Tuesday, November 10, 2009

On Bimetallism and Other Things

US 45th Infantry Division armpatch 1920-1935

Chase Logo: Note the thematic resemblance to the swastika. But to be fair to Chase, the swastika is an ancient symbol of life, the sun and power; but they use the counterclockwise wings as did the Nazis, which is rare. It was also found on the United States Infantry 45th division arm patch from 1920-1935 until they abandoned it to reject the Nazi taint.

A Few Notes On Our Magickal Monetary System

1) The Usual Suspects defraud the People
The same pattern reoccurs. Over and over again the plutocrats, the bankers, the industrialists, the investor class- those who live on the ability to manipulate money and not produce useful work or goods- take advantage of hard working and therefore ignorant people.
The robber barons of the "Gilded Age" used the insurance policy premium money of working people to create oil and railroad monopolies. Retirement account money and shaky mortgages have been used by the manipulators of this "Age Of Empty Promises" to create unfathomable baroque investment er, betting strategies which, when they inevitable fail, are salvaged by money soaked from the taxpayers. And surprise! Many of the institutions and individuals involved in these schemes are the direct descendants of those same culprits from the 19th Century, for example: the Rockefeller controlled Chase Bank.

2) Too Busy To Notice
The average person fails to notice what is happening until the theft of their money is a fait accompli; and that is when it hurts.

3) "Solutions" Only Intensify The Problem
In these situations certain individuals finally act to describe and correct the problem. Politicians wring their hands publicly and dine with the miscreants privately. The plutocrats delay. They control the courts and the houses of congress. But after a while they allow properly scrubbed "reforms" that are largely irrelevant. Throughout the 19th Century they squeezed the people with the railroads. Farmers were choked to death by the rails and farms were lost. By the time the railroads were finally regulated in the 20th Century these plutocrats moved on to controlling the energy that drove the railroads and the suddenly ubiquitous internal combustion engine. In very little (and those we discuss here think very far ahead) time those small farmers who had complained so much in the 19th century were mostly gone, replaced by the corporate farmer with all the rights of the individual and few of the responsibilities thanks to the Supreme Court consisting of mostly corporate lawyers who had determined that corporations, a legal construct, must have the rights of human beings, with protections retained. Soon corporate farms would receive federal subsidies far larger than the consistently refused modest requests of those 19th century farmers. The Age Of Corporate Socialism, the partnership of government and the holders of the money was underway.

Corporation, n. An ingenious device for obtaining individual profit without individual responsibility. -Ambrose Bierce, The Devil's Dictionary

4) The Monetary System Is Stacked Against Us
Beyond energy the plutocrats determined to own the mother lode of wealth itself, the monetary system would have to be placed under their control. Bimetallism was the original policy of the United States of America. The U.S. Coinage Act of 1792 established the United States Mint and set the ratio value of silver to gold at 15:1. This ratio had been very consistent for hundreds of years. The dollar was pegged at 371 4/16 grains of pure silver. In other words 15 ounces of silver got you one ounce of gold and vice versa at the mint; coined money could be gotten for weight equivalents of either of the precious metals. In 1834 the ratio was adjusted to 16:1 due to a fall in the value of silver. (England would soon adopt the Gold Standard and this project would affect the value of silver negatively.) This adjustment was necessitated, it was said, by the initial effects of Gresham's Law, which essentially states: Bad money drives out good money from circulation under legal tender laws.
As silver became more abundant due to increased production after discovery of new veins in the West, certain sophisticated and wealthy arbitragers redeemed silver for gold at the mint, taking advantage of the fixed ratio of value. Gold also tended to disappear from circulation into hoards partly because of its higher value than silver at the fixed ratio and the risks and inconvenience involved with carrying around high value money. How many of us carry around stacks of $100 (or higher) bills? But one must remember: both silver and gold are Good money. Only the ratio of value had gotten slightly askew and that ratio could be adjusted. Silver money did NOT have a considerably less value than its face; the difference was slight and the linkage with gold actually stabilized the value of BOTH metals. In fact, there was a shortage of silver coin in the 19th Century. Many of us old codgers remember when silver was removed from the coinage in the sixties (replaced by the worthless clink in your pocket today) and silver coins in circulation quickly disappeared into hoards: That was truly Gresham's Law!
After the Civil War as silver production in the West increased, the battle between Goldbugs (Eastern plutocrats as stalking horses for London bankers) and what I term the Silverfish (Westerners, silvermine owners, farmers) raged especially at the end of the 19th century. Goldbugs would scream about inflation caused by all that silver. Silverfish would wail of depression (and there were a lot of them then) and argue that more money in circulation would lead to a general prosperity. Since mostly it was the wealthy who possessed gold, they controlled the argument. Silver was murdered long before anyone noticed the death.
The champions of silver never won a significant battle in Congress once bimetallism was surreptitiously killed by the Fourth Coinage Act in 1873, which actually forbid the coinage of the silver dollar and which President Grant signed in total ignorance of this fact. The Sherman Silver Act was only a walking zombie corpse of silver(which forced the Mint to purchase a limited amount of the metal for dollar coinage) which was beaten down by Grover Cleveland in 1893. Argent was formally entombed by the Gold Standard Act of March 14, 1900. Silver officially became mere token coinage. The dollar was set at 25 8/10 grains of GOLD, about $20.67 dollars an ounce. Real money had effectively been taken out of the hands of the people.
Ironically, the value of silver plummeted after this change to a floating market and the ratio of silver to gold value rocketed to 40:1. Today, November 11, 2009 this ratio is about 64:1. Remember, a dollar at the founding of the Republic was worth a stable 371 4/16 grains of silver by Law; now a dollar gold would buy 1000 grains of silver. The age of inflation was underway. Silver, the money used by the people was inflated, i.e. became of lesser value and gold, the money held by the rich man deflated, i.e. increased in value, leaving the rich man much better off, as usual.
So a real inflation was born after the gold standard was put in place; the one stable monetary metal was gold only, and its price put ownership beyond the reach of the vast majority of the people. Bimetallism had actually kept inflation in check. But wait, the goldbugs saw the advantage of more plentiful money (gold, as well as silver, is in limited supply and it is difficult to transfer and protect); they just needed time to set up a system that would benefit them. Lo and behold; in 1913 the Federal Reserve Act was passed and inflicted on the people in 1914 as the panacea for the great (artificial) disturbances they had experienced in the economy since the Civil War, and especially the abandonment of bimetallism in 1873.
It was promised that this new system would stabilize the economy and the monetary system; but inflation the likes of which the American people had never imagined would be unleashed in the 20th Century. Now the money would be worth what the plutocrats said it was worth; and there would be as much of it available as they wanted to be available, at appropriate interest rates, of course. No one could fathom the magickal formulas performed by the High Priests of Mammon מָמוֹן, in the Temples of the Bankers to control the Current of these new and wonderful imaginary dollars printed in the Bank's name. No one dared to admit ignorance or knowledge of what was happening. But all believed in the Currency.

Denouement, or Faith Based Money

President Roosevelt devalued the dollar during the Great Depression to $35.oo an ounce of gold and in 1933 made it illegal for the people to own gold.
In March 1968 a two tier system of gold value was set up; the favored banks continued to trade at $35 an ounce while the "free market" was on its own. This precious ingenium was unsustainable and the dollar finally and officially lost all touch with any metal at all in November of 1973.
The masters somewhat lost interest in gold and it was allowed into the possession of the people again since most really couldn't afford to hold this yellow luxury in a consumer age. The Bimetallism Debates of the 19th Century had been rendered moot. The world had a monetary system based on Nothing....
(Those familiar with Aleister Crowley's work will understand the deeper significance of that last statement.)

And the currency doesn't even have to exist much on paper anymore; it shimmers predominantly as binary code in mainframes willed into existence by the Hierophants of Finance. The flow of printed money into the economy has been stifled. The rich man's paradise has arrived: unlimited money for them and very little available to the people.

Today, November 11, 2009 spot gold was selling for $1,108 imaginary dollars an ounce after record highs earlier this week at $1,110 an ounce.

Some Quotes of the Day

When you look for it, you cannot see it
When you listen for it, you cannot hear it
But when you use it, it is inexhaustible
-Laotse, on the Tao

"Nihilism is the belief that all values are baseless and that nothing can be known or communicated. It is often associated with extreme pessimism and a radical skepticism that condemns existence. A true nihilist would believe in nothing, have no loyalties, and no purpose other than, perhaps, an impulse to destroy. While few philosophers would claim to be nihilists, nihilism is most often associated with Friedrich Nietzsche who argued that its corrosive effects would eventually destroy all moral, religious, and metaphysical convictions and precipitate the greatest crisis in human history. In the 20th century, nihilistic themes–epistemological failure, value destruction, and cosmic purposelessness–have preoccupied artists, social critics, and philosophers. Mid-century, for example, the existentialists helped popularize tenets of nihilism in their attempts to blunt its destructive potential. By the end of the century, existential despair as a response to nihilism gave way to an attitude of indifference, often associated with antifoundationalism."-Internet Encyclopedia of Philosophy definition: Nihilism [LINK]

"There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it."-William Jennings Bryan, The Cross of Gold Speech at the Democratic Convention, July 9, 1896

" I wonder that silver is not already coming into the mint tosupply the deficiency in the circulating medium. Experience has proved that it takes about $40,000,000 of fractional currency to make the small change necessary for the transaction of the business of the country. Silver will gradually take the place of this currency and further, will become the standard of value which will be hoarded in a small way. I estimate that this will consume from $200,000,000 to $300,000,000 of this species of our circulating medium. I confess to a desire to see a limited hoarding of money. BUT I WANT TO SEE A HOARDING OF SOMETHING THAT IS A STANDARD OF VALUE THE WORLD OVER. SILVER IS THIS. Our mines are now producing almost unlimited amounts of silver, and it is becoming a question, 'What shall we do with it?' I suggest here a solution which will answer for some years, to put it in circulation, keeping it there until it is fixed, and then we will find other markets.
-Letter written by President Ulysses S. Grant, October 3, 1873, indicating that he had no knowledge that the Fourth Coinage Act, which he had signed eight months earlier, prohibited the coinage of the silver dollar and limited the legal tender of silver to no more than a five dollar transaction.

"How glorious it is - and also how painful - to be an exception."- Alfred de Musset, December 11, 1810 – May 2, 1857

"One should judge a man mainly from his depravities. Virtues can be faked. Depravities are real."-Klaus Kinski

What a pain in the ass must be the exceptional person.

Postscript: Gresham's Law And A New Law
Let us leave with a note on the adage, "Bad money drives out good," as the essence of Gresham's Law. This was actually an assertion by Henry Dunning Macleod, a Cambridge trained lawyer, in 1857 to characterize Gresham's monetary ideas.
Isn't it interesting that Macleod would be setting up what we can show to be a flawed and fallacious representation of Gresham that was used as a criticism of perfectly good coin, silver, at this time and place when the City of London couldn't act fast enough to demonetize silver? Oh yes, let us remember that England had gone to a gold standard in 1844 partly citing a silver shortage.
Gresham actually stated: "that good and bad coin cannot circulate together." This is not exactly the same thing as saying "bad money drives out good." But that is a quibble. However we can see that gold coin and silver coin are both "good" money when honestly represented, something England found difficult to do. Applying "Gresham's Law," as it was, to the bimetallism debate of the 19th Century in the United States was a disingenuous argument. Gresham was warning his Queen about debased silver coin, which in no way applied to U.S. coinage in the 19th Century prior to the demonetization of silver. Gresham was concerned, while in service to Queen Elizabeth in 1558, about the highly debased silver coin still in circulation issued during the reigns of Henry VIII and Edward VI to fraudulently finance the enormously expensive and frivolous wars of those times.
History shows that the gold standard always leads first to the official debasement of silver coin, rendering it token, and ultimately to the debasement of all currency, leading to institutionalized inflation. Gold value artificially pumps up on the steroid of positive government sanction in relation to the value of silver which is artificially suppressed by the negative government sanction of demonetization.

Bonanno's Law: The Gold Standard always devalues actual circulating money.

First Corollary To Bonanno's Law: Those who hold the gold establish a gold standard to effectively extract wealth from those who do not use or hold gold who are the vast majority of the people.

Second Corollary To Bonanno's Law: Once established, the gold standard can be jettisoned after the fiat monetary system is put in place and controlled by those who held the gold.

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