DEBT: PART FOUR - THE PURCHASING POWER ABYSS
Frank Smith (aka "Atocha")
The twentieth century technological revolution, and its illegitimate child, technological debtism; have widened, deepened, and prolonged the developing world-wide economic depression. This computer programmed economic depression will be so wide and so deep that bankers refer to it as "the abyss". The consequences of this Kondratieff cyclical debt liquidation will be unprecedented in severity of human suffering. (The Long Wave Gold Cycle, by George J. Paulos) (The Long Wave Cycle by Nikolai Kondratieff, translated by Guy Daniels and Introduction by Julian M. Snyder, Richardson & Snyder, l984)
As purchasing power collapses, due to world-wide debt liquidation, many shall seek understanding of the self-evident economic depression. Most will passively turn on their sheeplevision. But some, like you, actively seek out an understanding of the big picture. In a necessarily eclectic fashion; we shall tour inalienable rights, Locke and Hobbes, the fiat dollar, history, the gold cap, the Superstate Inc., accelerating debt, gold, freedom, Argentina, Daan Joubert's truck, and crime; seeking the big picture of the purchasing power abyss. (Referenced for depth.) This Part Four assumes that the reader is familiar with the contents and knowledge in Parts One, Two, and Three.
A MODERN ALEXANDRIA
The ancient library at Alexandria was treasured world-wide for its wealth of writings. The library of past Gold-Eagle editorials is an easily accessible, cost free, modern treasure of wealth of information and understanding on freedom, debt, gold, and silver, financial markets and economics. I must express my sincere and special thanks to the knowledge and understanding that I have personally gained from so many Gold-Eagle library contributors. I am also thankful to Gold-Eagle for creating its unrivaled library and for my being able to be a contributor.
JOHN LOCKE, THOMAS HOBBES AND CRIMINAL THEFT
"Locke was the seventeenth century precursor of classic liberalism, and Hobbes was the seventeenth century precursor of modern totalitarianism, particularly fascism. ...Hobbes favored unlimited power for the state, ....". (Locke versus Hobbes by jamesd@echequ.com at www.jim.com/hobbes.htm) "John Locke is the intellectual father of our country. ...this political and social philosopher of l7th century England influenced the author of the Declaration of Independence and the Framers of the Constitution more than any." (John Locke: His American and Carolinian Legacy by George M. Stephens)
"WE HOLD THESE TRUTHS TO BE SELF-EVIDENT. THAT ALL MEN ARE CREATED EQUAL, THAT THEY ARE ENDOWED BY THEIR CREATOR WITH CERTAIN UNALIENABLE RIGHTS; THAT AMONG THESE ARE LIFE, LIBERTY & THE PURSUIT OF HAPPINESS;" (The United States Declaration of Independence) Locke presupposes: I as an individual am endowed by my Creator with certain inalienable economic rights inherent in liberty; including the right to not be stolen from by my government. Hobbes presupposes: My sovereign state does have the 'right' to steal from me because; "man, as the state, makes right". For Hobbes, all crimes by a central bank become 'right' because "man, as the state, makes right".
Current world-wide, central bank practices that are traditionally criminal, such as theft and price fixing for insider profits, silently embrace the Hobbes presupposition that individuals have no inalienable economic rights. The consequence of the Hobbes presupposition is an amoral and criminal United States central bank. For our Hobbesian Federal Reserve, central bank price-fixing of financial markets for insider profits is 'right'. For our Hobbesian Federal Reserve, central bank theft by fiat currency is 'right'. Hobbes 'legitimizes' criminal theft as long as it is theft by the Federal Reserve, the central bank of our sovereign state. We the people must either throw off the current yoke of a criminal Hobbesian Federal Reserve Bank; or, totally submit to criminal bondage.
Hadamar was Hobbesian economics. At Hadamar, for economic reasons, the Germans systematically murdered their own elderly and handicapped citizens. (Nazi Extermination of People with Mental Disabilities, from A Teacher's Guide to the Holocaust) (The Hadamar Incident by Dennis L. Finnan) The Hobbes presupposition of "man, as the state, makes right" begets Hadamar, the WWII holocaust, and the abyss- where millions will die from hunger.
If theft of purchasing power is criminal behavior; then, any fiat currency is criminal behavior. If theft of purchasing power is criminal behavior; then, any fractional reserve banking system is criminal behavior. The abyss, the unfolding world-wide economic depression; is the direct creation and responsibility of bankers practicing traditional crimes within the pre-suppositional framework of Hobbes. The Hobbesian Nazis, including the doctors and nurses at Hadamar, were directly responsible for the deaths of millions. And likewise, the deaths by starvation of millions during the abyss, will be the direct responsibility of white-collar criminal Hobbesian bankers.
HOBBESIAN DEFAULTS AND THEFTS BY WORLD-WIDE FIAT
In August, l971, President Nixon exercised the Hobbesian authority of the sovereign state and closed the United States gold window that had previously settled our trade imbalances by transfers of physical gold. Thus, in l971, the United States repudiated and defaulted on its monetary promise to redeem overseas trade deficit dollars for physical gold. Under the Hobbes umbrella of presuppositions, there is nothing criminal or unethical about the sovereign state defaulting and repudiating its international obligations because, "man, as the state, makes right".
In March, l933, President Roosevelt exercised the Hobbesian authority of the sovereign state and repudiated and defaulted on the United States monetary promise to its citizens to redeem paper dollars for physical gold dollars. Under the Hobbes umbrella of presuppositions, there is nothing criminal or unethical about the sovereign state defaulting and repudiating its domestic promises and currency; because, "man, as the state, makes right".
In l933 some twenty-eight nations were involved in intergovernmental indebtedness that required payments in gold (Barron's, March 27, l933, Page Five). That 1933 market reality, of numerous other nations on a redeemable intergovernmental gold standard, mandated that even though America domestically abandoned a redeemable gold standard on March 9, l933; America had to by necessity remain on the redeemable gold standard internationally. In l933 Roosevelt's implementation of Hobbesian economics was partially checkmated by physical gold.
But, by August l5, l97l, there was an abandonment of other nation international financial settlements with physical gold. That absence of the settlement of international trade deficits by physical gold transfers opened the door to a de facto unlimited amount of international theft by a fiat reserve currency- the dollar. The result was world-wide theft by fiat. (The Emperor Has No Clothes, by Don Stott)
THE 'GOLD CAP': Criminal Price Fixing for Insider Profits
Since at least 1995, the 'gold cap' has been a criminal engine of massive debt creation. It was/is Federal Reserve/Treasury/Wall Street use of ever increasing debt instruments for the secret criminal price-fixing of the dollar/gold price relationship and the criminal price-fixing of other financial markets. That "the fix was in", resulted in those with insider knowledge stealing the investment funds of the unknowing, in sovereign state rigged financial markets. For Hobbes, theft through sovereign state price fixing is 'right'. Under the Hobbes umbrella of presuppositions, no matter what the behavior, the sovereign state can not commit crimes because: "Man, as the state, makes right". For Hobbes, the sovereign state is its own authority for determining right or wrong for its acts.
THE PRICE OF THE DOLLAR
The 'gold cap' was/is primarily a manipulated 'dollar floor' that artificially prevented the dollar's natural decline in purchasing power as total fiat dollar units expanded. The 'bull market in gold' will more accurately be noted as 'the bear market in the dollar'. A troy ounce of pure gold remains a finite and fungible troy ounce of pure gold. To paraphrase Gertrude Stein: "An ounce of gold is an ounce of gold, is an ounce of gold".....today, tomorrow and yesterday. It is the inelasticity of physical gold and silver that limits Hobbesian state monetary theft. It is the inelasticity of physical gold and silver that protects Locke's inalienable right of individuals to not be stolen from, even by the medium of exchange of the sovereign state. It is the elastic fiat dollar, that enables Hobbesian state monetary and fiscal theft of purchasing power. A Hobbesian fiat dollar today is different than a dollar of yesterday and tomorrow. I remember that in my youth I got haircuts for twenty-five cents. Today, I pay twelve dollars for what is a lesser haircut because I receive no razor trim around the ears. In order to understand the criminal theft of purchasing power by the dollar, automatically think of the gold/dollar ratio as the price of the dollar; and, NOT as the price of gold. ($$$-Think, by Carl Elkins, PhD)
When the Hobbesian sovereign state practices monetary theft of purchasing power from its own citizens by fiat currency, it is like the snake that swallows its own tail and self-destructively devours itself. Historically, empires have not lasted for centuries unless they resisted the temptation to steal from their own citizens by fiat currency.
THE ANCIENT GREEK CONQUEST
For several thousand years the long lasting currencies have been defined and denominated in terms of very precise weights of gold or silver. The standard silver coin of the ancient Greeks was the DRACHM. Portable mints traveled with the armies of Alexander the Great. After each military conquest, the local silver coinage was immediately turned into Drachm and other Greek silver coins. The Greek silver Drachm was the currency of much of Europe, Asia, and Africa, for centuries. (Greek Coins and Their Values, Volume 1 - Europe, by David R. Sear; and, Greek Coins and their Values, Volume 2 - Asia and Africa, by David R. Sear, l978, Seaby, London)
THE ANCIENT ROMAN REPUBLIC/EMPIRE
The standard silver coin of ancient Rome was the DENARIUS. It was first minted about 211 B.C. and it lasted until about 296 A.D. The decline and fall of the Roman Empire was chronicled in the decline of gold and silver content in her coins. Hmmm! (Handbook of Ancient Greek and Roman Coins by Zander H. Klawans, l995, Western Publishing Company, Inc., Racine, Wisconsin) The USA is the Roman Empire in its decline and fall.
THE SPANISH COLONIAL EMPIRE
Later, the Spanish silver REAL and gold ESCUDO survived little changed for centuries. 'Real' refers to 'royal' because the silver Real was defined by a specific weight of silver by the Spanish king. (Numismatica Espanola: Catalogo de las acunaciones realizadas desde los reys Catolicos A Juan Carlos I- l474-l988 by F. Calico, X. Calico y J. Trigo, 7th edicion, l988.) In their time, the silver and gold coins of Greece, Rome, and Spain, were the medium of exchange for internaional trade; and, they were the currency for their sphere of influence for centuries.
THE UNITED STATES EMPIRE
When the Greek, Roman, and Spanish empires lasted for centuries, they each had circulating gold and silver coins. That checkmated Hobbesian sovereign state monetary thefts. The circulating gold and silver coins protected a Lockean inalienable right of individuals to not be stolen from, even by their sovereign state. Historically, when empires have used clad or fiat in order to steal from their own citizens, they became internally weak and collapsed.
Like Greek, Roman, and Spanish coinage, the US Coinage Act of April 2, l792, defined the dollar as .7734 troy ounces of silver. In the Gold Standard Act of March l4, l900, the dollar was defined as .04375 troy ounce of gold. Then, the price of the dollar was approximately one twentieth (1/20.6718th) of an ounce of gold. (The Enemy in the Mirror, by Franklin Sanders) When the price of the current dollar becomes one/twenty thousandth of an ounce of gold, it will usher in the final collapse of the United States and its post WWII empire. It will change the world as we know it. With debt liquidation, and with the end of wealth transfers from world-wide criminal plundering via dollarization, the United States economy will collapse.
INFLATION, DEFLATION, & HOW MANY CENTRAL BANKERS
CAN DANCE ON THE HEAD OF A PIN?
We will have massive debt liquidation and loss of purchasing power; but, I don't know how it will happen. We could go from a dollar/gold ratio of 320 to one; to, a dollar/gold ratio of 20,000 to one, in less than sixty seconds. Poof! Or, debt liquidation could last a painful century. Inflation? Deflation? Both? When? How long? How many central bankers can dance on the head of a pin? (An infinite nuimber?) I don't need to know the answers. I only need to know: 1) Collective purchasing power is going to severely collapse; and, 2) Physical gold and silver in our hands offers some protection from our own amoral and criminal Hobbesian sovereign United States.
ARGENTINA TODAY IS THE UNITED STATES OF TOMORROW
"We have never seen a financial crisis like this anywhere... Attacks on politicians are growing. An average of one police officer is killed a day in a nation that once was as safe as any in Europe. Suicide hot lines are getting record numbers of calls. A woman who was unable to withdraw her money because of a banking freeze yesterday set herself on fire in a bank branch, suffering serious burns.....a furious, embittered and weary population....angry depositors laid seige to the national legislature, trapping officials and aides inside...one out of every four Argentine adults is already jobless. In a hint of what could come, furious state workers in Patagonia, many of whom haven't been paid in months, vandalized state buildings and halted a debate on budget cuts by storming their state legislature....and close to 8,000 people a day falling below the poverty line -- defined as an income of $2 a day." (Growing Crisis Leaves Argentines Feeling Helpless by Anthony Faiola, Washington Post Foreign Service)
CONFISCATORY DEFLATION (SOVEREIGN STATE THEFT): The case of Argentina
"Confiscatory deflation is a particular category of deflation. It is inflicted on the economy by the political authorities as a means of obstructing an ongoing bank credit deflation that threatens to liquidate an unsound financial system built on fractional reserve banking....(In Argentina) Cavallo's cruel and malign confiscatory deflation dealt a severe blow to cash businesses and, according to one report, 'brought retail trade to a standstill'...riots and looting soon broke out...Mr. Lenicov openly admitted that this latest round of confiscatory deflation was a device for protecting the inherently bankrupt fractional reserve system...many of its unfortunate Argentine victims have recognized it for what it essentially is: bank robbery by the political elites...the disgusted and enraged middle class took to the streets banging pots and pans and chanting 'out, out, all the politicians out' and 'give us our money'..." (Confiscatory Deflation: The Case of Argentina by Joseph T. Salerno (Austrian economist).
THE ARGENTINE 'STRONG PESO' POLICY &
THE UNITED STATES 'STRONG DOLLAR' POLICY
"By January 6, the Argentine government, now under ... Economy Minister Jorge Remes Lenicov, conceded that it could no longer keep the inflated and overvalued peso pegged to the dollar at the rate of l to l," (Like the United States could no longer keep the overvalued dollar pegged to gold at the rate of 285 to l) "and it devalued the peso by 30 percent, to a rate of l.40 pesos per dollar." (Like now; the United States is on the course of devaluation of the dollar) "Even at this official rate of exchange, however, it appeared the peso was still overvalued..." (Like the dollar will still be overvalued with a dollar/gold ratio of 350-400 to l) "The Argentine government recognized this, and instead of permitting the exchange rate to depreciate to a realistic level reflecting the past inflation...in the peso, it intensified the confiscatory deflation imposed on the economy earlier....Mr. Lenicov openly admitted that this latest round of confiscatory deflation was A DEVICE FOR PROTECTING THE INHERENTLY BANKRUPT FRACTIONAL RESERVE SYSTEM..." (emphasis is mine) ibid Joseph T. Salerno.
The United States has moved step by step, one step behind; but still in lockstep, with Argentina. I would pause before gambling the farm on the 'sure thing' of currency hyperinflation in the United States. We might have deliberate confiscatory deflation. If you dismiss that possibility; take heed in history. In reference to The United States Bank and the period l8l8 to l820, Wm Gouge said: "The Bank was saved and the people were ruined." (The Curse of Paper-Money and Banking, by Wm. M. Gouge, of Philadelphia, In l833, Greenwood Press reprint.)
THE UNSUSTAINABLE DOLLAR FLOOR
A Federal Reserve dollar price floor prevented the natural market place decline of the numerically expanding elastic fiat dollar. The Fed/Treasury covertly intervened by facilitating the selling of massive amounts of physical gold and paper gold claims. The dollar became stronger than many other fiat currencies, especially since l995. Both 'gold cap' and 'strong dollar policy' sound much more politically correct than the secret and criminal 'price-fixing' of world-wide financial markets in the dollar, currencies, interest rates, gold, silver, bonds and stocks, for criminal insider profits. (Exposing Gold Price Suppression: GATA's Work to Expose the Gold Price Suppression Scheme, by Bill Murphy) (The Fed: Up to its Earmarks in Gold Price Manipulation? by Reg Howe)
THE GREENSPAN CONFESSION OF CRIMINAL PRICE-FIXING
There is the often quoted direct confession of criminal dollar/gold price-fixing by Alan Greenspan: "...central banks stand ready to lease gold in increasing quantities should the price rise." (Mr. Greenspan, Pray Tell, WHY? by Keyser Soze) Greenspan casually takes for granted his absolute sovereign state 'rights' from Hobbes. For Greenspan, the criminal price-fixing of markets is 'right', because he says so! Mr. Greenspan is his own authority; and, his words alone determine what is 'right' or 'wrong'.
Thanks to Pancho Mendez, (Latin America's Plight: The Scourge from Spain to the USA, by Pancho Mendez) I have come to realize a major 'benefit' of the gold price manipulation confessed by Alan Greenspan. By the price-fixing of keeping an artifically strong dollar, the United States exploits and financiallly rapes Latin American countries of their natural resources. It is a diabolical form of empire and mercantilism whereby the 'colonies' of the United States provide we Americans with BOTH natural resources and labor finished products for nothing (paper or computer dots) so that we can live very far, far, faaaaaaaaaaaaaaar beyond our means. The United States benefits from the Greenspan acknowledged 'gold cap' by the financial rape and plundering of the natural resources (and the labor) of Latin American nations, African nations, the oil producing nations, and all other dollar holding peoples and nations around the world. Was not our own revolution greatly about dethroning the economic injustices and exploitation of our colonies by British Empire mercantilism? Ah, the wonders/horrors of the economic relativism of Hobbes are exposed by history.
CRIMINAL GREED
The 'gold cap' has by example spread the Fed/Hobbesian amoral, criminal, unrestrained pursuit of greed through PHONY EARNINGS (Unearned Earnings, by Brady Willet & Todd Alway); PHONY ECONOMIC DATA (Lies, Damned Lies, and Economic Data, by Mark M. Rostenko), (Shame on US Labor Statistics, by Don Smith); AND THE PRICE-FIXING OF MARKETS. (New Economy; Fraudulent Markets, by Don Smith)
ACCELERATING FIAT DOLLAR DEBT
From the Statement of the Public Debt by the United States Treasury; the public debt of the federal government per capita in l9l7 was $28.00. In l97l, when Nixon closed the gold window, the public debt of the federal government per capita was $l,921.00. In l998, the public debt of the federal government per capita was $20,884.00.
The federal government 'off budget' debt is also out of control. The list of types on unsustainable dollar debts includes external debts, mortgage debts, municipal debts, state debts, corporate debts, trade deficits, and consumer debts. (The Debt Bubble, by Milhouse) (More Plastic, Please, by Greg Pickup) (The Perfect Storm, by Greg Pickup) (The Depression Has Begun! by Jay Taylor) (Inflation or Deflation? by Adam Hamilton) Hamilton and Wegerif will not let us forget $l50 trillion of gambling (derivatives) debt. That is about 455,000 dollars of derivative debt for every man, woman, and child in the United States. (The JPM Derivatives Monster, by Adam Hamilton) (I Suspect Gold and Derivatives Bad Debts May Soon Be Cancelled, by Boudewijn Wegerif) (Current Writing: Deep in Debt, in Deep Danger, by Hans F. Sennholz)
THE SUPERSTATE, INC.
The United States evolved from the Lockean republic into a racketeering Hobbesian Superstate, Inc. Corporations became the dominant special interest group because they could best bribe politicians. Hence, the Superstate, politically sold to the corporations, becomes the Superstate, Inc. Corporations purchased the United States as their empire, just as in 193 A.D. Didius Julianus became Roman Emperorer by purchasing the throne at auction.
It brings to mind our WWII hero, Ike, and his dire January l7, l961 warning, about the military/industrial complex. (Dwight D. Eisenhower, "Farewell Address": January l7, l961)
With the expansion of the industrial revolution, CONTROL OF THE DAILY ECONOMY SHIFTED FROM HOUSEHOLD BUSINESSES TO CORPORATIONS. With that change; control of the local, state, and federal governments shifted from the families to the corporations. Government 'of the people, by the people, for the people'; became government 'of the corporations, by the corporations, for the corporations'. The John Locke of my Declaration of Independence and my Constitution, was replaced by Hobbes. Corporations, consolidated their Hobbesian coup d' etat of American governments by structuring codified limitations on commerce between families (licenses, permits, zoning laws, building codes, etc.). The price that Americans pay for limiting the land and labor uses of their neighbors, is the corporate slavery of being powerless serfs in the corporate labor pool. (The Corporate Century by Russell Mokhiber and Robert Weissman)
GOLD IS FREEDOM
Physical precious metals, as circulating currency, limits the empire building of government. Critics of precious metals as money argue that there is not enough gold to pay for everything. They are correct. There is not enough physical gold and silver to pay for government empires that secretly and criminally price-fix financial markets for insider criminal profits. There is not enough physical gold to confiscate the labor and economic resources of citizens and foreigners. So, a thousand cheers for the anti-gold argument that "there is not enough gold". And if there were enough gold; then, gold would no longer be GOLD: That which can protect freedoms. Then gold grains would be sand. Can sand as money insure freedom? Do the anti-gold bankers want to make sand money? Well, yes! They have already made the 'infinite' supply of sand into 'dollars', without actually using the sand.
Tlaga says it well: When "all forms of 'paper money' were redeemable in gold on demand (silver certificates in silver or in gold at the Treasury's option), the supply of money was finite...American bankers could not increase supply of money at will, for they could not increase supply of gold at will." (We Have Been Had, by Tlaga) Circulating physical gold protects the inalienable right of individuals to not be stolen from by their government's currency. Circulating physical gold greatly protects the inalienable right of individuals to not be subjugated by a fiscal fiat financed totalitarian government.
David Vaughn speaks with logic, passion, a sense of history; and, with a grasp of the criminal transfers of wealth and purchasing power that trample our freedoms into economic bondage. (Gold's Salvation Has Arrived!!! by David Vaughn) Gold is freedom. Paper is slavery. (Gold and Economic Freedom, by Alan Greenspan)
PAPER IS CORPORATE SLAVERY
The Superstate Inc. created by force of law and regulations an unemployed labor pool of Americans to supply the labor needs of corporate and government growth. Americans abandoned their over taxed, rent drained, and over regulated, family businesses. Americans lost their nineteenth century freedom to have in-home mom and pop barber shops, craft businesses, repair shops, etc.; to twentieth century implemented zoning restrictions and regulatory codes. Disenfranchised from the freedom of having their own rent free profitable businesses, BY FIAT FINANCED, REGULATORY AGENCIES, many Americans went to work as corporate and government chattels.
Fiat currency creates economic slavery via theft of private labor, private property, and purchasing power. Fiat currency will criminally suck the wealth out of any nation, such as by the dollarization of Argentina. (What Really Killed Argentina? by Hugo Salinas Price) (Argentina is Flush! by Paul Hein,M.D.)
THE GOLDEN KEY
Many Americans, as corporate and government chattels, became slaves afraid of their masters. They learned to CYA, brown nose, write memos with no opinions; and, to silently accept any marching orders. They abandoned the Statute of Liberty. They abandoned The Constitution of the United States as Amended. They abandoned their dreams of freedom. They abandoned their ability to think. Like cowardly sheep, they huddle together, yielding their fleece and their lamb chops. A labor pool mentality has killed the dreams of freedom in the hearts of too many Americans. Labor pool slavery has become so ingrained in the American psyche that it has become the preferred condition. Americans compete for the privilege to man an oar as a slave in a corporate ship. They have even lost their shame. Like shackled slaves, they silently row to the crack of the whip on sinking corporate death ships like Enron, Global Crossing, etc. Like good slaves, they go to Davey Jones locker, still shackled to their corporate ships by bankrupt pension funds, unemployment, and worthless stock certificates. If they venture into entrepreneurship, it is often for greed, and the desire to be a slave owner. Too many have foreclosed a third option of being neither slave owners or slaves; but, of just being free. It pains me as if my living, beating heart were carved out of my chest, diced into pieces, and cast upon the blood red sand dunes of America. I crawl around on all fours, picking up the pieces of my heart, and trying to thrust them back into my chest. Where is my America? I have lost her, for she died! Where are the freedoms of the past? Alas, they only dwell in the past. Locke is gone, and Hobbes is here. We need a modern Paul Revere to cry out: "Hobbes is here! Hobbes is here!"
THE MECHANICS OF FINITE PHYSICAL GOLD (AND SILVER), AS THE ONLY CIRCULATING MONEY, IS THE GOLDEN KEY TO UNBINDING MANY FREEDOMS. Accept just physical gold, silver and copper. Accept denomination by physical weights; and, by nothing else. Accept no receipts, no fractional reserve gold or fractional reserve banking, no gold standard, no gold notes, no paper/computer gold. For all those things are as infinite in banking creation as all of the grains of sand in the cosmos. And, we know the value of sand. Only sand, shall soon fill the mouths, the starving bloated bellies, and the hunger pains of dollar holders world-wide. For generations to come, the newborns of America, and dollar holders overseas, shall only suckle sand (debt repayments of purchasing power) from the shriveled, dry breasts of the Hobbesian redistribution of sand.
THREE ADVANTAGES
The Superstate Inc. extermination of historic household/family business opportunities by the corrupt and criminal use of new government powers has tendered three self-serving interests. First, this action created a massive pool of skilled, unemployed, labor for building large corporations and governments. Secondly, corporate employment creates ever increasing employee withholding dollar unit taxes that are easily collectible. Thirdly, the withholding taxes create need for dollar units These changes have benefitted the empire building and the revenue streams of both government and corporations. It has been a persistent Locke to Hobbes, political and economic revolution.
THE DEFEAT OF ASSET MONEY
During the twentieth century bankers defeated Constitutionally mandated asset money (gold, silver, and copper coins) as the medium of exchange. Bankers replaced asset money with debt; fiat dollar units. This asset to debt change empowered government to create more medium of exchange at will. Fiat currency creation steals purchasing power from all existing individual fiat holders. Fiat currency is an empowerment for government empire building and for government theft of purchasing power. Bondholders lost the purchasing power stolen by the bond issuing corporations and governments, via fiat currency depreciation. Both budding empires, government and corporate, benefited by the defeat of Constitutionally mandated asset money. Franklin Sanders presents an excellent legal history of the dollar from the United States Constitution through to the legislation of recent times. (The Enemy in the Mirror, by Franklin Sanders)
THE DEFEAT OF CAPITALISM
Capitalism is the predominant use of assets (capital) for private business purposes. With the change of the use of asset money (gold and silver coin) for the use of debt (fiat dollar units); debt became the predominant economic building block. Thus capitalism was structurally replaced by debtism because of the change from an asset to a debt medium of exchange within fractional reserve banking. It is impossible to sustain capitalsim and the political freedoms and economic benefits of capitalism, with either a fiat currency; or, fractional reserve banking. (Kitchen Table Talk II, by David M. Champeau) (A Way Out, by Dr. Paul Hein)
THE MARRIAGE
The economic marriage between government and corporations was a symbiotic relationship. The corporations built their goods and services market share empires with the attrition of mom and pop businesses. Both recruited from a captive labor pool. The Superstate Inc. used corporations as cost-free tax collectors for ever more taxes because of currency inflation and progressive taxation. The politicians used taxes, and new fiat units, for pork for purchasing special interest voting blocks. The pork barrel process ingrained the power, bribery, corruption, and ego glorification that goes with the buying of election votes. The elected officials were re-elected by unlimited pork fiat dollars for sale for corporate special interest group election votes. No wonder that our elected politicians hate gold: It severely limits the politician's capacity to purchase special interest group block votes for re-election.
THE PENDING DIVORCE?
Corporations built new plants in third world countries with 'cheap' labor. With globalization Americans became increasingly unemployed. Outdated domestic industrial plants became increasingly non-competitive. Corporate America hired the government created domestic labor pool; and then, abandoned them for overseas labor.
The Superstate Inc. does not collect taxes from third world laborers; nor, from Americans now unemployed because their jobs moved overseas. And, unemployed workers lack the ability to buy imported products. With the strong dollar and corporate globalization, the self-interests of government and the corporations have suddenly clashed big time. Now both are in mortal financial danger; and, both are convulsing in their death throes. (A Ring of Dominoes, by Daan Joubert)
The Praetorian Guard proclaimed Galba Roman Emperor in 68 A.D. The Praetorian Guard killed Galba in 69 A.D. The Federal Reserve proclaimed corporate America as Caesar in 1971 A.D. The Fed killed corporate America, with the 'strong dollar' in l995 A.D. The interests of bankers and corporate America clash severely on the 'strong dollar'. The 'strong dollar' protected external dollars, bonds, Wall Street insider profits; and, an unsound banking system, at the cost of the evisceration of corporate America and her employees. It is as if Rome has been sacked, pillaged, ravaged and destroyed by the Romans in banks, government, and Wall Street. Since l995, the United States has government 'of the banks, by the banks, for the banks'.
PURCHASING POWER & DEBT DURING DEFLATION
When debt is liquidated, purchasing power is liquidated, no matter how the debt is liquidated. The undeniable factual groundwork for this statement is laid out step by step in DEBT; PART ONE - PURCHASING POWER. As first noted by Kevin, PART ONE includes no example of debt liquidation of a bond with appreciated dollars. So, here is the missing bond example.
ABC Inc. creates and issues a bond for one hundred thousand dollar units, which is sold to Winston Smith. Twenty years later, ABC Inc. redeems the bond by paying Winston Smith one hundred thousand dollar units in currency, which, in this example, has doubled in purchasing power since the time of issue.
- In the combined bond issue/redemption, the bond seller, ABC Inc., NET loses the purchasingpower of l00,000 original dollar units.
- In the combined bond issue/redemption, the bond buyer, Winston Smith, NET gains the purchasing power of 100,000 original dollar units.
Thus the CUMULATIVE effect of the bond buy/sell transactions for both parties combined was a wash in purchasing power. After the repurchase of the bond, the net extra purchasing power gained by the bond buyer exactly equals the net purchasing power lost by the bond seller. Thus, Atocha's Supreme Law of Purchasing Power is affirmed. PURCHASING POWER GAINED BY DEBT CREATION IS ALWAYS (cumulatively) EQUALED BY PURCHASING POWER LOST BY DEBT LIQUIDATION. This is old knowledge, Simon Newcomb wrote about it in l865. "When this state of things reaches its inevitable termination, the depression is as great as was the previous excitement." (A Critical Examination of our Financial Policy, by Simon Newcomb, l865, D. Appleton)
Imagine having to repay your debts with dollars that had doubled in purchasing power. This happened in the l930s. "Due to the drastic fall in commodity prices throughout the world...the amount of exports necessary to make debt payments to the United States is vastly greater than the amount which would have settled these obligations at the time they were incurred....The debtor countries borrowed dollars worth about 51 cents in purchasing power in l9l7 and l9l8, and are being called upon to pay back dollars worth about $l.0l or more." (Barron's, March 27, l933)
Deliberate confiscatory deflation; or, an uncontrolled implosion of the dollar denominated fractional reserve banking system, could result in US homeowners having to make dollar mortgage payments with double or triple the purchasing power of the dollars that they borrowed. Most middle class homes would be for sale, with no buyers- just like in Argentina today. Or, just like Philadelphia in l822. "I have to tell the reader, that, in this market-street, where very few houses used to let for less that a THOUSAND DOLLARS A YEAR EACH; that, in this very street, in l822, houses of FOUR STORIES, with marble-steps and copper-spouts, were, in great numbers, SOLD FOR A DOLLAR A PIECE! Nay, my friend, Mr. Croft, at Manchester, told me, that he was offered several houses in that street for one single bottle of wine." (Emphasis by Gouge) (The Curse of Paper-Money and Banking, by Wm. M. Gouge, of Philadelphis, l833, Greenwood Press, New York, reprint) In the l930s, exclusive Coral Gables, Florida, saw many homes sold on the courthouse steps for taxes due, in order to discharge debts.
PLANET EARTH WILL BECOME A DEBTOR'S PRISON
At first blush, the notion of fine houses selling for one dollar each seems impossible. However in l822, "a prison system existed for those who didn't pay their bills. If a merchant filed a claim, the debtor was incarcerated until his debts were paid. ..many borrowers languished in prison for years, surviving on what their family could bring to them or, in many cases, simply starving to death." (Bankruptcy) Obviously, I don't know the specific circumstances in the houses that Gouge mentions. However if a house was encumbered with debt no longer repayable due to a general economic contraction; then, the choice could well be between going to a debtor's prison and starving to death; or, selling the house for a dollar and getting rid of the debt obligation.
Atocha's Supreme Law of Purchasing Power is absolute: "Purchasing Power Gained by Debt Creation is Always Equaled by Purchasing Power Lost by Debt Liquidation". It is a cumulative loss of purchasing power that can be absorbed by the borrower, the lender, or both (depending on how the debt is liquidated). That loss of purchasing power from debt liquidation is now just a beginning trickle. Economic recession shall progress to economic depression. (In the Eye of the Storm, by Vronsky)
We have lived unrestrained computer debt creation, for the first time in history. The liquidation of fiat currencies world-wide will be a "killing field" for financial debts AND THEIR PURCHASING POWER. The financial blood will cover the earth red; and, left standing will be physical precious metals, food, oil and weapons. (The Dilemma for Wealth: The Case for Gold, by John D. Meyer) We have used the computer and the Hobbesian fiat dollar in order to turn Planet Earth into a debtor's prison.
DAAN JOUBERT'S TRUCK
Daan Joubert gives us a very useful truck analogy (which I embellish and simplify). (When Systems Fail... by Daan Joubert) For analogy purposes we shall consider an economic system to be a truck and we shall consider the load the truck is carrying to be debt. The March, l933, crisis in the United States, was a fractional reserve banking crisis. In March, l933, the fractional reserve banking system, as 'the truck' stopped running because its load of debt (especially fractional reserve banking debt and fractional reserve gold debt- due to a 'gold standard') became too heavy for the truck to operate. The total debt load was reduced by devaluing the dollar and by terminating domestic gold redemption ability. Broken truck parts (insolvent banks) were removed. Damaged truck parts were strengthened (more cash was sent to weak banks that were not closed as insolvent). The system changed; but, it did not come apart. The l930s economy was like a truck that stopped running because its (debt) load was too great and some truck parts were broken. The debt load was reduced and truck parts were strengthened. The truck could again run as a truck. During the rest of the l930s, other debts were slowly liquidated and the truck load became even lighter. This is one of two types of systems failure that Daan Joubert describes: The system changed; but, it remained cohesively in tact.
In the second type of systems failure, the previously repaired (the 'gold cap/strong dollar' policy) truck stops running because the load (debt) and wear (interest payments)are so severe that when the truck breaks down, it is no longer repairable. The system ('truck') has lost its cohesiveness. "...the truck itself fails -- as a truck. The parts have lost their cohesiveness, the load now exceeds the strength of the links that keeps the parts together in a way that transforms a lot of essentially scrap metal into a thing called a truck." (ibid Joubert) If the truck is the world-wide dollar debt based economy, it is now the fiat reserve currency dollar, that provides Joubert's "cohesiveness".
Take away the "cohesiveness" (the fiat reserve dollar); and, the effect is that the truck is completely disassembled and the parts are dispersed into the debths of the seven seas. That truck is forever kaput. This time, pattern makers must design all new parts. Then each new part must be hand made by trial and error in machine shops. Then, piece by piece a new truck (economic system) must be assembled. It may take centuries.
That is the difference between the banking/debt crisis of the l930s, and the fiat reserve currency crisis now unfolding. Daan's point: "A system is more than the sum of its components." It is the dollar as the fiat reserve currency of the world that cohesively binds the world's debts together into a cohesive 'truck'. When the dollar goes 'poof', AS A FUNCTIONING INTERNATIONAL MEDIUM OF EXCHANGE, the fiat based debts of the world disassemble, LOSE THEIR PURCHASING POWER, and become worthless 'truck' parts. A fiat reserve currency collapse (on top of a fractional reserve banking crisis) is far more severe than just a fractional reserve banking/gold crisis while on a gold standard. This time, due to the computer, internet technology, and a debt reserve currency instead of an asset reserve currency, the load (the amount of debt) that the truck is hauling is exponentially larger and more geographically dispersed, than the (debt) load that caused the repairable March, l933, breakdown.
ONE, TWO, THREE
The liquidation of a historically unprecedented amount of debt equals a historically unprecedented loss of purchasing power. Historically unprecedented loss of purchasing power equals an economic depression of historically unprecedented depth and duration. It is as simple as One, Two, Three. (Basic Facts Point Inescapably Toward Disaster, by Rick Ackerman) (Bond Crash Harbingers Severe Economic Crisis, by Cliff Droke)
THE RISE AND FALL OF CIVILIZATIONS
Joseph M. Miller, Daan Joubert, and Marion Butler wrote the classic 'big picture' GOLD-EAGLE series: The Rise and Fall of Civilizations, from a perspective of Elliot Wave analysis. (The Rise and Fall of Civilizations: Part One; Part Two; and, Part Three)
Step back from the 'one day at a time' perspective. Immerse yourself in The Rise and Fall of Civilizations. Few goldbugs will ride this precious metals mega-tsunami to safe harbor; without an understanding of the 'big picture'. Barring nuclear war; or, 'poof' day, the news of any typical day or week is irrelevant. The dollar/metal ratios for any typical week are irrelevant. With all respect I humbly suggest that if typical weekly PM news, or prices, are very important to your decision making; then, you probably don't have a clue as to WHAT is happening and WHY. It is as if you are studying the cells of a leaf under a microscope, instead of studying the raging forest fire.
"The conclusion drawn by the authors from their research is that the Elliot Wave Principle does indeed fit the rise and fall of civilizations over the past 12,000 years. In addition, the evidence shows that in this Elliot Wave progression we have reached a point in the years between l998 and 2001 where we have ended a l,000-year X Wave bull market advance. The vital message that fact sends to modern humans is that we are now at the beginning of a substantial economic decline that will last up to l00 years if history is used as our guide." (The Rise and Fall of Civilizations, Part III, by Joseph M. Miller, Daan Joubert, and Marion Butler)
Miller, Joubert, and Butler; from a detailed analysis of history and Elliot Waves, have concluded that we are at the end of a thousand year cycle; and, the economic decline could last a century. They studied history and cycles over the past twelve thousand years. I applied recent technological debtism to Atocha's Supreme Law of Purchasing Power. We pursued totally separate methods of analysis. Yet, we reached the same conclusion, western civilization now faces a severe and prolonged economic 'abyss'. Yet, CNBC proclaims that the V recession is over.
THE ABYSS IS A PURCHASING POWER ABYSS
Whether by confiscatory deflation, uncontrolled implosion; or, by currency hyperinflation, the fiat dollar unit as A FUNCTIONING INTERNATIONAL MEDIUM OF EXCHANGE will suddenly CEASE FUNCTIONING. Poof! (The Economic Consequences of Mr. Greenspan: The World Could Be Sucked into the Blackhole of Zero Interest, by Antal E. Fekete) It is a purchasing power abyss!
Except for the military, sheeplevison, and quasi-military agencies; government functioning stops cold when medium of exchange functioning stops cold. Corporate functioning stops cold. Commerce stops cold. Employment stops cold. And purchasing power stops cold. Purchasing power vanishes. Your debt based purchasing power vanishes. Welcome your mind and thoughts to the "abyss". (The Last Great Bubble - Counterfeiting the Dollar, by M. A. Nystrom)
During the abyss the most common phrase in western civilization will be: "I remember when..." For example: "I remember when people were able to ride on the mass transit system." "I remember when we used to live in our house." "I remember when I was never hungry." "I remember when we had joy." "I remember when I could live on my retirement checks". "I remember when we had electricity every day." "I remember when I could trust my friends." "I remember when stores would accept checks or bank cards." "I remember when people smiled."
CONSEQUENCES
The fiat dollar, as the reserve currency of the world, is the 'cohesiveness' that binds together most of the world-wide economy. Take away the 'cohesiveness' (the fiat reserve dollar) of Daan Joubert's truck (the world economy); and, the truck becomes dismembered parts and the economic system of western civilization collapses. Thus, the financial and human consequences will be much more severe and widespread than in the current Argentine crisis. In Argentina today the financial system is severely stressed; but, it remains cohesively in tact. Paper Argentine pesos and US dollars will still purchase goods in Argentina. Daan Joubert's 'truck' for Argentina is still a cohesive truck. Daan Joubert's 'truck' for the United States will become dismembered scrap metal parts.
The dollar systems collapse shall bring terrible world-wide consequences. Brother shall steal from brother. Mother and daughter shall steal from each other. Prostitution shall flourish as formerly fashionable women sell their bodies for a hamburger, fries and a Pepsi. Children shall carry weapons in order to protect their school lunch money. There shall be turf wars over grocery store dumpsters. Neighborhood crime watch will turn into armed vigilante patrols. With the breakdown of the criminal court system, looters will be routinely shot by both vigilantes and police. The night shall belong to theft and violence. People shall stay armed and locked in their homes at night. In the anarchistic civil war between the haves and the hungry, uniformed police officers shall routinely be shot. Police will retreat into safe neighborhoods. Farms raising livestock and growing food crops will be plundered. Truck hijackings shall threaten the distribution of all merchandise. The National Guard shall loot what they are sent to protect; like they did at Homestead Air Force Base after hurricane Andrew. Suicides shall abound. The computer/internet debt system will crash. Graves shall be dug open and caskets searched for gold and silver jewelry. Not even the dead shall be safe. Fires shall rage through residential areas as fire fighters wait for the relative safety of dawn. Cats and dogs will disappear from urban streets. Yet the sale of cat food will increase. Men with pliers shall specialize in pulling the gold and silver teeth out of those who pass by. Home owners will flee from entire neighborhoods, even though unable to sell their homes. For self-protection from home invasion robberies, twenty or thirty people shall form 'tribes' and live together in the same house. The tribes shall join and form feudal terrorities under the domain of war lords. A new system shall evolve: From anarchy and anomie, to tribes, to war lord feudal states. Every aspect of life shall suffer. As musician Andrew Y emailed me: The arts and artistic creativity are already suffering. Andrew calls for "the gold standard for music". Indeed, the rebuilding of western civilization will be based on physical gold and silver coins; or, physical lead bullets. The direct responsibility for the collapse and dismembering of western civilization shall be criminal, Hobbesian bankers and economists that presuppose themselves to be above all laws; because, "man, as the state, makes right".
CRIME AND WHITE COLLAR CRIME
"The two abstract criteria generally regarded by legal scholars as necessary elements in a definition of crime are legal descriptions of an act as socially harmful and a legal penalty for the act." (Defining Criminology and Crime by Sociology online) "White-collar crime takes many forms. Some examples include: embezzlement, kickbacks, bribery, pilferage, price-fixing, fraudulent financial reporting, environmental crimes, software piracy, bid rigging, insider trading, computer related crime... white-collar crime... (is an) INDIRECT form of theft." (What Is White-Collar Crime? by Audit & Management Advisory Services) "In the late l930s, criminologist Edwin Suitherland first coined the term 'white collar crime' to describe the criminal activities of the rich and powerful. He defined it as 'a crime committed by a person of respectability and high social status in the course of his occupation.'... The following types of white collar crime are recognized today: Corporate crime...Government crime--illegal and socially injurious cooperation between governments and corporate institutions...Occupational crime...Professional crime.."(White Collar Crime)
Whether or not an act is a crime DEPENDS SOLELY ON THE NATURE OF THE ACT COMMITTED. In the United States, under equal protection of the laws, the identity of the perpetrator of the act is irrelevant as to whether or not a crime has been committed. (The United States Constitution as Amended) A crime is an act defined by law that carries a legal penalty for the act. White-collar crime includes indirect theft, price-fixing, fraudulent financial reporting, insider trading, Ponzi schemes, pyramiding, currency schemes, securities fraud, etc. One of four recognized types of white-collar crime is "government crime--illegal and socially injurious cooperation between governments and corporate institutions". (ibid) By establishment academic criminology criteria, the US government, in cooperation with the Federal Reserve, fractional reserve banks, and many Wall Street firms; is engaged in massive and long-standing crimes that are the 'government crime' category of white-collar crime.
Dollars are exchanged as units of purchasing power because of legal tender laws and because federal, state, and local taxes are denominated in dollars. These two factors endow dollars with purchasing power even though dollars have no intrinsic value. The purchasing power of dollar units is stolen every day from the American people in four major ways. First, each new dollar unit created by Federal Reserve computer entries or printing, steals some purchasing power from all prior existing dollar units. Second, fractional reserve banking creates new dollar units that steal purchasing power from all prior existing dollar units. Third, fiscal spending by unrepayable dollar debts such as bonds creates new dollar units that steals the purchasing power of future generations when the bonds are liquidated. Fourth, insider gains in purchasing power, from the Federal Reserve price-fixing of financial markets is fraudulent and theft of purchasing power from those investors who do not know that "the fix is in".
Since the only value of dollars is purchasing power, the theft of part of the purchasing power of dollars is de facto the same as the theft of a portion of dollars from any purse, wallet or bank account. These four types of thefts of purchasing power are committed by central bankers, fractional reserve bankers, Wall Street firms, and government officials. That does not alter the fact that according to the United States Constitution as Amended, theft is still criminal theft, no matter who is involved. Only the presupposition of Hobbes, 'decriminalizes and legitimizes' criminal acts of theft solely because of the identity of the thieves: "Man, as the sovereign state, makes right."
SUMMARY, CONFESSION, AND CREDITS
These debt essays provide: l) An understanding of the absoluteness of the laws of purchasing power and debt (Part I) ; 2) An understanding of our cultural and economic addiction to debtism as an economic system that is the opposite of capitalism (Part II); 3) Thoughts on how to protect our families during the economic abyss (Part III); and, 4) An understanding of the purchasing power abyss! It is a debtor's prison that is the child of Hobbesian presupposition and Fed computer banking. Without the 'golden key' it will be an eternal debtor's prison. (Part IV).
My goal was a concise, cohesive, and flowing 'movie picture', on the nature of the purchasing power abyss; and, how it criminally evolved through Hobbesian Federal Reserve theft of purchasing power by debt. Despite countless hours, I fell way short of my goal. I pursued a flowing 'movie picture' and I give you scattered still photos.
I have no short-term time predictions. Anticipated history unfolds so slowly; until it explodes. I simply share with you a cup of Boston tea and absolute Laws on debt and purchasing power. I thankfully credit the cited Gold-Eagle authors, many wonderful and knowledgeable email authors, Rothbard, Hayek, Von Mises, Salerno, Sennolz, Exter, Van Til, Locke, Rushdony, Newton, Kafka, Hayakawa, Orwell, Napoleon, Kondratieff, Durkheim, Pick, Paul, and so many others. Please, take steps to prepare and protect your own family, and at least one other, for living an Argentine type life during the purchasing power abyss. Think Argentina and act for family and freedom.
ARGENTINA: STARVED FOR CASH
Argentina today is a peek glimpse of the USA of tomorrow. Looting, mobs blocking roads and demanding food, bloody riots, hunger, political revolution, violent hungry deaths, the closing of the banking system, the printing of local scrip, etc.: Constitute Argentina today. (Reflections on Argentina, by Clif Droke) "...half of Argentina's 36 million people cannot meet their basic food needs or cover their cost of living." "Desperate pensioners were getting funds at most banks--in bonds, not cash--and most ATMs were likely to remain empty. 'I haven't had cash for eight days now and since no one accepts checks or bank cards, my family is getting pretty hungry,' said Angel...." (Argentines, Starved of Cash, Face Hungry Weekend by Gilbert Le Gras, Reuters Securities) "...with street rioting killing 28 people just before Christmas, the country is on the bink of civil war." (Argentina on the Brink by Hans Sennholz)
In Argentina the people torched the Finance Ministry and stoned bank buildings. They have smashed ATM machines. One woman, in protest against the banks, set herself on fire. (The Argentinean Collapse - Another IMF Triumph, by William R. Thomson)
I shall leave you with one factual visual image from Argentina in order to crystalize your thoughts. A truck hauling twenty-four live cattle overturned on the road. On the spot, quickly hundreds of people came forth. As a mob they quickly killed the twenty-four cattle and butchered them for food to eat. (Argentina: Images of a Shipwrecked Nation, by Marcela Valene, online Asia Times, March 29, 2002) It is time to put Pollyanna on the shelf, next to Santa Claus and the Tooth Fairy. (What Really Killed Argentina? by Hugo Salinas Price) (An Argentine Trailer, by Don Stott) (Argentina: Skirting Anarchy, by Hans F. Sennholz)
DISCLAIMER: This essay is provided only for intellectual stimulation and educational purposes. Consistent with my educational background, this essay is primarily a criminology paper. The contents are not intended as investment advice. You shall reap the consequences of YOUR decisions. The credit or blame will be only yours. I encourage you to consciously accept that responsibility and to think historically. Upon my death my copyrights for all of my writings are to be released into the public domain. I do learn from, enjoy, and thank you for your email feedback. (No email attachments please, they will not be opened.) I carefully read every email and I randomly respond to some, as time permits. So please, keep the emails, your ideas, and your comments coming.
Frank Smith has BS and MS degrees in Criminology from The Florida State University. He was a professional investigator; and, he has been an entrepreneur since l969. He spent fourteen years in a wholesale niche of precious metals. His criminology background serves him well for the study of current Hobbesian economics and banking.
Frank Smith, (aka "Atocha")
May 28, 2002
fhsmith@terranova.net
Copyright 2002, Frank Smith
Email this Article to a Friend 
Printer Friendly Version