Yet Another Champion of the Constitution
columnist: Jake Towne, the Champion of the Constitution

Topic: Media
The Sun Sets in New York

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The Sun, an alternative conservative/right-wing New York newspaper, shut down yesterday. However, the real Sun may be setting on much more than a newspaper. Some headlines from the Great Depression for your consideration.

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by Jake Towne, the Champion of the Constitution
(libertarian)
Wednesday, October 1, 2008

I'll miss reading the New York Sun, it provided a different viewpoint, although I have to note it has only been the last month that I starting using it as a source for my articles. Perhaps the reporters there lost their fear after the failure became imminent?

The Sun ran out of money and was unable to secure new investors to keep it running. Circulation was only 14,000.  The Associated Press reports that actually the AP itself was a spin-off from the owner of the original Sun back in the mid-19^th century.

The AP reports that Eliot Spitzer made one of his first public comments since he left office in disgrace and public humiliation due to prostitution scandal. Spitzer said the Sun was "one of the finest papers in terms of editing, writing, and analysis that one can find anywhere."

New York City Mayor Michael Bloomberg added his condolences to the deceased newspaper. "Whether you agreed or disagreed with the Sun's writers, they were smart, thoughtful, provocative, and sometimes even courageous."

The Sun was founded in 2001 as a reincarnation of the Sun from 1883, which wrote the American classic column "Yes, Virginia, there is a Santa Claus" in 1897. In a remarkable fit of irony I recently used this famous mnemonic pattern to write this article of my own "".

Which brings me to my next point. Following a famous quote from the billionaire investor Jim Rogers are some news clippings from the Great Depression era.  You can decide if Jim is right, or just wait to find out. (Photo source)

"If you were smart in 1807 you moved to London, if you were smart in 1907 you moved to New York City, and if you are smart in 2007 you move to Asia." - Jim Rogers, 2007

Brokers Believe Worst Is Over and Recommend Buying of Real Bargains
"....Wall Street in looking over the wreckage of the week, has come generally to the opinion that high grade investment issues can be bought now, without fear of a drastic decline. There is some difference of opinion as to whether not the correction must go further, but everyone realizes that the worst is over, and that there are bargains for those who are willing to buy conservatively and live through the immediate irregularity."

-- New York Herald Tribune, October 27, 1929

". . . Traders who would formerly have taken the precaution of reducing their commitments just in case a reaction should set in, now feel confident that they can ride out any storm which may develop. But more particularly, the repeated demonstrations which the market has given of its ability to "come back" with renewed strength after a reaction has engendered a spirit of indifference to all the old time warnings. As to whether this attitude may not sometime itself become a danger signal, Wall Street is not agreed."

-- New York Times, September 1, 1929

"Last Monday, all businessmen were shocked to read in their morning papers that the British pound sterling was no longer based on gold. The Tokyo Stock Exchange had announced that it would not open. Tokyo was followed by Bombay, Calcutta, Johannesburg, London, Berlin, Amsterdam, Copenhagen, Vienna, Oslo, Stockholm, Brussels and Athens. The Paris Bourse opened, but limited all trades to 5% of all holdings and no dealing in foreign exchange. Montreal's Exchange opened similarly restricted. The New York Stock Exchange remained open, but as in dark November 1929, short selling was forbidden. [My comment - The US also recently banned short selling for 800 troubled financial, automotive, etc companies.] In the artificial market thus created, stocks gyrated unsteadily, closed higher; bonds closed at lows for the year."

"In few nations nowadays is there a free and open market. The Berlin Bourse closed from July 13 to September 3, opened with shortselling banned, then closed again. In Great Britain all trades were put on a cash basis which practically eliminated shortselling as did restrictions imposed on the French and Athenian Bourses. On the Paris Bourse a seller must deposit 40% margin, also 25% on the amount of the stock sold which makes bear activities a rich man's privilege. One of the most dramatic events of the present crisis occurred in Amsterdam on September 21 when after a terrific slump in prices, all transactions were cancelled, the Exchange closed in status quo. Montreal and Toronto met the British crisis by banning shortsales and establishing 'minimum prices' for securities, but both last week were open with no restrictions. The Tokyo Exchange has been closing and opening repeatedly during recent weeks. Tokyo stocks broke badly when the shares owned by interests who operate the Exchange collapsed."

-- Time magazine, September 28, 1931 edition

"...Great Britain is a highly populated industrial country, carrying a terrific burden of internal debt, dependent predominantly for existence on foreign trade, enjoying the benefits of being the world's chief banking centre, possessed of a large net income from long-term investments abroad, but heavily indebted (in her role as world's banker) to other centres on short- term account."

-- Economist, September 26, 1931, p. 548

"The facts must be faced that the disappearance of the pound from the ranks of the world's stable currencies threatens to undermine the exchange stability of nearly every nation on earth; that even though London's prestige as an international centre may gradually recover from the blow which the sterling bill has received, banking liquidity throughout the world has been seriously impaired, much more so in other countries than this; that international trade must be temporarily paralysed so long as the future value of many currencies is open to grave uncertainty; and that, though the memory of the disastrous effects of post-war inflations should be a useful deterrent, there is an obvious risk lest we may have started an international competititon in devaluation of currencies motived [sic] by the hope of stimulating exports and leading to a tragic reversion to the chaotic conditions which existed five or six years ago."

-- "The End of an Epoch," London Economist, September 26, 1931, p. 547

The British... are suffering deeply from the shocks of the financial collapse on the Continent. Their abandonment of the gold standard & of payment of their external obligations has struck a blow at the foundations of the world economy. The procession of nations which followed Britain off the gold standard has left the US & France as the only major countries still holding to it without modification. The instability of currencies, the now almost world-wide restrictions on currency exchange, the rationing of imports to protect these currencies & the default of bad debts, have cut ever deeper into world trade."

-- Oct 6, 1931 - President Hoover in meeting at the White House with 32 members of Congress from both parties (link)

The Great Depression was not invented by the stock market. It was created by the forces of unsound international finance and sumptuary laws imposed upon the subjects of various nations both in the United States and in Europe. There is no doubt that the fate of the stock market in the future will be largely dictated by the swings in confidence within the international monetary system. ...

In conclusion, the fundamental explanations of the ups and downs of the stock market and the world economy cannot be simply drawn between an inference with interest rate actions or with corporate earnings. The impact of public confidence is by far the most profound influence in both the investment world as well as the world economy. Capital flowing back and forth between nations affords the closest relationship with the movement within the stock market and this perhaps can be most readily seen through the movement of foreign exchange markets as well. The issues are never purely domestic. No matter what market one may look at in whatever nation you may reside, the international influences will always be a subtle guiding force behind the more illuminated domestic issues of the day.

-- from "The Greatest Bull Market In History", Martin Armstrong

Defenders of Bernanke have mostly disappeared into the woodworks, but they claimed previously his key attribute is that he has extensively studied how to prevent a Great Depression. He claims to have studied and rejected gold and the Gold Standard. Well, I too have studied.  I've read Bernanke's papers, I've read a bunch of others.  We'll see who will be proven correct, because guess what?  Bernanke is being tested big-time. If I am right, you will start to hear the names of Rothbard and Mises again.   My opinion is its not too late - maybe - but bailouts and a continued panicked, uneducated course of action by the Treasury, Federal Reserve, and Congress could seal our fate.  Encourage Vern McKinley, especially if you have any ideas, he is working on a plan, and he is a lot smarter than me.  [FYI I am pro-gold and silver, but I do not want to insinuate I am pro-Gold Standard, subject for a later article, I don't want to insinuate this.]

As for me, I have no plans to shut down operations as long as Walt continues to not charge me to write here :) Actually, I am just gearing up. In a way, I have been preparing and training for this new world that is coming upon us for the past year or so. I openly invite you to take a look and comment on any of my other articles.

In Liberty!

Jake, the Champion of the Constitution

www.CampaignForLiberty.com

[Reach the Author Here!]

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

As always, unlike the NFL, the author grants full permission to allow any accounts of, rebroadcasts, retransmissions, repostings in part or full of this article to your blog or anywhere else in order to promote the Restoration of our Republic.

Veritas numquam perit. Veritas odit moras. Veritas vincit. Truth never perishes. Truth hates delay. Truth conquers.

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©2008 Jake Towne, the Champion of the Constitution, all rights reserved. You must have written permission from the author in order to republish this work.
Published: Wednesday, October 1, 2008
Last modified: Friday, October 3, 2008

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