

  • It pays off the bad debt of the big banks. (And there are oceans of debt.)

  • It forces you to spend everything you’ve got, as soon as you get it. (Otherwise it will shrink.)

  • It gives the system full control over your financial life. Everything is monitored, everything is tracked, and every single transaction must be approved by them (or not). If they decide they don’t like you, you’re instantly reduced to begging.

In short, this is a direct return to serfdom.

I suggest that you start talking to your friends and neighbors about this now, before it’s too late. Don’t let them comply without a fight.

Paul Rosenberg
www.freemansperspective.com

How Democracy Made Central Banking Possible

It is slowly dawning upon the people of the West that central banking cartels have been draining away their wealth. What they haven’t yet understood is that these money cartels were only made possible by what we call democracy.

DemocracyMade

It is slowly dawning upon the people of the West that central banking cartels have been draining away their wealth. What they haven’t yet understood is that these money cartels were only made possible by what we call democracy.

Given that democracy is almost a sacred dogma these days, it’s understandable that people have been slow in grasping this fact. Nonetheless, central banking, and giant banks in general, were impossible until democracy was instituted in the West.

Here’s why:

Prior to democracy, loans were undertaken by monarchs, who were personally responsible for their loans. As Meir Kohn of the economics department at Dartmouth University writes:

The debt of a territorial government was essentially the personal debt of the prince: if he died, his successor had no obligation to honor it; if he defaulted, there was no recourse against him in his own courts.

Sometimes princes paid their loans, and sometimes they didn’t. For example, the Peruzzi were a leading Florentine banking house in the 14th century. At one point, they lent Edward III of England 400,000 gold florins, which, for a variety of reasons, was never repaid. This led to the collapse of the Peruzzi Bank in 1343.

Deals were quickly made when a prince died, of course, but the bankers had a weak position. They had to negotiate the balances and promise to make more loans in the future.

On top of that, many rulers simply refused to pay loans they had taken. Probably the most prolific deadbeat was King Philip II of Spain. He refused to pay back his loans at least a dozen times.

Because of this, banks were seriously limited. They developed techniques of dealing with sovereign defaults, but central banking as we know it was more or less impossible. Bankers didn’t dare make the kinds of loans they do now.

Democracy, however, solved that problem for them. Under democracy, loans are not debited to an individual, but to the nation as a whole. All the citizens, and their children, become responsible for repaying the loan.

From the institution of democracy onward, loaning money to a government gave the banker a claim against the taxes of the people… a claim that never expires.

This was a clever trick: The person who signs for the loan ends up bearing almost no responsibility, and gets to spend all the money. At the same time, millions of people who never approved the debt—who probably had no way of even knowing about it—are left holding the bag… and passing on the obligation to their children.

This is how 18 trillion dollars of debt can be piled up on top of a populace. Without democracy, it couldn’t have happened.

Modern “Democracy”

I can’t help pointing out that what we call democracy bears almost no resemblance to the democracy of ancient Athens. I’ll go through the particulars in a future Daily Dispatch, but it’s important to understand that democracy vanished from Earth between about 300 BC and 1800 AD, and for good reason.

The arrangement we call “democracy” consists of three main parts:

  1. Elected representatives.
  2. Legislation.
  3. Police departments.

This (plus the ever-present bureaucracy) is the rulership we encounter on a daily basis, but it was never part of Western civilization until it showed up in the decades surrounding 1800 AD.

There were some representatives before 1800 in European cities, but they weren’t much like modern representatives. Mostly they were businessmen appointed to oversee things. Even Parliament was composed primarily of nobles (all nobles at first), not representatives in any modern sense.

Legislation was almost unknown before 1800. For example, when English philosopher Jeremy Bentham died in 1832, he was revered as “the founder of modern legislation.” Before that time, legislation was mainly a collection of laws that were condensed into a group for convenience. “Law” referred to the findings of judges, or to the process of judging actions that were just or unjust.

Permanent, government-owned police departments played no part of Western life until this new triumvirate was installed at about 1800. Before then, there were sometimes city guards, temporary forces, and even private guards, but the first police force we would recognize was created in Paris, in 1800 AD. London didn’t have a police department until 1829.

I’ll close with three quotes on the effects of democracy on the people of the West:

Alvin Toffler, in The Third Wave, writes this:

Voting provided a mass ritual of reassurance …. Elections symbolically assured citizens that they were still in command ….

Elections took the steam out of protests from below.

Alan Bloom, in The Closing of the American Mind, wrote:

Sycophancy toward those who hold power is a fact in every regime, and especially in a democracy, where, unlike tyranny, there is an accepted principle of legitimacy that breaks the inner will to resist.

And John Kenneth Galbraith wrote this in The Age of Uncertainty:

When people put their ballots in the boxes, they are, by that act, inoculated against the feeling that the government is not theirs. They then accept, in some measure, that its errors are their errors, its aberrations their aberrations, that any revolt will be against them.

Paul Rosenberg
www.freemansperspective.com

This article was originally published by Casey Research.

Why the Banksters Don’t Care About Your Gold

bankstersI regularly hear how important it is to hold silver and gold and how dangerous the central banks and their banksters (a combination of bankers and gangsters) really are. I’m sympathetic, of course, since I don’t like central banks and I do like silver and gold.

But these folks have a problem: Their plans never seem to bear any fruit. Mostly, they are waiting for the banksters to lose control, for the financial system to fall down, and for their silver and gold to save them from an apocalypse.

But it has been a lot of years now, and the banksters seem to have no concern about precious metals in the hands of average folks. In short, they don’t fear your silver and gold at all, and I think it’s important to examine why.

The Obvious Reasons

There are several obvious reasons why the banksters don’t fear metals in private hands, and then there’s a much bigger reason. Let’s start with the easy ones:

  1. The banksters already hold most the world’s silver and gold and control its pricing. The ‘official’ price of gold is set every day by a group of bankers in London.
  2. They lease it to each other and their friends.
  3. The largest bankers more or less control the gold futures markets. At last count, the big commodities market had 102 times more gold under contract than they had physical gold. Since this “paper gold” passes for real gold, manipulations can abound.
  4. Governments are very good at stealing gold from a populace. The US government did precisely that in 1933, and there’s no reason to think they wouldn’t try again when they want. Taking money is what governments do.

The Big Reason

All the reasons above are significant, of course, but there remains a vast amount of gold and silver in private hands. And this could present a serious problem to the banking monopolies, except for one thing:

The people who hold these metals never use them.

I regularly hear people asking, “How do we destroy the banks?” And the answer is obvious: Stop using their products.

That, of course, is where the inquiry usually ends.

The “gold bug” crowd already has the tool of victory in their hands – but they don’t use it. There is more than enough gold, silver, and copper in free circulation to conduct a great deal of commerce. And if they were serious about ending the reign of central banks, that would be the way to do it. (Bitcoin would more than suffice for international transactions.)

But they almost never use their metals. Rather, they hold them in safes, in drawers, and on shelves, treating them like little idols. Every so often they pull out their stacks, dust them off, appreciate them for a moment, then put them back into storage. Then they wait for the apocalypse to come, when they’ll finally do something with them.

Again, I like silver and gold; I think they are honest money and a good store of wealth. But if you want to great rid of central banking tyranny, you’ll have to USE your silver and gold. That’s the choice: Treat it like an idol or treat it like money.

As long as your coins remain static, they remain powerless. If you use them like money, big things can happen.

The Bitcoin Kids Have It Right

A lot of silver and gold people hate Bitcoin. But regardless of Bitcoin’s features or flaws, the Bitcoin community is doing one thing very well: They are using their currency, rather than merely admiring it.

This is why the banksters and governments are freaked out about Bitcoin and not about silver and gold. By using their currency, the Bitcoin kids are chipping away at the banksters. If left unmolested, these young people would seriously weaken the banksters and eventually render them obsolete.

  • The banksters fear Bitcoin, because people are using it in daily commerce.
  • The banksters don’t fear precious metals, because they are not used in daily commerce.

Silver and gold will start chipping away at the banksters when people pull their metals off their shelves and use them… and not before.

Paul Rosenberg
FreemansPerspective.com

Where the *Bleep* Is Germany’s Gold?

Germany's goldYou may have heard something about this story, but I think it’s important to take a few minutes to restate the facts clearly. In the modern news environment, stories come and go so fast – and in so many parts – that it’s very easy to get lost along the way.

So, here’s what we know so far:

  • In 2012, the Bundesbank (the central bank of Germany) asked to visit the vault of the Federal Reserve in New York, to view the 1,536 tons of gold they have stored there.
  • The Federal Reserve told them no. They were not allowed to see their gold.
  • In response, Germany said that they wanted 300 tons of their gold back.
  • The Federal Reserve said that they’d need seven years to get the gold back to Germany. (Something that should take them seven weeks, tops.)
  • One year later, the Fed has returned only 5 tons of gold to Germany. At this rate, it will take 60 years for the Germans to get less than one fifth of their gold back.

Though I don’t know precisely what, it is very clear that something strange is going on here… something that the prestigious central bankers want to keep away from the light of day.

Shipping 300 tons of metal is hardly a new and difficult technical challenge. Companies involved in metal trading do this all the time. Sure, gold requires extra security, but security is also something that lots of people know how to provide.

Give me half a percent as a premium, and I’ll have it arranged by next week!

The German Responses

The initial German response was the one mentioned above: Give us back our gold. But that happened over a year ago, after they weren’t allowed to see their gold. There have been further responses, following the very lame delivery of five tons.

These responses have come in just the past month or so:

The president of Germany’s top financial regulations group said that manipulation of gold and silver “is worse than the Libor-rigging scandal.” (The Libor scandal was and is a big deal, and lots of lawsuits are underway over it.) That’s a big accusation.

Then, Deutsche Bank, the biggest German bank, dropped out of the London gold fixing pool; the group of bankers that set the official price of gold. This is also related to the investigations by European regulators into the suspected manipulation of precious metals prices by banks. Again, this is a very significant event.

Germany does not seem happy about what the Fed is doing to them. These responses may seem timid, compared to what you or I might do if someone refused to give us back our gold, but they very clearly show that the German banks are objecting. (What’s going on behind the scenes remains unknown to us.)

In addition to this, the Financial Times ran an article advising investors to demand physical delivery of their gold. Bloomberg published an article on gold price manipulation. Whether they were pushed to do this by the Germans remains an open question.

What’s Really Going On?

So, given what we know, the obvious question becomes, “What’s really going on?”

The first answer is that we simply do not know, but even that deserves a short comment:

We don’t know because central banks are above scrutiny. They operate in secret, insulated by governments.

In any honest business, we could learn something about what’s going on, but central banking is different. Its operators not only control the world’s money, but they do it secretly.

So, we can only guess as to what’s happening.

Most likely, however, is that all of Germany’s gold has been lent out and/or used as loan collateral multiple times and that the Fed is having a very hard time unwinding all those loans. If they just give the gold back, the collateral for hundreds (maybe thousands) of international loans goes away.

And when I say “lent out multiple times,” I am not speaking loosely. There is a financial trick called rehypothecation that allows bankers to use the same stack of gold as the collateral for simultaneous loans… over and over and over.

So, in order to pull Germany’s gold out of the lending game (and central banks do loan out gold), lots and lots of loans would have to be rehypothecated to other piles of gold, and that requires a lot of office work. Each bar of Germany’s gold could be involved in a dozen loans, each of which must be re-arranged.

This would account for the slowness of the Fed returning the gold back to where it belongs.

Of course, there are other possibilities. Maybe the Fed is just trying to punish Germany for some reason (they’ve messed with them in the past), or that the gold is simply no longer there – that the Fed or its friends sold it.

The Bottom Line

It would be wonderful to figure out what will happen next, but we’d have to base that on what’s really going on now, and we don’t know even that. As mentioned, central banks never have to tell.

The one thing we can be sure of is that the Federal Reserve and the Bundesbank are at odds. What will come from that is unknown, but this is a very significant problem between giants, and it is already producing consequences.

Maybe this problem will go away. But if it doesn’t, it could become very, very significant.

And how that will affect each of us – well, that’s a very good question.

Paul Rosenberg
FreemansPerspective.com

They’re Not Gods – They’re Not Even that Smart

powers that beI hear people making all sorts of predictions of what the powers that be (TPTB) will allow or not allow. Honestly, they treat this group as though they are omnipotent.

Just to be clear, the term, “powers that be” generally refers to the partnership between central banking cartels, mega-corps, and governments (including military, spy agencies, and secret police). I will use it in that way also.

And while these groups have tremendous power in certain areas, they are not gods. In fact, they are, as individuals, not much more capable than the average person. Many of them, particularly at the higher levels, hold their positions by birth and not necessarily (or usually) for any meritocratic reason.

Given that, TPTB can maintain their edge in two ways:

  1. By hiring especially smart people.
  2. By being focused and ruthless.

I’ve known politicians and government officials, and few of them have struck me as exceptionally bright. I’ve attended meetings with a few central bankers, and they struck me as possessing a well cultivated air of separation, but not as being exceptionally bright. (Some of their hired analysts were very bright.)

But far more important than my impressions are a couple of facts:

  1. If they were so smart, they would have killed the Internet in 1989, when the death would have gone unnoticed.
  2. They could have, if they were so great, killed Bitcoin in 2009, before it proved to the world that cryptocurrencies were both effective and durable.

We could add plenty of other examples, including several rulers who tried invading Russia in autumn. However we look at it, the big, dominating bosses have almost never been mental giants. Ruthless, yes. Geniuses, no.

Nor are TPTB all-powerful. Just look at how well their two big prohibitions worked. (You could, even through the worst days of the War on Drugs, find a marijuana seller in every area of every city in the Western world.)

Our Attitudes Need To Change

There’s a useful old story about tying an elephant to a stake, like we tie dogs to parking meters:

A trainer ties a juvenile elephant to a stake, and the elephant learns that he/she is not strong enough to get away. After a while, it stops trying. Then, when the elephant is grown, and easily strong enough to escape, it never tries.

So far as I know, this story is true (though I’ve never examined it closely). But this is certainly the way most of us act. We think TPTB are so overwhelmingly powerful that we have no hope of resisting them. So, rather than injuring ourselves by fighting the rope around our legs, we simply give in.

The truth, however, is that TPTB have only the power we all give them. If people simply stopped obeying – stopped taking them seriously – TPTB would crumble in short order.

What the productive people of our time need is moral courage. They need to know that they have a right to retain their earnings, that it is right for them to see to their own needs and the needs of their families. And, most of all, they need to know that their morality is better than that of the thieving, manipulative powers that be.

It’s time to start pulling out our stakes and building a world that suits us, not them.

If enough of us take that statement seriously, TPTB will soon be on their way OUT.

Paul Rosenberg
FreemansPerspective.com

Is Bitcoin More Dangerous than “Cartel Money”?

bitcoin cartel moneyI’m going to use a couple of passages from the Bible (the original set of moral standards for our Western civilization), followed by an examination of both Bitcoin and cartel money, to see how they hold up in comparison.

As for my use of the term “cartel money,” it’s the best short description I know for the dollars, euros, yen (and so on) that we use in our daily commerce. They are produced by secretive and monopolistic groups of private banks. That rather precisely matches the definition of cartel.

Principle #1: For wherein you judge another, you condemn yourself; for you who judge practice the same things.

I think by now we have all heard the big accusation against Bitcoin – that it is used for “money laundering” – made especially by the money cartels (the European Central Bank first).

First off, that doesn’t make sense to me. A currency is supposed to be neutral – that is its purpose. So, accusing a currency of money laundering is like jailing a knife for murder. But, that’s not precisely the point we’re addressing here.

Rather, the question is: do the cartels do the same thing that they condemn?

You bet they do!

Read this story on HSBC. Then read this one on Wachovia. These banks laundered hundreds of billions of dollars – knowingly – for violent drug lords. And it gets worse: No one from either bank went to jail. Neither bank was shut down. Neither bank suffered more than a minor fine.

So, how much of a concern can money laundering really be to the cartels and their politician partners? Clearly none, or very close to none.

And, since the cartels accuse Bitcoin of being used for bad things, let’s be clear about the situation: Every mafioso on the planet uses cartel money. So do all the drug smugglers, terrorists, and pornographers.

Does Bitcoin accuse the money cartels? Nope. Bitcoin has no official operators to speak for it at all.

It is true that many Bitcoin users accuse the cartels of being manipulators, but, at least for now, there is no Bitcoin cartel that is even capable of manipulating the currency.

So, round one goes to Bitcoin: The cartels very clearly condemn themselves, and Bitcoin clearly does not.

Principle #2: Everyone who does evil hates the light, and does not come to the light, lest his deeds should be exposed. But he who does what is true comes to the light.

When Bitcoin creator Satoshi Nakamoto posted his Bitcoin paper in 2008, he laid everything open for all to see. Then he wrote the Bitcoin program and left it “open source,” so anyone could see the programming.

The process of creating cartel money, on the other hand, is mostly hidden, purposely confused, and isn’t even taught to most Econ majors. And if you think that’s just my opinion, here’s one from the esteemed economist John Kenneth Galbraith:

The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it.

The argument is made, of course, that the process of creating dollars, etc. is very complicated, and that people don’t understand it because of that.

I don’t think that’s true, but even so, let’s compare it to Bitcoin: Making bitcoins is also complex, but Bitcoin enthusiasts have been working night and day to explain their new currency and how it works. I’ve seen them cornering people at birthday parties, trying to make them understand.

Round two goes to Bitcoin also. Bitcoin wants to be seen and known, and the cartels surely do not.

It all comes down to the reason “why.”

Satoshi Nakamoto began the original Bitcoin document by saying that he wanted to, “allow online payments to be sent directly from one party to another without going through a financial institution.” He goes on to say that he was creating,

an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.

In other words, Satoshi wanted to remove the necessity of one man ruling another in the area of money. Furthermore, he did it, then went away.

As for the motives of the cartel, we can’t really tell. The visible heads of the Federal Reserve are certainly not the owners of the Federal Reserve, and the US government refuses to reveal the names of the owners.

Perhaps the closest real examination of their motives comes from a renowned professor who worked for them for a few years. Professor Carroll Quigley of Georgetown – and a major influence on none other than Bill Clinton, wrote this in his book Tragedy & Hope:

The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. Each central bank… sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent rewards in the business world.

So, was Quigley right? I have no solid proof that he is, but he would be an awfully hard witness to impeach. One substantiation that comes to mind is a recent comment by Illinois Senator Dick Durbin. In the midst of a political fight, he complained, “The banks own the Senate.”

That’s not really proof either, but it is interesting.

You can make up your own mind on the banks, but Satoshi’s motives are fairly well beyond question.

I think it is clear that from a moral standpoint, Bitcoin is far, far better than cartel money. (As are silver and gold.)

So, the next time you hear someone calling Bitcoin dangerous and evil, don’t let them get away with it!

Paul Rosenberg
FreemansPerspective.com

The Era of Fiat Currency Capitalism

fiat currencyI have worked long and hard to gather a broad perspective on history. I don’t doubt that there is value in specialization. In fact, I would have great difficulty doing what I do without good specialists.

Nonetheless, my particular set of abilities suits me to play specialist for short, intense periods, and then to integrate my gleanings into a larger whole.

One of my general conclusions has been that if we were to give a name to the last 40 years of Western history, we’d have to call it the era of fiat currency capitalism. There is a contradiction built into this term, of course, since fiat currencies and capitalism are oppositional, but such an inherent contradiction is also highly representative of this period.

Having been inside of this contradiction most or all of our lives, it can seem almost permanent and inevitable to us. Nonetheless, it will end, and probably before terribly long. As Robert Louis Stevenson once wrote:

Sooner or later, everyone sits down to a banquet of consequences.

For the last 40 years, things that should have crashed and burned have not crashed and burned, and it was fiat currency that permitted the consequences to be scorned. Western culture and millions of minds have been bent in the process.

Fiat versus Reality

Fiat currency is money based upon nothing at all. The Monopoly money shown above has the same actual value as the Dollars, Euros or Pounds in your pocket. For the moment, the paper in your pocket will buy you food and furniture, but not because it has any real value.

Our daily money is created by politically-favored groups who have been granted monopolies on the creation of currency. (They are referred to in polite company as central bankers.) They create our money, from nothing, and all others are forbidden from doing so. If that sounds crazy, it’s because it is.

The only people with any authority over these currency monopolists are politicians, and that isn’t terribly strong. (In the case of Great Britain, the monarch has some control as well.)

I won’t bother trying to list the ways this astonishing privilege could be abused. Feel free to play with the possibilities on your own. And do remember that more or less every dirty trick that people could get away with, they have eventually used… and bankers have never been exceptions.

This new era began in 1971, when the previous international monetary arrangements, the Bretton Woods system, fell apart. On May 5th 1971, US dollars flooded the European currency markets and threatened the Deutsche Mark. The central banks of Austria, Belgium, Netherlands and Switzerland stopped all dollar trades. Who was behind this flood of trades is unknown to me but it was apparently someone with inside knowledge. At about the same time, the French were, via complex arrangements, redeeming their dollars for gold from the US Treasury, as Bretton Woods allowed. (It was gold that kept the system honest. If you thought games were being played, you could turn in your paper for actual gold.)

If the US had allowed redemptions to continue, they would have lost all their gold reserves. So, on August 15th 1971, the US pulled out of their monetary agreements and refused to redeem any more dollars for gold. (This was called closing the gold window.) Bretton Woods fell apart and, very shortly, no major currencies were redeemable; everything became fiat currency, based on government edicts alone.

This change from redeemable money to fiat currency has affected Western life immensely. For more than 40 years, life in the West has been based on money with no value, which has spawned a lot of other things that have no value.

Quigley’s Chart

The chart below is my modernization of a chart used by Carroll Quigley, one of the best generalist historians of the 20th Century. The chart displays his seven primary factors of Western Civilization, and how they have varied over the last thousand years or so. You’ll notice that I’ve circled our era in red and called attention to the form of economic organization with blue.

fiat currency

As I’ll illustrate below, fiat currency has had significant influence, not only within the ‘Economic Organization’ category I have highlighted, but also over ‘Political’, ‘Economic Control’, ‘Dominant Group’, and even ‘Intellectual’. It has more or less defined our era. So, if I am correct that the reign of fiat currencies is ready to end… big, big changes lie in our future.

Horrific Debt

Fiat currencies allowed politicians to spend money without raising taxes. They did this by creating debt. I won’t spend time on the complex process involved, but every new Dollar, Pound or Euro that is created also creates more than its own value in debt. The currency is spent immediately but the associated debt can be pushed back indefinitely.

Faced with this situation, politicians asked their central bankers to create more and more money, which they quickly spent. Whether on social programs or wars, sensible or not, politicians spent money like there were no consequences attached.

But by spending in this way, the politicians also spent the tax receipts of future generations. Every new dollar requires the central bankers to sell more than a dollar’s worth of bonds, which are debt. This debt has been pushed endlessly toward the future… to the point where American children are now born $70,000 in debt, with five times that much promised.

All bonds are claims against future earnings. The children of the West have had decades of taxes pledged to bondholders they will never know, for money that was spent years before they were born. And, yes, it really is that bad.

The Welfare State

The debt of the Western states was spent on something, obviously, and the most notable destinations for that money were “welfare state” programs. This worked in the favor of politicians in the old, reliable way: by promising voters free stuff. And, more importantly, fiat currency allowed them to make good on those promises without raising taxes.

The most crucial fact about debt-funded welfare, however, is that it made it seem that politics could produce magic. Government was able to give massive streams of money to groups that placed ideals above reality. “Wishing makes it so” seemed to work. This corrupted the reasoning of millions of people and punished those who did hold doggedly to reason. And, this corrupting influence has continued for a long, long time.

Wall Street Contributed to the Damage

The people who work on Wall Street, and in the other financial capitals like London, tend to be aggressive and competitive. On top of that, the big financial firms place them into highly competitive situations like “the top producer gets a double bonus.” It should then be no surprise that such people would want to get in on the central banking game, and to create their own money from scratch.

Central banking need not be the only way to create money; any trusted debt can be used. Here is what Alexander Hamilton (who created central banking in the United States) had to say about this in his Report on Public Credit in 1790:

It is a well known fact, that in countries in which the national debt is properly funded, and an object of established confidence, it answers most of the purposes of money. Transfers of stock or public debt are therefore equivalent to payments in specie. [“Specie” was silver or gold.] In other words, stock, in the principal transactions of business, passes current as specie.

Hamilton’s formulation in plain words is this: Debt can be used as money, and people will accept it as money.

So, if the clever boys of Wall Street and Fleet Street couldn’t get in on the central banking game, they could nonetheless create a new version of it, by using new types of debt as money. (Though this was probably the result of many small decisions rather than one large one.)

What most people don’t know about Alexander Hamilton is that it wasn’t only American central banking that he created; he also created Wall Street. That his securities dealer descendants pursued an alternate way to create money seems almost fitting.

Wall Street’s new debt money is called derivatives. A derivative is a contract whose value is derived from other quantities. Derivatives have existed for a long time, but in the past dozen or so years the financial centers of the world have pumped out stunning amounts of them in a wide array of new configurations. All of these derivatives have their own value. It was one particular type of these financial products that seems to have started the crash of 2008.

I am not expert enough to reach any conclusion as to what specific fallout can be expected from this but $600 trillion dollars of synthetic monetary instruments have to be significant.

Indeed, it goes far beyond just money. The era of fiat currency capitalism has changed who we are in broad and disturbing ways.

[Editor’s Note: This article is an excerpt from our flagship newsletter Freeman’s Perspective – Issue #07: The Era of Fiat Currency Capitalism. If you liked it, consider taking a risk-free test drive. Not only will you gain immediate access to the rest of the issue (which shares 5 ways in which fiat currency has changed us for the worse), but you’ll also be able to enjoy the entire archive – more than 520 pages of research on topics of importance and inspiration to those looking for freedom in an unfree world. Plus valuable bonus reports and all new issues as well. Click here to learn more.]

Paul Rosenberg
FreemansPerspective.com

The Triumph of The Manipulators: The Entire “First World” Financial System is Manipulated

The Triumph of The Manipulators - The Financial System is ManipulatedThe entire “first world” financial system is manipulated. This is no secret – the manipulators not only admit it, but are proud of it. And yes, I am referring to central banks: manipulation is what they do. I really don’t have any inside information on this, except that I’ve heard a lot of confidential stories from Comex traders. (Don’t trust Comex for a second.)

So, manipulation is a given. What I’m referring to is the fact that the manipulators are succeeding beyond anyone’s wildest dreams. Joe Average knows in his gut that everything is smoke and mirrors, but he is unwilling to look. He prays that the manipulators can keep the game going until he is dead, when he can no longer be held accountable.

The success of the manipulators has reached such levels that their victims are unwilling to complain. In fact, their victims defend them! It’s a type of Stockholm Syndrome, spread over continents.

I got an email two days ago, from a friend who happens to be one of the world’s great investment analysts. He was at wit’s end over the markets. Not because of price moves – his charts predicted those – but because people no longer cared about reality.

Here’s what I wrote back to my friend:

They are winning. There is no question about it. They are printing like mad with minimal inflation, stealing from millions at once with no riots, stoking raging bull markets based on no reason whatsoever, creating paper silver and gold without limit and without consequences, while keeping all the foreigners in line and obedient.

This is the ultimate, screaming triumph of the political and banking elite – their highest high in the history of civilization. And yet, no matter how badly they abuse the world, they enjoy complete obedience.

To quote a scientist from the early 1980s, upon seeing a photo of braided rings around Saturn: “It’s stark, raving mad, but it’s there.”

We are living through a moment of madness that future historians will write about: Black is white, down is up, rehypothecation is prudence, naked shorting is benevolent, abuse is love, theft is mercy. And all the while, humanity just sits and accepts their abuse. Following is courage, thinking is threat, and no one dares a sideways glance at the insanity, for fear that it will break.

All cling to a system that grinds them up and all walk together into the sea as they are told, singing hymns to governments and central banks as they go.

It’s sick; it’s evil; it’s disgusting; but for now it is also true.

And the rest of the world is allowing it. You’d think that the Russians or the Chinese, at least, would make some self-interested moves, but they don’t.

Either something breaks, or humanity tires of this insanity, or it continues until all the world is North Korea, worshiping photos of a vile little man, never lifting their eyes and thanking the vile little man for the deaths of themselves and their children.

And if something does ever break, they’ll need a war – a big, nasty war – the kind that really scares people – not tanks rolling through a desert.

That’s the world as it stands today. Perhaps everything will change tomorrow, but for now, the manipulators are at peak success.

“The madness of crowds” is here. If, somewhere, there is a successor to Charles Mackay (who wrote the classic book of that title), he must be a very busy boy.

Paul Rosenberg
FreemansPerspective.com