Tuesday, August 25, 2009

Is Medicaid Needed For Our Sick Financial System?

Bob Chapman
August 22, 2009

In their maniacal quest to destroy the US economy, and indeed the world economy, in order to create an Orwellian one world police state of feudality, the Illuminists have greatly erred and have grossly miscalculated the timing of the financial disaster with their other pet projects. Asking people to undertake these costly legislative atrocities would have been very difficult even during prosperous times when the sheople might have been fooled into thinking they could afford such nitwit legislation, but under the current catastrophic financial conditions, the US public will not stand for such extravagant foolishness even if they agreed with the legislation itself, which most of them vehemently do not. When Meredith Whitney pulled the plug on Citibank's toxic waste, she may have prematurely created a negative financial environment that was inimical to future Illuminist plans. Why do you think that the latest Illuminist powwow put forth a decision to try to pull back from the now out-of-control financial catastrophe, while Bernanke hands out money created out of thin air to foreign and domestic banks by the trillions to support the stock, bond and derivative markets, and the moron media touts his smoke and mirrors acts as "green shoots" even though consumer spending, credit and employment continue to contract at an alarming rate?

Could it be that the Illuminati are desperately, albeit feebly, attempting to instill more confidence in the people to the effect that we are moving toward a recovery, and will be able to afford the poisonous "cap and trade" and euthanasia bills? You better believe it. If these bills pass, the only reason the Illuminati will have for keeping the economy afloat will be to milk the system a while longer. The passage of these bills could accelerate the plans of the Illuminati to destroy our economy and let it go down in flames. Fortunately, unlike the move to push through the TARP bailout, they can't threaten imminent financial destruction if the bills don't pass because that would not be logical.

Barry recently became "emotional" at a recent town hall meeting regarding his euthanasia bill. We guess he figured it worked for Queen Hillary in New Hampshire, so why not try feigning emotion for his own ends. Undoubtedly, his emotions are not based on his concern for the welfare of US citizens, who he could care less about, but on the possibility of being booted out of office by Puppet Master and kingmaker David Rockefeller. Marxist Hillary has already felt the sting of Rockefeller's rejection, and Barry wants to avoid that at all costs.

If Barry eally cared about Americans he would promote vitamins and herbs and a healthy lifestyle by helping to fund such things via government subsidies in the same way that pharmaceuticals are subsidized, he would free doctors from being forced into prescribing pharmaceuticals to avoid being accused of medical malpractice when vitamins, herbs and nutrition might be more appropriate or play a supplemental roll, he would promote the education of doctors regarding the use of vitamins, herbs and nutrition to treat various medical conditions, he would require the dispensing of all pharmaceuticals to health facilities in bubble packs so that all unused pharmaceuticals could be safely returned and reused instead of being dumped into our public water systems, he would put caps on tort awards for medical malpractice, he would base the amount of medical insurance reimbursements on the efficacy of treatment, he would take steps to curtail unnecessary testing and treatment, and he would form a partnership between the relevant government agencies and the private insurance industry to bargain together as a group with Big Pharma to control spiraling costs for drugs. We also do not need the exorbitant cost of a medical information data base to be forced on doctors so Big Brother can watch over us.

If Obama did these things instead of acting like an Illuminist marionette, Medicaid could afford to continue to take care of the poor as it was designed to do, and the Medicaid program could be expanded to provide better coverage. Any applicant for Medicaid would have to be a legitimate US citizen, by natural birth or proper naturalization, and not by amnesty, which should be forbidden to any illegal immigrant lawbreakers. Our current system would work the way it was supposed to if all these abuses were terminated, and the government stopped invading the funds set aside for the Social Security, Medicare and Medicaid programs so they can have their pork orgies and fund pet Illuminist projects. But the sad truth is that all these abuses have been allowed to fester to make it look like the system is broken and needs to be replaced by a toxic government euthanasia monopoly. Can you imagine having some moronic bureaucrat from our dysfunctional government in charge of your health? Have they gotten anything else right? So what could possibly lead anyone to think that they are going to make health decisions correctly?

The same parallel applies to our financial system. The Illuminati wanted to make it look like our financial system was broken as an orgy of fraud was paraded before us by our fane-stream media due to a lack of regulatory action. They took away Glass-Steagall courtesy of henchman Slick Willie Clinton and are now trying to replace Glass-Steagall with the Fed, when it is the Fed that is the base cause of virtually all our financial woes. They want us to put a private company, operating in total secrecy, committed only to big banking interests without the slightest commitment to the welfare of US citizens, and put them in charge of virtually our entire financial system, which system the Fed has malevolently destroyed by expanding and contracting the money supply in a way that steals money from the average citizens and places it in the coffers of the wealthy Illuminists.

Our regulatory system is perfectly fine, it is the people in charge of that system, basically Illuminist puppets, who are the problem. This is the state of affairs that Elliot Spitzer was decrying. He is the penultimate example of what happens to any government or regulatory official who steps out of line and criticizes the Illuminist cabal and its toxic policies. What he did was wrong, yes. But it would never have been exposed if he had not spoken out against what the Bush Administration had done to block efforts to investigate the real estate derivative fraud. This is why your Congressmen cow tow to the Puppet Masters. Most of these evil miscreants have gargantuan skeletons in their closets making them susceptible to extortion, which is often why they were selected by the Illuminists as candidates for public office in the first place. Their bad habits set them up for puppetry at the hands of the Illuminati. Either that, or they were just plain bribable.

Our so-called "representatives" have trillions to dole out to their crony capitalist banking buddies who paid to get them elected, but when it comes to funding the SEC and CFTC, all we hear about is how they are under-funded and understaffed. We suppose it is just as well, as the people running these agencies are little more than criminals themselves and are in on every Illuminist scam as co-conspirators. If we gave them more money to catch criminals, they would find a way to put the extra money in their pockets while doing nothing to catch the criminals. It would just be business as usual. Slap the Illuminist criminals with diminutive fines, require absolutely no accountability or jail time, and make absolutely certain that crime pays, so long as the criminal is part of the Illuminist cabal. Our financial system is a disgrace, and so are its regulators.

Speaking of regulators, Ted Butler thinks he can work with someone like Gary Gensler, who is the current chairman of the CFTC, and an alumni of Goldman Sachs (gee, what a surprise). Gary Gensler helped Larry Summers rig the gold market as the Clinton Administration established its strong dollar policy, taking gold down to its market bottom as Gordon Brown put his two cents in to create "Brown's Bottom." Gensler also teamed up with Summers to advocate the repeal of Glass-Steagall and the deregulation of derivatives via the Commodity Futures Modernization Act. Ted thinks he can work with Gary because Ted is a gentlemen, but he should know better. These people do not think like he thinks. They are greedy, slimy animals. Never in a million years will they decrease position limits for the COMEX silver market without continuing the various exemptions enjoyed by the commercial shorts even though they have absolutely no legitimate business purpose to hedge other than pure manipulation. In fact, it is most likely that any reduction in position limits by the CFTC will be used to suppress the large specs, and thereby to strengthen the positions of the large commercial shorts. But Ted is serving an important function in that he is documenting the rampant fraud and manipulation, and putting officials on notice, so they do not have the excuse that they were ignorant. We commend him for this. That way, when the trials and recriminations start, we will know who to prosecute and we will also know the precise nature of their crimes. This is why we always put links to Ted's articles in the IF. He is intelligent and well-meaning, and that is more than we can say for most newsletter writers who are little more than Illuminist disinformation specialists, or just plain idiots, with few exceptions.

The Chinese, on the other hand, might very well accomplish what the CFTC regulators have refused to do, which is to break the paper log jam created by the Illuminist cabal in the silver futures market. The Chinese just made it legal for their citizens to buy silver, probably so they can protect themselves from the idiot QE (Quantitative Easing) monetary debauchery being perpetrated against them and the rest of people in the world, including Americans, by Buck-Busting Ben. Even though China's hands are just as filthy-dirty as America's, we can only say: Go, China!!!

Speaking of COMEX gold and silver futures, it appears that the Illuminati have solved their physical gold and silver inventory shortage which was causing them great headaches as massive demands for physical delivery were received. At first, they just lied about their inventory. The inventories did not change even as hundreds of requests for physical bullion were settled month after month, often with the help of central banks like the ECB and other outsiders like the Canadian mint. Now, instead of using physical bullion, they can hand you an ETF contract instead. So they are trading paper for, well, more paper! Pretty slick, eh? They want to give investors the convenience of having an interest in a publicly traded security so they will just hang onto it and not demand physical delivery. But therein lies the trap. These ETF's have leased large portions of their bullion out to the bullion banks for purposes of gold and silver suppression. They do not have what they say they have any more than the COMEX does, and if you hold on to your ETF contract, you may well become the next victim of a Madoff-like Ponzi scheme.

What this means, oh precious members of the hard money community, is that you should demand delivery of your metals from the ETF's assuming that this is possible pursuant to your contract. Otherwise, here is what the system looks like: You buy a COMEX gold or silver contract with cash. You demand physical delivery of your gold or silver. Instead, they hand you an ETF contract. Unless you can demand the metal from the ETF, the ETF will simply hand you back cash instead when you liquidate your position, and you will be left hanging right where you started, with a pile of depreciating cash and no physical metals. If you try to hold on to your ETF position to at least get the appreciation in value of precious metals, you may never be able to cash it in, because the ETF's may well turn out to be nothing more than Ponzi schemes. If the sponsors do not have the metals, they will not be in a position to cash out all the shares. And the COMEX can just hand out as many ETF shares as they please, because no one will be checking the legitimacy of these contracts, especially the ETF sponsors, who will be in cahoots with the COMEX.

Theoretically, under such a system where you are run around in paper circles leading to nowhere, you could buy and sell gold and silver in any quantity, no matter how vast and ludicrous, because there would never be a requirement anywhere in the system to produce the actual physical bullion! This is unadulterated BS poppycock!!! They can just short gold and silver forever and keep handing out ETF contracts to satisfy requests for delivery, and no one will be the wiser as there will never be enough ETF liquidations to empty the ETF's cash pot until it is too late and the Ponzi scheme blows up. If the Illuminists need a technical advisor, they can always consult with Pat Kiley.

We wanted to remind our friends in the deflationary camp that they seem to be forgetting about the crony capitalist bailout mentality that is setting us up for hyperinflation. A large portion of world wealth held by private non-bank investors has already gone up in smoke (meaning that it was transferred from the middle class to the Illuminist cabal), and what wealth remains to be lost by non-bank private investors is far smaller than the losses which lie in wait for the anointed legacy banks on Wall Street, which losses will generate a crony capitalist bailout from the leaders of our Crony Capitalist Bailout Nation that will require the Fed to print money out of thin air in quantities more vast by far than all the losses suffered by non-bank private investors worldwide from the beginning of this financial crisis. Those losses are hidden by mark-to-model rules for bonds and derivatives and are also being kept out of sight in a smoldering volcano full of toxic waste, aka the Quadrillion Dollar Derivative Death Star. Remember that government spending of the type necessary to push through a recession or depression will only produce elevated double digit inflation such as we experienced recently and in the early 1980's. To get what Zimbabwe and the Weimar Republic experienced, you need a carry trade in the subject currency established by a partnership between currency speculators willing to short the subject currency, and a central bank willing to print as much money as the currency speculators demand.

Saturday, August 22, 2009

VIDEO: Founding Fathers - The Threat Of Tyranny

VIDEO: Money Banking & The Federal Reserve

Inflation and the Fall of the Roman Empire

by Joseph Peden

This is a transcript of Prof. Joseph Peden's 50-minute lecture "Inflation and the Fall of the Roman Empire" given at the Mises Institute Seminar on Money and Government in Houston, Texas on October 27, 1984. The original audio recording is available courtesy of the Mises Institute.

Two centuries ago, in 1776, there were two books published in England, both of which are read avidly today. One of them was Adam Smith's The Wealth of Nations and the other was Edward Gibbon's Decline and Fall of the Roman Empire. Gibbon's multi-volume work is the tale of a state that survived for twelve centuries in the west and for another thousand years in the east, at Constantinople.

Yet Gibbon in looking at this phenomenon commented that the wonder was not that the Roman Empire had fallen, but rather that it had lasted so long. And scholars since Gibbon have devoted great deal of energy to examining that problem: how was it that the Roman Empire lasted so long, and did it decline or was it simply transformed into something else? That something else being the European civilization, of which we are the heirs.

I've been asked to speak on the theme of Roman history, particularly the problem of inflation and its impact. My analysis is based on the premise that monetary policy cannot be studied, or understood, in isolation from the overall policies of the state. Monetary, fiscal, military, political and economic issues are all very much intertwined. And the reason they are all so intertwined is, in part, due to the fact that the state, any state, normally seeks to monopolize the supply of money within its own territory.

Monetary policy therefore always serves, even if it serves badly, the perceived needs of the rulers of the state. If it also happens to enhance the prosperity and progress of the masses of the people, that is a secondary benefit; but its first aim is to serve the needs of the rulers, not the ruled. And this point is central, I believe, to an understanding of the course of monetary policy in the late Roman Empire.

We may begin by looking at simply the mentality of the rulers of the Roman Empire, beginning at the end of the 2nd century [A.D.] and looking through to the end of the 3rd century. This period of the 3rd century Roman historians refer to as the Crisis of the Third Century. And the reason is that the problems of the Roman society in that period were so profound, so enormous, that Roman society emerged from the 3rd century very, very different in almost all ways from what it had been in the first and second centuries, a period the historians speak of as the Augustan Principate.

To look at the mentality of the Roman emperors, we can look just at the advice that the Emperor Septimius Severus gave to his two sons, Caracalla and Geta. This was supposed to be his final words to his heirs. He said, "live in harmony; enrich the troops; ignore everyone else." Now, there is a monetary policy to be marveled at!

Caracalla did not adhere to the first part of that; in fact, one of his first acts was to murder his brother. But as for enriching the troops, he took that so seriously to heart that his mother remonstrated with him and urged him to be more moderate and to restrain his increasing military expenditures and his very burdensome new taxes. He responded by saying there was no longer any revenue, just or unjust, to be found. But not to worry, "for as long as we have this," he insisted, pointing to his sword, "we shall not run short of money."

His sense of priorities was made more explicit when he remarked, "nobody should have any money but I, so that I may bestow it upon the soldiers." And he was as good as his word: he raised the pay of the soldiers fifty percent, and to achieve this he doubled the inheritance taxes paid by Roman citizens. When this was not sufficient to meet his needs, he admitted almost every inhabitant of the empire to Roman citizenship. What had formerly been a privilege now became simply a means of expanding the tax base.

He then went further by proceeding to debase the coinage. The basic coinage of the Roman Empire to this time - we're speaking now about 211 [A.D.] - was the silver denarius introduced by Augustus at the end of the 1st century before Christ. Augustus had issued a silver coin, a denarius, that was about 95% silver, and that coin continued for the better part of two centuries as the basic medium of exchange in the empire.

By the time of Trajan in 117, it was only about eighty-five percent silver, down from Augustus' ninety-five percent. By the age of Marcus Aurelius, in 180, it was down to about seventy-five percent silver. In Septimius' time it had dropped to sixty percent, and Caracalla evened it off at fifty-fifty. Caracalla was assassinated in 217 and there then followed an age that historians refer to as the Age of the Barrack Emperors, because throughout the 3rd century all the emperors were soldiers and all of them came to their power by military coups of one sort or another. There were about 26 legitimate emperors in this century and only one of them died a natural death; the rest were either assassinated or died in battle, which will give you some idea of the change since this was totally unprecedented in Roman history - with two exceptions: Nero, a suicide, and Caligula, assassinated earlier.

Caracalla had also debased the gold coinage. Under Augustus this circulated at 45 coins to a pound of gold. Caracalla made it 50 to a pound of gold. Within 20 years after him it was circulating at 72 to the pound of gold, reduced to 60 at the end of the century by Diocletian, only to be raised again to 72 by Constantine. So even the gold coinage was in fact inflated, debased.

But the real crisis came after Caracalla, between 258 and 275. In a period of intense civil war and foreign invasions, the emperors simply abandoned, for all practical purposes, a silver coinage. By 268 there was only five tenths percent silver in the denarius. And prices in this period rose in most parts of the empire by nearly a thousand percent. The only people who were getting paid in gold were the barbarian troops hired by the emperors. The barbarians were so barbarous that they would only accept gold in payment for their services.

The situation did not change until the accession of Diocletian in the year 284. Shortly after his accession he raised the weight of the gold coinage, the aureus, to 60 to the pound - this was from a low of 72. But ten years later, he finally abandoned the silvered coinage, which by this time was simply a bronze coin dipped in silver rather quickly. He abandoned that completely and tried to issue a new silver coin which was struck at 96 coins to the pound of silver, called the argenteus. This argenteus was fixed as equal to fifty of the old denarii, the old coinage. It was designed to respond to the need for higher-tariffed coins in the marketplace, to reflect the inflation. He also issued a new bronze coin tariffed at ten denarii, called the nummus. But less than a decade later, that silver coin had gone from being tariffed at 50 of the old to now equaling 100 of the old, and the bronze coinage from 10 denarii to 20; in other words, a hundred percent inflation. In other words, despite his efforts Diocletian had not been able to stop the inflation.

The next emperor who interfered with the coinage in a meaningful way was to be Constantine, the first Christian emperor of Rome. Constantine in the year 312, which is also the year he issued the Edict of Toleration for Christianity, issued a new gold piece which he called by a new name, the solidus - solid gold. This was struck at 72 to the pound, so it was in fact debased over Diocletian's. These were very large issues and historians have puzzled over where he got all the gold; but I think the puzzle is not so much of a real puzzle once you begin to look at the legislation that took place.

First of all, he issued two new taxes: one was taxed on the estates of the senators, and this was rather new because senators generally were free of most taxes on their land. He also issued a tax on the capital of merchants; not their earnings, but their capital. This was to be levied every five years and it was to be paid in gold. He also required that the rents from the imperial estates, which were rented out to tenants, were to be paid only in gold. He took on the bullion reserves of his former partner Licinius who had extracted, by force, bullion from the treasuries of the cities of the Eastern Empire. In other words, any city that had any gold bullion or silver bullion left in its treasury, this was simply requisitioned by Licinius and this passed on now into the hands of Constantine who had gotten rid of Licinius in a civil war.

We're also told that he stripped the pagan temples of their treasuries. This he did rather late in his reign, still somewhat afraid apparently in the early days of angering the gods of Rome. As his Christianity became more fixed, he felt greater ease at robbing the temples. Now, Constantine's reform in one sense began the reversal of the process: the gold coinage was sufficiently large that it began to take hold and to circulate more freely. The silver coinage failed and, what was worse, at no time in this period did the central government try to control the token coinage. And the result of that was [that] token coinage was being minted not only by the imperial mints, but also by the mints of cities. In other words, if a city couldn't pay its costs, pay its salaries to its employees, it simply struck up some token coinage and issued that.

By the late 3rd century we also begin to have massive appearance of what numismatists call counterfeits. I would say it would be called credit money today. People need small change, and they simply go and manufacture it - all of which of course means that the amount of token coinage in circulation is uncontrolled and increasingly massive. Now, one of the things that had happened in the course of this 3rd century inflation was that the government found that when it paid its troops in token coinage, or even in these debased silver coins, prices immediately rose. Every time the silver value of the denarius dropped, prices naturally rose; and the result of this was [that] the government, in order to try to protect its civil servants and its soldiers from the effects of inflation, began to demand payment of taxes in kind and services rather than in coin. They wound up, in effect, in repudiating their own issues, not accepting them for tax collection purposes.

With Constantine's reform, this situation changed somewhat and, slowly but surely, the government began to move away from collecting taxes in kind and from paying salaries in kind, and began to substitute paying salaries in gold and collecting taxes in gold. Over the long run, this meant that the gold standard was strengthened and gold remained the real money of the Roman Empire. However, the inflation did not end for the masses of the people. In other words, gold was a hedge against inflation for those who had it, and these were principally the troops and the civil servants. The taxpayers had to buy these gold coins in order to pay their taxes and so, if they were wealthy enough, they could afford to buy these gold coins which were increasingly expensive in terms of token money. If they were poorer they simply couldn't pay the taxes and this meant they lost their lands in one form or another or became delinquents; and we hear constant references to people abandoning their land, disappearing.

As a matter of fact in the 3rd century this was a constant problem in Rome: all sorts of people were trying to escape the increased taxes that the military needed. The army itself [had grown] from the time of Augustus, when they had about a quarter of a million troops, [to where] by the time of Diocletian they had somewhat over 600,000. So the army itself had doubled in size in the course of this inflationary spiral, and obviously that contributed greatly to the inflation.

In addition, the administration of the state had grown enormously. Under Augustus essentially you had the imperial administration at Rome and the governors of different provinces, the secondary level of administration, and then the primary governmental units in the Roman Empire in this time were the cities, the municipalities. By the time of Diocletian this pattern had been broken apart. You had not one emperor but you had, under Diocletian, four emperors. Which meant four imperial courts, four Praetorian Guards, four palaces, four staffs, etc.

Under them were four Praetorian prefectures, regional administrative units with their staffs and their budgets. Under these four prefectures, they were then divided into 12 dioceses, each diocese having its administrative staff and so on. Under the diocesan rulers, the vicars of the diocese, we have the provinces. In Augustus' time there were approximately 20 provinces. Three hundred years later, with no substantial increase in territory, there were over a hundred provinces. They had simply began to divide and subdivide provinces for purposes of maintaining internal military control of these regions. In other words, the cost of policing the Roman state became increasingly enormous.

All these costs, then, are some of the reasons why the inflation took place; I'll get to others in a moment. To give you some idea of the situation after Constantine's reform of the gold, let me just briefly give you the figures for what it cost in terms of the silver coinage, or token coinage now, the denarius, for a pound of gold. In Diocletian's time, in the year 301, he fixed the price at 50,000 denarii for one pound of gold. Ten years later it had risen to 120,000. In 324, in other words 23 years after it was 50,000, it was now 300,000; and in 337, the year of Constantine's death, a pound of gold brought 20,000,000 denarii. And by the way, just as we are all familiar with the German currency of the [1920s] with the bigger stamp on it, the Roman coinage also has stamps and over-stamps on the metal, indicating multiples of value.

At one point one of the Roman emperors had a marvelous idea: instead of issuing a single coin he devised a method to handle the inflation. He took brass slugs and put them in a leather pouch and called it a follis; and people began passing these pouches back and forth as value. I guess it was the Roman equivalent to those baskets of paper we see in the pictures of Germany in the [1920s]. Interestingly enough, within ten years or so after that began, the word follis - which had meant this bag of coins - had now drifted to mean one of those slugs. One of those slugs was now the follis; so they couldn't even keep the bags stable, they too were inflated.

Now one interesting thing with all this inflation, I think it should be a great comfort to us: historians of prices in the Roman Empire have come to the conclusion that despite all of this inflation - or perhaps we should say, because of all this inflation - the price of gold, in terms of its purchasing power, remained stable from the first through the fourth century. In other words, gold remained, in terms of its purchasing power, a stable value whereas all this coinage just became increasingly worthless.

What were the causes of this inflation? First of all, war; the soldiers' pay rose from 225 denarii during the time of Augustus to 300 denarii in the time of Domitian, about a hundred years later. A century after Domitian, in the time of Septimius, it had gone from 300 to 500 denarii; and in the time of Caracalla, about 10 years later, it had gone to 750 denarii. In other words, the cost of the army was also rising in the terms of the coinage; so, as the coinage became more worthless, the cost of the army had to be increased. The advance in the soldier's pay in the rest of the 3rd century and into the 4th century is not known, we don't have figures. And one reason is that the soldiers were increasingly paid in terms of requisitions of supplies and goods in kind. They were literally given food, clothing, shelter and other commodities in lieu of pay - and this applied also to the civil service.

When one Roman emperor refused to pay a donative on his accession - this was a bonus given to the soldiers on the accession of the emperor - he was simply murdered by his troops. The Romans had had this kind of problem even in the days of the Republic: if the soldiers don't get paid they rather resent it. What we find is that the donatives had been given on the accession of a new emperor from the time of Augustus on; then they began to be given in the 3rd century every five years. By the time of Diocletian, donatives were given every year, so that the soldiers' donatives had in fact become part of their basic salary.

The size of the army, I think I indicated already, had increased. Doubled from the time of Augustus to Diocletian, and the size of the civil service I indicated also. Now, all these events strained the fiscal resources of the state beyond its ability to sustain itself, and the debasement and the taxation were both used to keep the ship of state going; frequently by debasing, then by taxation, and then often simply by accusing people of treason and confiscating their estates.

One of the Christian fathers, Saint Gregory Nazianzus, commented that war is the mother of taxes and I think that's a wonderful thing to keep in mind: war is the mother of taxes. And it's also, of course, the mother of inflation.

Now, what were the consequences of inflation? One of the odd things about inflation is, in the Roman Empire, that while the Roman state survived - the Roman state was not destroyed by inflation - what was destroyed by inflation was the freedom of the Roman people, and particularly the first victim was their economic freedom. Rome had basically a laissez-faire concept of state/economy relations. Except in emergencies, which were usually related to war, the Roman government generally followed a policy of free trade and minimal restriction on the economic activities of its population. But now under the pressure of this need to pay the troops and under the pressure of inflation, the liberty of the people began to be seriously eroded - and very rapidly.

We could start with the class known as the decurions. This was your prosperous, small and middle landowning class who were the dominate elements of the cities of the Roman Empire. They were the class from which were chosen the municipal counsels, the municipal magistrates and officials. Traditionally, they had viewed service in the governments of their towns as an honor and they had responded to this by donating, not merely their time, but their wealth to the betterment of the urban environment: building stadiums and bathhouses and repairing the streets and providing for pure water. These were considered benefactions, it was a kind of philanthropic element and their reward was, of course, public recognition and esteem.

This class, in the mid-3rd century, was assigned a task of collecting the taxes in the municipality that were being assessed by the central government. The central government could no longer collect its taxes effectively, so they made the decurion class collectively responsible for getting revenues and passing them on to the imperial government. The decurions, of course, had as much difficulty as anyone else in doing this, and the returns were, again, frequently inadequate so the government solved that problem by simply passing a law that any taxes that decurions could not collect from others, they would have to pay out of their own pocket. That's known as the incentive method for the tax collect. [laughter]

As you can well imagine, as the crises became greater and the economy was disrupted by civil conflicts and invasions and the effects of inflation, the decurions, strangely enough, no longer wanted to be decurions; and they began to abandon their lands, abandon their cities, and escape to wherever they could find refuge in other larger cities or other provinces. But they were not to be allowed to do that with impunity, and the law was then passed that any decurion discovered somewhere else was to be arrested, bound like a slave and carted back to his hometown where he was restored to his dignity as a decurion. [laughter]

This third century is also the period of the persecution of the church, and we find that at least some of the emperors must have had a sense of humor because when they passed a regulation that if a Christian was arrested and found guilty of capital punishment, namely believing in Christ, he was to not be executed but offered the option of becoming a decurion. [laughter]

Now, the merchants and the artisans were traditionally organized into guilds and chambers of commerce and that sort of thing. They now, too, came under government pressure because the government could not obtain enough material for the war machine through regular channels - people after all don't want all that token coinage - and so they were now compelled to make deliveries of goods. So that if you had a factory making garments, you now had to deliver so many garments to the government requisitions. If you had ships, you had to carry government goods in your ships. In other words, what we have here is a kind of nationalization of private enterprises, and this nationalization means that the people who risk their money and their talent are compelled to now serve the state whether they like it or not.

When people tried to get out of this they were then, by law, compelled to remain in the occupation that they were in. In other words, you couldn't change your job or your business. This was not sufficient because, after all, death is always a relief from taxes; and so the occupations were now made hereditary. When you died, your son had to take up your business, your trade, your profession. If your father was a shoemaker, you had to be a shoemaker. These started by being restricted to the defense-oriented industries but, of course, gradually it was realized that everything is defense-oriented and the system just developed.

The peasantry, known as the coloni, these were leaseholders on both imperial and private estates. They, too, formerly a free class were now under the same kinds of pressures that all smallholders were in this situation, and they began to drift away trying to find better opportunities, better leases, better occupations; and so under Diocletian the coloni were now bound to the soil. Anyone who had a lease on a particular piece of land could not give that lease up. More than that, they had to stay on the land and work it. In effect, this is the beginning of what in the Middle Ages is called serfdom, but it actually has its origins here in the late Roman society.

We know for example from studies of Palestine, particularly in the Rabbinical writings, that in the course of the 3rd and early 4th century the structure of landholding in Palestine changed very dramatically. Palestine in the 2nd century was largely composed of small peasant landholders with very small acreage, perhaps an average of two and a half acres. By the 4th century those small holders had virtually disappeared and been replaced by vast estates controlled by a few large landowners. The peasants working the estates were the same people, but they had in the meantime lost their land to the larger landowners.

In other words, landholding became a massive kind of agribusiness. In [the] course of this the population of Palestine, still principally Jewish, also changed in that the ownership of land passed from Jews to Gentiles; and the reason for that undoubtedly was that the only people with large amounts of cash who could buy out these smallholders who were in distress were, of course, the government officials. And we hear of them being called potentates, powerful ones. In effect there is a shift in the distribution of wealth in Palestine; and obviously, from other evidence, similar things were happening in other places.

With regard to taxes, they naturally increased across the board, but Diocletian decided that it was a very inefficient system that he had inherited; every province more or less had its own system of taxation going back to pre-Roman times, actually. And so he, with his military mind, demanded standardization. And what he did was to have all wealth, which was of course landed wealth, assessed in units of productivity. In other words, every person who had land was either singly, if he was a large landowner, fit into a particular unit, a tax unit called iugum, and those who were smaller landowners were collectively put into a iugum. This meant that the emperor for the first time had the basis of a national budget, something the Romans never had until Diocletian, and therefore he knew at any given time how many taxable units of wealth there were in any province, and he could simply levy an assessment and expect to get a fixed amount of money.

Unfortunately, this took no account of the fact that in agriculture productivity varies considerably from season to season, and that if an army has passed through your district it may take years to recover. The result is, we hear of massive petitions from whole regions asking the emperor to forgive them their taxes, to remit five years of past dues and so on and so forth; or to reduce the number of units of productivity to reflect the loss of population or the loss of materials. As a matter of fact, when people began to say "it used to be I had five people paying this unit of taxation, but two them have fled and it's only half the land in production," the response of the government was to say, "that doesn't matter, you still have to pay for the land that is now out of production." So, I mean, there's no relationship between taxes and actual productivity.

How did people protect themselves from this? Well, first of all, mortgages virtually ceased; long-term mortgages virtually ceased to be given. Long-term loans of any kind disappeared. No one will lend unless they are guaranteed payment in gold or silver bullion. In fact the government itself, under Diocletian and Constantine, refused to accept gold coins in payment of taxes, but insisted instead on gold bullion. So that the coins that you bought in the marketplace had to then be melted down and presented in the form of bullion; and the reason was [that] the government was never sure how adulterated its own gold coinage really was so they insisted on bullion.

Pledges and securities for crops and for loans were always in either gold, silver or indeed in crops themselves. In Egypt we have a document in which the banks have been refusing to accept coins with the divine image of the emperor; in other words, state issues. The government's reaction to that, of course, was to force the banks to accept the coinage. This led to wholesale corruption in Roman society as the black market became a normal part, as people refused to pass, to exchange, coinage at the officially fixed tariffs but instead coinage was passed on a market principle.

There were, obviously, flight from the land, massive evasion of taxes, people left their jobs, they left their homes, they left their social status. Now, Diocletian's final contribution to this continuing disaster was to issue his famous Edict on Prices [of] 301, a very famous instance of a massive effort by the government to control inflation by price controls. You have to realize that there is a little problem: the Roman Empire was a vast region running from Britain in the west to Iraq, Mesopotamia in the east; from the Rhine and the Danube to the Sahara. It included areas of very sophisticated and very primitive economies, and the result of that was the cost of living varied considerably from province to province. Egypt seems to have had the lowest cost of living, Palestine had a cost of living twice that of Egypt, and [Rome in Italy] had a cost of living twice that of Palestine.

Diocletian ignored that; he just issued a single standard price for the entire empire. The result was that in Egypt the effects of the Edict probably didn't exist because the price, the maximum price fixed in the Edict, was very rarely reached in Egypt. But it was the people in Rome, of course, [who] had the maximum price lower than the market price. The result of that, of course, was riots in the street, disappearance of goods; the penalty for violating the law was death, a very common penalty in Rome for almost anything; and the mentality of Diocletian comes out, and the cause of [the] maximum price edict comes out in the preface to the law. I'll just quote briefly some of it; when you hear these first words I'd like you to pay attention because you may have a different interpretation of them than Diocletian meant. He says, "if the excesses perpetrated by persons of unlimited and frenzied avarice could be checked," he doesn't mean himself [laughter], "if the general welfare could endure without harm this riotous license, if these uncontrolled madmen, the unscrupulous, the immoderate, the avaricious, could be persuaded to desist from plundering the wealth of all, then all would be well." Now who are these people? They are the merchants; they are the avaricious greedy types who cause inflation as we all know.

Then he speaks about himself and his three partners. "[We, the protectors of the] human race," sounds familiar doesn't it [laughter], "we are agreed that decisive legislation is necessary, so that the long-hoped-for solutions, which mankind itself could not provide..." You know, it's the same stuff [laughter], we can't do anything ourselves, we need the legislator. "By the remedies provided by our foresight [laughter], these things may be remedied for the general betterment of all." In fact, as you read through the rest of the thing it becomes clear that the reason the Edict on Prices [was] issued was that the soldiers were the principal victims of the inflation, and that Diocletian was afraid he was losing control of his army. And so the people who are to be protected are the soldiers and the other servants of the state.

Now Diocletian's monetary reforms were tentative steps in the right direction; except for the Edict on Prices which, by the way, simply didn't work and was gradually dropped. But his steps were not radical enough; his inability to create a sufficient supply of gold and silver coinage, combined with his continued reliance on payments in kind for taxes and salaries, and the continued issuance of fiat bronze coinage in endless amounts, failed to make a significant dent in the problem.

Constantine's reforms were also partial, but of sufficient vigor and radical character to make a difference. Through his willingness to extract by compulsion the gold reserves of the taxpayers, forcing them to disgorge their bullion, he placed an ever-increasing supply of gold in the hands of the government officials. This was increasingly used to pay military bonuses, salaries for bureaucrats, and even payments for certain public works. Increasingly, then, a two-tier monetary system emerged in which the government, the soldiers and the bureaucrats enjoyed the benefits of a gold standard while the non-governmental portion of the economy continued to struggle with a rapidly-inflating fiat currency.

The new gold solidus - circulated widely by its possessors, the government-salaried employees - sold at various market rates to customers who desperately needed it to pay their taxes. Thus the state had found a way to protect itself and its servants from the unwholesome effects of its own earlier inflationary cycle, while slowly withdrawing itself from the cumbersome and wasteful system of accepting taxes and paying salaries in kind. Meanwhile, the masses suffered from [a] massive injection of fiat money which they had to accept in payment for government requisitions of such gold or silver or other commodities which the government demanded.

Now, we may wish to find some lessons in this tale of [the] monetary policies of the late Roman Empire. The first lesson, I think, must be that if war is the health of the state, as Randolph Bourne said, it is poison to a stable and sound money. The Roman monetary crisis therefore was closely connected with the Roman military problem. Another lesson is that the problems become solvable when a ruler decides that something can be done and must be done. Diocletian and Constantine clearly were willing to act to protect their own ruling-class interest, the military and the civil service. Monetary reforms were necessary to win the support of the troops and the bureaucrats that composed the only real constituency of the Roman state, and the two-tier system was designed to this end. It brought about a stable monetary standard for the ruling group who did not hesitate to secure it at the expense of the mass of the population.

The Roman state survived. The liberty of the Roman people did not. When freedom became possible in the west in the 5th century, with the barbarian invasions, people took advantage of the possibility of change. The tax burden remained burdensome even after the gold standard was re-established. The peasantry had become totally alienated from the Roman state because it was no longer free. The business community likewise was no longer free, and the middle class of the urban cities was no longer free.

The economy of the west was perhaps more fatally weakened than that of the east, and when we read in the writings of the early 5th century Christian priest Salvian of Marseille his account of why the Roman state was collapsing in the west - he was writing from France, Gaul - Salvian says that the Roman state is collapsing because it deserved collapse; because it had denied the first premise of good government which was justice to the people. And by justice he meant a just system of taxation. Salvian tells us, and I don't think he's exaggerating, that one of the reasons why the Roman state collapsed in the 5th century was that the Roman people, the mass of the population, had but one wish after being captured by the barbarians: that they would never again fall under the rule of the Roman bureaucracy. In other words, the Roman state was the enemy, the barbarians were the liberators. And this undoubtedly was due to the inflation of the 3rd century. While the state had solved the monetary problem for its own constituents, it had failed to solve that monetary problem for the masses and continued to use an oppressive system of taxation in order to fill the coffers of the ruling bureaucrats and military. Thank you.

This was transcribed by Arto Bendiken from an audio recording at Mises.org. The late Joe Peden, an instructor in history at Baruch College, was a close friend and colleague of Murray Rothbard's.

Friday, August 14, 2009

This So Called Recovery Is Going Nowhere

Bob Chapman
August 12, 2009

The Fed's Wall Street bubble, as we forecast in January, will need at least $2 trillion more in 2010, if the economy is to just stay on an even keel. The massive debt liquidation particularly in banking, Wall Street and in insurance demands many more trillions of dollars. $23.4 trillion is not going to be enough. Presently the Fed is in the process of monetizing $2 trillion in Treasuries, Agency paper, such as Fannie Mae and Freddie Mac and collateralized debt obligations held by lenders. It is a secret what the Fed is paying for this almost worthless paper. Is it any wonder the public has lost trust and confidence in these players and our government?

In order to escape from this global expansion of debt from government, corporations, banking, Wall Street and even state indebtedness, the bubble has to be maintained. The longer it lasts the worse will be the collapse when it bursts. Does anyone really believe that this can continue indefinitely?

People talk about robust inflationary environments in China, Asia and emerging markets In America the Fed's game of lowering interest rates and increasing money and credit and monetizing paper will end over the next two years, maybe three. What is already in the system guarantees inflation.

Many believe American re-flation boosts real estate values. Not a chance. The recovery is not going anywhere. Americans are starting to save and pay down debt, and that means eventually consumption, as a percentage of GDP will fall to the long-term mean of 64.5%.

The stock market and major market players are again highly leveraged even after 50% gains. They do not seem to understand that the sustained injection of trillions of dollars in money and credit is not going to work. It is not creating anything. Wild speculation is fine; it's the leverage that kills. As a broker I never had a margin account. The market is not discounting a rosy future, but the players do not understand that. Prices are simply disconnected from reality. Short covering and the reversal of derivative positions cannot go on indefinitely. Market performance is led by second and third tier companies that are in serious positions, some on the edge of bankruptcy. This is a very frustrating but temporary phenomenon. You are short failing companies, and good companies languish. This is one of the unpredictable parts of the market. All we can say is that current stock market action is a reflection of the current dysfunctional financial chaos that we are trapped in. Mis-pricing is legion. All we can say is it is not going to work. Your only alternative is to back in the safety of gold and silver related assets.

The same elements that were responsible for the collapse of the market in 2000 are at work today. Incidentally we recommended selling in the second week of April, two weeks after the top. Only 2% of analysts accompanied us. Then again, we called the top at 14,100. That element was interest rate carry trades. The players are taking advantage of the ability to borrow cheap dollars, yen and euros to buy other higher yielding currencies, which in turn strengthens their currencies, making their exports uncompetitive. South Africa and Turkey are such examples. Thus, currency appreciation caused by differing interest rates is reigniting third world countries. Free trade and globalization are having some unintended consequences. The dollar is headed down and at the G-20 meeting in London on September 4-5; the US will ask China and others to cut it more slack, because they cannot now reverse the reversal of fortune.

When we called the top on the dollar at 89.5 on the USDX a few months ago we never expected its decent to be as sharp as it has been. As we write it is 79, up from 77.60 in a normal bear market rally assisted by a temporary manipulation by the US government that will be of no lasting consequences. You might call this a normalization process, as a result of the unwinding of dollar gains in the de-leveraging process. The speculators got out and the banks are still upside down. The unwinding process is only half complete and that means the dollar will test 71.18 on the USDX by yearend and probably by the end of October. The banks have to reduce leverage and that makes it a lock. They are still leveraged 40 to 50 times deposits. You talk about stupid. Even Mr. Bernanke tells us tightening by raising interest rates is a long way off. In addition, world central banks are dollar sellers, even if only in a minor way. As long as the US Congress refuses to enact tariffs on goods and services the dollar will remain chronically and perpetually weak. As an aside, the further the dollar weakens the more expensive it will be for the US to purchase foreign goods, which will lead to higher inflation. That will force further dollar selling. Thus, you can more clearly see how this combination of events, accompanied by others, will continue to suppress the dollars value.

The result has been that second and third world currencies are strengthening against G-20 currencies, a result of unintended consequences in the elitists grab for profits and power. What they have done via free trade and globalization, offshoring and outsourcing is to allow China, Brazil, India and Russia to take their places at the head of the table. The developed economies have dug their own graves as they experience staggering unemployment and dollar depreciation simultaneously. It may not be evident now but it is every man for himself sooner than you think. Already officially manipulating their currencies are Sweden, New Zealand, Australia and the Swiss. This does not create a fair playing field and it pulls the underpinnings out from under the WTO, the World Trade Organization, which is the major element in the destruction of the industrial power of Japan, Canada, the US and Europe. All it really was created for was a redistribution of wealth from the first to the second and third worlds in the early 1960s. We wrote about this in the American Mercury in 1967, but, of course, no one was listening. A massive socialization process, a leveling if you may, so that the inhabitants of the world, and particularly the citizens of the more powerful nations, would accept world government. This did not just happen. It was done deliberately by design. As a result of this plan currently these second and third tier nations are growing 50% faster than the G-20, or more specifically Canada, the US and Europe.

We are going to see strong resistance to currency appreciation in the future and increases in subsidies in many nations - first, second and third tier currencies. Perhaps even currency wars. The damage done via free trade and globalization is vastly underestimated when related to the first world, which brings us back to the dollar and other carry trades that are a result of this. It is not only the dollar that will be destroyed, but also all major currencies. That accomplished, the elitists will then attempt to implant world government. That is what this is all about and few have the foresight to listen. Most do not even recognize the enemy at the Council on Foreign relations or at the Bilderberger meetings, because he or she wears a $3,000 suit and they look like nice people. When are people going to wake up and stop allowing themselves to be propagandized? Is the fog so thick that they cannot see what is being done to them? Do they not understand why they are unemployed; have to take mandatory swine flu shots; why socialized medicine will destroy our medical system; why Cap and Trade is a scam by Goldman Sachs to increase their taxes 20% or that our privately owned Federal Reserve is totally corrupt? This is part of a major plan to destroy the major nations, as we now know them. The carry trade, derivatives and massive injections of money created out of thin air are but nails in our coffins and if we do not stop these evil people it will mean destruction.

Last March net wealth declined from a peak of $22 trillion to $12 trillion and due to a bear market rally it has moved back to about $15 trillion. During the past two years consumer debt is about the same, but the market has gotten hit hard. Household equity is off about 90%, and had it not been for the personal stimulus package it would have fallen much more.

What is surprising to most but not to us was that the money in money market funds increased as the market fell. That means that leverage via borrowed money was what has driven the market rally, along with short covering and government manipulation. The Fed was the biggest factor in rigging this bear rally. We have probably seen all the public investor buying we are going to see. The US and European banks were probably given the funds by the Fed with strict instructions to push the equity market higher and use as much leverage as possible. This rally has not enticed the public to spend more and in fact, retail sales are off 6% and still falling, thus, no recovery except in the minds of Wall Street and Washington.

Further to the unemployment figures, the birth/death ratio should have been 113,000 job losses higher or about 350,000. This year the B/D model has added 879,000 jobs and that figure should be 992,000, during the worst employment environment since the �Great Depression", which is simply beyond belief. Then to have short-term unemployment fall from 9.5% to 9.4% is incredulous. You ask how did they do that? It was due to the fact 637,000 people were dropped from the labor force, not from an increase in employment, but they did end up on the U6, which officially is 16.8% unemployment, but if you extract the B/D ratio you end up with unemployment of 20.8%. What we have witnessed is more lies and propaganda, as the administration tries to use smoke and mirrors to regain public confidence to get them to increase spending. Barry and advisors, it isn't going to work. They are not that dumb.

Home prices continue to fall nationwide. Portland, OR is a good example. It reported a record decline in home values for the 17th straight month in May and month-on-month saw a 16.3% fall, the biggest decline in the index's 22-year history. Since the July 2007 peak prices have fallen 21% and that is the lowest level since May 2005.

We see the summer pause as natural and as unemployment rises, now by U6 at 20.8%, they'll be more foreclosures and lower prices. The depression is only pausing to catch its breath.

This past week the Dow gained 2.2%; S&P 2.3%; the Russell 2000 gained 2.8% and the Nasdaq 100 gained 1%. The homebuilding index rose 13.4%; retail 7.5%; banks 12.4%; broker/dealers 2.9%; cyclicals 5.7%; transports 4.7%; consumers 2.2%; utilities 0.2%; high tech 1.2%; semis fell 1.1%; internets gained 1.2% and biotechs 1.1%. Gold bullion was off $1.00 and the HUI Index rose 1.6%.

Two-year T-bills rose 20 bps to 1.20%; 10-year notes 37 bps to 3.86% and the 10-year German bund surged 21 bps to 3.51%.

Fed credit declined $32.1 billion and is up $122% yoy. Fed foreign holders of Treasuries and Agency debt rose $17 billion. Custody holdings for foreign central banks 19.6% ytd, and were up $414 billion yoy or 17.3%.

M2 narrow money supply jumped $24.6 billion to a record $8.366 trillion.

Total money market assets fell $27.5 billion to $3.606 trillion.

The USDX, the dollar index, rose 0.8% to 78.99.

The Fed never has and never will get money and credit policy right and that is why we are in part in the difficulties we are in today.

Recently Mr. Bernanke told congress he would not monetize debt and he does so every day. He says he has the tools to prevent the huge reserves he's pumped into the banks from generating inflation that would abort an economic recovery. There is no possibility he can do that without allowing deflation from escaping from its box. The answer to that by Ben is that, "economic conditions are not likely to warrant tighter monetary policy for an extended period." As we all know the Fed hasn't gotten money and credit, M3, right nor have they gotten interest rates right since 1913. The reason for that is that the Fed does what it does to enrich Wall Street. Once investors understand that the game is rigged the Fed will be eliminated and the revolving door between Wall Street and the beltway will close.

AAA says unleaded gas nationwide is selling at $2.64 a gallon.
The Saga of Pat Kiley Struggles Onward:

Rumor reaches us of a Panamanian casino and high-rise condo investments of some of those involved in the disappearance of funds. Not only is the FBI involved, but also so are the SEC and CFTC, which already have thousands of pages of evidence. All funds found will remain frozen until the case is completed.

This shapes up to be a prolonged engagement unless defendants default or the SEC doesn't freeze everything earlier than that and appoint a receiver. There are assets, so it is very important that you now join the lawsuit to recover what you can by contacting the two attorneys in the case. You have the article we sent before from the Minneapolis Star-Turbine. It would be a good idea if Beckman joined the present filing as well. Do not let this opportunity to rescue some of your funds slip through your fingers.

Information continues to leak out regarding the Pat Kiley saga.

Those who would like to join the lawsuit against these characters and to try to get your money back should contact John Harper at 952 885 5969 in Minneapolis, Mn. If your funds are tied up and you want their return it is important you contact Mr. Harper.

The attorneys in the action have been in touch with the SEC and the CFTC, which are investigating the matter. At this stage formal incompetent and politically driven they just might not want to get involved. This is a large and convoluted action where some of the assets are in foreign countries. There are casinos and condos in Panama and an island in Canada.

The main players, Pat Kiley and Trevor Cook, have denied the allegations. Before the lawsuits were filed some of the players, who obviously saw what was coming, started a parallel operation called, the Oxford Group and conducted business as if nothing had happened. Talk about gall and arrogance.

The website for Oxford Global Partners touts the currency program as safe and reliable. It directs prospects to www.thearbitrageroom.com for information and methodology, which promises annual returns targeted at 10.5% and claims 72 months of positive grains. As you can see nothing has changed and the SEC has yet to act.

Oxford Global appears to have an arrangement with a Canadian fund called, Tanren Global Strategy, whose CEO has denied comment concerning the connection.

A due diligence memo about the strategy says clients open a brokerage account through Crown Forex SA in Switzerland and sign a management agreement with Tanren. Tanren doesn't want to talk about it and Crown Forex is in bankruptcy.

In the original arrangement with Kiley and Cook funds were never supposed to be in Crown Forex.

This is it for now. We'll keep you updated.

Wednesday, August 12, 2009

An Amazing Article!: Did You Know That Every American Is An Economic Chattel Slave?

From the United States Congressional Record, March 17, 1993 Vol. 33, page H-1303



Speaker-Rep. James Traficant, Jr. (Ohio) addressing the House:

"Mr. Speaker, we are here now in chapter 11.. Members of Congress are official trustees presiding over the greatest reorganization of any Bankrupt entity in world history, the U.S. Government. We are setting forth hopefully, a blueprint for our future. There are some who say it is a coroner's report that will lead to our demise.

It is an established fact that the United States Federal Government has been dissolved by the Emergency Banking Act, March 9, 1933, 48 Stat. 1, Public Law 89-719; declared by President Roosevelt, being bankrupt and insolvent. H.J.R. 192, 73rd Congress m session June 5, 1933 - Joint Resolution To Suspend The Gold Standard and Abrogate The Gold Clause dissolved the Sovereign Authority of the United States and the official capacities of all United States Governmental Offices, Officers, and Departments and is further evidence that the United States Federal Government exists today in name only.

The receivers of the United States Bankruptcy are the International Bankers, via the United Nations, the World Bank and the International Monetary Fund. All United States Offices, Officials, and Departments are now operating within a de facto status in name only under Emergency War Powers. With the Constitutional Republican form of Government now dissolved, the receivers of the Bankruptcy have adopted a new form of government for the United States. This new form of government is known as a Democracy, being an established Socialist/Communist order under a new governor for America. This act was instituted and established by transferring and/or placing the Office of the Secretary of Treasury to that of the Governor of the International Monetary Fund. Public Law 94-564, page 8, Section H.R. 13955 reads in part: "The U.S. Secretary of Treasury receives no compensation for representing the United States?'

Gold and silver were such a powerful money during the founding of the united states of America, that the founding fathers declared that only gold or silver coins can be "money" in America. Since gold and silver coinage were heavy and inconvenient for a lot of transactions, they were stored in banks and a claim check was issued as a money substitute. People traded their coupons as money, or "currency." Currency is not money, but a money substitute. Redeemable currency must promise to pay a dollar equivalent in gold or silver money. Federal Reserve Notes (FRNs) make no such promises, and are not "money." A Federal Reserve Note is a debt obligation of the federal United States government, not "money?' The federal United States government and the U.S. Congress were not and have never been authorized by the Constitution for the united states of America to issue currency of any kind, but only lawful money, -gold and silver coin.

It is essential that we comprehend the distinction between real money and paper money substitute. One cannot get rich by accumulating money substitutes, one can only get deeper into debt. We the People no longer have any "money." Most Americans have not been paid any "money" for a very long time, perhaps not in their entire life. Now do you comprehend why you feel broke? Now, do you understand why you are "bankrupt," along with the rest of the country?

Federal Reserve Notes (FRNs) are unsigned checks written on a closed account. FRNs are an inflatable paper system designed to create debt through inflation (devaluation of currency). when ever there is an increase of the supply of a money substitute in the economy without a corresponding increase in the gold and silver backing, inflation occurs.

Inflation is an invisible form of taxation that irresponsible governments inflict on their citizens. The Federal Reserve Bank who controls the supply and movement of FRNs has everybody fooled. They have access to an unlimited supply of FRNs, paying only for the printing costs of what they need. FRNs are nothing more than promissory notes for U.S. Treasury securities (T-Bills) - a promise to pay the debt to the Federal Reserve Bank.

There is a fundamental difference between "paying" and "discharging" a debt. To pay a debt, you must pay with value or substance (i.e. gold, silver, barter or a commodity). With FRNs, you can only discharge a debt. You cannot pay a debt with a debt currency system. You cannot service a debt with a currency that has no backing in value or substance. No contract in Common law is valid unless it involves an exchange of "good &valuable consideration." Unpayable debt transfers power and control to the sovereign power structure that has no interest in money, law, equity or justice because they have so much wealth already.

Their lust is for power and control. Since the inception of central banking, they have controlled the fates of nations.

The Federal Reserve System is based on the Canon law and the principles of sovereignty protected in the Constitution and the Bill of Rights. In fact, the international bankers used a "Canon Law Trust" as their model, adding stock and naming it a "Joint Stock Trust." The U.S. Congress had passed a law making it illegal for any legal "person" to duplicate a "Joint Stock Trust" in 1873. The Federal Reserve Act was legislated post-facto (to 1870), although post-facto laws are strictly forbidden by the Constitution. [1:9:3]

The Federal Reserve System is a sovereign power structure separate and distinct from the federal United States government. The Federal Reserve is a maritime lender, and/or maritime insurance underwriter to the federal United States operating exclusively under Admiralty/Maritime law. The lender or underwriter bears the risks, and the Maritime law compelling specific performance in paying the interest, or premiums are the same.

Assets of the debtor can also be hypothecated (to pledge something as a security without taking possession of it) as security by the lender or underwriter. The Federal Reserve Act stipulated that the interest on the debt was to be paid in gold. There was no stipulation in the Federal Reserve Act for ever paying the principle.

Prior to 1913, most Americans owned clear, allodial title to property, free and clear of any liens or mortgages until the Federal Reserve Act (1913) "Hypothecated" all property within the federal United States to the Board of Governors of the Federal Reserve, -in which the Trustees (stockholders) held legal title. The U.S. citizen (tenant, franchisee) was registered as a "beneficiary" of the trust via his/her birth certificate. In 1933, the federal United States hypothecated all of the present and future properties, assets and labor of their "subjects," the 14th Amendment U.S. citizen, to the Federal Reserve System.

In return, the Federal Reserve System agreed to extend the federal United States corporation all the credit "money substitute" it needed. Like any other debtor, the federal United States government had to assign collateral and security to their creditors as a condition of the loan. Since the federal United States didn't have any assets, they assigned the private property of their "economic slaves", the U.S. citizens as collateral against the unpayable federal debt. They also pledged the unincorporated federal territories, national parks forests, birth certificates, and nonprofit organizations, as collateral against the federal debt. All has already been transferred as payment to the international bankers.

Unwittingly, America has returned to its pre-American Revolution, feudal roots whereby all land is held by a sovereign and the common people had no rights to hold allodial title to property. Once again, We the People are the tenants and sharecroppers renting our own property from a Sovereign in the guise of the Federal Reserve Bank. We the people have exchanged one master for another.

This has been going on for over eighty years without the "informed knowledge" of the American people, without a voice protesting loud enough. Now it's easy to grasp why America is fundamentally bankrupt.

Why don't more people own their properties outright?

Why are 90% of Americans mortgaged to the hilt and have little or no assets after all debts and liabilities have been paid? Why does it feel like you are working harder and harder and getting less and less?

We are reaping what has been sown, and the results of our harvest is a painful bankruptcy, and a foreclosure on American property, precious liberties, and a way of life. Few of our elected representatives in Washington, D.C. have dared to tell the truth. The federal United States is bankrupt. Our children will inherit this unpayable debt, and the tyranny to enforce paying it.

America has become completely bankrupt in world leadership, financial credit and its reputation for courage, vision and human rights. This is an undeclared economic war, bankruptcy, and economic slavery of the most corrupt order! Wake up America! Take back your Country."


Tuesday, August 11, 2009

VIDEO: Support Rand Paul For US Senate! - MONEY BOMB AUGUST 20th!

Dr. Rand Paul is running for US Senate in Kentucky. Please visit http://randpaul2010.com to learn more about Rand Paul. Also visit http://runrandrun.com and pledge to donate on August 20th!

VIDEO: Ronald Reagan Speaks Out Against Socialized Medicine

From the 1961 Operation Coffee Cup Campaign against Socialized Medicine as proposed by the Democrats, then a private citizen Ronald Reagan Speaks out against socialized medicine. There is no video because this was an LP sent out by the American Medical Association

VIDEO: Max Keiser - "Brown's Bottom" - (Documentary)

VIDEO: The Spirit of the Founders

1776 saw a revolution that changed the world. This great nation is now on the verge of extinction. The republic, so hard fought for, is being robbed by corporatists, tyrants, socialists, and special interests. Join with the Liberty Candidates to begin our next revolution!