MacDonald Silver Bomb

The End Of Paper Wealth Is Upon Us
1. Auflage 2012
ISBN: 978-1-62488-322-4
Verlag: BookBaby
Format: EPUB
Kopierschutz: Adobe DRM (»Systemvoraussetzungen)

E-Book, Englisch, 186 Seiten

The Silver Bomb is not a book about some predictive financial philosophy, but rather a frank, no-excuses glimpse at the current state of things, and an honest, candid, look at logical outcomes. The prestidigitations of central banking, which have until recently been shielded from scrutiny by a cloak of pro-banking cultural bias, are laid bare within these pages. Intimidating and complex financial and historical connections, no matter how deep down the rabbit hole they first may seem to be, are plainly exposed by the application of good strong light and close inspection. Formerly unquestioned fiat currency (money backed by nothing) and fractional reserve banking policies and their inevitable and historical results are brought out in the open and revealed.

Autoren/Hrsg.

MacDonald, Michael

Leseproben

Introduction August 15, 1971: The Day the Dollar Died 40 Years of Zombie Paper They called it the Nixon Shock. It was the day that then President Richard Millhouse Nixon, without the consent of the Nations whose currencies had been governed since 1944 by the agreements of the Bretton Woods conference, removed the US Dollar from the Gold Standard. It will prove to be the beginning of the end for the United States Dollar and has ultimately had a large part to play in what this story is actually about, the transfer of the value of the US Dollar, and all currencies whose value is tied to the US Dollar to the hands of an ever tighter circle of beneficiaries. The closure of the gold window was traumatic and disagreeable to the foreign holders of gold certificates that it undercut, but it was welcomed in the U.S. with public fanfare at the time. The media had made much political hay of the reports of the profits being realized by foreign “price gouger” arbitrage traders who were capitalizing on the fact that the U.S. was experiencing its first trade deficit in the 20th century. Foreign holders of U.S. Treasury bonds sensed the value-choking effect that inflation in the U.S. economy, which was standing at 4.7% in 1969 when Nixon took the presidential oath of the office, was having on the US Dollar. The cost of the Marshall Plan for the reconstruction of twice-war-torn Europe, the new mandates of The Great Society initiatives enacted during the Lyndon Baines Johnson administration, and the cost of the escalation of the war in Vietnam had compounded to expand the National Debt. These budget deficits, combined with the climate of social upheaval of the time, which was largely anti-war sentiment, had continued to drive up inflation figures. Nixon had been elected as a voice of reason by a war, and war-protest, weary America. The Vietnam War had been the all-encompassing topic of national interest. The press had encouraged the notion that Nixon had some sort of a secret plan for leading the US to an “Honorable Victory” in Vietnam. In November of 1968, voters endorsed the campaign button slogan “Nixon’s the One”, in a belief that Nixon would keep his word and end the war. The press, particularly certain print media seemed to derive great pleasure from knocking Nixon off the pedestal they had put him on. In his first year in office, he was bombarded with criticism for following the policies of his predecessor Johnson, and escalating, instead of ending the war. To the demise of his credibility, Nixon announced that the South-East Asian conflict was metastasizing across the border into Laos and Cambodia. This combined with other factors to create a slowly rising tidal wave of economic pressures. Interest rates had not been this high since the era of Reconstruction following the end of the Civil War. By the end of Nixon’s first year in office, inflation had risen to 5.84% and there was no top in sight. High interest rates were repeatedly fought to a stalemate by soaring inflation. Foreign arbitrage of the Dollar continued and by 1970, the reserves of gold in the US treasury had plummeted to less than 22% of the dollars they represented. The Nixon shock was only the codification of what had been a long term goal of central banking. The effort to remove the gold standard had begun with the 1933 gold confiscation and subsequent devaluation of the Dollar from its historic value of $20.60 per ounce of gold to $35.00 per ounce. It is only because of gold’s value as money and the fact that in 1933 other nations would not have accepted, what they have today, which is worthless paper backed by nothing, that the gold redemption window was open at all. Since the 1933 confiscation act, it had been illegal for U.S. citizens to hold gold, but not so for foreign investors. Federal Reserve notes that were backed by gold, as well as mature Treasury bonds, could be redeemed in gold. The increasing trend among international investors who held assets in US Dollars had been to steadily redeem them from the Treasury, which accelerated a precipitous decline in U.S. gold reserves which, at least fractionally, still backed the USD. Nixon faced relentless attacks in the press and by the Democrat-lead Houses of Congress. In an attempt to out-posture the President as “fighters of inflation,” the Democrat majority in congress conferred emergency powers to the Executive Branch, giving the President authority to fix wages and control prices. Nixon, a proponent of limited government favored what was called “New Federalism” (a belief in limited central government), and attempted to help the economy by devolving Federal power and returning block grant funds to the States. It appeared to members of Congress that since Nixon was against more central power, he would not use the new executive powers, and it could be an on-going source of accusation that despite being given ample opportunity, the White House was doing nothing to help the worsening economy. By 1971, continued deficit spending had increased the money supply, and the resultant inflated or “bad” money drove out the “good” money as 22 billion US Dollars (that’s $22,000,000,000.00) in gold reserves left the country in the first half of 1971. Nixon then did what the Democrats in Congress least expected, and picked up the gauntlet as challenged. On August 15, 1971, Nixon, exercising the powers that had been dangled in front of him, declared a 90 day wage and price freeze, a 10% surcharge on all imports and the closure of the Gold Window. Ending the convertibility of the US Dollar for gold, as in taking the Dollar off of the gold standard, was essentially a reneging by the US on its obligations under the established order, and was effectively the end of the 27 year old Bretton Woods System. Handing Over The Reserve Currency Baton Named for the location of the Mount Washington Hotel in which it was held, The Bretton Woods conference was convened July 1, 1944 to find a common ground between the major economies of the world. World War II was still raging as 730 delegates came together from the 44 allied nations. It was in anticipation of an allied victory that the delegates to the conference hoped to establish a global financial order which would regulate all aspects of international monetary policy. The actual name of the meeting which lasted for 22 days in July of 1944 was the United Nations Monetary and Financial Conference, but is commonly known as the Bretton Woods conference, simply because it was held in Bretton Woods, New Hampshire. The ensuing Bretton–Woods System was developed, which remained the status quo until it essentially unraveled in the 1970’s with the Nixon Shock. The structure of international finance and exchange rate management was set forth in agreements made at the conference, including provisions for creation of the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (IBRD), and the Global Agreement on Tariffs and Trade (GATT). The conference has been characterized as a struggle for control of the world’s reserve currency between Great Britain and The United States. The British delegation was headed by Lord John Maynard Keynes who proposed the International Clearing Union (ICU) which would have essentially been a central bank for the entire world. Keynes proposed that the bank issue its own currency in the form of the Bancor to which the value of all national currencies would be pegged. Keynes’ vision of a central bank included it having power to control the disproportionate economic development of any individual nation. Keynes believed that forced measures of economic redistribution on an international scale would be the end of economic inequity, which he viewed as the source of all war and conflict. Keynes was also strongly motivated to direct the conference proceedings so as to prop up Britain’s historic place of prominence in world economics. England, as being the national home of the Pound Sterling, then the reserve currency of the world, had enjoyed a long run at the top of international finance. Following Wellington’s defeat of Napoleon at Waterloo, the British Empire fully dominated the military and economic landscape and the British Pound became the world’s reserve currency. The Bank of England was the undisputed central bank of the world. Then came the combined forces of crushing debt from two wars and British pursuit of interests in the Middle East, particularly oil interests, following the institution of the British Commonwealth of Nations under the 1926 Balfour Declaration after the end of WWI. England had slipped from being a creditor nation to being deeply in international debt, primarily to the U.S. The United States had become the largest creditor nation in the world at that time and as such, carried a lot of weight at the conference. Refusing to be held to any limits on the growth of U.S. interests, regardless how disproportionate, the U.S. delegation, led by Henry Morgenthau and Harry Dexter White vetoed the British proposals for the Bancor and the ICU. Keynes was also the strongest opponent to the dissolution of the Bank of International Settlements (BIS) which had been formed after WWI to facilitate payments of reparations from Germany to its victors. The BIS was shown during the conference in evidence from the ‘delegation from Norway to be guilty of war crimes, specifically, that the bank had helped Nazi Germany launder assets stolen from occupied lands. The BIS had several Hitler appointees on its board...