Topic: Gold and Silver
Gold and the "Average Man" "What can I do to protect my family?" - Arthur Burns, Federal Reserve Chairman, 1978by Jake Towne, the Champion of the Constitution
(libertarian)
Sunday, May 17, 2009
On January 17th, 1978, Federal Reserve Chairman Arthur Burns stated from the meeting transcript (emphasis mine):
.
"You know, the American public, in contrast to some or many of our politicians--perhaps most of them--is very deeply concerned about inflation. People all over the country have been asking themselves the question:
"What can I do to protect my family? What can I do to protect my children, my family, and myself against the ravages of inflation? And gradually the thought has evolved and is spreading rapidly that, on the negative side, putting money in the bank or a savings and loan account is no protection.
"Buying bonds, Treasury bonds or corporate bonds, is no protection. Buying common stocks is no protection. It used to be a major protection but it no longer is.
"Then what is left? Well, gold or paintings. But the average man cannot invest in gold; he doesn’t know how. It’s not something he’s accustomed to. Likewise with paintings.
"What will he turn to? Well, there is farm real estate, a remarkable record there. But the average man doesn’t know how to buy farm real estate. He realizes that location can make an enormous difference. But there’s one thing the average man is capable of doing. If he doesn’t have a home, he can buy a home. If he already has a home, he can buy another.
"The average man is also capable of judging neighborhoods. All he has to do is get into an automobile or walk and he can locate areas where the prospect of maintaining good conditions in the neighborhood or some improvement are pretty good over the next ten years or twenty years. People can do that. And they’re doing it in increasing numbers. It’s surprising to me. I hear it from college professors; I hear it from young people; I hear it from my own children."
Well, first please understand that our brilliant Keynesian economists created currency that is 100% pure DEBT. That's right, the U.S. Petrodollar (and all other world currencies too!) is simply debt as I explained in gory detail here "The Money Matrix - What is a Dollar Bill Worth? (PART 2/15)". All holders of dollars are technically debtors to the Federal Reserve, who kindly extended to you constantly depreciating currency-credit created with a pen and a flick of wrist in the form of Federal Reserve Notes.
By using these FRN's - as is mandated by the force of decree (or by fiat) our nation's legal tender laws - you are in debt to the Federal Reserve, which is a quasi-private banking cartel created by the bankers, for the bankers, as I describe here "The Money Matrix - Who Owns the FED (PART 7/15)". Also, classifying the elite market of painting with gold is just plain ignorant. I do not know of a single central bank that holds "paintings" as an asset, but they ALL hold gold.
Furthermore, while Burns seems to sneer at the stupidity of the "Average Man," it does not seem that he realizes that the "Average Man" is actually quite a bit smarter than he is. For you see, people have long realized that if they leave money in the bank over the long haul, the rate of interest they earn is much less than the rate of inflation. Although savings increase in nominal dollar terms, they lose purchasing power.
Back when gold and silver were in use as lawful and honest money** one could receive interest – in gold grams or silver grams – that had real value. Since these precious metals are scarce, their purchasing power tended to grow over time as the economy became more efficient at outputting goods and services. This was literally the invention of retirement, prior to this invention you typically worked until you died or could work no longer. This greatly expanded the leisure time of a society and is also why people back in the 1800s referred to this as the "miracle" of compound interest. (photo)
For the "Average Man" there have long been two escape hatches from the Keynesian and Fabian Socialist doom-economics. These were 1) the stock market and 2) real estate. In recent times, this got so bad that people started to referring to "saving" money in their 401k equities and pension bonds, to "investing" in a home. People are now realizing that stocks and bonds are either speculation or investing, depending on your level of knowledge. Homes are "investments" of a sort – homes really are longer-term durable goods - but far too many American have really been speculating, not investing, as we now recognize.
However, despite reports of the economy's "green shoots" - pardon my French but replace the "oo" with another vowel to summarize my thoughts – these two escape hatches have been firmly sealed on our sinking global economic submarine piloted by the FED and the Bank of International Settlements (BIS) in Basel, Switzerland. People trying to retire have seen their "savings" disappear, but hopefully will now realize that real "savings" are held in the form of physical gold or in a bank account.... or will the banking system also give way? I made a case for this here in "Off a Cliff with No Airbags: The FED Banking System Quivers in Fright".
After Burns's speech, the price of gold never went lower. In January 1978, the monthly close was $175/oz. In September of 1980, the monthly close reached $670/oz. As GATA has painstakingly made clear from its' long list of evidence, governments and central bankers have colluded to suppress the price of gold to make their own currencies look better. Just as the London Gold Pool experienced momentary success and then perished in 1968, gold and its holders will win this war.
These days, the "Average Man" has a new defender who will never betray them to the immoral madness of the central bankers. This is my message.
** Article 1, Section 10, Clause 1 still states that gold and silver coin are lawful money and that forbids the right to emit bills of credit for use as money. Although Congress is given the right to borrow money (Art 1, Sec 8, Clause 2), money is defined ascoins consisting of gold and silver. (Art 1, Sec 8, Clause 5).
"Call me blind, but I didn't see it coming! Everybody was running! But I couldn't hear nothing!..
"Who's to blame for the lives that tragedies claim? No matter what you say, it don't take away the pain! That I feel inside, I'm tired of all the lies! Don't nobody know why? It's the blind leading the blind!
"I guess that's the way the story goes, will it ever make sense? Somebody's got to know! There's got to be more to life than this! There's got to be more to everything I thought exists!"
- P.O.D., "The Youth of the Nation" Physical gold and silver are the best insurance for the future.
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.
Tu ne cede malis sed contra audentior ito. Do not give in to evil but proceed ever more boldly against it.
"Intelligence is quickness in seeing things as they are." - George Santayana
The views expressed in this
article are those of Jake Towne, the Champion of the Constitution only and do not represent
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I love reading about real money. It always jazzes me up. We ARE returning to a gold standard, it just doesn't look like it. But the first steps in going to a gold standard are always discontent and distrust of the government by the people and then the people becoming educated about money and gold. We will see it in our lifetimes. Intersting note: If we actually backed the dollar by gold it would be worth $5400 an ounce right now based off of money supply.
jake, i'm intentionally writing this in an older forum so that I don't bother a current forum w/my question.
But a few mos. ago I remember reading an article which broke down the derivatives that the US companies had, and which, by proxy, the taxpayers will likely be on the hook for (unless they wake up and quickly).
What I remember most is the researcher showing all the different banks and breaking it down, and suggesting that conservatively, the US and its companies held some $210-310 trillion or so in various derivatives.
I'm wondering w/your stellar research abilities, and your keen memory, if you can remember to what i'm referring. It could have been you, but I was thinking it wasn't.
If you could let me know here, that would be great.
you're a beautiful man, jake towne :) i'm preparing to give a speech at my university here in indianapolis and want to make sure the research is tight.
i was thinking it was referencing a BIS document, though the 201 figure I remember. I believe that whoever wrote to article added that to the debt obligations as referenced by the comptroller of the US, in addition to some $40-50 trillion other money that may become a problem. he could substantially put the number for the US and its taxpayers at some 300+ trillion in definite risk.
also, what's the diff between the banks and the holding groups; esp since on p 23, it seems the holding groups are on the hook for $293 trillion. do you have any thougths on that?
also, what other numbers specifically jumped out at you?
Posted By: Jake Towne, the Champion of the Constitution
Date: 2009-07-16 22:15:20
Pardon my brevity, about to turn in
One figure that lept off the page was the debt ratio of Goldman Sachs at 1046% or so. Off the charts.
Congress removed the diff between banks and bank holding comps. in late 90s by revoking sections of Glass_Steagal. you can google it
Banks like Citi were then able to dive into CDOs, SIVs, and derivative with both feet. After the banker bailout/crash, many investment bankers changed to be bank holding companies - Merrill Lynch, Govt Sachs and I think even Morgan Stanley did this. This enabled them to go beg at the FED's window.....
jake...you and a I are on the same page re: glass-steagall, as well as how non-banks became holding companies. But the essence of what i'm trying to get at is why on p 23 does it show that the obligations for top 25 holding companies is some $293 trillion when on the page before, it was $201 trillion for bank companies. what is the extra $92 trillion, and why does it show up in the holding companies vs the bank companies?
Posted By: Jake Towne, the Champion of the Constitution
Date: 2009-07-17 06:01:05
Little confused on your question, its just because the "holding companies" hold an additional $92 Trillion or so. The "commericial banks and trust companies" are on the previous slide. While I am not 100% clear on the classification split, I believe I am correct. See how Morgan Stanley is a holding company, whereas GS is a CB+T? If you go back a few years GS did not appear on the CB+T list.
I believe the Holding company list is all-inclusive of the prior slide.
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Back when gold and silver were in use as lawful and honest money** one could receive interest – in gold grams or silver grams – that had real value. Since these precious metals are scarce, their purchasing power tended to grow over time as the economy became more efficient at outputting goods and services. This was literally the invention of retirement, prior to this invention you typically worked until you died or could work no longer. This greatly expanded the leisure time of a society and is also why people back in the 1800s referred to this as the "miracle" of compound interest. (