Currency crash course, 5

Although Mike Maloney is afraid, like almost all westerners today (including quite a few white nationalists) of Hitler and his movement, I see this latest video of his course as the opening of a window of opportunity for us national socialists after the American dollar crashes in the near future.

Watch this video that mentions the rise of the Third Reich—but not as a warning, as Maloney sees it. Watch it as our best chance to pursue political change in both this continent and at the other side of the Atlantic (where they are also mistaking currency for real money).

Maloney didn’t read my previous entry on Liberalism by Yockey, of course. Although I see Austrian economists like Maloney as Cassandras insofar as they are accurately predicting the coming collapse, it goes without saying that I don’t endorse individualism in a capitalistic society, which easily leads to the worship of Mammon. However, this is not an entry to debunk libertarianism but to show how, as Maloney says at the very end of this episode, the Central Banks and even their think thanks “still don’t get it.”

(See also the four previous videos on the course:
Episode 1Episode 2Episode 3Episode 4.)

Doctor Doom

“The people are being kept in line at the moment, because there are still lots of shiny new things for them to buy… If the economy slips badly, there will be hell to pay. More and more people will listen to the dissidents.”

—William Pierce (“Get Set for War”, 1997)






With the exception of the blogger Mindweapon, no one in the pro-white movement seems to be aware that we are heading straight toward an economic collapse and a foreign debt crisis of epic proportions. This will happen when the US’s creditors impose a lending ceiling to the traitorous US government.

Now that the US government-created phony crisis is over and that the debt ceiling will be raised for the Nth time, I would like to point out that I have embedded quite a few videos by Peter Schiff, called “Doctor Doom” by the media, explaining the subject (here, and more at the addenda here): must-watch clips for those still clueless that we are living near the end of the long Diktat after 1945.

Of course, you may prefer to see directly Schiff’s latest videos in his own YouTube channel (here). Whatever you chose, this is the most important subject for all those who desperately crave for the long interregnum imposed by the Americans on Europe to end.

The eschaton

Or:

How WNsts who say that they don’t believe the media,
they actually believe the media




The End of The Road documentary (YouTube clips here) that I have been advertizing on how the world as we know it will end soon—what I’m starting to call the eschaton—was released last year. People should take heed that Edgar Steele advised all of us to storage food for at least a year, before the System put him in jail.

On May 28, 2012 I posted an expanded entry of the below post. That’s why the first threaded comments date from those times. I am just editing and relocating it to August 1, 2013 for further context to what I said yesterday about my fundraising thermometer. Pay special attention to what the commenters in the entry itself say about the psychology of normalcy bias, and how white nationalists who say that they don’t believe in the media, they actually believe in the media.

Below, a miscellaneous collection of what can be read in several blogsites about the coming eschaton:



End of The Road portrays eleven influential commentators within the finance and investment communities, as they share their knowledge of our current financial structure. Through each of their narratives, a story is built which chronicles the current economic dilemma and paints a picture of the world’s financial future.

Cast:

Eric Sprott,
James Turk,
Jim Puplava,
Peter Schiff,
Bill Murphy,
Dimitri Speck,
Mike Maloney,
James Rickards,
Edward Griffin,
Adam Fergusson,
Alasdair Macleod

These gentlemen have an intimate understanding of the ongoing policies—read manipulation—central bankers have utilized in order to keep currencies and markets from imploding. If you are familiar with central banking you will have come to understand that all fiat currencies have gone to zero (see the Mike Maloney clip in the comments section). This time it will be vastly different because it is occurring simultaneously, in the context of a macro-level, around the entire world.


From 100th Monkey Films:

In 2008 the world experienced one of the greatest financial turmoils in modern history. Markets around the world started crashing, stock prices plummeted, and major financial institutions, once thought to be invincible, started showing signs of collapse. Governments responded quickly, issuing massive bailouts and stimulus packages in an effort to keep the world economy afloat.

While we’re told that these drastic measures prevented a total collapse of our system, a growing sense of unease has spread throughout the population. In the world of finance, indeed in all facets of modern life, cracks have started to appear. What lies ahead as a result of these bold “money printing” measures? Was the financial crisis solved, or were the problems merely kicked down the road?

B. Paul said…

It looks interesting but I’m not sure that it [End of the Road documentary] will have anything new for regular Collapsenet users. Perhaps it will be a good tool for friends/family, if it doesn’t come out too late. However, some Zombies will never get it, no matter what evidence they are presented with or how clearly, concisely and urgently it is presented.

Lydian Mode said…

I’m starting to wonder if some people aren’t supposed to get it. Maybe they’re the ones who are supposed to die off. Maybe they are missing a vital evolutionary gene or something that’s keeping them from realizing that they are living in a very dangerous time and should think about some options to help them survive. Who knows? I just hate thinking about all the innocent children who are dependent upon their Zombie parents for their survival. This is the part of collapse I really, really dread to see happening.

James Beckmeyer said…

Most people are far too busy and wrapped up with their lives to “get it.” What we want them to “get” sounds outright loony to them, and since few people want to believe in loony shit, they will never get it. This is a perfect set-up for a very hard fall—much harder than the Soviet Union whose citizenry, for the most part, had a belief system much more rooted in reality than the US.

Businessman said…

This discussion reminds me of a quote I saw on video given by a late historian and political activist, which I’m paraphrasing here: “These people who tell you that they don’t believe the media… they believe the media.”

Economic illiterates

Greg Johnson’s latest article, “Premature populism,” reminded me my favorite comment by Ward Kendall in this blog:

The moment Billy Pierce started selling “hate core” CDs via the National Alliance’s putrid distributor Resistance is the moment he shoved a figurative gun barrel clean down his clucking, chicken-skinned, babbling throat and yanked the trigger.

Brainz wuz eberwheres, folks!

Kendall is right. And Johnson is right too that—as I interpret his latest article—, since the US is not economically suffering like Greece, Americans still cannot have the benefits of a movement like Golden Dawn.

But like most white nationalists Johnson ignores that America’s bottom will drop out sometime during this decade. See for example the first comment at Johnson’s piece: a whole essay on its own where a commenter, suffering from typical normalcy bias, imagines that business as usual will continue… until 2045!:

If, a hundred years and more after Hitler is dead, it’s still too soon for any assertion of white interests, I think that would be a logical reason for being pessimistic about our prospects.

Here at WDH I have been embedding quite a few Peter Schiff videos (see for example this one) that, with the honorable exception of the commenter John Martínez, have not convinced anyone.

Why people, why? Because Schiff is of Jewish extraction?

Oh boy! I own a copy of the documentary film End of the Road. If some of the regular commenters want to listen voices of economists light-years away from Counter-Currents’ point of view on economics, including gentile voices of course, let me know. I could lend the DVD by mail to those who are willing to listen the pretty solid arguments of those who have been predicting the crash since Alan Greenspan started to print dollars like crazy (and let’s not talk of Obama’s Jew, Ben Bernanke).

Thanks to the fact that, as Mike Maloney says, “fiat currencies always fail” and that “there’s no exception to this,” the days when white populism are no longer premature in America are closer than what the average nationalist imagines.

Germany: be warned!

Denise, one of the commenters at Occidental Dissent today, addressing another commenter said:

Dammler: Jews created World War II. They created that mess. Hitler tried to prevent Jews doing to Germany what they did to Russia. Screw off. The problem with Adolf and the National Socialists is that they were too liberal. When one pulls up the rock on the real history of the kikenvermin one marvels at the fact that they weren’t all hunted down and killed off completely.

My sister and I were discussing this error of judgment at Easter Dinner. I’ve concluded that Jews escaped their well-deserved fate because we did not possess mass communications before. The Juden Tuefel would go to one place—wreck that, get the boot, then go somewhere else. The new Host knew nothing about what happened in “the last place.” The whole effing world is pretty much on to the Hebes, now. America is the Last Bastion of Cluelessness—but that miasma is rapidly dwindling. As the economy implodes, due the systematic, eternal malevolent machination of the Spawn of Satan, I see more and more folks wising up. When the USA is Cypressed hell will breaketh loose, and the Spawn of Satan will be sent back to their Daddy in Hell. Expulsion #110 will be global, and final—and they’ve brought it all on themselves.

Can’t wait. I’m stocking up on lots of popcorn.

Ditto: sooner or later the USA will get Cypressed. Those who have been following the entries of this blog under the category “currency crash” know that there is no question that the dollar will collapse and probably hyperinflate.

Germany: pay attention please!

Most of the thousands of tonnes of your gold in the Federal Reserve Bank of New York, located beside the gold that belongs to other countries, should be instead in Frankfurt or Berlin.

RickardsThe economist James Rickards has been predicting for some time that, after the dollar hyperinflates, the thousands of tonnes of gold in New York will be confiscated from the Europeans, Japanese and the IMF by the US government: a nation that already is the main perpetrator of the crime of the century when we were born.

If the dollar crashes under the watch of Ben Bernanke, and some Austrian economists are predicting that it will crash under this Obama administration, the US government will probably combine all of its gold with the confiscated gold of the nations that naively deposited it overseas and have 17,000 tonnes or upwards of 20,000 tonnes: 70 percent of all the official gold in the world.

Federal-Reserve-Bank-of-New-YorkThat would be enough to “reboot” the crashed economic system after the dollar hyperinflates! To boot, with that amount of gold the nation that led the crime of the century will be able to continue to dictate the international monetary system along with still more Americanism: exactly the sort of Yankee Americanism that has been leading the white race to extinction throughout the western world!

I would recommend Germany and other countries to withdraw all of your gold reservoirs from Yankeedom, exactly what Hugo Chávez did before he died.

Take heed, you have been warned…

Ex Gladio Libertas!
68 Anno Hitleris

Amazon comments on Mark Steyn’s book

MS

Steyn begins by showing us the writing on the wall, using the story of Belshazzar’s feast as a framework to show us that we are broke. Not just in financial difficulties or right up against it, but way past a mere spendthrift nation and into a level of debt that will not only bankrupt the world, but generations to come.

Chapter one shows us images of America past and compares it with America present and compares that with late Rome. Rome was built slowly, but fell quickly. America may be in for the same nightmare.

Chapter two shows us what the true American Dream was, demonstrates how we have traded in our patrimony for some magic beans and some Fool’s Gold. Chapter three demonstrates how close we are to the sickness of Greece right here in America. Much closer than anyone admits and Obama’s policies are drawing us and the whole world closer to that abyss. Chapter four takes us through the cultural decay the role the present all-consuming fetish with Diversity has played in making America weak and incapable of response to our present difficulties. He uses the images of Eloi and Morlocks to show the cultural split between American elites and Americans who actually produce. And how the Americans who still do are condemned, mocked, and are being nanny-stated into becoming passive and government approved Eloi.

What a terrific book. I hope you get a copy and read it. And then tell all your friends about it so they can also hear the warning. And get some laughs as they think about the nightmare we truly face. I know it sounds odd. But we don’t just cry at funerals. Sometimes we have to laugh, too.

Reviewed by Craig Matteson, Saline, MI

In November of 2010, bestselling author and radio personality Mark Steyn gave a speech in London, Ontario, Canada entitled “Head for the Hills: Why Everything in Your World is Doomed.” While comical, Steyn put forth a very negative outlook for the West that addressed a lot of the major demographic challenges facing Western nations.

After America: Get Ready for Armageddon (the much anticipated sequel to America Alone: The End of the World as We Know It) focuses almost exclusively on the United States. The country that once shone as the beacon of wealth and freedom to the world lost its way, and Steyn doesn’t pretend that patriotism and belief in American exceptionalism alone can fix the problems plaguing the nation.

Drawing from some of the greatest thinkers of the past and present in his book, Steyn brings home lessons that people should have learned through history, particularly the recent history of Europe’s economic and cultural crash, as well as many anecdotes and chapters in ancient history. Most shocking was Steyn’s use of classic novels to illustrate his points. The shock comes not from an author using fiction to make his case for the decline of America, but that what’s happening in the present day is so unprecedented: plot lines previously thought of as bizarre fantasy have become reality.

Make no mistake: in the author’s eyes, the United States is not facing a decline—the decline is already happening, and has been since mid century. What’s next for America is a fall, a plummet, and the result is not pretty.

His argument is straightforward, and familiar to anyone paying attention to the debt crisis. He claims that America has gone from a nation of producers to a nation of borrowers, as he puts it, “from a nation of aircraft carriers to a nation of debt carriers.” Steyn notes that our debt service alone could fund China’s military—even if China quadrupled its military budget.

He sums up the situation with one great Steynism after another, my favorite: “We’ve spent too much of tomorrow today—to the point where we’ve run out of tomorrow.”

This is probably the only recent book that will have you rolling on the floor with laughter while discussing such a depressing subject (the last such book was Steyn’s America Alone). Steyn takes a hard look at the position of the U.S. today financially, politically and in terms of national security and analyzes these with his deep insight and hilarious writing style. As Steyn would probably say himself: “it’s the end of the world as we know it, but I feel fine.”

PC is the chains that keep the Eloi silent. Government hand outs are what keep the Eloi bound. It works amazingly well. Mark’s goes on to show how absolutely dreadful the Federal and State governments of the USA has become.

Personally I don’t think the USA will just up and go away like old Rome. Instead it will eventually fade into an overworked, overtaxed, and over governed society with indifferent citizens. The person who has correctly predicted the future of the USA was Robert Bork in his book Slouching Towards Gomorrah: Modern Liberalism and American Decline.

His previous book America Alone was about the decline of the western world sans USA. After America is about the impending decline of the United States due to massive spending and growing debt. Steyn warns that fall of the USA will be a catastrophe for the whole world and it will be a nasty thing.

The hot topic lately in Washington is the astronomical debt of the U.S. Government. But Steyn demonstrates that the questions of government debt, overspending, and likely national decline are fundamentally moral questions…

Western civilization, Steyn writes, “is a synthesis—a multicultural synthesis, if you like: Athenian democracy, Roman law, the Hebrew Bible, dispersed by London to every corner of the globe.” In many ways, America is the culmination of this glorious heritage. Unfortunately, America now more closely resembles the newer, degenerated versions of these once-great geopolitical states (Rome, Athens, Britain and Jerusalem) than their celebrated pasts, which so mightily contributed to the founding of our country.

Steyn states what everyone knows but is afraid to say: The welfare state of Europe and, to a slightly lesser degree, America, is simply unsustainable. “When you’re spending four trillion dollars but only raising two trillion in revenue, you’ve no intention of paying it off, and the rest of the world knows it.” The Obama administration, upon taking office, took the average Bush deficit from 2001-2008 and doubled it—all the way to 2020.

America’s debt has other consequences besides just the obvious ones. In 2010, half of our debt was owned by foreigners, and most of that was held by the Chinese. Steyn continues:

“What does that mean? In 2010, the U.S. spent about $663 billion on its military, China about $78 billion. If the People’s Republic carries on buying American debt at the rate it has in recent times, then within a few years U.S. interest payments on that debt will be covering the entire cost of the Chinese armed forces.”

Yikes! And all that, Steyn mentions, while China is undergoing, according to alarming Pentagon reports, a “massive military build-up.” In other words, we are paying what might be our most dangerous enemy to build-up and maintain its military. Can someone say insane?

This is a direct quote from the flyleaf of the book: “What will a world without American leadership look like? It won’t be pretty—not for you and not for your children. America’s decline won’t be gradual, like an aging Europe sipping espresso at a cafe until extinction (and the odd Greek or Islamist riot). No, America’s decline will be a wrenching affair marked by violence and possibly secession.”

Unlike the situation with Europe though, when America collapses there will be no great Western Civ nation to carry the banner and support Western Civ’s ideals in the world.

Don’t read this book if you don’t want to be severely depressed. In fact, I’d most likely recommend this one to lefties. Since they don’t use their brains anyway, and will never absorb any of the truth to bear the burdens of being an adult knowing adult things. They’ll be too busy frothing at the mouth, angry at Steyn for using Obama’s name in a book talking about America’s decline.

Neither Limbaugh nor Steyn have advanced, or even college, degrees. Yet each has more insight, intelligence, honesty and humor each weekday than most Harvard graduates muster in a lifetime. What if they had gone to Harvard? We can never know, but I’m glad they didn’t.

Truth hurts and can also be depressing. Is the reader more ready for Armageddon having read the book? If “ready” means to be not surprised and awake and conscious while facing reality, the read is worth it. If “ready” means spiritually at peace, look elsewhere.

This is a very fine authorship of issues confronting the Western nation economies. Although the title and content certainly focus on America, the overall impact of decades of badly managed fiscal policies has finally caught up with America especially. And what goes wrong here will also go wrong with all other nations linked to the dollar or euro.

The coming Armageddon is an appropriate phrase for the repositioning of western economies into a pattern of insignificance globally speaking. The eventual reality for America is the weakening of our global influence to a level where we cannot do anything more than struggle with a 3rd world level of significance. The fiscal debt and loss of influence will place America in a position of meaningless power.

Mark Steyn is a true patriot that is not afraid to tell the truth and deserves to be read, heard, and recognized as a brave warrior in American politics. The people of America must wake up to the eventual destruction that is propelling us to the brink of cataclysmic uncertainty if we don’t get out of our comfort zone from the distraction of entertainment until it is too late…

A wonderful book. Steyn somehow is able to be very funny on a topic that is disturbing and depressing. The book is not very well organized. It’s a torrent of data about contemporary America, all of it pointing toward an imminent collapse, all of it well documented.

Any English teacher seeking writing samples to illustrate figures of speech—from alliteration to understatement—would find an abundant source here. Steyn is a word artist.

Some (of many) coinages: armageddonouttahere, conformicrats, Eurosclerosis. He turns common phrases upside down and inside out and presents ideas in new, and usually comic, ways. Steyn always provides a fresh perspective on issues, ideas you don’t find anywhere else. And even ideas you have heard before are presented in novel ways.

America Alone warned us; we continue to slide into an abyss of our own making. After America is Mr. Steyn’s red alert. With typical brilliance and humor he paints a picture of a great nation in its death throes.

Mark Steyn, well known radio host and author of previous bestsellers, writes a sobering 350 pages of anecdotes and statistics showing a bleak future for America and the world.

This type of book is becoming more common and more mainstream, unfortunately. Not too long ago, anyone that saw such a dark future would have been called an extremist wacko. Nobody says that anymore. Perhaps the first down-rating of America’s financial picture convince you, perhaps our endless wars and casualties, perhaps our inability to prevent illegal immigration, perhaps our failing cities and states. What Steyn does well is put all of these kinds of trend together in an understandable whole, backed up by extensive documentation.

In addition to the 350 pages, we get 50 pages of footnotes. Steyn’s research is impeccable. The book consists of chapters on economics, culture, demographics and has frequent excerpts from current essays and news reports. Steyn writes clearly and uses humor effectively, but does not resort to simple primal screaming in print.

I figured out long ago that the United States seems intent on committing suicide by government so Mr. Steyn’s message was well received by me.

I just finished Stanley Goldman’s How Civilizations Die. These are both must read books.

In his previous book, America Alone, Steyn argued from a demographics perspective that the Islamic world was taking over the West and that the U.S. was the only nation in the West with a birthrate that didn’t portend a hopeless national death spiral. In After America, Steyn looks at the world through the lens of economics and he determines that the U.S. has joined the rest of the West in a self-destroying debt spiral, one which will result in a short shift of power to countries like China and Russia.

Since Steyn published America Alone, a lot has happened. Obama was voted in by a star-struck, celebrity worshipping, fiscally suicidal U.S. majority who believes that Obama’s personal charisma can underwrite an eternal and bottomless credit line with China and other (often hostile) foreign creditors. But unlike most party-line republicans, Steyn recognizes that, while Obama has done much to worsen and hasten the U.S. fiscal death spiral, he is not the real problem. In fact, the best America could hope for from a majority of republican politicians and presidential candidates would be to slow the car from 90 to 70 miles per hour as it speeds toward the cliff.

My Adorable Husband kicked me out of bed for reading this book—I was laughing out loud at the perfect phrasing and framing of the issues. It was disturbing his sleep.

This book reads like a long Mark Steyn column. Steyn is a great composer of one-liners that induce both thought and laughter. The sarcasm and cynicism that drips through the pages also points to greater sad truths about the civilizational torpor of the West and the sad state of who we have become as a nation.

I finally stopped reading this book for my own mental health. After going through emotions such as anger, then fear, then depression, I was wondering what Mr. Steyn would offer as a solution rather than depressing us all to kingdom come.

If only to further annoy your friends who shun you at cocktail parties as a relentless purveyor of doom and gloom, read After America and burnish your perceptions and arguments. You may at least become more entertaining if not more popular.

A doomsday book ought not to be this much fun to read. Steyn’s wit, erudition, and style are second to none in today’s polemical political punditry, and in his latest book he’s been combining them and using them to the max.

Steyn has a gift for taking a very depressing topic—the decompression of America from superpower to Greece—and making it entertaining and informative. He documents how an entitlement culture has bred dependency and how, in the face of a debt crisis, the government we elected has opted for… wait for it… more spending and regulations!

If you want to get past the noise coming from the media and understand the magnitude of the turd flying towards the fan, this is the book for you. Incisive, witty, thoughtful laying out of the mess we are in and the even nastier one we are heading into. Don’t expect partisanship. Steyn understands that there is plenty of blame to go around and a lack of seriousness on both sides. Even though Steyn doesn’t endorse any politician, after reading this book I wistfully dreamed of a Ron Paul presidency.

Steyn is witty and funny though there is nothing funny about what’s going on in the world as America withdraws and takes its place with those Western nations that dominated a century and then went to sleep: Portugal, Spain, the Netherlands, Great Britain and now us.

Describes the severity of our financial and cultural problems as the United States nears its end. Essentially, the point is that Americans are dependents of government, the government is run by pseudo-intellectual twits, and there is no possible way our economy can survive the debt crisis.

However, I must dock one star because the author keeps suggesting that some of this might be avoidable. That is hopelessly optimistic. 2012 was the last chance, and America blew it. The Obama administration is now talking about minting trillion dollar coins. Republican “spending cuts” are not only rejected by the Democrats, but are so pathetically miniscule that they wouldn’t do diddly-squat even if implemented. The question now is what to do with your savings… gold? land? ammo? We’ll find out soon.

Outlines a very accurate analysis of our national future. Chronicles how we’re destroying our economy, giving away our freedoms, stripping our national defense and making the future of the world a much less free and much more dangerous and poverty stricken place for everyone.

Unfortunately, if you’re getting government assistance, you probably don’t care.

Our crystal ball

Further to my previous post.

As der Schwerter has just translated to German an article by Edward S. May (“Baron Bodissey”) that explains beautifully why it is almost certain that economic Armageddon is around the corner.

Below “Chump Change,” the complete 2009 article by May that originally appeared at Gates of Vienna. Presently the situation in the US is far more compromised thanks to the ongoing (suicidal) efforts of chairman Ben Bernanke:




When I was seven years old I took up coin collecting as a hobby. Back in those days there were still a lot of interesting coins in circulation: the buffalo nickel, the Mercury dime, the Liberty Walking half dollar, and—if you were patient and went through enough rolls of coins—the occasional Indian head penny or “V” nickel.

The most exciting coin of all, however, was the silver dollar. The 1921 “Peace” dollar would do, but the Morgan dollar was preferable—it had a serious-looking 19th century design, and was the very same dollar that filled those heavy payroll bags heisted by stagecoach robbers in Westerns. It was a nice hefty piece of real American history, and it could fill the palm of a small boy’s hand.

Up until my tenth birthday my allowance was fifty cents a week, which I received in the form of a biweekly dollar bill. During my silver dollar craze I would take that bill down to the bank and ask for a silver dollar in exchange for it. The tellers all knew me, and would oblige me by picking through their selection of silver dollars until they found a date I didn’t have.

I was able to indulge myself in this manner because most of the dollar bills in circulation back then were still silver certificates.

The bank had no choice: under its charter, it was required by law to “pay the bearer on demand” a dollar in official United States silver coinage for every silver certificate presented to it.

No one has the same option today. Today all the paper money in circulation consists of Federal Reserve notes, which are not redeemable for anything in particular. You can go to the bank and exchange your dollar bill for four quarters, but those are no longer the shiny silver discs that rang so delightfully on the marble counter at the teller’s window. Nowadays the dimes, quarters, and half dollars are all “Johnson slugs”, the ugly nickel-copper sandwiches that were introduced in 1964 when silver coinage was abolished and the silver certificates were withdrawn from circulation. 1968 was the last year in which the law required that any paper dollar be redeemable in silver.

The abolition of silver coinage was the culmination of an extended process that took most of a century to complete: the disconnection of American paper currency from any fixed standard of value as represented by precious metals.

By the time the Johnson slugs appeared, the abolition of the silver coinage was an absolute necessity. The price of silver had been allowed to float, and because of inflation the silver in a dollar coin was worth more than $1.25. Entrepreneurs could make a tidy profit buying up silver dollars in bulk, melting them down, and selling them as bullion to silver traders. The old coins had to go, which meant that the silver certificates had to go, too.

From then on the federal government was not required to give you anything for your dollar bill. If you had one, you could go out and buy something that other people were willing to give you in exchange for your piece of paper. But the Treasury was obliged to provide nothing of value in return for that piece of paper except the “full faith and credit of the United States government”, which was worth a lot more in 1964 than it is today.

In the 19th century, the United States adhered first to a “bi-metallic” standard—both silver and gold coinage—and then the gold standard. Under the pressure of the Great Depression, FDR initiated a gradual slide away from gold and into a silver standard for the paper currency, although the Treasury and the Federal Reserve adhered to the gold standard until 1971.

Since then the official currency of the United States has been anchored by nothing more than global confidence in the soundness of the dollar. As long as everybody believed in the same fantasy, then the system could operate. The dollars were printed, credit was extended, the financial markets functioned, and business enterprises were profitable. People went to work and got paid and bought stuff.

They also borrowed money and took out mortgages, which brings us to the mess we’re in today.

Today’s system of commercial and consumer credit is made possible by the practice of fractional reserve banking. Until the late 18th or early 19th century, banks did not lend out their cash reserves of depositors’ money. The advent of fractional reserve banking made it legal for a bank to lend out a portion of its deposits, and required it to keep only a fraction of those deposits—in modern times, typically 20%—as an actual cash reserve.

This means that when Joe Consumer deposits $1000 into his bank account, the bank can lend up to $800 of it and keep $200 of the deposit as a fractional reserve, maintaining the loan on its books as an asset. At this point the initial $1000 in cash has morphed into $1800 in cash assets and credit—in effect, $800 worth of money has been created.

When the borrower deposits the $800 into another bank, that bank in turn can loan out $640. And so the process continues, forming a geometric progression of assets which cannot exceed $5000 (500% of the original deposit), $4000 of that in loans listed as assets on the books of the respective banks.

This practice seems bizarre and imprudent at first glance, but it was absolutely essential during the expansion of our industrial economies. Industrialization created wealth where none existed before, but without a way to extend the money supply to match the added wealth, the capitalization of industry would have lagged, and growth would have been much slower. Fractional reserve lending allowed credit to be extended to industrial entrepreneurs, and as long as loans were made prudently and repaid on time, and banks retained their depositors’ confidence, the system functioned well.

Maintaining a gold or silver standard imposed a natural limit on the inflation of the money supply via fractional reserve banking. As long as banks met their capitalization requirements and observed the rules for fractional reserves, the money supply could never expand past the implied mathematical limit.

During times of economic contraction the system sometimes foundered. Then there would be a run on the banks, and some banks would fail. Although the system always righted itself eventually, businesses were ruined and individuals impoverished in the process, so that the political pressure for a system of government controls was irresistible.

Right: At a distance looks like the White House but it is the “Fed” headquarters (Eccles Building)

Thus was the Federal Reserve born in 1913. The Fed is a consortium of private banks linked closely to the government, and functions more or less as a central bank would in many countries. Its job is to control the money supply by setting interest rates for government lending. By stabilizing swings in the money supply, the Fed’s mission is to prevent bank runs. It’s not always successful: witness the recent run on Washington Mutual and its subsequent collapse—the largest bank failure in history.

The current gargantuan federal government, so far beyond the size and scope of what the Founding Fathers originally envisaged, owes its origins to the Civil War and Abraham Lincoln. Using military means, Lincoln demonstrated that the government in Washington was the absolute master of the several States.

But the bloated bureaucracy didn’t really take off until Woodrow Wilson invoked his presidential authority during World War I to create federal powers and functions which had never existed before, and which just happened to fit into his Progressive framework.

Not all of these powers were scrapped after 1918, and Franklin Delano Roosevelt took everything a step further when he created the New Deal to fight the Great Depression—once again, an excuse for massive Progressive intervention—and then World War II.

By 1945 the federal government was simply “too big to fail”, and all the layers of emergency powers that had accreted over the previous thirty years became permanent bureaucratic institutions. Once initiated, a new federal program was virtually never abandoned. No cabinet office has ever been abolished—new ones can be created, but they cannot be destroyed; they may only persist and grow.

Decade after decade the government has continued to expand, adding agency upon agency and bureau upon bureau. It has sprawled out across the District of Columbia into satellite fiefdoms in Maryland and Northern Virginia and created nests of regional offices across the rest of the nation. Whenever a congressman or senator perceives an important “constituent need”, a new federal function is created and funded, and becomes a permanent fixture in the Washington ecosystem.

Needless to say, all of this is very expensive. For the first thirty years or so of the federal explosion, increased taxes were sufficient to fund the pet projects and Progressive fantasies of the federal mandarins. But then the post-war boom leveled off, even as the Great Society was mandating a thicker layer of lard on top of the government pudding.

Increased taxation was not good enough. Unfortunately for the feds, raising taxes much further had become politically impossible, yet the internal logic of government expansion required that more money be found.

That’s where the Johnson slugs came in.

The uncoupling of the money supply from any reserve of precious metals did not automatically doom the country to inflation, indebtedness, profligacy, and ruin.

If the individual functionaries within the system did their jobs properly—if they acted with probity, prudence, fiduciary integrity, honesty, and in the interests of the people they purportedly served—the fractional reserve system could have continued indefinitely.

But there are too many perverse incentives built into a banking system that is not pegged to any external reserve of actual tangible value. By adding new rules, augmenting existing procedures, and tinkering with the arcana of accounting terminology, new wealth could be created where it didn’t exist before. The Treasury could keep issuing bonds, and as long as the price of milk and shoes didn’t rise too much, why then, everything must be fine, mustn’t it?

But it wasn’t fine. Decade after decade of deficit financing created the infamous national debt, which kept growing and growing. But, once again, as long as productivity increased and the economy kept on expanding, inflation could be kept at bay. The national debt, huge as it was, might theoretically be paid off—someday.

Unfortunately, during the last two decades or so, productivity hasn’t really been as high as it seemed. Our national wealth is now denominated at least partially in assets that are over-valued, with real estate as a notable example. Those California house prices—a million dollars for a tiny bungalow on a postage-stamp lot—might have looked good on the asset side of a balance sheet, but they weren’t real money.

That value was conjured out of thin air by cynical or short-sighted people who gamed the system to their own advantage—quite legally, in most cases. But the wealth thus generated was illusory, and could disappear as easily it was created—which it is even now in the process of doing.

The final stroke which broke the banking system—and caused it to collapse years or decades earlier than it would have otherwise—was meddling by the federal government for political reasons.

Meddling was irresistible. And, without a gold standard to enforce fiscal restraint, it was inevitable. Money could always be created out of nothing, so the federal government created it and ordered its agencies to force the private sector to do certain things with it, things that might otherwise be considered foolish or imprudent.

In the case of the subprime mortgage fiasco—the most visible and notorious example—the federal government created government-protected lending institutions and through them forced banks to loan money to homebuyers who would not otherwise have qualified for the loans, and who could not reasonably be expected to pay them back.

Beginning in the 1970s, and continuing until the whole house of cards collapsed last year, the government used Fannie Mae and Freddie Mac—two quasi-government lending institutions which were not bound by normal market constraints—to pump untold billions of dollars into the housing market. Mortgages were issued to people who were poor, or had vaginas, or spoke English badly, or had sufficient melanin in their skin—because they deserved them. Never mind whether they could afford them: it was unfair for them not to own houses, and so the mortgages were issued, backed by the full faith and credit of the United States government.

The rules kept being eased, the system got more corrupt, more and more money flowed through more and more hands, creating an ever-increasing supply of perverse incentives for bureaucrats and businesses to lie, to manipulate the rules, and to line their own pockets.

In the process the demand for real estate increased, driving the price of housing far beyond what it would otherwise be, thus creating the real estate “boom”—which was actually a bubble, and which has now officially popped.

During this period baroque new rules emerged to facilitate the issuing of additional debt. Exotic new financial derivatives were designed. Accounting rules for valuing assets were loosened. Bond-rating agencies were corrupted by their dependence on the institutions whose debt they rated. The securitization of debt removed the traded derivatives ever farther from anything of tangible value. Debt instruments were used as collateral on new debt, which was in turn used as collateral on yet more debt, until the money supply became so attenuated and rarefied that it had almost no connection with anything real. The entire elaborate financial structure of the country’s banking system was spun out of the purest speculative gossamer.

And at every level of the process somebody took a cut, so everyone worked very hard to increase the size of the pie.

In order to issue all those worthless mortgages, the ultimate guarantor—Uncle Sam—had to create the money by borrowing it himself. T-bills were issued, and buyers snapped them up.

Many of the customers for US Treasury paper were foreign governments, especially in Asia. The Chinese accumulated a large surplus of dollars, and recycled them by buying up more dollar-denominated debt. As long as China kept producing cheap products and exporting them to us, the process could continue. Our manufacturing capacity was diminished, and our money flowed out of the country to buy Chinese goods. But they kept loaning it back to us so that we could continue to fund the federal behemoth and its profligate habits.

The entire system depends on confidence in the dollar—as long as foreign countries continue to believe that real value lies behind the dollar, and that the American economy is strong enough to withstand this level of debt, they will continue to loan money to us, and pump liquidity into the system.

But confidence in the dollar won’t last. It can’t, because all those dollars in circulation, held in reserves in central banks all over the world, are not backed up by enough collateral. The last estimate I read—which was over a month ago, and real estate prices have presumably dropped even further since then—placed the number of dollars in circulation and held in reserves all over the world as thirteen times the amount of tangible assets in the U.S. financial institutions that back them up. That is, if all the holders of dollars across the globe decided to exchange them at the same time, the currency would have to be inflated at least 1,300% to redeem them.

With the addition of the recent stimulus package, American debt now exceeds the entire collective wealth of every man, woman, and child in the United States.

And this debt is almost entirely collateralized by confidence in the dollar. There’s nothing else backing up our currency.

The national debt is even more alarming if our unfunded liabilities are taken into consideration. One of the ways that successive presidential administrations kept deficits to a theoretically manageable level was by putting the Social Security Trust Fund “off-budget”—i.e., outside of its fiscal calculations. The “Trust Fund”, of course, is a joke—there’s nothing in it but IOUs. The FICA money that is withheld from your paycheck and contributed by your employer disappears instantly into the insatiable maw of federal spending, leaving only a promise that your retirement fund will be available for you when you are ready to collect it. Your future Social Security, like all things federal, depends solely on the “full faith and credit of the United States Government”, a commodity whose value is dropping precipitously.

One recent estimate puts the unfunded liability of Social Security and Medicare—the money which the system will be statutorily required to provide for today’s citizens at some point in the future—at more than $100 trillion. And that’s just for the two biggest federal entitlements—add to them federal pensions, veterans’ benefits, and state, local, and private pensions, and the amount of unfunded liability is unimaginably huge.

All those hundreds of trillions of dollars are mandated by law and must someday be paid out. Yet the money is not there now—where will it come from?

And “someday” is drawing rapidly closer. Much of the unfunded liability will begin to come into play in the next few years as my generation, the Boomers, begins to retire and claim all its benefits. That’s why political leaders of both parties are so keen to get Pedro and Ahmed into the country—they’re looking for somebody, anybody, who will go to work and pay the FICA and income tax necessary to support the Beautiful People as they shuffle off into assisted living.

But it’s not going to work. Even if all the immigrants were skilled and ready to work, even if mass immigration were not doomed to destroy the culture and civil society that holds this entire Potemkin village together, even if the multicultural dream could be fully realized—even if everything else were ideal, the system would not be able to handle the load. The conclusion is inescapable: the persistence of our current political arrangements is fiscally and actuarially impossible.

This is the broad context in which the current financial crisis has emerged.

The system is going to fail. Failure is unavoidable. The big questions are:

1. How soon will it fail?

2. What form will that failure take?

3. How much civil unrest, violence, deprivation, and destruction will accompany the changeover to whatever new system emerges?

The broad outlines of what is to come are already visible. The banking systems of the West are heading for insolvency, and no amount of bailout money is going to save all the major banks. Bailing them out will only serve to delay the catastrophe and make it worse when it finally arrives. Real value to match the newly-created bailout money does not exist, and at some point the market will mark everything down to its true worth, destroying roughly 90% of the system’s wealth in the process.

One of the first symptoms of the collapse will be a run on the dollar. When confidence finally erodes past a certain point, speculators will start to unload their dollars en masse, and the U.S. government will have to choose between inflating the currency or defaulting on its obligations.

The United States is at the epicenter of the banking crisis, but the European currencies are feeling the pinch first. With the Austrian banks facing the default of Eastern European debt, the euro may be in trouble, and sterling is also widely rumored to be near collapse. The dollar is maintaining its value relative to these currencies (and the yen), but all of them are in the same boat. It won’t be long before investors start unloading their reserves of currency and taking refuge in gold, silver, platinum, and other non-perishable commodities whose value is expected to outlast whatever unpleasantness lies ahead.

After that the major Western nations will experience an unprecedented fiscal and monetary crisis. Mass insolvency, bank failure, an inability to meet entitlement payments, and the suspension of normal commercial activity will be the result.

The modern global economy depends on mass consumption by the wealthy Western democracies of goods produced by the Third World and purchased by savings borrowed from the Third World. This part of the system is already in retreat—consumption in the West has dropped dramatically, Chinese exports have collapsed, and the Chinese are signaling their unwillingness to loan us more money unless we can guarantee that we won’t inflate our currency to pay off our debts. What sane person would believe such a guarantee, even if the Treasury were so foolish as to offer it? The inflation is coming, and the current system will grind to a halt.

We are, in a word, screwed.

All of this will not just happen. None of the unfortunate consequences will occur in a vacuum, and there will be reactions and counter-reactions on the part of governments and the public, which will make the system chaotic and unpredictable.

Governments will continue to intervene to “fix” the market, and by doing so will generally make the problems worse. Riots, civil wars, insurrection, and revolution will be likely if the maintenance dose of government cash is withdrawn from recipients in the major welfare states. Many other negative consequences are probable, but no one knows when, where, and how much.

Even the wisest and most skilled political leadership would find it difficult to intervene in a way that would mitigate the worst effects. At some point the market will have to realistically revalue the system’s assets, and the results will be painful. The consequences can only be postponed, and thus made more severe; they cannot be avoided.

Unfortunately, wise and skilled political leadership is in short supply all across the West. Our social democracies—with their welfare systems and ideologically uniform media—do not reward risk-takers and visionaries. Cynical time-servers, technocrats, obedient functionaries, and corrupt fixers tend to rise to the top. This is the cohort who will be leading the charge with broom-handle and dustbin lid during the coming debacle.

So far Congress and the Obama administration seem determined to do the worst possible things, economically speaking. Pumping more debt into the system, bailing out inefficient and unprofitable private companies, increasing pork-barrel spending and patronage, nationalizing financial institutions, rewarding corrupt and incompetent administrators, raising taxes, increasing regulation… How much more perverse can they get?

Giving bankruptcy judges the right to “adjust” interest rates on individual mortgages will serve only to distort the credit markets further and make the crash much worse when it finally arrives. Appropriating vast quantities of public funds to force a restructuring of private mortgages is senseless when the market value of the mortgaged real estate is half the face value of those loans, and dropping fast.

Barack Obama has assumed the role of King Canute in the current farce, sitting on the foreshore with his hand raised, ordering the tide to stop. A pathetic and futile gesture, but one that he and all the other leaders must inevitably make. They have no other solutions.

“Tide, I command thee: turn back!”

There are a few possible positive aspects of the current mess. As the crisis matures, supra-national institutions will fail and become irrelevant before nation-states do. Individual nations will reclaim their authority and sovereignty in an attempt to take care of their own.

Here in the United States, in the face of new unfunded mandates, trillions of dollars of federal largesse with strings attached, and volumes of new federal regulations, the several States have suddenly recalled the Tenth Amendment and are invoking their own sovereignty. This is all to the good, because for the last sixty years or so the federal government has extended its effective reach by dangling money before the states and making them dance for it. As the money disappears, the dance will come to an end. Without a bottomless cash drawer, the federal government is a pathetic weakling, and most power will eventually devolve to the states.

Another possible spinoff of the coming financial collapse is that the problem of Islam will solve itself. One of the consequences of the depression is that the demand for oil has dropped dramatically, and the price will be low for years. Not only will the sheikhs lose much of their income, but many of them are heavily leveraged and live on the margin, with their assets tied up in the Western financial markets. Like everyone else, they will see most of their wealth disappear.

And, unlike many other countries, the oil-dependent states of the Middle East have nothing else to fall back on. When the oil money disappears, that’s it. The entire population—millions of people on the Arabian peninsula and in Iran—subsists on state oil revenues, directly or indirectly.

The effects of this are already becoming evident. Hundreds of thousands of guest-workers in Saudi Arabia and the emirates are being sent home to Malaysia, Indonesia, Nepal, Bangladesh, and the Philippines. These latter countries will thus experience the unfortunate secondary effects of the collapse of oil prices. Given that most of the rest of their economy depends on the manufacture of cheap consumer goods for the West, they will be in serious trouble.

If this process is severe and goes on long enough, rioting, civil insurrection, and revolution may well give way to epidemics and actual mass starvation all across the long crescent of Islam’s bloody borders, from Marrakech to Mindanao.

All of the above is pure speculation.

I’m a rank amateur when it comes to economics and finance. Over the past three months I have read and digested a huge volume of information in an attempt to understand the catastrophe that is unfolding in slow motion around us.

I don’t know if my prognostications are correct. Unfortunately, no one else can predict what’s going to happen, either. The current situation is unprecedented. It is inherently unstable, chaotic, and unpredictable. Don’t believe anyone who says he knows what will happen next year. No one does.

Preliminary indications are that the global economy has actually been a planet-wide Ponzi scheme since at least the beginning of the Industrial Revolution. Like any other Ponzi scheme, it depended on a constant infusion of new suckers. As long as the world’s population was expanding, and the efficiency of industrial production was increasing, the fiscal bubble could continue to inflate.

But the dream is over, and the bill is coming due. The bubble has popped. The scheme is collapsing. The entire finance system will soon become like 1997 Albania writ large.

When the fever has run its course, a new system will emerge. Eventually the market will reassert itself, and production and consumption will resume.

But how much trouble and sorrow lies ahead of us is hard to predict.

Given that the economy of the United States will take the biggest hit—and has the farthest to fall—the era of American hegemony will almost certainly come to an end within the next decade. On balance this will be a salutary thing for the rest of the world. Europe will learn to deal with Russia and Iran on its own. Third World dictatorships will have to extort protection money from a different client. The Japanese will rapidly discover the value of missile defense and a strong military. All the fires that have been prevented or contained by American military power will rage unchecked until their human fuel is fully consumed.

And America will persist in some form, perhaps in several pieces, or as a loose confederation that will warm the heart of Jefferson Davis’ ghost.

Or perhaps we will continue as a single nation, much poorer and unable to project power abroad, but ruled by a despotic central government wielding a citizens’ army of multicultural block wardens to keep the citizenry in line—a continent-wide Cuba from sea to shining sea.

Or perhaps some other currently unimaginable form of government and civil society will emerge.

The only thing that’s certain is that the system cannot continue for much longer in its present form. The laws of economics—which are nothing more than a mathematical model describing what must happen—tell us that a collapse of some sort is unavoidable.

You will know changes soon.

Why not look through the crystal ball?

Our only strategy appears to be waiting for ZOG to blow itself up based on the inherent unworkability of its founding nostrums.

—Alex Linder

Very few nationalists are taking seriously Austrian economics: that the US will be facing a depression soon—in case that Romney is elected and decides to prick the government bubble—, or even a complete currency crash in case that Obama gets reelected and his Ben Shalom Bernanke allows the bubble continue to expand until it pops by itself.

While I am no promoter of a capitalism that ignores racial interests, I see Austrian economics as a reliable predictor of what’s going to happen during the next administration: either way, Americans will face economic meltdown. The subject is of such paramount importance that I find it bothersome to find the promotion of third-way economics, such as Social Credit, at several Robert Stark radio shows and essays at Counter-Currents, which recently hosted a Stark interview of Anthony Migchels (for an exchange of Austrians with Migchels see here).

Bothersome I said: because nationalists are flatly ignoring the Austrians’ main message, that Keynesian economics is (good news for us!) driving the US economy straight toward the cliff.

Why are they ignoring the most momentum issue of our times?

Most nationalists are just reactionaries. It can be no coincidence that, unlike these reactionaries that like to discuss Social Credit in ivory towers, revolutionaries like Michael O’Meara do mention the literature of collapse. O’Meara for one believes that only a catastrophic collapse of imperial America holds out a possibility that a racially-conscious vanguard of white Americans reclaim their territory.

I don’t see Austrian economics as a way to promote libertarianism (“sound money for brown people”) because, by definition, there will be no browns in the White Republic. I see it as a very hilarious way to expose the Keynesianism that is fulfilling the deconstruction of imperial America for white nationalists to takeover. Austrian economics is a reliable crystal ball to see the future. Even if nationalists fail to take full advantage of it, we all must welcome the big window of opportunity that is about to be opened—exactly what happened in Weimar Germany.

Are you prepared for the coming crash?

Note of June 2014: YouTube has removed this clip that used to be located: here.

Published in: on August 12, 2012 at 11:00 am  Comments (2)  

Washington’s

Keynesian trap

Peter-Schiff

See conference: here.

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