AT FIRST FOR BUSES ONLY
Copyright 2002 J.N. Tlaga
Please try to imagine Irish Parliament voting one day in favor of adopting the continental right-hand-side traffic rule, and Irish Prime Minister then advising the public that in order to appease the English opposition her government would introduce the new rule gradually, one step at a time: at first for buses only.
And after you stop laughing, please pause to note that we do have such prime ministers here.
Professor Antal E. Fekete, in "DON'T FIX THE PRICE OF GOLD!", makes the following announcement:
"The first remark on this blueprint which, as far as I am aware is new and radically different from any other that has been offered so far, is that it expressly avoids fixing the price of gold. At least for a transitional period that may last for several years, the paper dollar and the Eagle gold coins would circulate side-by side at a floating exchange rate. In other words, there would be a parallel monetary standard and the paper dollar would be free to compete with the Gold Eagle. The market should in the end decide which of the two deserved to survive. This is a major departure from historical precedents, which have all involved the stabilization of the paper currency in terms of gold."
And GATA's Reginald H. Howe, of "Howe vs BIS", endorses similar plan:
"Rather than try to beat new life into the dead horses of the gold standard and the Constitution's original monetary provisions, my best suggestion at this point is to follow the lead of GATA friend and supporter Hugo Salinas Price, who has long urged the use of silver as a parallel money in his native Mexico and the other nations of Latin America...
www.plata.com.mx/plata/plata/silver.htm His approach applies equally to gold, which as the principal monetary metal is even more suitable for use as parallel money than silver."
"Within this framework" - Mr Howe continues - "the fight for sound money can be conducted on multiple levels but without a frontal attack on established monetary institutions. The principles of freedom are likely to be achieved more easily by redirecting the debate from the power of governments everywhere to establish and operate domestic monetary systems to the right of people everywhere to use gold and silver specie at their election in free and open competition with government managed currencies. It is easy, both practically and politically, to oppose a return to the gold standard; it is more difficult to oppose a free market for gold.
Allowing private alternatives to often mismanaged government monopolies is an idea whose time has come. It applies to money with as much a force as to post offices and pensions."
Of course, there is nothing inherently and fundamentally wrong either with the proposal of Professor Fekete or with the proposal of Don Hugo Salinas, just like there is nothing inherently and fundamentally wrong with the right-hand-side traffic rule. Only their mode of implementation is called into question here. Like the fictitious changeover of Irish traffic rule, they don't preempt the opposite rule all at once, thus setting their - otherwise sensible - reform on the collision course they are unlikely to survive.
To say "the paper dollar would be free to compete with the Gold Eagle" is like saying "armed gangsters would be free to compete with disarmed storekeepers" (please don't be nervous, Ladies and Gentlemen, and allow this competition to go on for a few more years to see where it will ultimately take us, as if you didn't know it already), and the outcome of "Howe vs BIS" proves that opposing free market for gold by the fiat money regime is not any "more difficult" than introducing yet another racketeering enterprise into the already corrupted town.
It is difficult indeed to understand the logic of driving buses on the right-hand side of the road when trucks are driven on the left-hand side, and call it a "private alternative to government monopoly". And it is even more difficult to understand how riding on such buses may be considered "an idea whose time has come". The Book of Ecclesiastes tells us: "There is an appointed time for everything, and a time for every affair under the heavens. A time to be born, and a time to die..." plus twenty six other "times" arranged in pairs. But I am afraid we won't find the time appointed for this bright idea listed there. The closest "time" befitting this occasion might be Al Gore's "It's time for them to go" with a caveat that he would have to go with them of course.
Do unto them what they did unto you - is the only practical approach. They did not defeat gold in fair competition; they used government power to install their fiat money system. Would the Federal Reserve notes, standing on their own, ever be able to supplant gold dollars without the governmental sanction of a legal tender status? Yes or No? A thousand times, No! Then why in the world should we even consider accepting the idea of competing with the Fed's counterfeits while they continue to enjoy a legal tender status? How can honest people compete with counterfeiters who enjoy not only legal impunity but the government conferred privilege to force their counterfeits upon the whole world. First close their enterprise down, then compete with them! That's how they did it.
The fundamental reason why gold coin cannot compete on equal basis with fiat note is that we cannot create new gold coins by computer click; we have to earn them.
How many people would have to work full time for how long to earn a trillion dollars worth of gold coins (whether the price of gold is manipulated or not)? And how many clicks on Alan Greenspan's computer does it take to expand money supply by one trillion dollars?
Free competition?!
Only by electing the honest-money President and the honest-money Congress can we abolish the scourge of fiat money. Any other approach will in the end prove to be like bombing of London instead of RAF airbases - an exercise in futility. (Even if London would have been bombed out into total oblivion, crossing the English Channel would still be impossible, because it were the RAF= airplanes not the London houses that were blocking the invasion of England in 1940.) Nothing on this planet is more exasperating than arguing the obvious.
To make it even more explicit: Electing Congressman Ron Paul to the Oval Office will make a difference; passing Congressman Paul's "Monetary Freedom and Accountability Act" (HR 3732) will change nothing.
In "THE ALTERNATIVE FUTURE - A Call for Overnight Revolution" ,
grams of monetary silver and grams of monetary gold are proposed to "circulate parallel with new cents" (existing cents revalued by 10 to replace Federal Reserve notes) in order to find their value against new cents and against each other on the free market. But it is not a "free market" where the Treasury manipulates the price of gold, where the stock exchanges finesse the people's earned money by trillions, and where the Fed continues to counterfeit new cents as it counterfeited paper dollars, while corporate
managers and bankers change the rules of accounting as they see fit; it is a free market without quotation marks, a fair market in which the Fed and its stock exchanges are closed for good, the fiat debt is summarily repudiated, the corporate equity is determined by the book value alone, and the Treasury is required to mint all the silver and gold and put it into circulation for everyone's use.
Parallel circulation of grams of silver and grams of gold with new cents makes sense only because the new cents are no longer counterfeited; their overall number is finite, and they don't proliferate anymore, simply because the Fed is shut down. Under such conditions, calibrating the value of one gram of silver and one gram of gold into the existing new cent price structure will be nearly instantaneous; it will not require "transitional period that may last for several years".
(In the wake of THE ALTERNATIVE FUTURE, I was getting a lot of static from the supporters of the Fed's counterfeiting business in the vein of: "It is the most dishonorable thing to repudiate a debt, fiat or not." My response: "Counterfeiting is stealing by gradually reducing the value of money in circulation. In legalese, any such endeavor is called a larceny by trick. If it is honorable for the bankers to steal by counterfeiting, why is it dishonorable to repudiate this false money together with the fruits of this
stealing accumulated over the years?")
Sometimes even the greatest minds do not see the obvious, and such oversights should never be used to downgrade their accomplishments. No economic historian of the first half of the 20th century rates higher in my eyes than Benjamin McAlester Anderson for his "Economics and the Public Welfare". And yet he never thought in terms of Gold Standard Index, and never grasped that Montagu Norman operated Bank of England on pure fiat while propping up sterling's exchange value by manipulating real gold prices down by more than 40 percent. In Chapter 22 of his opus magnum, he repeats English disinformation line that pound sterling stood on the eve of its "return to gold standard at par" at "approximately ten percent below the gold parity".
Dr Anderson simply could not see Montagu Norman's gold price game with two-tier sterling and two-tier dollar. Only a few people could see that situation, and they weren't talking. If more people could see it and would talk about it, perhaps World War II could have been averted. It is one thing when no one can see what is happening, and quite another when the requisite knowledge is in the public domain but no one applies it where it would have made a difference.
In theory, EURO AND GOLD PRICE MANIPULATION, PART I should have deflated all misrepresentations about gold and fiat dollar regime because it introduced Gold Standard Index to serve as Greenwich Meridian for navigating through the vagaries of gold and fiat dollar. But one year and two months later, GATA press conference was sabotaged with total impunity by yet another obvious misrepresentation.
I have in front of me a videotape issued by , whose cover contains the following information:
"Forum: Gold Standard
Gold Anti-Trust Action Committee
Washington District of Columbia (United States)
ID: 168661 Date: 02/12/2002 Length: 1:50
Fitts, C. Austin, Commissioner, Federal Housing Administration (1989)
Murphy, William, Chairman, Gold Anti-Trust Action Committee (2002-)
Powell, Chris, Secretary, Gold Anti-Trust Action Committee (2002-)
Participants talked about potential manipulation of gold markets through alleged collusion and price fixing by major financial institutions. Among the issues they addressed were the levels of transparency in the markets, the role of the press in disseminating information about the issue, and the government's role in correcting the problems. Following their remarks they
answered questions from the audience."
On February 12, 2002, GATA had a press conference at National Press Club, attended and recorded by C-SPAN crew. GATA was given ample opportunity to present its case to the whole world, for C-SPAN broadcasted that conference time and again.
I will confine my comments here to one question from the audience. It was a part of a series of questions presented by Martin Hutchinson, Business and Economics Editor of United Press International:
"Economically, firstly, I don't believe the gold price is out of line. If you look at the late fifties, which is when the last time the thing was in balance, gold was then 35 dollars an ounce. The Consumer Price Index is up about eightfold since then. [...inaudible...] That would suggest the gold price of 270 an ounce now, which doesn't look far from where we are."
Why have I singled out only one part of one reporter's question? Because it was the only important part, and because it was never answered.
The court of public opinion functions very much like the court of law. Allegations not rebutted are deemed admitted. Thus Every Joe and Jane who watched that press conference, and who was ignorant of the underlying issues, could rightly assume GATA did not really have a case because the price of gold was not far out of line.
How different the public reaction to that press conference could have been, if Mr Hutchinson would hear the following response to his question:
My Dear Mr Hutchinson:
Before becoming a UPI journalist, you were an international investment banker. With master's degree in mathematics from Cambridge University in England and with MBA degree from Harvard Business School, you drafted the first ECU Eurobond issue documentation for the British merchant bank Hill Samuel.
You worked as a Latin American specialist for Citibank in New York, and you worked to establish derivatives operations for banks in Sweden and Austria.
You acquired such an expertise as a consultant on investment opportunities in emerging markets, that you were named US Treasury adviser in Croatia.
Now, please tell us Mr Hutchinson, how is it possible that with all these overwhelming credentials you seem to be unable to figure out the current value of gold in terms of Consumer Price Index?
You see, Mr Hutchinson, it was in December 1942, January 1943 and February 1943, not in the late fifties, when the price of gold of 35 dollars an ounce was "in balance". In the late fifties, the value of gold in terms of Consumer Price Index was $58.09 in 1957, $59.74 in 1958 and $60.15 in 1959.
Thus the 35 dollars per ounce Bretton Woods price of gold was off by 39.75 percent in 1957, by 41.41 percent in 1958, and by 41.81 percent in 1959. It was not "in balance", Mr Hutchinson. Furthermore, the Consumer Price Index for the year 2001 and for January 2002 is up exactly sixfold since 1959, not "about eightfold".
$60 X 6 = $360, Mr Hutchinson, not $270.
Alternatively, if you would have taken July 1914 price of gold ($20.67 per ounce), the last month when the world was at peace with gold standard reigning supreme, and multiplied it by 17.71, because, according to Consumer Price Index, 1 dollar of July 1914 is worth $17.71 now, you would have found that the present value of gold in terms of Consumer Price Index is 366.07, meaning, today's price ($298.90 per ounce) is off by 18.35 percent. At the lowest point of the current wave of manipulation, the price of $252.80 on July 20, 1999 was off by 26.64 percent against then CPI adjusted value of $344.60. And in all these calculations, it would be wise on your part to take into consideration that current reading of CPI is artificially lowered by more than 20 percent.
In view of your credentials, Mr Hutchinson, it would not be correct to dismiss you as an illiterate person. It is therefore imperative to assume you have made this false assertion knowing that it was false. We submit you did it to disinform public opinion. There could be no other rational purpose to it. And this begs the question: Who or what made you do it?
In any event, we have it now on undeniable authority, that UPI is here not to inform but to disinform the public. Thank you.
(It is entirely possible that if such a reply would be given to Mr Hutchinson, GATA press conference would receive less exposure, or none at all, but that's quite another matter.)
I am not trying to blame GATA crew for letting Mr Hutchinson and his UPI employers get away with their vulgar misrepresentation. The reason why this oversight is brought up here is to make us all realize how vital it is to retain and use the important information.
Just a few days ago, I was very much impressed with a post by a gentleman who uses a handle "Sage" at GOLD-EAGLE Forum, in which the dramatic ouster of Brian Mulroney's party from Canadian House of Commons was recalled. Back in 1984, Brian Mulroney led Progressive Conservatives to landslide electoral victory: 211 seats in 295 member House of Commons. Nine years later, saddled with NAFTA and high unemployment, Canadians could not wait to run Mulroney and his party out of office. Knowing what was coming, Mulroney resigned in June 1993. Even though he was replaced with very attractive woman, Kim Campbell, Progressive Conservatives retained only two seats in the New House of Commons after October 1993 elections. (The pretty woman's seat was not among the two.)
What else could be more on point now that we are embarking on a crusade to accomplish the very same thing in the United States?
Later on, I recalled I read about Progressive Cons defeat just after it happened. I even commented that, regretfully, their unmitigated defeat would not change anything because Canadian opposition was in reality as much pro NAFTA as the PCs were. And then I promptly forgot what was most important in the whole story: that it is possible for the people to go to the polls and literally wipe out the whole political party out of existence. I forgot it so completely, that "Sage's" post came across to me as news, as something I never knew before.
This is precisely the problem I am trying to bring to your attention. If we won't retain the information that is important to our cause, and we won't alert our fellow citizens to everything that is important to vote intelligently, they will continue to vote for establishment stooges along the lines of partisan politics, and ignore the supra national issues of silver and gold.
Please try to begin your days from the moment of reflection that all it takes to elect honest-money President and honest-money Congress is to do to establishment parties in the US of A what Canadians have done to Progressive Conservatives in 1993.
This article is deliberately published ahead of a far larger article on the subject how to prevent predictable assassination of the honest-money Presidential candidate, to put to rest the lingering myth that gold and silver can defeat fiat money racket by its intrinsic power of persuasion so to speak, and for this reason there is nothing for us to do except waiting for our Godot.
Greetings!
J.N. Tlaga
tlaga@shadow.net
29 July 2002
PS: This is to inform all the people who are receiving mischief e-mail messages with my return address that I am not doing it. I take this hooliganism as a sign of recognition. Thank you.
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