Archive for the Sound Money Category

Debt Slavery – Why It Destroyed Rome, Why It Will Destroy Us Unless It’s Stopped

Posted in Debt Collapse, Fiat Money, Fractional Reserve Banking, Globalization, Gold, Sound Money on December 7, 2011 by JT


Book V of Aristotle’s Politics describes the eternal transition of oligarchies making themselves into hereditary aristocracies – which end up being overthrown by tyrants or develop internal rivalries as some families decide to “take the multitude into their camp” and usher in democracy, within which an oligarchy emerges once again, followed by aristocracy, democracy, and so on throughout history.

Debt has been the main dynamic driving these shifts – always with new twists and turns. It polarizes wealth to create a creditor class, whose oligarchic rule is ended as new leaders (“tyrants” to Aristotle) win popular support by cancelling the debts and redistributing property or taking its usufruct for the state.

Since the Renaissance, however, bankers have shifted their political support to democracies. This did not reflect egalitarian or liberal political convictions as such, but rather a desire for better security for their loans. As James Steuart explained in 1767, royal borrowings remained private affairs rather than truly public debts. For a sovereign’s debts to become binding upon the entire nation, elected representatives had to enact the taxes to pay their interest charges.

By giving taxpayers this voice in government, the Dutch and British democracies provided creditors with much safer claims for payment than did kings and princes whose debts died with them. But the recent debt protests from Iceland to Greece and Spain suggest that creditors are shifting their support away from democracies. They are demanding fiscal austerity and even privatization sell-offs.

This is turning international finance into a new mode of warfare. Its objective is the same as military conquest in times past: to appropriate land and mineral resources, also communal infrastructure and extract tribute. In response, democracies are demanding referendums over whether to pay creditors by selling off the public domain and raising taxes to impose unemployment, falling wages and economic depression. The alternative is to write down debts or even annul them, and to re-assert regulatory control over the financial sector.

Near Eastern rulers proclaimed clean slates for debtors to preserve economic balance

Charging interest on advances of goods or money was not originally intended to polarize economies. First administered early in the third millennium BC as a contractual arrangement by Sumer’s temples and palaces with merchants and entrepreneurs who typically worked in the royal bureaucracy, interest at 20 per cent (doubling the principal in five years) was supposed to approximate a fair share of the returns from long-distance trade or leasing land and other public assets such as workshops, boats and ale houses.

As the practice was privatized by royal collectors of user fees and rents, “divine kingship” protected agrarian debtors. Hammurabi’s laws (c. 1750 BC) cancelled their debts in times of flood or drought. All the rulers of his Babylonian dynasty began their first full year on the throne by cancelling agrarian debts so as to clear out payment arrears by proclaiming a clean slate. Bondservants, land or crop rights and other pledges were returned to the debtors to “restore order” in an idealized “original” condition of balance. This practice survived in the Jubilee Year of Mosaic Law in Leviticus 25.

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via Debt Slavery – Why It Destroyed Rome, Why It Will Destroy Us Unless It’s Stopped » Counterpunch: Tells the Facts, Names the Names.

John Williams: Hyperinflation Warning, Preserve Value with Gold

Posted in Debt Collapse, Economy, Gold, Inflation, Monetary Policy, Sound Money on November 29, 2011 by JT

Among the specters lurking in’s Editor John Williams’ gloomy outlook for the U.S. are the demise of the dollar, hyperinflation and the ongoing lack of political will to take sound corrective measures. Still, as he tells The Gold Report in this exclusive interview, investors have options. Williams contends that turning to gold, silver and strong foreign currencies would protect wealth and position savvy investors to take advantage of extraordinary opportunities likely to flow out of the turmoil ahead.

The Gold Report: When we talked in May, you predicted that hyperinflation could be a reality as soon as 2014, something you addressed at length in your Hyperinflation Special Report. Have six months of euro debt crises, Middle East revolts and U.S. Treasuries’ downgrading altered your outlook?

John Williams: Not a bit. We still seem to be moving down that road to a relatively near-term break toward hyperinflation. The most important thing that’s happened since we last talked was the global response to the U.S. legislators’ negotiations over the debt-limit ceiling and the deficit reduction problems at that time. Clearly, no one controlling the White House or Congress was serious about addressing the nation’s long-term solvency issues. That sparked a panic selloff on the dollar against currencies such as the Swiss franc, and of course gold, which made the gold price rally sharply.

TGR: Did the politicos learn anything from those “negotiations,” as you just described them?

JW: Not at all. In fact, I’ll contend that everything that’s happened since then has been just a playing out of what resulted in a complete collapse in global confidence in the dollar. The ensuing rapid shift of market focus to crises in the euro area was really more of a foil to distract the global markets from the dollar. Following that horrendous performance by Congress and the White House, the global markets indicated a major loss of confidence in the dollar that had been coming. I think that’s now established and in place. The dollar is doomed to lose its reserve status eventually, and any day now, we may see things heat up again over the deficit negotiations.

TGR: What steps would we see on the way to the dollar losing its reserve status?

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via The Gold Report – John Williams: Hyperinflation Warning, Preserve Value with Gold.

Germany Votes To Allow Exit From Euro

Posted in Debt Collapse, Fiat Money, Sound Money on November 15, 2011 by JT

This is a project that was destined to fail from the start, as many Austrian economists predicted.  When the EU fails, along with it’s supranational fiat fraud the Euro(failing now at an accelerating pace), it will free the sovereign states of Europe from the authoritarian dominion of the unelected bureaucrats of the European Union.

I view Germany’s vote as a very positive development for the subjects ruled by the tyrannical EU, and a positive move toward sound money and liberty in Europe.  JT

Update: Chancellor Angela Merkel’s leading party in Germany voted for a measure that would offer euro states a way to voluntarily leave the euro zone currency union, according to a report from Bloomberg.

Markets are continuing to see volatility alongside changes in leadership in Europe and a rush to balance Italy and Greece’s budgets. So-called safe haven spots have eased in the last week, with gold falling to $1,778 an ounce and the yield on 10-year U.S. Treasury notes at 2.04%. The safe assets may yet see another record tested, however. Analysts at Goldman Sachs raised their 12-month gold forecast by 3.8% to $1,930 an ounce, one of the reasons being the chances for continued low interest rates.

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via Germany Votes To Allow Exit From Euro – Forbes.

Civil Unrest and Economic Chaos: The End Result Of Our Fiat Currency System Pt1 w/ John Rubino – YouTube

Posted in Debt Collapse, Economy, Sound Money on October 10, 2011 by JT

Civil Unrest and Economic Chaos: The End Result Of Our Fiat Currency System Pt1 w/ John Rubino – YouTube.

Sound Money: Fight for It! – George F. Smith – Mises Daily

Posted in Austrian Economics, Sound Money on October 3, 2011 by JT

As a thought experiment, suppose you knew you were going to die three months from now. Further, suppose some multibillionaire hears of your impending death and decides to make you an offer: He will produce a 30-second TV commercial of your final message to the world and air it during the 2012 Super Bowl and the Summer Olympics in London. It will also be aired at appropriate times during the presidential debates next year. In addition, he will run a highly creative ad campaign encouraging people to watch your parting message.

So, here’s the deal: You’ve got thirty seconds. You’ll have a big audience. What would you say?

I knew immediately what my message would be, though not exactly how I would say it. I thought about what my message implied about my life and the world, and came away satisfied with my decision.

Then I considered what others might say. I could easily imagine any number of people issuing a message of love. Stop hating and love. Make love, not war. They might even recite the popular Biblical passage, 1 Corinthians 13: “If I speak in the tongues of men or of angels, but do not have love, I am only a resounding gong or a clanging cymbal.”

I recalled Mel Gibson’s final message as Sir William Wallace in the movie Braveheart. For leading a revolt against the treacherous King Edward I of England, Wallace has been brought to the Tower of London for public torture and execution. Eager to see a traitor get his just punishment, the crowd watches as he’s half-hanged, racked, and disemboweled. Before the final deathblow he’s given one last chance to confess his treason. By this time the crowd is calling for mercy. Already near death, Wallace summons the last of his strength and shouts “Freedom!” before the ax comes down on his neck.

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via Sound Money: Fight for It! – George F. Smith – Mises Daily.

Debt Collapse – $20,000 Gold – Mike Maloney On Gold, Silver & Economics – YouTube

Posted in Debt Collapse, Dollar, Gold, Inflation, Silver, Sound Money on September 16, 2011 by JT

Debt Collapse – $20,000 Gold – Mike Maloney On Gold, Silver & Economics – YouTube.

Restoring Sound Money

Posted in Sound Money on September 14, 2011 by JT

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