Reading time: 8 – 12 minutes
The FRN$ illusion is under increasing pressure. In The Age Of Turbulence Alan Greenspan wrote on page 483, “But the dysfunctional state of American politics does not give me great confidence in the short run. We could instead see a return of populist, anti-Fed rhetoric, which has lain dormant’. Despite receiving no significant coverage in the evaporating government managed press Ron Paul’s bill to audit the Federal Reserve, H.R. 1207, has attracted 260 cosponsors.
GREENSPAN AND THE FED DESTRUCTION
Alan Greenspan occupied the position of Chairman of the Federal Reserve from 11 August 1987 to 31 January 2006. During this tenure that spanned four presidential administrations derivatives ballooned as the financial markets shot towards space thinking they were free of the constraints of monetary gravity. But gold’s gravity will not be defied.
Greenspan knew or should have known that the rise of the derivative markets would pose systemic risk to the fiat monetary and fractional reserve banking system. Almost tongue in cheek he quips, “I fear that my successors on the FOMC, as they strive to maintain price stability in the coming quarter century, will run into populist resistance from Congress, if not from the White House.”
To combat this resistance Reuters reports that the Federal Reserve is going to hire Linda Robertson. She is a veteran lobbyist, former VP for government affairs for evaporated Enron, assistant Treasury secretary for legislative and public affairs under President Bill Clinton and is currently at Johns Hopkins University as head of government, community and public relations.
ROLE OF GOVERNMENT
On page 481 Dr. Greenspan also hit on the real issue with regard to monetary policy:
I have always harbored a nostalgia for the gold standard’s inherent price stability – a stable currency was its primary goal. But I’ve long since acquiesced in the fact that the gold standard does not readily accomodate the widely accepted current view of the appropriate functions of government – in particular the need for government to provide a social safety net.
The Industrial Age saw the rise of gargantuan welfare and warfare states which view humans as livestock which are reduced to ‘material input’ for the system which harvests their milk and meat. Whether toddlers marching off to government schools, the youth marching off to Normandy or Vietnam, the middled aged marching off to the assembly lines in manufacturing plants or accounting firms, the aged being wheeled off to nursing homes or the fully depreciated being hauled off to their final burial place there was one commonality: coerced taxation.
The premiment form of taxation to perpetuate this illusion of safety nets has been inflation. The Federal Reserve with its little green coupons has been able to engage in confiscation through inflation which is a form of taxation without representation or due process of law. Additionally, as William Grieder asserts in Secrets Of The Temple: How The Federal Reserve Runs The Country the federal government and Federal Reserve deliberately induce recessions to lower inflation and interest rates.
EVAPORATING ILLUSIONS
Just ask the graduating college seniors with a commencement into the worst labor market in decades. Even worse, the Wall Street Journal reports that their wages will be lower their entire working life. Perhaps Obama, who they largely voted for, will buy them something besides Ramen to eat. But really they should be happy to have even Ramen.
Next are the middle aged who are entering their peak earning years. The responsible who got good grades and a good job, following the traditional path to be harvested, are now saddled with mortgages, declining home prices, being milked overtime by their employers without being given extra rations, perhaps have some medical related debt and know they will never see the benefits of Social Security or Medicare that gouge their paychecks. The irresponsible are drowning in unreasonable credit card debt. This group is debating whether to file bankruptcy or pay their debts.
The Baby Boom generation are entering their golden years with eviscerated 201Ks. This group diligently saved for years and has seen the purchasing power evaporated in a matter of months. The country they grew up in is a distant memory and the current state of affairs is almost unrecognizable.
The politicians realizes the cost benefit analysis of this demographic and since involuntary euthanasia is currently prohibited the federal government does the next best thing; it subsidizes genocide with multi-trillion dollar prescription drug plans to purchase death pills like Vioxx which was FDA approved and killed over 50,000 people. If the Reaper does not visit soon then at least this demographic is kept in a comatose state.
Each of the demographics are being assaulted by the economic conditions. All demographics are encountering incredible stress from monetary issues. Each of the demographics is pitted against the other by the various government policies. All are united as their faith in ‘the system’ and the illusion is rapidly evaporating. Many wish they had an adhesive remover pen.
PROPER ROLE OF GOVERNMENT
Tough economic times require tough decisions. Government is a parasitic organization and in the long run must have the consent of the governed. The livestock are getting restless. They are flailing, grasping and searching for better ideas; actionable ideas that will help heal their economic wounds.
On page 468 Dr. Greenspan wrote:
In my experience, the most important is the nature of our rule of law. I do not believe most Americans are aware of how critical the Constitution of the United States has been, and will continue to be, to the prosperity of our nation.
The first step in healing the economic wounds is understanding that virtually everything the government, which acts almost completely outside the bounds of the Constitution and The Declaration of Independence, and its paid allies say is false. This step is essential to withdrawing consent from the costumed thieves, coercers, professional liars and killers; like former officer Johannes Sebastian Mehserle who is being charged with murder for the execution of Oscar Grant. The withdrawal of that consent, even if exercised through civil disobedience, has a massive effect on the costumed parasites.
The secretive Federal Reserve is outside the bounds of the Constitution. The FRN$, not a real dollar, is outside the bounds of the Constitution. These are the primary tools used to oppress The People, who are the sovereigns, and keep them in their role as livestock.
Gold and silver are not mere barbaric commodities but essential checks and balances in the political machinery and played a vital role in the waning prosperity Americans currently enjoy. British Sovereigns have that name for a reason. Those who buy gold or silver seize sovereign wealth and asset their independence; they have a voice in the future.
Auditing the barbarous relic called the Federal Reserve and abolishing it and its little green ticket, the FRN$, will be great steps towards putting America the country back on a firm foundation for economic prosperity.
CONCLUSION
The age of turbulence has arrived. The illusion so many have lived within is rapidly evaporating. The Great Credit Contraction has begun (It seems Mr. Bonner of the Daily Reckoning has decided to use my phrase). All the demographics are seeing their ability to enjoy life and pursue happiness impinged by economic conditions. This Greater Depression, that we are only a couple years into, will likely leave an indelible impression upon those under 40 and radically alter their behavior for the lifetime just like those who went through the two decade Great Depression.
The Greater Depression need not continue into ‘the coming quarter century’. The solution is extremely simple to start: (1) remove any taxes on gold and silver, (2) remove legal tender status for the FRN$, (3) raze the Federal Reserve to the ground and (4) repeal the Sixteenth Amendment.
Will there be a difficult adjustment process? Sure, it would be the destruction of a world reserve currency; but that is happening anyway just in slow motion. Why prolong the pain and continue misallocating resources? The turbulence would last perhaps for six months instead of a quarter century and then America will be back on its solid economic foundation and can become a tremendous wealth generator like it was. Let your Congress Critter know your opinion; after all they work for you.
Disclosure: Long physical gold and silver and no position the problematic GLD or SLV ETFs.
Raze The FedRELATED POSTS:
- Audit The Fed And Apportionment
- Inflation With Gary North Or Deflation With Mish
- Gold Oil And Your Stomach
- The Coming Market Crash
- The Case For A Rise In The FRN Dollar
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Trace—
Raze The Fed – Definitely one of your best articles! I am both horribly concerned and inspired.
Best Regards,
William
What is the problem with a gold or silver or commodities based financial system? At least to me, it seems that a hard currency would limit government power and force the government to downsize. How much more government deficit spending, inefficiency and wastefulness can we possibly tolerate? How are we (the victimized slaves) ever, ever, ever going to pay back all of the borrowed money, money that was just simply created from nothing, out of thin air? Where is the fiscal responsibility. Where is the morality … the fairness, the decency? Where is the discipline? Let’s just stop fooling and tricking ourselves into thinking we can just get something for free, based on paper money that we can be printed for us then used against us. This whole monetary system is completely immoral and must be stopped immediately. Zimbabwae and the Weimar Republic thought they could get away with this outlandish printing. The audacity of them! They, and many others are just a few examples of failed fiat currency systems that fill the pages of history books. Our fiat currency system, though it is still the world’s reserve currency, will also not hold up either. History shows this to be conclusively true. Who is fooling who? We could all benefit with a much, much smaller government in which the private sector takes over much of the current morasse of government operations and in which the free market creates efficiency and soundness as a necessary solution to fiscal negligence that has gone on far too long! If we revert back to a sound monetary system again as our founding fathers sternly warned us that we should never depart from, then government will also ultimately have to abide by the hard currency rules that are entailed in this. This would be great for freedom! It would mean that government would be forced into paying off its debts, as hard asserts cannot be created from printing presses nor can they be created by pushing buttons on a computer. Let us no longer be decieved by the federal reserve note. It denotes nothing except inflation and taxation without representation! The federal reserve and the US fiat dollar must be stopped lest we all become slaves of the bankers!
In 1916 the Supreme Court has said that the 16th amendment did not authorize any new type of tax, nor did it repeal or revoke the tax clauses of Article 1. Given that, then repealing the amendment would also not remove any form of taxation which existed in 1916 (e.g. the income tax). (Stanton vs Baltic Mining and Brushaber vs Union Pacific)
A 1943 analysis published in the congressional record states, “The income tax is, therefore, not a tax on income as such. It is an excise tax with respect to certain activities and privileges which is measured by the income they produce. The income is not the subject of the tax: it is the basis for determining the amount of the tax.”
A 1980 Congressional Research Service report said, ” it can be clearly determined from the decisions of the United States Supreme Court that the income tax is an indirect tax, generally in the nature of an excise tax.”
(quotes seen many places, recently on http://www.thepriceofliberty.org/04/04/16/greenslade.htm )
Thank you for posting a common sense review. I work at a book store and I have never sold so many books on monetary policy & economics as in the last 8 mos. Even my barber is fascinated by the Fed and gold. He asks me for good books to read on this topic.
I believe the Fed will be abolished. I think that the anti-Fed crowd have too much energy, conviction, and history on their side. I hope that we will not have another Great Depression on our hands.
You are right that we are at the beginning of the end of the Fed. The only question is how badly will our Central Bank go down.
Trace,
The Sixteenth Amendment gave Congress no new powers of taxation. I implore to read,” Cracking The Code: The Fascinating Truth About Taxation in America”, authored by Peter Hendrickson , available at his website http://www.losthorizons.com.
Thanks again for an insightful article.