first majestic silver

Chains of Paper

December 6, 1999

The traditional method of conquering another nation has been via warfare. It's a dangerous method, and leaves the victor with a seriously impaired property to manage after the war is over. This is especially true today, when weapons are so powerful and their effects, as, for example, radiation, so long-lasting and pernicious.

Accordingly, a newer method has been devised: conquest by paper. There appear to be two variants of this technique: the loan, and the replacement.

The euro is an example of replacement. The countries which have chosen to subjugate themselves to the euro-issuers are simply replacing their old monetary units with the new one. No more marks, pesetas, lira, etc.; now it's euros. The local paper currency will still be in use for another year or so; but important, and large, transactions are not carried out with those, but with check-transferrable credit numbers, which will now be called euros instead of their former names. Once the idea of the euro has become comfortable to its victims, the actual wallet money will be changed as well. Acclimation is important, because money is all about psychology, and people can become comfortable with the most egregious inequity if it is brought about gradually, and attended with much weighty discussion by serious types in three-piece suits.

There have been a few protests already about the euro, with one euro-banker getting a pie in the face, but that was no doubt to be expected. There are bound to be a few people who will realize--and perhaps even a few who will care--that the advent of the euro signals the end of sovereignty. Sure, there will still be boundaries, and different languages and customs, but so what? As long as the conqueror receives his tribute, he doesn't care what language his victims speak, or where lines are drawn on a map. Sir Reginald McKenna, former Chancellor of the Exchequer of England, told us that "Those who create and issue money and credit direct the policies of government and hold in the hollow of their hands the destiny of the people." Our own President Arthur said the same thing: "Whoever controls the volume of money in any country is absolute master of all industry and commerce." With the advent of the euro, the situation has gone international. The people of eleven European nations now are not only enslaved to their own governments, but to the euro-issuers. Their absolute masters, who hold their fate in the hollow of their hands, are foreigners. And not a shot was fired!

The other method of non-violent conquest is via the loan, as in the recent IMF loan to Brazil. It is self-evident that loans cannot be repaid, when the only source of "money" is a lending process. Money, or what passes for it today, comes into existence only as a loan. It isn't as though Brazil, having borrowed dollars, could go out and find some somewhere, maybe in the ground, or the ocean, to use for repayment. Nor can it manufacture them. No, the source of dollars is a lending bank, so the more people using dollars, the greater the number who will be trying to borrow themselves out of debt. The IMF, which lends dollars, is touted as an international agency. It encouraged "private" banking firms to lend to Brazil also, and guess what---U.S. banks did! Five billion. Of course, the 41 billion from the IMF is, ultimately, from the U.S. as well, since U.S. banks are the source of dollars. President Clinton hailed this explosive inflation, saying, "A strong Brazil is in America's interests.---A strong Brazil makes for a stronger United States." Well, if a stronger United States means one which sacrifices its own economic well-being for the sake of rescuing the banks, the President is certainly right. The only way a bank, which creates money, can "fail," is if its assets--the IOUs of its borrowers--are declared worthless, as in bankruptcy. That can be prevented by further lending, though it is prudent to use another bank for the additional loan, since some might question why a bank lends still more money to a deadbeat borrower. (To keep collecting the interest, of course!)

A naive thought: if Brazil needs some money, why doesn't it just create a few tons of reals to take care of its debts? Why is one non-redeemable chit "stronger" than another? The answer leads us again to the concept of conquest. Admittedly, any fiat currency is as "good" as any other; namely, no good at all, or extremely good, depending on whether you're the issuer or the user. An aggressor nation, however, wishes to impose its own currency upon anyone it can; and if that aggressor-nation is also home to a productive people, blessed with abundant natural resources, it's not difficult. Dollars are preferred to reals because you can buy more good things with them, and the world's bankers take the dollar more seriously than the real. Dollar "aid" is a little like drug dealing: give the stuff away to potential victims, (a sort of narcotic Marshall plan) and once they're hooked, they're hooked. The bankers who have the most people paying them interest win. For a while, it looked like the dollar was being challenged by the yen. A more serious challenge is now presented by the euro. The stakes are high: billions upon billions in interest, and never-ending, since ultimate debt repayment is not possible within the system. Additionally, as long as more and more new people can be induced to borrow, the burden upon the established users of the particular currency can be eased a bit, and for a while.

These are portentous times! In less than a month, we will enter upon a new millennium. (Yes, I know that the third millennium begins with 2001, not 2000, but we won't quibble.) For the ambitious in government, that presents an opportunity which they may not be able to resist; namely, the chance to generate such confusion and distress as to warrant draconian government intervention, justified by the undoubted computer glitches which will arrive with the year 2000. In addition, however, there will be continuing economic crises, which can easily be aggravated by such powerful groups as the IMF, World Bank, or Inter-American development bank. In turn, there can be massive downturns in business activity, resulting in unemployment and unrest in the cities. A new economic plan will be proposed to solve these worldwide problems. Will it be based upon the euro, or the dollar? That question, I suspect, is being decided even as we write these words. Whichever way it goes, it does not bode well for you or me!

Money is too important to place in the hands of government, and the system devised by the Founding Fathers effectively prevented that. Recently our ears have been besieged with pious references to the Constitution regarding the Presidential impeachment and trial, but far more important is what the Constitution has to say about money. And no one's talking about that, and no one will. As long as governments are, in effect, owned by bankers, the economy, and human freedom, will spiral inexorably downward.

Minting of gold in the U.S. stopped in 1933, during the Great Depression.
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