War Cycles, Peace Cycles

February 26, 2002

Richard Hoskins dropped a bomb on the literary world in 1985 with the publication of his book, "War Cycles, Peace Cycles." The book was so poignant and controversial that references to it were made in nearly every major newspaper from coast to coast at the time, and its message was vilified especially by the banking community. Efforts at first lambasting, then later suppressing this work (when it became evident that the public was intrigued by its message) were the order of the day when the book first shocked readers in the mid 1980s. Since that time the book has undergone numerous printings, with the last print run in 1991 being snapped up by a large, unidentified consortium which took the books off the market. Repeated attempts by this writer at locating a copy of this seminal work came up short every time until recently. Much to my surprise and delight I discovered that another print run was made of Hoskins' classic book in 2000, the first re-publication in nearly a decade. I read every page voraciously and loved every morsel. I felt compelled to share this information with Gold-Eagle readers since no other book I've encountered comes close to isolating the root of our modern-day economic problems than this one, and none offer more practical and effective solutions than Hoskins.

According to Hoskins, every major war, financial panic, economic depression, and famine in recorded history can be traced to the insidious influence of usury banking. Moreover, these devastating events recur with cyclical regularity that can be charted and predicted. While natural, geo-cosmic influences may account in part for these cyclical occurrences, Hoskins maintains that they are mostly attributable to central banking influences. Starting with this premise, Hoskins takes the reader on a journey that winds its way through nearly 4,000 years of history to our present day all within the short space of 300 pages. All along the way the presence of usury banking makes its appearance.

For instance, Hoskins points out that history records the first known use of credit-or IOUs-is found in the ancient ruins of Babylon and perfected by the priests of Baal. The whole concept of usury, or of lending money with interest, invented at that time remains unchanged today. Hoskins boils it down to lending 10 talents of money and demanding payment of 11 talents when there are only 10 talents in circulation. Usury contracts drawn up then stated that the borrower was to pay his debt in "talents" only, but the problem is and always has been that the central bank-created money supply is always finite while compound interest is theoretically infinite. Little has changed since then, Hoskins says, as today's high priests of finance are the world's central banks sitting in their temples of mammon, the modern progeny of the money-lending priests of Baal.

Hoskins refers continually to the ancient common law prohibition against usury while painting his sordid picture of the history of the effects of usury upon any given nation. He catalogs an extensive list of biblical references that strictly condemn the lending (or borrowing) of money at interest: "Thou shalt not lend upon usury to thy brother." (Deuteronomy 23:19); "He that by usury and unjust gain increaseth his substance, he shall gather it for him that will pity the poor." (Proverbs 28:8); "The borrower is servant to the lender." (Proverbs 22:7); "Owe no man anything but to love one another." (Romans 13:8). Had people throughout history heeded these warnings about avoiding taking on debt with interest attached to it, untold wars, revolutions, conquests, famines, and financial panics could have been averted, Hoskins contends.

One of the first consequences of a usury-based financial system, according to Hoskins, is heavy taxation. Hoskins contends that "The only thing that has kept the usury system operating through the ages is taxation." The only time heavy taxation is not needed is when there is no usury system." This is done to keep the money supply moving and to prevent severe inflations and deflations due to hoarding or over-printing.

The next consequence of having a usury system is war, says Hoskins. This is the first phase of the "War Cycle, Peace Cycle" which the book is titled after. According to Hoskins, "hot" wars are typically fought near the trough of the War/Peace Cycle and are waged only as a desperation measure to stimulate an economy suffering from the effects of deflation (a consequence of usury). They tend to have the effect of providing a short-term stimulus to the economy since new money has to be borrowed into existence in order to fight the expensive battles and industry is provided an excuse to begin operating at full capacity again. This is followed by a "peace" phase of non-aggression, completing an idealized cycle of approximately 50 years from trough to trough. Hoskins identifies his War/Peace Cycle with the 50-year "Jubilee Cycle" mentioned in the biblical book of Leviticus. Without the plague of debt with compound interest attached, there could be no "War/Peace Cycle," says Hoskins.

Another consequence of having a debt/usury-based monetary system according to Hoskins is a declining birth rate. When typical 6% interest rates begin compounding debt over time, due to the lack of enough money to pay the existing debts, the debt-plagued native population of a given country stops reproducing due to the heavy cost of living. This in turn leads to the influx of immigration of foreign peoples. Hoskins states that mass immigration is an absolute necessity for any usury-based system since new money must always be borrowed into existence and the money system was continue to operate at all costs. Immigrants represent new, debt-free borrowers and bank customers.

Yet another result of a usury system is the complete abolition of slavery at some point. Hoskins maintains that every instance of slavery abolition in recorded history can be traced to the influence of a banking systems which must keep the money system circulating at all costs. Hence, slaves are abolished whenever the economy begins to contract and fresh new borrowers are needed to get the wheels of commerce rolling again. Writes Hoskins, "I have never encountered a case in history where slaves were freed en masse for humanitarian reasons. First usury causes high prices (inflation), then heavy debts, a landless people, lower birth rates and declining population, and finally immigration of new peoples needed to borrow money into existence and pay taxes, or slaves are emancipated to achieve the same object." As Hoskins relates, a debt-free potential borrower is of far greater value than a heavily indebted native citizen.

Hoskins' grasp of economic history is astounding. The reader is treated to many nuggets of his wisdom and he presents amazingly simple, yet profound, solutions to modern economic problems based on his learning. Perhaps the most profound chapter in his book is the chapter entitled "Tallies & T-Bills." Hoskins takes the reader back to the year 1100 A.D. when Henry I, fourth son of William the Conqueror, ascended the throne of England. Finding the treasury empty and his needs great, he cast about for a source of income.

Having wise advisors he soon hit on a plan. The plan, with a few refinements, remained in effect for the next 726 years and is so simple and workable that it can be reinstated tomorrow. He issued "tallies."

Quoting Hoskins at length, he writes: "A tally was a stock about nine inches or so long with each of the four sides about ½ inch wide. On two of the sides, the value of the "tally" was carved into the wood. On the other two sides, the amount was printed in ink.

"The tally was then split in half lengthwise. One half remained in the treasury and the other half was given to soldiers for their pay, to farmers for wheat, to armorers for armor, and to laborers for their labor.

"At tax time, taxpayers were required to bring in one half of a tally to pay their taxes. Woe unto the man who did not have the required number of tally sticks. As a consequence, these intrinsically worthless sticks of wood were in great demand. Gold and silver coins were fine if you traveled abroad for a crusade or something, but at home if you did not have your tax-tally at tax time-you were done.

"Upon receipt of a tally the treasurer would immediately match the presented half with the half stored in the treasury. They had to tally-which is what gave it the name. Counterfeiters lost their heads! Actually, it was practically impossible to counterfeit a tally. The wood grain had to match-the notches had to match-and the ink inscriptions had to match. This could only come about if both pieces came from the same split tally stick.

"There you have it! An inexhaustible source of revenue for the government. The means were available to make tallies as long as there were trees. There was a demand as long as the government required the tallies for taxes. The system flourished as long as tax-evaders and counterfeiters were punished, and they always were. For 726 years the system flourished."

Hoskins points out that government "tally" money and "usury" money cannot exist side by side. Tally-money makes usury-money look bad because it stays constant, while usury-money expands and contracts. The advent of usury-money spelled the death of the tally. The process began with the Bank of England being chartered in 1694 and continues today with the Federal Reserve banking system.

Writes Hoskins, "The government has the right to make money. It can do so whenever it chooses. In the United States the government has authorized the Treasury to create Treasury Bills. These bills are created out of thin air, but they are no less real than the wooden tallies of our ancestors. The government doesn't need to borrow money from the banks of the Federal Reserve and have a debt of over a trillion dollars. It can make money instead. All it has to do is MAKE IT…T-Bill tallies in denominations of $1, $5, $10, $20 $50, $100, and $1000. Then it can spend them for needed government services, and tax them out of circulation again. Our ancestors did it for almost three-fourths of a thousand years."

Hoskins presents a modified system of the tally system in his book as a model to help relieve beleaguered towns and municipalities during times of economic depression when no money is available in the Fed-controlled economic system. He advises the printing of localized "scrip" for use as a monetary medium for payments of goods and services and taxes. With careful planning and organization, he maintains this plan can be put into effect with only minimal costs. He documents several instances in recent history when such systems were used effectively.

He also provides excellent words of advice for the individual or family suffering under the burden of crushing debts. His advice on this subject is worth the price of the book alone.

In 1985, Hoskins' book announced that South Africa, at that time the warmest friend the U.S. had in Africa, would be turned into an enemy. This occurred one year later. The book projected that the Arab oil-producing world would be the next war target-for different economic reasons. This prediction, too, has come to pass. Massive bank consolidations were predicted, reducing the total number worldwide. Open immigration was envisioned as a practical economic necessity. Now, every locality has its immigration problems. Other things have not yet come to pass-things like widespread municipal bond failures, a massive stock market collapse, widespread famine, a crackdown on dissidents, rampant civil disobedience, a religious revival, and an invasion of America by foreign armies. Logically, these things should also come in time. If they do, America will be very, very different from what it is today.

We deeply recommend "War Cycles, Peace Cycles" to any serious student of economic history as well as to the concerned individual who wants to learn more about why things are the way they are today and what can be done to assuage our problems. No library should be without a copy. The book is available from most online bookstores, or by ordering directly from the publisher at his web site:www.richardhoskins.com

Clif Droke is the editor of the three times weekly Momentum Strategies Report newsletter, published since 1997, which covers U.S. equity markets and various stock sectors, natural resources, money supply and bank credit trends, the dollar and the U.S. economy.  The forecasts are made using a unique proprietary blend of analytical methods involving cycles, internal momentum and moving average systems, as well as investor sentiment.  He is also the author of numerous books, including most recently “2014: America’s Date With Destiny.” For more information visit www.clifdroke.com.

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