American Clarity Essays political, philosophical, and theological from an American romantic.

Waking up in the middle of the night with a revelation isn’t always a fun thing. Sometimes, it happens on a night when you were counting on making up for the sleep you lost during the last few nights, and sometimes you wish you could forget about whatever it is, and go back to dreaming about multicolored and magical Shamwows with beards and beautiful voices (!).

Fortunately for us, revelation wasn’t something yours truly could shake off, and I wanted to bring it to you so that you could prepare yourselves for what’s coming: massive disappointment in Republican AND Democratic leadership on two major issues, and potentially the collapse of our entire economic system. Those two issues are immigration for Republicans and the green movement for Democrats, both reforms being economically impossible under our current banking system. I’d like to tell you why, through the lens of a man named Chris Martenson.

For those of you unfamiliar with the man and his work, Mr. Martenson is a rogue economist, and has devoted the last few years of his life studying the Austrian school of hard-currency economics and the logical implications of having a fiat currency system (or rather, what’s known as “money with no value other than what the government decides it has”).

Mr. Martenson would say that one of the major implications of a fiat currency system is that, because all our currency is loaned—yes, loaned—from thin air into existence through our banking system, there’s always going to be more debt in our system than actual money (1). As such, there’s really no way to pay off all the loans in existence, because there isn’t enough money to pay the interest.

If this sounds convoluted and strange, it’s because it’s an insustainable abomination and a lie. In fact, this system seems so unfathomable, I always ask disbelievers to explain how the money in our economy has expanded enormously and home prices have inflated even despite what the CIA describes as an 813 billion dollar trade deficit(2), and a national debt load that should have been dwarfed by this point, considering the insane amounts of capital created since 1971 (3). For an easily-digestible explanation of how this works, go to this following link.

http://www.chrismartenson.com/crashcourse/chapter-7-money-creation

So anyway, with a system like this, the only way we can continue to function and have everyone actually pay the interest on their loans is by creating more money through even more lending. The government creates more money out of thin air (or basically does so by allowing banks to lend even higher quantities than the amount of capital they have on hand), lends it to banks, and they lend it to you. Thus, the money supply (debt!) must constantly grow to fuel the other debts in existence, otherwise nobody can pay their loans off, and this results in a massive collapse in capital (1)(4). This is where the problem lies: how do we get the money supply to grow without massive inflation?

Well, most economists know that in a fiat economy, a little bit of inflation is a good thing. For instance, you can look back in history and see how home prices have inflated (on average) at 6.74% every year for the past 60 years (1940-2000), and people are okay with this (5). What’s bad is rampant inflation, which occurs when prices rise higher than wages can follow, and causes massive problems for an unhappy populace (6).

Unfortunately, since the money supply must grow so that the whole country doesn’t default on their loans, there are three things that have to happen:

1) the economy must constantly grow, so that we don’t feel the effects of massive inflation

2) we must increase our consumption of resources to grow the economy

3) the population must continue to expand in order to support a growing economy

As you can imagine, this throws Democrats into a pretty bad place, because our economy is dependent upon oil consumption and the plastics and wastes it produces. Because of this, Democrats are being promised a green revolution without ever getting anywhere near a solution: we’re going to actually increase our pollution until the day our banking system collapses. The world will be ruined or we’ll run out of oil before that happens, and all those new green laws and the exorbitant application fees they bring aren’t really doing too much other than sending our businesses overseas. It’s volume of unavoidable pollution that’ll kill us, after all.

Republicans are in the same pickle: they’re being promised immigration reforms without recognizing the fact that the economy must grow in order to even survive, and this requires a growing population. And guess which indigenous population isn’t breeding (7)? Just so happens, that whole “one kid is good enough for me” thing isn’t really compatible with our economic system.

So what we’re looking at here is a Republican leadership that’s being forced to allow the illegal aliens and other imports to stay here, because the bottom line is that if they leave, we won’t have the people to facilitate a growing economy. Once they leave, we can’t inflate the money supply, and massive defaults on loans would occur.

Couple that with the Immigration Act of 1965, which mandates that we import from every nation equally (8), and you can guarantee that when plastics and oil become difficult to get and the economy can’t grow anymore (consider that even as you read this, Mexico, the US’s number three producer of oil, won’t be able to produce any more in 9 years[9][10]), the US economic system will shatter and splinter the country into various portions, the government incapable of maintaining any sort of unity other than through violence. So if this keeps up, I smell a civil war. It’s not like your sense of belonging is entirely a social construct, you know, and people look out for others similar to them. Believing that an economy could shatter and people will horde into completely diverse groups is LaLa Land fantasy.

Plus, Republicans have been so lazy and weak as of late, not challenging the welfare system or the equal-opportunity laws, even considering that the a major reason our country was successful in the past was that the people who showed up had two options: work hard or starve. Thus, the traditionally lazy scoundrels known as the Irish became the hard workers and integrated after a long, difficult struggle to improve and let everyone know that they were just as good as anyone else, all through sheer determination, competition, and healthy passive eugenics. Today, there’s no incentive for any imports to do anything. A person arriving from another country can expect to not have to work (13), get health care and welfare for their illegitimate kids (11)(12), in-state tuition (14), free/cheap public housing (15), and nice healthy lawsuit money if they aren’t being treated like royalty at work (16)(17). So you can count on work ethics and family values not being economically necessary, thanks to your government. If that isn’t going to keep people lazy, criminal, and dependent on the government, I don’t know what will (18).

Looking a little deeper, though, maybe our leaders understand that having an illegal, uneducated, poor population without voting rights is preferable to being forced into importing people with money who could actually end up putting more Democrats in power in exchange for more handouts and a “legislatively inclusive mentality.” Might be. If this last election proves anything, it’s that race and handouts matter. If not to people who actually follow current events and enjoy philosophizing on the issues, then to all the masses of people who don’t (that would be 3/4ths of Americans).

So, Right Wing or Left Wing? It’s all Dumb Wing if you enjoy simultaneously facilitating the eventual destruction of the country through debt and not getting what you’re promised. But the way things are looking, it’s not like anyone actually believes the country will survive anyway. Already this year (in January, need I remind you), our federal deficit is close to half a trillion dollars in a 14 trillion dollar economy, and that’s not including the coming 800 billion dollar stimulus package which is necessary to make sure that our pyramid-scheme financial system doesn’t collapse because of all the toxic loans that just disappeared (19)(20). But then again, those who study Austrian economics know that there are only two paths out of this mess: massive inflation or massive default.

So if you’re a Democrat, realize that a gold standard is the only way to a green revolution. If you’re a Republican, realize that you can’t stop the destruction of your nation’s cultural heritage without the gold standard either. The banking system has to go, and you shouldn’t vote for anyone who promises anything otherwise, because a system that’s predicated on eternal and exponential growth can’t facilitate either movement.  And as we all know, if you don’t have a gold/silver standard, you have a fiat currency system.

Now, here’s how to fix the banking system: allow all cash to be pegged to a specific gold weight, and compensate for the current imbalance between the debt to cash ratio by calculating the imbalance, dividing that imbalance by the number of our population, and sending equal checks to everyone without a criminal record who has legal citizenship. That way, the whole lending structure won’t collapse because the money doesn’t exist, you’ll get a stimulus package, and our money supply won’t be controlled by bankers. And if that seems a little too drastic of a plan, then we could also opt for Ron Paul’s idea of having a secondary gold currency, which people could choose to use instead of the paper money. That way nobody is forced into anything, and the people decide what they like best. Be prepared, though: regardless of which option we pick, our GDP will shrink for a while as the country re-gears itself for efficient production and liquidates bad debt, but that’ll be preferable to hyperinflation, total currency collapse, dysgenically drowning our population in culturally adverse imports with too many privileges, and/or destroying the planet.

Last, As Alan Greenspan once said (before he became evil): “In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

“This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”

So what’ll it be?

 

 

1) How a fiat currency system operates, and why inflation occurs to protect banks (for quick reference, look to “Postponing the Ultimate Disaster”)

http://mises.org/story/3146

2) CIA factbook: USA info

https://www.cia.gov/library/publications/the-world-factbook/geos/us.html

3) Federal data regarding M1, M2 money supplies

http://research.stlouisfed.org/fred2/data/M1SL.txt

http://research.stlouisfed.org/fred2/data/M2SL.txt

4) Our financial house of cards

http://www.mises.org/story/2926

5) Census Bureau: increasing home values since the 1950′s

http://www.census.gov/hhes/www/housing/census/historic/values.html

6) Problems associated with inflation

http://www.oswego.edu/~edunne/200ch7.html

http://www.beginnermoneyinvesting.com/html/the_effects_of_inflation_.htm

7) PEW research center: over 80% of population increase in coming years from immigrants

http://www.nysun.com/pics/71104.pdf

8) The Immigration Act of 1965 (Hart-Cellar Act)

http://www.america.gov/st/educ-english/2008/April/20080423214226eaifas0.9637982.html

9) Mexico, our third largest source of oil

http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html

10) Mexico running out of oil

http://www.iht.com/articles/2007/10/22/bloomberg/bxatm.php

11) Immigrants tend to live in high-benefit (aka welfare) states

http://www.nber.org/cgi-bin/printit?uri=/digest/apr99/w6813.html

12) Immigrants excluded from TANF benefits receive them if children are US citizens

http://www.hhs.gov/asl/testify/t060726.html

13) Immigrants skirting around welfare restrictions

http://www.fairus.org/site/PageServer?pagename=iic_immigrationissuecenters7fd8

14) In-state tuition for even illegal immigrants

http://www.foxnews.com/story/0,2933,186876,00.html

15) Even illegal immigrants crowding into public housing

http://www.marinij.com/ci_11350240

16) Discrimination laws

http://www.eeoc.gov/facts/qanda.html

17) Illegal aliens sue Wendy’s

http://www.msnbc.msn.com/id/15208225/

18) The Cato institute: welfare and crime

http://www.cato.org/testimony/ct-wc67.html

19) US January deficit already more than all of 2008

http://money.cnn.com/2009/01/13/news/economy/treasury_budget_deficit_Dec08/

20) Obama’s 800 billion dollar stimulus package

http://www.nytimes.com/2009/01/29/us/politics/29obama.html?_r=1&hp