Armstrong Economics ” The Paradox ofSante 4 Toformation Please Sed by wet) Martin A, #12518-050 CE Fort Di Camp 0 Box 2000 Fort Dix, NT 08640 ‘ACKWoWLEDGEMERTS I would 2tke to thank all the former employees, associates, sources, and contacts for thetr continued support and effores to contribute to the writings T have been able to continue through their great efforts. I would also like to: thank emose ho have looked after not just myself, but ay amily, and shovn then suppor end Kindness, Everything we et Frinceton Economics that was our mission to gather information and bring together the most widely covered global scononic perspective, has been 8 effort that is now beinging us to that fateful crossroads in history, There are those who are trapped by the past and cannot see the dynamic evolution thet causes history to repeat, but Like lightening, never quite precisely the sane vay twice, In 1914, Britain reached its peak as the center of the global economy, Tt passed that torch to the United States who by 1929 become the leading world cconosy who yas also @ CREDITOR nation just as Osina ig today. There will be no 19908 seyle depression, for the cards are novhere near the sane, Yet China will became the leading vorld economy by 2016, and then suffer its 1929. The West { doomed and st wALT collapse from its ovn debt. We borrow with no intent of ever paying off the debt, and sonchow both Congress and the majority ignore this fact just as they had ignored the problens in mortgages that violated conmon sense. No matter vhat country you live in, it is the duty that falls upon the shoulers of every reader to do what you can to'get reality to manifest. Peel free to send this Feport to every government, friend, and menber of the press around the world. If ve do not get the debate started, ve stand no chance of saving the future for ourselves and our posterizy. We can reach that next never in political-econoste eVoiution only through the hard work of everyone, For this reason, this ia provided as a free service, ‘There is a NEW DATABASE that will be used for specisl updates provided exclusively to those who register. I want to thank you all once more for your suppore ané for Tour contribution to try to help society survive the coning storm. PLEASE ROGISTER YOUR UATL ADDRESS FOR UPDATES & SPECIAL, REPORTS WIEN CRITICAL Armstronglonoates..COM YOU MAY FORWARD ANY REPORT 70 A FRIEND OR TO ANY GOVERNMENT TO GET POLITICAL CHANGE MOVING atin ai Taw ‘This Report my bo forvecded as yau Like ultheut charge to individuals or guvecrmante erand Ge yotie, TE 4s provices as » Public Service at this tine ulthavt cost because of the sitio feces hat we au faced eoaranicslly. The cantante and castgns af the systens are in Fact capyelghien At 8 Future dite, © nov eition of the 1696 Tho Grantaat Gull Mastst Tn Misty will oe vasowced ‘zs a rev book uill acon be publishes on the model ftaelt ~ The Gamatny OF Hines It 2s sit oat WE Ge-ret foroet this ts » was canon and the azragarce that ary nation can dictee ts tne tg is Sunt Amanity, Every nation effects all others no different thar if om ration uns te oon Oar ‘ts toxie waste into te acen, Everything ie intwrlioked ond solutions aie news ioletee comeThank You For : Your Support I would Like to thank so many people for their continued support. het we face in the years ehead is not going to be easy. There will be NO Great Depression as there vas in the 1930s. In fact, where America was bankeupt in 1896 and Pritain was the center of the vorld economy reaching its zenith by 1914, ite fall from grace oliminating the title "Great" passed the torch to Aserica and by 1929, the USA had become the Jorgest econony in the world measured both by productive capacity ae vell as by, the standard of its gold reserves. What took place in 34.4 years (4 x 8.6), is once again unfolding from 1989 as the torch is now passed from America to China. We "2 on the verge of such a profound economte fall from grace, that ve are Flying too close to the flanes and we may crash and burn through the turmoil of civil Unrest. I cannovistvess enough that we must understand the nature of the problen before we ean comprehend the solution for the future. I vould like to think we can sake e difference. But to do so, it vill take take many in ALL nations to DEMAND that polities! change is addressed BEFORE the next crisis. Since politicions act in their ovn self-interest, ve are most likely doomed. To set thes to do soncthing BEFORE the crisis, ie not realistic. Nevertheless, all ve can do, is kick up our heels and DEMAND chenge, even though they will ignore the people, We are in such 9 economic crisis, it 4¢ Lékely that even Oboma may be one term president, The status quo, 8 not what it use to be. ‘There are people in various governments around the globe who can see the crisis coming. I remain in contact with then end pray thet they will be able to gather the ‘support within government before it is beyoltd all hope. Bach of us de charged with = duty to try our best to save our ovn future and that of our children, T have been Working very hard to explain the full scope of the probles and the solutions ve must fenbrace to be released in a book format. Please register at Armstronglconomics.COM. I will be providing sone special Foports to these who register. With each event, the solutions that energe are warely a restoration of errors that are seon as setting in motion the previous erieia. There is so mich that has co be restructured, to address it all and how it truly vorks requires 9 book. Tt is almost done.The Paradox of Solution By: Martin A. Araatrong former Chairman of Princeton Economies Taversational, Lid. ‘and the Foundation of the Study of cles MK Parador of Solution is alive and vel. T vish there vere sone vay to prevent the complete econonic sadnace that vill be unleashed by the bold ‘new regulations coming dovn the pike, but there just isn't. During the Final stages of the Decline and Pall'of every nation or empire, whatever political state that is in pover, ‘they inevitably turn against their own. people. We are seeing this in tho thirst for tex revenve and all one need fo is look at the legal notices in the Wall Street Journal of page after page of notices of property seizures. Even soneone who grove pot in their basomont for personsl use places at risk the loss of their entire property under the érug lays. This is all about money. Fines and penalties are rising on just about anything you can imagine all in e revenue gathering mode. The health care bill ie not without its tax hikes. Yet these are the minor events within the trend. The nore serious huge problen is screwing up the entire econoay under the pretense of protective regulation. It is one of the strangest paradox event of all time when the solution to a innediate Crisis becone restoring the very system that created the previous crieia. Tet there is & serious problen lurking betting the regulation| changes both circulating in Congress and. now ‘those proposed by the SEC. There is simply favcomplete lack of understanding of how the global econoay even functions. Those vho are proposing these regulations are clearly lost Gud enain clueless even about the evolution Of the entire finencial system that has in fact brought us to this point of no returns We are about to commit econosie suicide ané that seems simply unstoppable. ‘There has been a tresendous and complete breakdown in understanding what roles each entity possessed going into this crisis. The fone entity that seems to unfairly taken all the blane de none other than the Federal Re- serve, There 9 mich debate that Links the Fed to the big banks and that alone leads co the popular view that it should be destroyed. The proposals TO STRIP If of all pover over the bulk of the hanks and Eransform st into some sort of watchdog over only the very biggest, illustrates above all else, the complete and total misconception of what the Fed was indeod suppose to have bean uhen it was formed in 1913.People who hate the Fed have largely in fact overlooked vhat its historical purpose ‘yao suppose to have been. Today, people just Dame the Ped vhen in fact the Ped never had any regulatory role over investment banks ho created this nightmare, The real culprit hes been the SEC and CFTC, ‘vho energe in shining ‘ermour armed with more power to screv things up than they had before the crisis. ost of the hatred sgeinst the Fod hae centered on its claimed control of the money supply. This was NOT ies original intent in 41913 end the reasons Vhy local. banks sat on the various bosrds in each of the 12 branches was in fact to replace the role J.P. Morgan, hed provided in 1907. ‘The purpose of the Fed was simply to provide funding to prevest banking erieie ‘and that funding was to cone from the banks themselves. Much has changed since 1913 and the role of the Fed was transforned sharply in 1935, Before the advent of World War T, the oped market operations to stimulate the Jocal econoay was through buying and selling ‘of comercial paper ~ not US government bonds} That decane 2 mandate changing the structure of the Fed entirely. Once the politicians ordered the Fed to support their bonds for the var effort, at ‘that moment, the Fed was truly transformed and began dovn a path of a quasi-ofsieial Government branch. This was dramatically in~ ‘deed changed with the Great Depression. Not merely vas there the realization of a global contagion that bogan in Austria, but this event nov Jed to the usurpation of the Fed even in far more serious ways. "The popular view that Fed vas raising interest rates during the early stoges of the decline, must be. put in perspective of the gold standard, Tt’ vas the seme view even now put forth by the IMF in their advice to nations Like Greece ~ cut spending and nove: to balance the budget. Just as there is a ‘serious uprising of civil unrest in Greece, this very sane policy is what caused the Great Depression, To that extent, John May- hard Keynes vas correct. To offset the fall Implosion, the state should move into being fa spender ‘to compensate for the contraction within the private sector. The problem hae serged that governments tock Keynesian economics to justify perpetual deficits that he never advocated. Hovever, once the role (of the Fed was changed, the’ systex vas set o implode. Just as the 1907 Crash was seen as a major donestic capital flov probien, the 19308 was seen ass internstionel capical flow problen. Benjamin Strong sav the NY Fed 25a major central banker vith the largest gold reserve following World War T. lle sav this role as displacing the Bank of Eneland and adopted policies to try to deflect the Tush of capital to the United States by then lovering interest rates. But that move was seen only as a confirmation that there vere long-term probless in Burope, ‘The macho role of Strong led to the usurpation of all independent branch power at the Fed into s single policy established through central control in Washington in 1935. Wow, we add the confiscation of gold by FOR in'1934. ALT the old Large size paper currency was replaced by Federal Reserve notes. Suddenly, the Ped became a strange quasi-ofticial branch vhere private banks Still retained board positions anon the branches that vere stripped of Sadependent Power to set interest rates in helt region. ‘The new currency became the snall size notes still used today beginning in 1934, Blend this with the new evolving view of Keynesian econosics and monetary theory. Suddenly, the political forees vere able to have their cake ané eat it to. The politicians were able to now spend as they like! because it became the role of the Fed to conpensate for infletion despite the fact it did not in fay possible manner control the governaent spending. Because thore were ample hoards of those Who generally disliked banks as there were in the days of Andrew Jackson, they focused on the private bankers ovnershtp in the Fed and board memberships. Nobody seaae to have taken the time to observe that this vas one stent Shell game, The politiciene could spend ac they Liked and the Fed got the blame for just shout everything. Now ve have proposols to strip the Fea of ita role to provide security for the banking system a5 a whole. ‘The mistake that the Fed nade began with Long-Tera Capital Management. The news made it seem that the Fed vas now in fact bailing out a hedge fund. In reality, it vas bailing out the banks without mentioning then by nane. Tt vas e backdoor ballout just fas AIG. The position defaulted on was with the bonks. By bailing ove LTO, it was no different than yhat just took place with AIG.Once the Fed betied out LTH, they set thenselves up as being the masters of their ow denise, The public now began to coe. the Fed not aa the protector of the banka, but the entity that vas to baflout anything. Thus, Wwe now have the 2008 counterpart ro LTH that became ATG. Once again, it was nota bank, It owed the banks and thus a bailout of ATG vas really a baak-door bailout of Goliinan’ Sache fanong others. But the perception vas forever changed with LTO, The banks showlé have then fand their suffered their fate, Bringing in the Fed in 1998 has set the stage for the complete and ultinate collapse of the Anerican system. Consequently, politicians are themselves confused. They are altering the Fad transform ing e into some bailout epecialiet that is Just insane, Meanwhile, the very agencies vho fare directly responsible for the mortgage back crisis, get more paver to serew things up even better. We are now back to where ve were in 1907. The ontire US banking system will be vulnerable to 2 major crisis, There will esther be the Fed nora J.P. Morgan to usher in any practical management ‘whatsoever. Simply put - ve need the Fed to be what 4 was dntended co be in 1913 AND NOTHING MORE. at all. It is NOP che controller of the mney ‘supply. IF the Fed tries to stimulate the Local econony by injecting cash through its ‘open sarket operations, it can just ae easily buy US government securities that belong to China, then the cash injected into the aysten will flow out to China, accomplishing NOTHING, We are not an economy of the old gold standard days. The Fod has no more pover over ‘the economy than Walliare. Tt ie an illusion to evan pretend the Fed controle interest rates. They can sot a rate but the free market: will circumvent it, They even call the REPO market the shadow banking systes. Once you alloy Fed Funds, that means @ dank that 8 overmextended, Gan circumvent regluations by dorrowing excess funds from another, The viole| purpose of regulations falls moot at the end of the day. Neither the press nor the Congress have fa serious clue as to whet is going on no sss how to honestly regulate reality. We are all Living in a éream world and then as the old popular song goes, don't bother sending in the clovns, for they are already here. Those who hate the Fed, better look closer. Assuming ve can dismantle the Fed and #11 our problens will be solved, 19 taking @ shallow view. T do not disagree with all the eriticiom of the Fed and des atructure that 1s truly morphed into a strange and unthinkable quasi-official government branch. Removing the private banks from the New York Fed and making that position slso appointed by the President, merely places the last nail in the coffin. This illustrates that the Fod is so far resoved from its original purpose, vhatever role it 1s being reshaped nto now, you can bet will do nothing to protect tho banking system. One of tha very Feasons why there was a national FDIC and Fed on top of a state systea, vas due to the widespread collapse in the 1930s, Even $f we go back to the 1890s and collapse of the state vildcat banks, the more regulators dnvolved, the greater the chances for the Jnevitable corruption. The advantage of ational single entity, is to reduce thee Propensity for widespread corruption. The secret deslings of the Fed is in fact the lash between the old design and the new quasi-official branch status. Ones the view was that money supply increases crested the inflation, then politicians shifted the Blame to the Fed and torroved rather thon printed and that has led us to the brink of a aajor debt crisis. Further evidence that we are doomed is Allustrated by the SEC attempt to regulate abe. The SEC is intending to remove the ‘credit rating agencies from the process in evaluating debt products backed by consuner Iosns. The SEC proposed rules will require ‘the houses “asuing the bonds to vouch for thetr soundness. ‘The SEC brain-dead rules require the iscuere to retain a chunk of the securities in thetr ovn portfolios. The idea is that they would not put together a debt product that will collapse ascusing that they thensolves will have to retain a portion ex thelr investnent. Wary Shapiro staved thet this vould "represent @ fundamental revision to the way in which the asset-backed secur~ ities market would be regulated." HELLO! Yes, it would be ¢ fundamental change. The problen is it vill wipe out the market and ensure that real estate vill in fact collapse into 2032. Capital is not un~ Limited. If a house 1s going to retain a portion of each issue, it vill be Limiced by dts capital. Underwriters vill shy avayFrou Tasues merely because of the restriction upon capital. What do you do vhen all the big Firms afe saturated? The SEC rules vould then cut off the securitization market entirely. The SBC is also assuming that this new requirement vill sonchov ensure that the debt products are sound. MELLO Didn't Bear and Lehman collapse because they had excessive positions on their booke? The idea ney sound ice Like some bedtine story you tell your Children at night, but it ia just plain bull- Shit. Neither Beat nor Lehaen foresaw the risk when they retained the mortgage back securit— Ses on thesr books. “The SEC 4s brain-dead. They have simply no understanding of the economy and this is nearly a §10 tritlion area that they are nov proposing to regulate with obviously unsound dess and no track recard vhatsoaver. If you ook at the size of the market, that means tthe capital requirement vill be $500 billion Hf fens must retain SE of the isaue on their ‘own books, T doubt that even J.P, Morgen can handle more than $150 billion. ‘The SEC has conceded that the total of offerings in 2009 vere 87 down from over 1,300} 4n 2004, The rules would extend to private placenents which are sold only to institu- tional investors. The SEC is reducing the entire professional institutional market to the sane level as a widow and orphan. ‘This illustrates the {lemma with hov government approaches a problea. They take 5 constant top-down approach leaving in place ‘the very thing that needs to be reformed or changed, ond then regulating chat in such a ‘broad manner that ve are Looking at the risk of collapsing the available marker to service consumer loans that will include residential fnortgages, automobile loans, and even student ‘leans. ‘The SEC screved the entire econoay by not properly preventing excessive leveraging ‘and promoting effectively propreitary trading to displace the entire purpose of brokerage and undervriting. Ts it that difficult to Faquire some simple reforms such as restoring Glase-Segal? Fow about altering the label “Investment Banking” to "Investment ilouse” that will end the public confusion that all Danks are Rot Wall Street. flow about a clean simple rule NO PROPRIETARY TRADING beyond hedging that is simply measured ty an offset-| ng position cannot exceed the face value of hat co be hedged! Neither the SEC nor those in Congress ‘seem to understand that you vill create a complete disaster by overlaying regulations fon top of present structures that will only Complicate satters and eneure there vill be ne real reform, There is n0 problem with the onus paid out even at Goldman Sachs. The problen is alloving proprietary trading to fake place as the bulk of the profst engine within the banking/brokerage industry. What is taking place is that the industry is not ‘servicing the comunity, but 1s an edversary to the comunity. Goldman Sachs 9 a lean and ‘sean trading taachine. THERE 18 NOTHING WRONG WITH THAT ‘f° it is a hedge fund. Proprietary trading should be separated from tanking/brokerage. Ze is one thing for a market maker(spectalist) to take positions co provide Tauidity and another to create products to sell to clients vhile taking adyarse positions to the client. Simply divide and conguer. Requiring 3 to be retsined to ensure the issuing house has sone sort of stake in the product is just ruts. Nobody has $500 billion to service the consimer loan industry and if the economy vas recovering, the SEC should ensure that the consumer will be unable to go to college, buy 2 house, or even a car to sleep in if ‘the house 15 too expensive. It dg tine to restructure everything Zor once from the ground up. Enough 1 enough! We have to begin to step back and look at the whole econoay and how 1t works. Even the idea that the Fed or anybody can dictate the rate of interest se absurd, Tf capieal will noe Javest in Greece, the vate will rise until ‘the FREE MAREET actracks capital. There ie no dictating, The whole idea that the Fed controls interest rates is also absurd. Tt is fust not true. It is time ve stop pretending. ‘The Fed raises and lowers interest rates in hope that de will indirectly effect banks by altering deeand, This is Hike harraseing your wife in hhope that she vill force you to take out the trash, The DIRECT way to effect hanks is to raise or lower the reserve ratio. In other words, if the economy is heating up, you now raise the ratio requirement from 6% to 10% of deposits and that vill reduce Lending. Instead, the Fed reises interest rates and ‘erses to make the consuner pay so such that they will reduce their demand. Sorey, but it is tine for a complete restructure!‘The outrage over the Federal Reserve 3 Largely caused by the overvhelming confusion fas to how and what it is nov, combined with hhow we got here. Much of this confusion has been centered around the presumed role that the Fed actually controls’ the money supply ‘and interest rates. We are trapped to a large extent in a world that no longer existe. Much of the theory of monetary policy ig @ throv-back to the gold standard and the complete lack of ‘any comprehension of how the global econeay has evolved. It is agsuned that monetary policy if the domain of a nation's central Dank. "HIS TS DEAD WRONG! Te 4s true that inflation hae been tied to the quantity of. money as vell as its true quality. T can show numerous exanples from ancient history that when there vas a real shortage of money, the political: state’ often began to debsce ‘the currency, meaning they Tovered the purity of silver or gold sn order| to ereate a greater susber of coins vith the ‘same amount of silver. We can see this in the coinage of Athens toward the later stages of its war with Sparta. We can see the long, progression of @ gradual debasenent of the Silver denarius that began with Nero (St-68 AD) in Rose, and we can see this within the collapse of the gold standard in Byzantiun after the Arahs Seized the Nubian gold mines in Wotth Africa. Those are just a few easily documented debasenents in aaeient times. ‘The practice of debasing coinage indeed reappeared in sedieval tines. In fact, it became knoun as Greshaa's Law that bad money drives out good money. In other words, uhea Lovering the purity of @ coinage based upon precious metal, the public will hoard the O14 end circulate the debased nev currency. ‘Thomas Gresham (1519-1579) was an English financial advisor to Queen Elizabeth I (1533 =1603) who succeeded her father, King Henry VIET (14981-1547) who had resigned 1509-1547 whose coinage was profoundly and notably debased. When Franklin D. Roosevelt sought to confiscate gold, he did so in part because People were hoarding gold out of runors he Would confiscate it. Even in 1964 when the United States renoved silver fron its coin ‘age as did most other nations, whatever Silver coin that had circulated, disappeared within just a couple of years. hei Honey wos tangible, debasenent was the game. Hence, I'm sorry, bat a GOLD & SIL~ VER STANDARD wilt sot eliminate inflation! Those who argue for "sound woney” just de not. understand that vhat is money, is far less Amportant than WHO controle roney. Politicians from ancient tines have always sought to make just a little bit more to cover their spending that has never beon responsible. Some have needed money desperately to defend the nation fas was the case in Athens. Others just wanted {to spend more to have alee things Like Neros = Regardless of the reason, it is WH controls the quancity and quality’ of money thet truly matters ~ NOP what is actually money! Now that we understand that it ie really HE WHO CONTROLS THE NOWEY CONTROLS THE RULES, it is tine thet ve Journey don chis path to reach 8 clear understanding of what ie money and then ve can comprehend hov to ia fact feven argue about restructuring the economy & the governaent. MONEY IMPLTES THE CONCEPT’ OF FUTURE When sodern man has encountered lost ers bos that society has left behind still living within the hunter~gathering stage, che traly fanazing energing realization has been that there is the absence of the concept of FUTURE! In other words, they live for today and do not. nuke preparations for the future, hon tribes fae this stage in evolution encounter another, fe produces warfare over resources and taking wonen. There is no TRADE because there 18 no Concept of the future as ve understand iz. To a large extent, mankind reverts back to this prinitive stage far aore often than fone would suspect. Warfare exista fron this Drinitive period insofar as one needs either women (Rowan rape of the Sabines) or resources plundering the vealth of a neighbor. There ie ho practical reason for China to invade the USA'nor for the USA to invade China. There is nothing thar either nation wants to further its own goals. The only reason for warfare remains to elininete coapetition. In order for society to have created 2 concept of money, there had to have been the Fealisation that there i¢ a tonorrev. Once that develops,. the birth of planaing for @ rainy day emerges. Sonething of VALUE is now ‘£0 be atored and retained. Consequently, that Simple step created a host of evolving social development.‘The earliest forns of money vas sinply food be it grain or cattle. Once agriculture was born ané the donesticatson of animals, ve Clearly have the concept of future and with that concept is born money. Vaere hunter-gath> erers simply raided, plundered, and pillaged, tthe concapt of future giving rise to the ides of value (soney) gave rise to raiding being no replaced with barter and trade. ‘To the shock of most, once this concept of future vas born yielding the idea of VALUE, everything from banking to derivatives began to energe even in ancient tines. In Mesopotam ia, ve have price codes for commodities, legsl| decisions to dispuce titles, end FORVARD con tracts to sell crops when they cone in, There are even clay. tablets that illustrate contract low and the eaerging concept of bearer bonds. For example, a farner has borrowed sonething of value and issues s clay tablet stating thet he vill psy a predetermined anount of barley Lo the BEARER oF the tablet av crop season. In order to truly appreciate ‘what. these clay documents are, you mist realize that they in fact do NOT state a particular person. What is absolutely amazing, ie that they expressly Grafted to pay whoever tho BEARER may be. This implies that the tablet circulated as s form of private bearer bond. This ss NOT a lamited oan fron one person to another. This is a freely circulating bearer bond. There are ‘also loans with official usury lave Lintting the anount of interest one could charge. ‘The implication of thie economic activity} from Mesopotaaia illustrates the exerging and dynanic development of banks, credst, trade, ‘and interest rates not to mention insurance ‘and people vould share the burden of a voyage in a fundamental way creating venture capital, Therefore, this practice of hating the baake goes back’a long tine and:is focused on the typical person who complatne when oss ‘now eoerges. While I far fron a fan of Karl Mars, T ‘cannot overlook his observation bout labor representing value. The idea of communism vas to create a state of utopia vhere money i not necessary and is replaced by a unit of Labor that is, collectively employed to now create the perfect state. Marr dehumanizad people and ony sav the exploitation of labor while ignoring that the so called "rich” that presented the greatest threat to the people were those vho controlled thet state, not corporations. Woney is not gold, silver, cattle, grain nor oppressed Tabor. Money ie the future ides of value, Marx was partially correct in seeing labor es value. The vealth of a nation ie sts total productive force. That labor can be both physical or mental. It is best expressed a the ‘TOTAL, PRODUCTIVE FORCE of @ nation. Thus, 2 man who davents the automobile has produced ‘the PRODUCTIVE FORCE that will bring in far ingle individual butldsng one BALL Gates will do fer sore for society in furthering the national wealth (creating fobs) than a single individusl vko only repairs the car. Noney is only an expression of value Is can be whatever the other person ie viiling to consider.has value. Barter is the ultimate Rearing of economic coamanfeatfon that created trade. Money merely facilitated Harter since it was not always possible to find someone who had what you wanted but was willing to. exchange it for barley that vas your sole crop, Precious metals merely becane universal insofar as being accepted ag « wedivm for all exchange. HONEY BECAME THE LANGUAGE. OF TRADE ‘The concept of barter thus energed with the concept of future. Then, money emerged a5 8 universal language of barter. Precious Metals simply becase nore coaveriénc ‘than cattle to transport. Nevertheless, it vas only the language of exchange. Te vas NOT the sole reason for trade, Neither did gold or silver create wealth. The wealth of a nation emerged from the productive -forces of its people. Once ve wnderatand the role of money fand how it has energed, only then can ve in anyvay comprehend how to make it to the ext stage in our economic eveolution. We are still struggling from the primitive da of hunter~gatherera vhare we vere prone to Feact violently in confrontation. There is nothing to be gained by international con flict, Yet there are thoee who eee it as a throw-back to prehistoric tines where one Just doesn’t like the ideas of another oF ‘he tries to dominate their vieve oppressing all others. We have to distance ourselves fron this primitive state of mind that is by far not easy. For as much as ve try to pretend ve are civilized, we do not act the role in the lesst.Ie 8 nice to create @ unrealistic riew of @ vorlé where all ve have to do ie restore ‘2 gold standaré and all will be well. That 1s ‘about as practical as Karl Marx who believed chat we could eliminate money and collective society would create utopia. Te is not vhat 4g money, but vho costrois ituthet hes slvays counted. Do not get confused by looking at the Fed and its current role. With each event, the Fed has been transformed from one thing ts into, another alvays roving further avey froa what ie is. ‘The creation of wioney 15 a TREASURY function. ‘The governient merely usurped the the Fed, who use to stimilate by buying com ercial paper, into the buyer of government. paper. In fact, until 1948, the law vas that the Pod had to’ support US government. bonds at par with no loss to the investor. Gace the Fed was relieved of that duty, the value of those bonds fell by 96% going into “1981. ‘The Fed has been demonized unfairly for the real culprit has alvays been Congress. If the politicians could spend vhatever they want| fand thea blane the Fed for the effects, they 4id 0. Now, the roof is caving in and ye are about co seo the Fed diminished co such an extent, ve will ge 2 major banking crisis ‘unfold and the SBC is-abour to wipe-out the econoay because they are a Loose nut=Job who are far beyond their original intonded design. ‘The SEC MIST be merged with the CFTC, and they are not to get involved beyond the plain Listed securities on exchenges!The SEC wants to call everything security. That i just insane. Private notes between private parties ave NOT secursties within their dosain. Look well after the stock and futures markete and get the hell out of everything else. They are bout to destroy the economy entirely that has nothing to do with listed securties. Interest rates are a natural product of the free market, Just as Greece rates are at ‘a prenium to Germany vhea they are the same Currency, thie proves ‘that central. banks will. never be able to control interest rates. We fare Living in a delusion to think that the Fed can control interest rates or money for neither one can be foread to more opposite OF the Free Markets. Money is purely the PRODUCTIVE FORCE, of a nation. Tt is NOT the anount of gold @ natin possesses, nor is it the anount of people. Tt is not even the amount of natural Tesources. Evidence of that 9 Japan, ho Tose to be the second largest economy and yet it had to import nost rev materials including 41. Chine has more people, but without the skills, it could not transfora that into @ productive work force. China allowed the n-" Gividual spirit to survive vhereas Stalin arged intelligence and suppressed the core spirit of the individual. When the Berlin Wall fell, it quickly becane obvious that it took 2'to 4 Tost German workers to produce he same e5 1 West German worker. Fins? SveP To survive the future, wo truly need to restrueture, Bit ve need £9 comprehend two critical aspects, FIRST: We are in desperate shape and MUST.return the Fed to its 1913, role, Te cannot control the money supply for that és now electronic and the morenent of capital in and out of the country can change the domestic soney supply at any given soment, Money is really the PRODUCTIVE FORCE of any nation. It ie tine we wake up and underatand sts tru role. Congress has to stop pushing the duty of minaging inflation upon the Fed while it does as it pleases to vin elections. Take responsibility for your evn actions and ‘stop the bullshit! Stop borrowing money and ‘simply create ronoy as a fixed percent of CDP ‘each Jear eliminating taxes federally on a Sndividval Level. Indirect tares are the only way @ state may Seek revenue. Anything else is tyranny. Taxes are a barbaric relic of the gold stendard vhen God controlled money, not sman, Eliminate the debt and borroving and_you will see the greatest explosion in economic growth creating Jobs Like never before. The boos-bust cycle cannot be sanipulated by the interest rates. That is indirect. The Fed is incapable to sich managenent and should just reise or lower the reserva racio banks must. Put up at the Fed. Regulate the REPO market to eliminate posting collateral that explodes in the middle of the aight. SBOOND: creating a RESERVE currency will ‘eliminate contagions to a large extent. With the US$ ap a reserve currency. st exports ite donestic policies to the world. A RESERVE cur oney 4a,NOT s circulating currency, just @ © seuttal buffer - a