com Address by Edwin Vieira Jr.
Gold Anti-Trust Action Committee Inc. conference
GATA Goes to Washington -- Anybody Seen Our Gold?
Hyatt Regency Crystal City Hotel, Arlington, Virginia
Friday, April 18, 2008 Silver and gold are not merely valuable commodities, investments, and media of exchange. More importantly, they are key "checks and balances" in America's legal and political institutions.
The fight against the use of silver and gold as money that has been waged by bankers and rogue politicians since the 1870s as to silver and the 1930s as to gold --and will intensify as fiat currencies collapse throughout the world -- is ultimately directed against America's national independence, her constitutional government, and every common American's individual liberty and prosperity.
The Constitution of the United States adopted a monetary system consisting of silver and gold coin, in which the standard is the "dollar," containing 371 1/4 grains (troy) of fine silver, with the values of gold coins to be measured in "dollars" according to the free market's rate of exchange between silver and gold. Neither the general government nor any state is authorized to emit paper currency.
These restrictions prevent rogue public officials from turning public debts into currency, as a means for redistributing wealth from society to political elitists and their clients in special-interest groups.
Furthermore, although the Constitution does not mention banks, either public or private, its only correct construction requires separation of bank and state -- extirpation of all inherently fraudulent fractional-reserve banking schemes -- and rigorous regulation of all other fractional-reserve arrangements that might operate fraudulently. (See Edwin Vieira Jr., "Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution," second revised edition, 2002.)
But since the early 1800s rogue politicians and bankers have steadily subverted the Constitution by forging an increasingly tight relationship between bank and state. Through the grant of one abusive special privilege after another, politicians have immunized fractional-reserve banking against the just economic and legal consequences of its own inevitable failures, so that public officials and bankers could turn both public and private debts into currency -- thus separating the supply and the purchasing power of currency from the economic discipline of the free market, and rendering those matters largely political in nature.
Under the Federal Reserve System, Americans no longer enjoy "money" in the economic sense but are subjected to what must be denoted as "political currency," with emphasis on the adjective. Political currency is emitted on the basis of political debts --that is, either 1) public debts or 2) private debts for the payment of which the creditors expect public bailouts if their debtors default.
Unfortunately, the Federal Reserve System is inherently unstable, and must lurch from one self-generated crisis to another, each increasing in severity, until its house of financial cards self-destructs.
Having separated society's medium of exchange from the production of real goods and services in the free market -- and instead linked the currency to creating, packaging, marketing, servicing, and eventually salvaging political debts -- the Federal Reserve system encourages, facilitates, and rewards irresponsibility on the part of both lenders and borrowers, in the private as well as the public sector.
For those who benefit from the system to continue to loot society, the supply of political currency must expand. For that supply to expand, political debts must increase.
True enough, political debts can increase, even geometrically, because political currency can be created (as the saying goes) "out of nothing" to float them. But real wealth cannot be generated simply by the emission of paper promises. Neither can new paper promises pay off old ones.
So, avarice being unlimited, insatiable, and imprudent, the whole operation must cumulate and culminate in an unsustainable bubble of debts that either implodes in a depression or explodes in hyperinflation.
Although the Federal Reserve System is fatally flawed, the wealth and power of elitists in high finance, big business, and the political class depend on maintaining it -- or replacing it in a timely fashion with something of equal serviceability for their ends.
As it cannot long be maintained, it must and will soon be replaced. With what remains a matter for speculation. Not open to the slightest doubt, however, is that, as crises have rocked the system, the establishment has always moved farther away from the Constitution -- deeper into the sump of lawlessness -- to shore up the banking cartel, and always at the expense of common Americans.
In the 1930s, in response to the collapse of the fractional-reserve racket, rather than reforming the operations of the banks, the Roosevelt administration and a pliant Congress seized the American people's gold and outlawed almost all public and private contracts promising to pay in gold. In the 1950s and through the 1960s, until the Nixon administration terminated redemption of Federal Reserve notes in gold in 1971, the inflationary policies of the Federal Reserve System drained off more than half of America's national stock of gold to foreign banks and the profiteers operating through them. And during the last few decades, surreptitious manipulation of the precious-metals markets has kept the price of gold (measured in Federal Reserve notes) suspiciously low, even as this country's financial structures have become increasingly shaky.
The price of gold has been manipulated for two reasons, one being the suppression of evidence, the other the throttling of monetary evolution.
First, an ever-increasing price of gold reflects the breakdown of the Federal Reserve System -- just as an ever-increasing temperature reveals that the human body is sick, and when it reaches a critical point that death is imminent.
Second, those who fatten off of political currency need to prevent ordinary people from realizing that only a return to silver and gold as common media of exchange can stabilize America's economy, and especially from actually employing silver and gold in preference to Federal Reserve notes in their day-to-day transactions. However, as the Federal Reserve System experiences ever-more-frequent, ever-more-serious, and ever-less-tractable problems, downward manipulations of the prices of gold and silver will become impossible. And that the system is beyond repair will become apparent to all.
At that point, the question will arise -- and behind the scenes doubtlessly already has arisen among bankers and politicians -- as to how and with what to replace the banking cartel.
When a political currency has failed, the traditional trick of the bankers and politicians has been to introduce a new, supposedly more stable currency -- often within a new, supposedly more stable banking apparatus. This was the sleight of hand that moved America from the independent state banks in operation prior to the Civil War, through the partially cartelized national banks created in the 1860s, to the fully cartelized Federal Reserve System established in 1913.
Throughout this devolution, the progression of illegality became increasingly stark.
The state banks violated Article I, Section 10, Clause 1, of the Constitution. But at least they operated only regionally. The national banks violated Article I, Section 8, Clause 2, and operated throughout the country. But at least their emission of paper currency was limited by the amount of...to be continued in Part 2.
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