Discount Gold and Silver Trading
A Weekly Newsletter for Sunday, January 22nd, A.D. 2012
  Between Friday, January 13th, and Friday, January 20th, the bid prices for:

Gold rose 1.6 % from $1,639.70 to $1,667.00
Silver rose 8.1 % from $29.77 to $32.20
Platinum rose 2.9 % from $1,487 to $1,531
Palladium rose 6.3 % from $637 to $677
DJIA rose 2.4 % from 12,422.06 to 12,720.48
NASDAQ rose 2.8 % from 2,710.67 to 2,786.70
NYSE rose 2.6 % from 7,632.03 to 7,829.34
US Dollar Index fell 1.5 % from 81.56 to 80.33
Crude Oil fell 0.9 % from $98.84 to $97.93


Change Your Money, Change Your World

Edited by Alfred Adask

Despite mainstream media’s persistent attempts to ignore or denigrate Ron Paul, his popularity tends to grow.  This growth indicates: 1) mainstream media is increasingly unable to shape public opinion; and 2) Paul isn’t simply a candidate so much as evidence of an “idea whose time has come”.

Most of Paul’s objectives are reasonable and beneficial to the vast majority of Americans.  For example, Paul recently said, “I want to cut military money. I don’t want to cut defense money.  I want to bring the troops home. I’d probably have more bases here at home. We were closing them down in the 1990s and building them overseas. That’s how we got into trouble. So we would save a lot more money and have a stronger national defense, and that’s what we should do.”

Who can argue against such objectives?   Less war?  Less meddling in the affairs of foreign nations?   Even people who don’t like Paul concede that most of his ideas are not only reasonable, but desirable, and perhaps even necessary to our national survival.

• Nevertheless, Paul has his detractors.

Pat Buchanan notes that, “The mainstream media is deeply hostile to Ron Paul's ideas.  The mainstream media is caught up with the idea of globalism, caught up with the idea that America should be the dominant force in virtually every region of the world.” 

More, while rank and file soldiers who actually fight and die in wars may broadly support Paul’s candidacy, the military-industrial complex does not.   If Paul “cuts military money,” he will necessarily cut defense contractors’ profits.  Therefore, defense contractors and their lobbyists oppose Paul’s candidacy. 

But the biggest opposition to Paul’s candidacy is from central bankers, Keynesian economists and advocates of big U.S. and world government.  Why?  Because Paul wants America to abandon the fiat currency that we’ve had for the past 41 years, and return to the gold and silver-based money that’s still expressly guaranteed at Article 1 Section 10 Clause 1 of The Constitution of the United States.  (I.e., “No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts.”)

Big government, “global free trade” and the New World Order are all absolutely dependent on fiat currency and government’s ability to “spin” fiat currency “out of thin air”.    It’s by means of a seemingly inexhaustible supply of fiat currency, that central banks and big governments around the world can effectively “buy” more power and grow larger.  With fiat currency, big governments can seemingly supply “something for nothing”.   Fiat currencies allow governments to create the illusion of providing their people with a “free lunch”.  So long as that illusion persists, the good times roll, and the people of world will faithfully follow their big (and growing) governments. 

But if that illusion fails, the people will soon abandon and perhaps attack those governments that no longer provide “free lunches”.  (Witness the recent riots in Greece.) 

•  Most people view Paul’s ideas and objectives as interesting, potentially helpful or perhaps annoying.  But very few realize that insofar as Paul wants to: 1) audit and close the Federal Reserve System; 2) abandon the fiat dollar; and 3) return to a gold- and silver-based monetary system—he is threatening the foundation of “military-industrial complex,” global free trade, big government and the New World Order.  Very few realize that Ron Paul’s attack on the fiat money system constitutes the single most important and revolutionary phenomenon in America’s recent political history.  Paul is the single most potentially transformative candidate for President since (at least) Ronald Reagan.  

If Paul wins, the fiat monetary system that currently rules the world may be shattered.  The consequences could be enormous.  Major institutions will collapse.  A U.S. and global depression is likely.  Paul’s candidacy is truly revolutionary.

•  The Washington Post recently touched on the opposition to Paul’s candidacy in “Ron Paul wins support urging end to the Fed, pushing the gold standard. But is that possible?”:

“Today, Paul’s surprisingly strong race for the Republican presidential nomination is drawing new attention to a notion [return to a gold standard] that long has been a cherished cause for a small group of conservatives but is considered a relic of history by mainstream economists and politicians.”
One man’s “relic” is another man’s tradition.  Gold has been the monetary standard for over 3,000 years.  Gold is no more a “relic” than gravity. 

Perhaps, the “mainstream economists and politicians” who view gold as a “relic” also view the Constitution (which still mandates “gold and silver Coin a tender in payment of debts”) as a relic. 

But most previous fiat currencies have typically become “relics” within 40 to 60 years of their inception.  Our fiat dollar is already 41 years old.  Ten years from now—perhaps two years from now—the fiat dollar will be a “relic” while gold still persists as a viable form of money.

“Paul and his supporters would like to set a firm value for the U.S. dollar, much like when it was pegged to a specific amount of gold. They say prices would be stable and inflation controlled because the government couldn’t print more money than it had gold to back it up. This approach, Paul maintains, would address many of the economy’s problems.  Other Republican candidates haven’t joined him, though, and most experts dismiss the scheme as completely unfeasible in the modern global economy.”
Yeah, buddy—without fiat dollars, there is no global reserve currency.  Without a global reserve currency, the “modern global economy” (which, incidentally, is reducing the American standard of living and destroying America’s middle class) would fold up like a circus tent.  The globalists (multi-national corporations and New World Order advocates) necessarily love fiat currencies and hate Ron Paul.

The choice between fiat dollars and gold is the choice between a strong, prosperous American economy and a strong, but not necessarily prosperous, global economy.  Are Americans really willing to sacrifice their own prosperity and that of their children for the sake of a “global economy” that will ultimately enrich only the elite?

“For one thing, [a U.S. return to gold-based money] would require most other countries to change their monetary systems.”
Yes, indeed—if the U.S. returned to a gold-based monetary system, the rest of the world would be forced to follow.  In fact, if any significant nation were able to reestablish a gold-based money, the world would flock to that nation’s money and abandon fiat currencies. 

It’s almost impossible for any nation relying on a fiat currency to compete with another nation that relies on gold.  If you don’t believe me, ask Colonel Khadafy, next time you see him.  He tried to advance a “pan-African” gold-based monetary system.  NATO and the U.S. joined forces to invade Libya.  Libya was crushed and Colonel Khadafy paid for his “gold money” idea with his life. 

The domestic and global forces advocating—and dependent upon—fiat money are powerful, ruthless and determined.  Insofar as Congressman Paul emulates Khadafy’s assault on fiat currencies, Congressman Paul is in peril.

“[A U.S. return to gold-based money] would also preclude the ways that nations now manage the ups and downs of their economic cycles.”
Ohh, puleese!  If fiat currency is so important to managing our economies, why is the world teetering on the edge on an economic collapse?  Fiat currency “management” has led the U.S. and the world to the brink of disaster.   How much more of that “management” can we stand?  How much more of that “management” can we survive?

 In fact, governments have been using fiat currencies to “hustle”—rather than “manage”—their economies.  We’re facing the biggest economic collapse in world history because the fiat-currency “hustle” is breaking down. 

There’s nothing benignly “managerial” about fiat currencies—their primary purpose is to control and subject people to fascism.  

Fiat currencies are a device used to rob creditors (by means of inflation).  Fiat currencies transfer the wealth of those who actually work to an elite class of parasites who own, control or are closely associated with central banks.

“Is it feasible to go back to something called ‘the gold standard’? The answer is no,” said Edwin Truman, senior fellow at the Peterson Institute for International Economics, who has written about gold and monetary policy. “The United States does not have the capacity to run such a system in the world today.”
Exactly right.  It is not feasible to return to the gold standard “in the world today”—and this is a huge point.  If Ron Paul succeeds in restoring the gold standard, he will precipitate the destruction of the “world today”. 

But is the “world today” our only alternative?  Is the “world today” even desirable?  Do we really want the “world today” with falling standards of living, decreasing freedoms and a growing police state?  If the “world today” can be collapsed by simply returning to a gold standard, shouldn’t we want that gold standard?   

The resulting collapse would be initially painful, but the ultimate result would be an America characterized by general prosperity, increased freedom  and limited government.  Isn’t that result worth the pain of transition from fiat dollars back to gold and silver?

“Still, talk about a gold standard, which the United States used in its early years but largely abandoned in 1933, shows how economic anxiety has fed a growing appeal for unusual remedies.”
What’s so “unusual” about a “remedy” that’s been around for 3,000 years and is still expressly mandated by the Constitution?  If there’s anything “unusual,” it’s the imposition of fiat currencies that never last more than a two or three generations.
“The Federal Reserve, America’s central bank, sets interest rates to keep the economy, inflation and employment on a healthy track.”
“Healthy track”?!  Are these people on drugs?  Look at almost any historical economic charts, and you’ll see that America’s economic decline began somewhere after A.D. 1971—the year the dollar became a pure fiat currency.  The evidence is obvious that we’ve been on an “unhealthy track,” ever since.  Fiat currency is not a panacea; it’s a disease.
“[Economist Edwin] Truman said ‘[A]t the core, you’d still want what the Fed has, which is humans, policymakers, deciding how to set interest rates.”
Historically, the Federal Reserve has had two fundamental powers: 1) set interest rates; and 2) control the money supply.

Ironically, the first of those powers (setting interest rates) was primarily effective only so long as we had gold or silver-based money.  Because gold and silver are physical commodities, and the U.S. is surrounded by the Atlantic and Pacific oceans, the gold/silver money was effectively “trapped” within the geographic U.S..  If interest rates were lowered, gold and silver could not easily flee to a foreign country.  Similarly, foreign moneys could not easily travel into the U.S.. 

The physical nature of gold/silver dollars made them largely subject to the Federal Reserve’s interest rate declarations.  So long as that was true, the Fed could accelerate or slow the national economy by lowering or raising interest rates.

But, in today’s “brave new world” of digital fiat dollars, it’s possible to move non-physical, digital currency all over the world with a few computer key strokes.  As a result, if the Fed wants to slow the economy by raising interest rates, it will instantly attract offshore investors who will flood the U.S. economy with foreign currency seeking higher interest rates.  The influx of foreign currency will offset the Fed’s increase in interest rates and tend to stimulate the economy rather than slow it.

Similarly, if the Fed wants to stimulate the economy (as it has recently) by lowering interest rates, people or institutions that have currency to lend will simply move it overseas to those nations that are paying a higher interest rate.  Thus, lowering interest rates won’t necessarily stimulate the economy, but may actually cause the economy to slow.

Digital fiat currencies have rendered the Federal Reserve’s ability to control interest rates increasingly ineffective and largely symbolic.

Even the Fed’s control over the supply of fiat currency has been diminished.  In the last three years, the Fed issued over 16 trillion fiat dollars to domestic and foreign banks, only to have the banks sit on those funds or invest them overseas, rather than lend them into domestic circulation in the U.S..  Result?  Almost no stimulation from $16 trillion.  The Fed must see that lack of effect as shocking.

If the Fed can’t use interest rates to effectively control the economy, and can’t really control the “money supply” in the domestic economy, who needs the Fed?  Insofar as fiat currency has rendered the Fed is increasingly impotent, does it really matter if Ron Paul seeks to close it?

“Paul calls for auditing — and then ending — the Federal Reserve. He argues that with gold backing the value of the dollar, the Fed would be obsolete and thus unable to play a role in creating credit bubbles that cause misery when they burst.”
If it’s true that: 1) the Fed causes “credit bubbles” that eventually lead to “misery”;  and, 2) the Fed can no longer effectively “manage” the economy by setting interest rates or controlling the supply of currency—we’re left to wonder if the game is worth the candle.  Undoubtedly the Fed’s interest rate and money supply controls still have some effect—but are those allegedly beneficial effects sufficient to justify the “misery” that’s also caused by the Fed’s credit bubbles? 

On balance, does the Fed do more good than harm?  If not, why shouldn’t we support Paul’s determination to End the Fed?

“Truman said going back [to the gold standard] is impossible: ‘It would drain all of our gold and we would go into huge deflation.’”
Nothing’s impossible.  Yes—going back to a gold-based currency at the current $1,670 price of gold would “drain all of our gold”.  But going back to a gold-based currency at the price of $20,000/ounce would probably not “drain all of our gold”.  Depending on the price that’s set for gold, return to a gold-based monetary system is absolutely “possible”—as is even the election of Ron Paul.

Nevertheless, a lot of commentators assure us that Ron Paul can’t be elected.  However, there are 310 million Americans.  Of those, only five (Obama, Romney, Gingrich, Santorum and Paul) have any chance of being elected next November.  Yes, Paul finished 4th in South Carolina, but even so, any one of the five remaining candidates—including Paul—could still be elected.  Commentators who say otherwise are fools.

Paul lacks the looks, the voice, the charisma and gravitas to be elected President.  The only reasons anyone might vote for Paul are his ideas, objectives, courage and integrity.  The fact that Paul is even a contender is a triumph of substance over style.  More importantly, Paul’s candidacy is evidence that the American people are increasingly seeking substance rather than rhetoric and stylish lies.

And what’s the fundamental substance of Paul’s campaign? To eliminate fiat currency.  He’s not the first to advocate that objective.  But he’s the first advocate when there’s also a substantial portion of the US electorate who support that objective.

Whether Paul or his supporters fully understand, it’s nevertheless true that If you change the money, you’ll change the world.   Ron Paul and his supporters are seeking to change the money.  Ron Paul and his supporters are seeking to change the world.  Ron Paul’s candidacy is truly revolutionary.

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