[cymnPrayerm]

Figured I'd deviate a bit, and post something about gold. @ Makow's site, check link for developing reader comments:


"The Destiny of Mankind Hinges upon Gold"

September 30, 2011
Once fiat money is in place, all becomes illusion and gambling and people give up trying to make sense of life. Pretty soon they take illusions to be realities.


By Hugo Salinas Price

Hugo Salinas Price, 75, is a successful, retired businessman who lives in Mexico. He has been a follower of the Austrian School of Economics since his youth. He has written three books in Spanish on how and why silver should be instituted as money in Mexico, in parallel with paper money, and numerous related articles in English and Spanish, posted at his website. His organization, the Mexican Civic Association Pro Silver, is actively lobbying the Mexican Congress to approve legislation, which will institute the pure silver "Libertad" ounce as money.



I must have read fifty accounts, in the FT and others of that ilk, about what went wrong with the Euro. I have yet to read one that comes out with the plain, unvarnished truth. The whole bloody Establishment of bankers, politicians, economists and journalist whores sings the same song: "The euro came to grief because there was no fiscal union". Therefore, the solution to be inferred is that fiscal union would remedy the case of the European Union's imminent collapse.

Let's face it: the euro is a fiat currency and fiat always ends up in disaster.

Our civilization is in evident decline. If it weren't, we would find several eminent economists of the stature of Jacques Rueff in the halls of power; he was the French economist who wisely counseled General Charles de Gaulle to remove France's gold from the cellars of the NY Fed and transfer it to France.

Jacques Rueff was a man capable of understanding the fundamentals of how the world works. His vision was clear, and his intellectual scope was capable of taking in the details of local commerce as well its international workings. Men and women of his capacity are still around today, but they are not welcome in the higher reaches of politics.

Rueff wrote a little book in 1963, "L'Age de L'Inflation" ("The Age of Inflation") made up of some articles he had written. He wrote an "Introduction" to his book, and the very first words are these:

"LE SORT DE L'HOMME SE JOUE SUR LA MONNAIE"

A loose translation:

"THE DESTINY OF MANKIND HINGES UPON GOLD"

Europe is a great mess today because those in power made the wrong choice when deciding what currency the European Union should use. They chose a fiat currency instead of the Gold Standard and currency redeemable in gold at sight. That is the Original Sin of the euro.

Rueff was also active when the European Union was being forged. His book's fifth essay ends with these prophetic words:

"L' EUROPE SE FERA SUR LA MONNAIE, OU NE SE FERA PAS"

Translated loosely:

"EUROPE WILL BE BUILT UPON GOLD, OR IT WILL NOT BE BUILT"

Indeed, United Europe is falling apart. By the time you read this, it may already have collapsed. But it is falling apart not because of a lack of "Fiscal Union". It is collapsing because of the absence of the fundamental means for free international collaboration, based on the realities of each nation of Europe: there is no gold standard at work.

Somewhere in his books, Ludwig von Mises states that the end of the Austrian Empire came when the gold coin stopped circulating. It was this stable and trustworthy money that had held together an Empire made up of several nations with very different cultures. When the gold coin disappeared, the unifying factor was gone as well.

FIAT CURRENCY = WELFARE STATE PONZI SCHEME

Gold is the money for societies made up of men and women who wish to live in the real world.

This is part of the trouble in our declining civilization: men and women in these times wish to live in illusions, and the politicians, the bankers and their economist lapdogs have been providing those illusions for many decades now.

Those illusions were enabled by the "Welfare State": Comfort and security from cradle to grave, with no requirement of hard work to merit them. On the other hand, it would also be reasonable to say that men and women today live in illusions, because they were forced to do so by the fiat money they had to use. Once fiat money is in place, all becomes illusion and gambling and people give up trying to make sense of life. Pretty soon they take illusions to be realities.

Wolfgang Münchau in the FT of September 26 writes in the editorial page: "I have never seen Europe's politicians as scared as I saw them in Washington last week".

Europe's politicians have good reason to be scared stiff; if the euro cracks up and the European Monetary Union collapses, then the viability of the Welfare State is in question. Without the perpetual deficits that the Welfare State entails, how will it be possible to maintain the populations of Europe in their illusion of perpetual untrammeled bliss?

If the peoples of Europe are to wake up one morning to find themselves once again in the real world, where survival means hard work and personal privations, the political upheaval will be gigantic. This is why the politicians are scared.

If the continued existence of the Welfare State is in question, then so is the Democratic State, because Democracy - or what passes for it - can only be simulated where the voting population is constantly appeased with ever greater hand-outs from the Welfare State, the Siamese twin of Democracy.

If the euro cracks up and the European Monetary Union goes the way of all fiat we can expect a political convulsion of the first order in Europe as the ingrained illusions vanish. Perhaps that would not be a bad thing. Bill Bonner has written, with his usual wry humor, "Give Collapse a Chance".

CONCLUSION

The world is not coming to an end just because illusions have vanished. The world will adjust, individuals will adjust, the behavior of multitudes will adjust. Those intellectual and moral midgets, who think that the world ends if their particular plans for the world are scrapped, will go to the dustbin of history - at least for a while. That would be a healthy relief.

Central Banks were invented with the express purpose of eliminating volatility in the business of banking. That was a mistake, because today, instead of relatively small bankruptcies of imprudent banks we have the menace of wholesale collapse of banking systems. Unfortunately, no one on the global political scene seems to have grasped this insight.

So we continue to watch the evolution of this European crisis - by implication also a world crisis - with great interest. If a convulsion besets Europe, authoritarian régimes are not out of the question. Authoritarian régimes, despite the bad name given to them by the so-called partisans of "Democracy", are not necessarily bad. After all, the family is an authoritarian organization, and it functions well - when it is allowed to function. Every private business concern is an authoritarian organization. An authoritarian régime oriented to order, property rights, the rule of law and sound money is actually more stable and viable than an authoritarian régime that wishes to install a socialist society. Incidentally, the Founding Fathers of the US did seriously consider establishing a Monarchy...

The present crisis will offer possibilities that can be either good or bad. Let us remember that the Chinese symbol for "crisis" means "Danger/Opportunity"

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Makow comment: I'd like Price's response to these criticisms: 1. There isn't enough precious metals to make them the medium of exchange. Doing so would result in a huge deflation and depression. 2. Governments are broke. How are they going to buy the metal for currency? The only problem with fiat currency as a medium of exchange, is that it is private, not public.




More by Price : Why Silver Should be Currency

Mexican Central Bank Rejects Price Plan
http://www.vnnforum.com/showthread.php?t=14320

Check LINK for reader comments, now there's only this one:

Tony said (October 1, 2011):

Henry, don't forget the other problem of ANY KIND OF MONEY. If it is loaned into circulation at usury it is a dysfunctional medium of exchange but an effective conveyor belt of all wealth into the hands of whomever owns the money. Makes no difference what it is composed of. That's exactly what Rothschild's gold did to the American colonies bringing on the war for independence from Rothschild's already impoverished England.

Not to mention that precious metal money cannot be removed from simply being inefficient barter. As soon as the commodity value passes the fiat value it is melted and sold as the commodity. It sucks as money. The writer of the article probably owns silver mines. His intro as a "follower of the Austrian (mislabeled) School of Economics" says it all. He is deluded or stupid or a crook. Maybe a combination of the three.

[vesiasmepay]

Just an opinion. Mankind still only uses gold or silver. Fiat is a negotiable instrument intended for human (hue-man ... color of man) and corporations and corporations are ALL under the executive branch of government.

The type of money you use imports the lawform you abide by. You handle fiat at your own risk if you consider yourself part of mankind. If you are a corporation or a human then you may handle fiat but its use imparts no ownership of anything.

Adask related a story a week ago where a judge instructed his bailiff to empty the pockets of the fellow promoting some facet of law in front of him. The bailiff did as instructed and some paper dollars were found. With no other explanation the fellow was charged with contempt and thrown into jail. The presumption here is that the fellow was using arguments that would put his status as "man" but the use of fiat proclaimed him "human".

Use of fiat by other countries imports the laws of the United States to that country. The U.S. operates as an independent government WITHIN many countries of the world. Extradition of people they are interested in is accomplished by KIDNAPPING. There is no physical boundary where the laws of the U.S. start and stop. This is why I laugh at people talking about bugging out to a foreign country. There are few places in the world where you cannot be brought to justice by the feds. Notice I said "few" rather than "none". One of the most unique places you can go to escape the long arm statutes of the feds is your birth state. This avenue is not available to anyone who uses fiat money or uses a postal zip code that places them directly in the federal "trust".