Wednesday, October 17, 2007

Politics: Bread and Circuses

There’s an old saying: “If you want to know what’s really going on, follow the money trail.”
If you do not understand money, banking and finance, you cannot really understand politics. For the motivation of politics and politicians is ultimately the accumulation of money and resources. Money and resources = power.

Many people object to this statement. One of my clients said, “I grew up in the 60’s during the civil rights movement. That was a purely political and altruistic agenda that had nothing to do with money.”
In the 1960’s however, the United States was unquestionably the world’s greatest economic power. Our currency was strong. When you are abundant and strong, you feel magnanimous. In 2007, our economy is weak, our debt is high and our currency is declining. The current corrupt and mean–spirited political environment is a reflection of our country’s declining economic status.

The OMB predicts that by the year 2012, the national debt of the United States will be 11.466 trillion dollars. This figure does NOT account for unfunded liabilities like Social Security.
The total amount of dollar denominated debt (including unregistered derivatives securities) worldwide has been estimated at 1.2 quadrillion dollars. That’s right folks. 1.2 quadrillion. The dollar has been hyper–inflated on a planetary scale.

How has this happened? To understand that, you have to understand how money is created and manipulated. A great place to start is to read this book.

The money we use is monetized debt. It has no value whatsoever. Today, money is not backed by anything tangible, other than the “full faith and credit of the United States.” What does that mean? It means the future work, sweat and productivity of the American people. It is a startling fact that if all dollar denominated loans and debts were paid off, all of our money would disappear. Therefore, even if Congress wanted to pay off the national debt, it could not do so without destroying the economy!

Look at the top of any bill of any denomination, and you will find “Federal Reserve Note.” Do you know what a note is? It is a promise to pay, a certificate of debt. The money we use are just fancy IOU’s. Unfortunately, the Fed, in cooperation with Congress, has played fast and loose with our currency. When you discover how money is created, you will understand the truth of this statement: “Money DOES grow on trees.” Those who control the creation of money control the economy, and to a certain extent, the lives of everyone in the nation. Economic cycles of boom and bust are not natural economic occurrences, but artificially created conditions due to the manipulation of the money supply.

Did you know that legal tender laws FORCE Americans to use Federal Reserve Notes? Look on the left hand side of the bill: “This note is legal tender for all debts, public and private.” It is illegal in the United States to use gold or silver as money. If you refuse to accept Federal Reserve Notes in exchange for your valuable goods and services, you can be thrown in jail. The power of the State is used to enforce legal tender laws.

The debasing of our currency (and thus our economy) is the most important crisis facing our country, and the world, because the dollar is the linchpin of international finance. [1] The growth of the unregistered derivatives market has hyper–inflated the dollar to the point where the international financial and banking system is in turmoil. At the present moment, and behind the theater of politics, the world is confronted with an international banking and currency crisis which is being completely ignored by the mass media in the United States (so what else is new?)

Called “Wantagate” by those in the know, it is a story of fraudulent financial manipulation that involves the highest banking and political officials in the United States, and the world.

How can such a gigantic crisis go unreported?

Because the focus is on politics!

Pick up a copy of the New York Times, the Washington Post, or the L.A. Times. Listen to the news. Listen to NPR.
The news is, almost exclusively, political. What economic news is reported is mostly mundane stuff like the Dow Jones industrial average.

Politics and political intrigue obscures the fundamental economic and financial realities underlying the actions politicians take. In other words, the bread and circuses of politics takes your attention away from the money trail. Following the money trail will ALWAYS explain the actions of politicians.
For example, why did we go to war in Iraq?

The government says that we did it to establish democracy, or remove WMD’s, or destroy Al Queda, blah, blah, blah. Former secretary of State Jim Baker said facetiously that we invaded Iraq because of “oil, oil, oil.” Well that, at least, is partially true. According to Christopher Story, noted U.K. intelligence analyst, one of the fundamental reasons for invading Iraq was the takeover of the Rafidain Bank, Saddam Hussein’s private bank. The Rafidain Bank had trillions of dollars worth of assets and billions in gold bullion. That money properly belongs to the people of the United States via the U.S. Treasury, as the spoils of war. According to Story, Saddam’s money was stolen by criminal operatives within the U.S. intelligence community –– with full knowledge of officials at the highest levels of government, including the President, the Vice President, the Treasury secretary and the Homeland Insecurity chief –– and parked in offshore bank accounts. This money is “off the books,” because the people who stole it cannot identify source of funds. In any legitimate banking transaction, official codes are issued which identify the financial institutions on both ends of the transaction, and where the money came from. This is not possible with stolen money.

We are spending 10 billion dollars every day to fund the war in Iraq. The war has so far, as of this writing, cost almost 500 billion dollars and President Bush has just submitted a request to Congress for 200 billion more. Moreover, the war in Iraq is being privatized, which means that private contractors are making billions from this war. Meanwhile, our brave men and women in the military fight and die –– for what? [2]

Governments throughout history have printed money and debased the currency to fund their conflicts. When the currency becomes devalued, it loses its purchasing power, and prices rise. This is the genesis of inflation. Inflation is not rising prices, it is the debasing of the currency. The only legitimate way for governments to get money is through taxation. But politicians do not like to raise taxes because the voters will throw them out of office. However, the political scientists in Congress and the monetary scientists at the Fed have devised a brilliant scheme to spend more and more money and keep themselves in power: simply print and create more and more of it. The process by which this occurs is complex and obfuscated, but the bottom line is that the population is taxed by inflation when the money supply increases too rapidly. Each dollar buys less and less, you see. Inflation is a hidden tax –– a cowardly trick imposed by politicians (and bankers) who hide behind the power of the state to enforce legal tender laws. [3]

Moreover, when money is created from nothing, the size and power of government grows larger and larger, sapping the economy. Money that would have been used to start businesses and employ people is wasted by government cronyism. Regardless of who is in power –– capitalists, socialists, liberals, conservatives, Democrats or Republicans –– political parties always use the power of the state to enforce their decrees. Thus, government grows and the political structure of a nation becomes more and hierarchical, fertile soil for the growth of tyranny.

Political parties and groups exist first and foremost to advance an economic agenda. Study the bills Congress passes. Almost all of them have language benefiting special interests –– tax breaks, government contracts, etc. Political parties did not exist in 1789. Many of the founders of the United States were against the establishment of political parties. George Washington, in his farewell address in 1796, said,

"They [political parties] serve to organize faction, to give it an artificial and extraordinary force; to put, in the place of the delegated will of the nation, the will of a party, often a small but artful and enterprising minority of the community; and, according to the alternate triumphs of different parties, to make the public administration the mirror of the ill-concerted and incongruous projects of faction, rather than the organ of consistent and wholesome plans digested by common counsels, and modified by mutual interests."

Although the motivation of the founders of the United States was rooted in the ideals of freedom, economic issues –– such as taxation –– played a very important role. Moreover, the creation of a central bank was one of the fundamental issues that divided the founders. Whether or not a political party begins it’s life with a set of high ideals, once it becomes established, it ‘s main motivation is to stay in power. Then it always becomes a vehicle to protect the vested interest.

So people, do not become distracted by the bread and circuses of political theater, for that is what politics is.
Look underneath the superficialities of the news and always ask yourself these questions:
1) Who stands to gain financially by a declared government policy?
2) Where is the money trail?
In this way you may uncover the true motivations behind the actions of the actors on our political stage. You can then begin to identify people who are open and honest, and vote for them. The crooks, of course, stand out like sore thumbs.
Footnotes and References:

[1] In an interview for the German magazine Stern, Allan Greenspan, former Fed chief, says that the Euro is rapidly replacing the dollar as the world’s reserve currency. Greenspan said that the dollar is still slightly ahead in its use as a reserve currency, but added that "it doesn't have all that much of an advantage" anymore. And why is that, do you think?

[2] According to the FRONTLINE documentary “Private Warriors,” private military contractors comprise the second largest "force" in Iraq. There are as many as 100,000 civilian contractors and approximately 20,000 private security forces currently in Iraq, and the number is growing.

[3] Here’s an historical example: The Continental Congress, beginning in 1775, simply printed money to fund the colonial rebellion. By 1779, the Continental, which was worth 1 dollar in gold in 1775, was trading for less than a penny. A loaf of bread cost $5,000! In a letter to Samuel Cooper in 1779, Benjamin Franklin wrote, “This Currency, as we manage it, is a wonderful machine. It performs its Office when we issue it, it pays and clothes Troops and provides Victuals and Ammunition, and when we are obliged to issue a Quantity excessive, it pays itself off by Depreciation.”

Copyright © 2007 Kenneth James Michael MacLean
The Big Picture

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