H.R. 2629: Coercion is Not Health Care Act
May 21, 2009 Introduced and Referred to the House Committee on Energy and Commerce.
To protect the American people's ability to make their own health care decisions by ensuring the Federal Government shall not force any American to purchase health insurance.
SPEECH OF HON. RON PAUL OF TEXAS
IN THE HOUSE OF REPRESENTATIVES
THURSDAY, MAY 21, 2009
* Mr. PAUL. Madam Speaker, today I am introducing the Coercion is Not Health Care Act. This legislation forbids the Federal Government from forcing any American to purchase health insurance, and from conditioning participation in any Federal program, or receipt of any Federal benefit, on the purchase of health insurance.
* While often marketed as a ``moderate'' compromise between nationalized health care and a free market solution, forcing every American to purchase a government-approved health insurance plan is a back door approach to creating a government-controlled health care system.
* If Congress requires individuals to purchase insurance, Congress must define what insurance policies satisfy the government mandate. Thus, Congress will decide what is and is not covered in the mandatory insurance policy. Does anyone seriously doubt that what conditions and treatments are covered will be determined by who has the most effective lobby. Or that Congress will be incapable of writing a mandatory insurance policy that will fit the unique needs of every individual in the United States?
* The experience of States that allow their legislatures to mandate what benefits health insurance plans must cover has shown that politicizing health insurance inevitably makes health insurance more expensive. As the cost of government-mandated health insurance rises, Congress will likely create yet another fiscally unsustainable entitlement program to help cover the cost of insurance.
* When the cost of government-mandated insurance proves to be an unsustainable burden on individuals and small employers, and the government, Congress will likely impose price controls on medical treatments, and even go so far as to limit what procedures and treatments will be reimbursed by the mandatory insurance. The result will be an increasing number of providers turning to ``cash only'' practices, thus making it difficult for those relying on the government-mandated insurance to find health care . Anyone who doubts that result should consider the increasing number of physicians who are withdrawing from the Medicare program because of the low reimbursement and constant bureaucratic harassment from the Centers for Medicare and Medicaid Services.
* Madam Speaker, the key to effective health care reform lies not in increasing government control, but in increasing the American people's ability to make their own health care decisions. Thus, instead of forcing Americans to purchase government-approved health insurance, Congress should put the American people back in charge of health care by expanding health care tax credits and deductions, as well as increasing access to Health Savings Accounts. Therefore, I have introduced legislation, the Comprehensive Health Care Reform Act (H.R. 1495), which provides a series of health care tax credits and deductions designed to empower patients. I urge my colleagues to reject the big government-knows-best approach to health care by cosponsoring my Coercion is Not Health Care Act and Comprehensive Health Care Reform Act.
Sunday, May 24, 2009
H.R. 1207: Federal Reserve Transparency Act of 2009
To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.
Sponsor: Rep. Ronald Paul [R-TX14] 179 Cosponsors
Feb 26, 2009 Introduced and Referred to the House Committee on Financial Services.
SPEECH OF HON. RON PAUL OF TEXAS
IN THE HOUSE OF REPRESENTATIVES
THURSDAY, FEBRUARY 26, 2009
* Mr. PAUL. Madam Speaker, I rise to introduce the Federal Reserve Transparency Act. Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar. Since 1913 the dollar has lost over 95% of its purchasing power, aided and abetted by the Federal Reserve's loose monetary policy. How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? Only big-spending politicians and politically favored bankers benefit from inflation.
* Serious discussion of proposals to oversee the Federal Reserve is long overdue. I have been a longtime proponent of more effective oversight and auditing of the Fed, but I was far from the first Congressman to advocate these types of proposals. Esteemed former members of the Banking Committee such as Chairmen Wright Patman and Henry B. Gonzales were outspoken critics of the Fed and its lack of transparency.
* Since its inception, the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations. While the conventional excuse is that this is intended to reduce the Fed's susceptibility to political pressures, the reality is that the Fed acts as a foil for the government. Whenever you question the Fed about the strength of the dollar, they will refer you to the Treasury, and vice versa. The Federal Reserve has, on the one hand, many of the privileges of government agencies, while retaining benefits of private organizations, such as being insulated from Freedom of Information Act requests.
* The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight? Particularly when hundreds of billions of dollars of currency swaps have been announced and implemented, the Fed's negotiations with the European Central Bank, the Bank of International Settlements, and other institutions should face increased scrutiny, most especially because of their significant effect on foreign policy. If the State Department were able to do this, it would be characterized as a rogue agency and brought to heel, and if a private individual did this he might face prosecution under the Logan Act, yet the Fed avoids both fates.
* More importantly, the Fed's funding facilities and its agreements with the Treasury should be reviewed. The Treasury's supplementary financing accounts that fund Fed facilities allow the Treasury to funnel money to Wall Street without GAO or Congressional oversight. Additional funding facilities, such as the Primary Dealer Credit Facility and the Term Securities Lending Facility, allow the Fed to keep financial asset prices artificially inflated and subsidize poorly performing financial firms.
* The Federal Reserve Transparency Act would eliminate restrictions on GAO audits of the Federal Reserve and open Fed operations to enhanced scrutiny. We hear officials constantly lauding the benefits of transparency and especially bemoaning the opacity of the Fed, its monetary policy, and its funding facilities. By opening all Fed operations to a GAO audit and calling for such an audit to be completed by the end of 2010, the Federal Reserve Transparency Act would achieve much-needed transparency of the Federal Reserve . I urge my colleagues to support this bill.
GovTrack link
Sponsor: Rep. Ronald Paul [R-TX14] 179 Cosponsors
Feb 26, 2009 Introduced and Referred to the House Committee on Financial Services.
SPEECH OF HON. RON PAUL OF TEXAS
IN THE HOUSE OF REPRESENTATIVES
THURSDAY, FEBRUARY 26, 2009
* Mr. PAUL. Madam Speaker, I rise to introduce the Federal Reserve Transparency Act. Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar. Since 1913 the dollar has lost over 95% of its purchasing power, aided and abetted by the Federal Reserve's loose monetary policy. How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? Only big-spending politicians and politically favored bankers benefit from inflation.
* Serious discussion of proposals to oversee the Federal Reserve is long overdue. I have been a longtime proponent of more effective oversight and auditing of the Fed, but I was far from the first Congressman to advocate these types of proposals. Esteemed former members of the Banking Committee such as Chairmen Wright Patman and Henry B. Gonzales were outspoken critics of the Fed and its lack of transparency.
* Since its inception, the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations. While the conventional excuse is that this is intended to reduce the Fed's susceptibility to political pressures, the reality is that the Fed acts as a foil for the government. Whenever you question the Fed about the strength of the dollar, they will refer you to the Treasury, and vice versa. The Federal Reserve has, on the one hand, many of the privileges of government agencies, while retaining benefits of private organizations, such as being insulated from Freedom of Information Act requests.
* The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight? Particularly when hundreds of billions of dollars of currency swaps have been announced and implemented, the Fed's negotiations with the European Central Bank, the Bank of International Settlements, and other institutions should face increased scrutiny, most especially because of their significant effect on foreign policy. If the State Department were able to do this, it would be characterized as a rogue agency and brought to heel, and if a private individual did this he might face prosecution under the Logan Act, yet the Fed avoids both fates.
* More importantly, the Fed's funding facilities and its agreements with the Treasury should be reviewed. The Treasury's supplementary financing accounts that fund Fed facilities allow the Treasury to funnel money to Wall Street without GAO or Congressional oversight. Additional funding facilities, such as the Primary Dealer Credit Facility and the Term Securities Lending Facility, allow the Fed to keep financial asset prices artificially inflated and subsidize poorly performing financial firms.
* The Federal Reserve Transparency Act would eliminate restrictions on GAO audits of the Federal Reserve and open Fed operations to enhanced scrutiny. We hear officials constantly lauding the benefits of transparency and especially bemoaning the opacity of the Fed, its monetary policy, and its funding facilities. By opening all Fed operations to a GAO audit and calling for such an audit to be completed by the end of 2010, the Federal Reserve Transparency Act would achieve much-needed transparency of the Federal Reserve . I urge my colleagues to support this bill.
GovTrack link
H.R. 2630: Protect Patients and Physicians Privacy Act
Statement of Congressman Ron Paul
United States House of Representatives
Statement Introducing the Protect Patients' and Physicians' Privacy Act
May 21, 2009
Madam Speaker, I rise to introduce the Protect Patients’ and Physicians’ Privacy Act. This legislation protects medical privacy, as well as quality health care, by allowing patients and physicians to opt out of any federally mandated, created, or funded electronic medical records system. The bill also repeals the sections of federal law establishing a “unique health identifier” and requires patient consent before any electronic medical records can be released to a third party.
Congress has refused to fund the development of a unique health identifier every year since 1998. Clearly, the majority of my colleagues recognize the threat this scheme poses to medical privacy. It is past time for Congress to repeal the section of law authorizing the federal unique health identifier.
Among the numerous provisions jammed into the stimulus bill, which was rushed through Congress earlier this year, was funding for electronic medical records. Medicare providers have until 2015 to “voluntarily” adopt the system of electronic medical records, or face financial penalties.
One of the major flaws with the federally-mandated electronic record system is that is does not provide adequate privacy protection. Electronic medical records that are part of the federal system will only receive the protection granted by the federal “medical privacy rule.” This misnamed rule actually protects the ability of government officials and state-favored special interests to view private medical records without patient consent.
Even if the law did not authorize violations of medical privacy, patients would still have good reason to be concerned about the government’s ability to protect their medical records. After all, we are all familiar with cases where third parties obtained access to electronic veteran, tax, and other records because of errors made by federal bureaucrats. My colleagues should also consider the abuse of IRS records by administrations of both parties and ask themselves what would happen if unscrupulous politicians gain the power to access their political enemies’ electronic medical records.
As an OB/GYN with over 30 years of experience in private practice, I understand that one of the foundations of quality health care is the patient's confidence that all information the patient shares with his or her health care provider will remain confidential. As an OB/GYN with over 30 years of experience in private practice, I understand that a physician’s ability to provide effective treatment often depends on a patients’ trust that all personal information divulged to a physician will remain confidential. Forcing physicians to place their patients’ medical records in a system without adequate privacy protection undermines that confidence, and thus undermines effective medical treatment.
A physician opt out is also necessary in order to allow physicians to escape from the inefficiencies and other problems that are sure to occur in the implementation and management of the federal system. Contrary to the claims of the mandatory system’s proponents, it is highly unlikely an efficient system of mandatory electronic health records can be established by the government.
Many health technology experts have warned of the problems that will accompany the system of mandatory electronic medical records. For example, David Kibbe, a top technology adviser to the American Academy of Family Physicians, warned President Obama in an open letter late last year that existing medical software is often poorly designed and does a poor job of exchanging information. Allowing physicians to opt out provides a safety device to ensure that physicians can avoid the problems that will inevitably accompany the government-mandated system.
Madam Speaker, allowing patients and providers to opt out of the electronic medical records system will in no way harm the practice of medicine or the development of an efficient system of keeping medical records. Instead, it will enhance these worthy goals by ensuring patients and physicians can escape the inefficient, one-size-fits-all government–mandated system. By creating a market for alternatives to the government system, the op-out ensures that private businesses can work to develop systems that meet the demands for an efficient system of electronic records that protects patients’ privacy. I urge my colleagues to stand up for privacy and quality health care by cosponsoring the Protect Patients’ and Physicians’ Privacy Act.
GovTrack link
United States House of Representatives
Statement Introducing the Protect Patients' and Physicians' Privacy Act
May 21, 2009
Madam Speaker, I rise to introduce the Protect Patients’ and Physicians’ Privacy Act. This legislation protects medical privacy, as well as quality health care, by allowing patients and physicians to opt out of any federally mandated, created, or funded electronic medical records system. The bill also repeals the sections of federal law establishing a “unique health identifier” and requires patient consent before any electronic medical records can be released to a third party.
Congress has refused to fund the development of a unique health identifier every year since 1998. Clearly, the majority of my colleagues recognize the threat this scheme poses to medical privacy. It is past time for Congress to repeal the section of law authorizing the federal unique health identifier.
Among the numerous provisions jammed into the stimulus bill, which was rushed through Congress earlier this year, was funding for electronic medical records. Medicare providers have until 2015 to “voluntarily” adopt the system of electronic medical records, or face financial penalties.
One of the major flaws with the federally-mandated electronic record system is that is does not provide adequate privacy protection. Electronic medical records that are part of the federal system will only receive the protection granted by the federal “medical privacy rule.” This misnamed rule actually protects the ability of government officials and state-favored special interests to view private medical records without patient consent.
Even if the law did not authorize violations of medical privacy, patients would still have good reason to be concerned about the government’s ability to protect their medical records. After all, we are all familiar with cases where third parties obtained access to electronic veteran, tax, and other records because of errors made by federal bureaucrats. My colleagues should also consider the abuse of IRS records by administrations of both parties and ask themselves what would happen if unscrupulous politicians gain the power to access their political enemies’ electronic medical records.
As an OB/GYN with over 30 years of experience in private practice, I understand that one of the foundations of quality health care is the patient's confidence that all information the patient shares with his or her health care provider will remain confidential. As an OB/GYN with over 30 years of experience in private practice, I understand that a physician’s ability to provide effective treatment often depends on a patients’ trust that all personal information divulged to a physician will remain confidential. Forcing physicians to place their patients’ medical records in a system without adequate privacy protection undermines that confidence, and thus undermines effective medical treatment.
A physician opt out is also necessary in order to allow physicians to escape from the inefficiencies and other problems that are sure to occur in the implementation and management of the federal system. Contrary to the claims of the mandatory system’s proponents, it is highly unlikely an efficient system of mandatory electronic health records can be established by the government.
Many health technology experts have warned of the problems that will accompany the system of mandatory electronic medical records. For example, David Kibbe, a top technology adviser to the American Academy of Family Physicians, warned President Obama in an open letter late last year that existing medical software is often poorly designed and does a poor job of exchanging information. Allowing physicians to opt out provides a safety device to ensure that physicians can avoid the problems that will inevitably accompany the government-mandated system.
Madam Speaker, allowing patients and providers to opt out of the electronic medical records system will in no way harm the practice of medicine or the development of an efficient system of keeping medical records. Instead, it will enhance these worthy goals by ensuring patients and physicians can escape the inefficient, one-size-fits-all government–mandated system. By creating a market for alternatives to the government system, the op-out ensures that private businesses can work to develop systems that meet the demands for an efficient system of electronic records that protects patients’ privacy. I urge my colleagues to stand up for privacy and quality health care by cosponsoring the Protect Patients’ and Physicians’ Privacy Act.
GovTrack link
Wednesday, March 25, 2009
The UnConstitutionality of Citizenship by Birth to Non-Americans
By P.A. Madison
Former Research Fellow in Constitutional Studies
February 1, 2005
We well know how the courts and laws have spoken on the subject of children born to non-citizens (illegal aliens) within the jurisdiction of the United States by declaring them to be American citizens. But what does the constitution of the United States say about the issue of giving American citizenship to anyone born within its borders? As we explore the constitutions citizenship clause, as found in the Fourteenth Amendment, we can find no constitutional authority to grant such citizenship to persons born to non-American citizens within the limits of the United States of America.
We are, or should be, familiar with the phrase, "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and the States wherein they reside." This can be referred to as the citizenship clause of the Fourteenth Amendment, but what does "subject to the jurisdiction" mean? Jurisdiction can take on different meanings that can have nothing to do with physical boundaries alone--and if the framers meant geographical boundaries they would have simply used the term "limits" rather than "jurisdiction" since that was the custom at the time when distinguishing between physical boundaries and reach of law.
Fortunately, we have the highest possible authority on record to answer this question of how the term "jurisdiction" was to be interpreted and applied, the author of the citizenship clause, Sen. Jacob M. Howard (MI) to tell us exactly what it means and its intended scope as he introduced it to the United States Senate in 1866:
Mr. HOWARD: I now move to take up House joint resolution No. 127.
The motion was agreed to; and the Senate, as in Committee of the Whole, resumed the consideration of the joint resolution (H.R. No. 127) proposing an amendment to the Constitution of the United States.
The first amendment is to section one, declaring that all "persons born in the United States and Subject to the jurisdiction thereof, are citizens of the United States and of the States wherein they reside. I do not propose to say anything on that subject except that the question of citizenship has been fully discussed in this body as not to need any further elucidation, in my opinion. This amendment which I have offered is simply declaratory of what I regard as the law of the land already, that every person born within the limits of the United States, and subject to their jurisdiction, is by virtue of natural law and national law a citizen of the United States. This will not, of course, include persons born in the United States who are foreigners, aliens, who belong to the families of ambassadors or foreign ministers accredited to the Government of the United States, but will include every other class of persons. It settles the great question of citizenship and removes all doubt as to what persons are or are not citizens of the United States. This has long been a great desideratum in the jurisprudence and legislation of this country.[1]
It is clear the framers of the Fourteenth Amendment had no intention of freely giving away American citizenship to just anyone simply because they may have been born on American soil, something our courts have wrongfully assumed. But what exactly did "subject to the jurisdiction thereof" mean to the framers of the Fourteenth Amendment? Again, we are fortunate to have on record the highest authority to tell us, Sen. Lyman Trumbull, Chairman of the Judiciary Committee, author of the Thirteenth Amendment, and the one who inserted the phrase:
[T]he provision is, that 'all persons born in the United States, and subject to the jurisdiction thereof, are citizens.' That means 'subject to the complete jurisdiction thereof.' What do we mean by 'complete jurisdiction thereof?' Not owing allegiance to anybody else. That is what it means.
Trumbull continues, "Can you sue a Navajo Indian in court? Are they in any sense subject to the complete jurisdiction of the United States? By no means. We make treaties with them, and therefore they are not subject to our jurisdiction. If they were, we wouldn't make treaties with them...It is only those persons who come completely within our jurisdiction, who are subject to our laws, that we think of making citizens; and there can be no objection to the proposition that such persons should be citizens.[2]
Sen. Howard concurs with Trumbull's construction:
Mr. HOWARD: I concur entirely with the honorable Senator from Illinois [Trumbull], in holding that the word "jurisdiction," as here employed, ought to be construed so as to imply a full and complete jurisdiction on the part of the United States, whether exercised by Congress, by the executive, or by the judicial department; that is to say, the same jurisdiction in extent and quality as applies to every citizen of the United States now.[3]
In other words, only children born to American citizens can be considered citizens of the United States since only a American citizen could enjoy the "extent and quality" of jurisdiction of an American citizen now. Sen. Johnson, speaking on the Senate floor, offers his comments and understanding of the proposed new amendment to the constitution:
[Now], all this amendment [citizenship clause] provides is, that all persons born in the United States and not subject to some foreign Power--for that, no doubt, is the meaning of the committee who have brought the matter before us--shall be considered as citizens of the United States. That would seem to be not only a wise but a necessary provision. If there are to be citizens of the United States there should be some certain definition of what citizenship is, what has created the character of citizen as between himself and the United States, and the amendment says that citizenship may depend upon birth, and I know of no better way to give rise to citizenship than the fact of birth within the territory of the United States, born to parents who at the time were subject to the authority of the United States.[4]
No doubt in the Senate as to what the citizenship clause means as further evidenced by Sen. W. Williams:
In one sense, all persons born within the geographical limits of the United States are subject to the jurisdiction of the United States, but they are not subject to the jurisdiction of the United States in every sense. Take the child of an embassador. In one sense, that child born in the United States is subject to the jurisdiction of the United States, because if that child commits the crime of murder, or commits any other crime against the laws of the country, to a certain extent he is subject to the jurisdiction of the United States, but not in every respect; and so with these Indians. All persons living within a judicial district may be said, in one sense, to be subject to the jurisdiction of the court in that district, but they are not in every sense subject to the jurisdiction of the court until they are brought, by proper process, within the reach of the power of the court. I understand the words here, 'subject to the jurisdiction of the United States,' to mean fully and completely subject to the jurisdiction of the United States.[5]
Rep. John Bingham of Ohio, considered the father of the Fourteenth Amendment, confirms the understanding and construction the framers used in regards to birthright and jurisdiction while speaking on civil rights of citizens in the House on March 9, 1866:
[I] find no fault with the introductory clause [S 61 Bill], which is simply declaratory of what is written in the Constitution, that every human being born within the jurisdiction of the United States of parents not owing allegiance to any foreign sovereignty is, in the language of your Constitution itself, a natural born citizen...[6]
Further convincing evidence for the demand of complete allegiance required for citizenship can be found in the "Naturalization Oath of Allegiance to the United States of America," an oath required to become an American citizen of the United States. It reads in part:
I hereby declare, on oath, that I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state or sovereignty, of whom or which I have heretofore been a subject or citizen...
Of course, this very oath leaves no room for dual-citizenship, but that is another troubling disregard for our National principles by modern government. Fewer today are willing to renounce completely their allegiance to their natural country of origin, further making a mockery of our citizenship laws. In fact, recently in Los Angeles you could find the American flag discarded for the flag of Mexico in celebration after taking the American Citizenship Oath.
It's noteworthy to point out a Supreme Court ruling in Afroyim v. Rusk, 387 U.S. 253 (1967), where the court completely discarded the fourteenth's Citizenship Clause scope and intent by replacing it with their own invented Citizenship Clause. The court in effect, ruled that fourteenth amendment had elevated citizenship to a new constitutionally protected right, and thus, prevents the cancellation of a persons citizenship unless they assent.
Unfortunately for the court, Sen. Howard effectively shoots down this feeble attempt to replace his clause with their own homegrown Citizenship Clause. Firstly, Howard finds no incompatibility with expatriation and the fourteenth's Citizenship Clause when he says: "I take it for granted that when a man becomes a citizen of the United States under the Constitution he cannot cease to be a citizen, except by expatriation for the commission of some crime by which his citizenship shall be forfeited."
Secondly, Sen. Howard expressly stated, "I am not yet prepared to pass a sweeping act of naturalization by which all the Indian savages, wild or tame, belonging to a tribal relation, are to become my fellow-citizens and go to the polls and vote with me and hold lands and deal in every other way that a citizen of the United States has a right to do."
The question begs: If Howard had no intention of passing a sweeping act of naturalization--how does the court elevate Howard's Citizenship Clause to a new constitutionally protected right that cannot be taken away since this would certainly require a sweeping act with explicit language to enumerate such a new constitutional right? Remember, the court cannot create new rights that are not already expressly granted by the constitution.
A third problem for the court is the fact both Howard and Bingham viewed the citizenship clause as simply "declaratory" of what they regarded "as the law of the land already." This then requires flights of fantasy to elevate Howard's express purpose of inserting the Citizenship Clause as simply removing "all doubt as to what persons are or are not citizens of the United States," and not to elevate citizenship to a new protected constitutional right. Citizenship is a privilege, not a right as say the right to freedom of religion is, and therefore, can be taken away just as any other privilege can be.
James Madison defined who America seeked to be citizens among us along with some words of wisdom:
When we are considering the advantages that may result from an easy mode of naturalization, we ought also to consider the cautions necessary to guard against abuse. It is no doubt very desirable that we should hold out as many inducements as possible for the worthy part of mankind to come and settle amongst us, and throw their fortunes into a common lot with ours. But why is this desirable? Not merely to swell the catalogue of people. No, sir, it is to increase the wealth and strength of the community; and those who acquire the rights of citizenship, without adding to the strength or wealth of the community are not the people we are in want of.[7]
What does it all mean?
In a nutshell, it means this: The constitution of the United States does not grant citizenship at birth to just anyone who happens to be born within American borders. It is the allegiance (complete jurisdiction) of the child’s birth parents at the time of birth that determines the child’s citizenship--not geographical location. If the United States does not have complete jurisdiction, for example, to compel a child’s parents to Jury Duty–then the U.S. does not have the total, complete jurisdiction demanded by the Fourteenth Amendment to make their child a citizen of the United States by birth. How could it possibly be any other way?
The framers succeeded in their desire to remove all doubt as to what persons are or are not citizens of the United States. They also succeeded in making both their intent and construction clear for future generations of courts and government. Whether our government or courts will start to honor and uphold the supreme law of the land for which they are obligated to by oath, is another very disturbing matter.
Footnotes
[1]. Congressional Globe, 39th Congress (1866) pg. 2890
[2]. Id. at 2893
[3]. Id. at 2895
[4]. Id. at 2893
[5]. Id. at 2897
[6]. Id. at 1291
[7]. James Madison on Rule of Naturalization, 1st Congress, Feb. 3, 1790.
Permission is granted to use, copy or republish this article in its entirely only.
* George Washington, in a letter to John Adams, stated that immigrants should be absorbed into American life so that "by an intermixture with our people, they, or their descendants, get assimilated to our customs, measures, laws: in a word soon become one people."
* In a 1790 speech to Congress on the naturalization of immigrants, James Madison stated that America should welcome the immigrant who could assimilate, but exclude the immigrant who could not readily "incorporate himself into our society."
* Alexander Hamilton wrote in 1802: "The safety of a republic depends essentially on the energy of a common national sentiment; on a uniformity of principles and habits; on the exemption of the citizens from foreign bias and prejudice; and on that love of country which will almost invariably be found to be closely connected with birth, education and family."
* Hamilton further warned that "The United States have already felt the evils of incorporating a large number of foreigners into their national mass; by promoting in different classes different predilections in favor of particular foreign nations, and antipathies against others, it has served very much to divide the community and to distract our councils. It has been often likely to compromise the interests of our own country in favor of another. The permanent effect of such a policy will be, that in times of great public danger there will be always a numerous body of men, of whom there may be just grounds of distrust;—the suspicion alone will weaken the strength of the nation, but their force may be actually employed in assisting an invader."
* The survival of the American republic, Hamilton maintained, depends upon "the preservation of a national spirit and a national character." "To admit foreigners indiscriminately to the rights of citizens the moment they put foot in our country would be nothing less than to admit the Grecian horse into the citadel of our liberty and sovereignty."
*“Nothing was more to be desired than that every practicable obstacle should be opposed to cabal, intrigue, and corruption. These most deadly adversaries of republican government might naturally have been expected to make their approaches from more than one quarter, but chiefly from the desire in foreign powers to gain an improper ascendant in our councils. How could they better gratify this, than by raising a creature of their own to the chief magistracy of the Union? But the convention have guarded against all danger of this sort, with the most provident and judicious attention.”
- The Federalist Papers - Hamilton (Oct 1787-May 1788)
*“The common law of England is not the common law of these states... The indiscriminate admission of all foreigners to the first rights of citizenship, without any permanent security for their attachment to the country, is repugnant to every principle of prudence and good policy.”
George Mason 1788.
*And the children of citizens of the United States that may be born beyond Sea, or out of the limits of the United States, shall be considered as natural born Citizens
- Congress’ Rule of Naturalization (March 26,1790)
Saturday, March 14, 2009
Margaret Hamburg
Al, Lehig Valley, PA said:
"So what you say.........
Well think of it like this if the STATE SETS THE STANDARDS AND THE STATE PICKS THE DOCTORS THAT ARE APPROVED TO ADMINISTER THIS EVALUATION...
What does that mean????
It means they can pick and word questions in such a way that PEOPLE OF FAITH COME UNDER ATTACK....
They could word things so that anyone who actually believes in Crhist Allah Buddah or the like would be deemed incompetent!!!!!!
Think about it not only will this bill DISARM US BY DEEMING ANYONE THEY LIKE UNFIT..."
OH and how much better when they can FORCE treatment and/or institutionalization on people once they declare them "unfit", OH but it will be for the sake of "public safety" or if that don't work "your own safety"...
From NPR.org:
"President Obama's nominee for FDA commissioner — Dr. Margaret Hamburg...
Hamburg fought a tuberculosis epidemic by beefing up the city's ability to force treatment on people infected by the TB bacteria.
"As public health officials [we] have to have the power to take more aggressive actions in those cases," she said at the time, "so that we can protect the health of the public."
http://www.npr.org/templates/story/story.php?storyId=101914671
Here's her profile on Forbes:
Margaret A. Hamburg
Director of Henry Schein, Inc.
Melville , NY
Sector: SERVICES / Medical Equipment Wholesale
52 Years Old
MARGARET A. HAMBURG, M.D. has been a director since 2003. Since 2005, Dr. Hamburg has served as Senior Scientist for the Nuclear Threat Initiative where she served as Vice President of Biological Programs from 2001 to 2004. From 1997 to 2001, Dr. Hamburg served as the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services. From 1991 to 1997, Dr. Hamburg served as the Commissioner of Health for the City of New York. From 1988 to 1990, Dr. Hamburg held positions with the National Institute of Allergy & Infectious Diseases and the Office of Disease Prevention and Health Promotion, Office of the Assistant Secretary for Health, U.S. Department of Health and Human Services.
Director Compensation (Henry Schein, Inc.) for 2007
Total Compensation $249,151.00
Director Compensation (Henry Schein, Inc.) for 2006
Total Compensation $282,365.00
http://people.forbes.com/profile/margaret-a-hamburg/40368
During my google search on her I came across this:
"So what you say.........
Well think of it like this if the STATE SETS THE STANDARDS AND THE STATE PICKS THE DOCTORS THAT ARE APPROVED TO ADMINISTER THIS EVALUATION...
What does that mean????
It means they can pick and word questions in such a way that PEOPLE OF FAITH COME UNDER ATTACK....
They could word things so that anyone who actually believes in Crhist Allah Buddah or the like would be deemed incompetent!!!!!!
Think about it not only will this bill DISARM US BY DEEMING ANYONE THEY LIKE UNFIT..."
OH and how much better when they can FORCE treatment and/or institutionalization on people once they declare them "unfit", OH but it will be for the sake of "public safety" or if that don't work "your own safety"...
From NPR.org:
"President Obama's nominee for FDA commissioner — Dr. Margaret Hamburg...
Hamburg fought a tuberculosis epidemic by beefing up the city's ability to force treatment on people infected by the TB bacteria.
"As public health officials [we] have to have the power to take more aggressive actions in those cases," she said at the time, "so that we can protect the health of the public."
http://www.npr.org/templates/story/story.php?storyId=101914671
Here's her profile on Forbes:
Margaret A. Hamburg
Director of Henry Schein, Inc.
Melville , NY
Sector: SERVICES / Medical Equipment Wholesale
52 Years Old
MARGARET A. HAMBURG, M.D. has been a director since 2003. Since 2005, Dr. Hamburg has served as Senior Scientist for the Nuclear Threat Initiative where she served as Vice President of Biological Programs from 2001 to 2004. From 1997 to 2001, Dr. Hamburg served as the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services. From 1991 to 1997, Dr. Hamburg served as the Commissioner of Health for the City of New York. From 1988 to 1990, Dr. Hamburg held positions with the National Institute of Allergy & Infectious Diseases and the Office of Disease Prevention and Health Promotion, Office of the Assistant Secretary for Health, U.S. Department of Health and Human Services.
Director Compensation (Henry Schein, Inc.) for 2007
Total Compensation $249,151.00
Director Compensation (Henry Schein, Inc.) for 2006
Total Compensation $282,365.00
http://people.forbes.com/profile/margaret-a-hamburg/40368
During my google search on her I came across this:
Margaret Hamburg • Board • Nanotechnology Project
Margaret Hamburg. Vice President for Biological Programs, Nuclear Threat Initiative. Margaret A. Hamburg, M.D. is the Vice President for Biological Programs ...
www.nanotechproject.org/about/leadership/board/margaret_hamburg/ - 9k - Cached - Similar pages
When clicking on the top link I got this:
404 Page Not Found
The page you have attempted to access has either moved or does not exist.
To find the page you are looking for, please use our search engine (upper right hand corner), or see the site map.
So I clicked the "Cached" link:
www.nanotechproject.org/about/leadership/board/margaret_hamburg/ - 9k - Cached - Similar pages
When clicking on the top link I got this:
404 Page Not Found
The page you have attempted to access has either moved or does not exist.
To find the page you are looking for, please use our search engine (upper right hand corner), or see the site map.
So I clicked the "Cached" link:
Tuesday, March 10, 2009
Democracy vs. Republic or Republic vs. Democracy
“Indisputably, this nation was founded as a republic and its leaders were justifiably afraid of a democracy, lest it destroy the nation they had risked their lives to establish”
It was long ago speculated that the reason why so many Americans — especially new (naturalized) and working class Americans — register and vote as Democrats instead of Republicans is that they think this nation is a democracy. After all, that's what they've been told all their lives, and, wanting to be "good Americans," they opt to call themselves Democrats.
As a person who has never been able to understand how so many people with, supposedly, common sense would identify with and slavishly support the very party that bleeds their pocketbooks dry while enacting interminable tax loopholes for their very rich campaign contributors, that theory makes better sense than anything I have been able to come up with.
The redefining of "democracy" is one of the most disastrous and potentially fatal blows America has ever suffered, and the most frustrating thing about it is that it is such a blatant lie. The simple truth is that America is not now, never was, and was never intended to be a "democracy."
The political systems known as "democracy" and "republic" were created and named concurrently about 3,000 years ago in ancient Greece in what are known as "city-states": cities that were in bare-knuckle competition with each other even though their citizens were all the same nationality, Greek.
The one thing both systems had in common was the idea of self rule; that is, the absence of a "king" by any name. The distinction between them was that, in democracies, the qualified voters (which included every "free" citizen — yes, the ancient Greeks had their helots; lower, "serf" class people) met together and enacted all laws and made all decisions directly for the state. In the republics, the qualified voters elected representatives who, in turn, met together and enacted all laws and made all decisions for the state. Obviously, any political unit that got too large for all its qualified voters to meet together at one time in one place could not be a democracy, even if it wanted to be.
Also, keep in mind the fact that, contrary to what every 20th Century "liberal" (closet communist) propagandist tells you, "democracies" have never been classless societies, and have never been governments "of all the people."
Furthermore, even then, even 2,500 to 3,000 years ago, the dangers and failures of a democracy had revealed themselves, as shown by writers of the times.
About 370 BC, Plato wrote: "A democracy is a state in which the poor, gaining the upper hand, kill some and banish others, and then divide the offices among the remaining citizens equally."
About 126 BC, Polybius wrote: "The common people feel themselves oppressed by the grasping of some, and their vanity is flattered by others. Fired with evil passions, they are no longer willing to submit to control, but demand that everything be subject to their authority. The invariable result is that government assumes the noble names of free and popular, but becomes in fact the most execrable thing, mob rule."
And about 63 BC, Seneca, a Roman wrote: "Democracy is more cruel than wars or tyrants."
More than 2,000 years before this nation was founded, democracy had been recognized by its creators for the political and economic failure it is.
Colonial American Experience — Subsequent to declaring their independence from Britain, the colonies established their own, individual governments and, apparently in the enthusiasm of independence, most of them incorporated "democratic" standards for qualifying voters in their systems. According to some of the framers of the Constitution and to many 20th Century historians, this act very nearly caused the political death of the infant nation.
Specifically, most of the colonies voted themselves all manner of benefits without any apparent reflection on the ramifications of their acts. As a result, the individual colonies as well as the Confederation were confronted with massive debts and zero funds with which to pay them off. They had no credit — either financial or psychological — anywhere in the world. They were teetering on the brink of bankruptcy and facing the very real threat of being taken over by some European nation.
This crisis, created by the financial and social irresponsibility of "democracy," compelled the convening in 1787 — barely four years after wining their war for independence — of the convention that led to the writing of our Constitution. During those debates, the danger and failure of democracy as a political system was known and pointed out.
Edmund Jennings Randolph, in debate, stated: "Our chief danger arises from the democratic parts of our constitutions."
Alexander Hamilton, in debate, said: "Real liberty is neither found in despotism or the extremes of democracy, but in moderate government."
Elbridge Gerry, in debate, said: "The evils we experience flow from the excess of democracy. The people do not want virtue, but are the dupes of pretended patriots."
And after the Constitution had been adopted: Alexander Hamilton, in Senate: "It has been observed that a pure democracy, if it were practicable, would be the most perfect government. Experience has proved that no position is more false than this. The ancient democracies, in which the people themselves deliberated, never possessed one feature of good government. Their very character was tyranny: their figure deformity."
John Adams, in a letter to John Taylor, wrote: "Remember, democracy never lasts long. It soon wastes, exhausts and murders itself. There never was a democracy yet that did not commit suicide."
James Madison said: "...democracies have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security, or the rights of property; and have in general been as short in their lives as they have been violent in their deaths."
Thomas Jefferson, in the drafts of the Kentucky Resolutions, wrote: "In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution."
(Yes, Democratic Party propagandists and their dupes insist that Thomas Jefferson was a Democrat. And he did, in a response to a European correspondent, say, "...we are all democrats; we are democratic Republicans and democratic Federalist..." and explained that, to him, "democratic" was not a political system but a political condition; specifically, a system in which the government recognizes no social classes and creates no social classes. Where, as far as law go, "all men are created equal." Jefferson, of course, acknowledged that all humans are not equal, in hardly any way — he was just adamant that the laws should make no acknowledgment of these differences, should bestow no benefit or civil advantage to a part of the citizenry because of differences. That was as far as his "democratism" went, which, obviously, is the exact opposite of what "Democrats" today believe.)
John Adams, in a letter to William Cunningham in March 1804, wrote: "Democracy is Lovelace and the people is Clarissa" (an allegoric reference to popular literature of the time, in which Lovelace "did Clarissa wrong").
Not only were our Founding Fathers adamantly opposed to creating a "democratic" system, they were unanimous in giving this nation a republic as its political system.
Alexander Hamilton, June 26, 1788, stated: "There are few positions more demonstrable than that there should be in every republic some permanent body to correct the prejudices, check the intemperate passions, and regulate the fluctuations of a popular assembly."
Alexander Hamilton, also in 1788: "It is of great importance in a republic not only to guard against the oppression of its rulers, but to guard one part of society against the injustice of the other part."
George Washington, April 30, 1789: "The...destiny of the republican model of government (is) justly considered as deeply, perhaps as finally stacked, on the experiment entrusted to the hands of the American people."
Thomas Jefferson, March 11, 1790: "The republican is the only form of government which is not eternally at open or secret war with the rights of mankind."
Thomas Jefferson, 1791: "Government in a well constituted republic requires no belief from man beyond what his reason authorizes."
Thomas Jefferson, July 30, 1795: "The revolution forced them (the "people of America" — author) to consider the subject for themselves, and the result was an universal conversion to republicanism."
Thomas Jefferson, March 12, 1799: "The body of the American people is substantially republican. But their virtuous feelings have been played upon by some fact with more fiction, they have been the dupes of artful manoeuvres, & made for a moment to be willing instruments in forging chains for themselves."
Thomas Jefferson, March 4, 1801: "If there be any among us who would wish to dissolve this Union or to change its republican form..."
Thomas Jefferson, Jan. 18, 1802: "The body of our people ... have ever had the same object in view, to wit, the, maintenance of a federal, republican government..."
Thomas Jefferson, Jan. 13, 1813: "This is my belief of it; it is that on which I have acted...to administer the government according to its genuine republican principles..."
Thomas Jefferson, in the Anas: "He (John Adams — author) has since thoroughly seen that his constituents were devoted to republican government..."
Thomas Jefferson, in the Anas: "...and I fondly hope ... that the motto of the standard to which our country will forever rally, will be ‘federal union, and republican government..."
As historians Charles Austin Beard and Mary Ritter Beard wrote (1939): "At no time, at no place, in solemn convention assembled, through no chosen agents, had the American people officially proclaimed the United States to be a democracy. The Constitution did not contain the word or any word lending countenance to it, except possibly the mention of ‘We the people,' in the preamble ... When the Constitution was framed, no respectable person called himself a democrat."
Justifiably Afraid Of ‘Democracy' — Indisputably, this nation was founded as a republic and its leaders were justifiably afraid of "democracy," lest it destroy the nation they had risked their lives to establish.
And thus it officially was for a century and a half. As recently as in a 1928 U.S. Army training manual it was described thusly:
It is stated that Woodrow Wilson, the Democratic president who gave control of this nation's money to the Federal Reserve Bank and thus put America's economic destiny in the hands of foreign bankers, was the first public figure to proclaim this nation a "democracy."
One of the 1993 Merriam-Webster's definitions of "democracy" is: "the absence of hereditary or arbitrary class distinctions or privileges." Yet today, "democratic" America is riven by class distinction, class envy, and class warfare, and all of it has been deliberately created and fomented by "liberal" (closet communist) Democrats in order to facilitate their personal possession of political power! Not a single day passes today but some Democrat politician somewhere deliberately agitates the masses in class envy, ethnic envy, economic envy, etc. — all in the name of "democracy" which, by their modern definition, forbids the very sociopolitical condition they advocate."
While our "democracy" and its accompanying social self destruction are the planned and deliberate handiwork of the "liberal" enemies of free people, so successful has their redefinition of "democracy" been that the leaders of the opposition, i.e., "conservatism," aid and abet the liberals by their constant reinforcement of the idea that this nation is a democracy and that there is nothing wrong with that.
All of the "conservative" and Republican icons of the past 50 years — William Buckley, Barry Goldwater, Ronald Reagan, Robert Dole, Newt Gingrich, Phil Gramm, Dick Armey, Rush Limbuagh, and Gordon Liddy, to name just a few — invariably refer to this nation as a "democracy" without hesitation.
Today, America is 220 years old, and to call Congress' fiscal policy "loose" is an understatement of monumental proportions. Today, America's debt is several times as large as its total worth (in fact, America's total debt today — over $13 trillion — is, according to Ibbotson Associates, equal to 30 to 35 percent of the entire world's total worth) while chaos prevails in her streets and, like the cancer it is, is spreading to he countryside.
And all because of the successful definition and sanitization of the word "democracy."
"Those who cannot remember the past are condemned to repeat it" — George Santayana.
It may be too late to save America from its historically mandated fate, but that doesn't mean we can't try. And one thing we can all do is to quit propagating the "democracy" lie. We who know better can quit calling America a democracy and we can try to educate those who don't know any better. Oh, yes. We can also call on those public leaders who keep repeating the lie to cease to do so. When the very people who invented "democracy" learn the error of their ways, what excuse can a modern educated person have for not knowing?
Marvin Gardner
Marvin Gardner is secretary of Sons of Liberty (P.O. Box 44673, Boise, ID 83711-0673; phone 208-322-7863), a network of activist patriots whose goals is "the full and permanent restoration of the Constitution and the Bill of Rights as their authors intended them"
NOTE: In accordance with Title 17 U.S.C. section 107, any copyrighted material herein is distributed without profit or payment to those who have expressed prior interest in receiving this information for non-profit research and educational purposes only. For further information please refer to: http://www.law.cornell.edu/uscode/17/107.shtml
http://www.citizensforaconstitutionalrepublic.com/gardner10-27-04.html
It was long ago speculated that the reason why so many Americans — especially new (naturalized) and working class Americans — register and vote as Democrats instead of Republicans is that they think this nation is a democracy. After all, that's what they've been told all their lives, and, wanting to be "good Americans," they opt to call themselves Democrats.
As a person who has never been able to understand how so many people with, supposedly, common sense would identify with and slavishly support the very party that bleeds their pocketbooks dry while enacting interminable tax loopholes for their very rich campaign contributors, that theory makes better sense than anything I have been able to come up with.
The redefining of "democracy" is one of the most disastrous and potentially fatal blows America has ever suffered, and the most frustrating thing about it is that it is such a blatant lie. The simple truth is that America is not now, never was, and was never intended to be a "democracy."
The political systems known as "democracy" and "republic" were created and named concurrently about 3,000 years ago in ancient Greece in what are known as "city-states": cities that were in bare-knuckle competition with each other even though their citizens were all the same nationality, Greek.
The one thing both systems had in common was the idea of self rule; that is, the absence of a "king" by any name. The distinction between them was that, in democracies, the qualified voters (which included every "free" citizen — yes, the ancient Greeks had their helots; lower, "serf" class people) met together and enacted all laws and made all decisions directly for the state. In the republics, the qualified voters elected representatives who, in turn, met together and enacted all laws and made all decisions for the state. Obviously, any political unit that got too large for all its qualified voters to meet together at one time in one place could not be a democracy, even if it wanted to be.
Also, keep in mind the fact that, contrary to what every 20th Century "liberal" (closet communist) propagandist tells you, "democracies" have never been classless societies, and have never been governments "of all the people."
Furthermore, even then, even 2,500 to 3,000 years ago, the dangers and failures of a democracy had revealed themselves, as shown by writers of the times.
About 370 BC, Plato wrote: "A democracy is a state in which the poor, gaining the upper hand, kill some and banish others, and then divide the offices among the remaining citizens equally."
About 126 BC, Polybius wrote: "The common people feel themselves oppressed by the grasping of some, and their vanity is flattered by others. Fired with evil passions, they are no longer willing to submit to control, but demand that everything be subject to their authority. The invariable result is that government assumes the noble names of free and popular, but becomes in fact the most execrable thing, mob rule."
And about 63 BC, Seneca, a Roman wrote: "Democracy is more cruel than wars or tyrants."
More than 2,000 years before this nation was founded, democracy had been recognized by its creators for the political and economic failure it is.
Colonial American Experience — Subsequent to declaring their independence from Britain, the colonies established their own, individual governments and, apparently in the enthusiasm of independence, most of them incorporated "democratic" standards for qualifying voters in their systems. According to some of the framers of the Constitution and to many 20th Century historians, this act very nearly caused the political death of the infant nation.
Specifically, most of the colonies voted themselves all manner of benefits without any apparent reflection on the ramifications of their acts. As a result, the individual colonies as well as the Confederation were confronted with massive debts and zero funds with which to pay them off. They had no credit — either financial or psychological — anywhere in the world. They were teetering on the brink of bankruptcy and facing the very real threat of being taken over by some European nation.
This crisis, created by the financial and social irresponsibility of "democracy," compelled the convening in 1787 — barely four years after wining their war for independence — of the convention that led to the writing of our Constitution. During those debates, the danger and failure of democracy as a political system was known and pointed out.
Edmund Jennings Randolph, in debate, stated: "Our chief danger arises from the democratic parts of our constitutions."
Alexander Hamilton, in debate, said: "Real liberty is neither found in despotism or the extremes of democracy, but in moderate government."
Elbridge Gerry, in debate, said: "The evils we experience flow from the excess of democracy. The people do not want virtue, but are the dupes of pretended patriots."
And after the Constitution had been adopted: Alexander Hamilton, in Senate: "It has been observed that a pure democracy, if it were practicable, would be the most perfect government. Experience has proved that no position is more false than this. The ancient democracies, in which the people themselves deliberated, never possessed one feature of good government. Their very character was tyranny: their figure deformity."
John Adams, in a letter to John Taylor, wrote: "Remember, democracy never lasts long. It soon wastes, exhausts and murders itself. There never was a democracy yet that did not commit suicide."
James Madison said: "...democracies have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security, or the rights of property; and have in general been as short in their lives as they have been violent in their deaths."
Thomas Jefferson, in the drafts of the Kentucky Resolutions, wrote: "In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution."
(Yes, Democratic Party propagandists and their dupes insist that Thomas Jefferson was a Democrat. And he did, in a response to a European correspondent, say, "...we are all democrats; we are democratic Republicans and democratic Federalist..." and explained that, to him, "democratic" was not a political system but a political condition; specifically, a system in which the government recognizes no social classes and creates no social classes. Where, as far as law go, "all men are created equal." Jefferson, of course, acknowledged that all humans are not equal, in hardly any way — he was just adamant that the laws should make no acknowledgment of these differences, should bestow no benefit or civil advantage to a part of the citizenry because of differences. That was as far as his "democratism" went, which, obviously, is the exact opposite of what "Democrats" today believe.)
John Adams, in a letter to William Cunningham in March 1804, wrote: "Democracy is Lovelace and the people is Clarissa" (an allegoric reference to popular literature of the time, in which Lovelace "did Clarissa wrong").
Not only were our Founding Fathers adamantly opposed to creating a "democratic" system, they were unanimous in giving this nation a republic as its political system.
Alexander Hamilton, June 26, 1788, stated: "There are few positions more demonstrable than that there should be in every republic some permanent body to correct the prejudices, check the intemperate passions, and regulate the fluctuations of a popular assembly."
Alexander Hamilton, also in 1788: "It is of great importance in a republic not only to guard against the oppression of its rulers, but to guard one part of society against the injustice of the other part."
George Washington, April 30, 1789: "The...destiny of the republican model of government (is) justly considered as deeply, perhaps as finally stacked, on the experiment entrusted to the hands of the American people."
Thomas Jefferson, March 11, 1790: "The republican is the only form of government which is not eternally at open or secret war with the rights of mankind."
Thomas Jefferson, 1791: "Government in a well constituted republic requires no belief from man beyond what his reason authorizes."
Thomas Jefferson, July 30, 1795: "The revolution forced them (the "people of America" — author) to consider the subject for themselves, and the result was an universal conversion to republicanism."
Thomas Jefferson, March 12, 1799: "The body of the American people is substantially republican. But their virtuous feelings have been played upon by some fact with more fiction, they have been the dupes of artful manoeuvres, & made for a moment to be willing instruments in forging chains for themselves."
Thomas Jefferson, March 4, 1801: "If there be any among us who would wish to dissolve this Union or to change its republican form..."
Thomas Jefferson, Jan. 18, 1802: "The body of our people ... have ever had the same object in view, to wit, the, maintenance of a federal, republican government..."
Thomas Jefferson, Jan. 13, 1813: "This is my belief of it; it is that on which I have acted...to administer the government according to its genuine republican principles..."
Thomas Jefferson, in the Anas: "He (John Adams — author) has since thoroughly seen that his constituents were devoted to republican government..."
Thomas Jefferson, in the Anas: "...and I fondly hope ... that the motto of the standard to which our country will forever rally, will be ‘federal union, and republican government..."
As historians Charles Austin Beard and Mary Ritter Beard wrote (1939): "At no time, at no place, in solemn convention assembled, through no chosen agents, had the American people officially proclaimed the United States to be a democracy. The Constitution did not contain the word or any word lending countenance to it, except possibly the mention of ‘We the people,' in the preamble ... When the Constitution was framed, no respectable person called himself a democrat."
Justifiably Afraid Of ‘Democracy' — Indisputably, this nation was founded as a republic and its leaders were justifiably afraid of "democracy," lest it destroy the nation they had risked their lives to establish.
And thus it officially was for a century and a half. As recently as in a 1928 U.S. Army training manual it was described thusly:
"Democracy: A government of the masses. Authority derived through mass meeting or any form of ‘direct' expression. Results in mobocracy. Attitude towards laws is that the will of the majority shall regulate, whether it is based upon deliberation or governed by passion, prejudice or impulse, without restraint or regard to consequences. Results in demagogism, license, agitation, discontent, anarchy."
It is stated that Woodrow Wilson, the Democratic president who gave control of this nation's money to the Federal Reserve Bank and thus put America's economic destiny in the hands of foreign bankers, was the first public figure to proclaim this nation a "democracy."
One of the 1993 Merriam-Webster's definitions of "democracy" is: "the absence of hereditary or arbitrary class distinctions or privileges." Yet today, "democratic" America is riven by class distinction, class envy, and class warfare, and all of it has been deliberately created and fomented by "liberal" (closet communist) Democrats in order to facilitate their personal possession of political power! Not a single day passes today but some Democrat politician somewhere deliberately agitates the masses in class envy, ethnic envy, economic envy, etc. — all in the name of "democracy" which, by their modern definition, forbids the very sociopolitical condition they advocate."
While our "democracy" and its accompanying social self destruction are the planned and deliberate handiwork of the "liberal" enemies of free people, so successful has their redefinition of "democracy" been that the leaders of the opposition, i.e., "conservatism," aid and abet the liberals by their constant reinforcement of the idea that this nation is a democracy and that there is nothing wrong with that.
All of the "conservative" and Republican icons of the past 50 years — William Buckley, Barry Goldwater, Ronald Reagan, Robert Dole, Newt Gingrich, Phil Gramm, Dick Armey, Rush Limbuagh, and Gordon Liddy, to name just a few — invariably refer to this nation as a "democracy" without hesitation.
Today, America is 220 years old, and to call Congress' fiscal policy "loose" is an understatement of monumental proportions. Today, America's debt is several times as large as its total worth (in fact, America's total debt today — over $13 trillion — is, according to Ibbotson Associates, equal to 30 to 35 percent of the entire world's total worth) while chaos prevails in her streets and, like the cancer it is, is spreading to he countryside.
And all because of the successful definition and sanitization of the word "democracy."
"Those who cannot remember the past are condemned to repeat it" — George Santayana.
It may be too late to save America from its historically mandated fate, but that doesn't mean we can't try. And one thing we can all do is to quit propagating the "democracy" lie. We who know better can quit calling America a democracy and we can try to educate those who don't know any better. Oh, yes. We can also call on those public leaders who keep repeating the lie to cease to do so. When the very people who invented "democracy" learn the error of their ways, what excuse can a modern educated person have for not knowing?
Marvin Gardner
Marvin Gardner is secretary of Sons of Liberty (P.O. Box 44673, Boise, ID 83711-0673; phone 208-322-7863), a network of activist patriots whose goals is "the full and permanent restoration of the Constitution and the Bill of Rights as their authors intended them"
NOTE: In accordance with Title 17 U.S.C. section 107, any copyrighted material herein is distributed without profit or payment to those who have expressed prior interest in receiving this information for non-profit research and educational purposes only. For further information please refer to: http://www.law.cornell.edu/uscode/17/107.shtml
http://www.citizensforaconstitutionalrepublic.com/gardner10-27-04.html
Saturday, February 14, 2009
Valid and NOT southern - WDK
Most Americans have found out the difference between what Our Founding Fathers gave us and the country we have today. Unfortunately the country we have today, we have a federal government that nobody can really control. It is like the big bully guy on the block that pushes everybody around. And nobody can make the federal government abide by our charter that we bring to it – which is the Constitution. More or less they use the Constitution as a mat to walk upon. Real State’s Rights existed before Appomattox. At that time we the people of the sovereign States could force the federal government to abide by the Constitution. Today the federal government does as it pleases.
If you remember ever reading the Kentucky and Virginia Resolves in 1798, James Madison and Thomas Jefferson wrote the Resolves in which they told the world – and the Kentucky and Virginia Legislatures adopted these Resolutions – that the States did not create the federal government to be their lord and master. We created the federal government to be our servant. And they warned us that if we did not maintain strong state’s Rights the federal government would become our lord and master – in essence a tyrant. And that is what we have today.
Real State’s Rights is that type of state’s rights where the people of the sovereign states can enforce the limitations of the Constitution upon the federal government. And that is the main difference. And that is what we have to get back to.
It is not a Southern idea, it is an American idea. Northerners and Southerners at one time embraced this idea. Unfortunately after Appomattox that idea is now Gone With The Wind.
Both the politicians in Washington and the liberal media have basically told the American people that State’s Rights is just a code word for racism.
I love it when these people talk about we are using code words. I am almost 60 years old. I say what I think. I don’t have to run around and hide from anybody. I tell it like it is and as I feel. If you read any of my books you can tell exactly what I feel and what I believe. So I am not using as code words.
The idea that State’s Right is a code word for something evil is absolutely ridiculous. I know that the liberal media, especially the politically correct liberal media, they like to point to State’s Rights and say, “ … Oh that was just a defense of slavery” “Oh that was a defense of Jim Crowism, segregation, discrimination and things of that nature” “Something that the wicked Southerners were all about, but we don’t want that any more.”
The Truth is that State’s Rights has a very noble origin and it comes from the North as well as the South. Northern States when they entered this Union they embodied within their Constitution and in their adoption of the Constitution the concept of State’s Rights. More than anything else, they feared a strong central government that would become a tyrant.
I understand that anything can be misused, the Bible can be misused. Jim Jones was a preacher. But he misused the Bible. So there are things that can be misused. But we don’t condemn the Bible because Jim Jones misused it. We condemn Jim Jones and his activities. So the same thing is true whether or not we are talking about slavery or segregation. If these things were caused by State’s Rights it was a misuse of State’s Rights.
Now here is something that people don’t realize. Southerners are sometimes left straddled carrying the burden of guilt for slavery and segregation as if we were the ones who invented it. No we didn’t invent slavery, it was invented right after the fall of man in the Garden of Eden. It was part of our sin nature. We didn’t invent slavery. Slavery existed up North as well as it down South. So this is not a Southern institution we are talking about here.
And as far as segregation, I know a lot of people say well the South is the place of segregation. Do you realize that in 1954 when the first Supreme Court decision, Brown vs. Board of Education, where was that board of education from? Do you recall?
Topeka, Kansas.
Now I am not real good on geography, but I don’t think that Kansas is down South, ToTo! So the point is – at that point in time there were 26 States in the United States had laws that discriminated against people of color. It was not just the South. New York City was just as segregated as Montgomery, Alabama at that time. This is not a Southern idea.
Another thing we got to remember – where did these laws come from? Do you have any idea where the laws of segregation came from? …
Most people think they came from Georgia, South Carolina, Mississippi. They actually came from New England. The New England States were the first States that segregated black and white school children. Did you know that?
As a matter of fact, when the Supreme Court of the United States made segregation the law of the land in Plessey vs. Ferguson in 1898. Did you know that was a federal Supreme Court that did that, Ray. That wasn’t a Georgia Supreme Court or a Louisiana Supreme Court. That was a federal Supreme Court that said that segregation is now the law of the land in the United States – not just the South – in the United States of America.
Interestingly enough, of the judges that were on the Supreme Court at that time, there was only one Southerner on that Supreme Court. All the judges except for that one Southerner voted for segregation. The Southerner voted against it. How many times have you heard that Ray?
Not Often!
The guy who wrote the opinion, the majority opinion, for the Supreme Court that made segregation the law of the land was from Minnesota, not Mississippi. He based his concept upon a law in Massachusetts in 1845 that segregated white and black school children. But yet, it is always the South that is dumped on and has to carry the burden of that guilt. I am pointing this out for point number one: Southerners aren’t the ones who invented all of this we just have to carry the burden and number two: State’s Rights is something totally removed from that concept.
To give you a real good idea about this – have you ever heard of a guy by the name of Saint George Tucker. Saint George Tucker was an American patriot from Virginia – very well known legal scholar in the early history of the United States. He was from Virginia, he was a Southerner. But in 1803 he wrote some of the earliest pamphlets in opposition to slavery and in opposition to discrimination against people of color. When is the last time that you heard this about this great Southerner and Patriot who was opposed to the discrimination against people of color. You don’t heard things like that!
The reason that you don’t hear it is that you would have to say something nice about Southerners. And oh, we can’t have that, we only use Southerners as an evil person as somebody who we can point our children to and say aren’t you glad you are not like those wicked people down there in the South.
Well folks there you have it, some truth that you didn’t probably know about State’s Rights and about being Southern.
If you remember ever reading the Kentucky and Virginia Resolves in 1798, James Madison and Thomas Jefferson wrote the Resolves in which they told the world – and the Kentucky and Virginia Legislatures adopted these Resolutions – that the States did not create the federal government to be their lord and master. We created the federal government to be our servant. And they warned us that if we did not maintain strong state’s Rights the federal government would become our lord and master – in essence a tyrant. And that is what we have today.
Real State’s Rights is that type of state’s rights where the people of the sovereign states can enforce the limitations of the Constitution upon the federal government. And that is the main difference. And that is what we have to get back to.
It is not a Southern idea, it is an American idea. Northerners and Southerners at one time embraced this idea. Unfortunately after Appomattox that idea is now Gone With The Wind.
Both the politicians in Washington and the liberal media have basically told the American people that State’s Rights is just a code word for racism.
I love it when these people talk about we are using code words. I am almost 60 years old. I say what I think. I don’t have to run around and hide from anybody. I tell it like it is and as I feel. If you read any of my books you can tell exactly what I feel and what I believe. So I am not using as code words.
The idea that State’s Right is a code word for something evil is absolutely ridiculous. I know that the liberal media, especially the politically correct liberal media, they like to point to State’s Rights and say, “ … Oh that was just a defense of slavery” “Oh that was a defense of Jim Crowism, segregation, discrimination and things of that nature” “Something that the wicked Southerners were all about, but we don’t want that any more.”
The Truth is that State’s Rights has a very noble origin and it comes from the North as well as the South. Northern States when they entered this Union they embodied within their Constitution and in their adoption of the Constitution the concept of State’s Rights. More than anything else, they feared a strong central government that would become a tyrant.
I understand that anything can be misused, the Bible can be misused. Jim Jones was a preacher. But he misused the Bible. So there are things that can be misused. But we don’t condemn the Bible because Jim Jones misused it. We condemn Jim Jones and his activities. So the same thing is true whether or not we are talking about slavery or segregation. If these things were caused by State’s Rights it was a misuse of State’s Rights.
Now here is something that people don’t realize. Southerners are sometimes left straddled carrying the burden of guilt for slavery and segregation as if we were the ones who invented it. No we didn’t invent slavery, it was invented right after the fall of man in the Garden of Eden. It was part of our sin nature. We didn’t invent slavery. Slavery existed up North as well as it down South. So this is not a Southern institution we are talking about here.
And as far as segregation, I know a lot of people say well the South is the place of segregation. Do you realize that in 1954 when the first Supreme Court decision, Brown vs. Board of Education, where was that board of education from? Do you recall?
Topeka, Kansas.
Now I am not real good on geography, but I don’t think that Kansas is down South, ToTo! So the point is – at that point in time there were 26 States in the United States had laws that discriminated against people of color. It was not just the South. New York City was just as segregated as Montgomery, Alabama at that time. This is not a Southern idea.
Another thing we got to remember – where did these laws come from? Do you have any idea where the laws of segregation came from? …
Most people think they came from Georgia, South Carolina, Mississippi. They actually came from New England. The New England States were the first States that segregated black and white school children. Did you know that?
As a matter of fact, when the Supreme Court of the United States made segregation the law of the land in Plessey vs. Ferguson in 1898. Did you know that was a federal Supreme Court that did that, Ray. That wasn’t a Georgia Supreme Court or a Louisiana Supreme Court. That was a federal Supreme Court that said that segregation is now the law of the land in the United States – not just the South – in the United States of America.
Interestingly enough, of the judges that were on the Supreme Court at that time, there was only one Southerner on that Supreme Court. All the judges except for that one Southerner voted for segregation. The Southerner voted against it. How many times have you heard that Ray?
Not Often!
The guy who wrote the opinion, the majority opinion, for the Supreme Court that made segregation the law of the land was from Minnesota, not Mississippi. He based his concept upon a law in Massachusetts in 1845 that segregated white and black school children. But yet, it is always the South that is dumped on and has to carry the burden of that guilt. I am pointing this out for point number one: Southerners aren’t the ones who invented all of this we just have to carry the burden and number two: State’s Rights is something totally removed from that concept.
To give you a real good idea about this – have you ever heard of a guy by the name of Saint George Tucker. Saint George Tucker was an American patriot from Virginia – very well known legal scholar in the early history of the United States. He was from Virginia, he was a Southerner. But in 1803 he wrote some of the earliest pamphlets in opposition to slavery and in opposition to discrimination against people of color. When is the last time that you heard this about this great Southerner and Patriot who was opposed to the discrimination against people of color. You don’t heard things like that!
The reason that you don’t hear it is that you would have to say something nice about Southerners. And oh, we can’t have that, we only use Southerners as an evil person as somebody who we can point our children to and say aren’t you glad you are not like those wicked people down there in the South.
Well folks there you have it, some truth that you didn’t probably know about State’s Rights and about being Southern.
Friday, February 13, 2009
New Stimulas - compromise
Read the new stimulus bill as agreed on by the House and Senate Democrats (Neo-Socialist)
My personal opinion: I'd rather it be done right than fast!
__________________________________________________________________
A group of liberal lawmakers met secretly... literally behind closed doors, and announced that they had reached a "deal" on the so-called "stimulus package" on Wednesday!
What you're not being told is that Republican lawmakers (including Members of the House-Senate Conference Committee) were EXCLUDED from this deal-making session!
We couldn't make this up!
HOW, IN THE NAME OF ALL THAT IS HOLY, DO YOU REACH A "DEAL" ON THE LARGEST SPENDING BILL IN THE HISTORY OF OUR NATION (NEARLY $1,000,000,000,000 IN TAXPAYER MONEY) WHEN THE OPPOSITION IS NOT EVEN ALLOWED INTO THE ROOM?
According to Connie Hair, writing on HumanEvents.com:
"Republicans have caught the Democrats in a midnight 'stimulus' power play that seeks to cut Republican conferees out of the House-Senate negotiations to resolve a final version of the Obama 'stimulus' package... . They intend to attempt to shove this $1.3 trillion spending bill through in the dead of the night without Republican input so floor action can take place in both chambers..."
Hair goes on to quote Congressman Mike Pence:
“I think the American people deserve to know that legislation that would comprise an amount equal to the entire discretionary budget of the United States of America is being crafted without a single House Republican in the room.”
Later, we found out that some Republicans WERE in the room (the most likely suspects are Senators Arlen Specter, Susan Collins and Olympia Snowe - the three Republicans-In-Name-Only who sided with the Democrats and saved this horrendous socialist "porkulus" bill from a well deserved death).
But according to HumanEvents.com, Senators Charles Grassley and John Thune also confirmed that they DID NOT participate in these secret behind-closed-doors meetings.
That means that - at the very least - the ENTIRE Republican House delegation of conferees and AT LEAST two of the Republican Senate conferees were EXCLUDED!
But that's not the half of it. This so-called "stimulus package" is turning into even more of an Orwellian nightmare!
After reaching a “deal” to rectify differences in the House and Senate versions of this so-called "stimulus package," liberals in Congress now want to SHOVE it onto the floor of the House and the Senate for a QUICKIE VOTE BEFORE ANYONE EVEN HAS THE CHANCE TO READ IT!
We don't know what's in it... you don't know what's in it... most of our elected officials won't even know what's in it!
That's NOT a "deal." THAT'S TYRANNY!
Nancy Pelosi and Harry Reid, Barack Obama and liberals in Congress may think they have a "deal."
But I say "NO DEAL!"
Make no mistake, the fate of this "porkulus bill" is STILL UNCERTAIN! Support is VERY FRAGILE!
That's why our elected leaders need to hear you say "NO DEAL" one more time and they MUST hear from you NOW because we only have hours to kill this horrendous bill!
If you've ALREADY sent Blast Faxes or made calls to the Senate, please do so AGAIN. If you HAVEN'T made your voice heard yet, this may be your LAST CHANCE! Time is running out!
My personal opinion: I'd rather it be done right than fast!
__________________________________________________________________
A group of liberal lawmakers met secretly... literally behind closed doors, and announced that they had reached a "deal" on the so-called "stimulus package" on Wednesday!
What you're not being told is that Republican lawmakers (including Members of the House-Senate Conference Committee) were EXCLUDED from this deal-making session!
We couldn't make this up!
HOW, IN THE NAME OF ALL THAT IS HOLY, DO YOU REACH A "DEAL" ON THE LARGEST SPENDING BILL IN THE HISTORY OF OUR NATION (NEARLY $1,000,000,000,000 IN TAXPAYER MONEY) WHEN THE OPPOSITION IS NOT EVEN ALLOWED INTO THE ROOM?
According to Connie Hair, writing on HumanEvents.com:
"Republicans have caught the Democrats in a midnight 'stimulus' power play that seeks to cut Republican conferees out of the House-Senate negotiations to resolve a final version of the Obama 'stimulus' package... . They intend to attempt to shove this $1.3 trillion spending bill through in the dead of the night without Republican input so floor action can take place in both chambers..."
Hair goes on to quote Congressman Mike Pence:
“I think the American people deserve to know that legislation that would comprise an amount equal to the entire discretionary budget of the United States of America is being crafted without a single House Republican in the room.”
Later, we found out that some Republicans WERE in the room (the most likely suspects are Senators Arlen Specter, Susan Collins and Olympia Snowe - the three Republicans-In-Name-Only who sided with the Democrats and saved this horrendous socialist "porkulus" bill from a well deserved death).
But according to HumanEvents.com, Senators Charles Grassley and John Thune also confirmed that they DID NOT participate in these secret behind-closed-doors meetings.
That means that - at the very least - the ENTIRE Republican House delegation of conferees and AT LEAST two of the Republican Senate conferees were EXCLUDED!
But that's not the half of it. This so-called "stimulus package" is turning into even more of an Orwellian nightmare!
After reaching a “deal” to rectify differences in the House and Senate versions of this so-called "stimulus package," liberals in Congress now want to SHOVE it onto the floor of the House and the Senate for a QUICKIE VOTE BEFORE ANYONE EVEN HAS THE CHANCE TO READ IT!
We don't know what's in it... you don't know what's in it... most of our elected officials won't even know what's in it!
That's NOT a "deal." THAT'S TYRANNY!
Nancy Pelosi and Harry Reid, Barack Obama and liberals in Congress may think they have a "deal."
But I say "NO DEAL!"
Make no mistake, the fate of this "porkulus bill" is STILL UNCERTAIN! Support is VERY FRAGILE!
That's why our elected leaders need to hear you say "NO DEAL" one more time and they MUST hear from you NOW because we only have hours to kill this horrendous bill!
If you've ALREADY sent Blast Faxes or made calls to the Senate, please do so AGAIN. If you HAVEN'T made your voice heard yet, this may be your LAST CHANCE! Time is running out!
Thursday, February 12, 2009
What the Price of Gold Is Telling Us
U.S. House of Representatives, April 25, 2006
What the Price of Gold Is Telling Us
The financial press, and even the network news shows, have begun reporting the price of gold regularly. For twenty years, between 1980 and 2000, the price of gold was rarely mentioned. There was little interest, and the price was either falling or remaining steady.
Since 2001 however, interest in gold has soared along with its price. With the price now over $600 an ounce, a lot more people are becoming interested in gold as an investment and an economic indicator. Much can be learned by understanding what the rising dollar price of gold means.
The rise in gold prices from $250 per ounce in 2001 to over $600 today has drawn investors and speculators into the precious metals market. Though many already have made handsome profits, buying gold per se should not be touted as a good investment. After all, gold earns no interest and its quality never changes. It’s static, and does not grow as sound investments should.
It’s more accurate to say that one might invest in a gold or silver mining company, where management, labor costs, and the nature of new discoveries all play a vital role in determining the quality of the investment and the profits made.
Buying gold and holding it is somewhat analogous to converting one’s savings into one hundred dollar bills and hiding them under the mattress – yet not exactly the same. Both gold and dollars are considered money, and holding money does not qualify as an investment. There’s a big difference between the two however, since by holding paper money one loses purchasing power. The purchasing power of commodity money, e.g., gold, however, goes up if the government devalues the circulating fiat currency.
Holding gold is protection or insurance against government’s proclivity to debase its currency. The purchasing power of gold goes up not because it’s a so-called good investment; it goes up in value only because the paper currency goes down in value. In our current situation, that means the dollar.
One of the characteristics of commodity money – one that originated naturally in the marketplace – is that it must serve as a store of value. Gold and silver meet that test – paper does not. Because of this profound difference, the incentive and wisdom of holding emergency funds in the form of gold becomes attractive when the official currency is being devalued. It’s more attractive than trying to save wealth in the form of a fiat currency, even when earning some nominal interest. The lack of earned interest on gold is not a problem once people realize the purchasing power of their currency is declining faster than the interest rates they might earn. The purchasing power of gold can rise even faster than increases in the cost of living.
The point is that most who buy gold do so to protect against a depreciating currency rather than as an investment in the classical sense. Americans understand this less than citizens of other countries; some nations have suffered from severe monetary inflation that literally led to the destruction of their national currency. Though our inflation – i.e., the depreciation of the U.S. dollar – has been insidious, average Americans are unaware of how this occurs. For instance, few Americans know nor seem concerned that the 1913 pre-Federal Reserve dollar is now worth only four cents. Officially, our central bankers and our politicians express no fear that the course on which we are set is fraught with great danger to our economy and our political system. The belief that money created out of thin air can work economic miracles, if only properly “managed,” is pervasive in D.C.
In many ways we shouldn’t be surprised about this trust in such an unsound system. For at least four generations our government-run universities have systematically preached a monetary doctrine justifying the so-called wisdom of paper money over the “foolishness” of sound money. Not only that, paper money has worked surprisingly well in the past 35 years – the years the world has accepted pure paper money as currency. Alan Greenspan bragged that central bankers in these several decades have gained the knowledge necessary to make paper money respond as if it were gold. This removes the problem of obtaining gold to back currency, and hence frees politicians from the rigid discipline a gold standard imposes.
Many central bankers in the last 15 years became so confident they had achieved this milestone that they sold off large hoards of their gold reserves. At other times they tried to prove that paper works better than gold by artificially propping up the dollar by suppressing market gold prices. This recent deception failed just as it did in the 1960s, when our government tried to hold gold artificially low at $35 an ounce. But since they could not truly repeal the economic laws regarding money, just as many central bankers sold, others bought. It’s fascinating that the European central banks sold gold while Asian central banks bought it over the last several years.
Since gold has proven to be the real money of the ages, we see once again a shift in wealth from the West to the East, just as we saw a loss of our industrial base in the same direction. Though Treasury officials deny any U.S. sales or loans of our official gold holdings, no audits are permitted so no one can be certain.
The special nature of the dollar as the reserve currency of the world has allowed this game to last longer than it would have otherwise. But the fact that gold has gone from $252 per ounce to over $600 means there is concern about the future of the dollar. The higher the price for gold, the greater the concern for the dollar. Instead of dwelling on the dollar price of gold, we should be talking about the depreciation of the dollar. In 1934 a dollar was worth 1/20th of an ounce of gold; $20 bought an ounce of gold. Today a dollar is worth 1/600th of an ounce of gold, meaning it takes $600 to buy one ounce of gold.
The number of dollars created by the Federal Reserve, and through the fractional reserve banking system, is crucial in determining how the market assesses the relationship of the dollar and gold. Though there’s a strong correlation, it’s not instantaneous or perfectly predictable. There are many variables to consider, but in the long term the dollar price of gold represents past inflation of the money supply. Equally important, it represents the anticipation of how much new money will be created in the future. This introduces the factor of trust and confidence in our monetary authorities and our politicians. And these days the American people are casting a vote of “no confidence” in this regard, and for good reasons.
The incentive for central bankers to create new money out of thin air is twofold. One is to practice central economic planning through the manipulation of interest rates. The second is to monetize the escalating federal debt politicians create and thrive on.
Today no one in Washington believes for a minute that runaway deficits are going to be curtailed. In March alone, the federal government created an historic $85 billion deficit. The current supplemental bill going through Congress has grown from $92 billion to over $106 billion, and everyone knows it will not draw President Bush’s first veto. Most knowledgeable people therefore assume that inflation of the money supply is not only going to continue, but accelerate. This anticipation, plus the fact that many new dollars have been created over the past 15 years that have not yet been fully discounted, guarantees the further depreciation of the dollar in terms of gold.
There’s no single measurement that reveals what the Fed has done in the recent past or tells us exactly what it’s about to do in the future. Forget about the lip service given to transparency by new Fed Chairman Bernanke. Not only is this administration one of the most secretive across the board in our history, the current Fed firmly supports denying the most important measurement of current monetary policy to Congress, the financial community, and the American public. Because of a lack of interest and poor understanding of monetary policy, Congress has expressed essentially no concern about the significant change in reporting statistics on the money supply.
Beginning in March, though planned before Bernanke arrived at the Fed, the central bank discontinued compiling and reporting the monetary aggregate known as M3. M3 is the best description of how quickly the Fed is creating new money and credit. Common sense tells us that a government central bank creating new money out of thin air depreciates the value of each dollar in circulation. Yet this report is no longer available to us and Congress makes no demands to receive it.
Though M3 is the most helpful statistic to track Fed activity, it by no means tells us everything we need to know about trends in monetary policy. Total bank credit, still available to us, gives us indirect information reflecting the Fed’s inflationary policies. But ultimately the markets will figure out exactly what the Fed is up to, and then individuals, financial institutions, governments, and other central bankers will act accordingly. The fact that our money supply is rising significantly cannot be hidden from the markets.
The response in time will drive the dollar down, while driving interest rates and commodity prices up. Already we see this trend developing, which surely will accelerate in the not too distant future. Part of this reaction will be from those who seek a haven to protect their wealth – not invest – by treating gold and silver as universal and historic money. This means holding fewer dollars that are decreasing in value while holding gold as it increases in value.
A soaring gold price is a vote of “no confidence” in the central bank and the dollar. This certainly was the case in 1979 and 1980. Today, gold prices reflect a growing restlessness with the increasing money supply, our budgetary and trade deficits, our unfunded liabilities, and the inability of Congress and the administration to reign in runaway spending.
Denying us statistical information, manipulating interest rates, and artificially trying to keep gold prices in check won’t help in the long run. If the markets are fooled short term, it only means the adjustments will be much more dramatic later on. And in the meantime, other market imbalances develop.
The Fed tries to keep the consumer spending spree going, not through hard work and savings, but by creating artificial wealth in stock markets bubbles and housing bubbles. When these distortions run their course and are discovered, the corrections will be quite painful.
Likewise, a fiat monetary system encourages speculation and unsound borrowing. As problems develop, scapegoats are sought and frequently found in foreign nations. This prompts many to demand altering exchange rates and protectionist measures. The sentiment for this type of solution is growing each day.
Though everyone decries inflation, trade imbalances, economic downturns, and federal deficits, few attempt a closer study of our monetary system and how these events are interrelated. Even if it were recognized that a gold standard without monetary inflation would be advantageous, few in Washington would accept the political disadvantages of living with the discipline of gold – since it serves as a check on government size and power. This is a sad commentary on the politics of today. The best analogy to our affinity for government spending, borrowing, and inflating is that of a drug addict who knows if he doesn’t quit he’ll die; yet he can’t quit because of the heavy price required to overcome the dependency. The right choice is very difficult, but remaining addicted to drugs guarantees the death of the patient, while our addiction to deficit spending, debt, and inflation guarantees the collapse of our economy.
Special interest groups, who vigorously compete for federal dollars, want to perpetuate the system rather than admit to a dangerous addiction. Those who champion welfare for the poor, entitlements for the middle class, or war contracts for the military industrial corporations, all agree on the so-called benefits bestowed by the Fed’s power to counterfeit fiat money. Bankers, who benefit from our fractional reserve system, likewise never criticize the Fed, especially since it’s the lender of last resort that bails out financial institutions when crises arise. And it’s true, special interests and bankers do benefit from the Fed, and may well get bailed out – just as we saw with the Long-Term Capital Management fund crisis a few years ago. In the past, companies like Lockheed and Chrysler benefited as well. But what the Fed cannot do is guarantee the market will maintain trust in the worthiness of the dollar. Current policy guarantees that the integrity of the dollar will be undermined. Exactly when this will occur, and the extent of the resulting damage to financial system, cannot be known for sure – but it is coming. There are plenty of indications already on the horizon.
Foreign policy plays a significant role in the economy and the value of the dollar. A foreign policy of militarism and empire building cannot be supported through direct taxation. The American people would never tolerate the taxes required to pay immediately for overseas wars, under the discipline of a gold standard. Borrowing and creating new money is much more politically palatable. It hides and delays the real costs of war, and the people are lulled into complacency – especially since the wars we fight are couched in terms of patriotism, spreading the ideas of freedom, and stamping out terrorism. Unnecessary wars and fiat currencies go hand-in-hand, while a gold standard encourages a sensible foreign policy.
The cost of war is enormously detrimental; it significantly contributes to the economic instability of the nation by boosting spending, deficits, and inflation. Funds used for war are funds that could have remained in the productive economy to raise the standard of living of Americans now unemployed, underemployed, or barely living on the margin.
Yet even these costs may be preferable to paying for war with huge tax increases. This is because although fiat dollars are theoretically worthless, value is imbued by the trust placed in them by the world’s financial community. Subjective trust in a currency can override objective knowledge about government policies, but only for a limited time.
Economic strength and military power contribute to the trust in a currency; in today’s world trust in the U.S. dollar is not earned and therefore fragile. The history of the dollar, being as good as gold up until 1971, is helpful in maintaining an artificially higher value for the dollar than deserved.
Foreign policy contributes to the crisis when the spending to maintain our worldwide military commitments becomes prohibitive, and inflationary pressures accelerate. But the real crisis hits when the world realizes the king has no clothes, in that the dollar has no backing, and we face a military setback even greater than we already are experiencing in Iraq. Our token friends may quickly transform into vocal enemies once the attack on the dollar begins.
False trust placed in the dollar once was helpful to us, but panic and rejection of the dollar will develop into a real financial crisis. Then we will have no other option but to tighten our belts, go back to work, stop borrowing, start saving, and rebuild our industrial base, while adjusting to a lower standard of living for most Americans.
Counterfeiting the nation’s money is a serious offense. The founders were especially adamant about avoiding the chaos, inflation, and destruction associated with the Continental dollar. That’s why the Constitution is clear that only gold and silver should be legal tender in the United States. In 1792 the Coinage Act authorized the death penalty for any private citizen who counterfeited the currency. Too bad they weren’t explicit that counterfeiting by government officials is just as detrimental to the economy and the value of the dollar.
In wartime, many nations actually operated counterfeiting programs to undermine our dollar, but never to a disastrous level. The enemy knew how harmful excessive creation of new money could be to the dollar and our economy. But it seems we never learned the dangers of creating new money out of thin air. We don’t need an Arab nation or the Chinese to undermine our system with a counterfeiting operation. We do it ourselves, with all the disadvantages that would occur if others did it to us. Today we hear threats from some Arab, Muslim, and far Eastern countries about undermining the dollar system – not by dishonest counterfeiting, but by initiating an alternative monetary system based on gold. Wouldn’t that be ironic? Such an event theoretically could do great harm to us. This day may well come, not so much as a direct political attack on the dollar system but out of necessity to restore confidence in money once again.
Historically, paper money never has lasted for long periods of time, while gold has survived thousands of years of attacks by political interests and big government. In time, the world once again will restore trust in the monetary system by making some currency as good as gold.
Gold, or any acceptable market commodity money, is required to preserve liberty. Monopoly control by government of a system that creates fiat money out of thin air guarantees the loss of liberty. No matter how well-intended our militarism is portrayed, or how happily the promises of wonderful programs for the poor are promoted, inflating the money supply to pay these bills makes government bigger. Empires always fail, and expenses always exceed projections. Harmful unintended consequences are the rule, not the exception. Welfare for the poor is inefficient and wasteful. The beneficiaries are rarely the poor themselves, but instead the politicians, bureaucrats, or the wealthy. The same is true of all foreign aid – it’s nothing more than a program that steals from the poor in a rich country and gives to the rich leaders of a poor country. Whether it’s war or welfare payments, it always means higher taxes, inflation, and debt. Whether it’s the extraction of wealth from the productive economy, the distortion of the market by interest rate manipulation, or spending for war and welfare, it can’t happen without infringing upon personal liberty.
At home the war on poverty, terrorism, drugs, or foreign rulers provides an opportunity for authoritarians to rise to power, individuals who think nothing of violating the people’s rights to privacy and freedom of speech. They believe their role is to protect the secrecy of government, rather than protect the privacy of citizens. Unfortunately, that is the atmosphere under which we live today, with essentially no respect for the Bill of Rights.
Though great economic harm comes from a government monopoly fiat monetary system, the loss of liberty associated with it is equally troubling. Just as empires are self-limiting in terms of money and manpower, so too is a monetary system based on illusion and fraud. When the end comes we will be given an opportunity to choose once again between honest money and liberty on one hand; chaos, poverty, and authoritarianism on the other.
The economic harm done by a fiat monetary system is pervasive, dangerous, and unfair. Though runaway inflation is injurious to almost everyone, it is more insidious for certain groups. Once inflation is recognized as a tax, it becomes clear the tax is regressive: penalizing the poor and middle class more than the rich and politically privileged. Price inflation, a consequence of inflating the money supply by the central bank, hits poor and marginal workers first and foremost. It especially penalizes savers, retirees, those on fixed incomes, and anyone who trusts government promises. Small businesses and individual enterprises suffer more than the financial elite, who borrow large sums before the money loses value. Those who are on the receiving end of government contracts – especially in the military industrial complex during wartime – receive undeserved benefits.
It’s a mistake to blame high gasoline and oil prices on price gouging. If we impose new taxes or fix prices, while ignoring monetary inflation, corporate subsidies, and excessive regulations, shortages will result. The market is the only way to determine the best price for any commodity. The law of supply and demand cannot be repealed. The real problems arise when government planners give subsidies to energy companies and favor one form of energy over another.
Energy prices are rising for many reasons: Inflation; increased demand from China and India; decreased supply resulting from our invasion of Iraq; anticipated disruption of supply as we push regime change in Iran; regulatory restrictions on gasoline production; government interference in the free market development of alternative fuels; and subsidies to big oil such as free leases and grants for research and development.
Interestingly, the cost of oil and gas is actually much higher than we pay at the retail level. Much of the DOD budget is spent protecting “our” oil supplies, and if such spending is factored in gasoline probably costs us more than $5 a gallon. The sad irony is that this military effort to secure cheap oil supplies inevitably backfires, and actually curtails supplies and boosts prices at the pump. The waste and fraud in issuing contracts to large corporations for work in Iraq only add to price increases.
When problems arise under conditions that exist today, it’s a serious error to blame the little bit of the free market that still functions. Last summer the market worked efficiently after Katrina – gas hit $3 a gallon, but soon supplies increased, usage went down, and the price returned to $2. In the 1980s, market forces took oil from $40 per barrel to $10 per barrel, and no one cried for the oil companies that went bankrupt. Today’s increases are for the reasons mentioned above. It’s natural for labor to seek its highest wage, and businesses to strive for the greatest profit. That’s the way the market works. When the free market is allowed to work, it’s the consumer who ultimately determines price and quality, with labor and business accommodating consumer choices. Once this process is distorted by government, prices rise excessively, labor costs and profits are negatively affected, and problems emerge. Instead of fixing the problem, politicians and demagogues respond by demanding windfall profits taxes and price controls, while never questioning how previous government interference caused the whole mess in the first place. Never let it be said that higher oil prices and profits cause inflation; inflation of the money supply causes higher prices!
Since keeping interest rates below market levels is synonymous with new money creation by the Fed, the resulting business cycle, higher cost of living, and job losses all can be laid at the doorstep of the Fed. This burden hits the poor the most, making Fed taxation by inflation the worst of all regressive taxes. Statistics about revenues generated by the income tax are grossly misleading; in reality much harm is done by our welfare/warfare system supposedly designed to help the poor and tax the rich. Only sound money can rectify the blatant injustice of this destructive system.
The Founders understood this great danger, and voted overwhelmingly to reject “emitting bills of credit,” the term they used for paper or fiat money. It’s too bad the knowledge and advice of our founders, and their mandate in the Constitution, are ignored today at our great peril. The current surge in gold prices – which reflects our dollar’s devaluation – is warning us to pay closer attention to our fiscal, monetary, entitlement, and foreign policy.
Meaning of the Gold Price – Summation
A recent headline in the financial press announced that gold prices surged over concern that confrontation with Iran will further push oil prices higher. This may well reflect the current situation, but higher gold prices mainly reflect monetary expansion by the Federal Reserve. Dwelling on current events and their effect on gold prices reflects concern for symptoms rather than an understanding of the actual cause of these price increases. Without an enormous increase in the money supply over the past 35 years and a worldwide paper monetary system, this increase in the price of gold would not have occurred.
Certainly geo-political events in the Middle East under a gold standard would not alter its price, though they could affect the supply of oil and cause oil prices to rise. Only under conditions created by excessive paper money would one expect all or most prices to rise. This is a mere reflection of the devaluation of the dollar.
Particular things to remember:
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If one endorses small government and maximum liberty, one must support commodity money.
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One of the strongest restraints against unnecessary war is a gold standard.
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Deficit financing by government is severely restricted by sound money.
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The harmful effects of the business cycle are virtually eliminated with an honest gold standard.
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Saving and thrift are encouraged by a gold standard; and discouraged by paper money.
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Price inflation, with generally rising price levels, is characteristic of paper money. Reports that the consumer price index and the producer price index are rising are distractions: the real cause of inflation is the Fed’s creation of new money.
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Interest rate manipulation by central bank helps the rich, the banks, the government, and the politicians.
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Paper money permits the regressive inflation tax to be passed off on the poor and the middle class.
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Speculative financial bubbles are characteristic of paper money – not gold.
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Paper money encourages economic and political chaos, which subsequently causes a search for scapegoats rather than blaming the central bank.
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Dangerous protectionist measures frequently are implemented to compensate for the dislocations caused by fiat money.
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Paper money, inflation, and the conditions they create contribute to the problems of illegal immigration.
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The value of gold is remarkably stable.
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The dollar price of gold reflects dollar depreciation.
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Holding gold helps preserve and store wealth, but technically gold is not a true investment.
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Since 2001 the dollar has been devalued by 60%.
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In 1934 FDR devalued the dollar by 41%.
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In 1971 Nixon devalued the dollar by 7.9%.
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In 1973 Nixon devalued the dollar by 10%.
These were momentous monetary events, and every knowledgeable person worldwide paid close attention. Major changes were endured in 1979 and 1980 to save the dollar from disintegration. This involved a severe recession, interest rates over 21%, and general price inflation of 15%.
Today we face a 60% devaluation and counting, yet no one seems to care. It’s of greater significance than the three events mentioned above. And yet the one measurement that best reflects the degree of inflation, the Fed and our government deny us. Since March, M3 reporting has been discontinued. For starters, I’d like to see Congress demand that this report be resumed. I fully believe the American people and Congress are entitled to this information. Will we one day complain about false intelligence, as we have with the Iraq war? Will we complain about not having enough information to address monetary policy after it’s too late?
If ever there was a time to get a handle on what sound money is and what it means, that time is today.
Inflation, as exposed by high gold prices, transfers wealth from the middle class to the rich, as real wages decline while the salaries of CEOs, movie stars, and athletes skyrocket – along with the profits of the military industrial complex, the oil industry, and other special interests.
A sharply rising gold price is a vote of “no confidence” in Congress’ ability to control the budget, the Fed’s ability to control the money supply, and the administration’s ability to bring stability to the Middle East.
Ultimately, the gold price is a measurement of trust in the currency and the politicians who run the country. It’s been that way for a long time, and is not about to change.
If we care about the financial system, the tax system, and the monumental debt we’re accumulating, we must start talking about the benefits and discipline that come only with a commodity standard of money – money the government and central banks absolutely cannot create out of thin air.
Economic law dictates reform at some point. But should we wait until the dollar is 1/1,000 of an ounce of gold or 1/2,000 of an ounce of gold? The longer we wait, the more people suffer and the more difficult reforms become. Runaway inflation inevitably leads to political chaos, something numerous countries have suffered throughout the 20th century. The worst example of course was the German inflation of the 1920s that led to the rise of Hitler. Even the communist takeover of China was associated with runaway inflation brought on by Chinese Nationalists. The time for action is now, and it is up to the American people and the U.S. Congress to demand it.
by Ron Paul
Business Intelligence (Middle East) - 02/12/2009
Source: BullionVault , Author: Adrian Ash
Gold hits seven-month high with fresh records for non-US buyers
INTERNATIONAL. The price of gold held steady ahead of the US opening on Thursday, recording the best London Gold Fix in seven months at US$944 an ounce.
World stock markets tumbled despite US lawmakers nearing final approval of their US$789 billion stimulus bill.
Eurozone, Indian, British, Canadian, Australian and Swiss investors all saw the gold price reach new all-time highs.
"Relentless buying....renewed fund buying interest....investment pouring into gold," is how three major gold dealers describe Wednesday's 3.1% jump in spot gold prices, the sharpest gain so far this year.
Crude oil meantime slipped below US$36 per barrel early on Thursday, while government bond prices rose, pushing 10-year US Treasury yields down to 2.75%.
New data showed European industrial production sinking by one-eighth in Dec. compared with a year earlier. Japanese wholesale prices fell for the first time in 5 years last month, slipping by 0.2% and marking the return of deflation.
Credit Suisse, the Swiss banking group, reported a record quarterly loss of CHF 6 billion (US$5.2 billion), while insurance giant Swiss Re lost its CEO, Jacques Aigrain. Shareholders in Belgium's ailing Fortis Bank rejected a US$20 billion takeover by BNP Paribas.
"[It was] the SPDR gold ETF that drove the spot market through resistance at US$930 yesterday to paint a very bullish picture," according to a technical note from Mitsui.
Wednesday was "the third largest daily addition to this fund since its inception at 1.3 million ounces," the gold dealer adds.
"Approximately US$4.5 billion has flowed into this fund since the start of the year – safe haven buying in force!"
All told, the gold ETF funds sponsored by marketing-group the World Gold Council (WGC) yesterday added 45.5 tonnes of gold – swelling by 4.3% – to reach a new record hoard of 1,107 tonnes.
The gold is held in trust, mostly at London's HSBC bank, with investors – led by institutional buyers – then holding shares in the trust.
Faced with a one-third collapse in the value of Russian Rubles, high-net worth individuals in Russia are also pouring money into gold, reports Reuters, demanding physical gold bullion – whether as bars or coins – as well as "gold accounts" at the government-owned Sberbank, Russia's largest lender.
"Russians opened 170,000 new accounts which track the price of precious metals last year," according to Sberbank's head of forex operations, buying the equivalent of 55 tonnes of metal and "taking the total number of such deposits to around 300,000."
Over in India, however – home to the world's hungriest gold jewelry market – "gold buyers are not forthcoming," says Daman Prakash, head of the MNC Bullion wholesalers in Chennai.
"I can only sit and wait for my customers, even though we are in the midst of a wedding season. Gold demand is not even trickling in. I am stuck with my gold and silver stocks since mid-December."
Gold has risen in value for India owners in 26 of the last 38 years. Today the gold price in Rupees leapt to new all-time highs above INR 14,500 per 10 grams, while the New Delhi government approved a capital injection of INR 38 billion (US$778 millio) into three major banks, staged over two years.
Staged over two years, the cash should "increase their capital adequacy ratio" according to Minister for Home Affairs P Chidambaram.
Across in Dublin, the Irish government announced a fresh €7 billion (US$9 billion) cash injection for Allied Irish and the Bank of Ireland, collecting warrants worth 25% of each lender in return.
"In terms of capital, I believe we got it right," claims Ireland's Finance Minister Brian Lenihan.
"No government in the world has been able to devise a totally satisfactory scheme of risk assessment. We will continue to work on that."
In London, City watchdog the Financial Services Authority (FSA) joined the row over risk management at now-failed mortgage lender HBOS by claiming it was concerned by the bank's behaviour both before and after it sacked global risk manager, Paul Moore, in 2004.
Moore claims he took a "substantial" pay-off after the group's CEO, Sir James Crosby, sacked him for warning that "the bank was moving too fast."
Sir James yesterday quit his new role as a non-exec' director of the FSA, claiming there was "no substance to [Moore's] allegations."
On the political front – and ahead of this weekend's emergency G7 meeting of leaders from the West's largest economies – German Finance Minister Peer Steinbrück accused France of "indirect protectionism" after it offered a €6 billion loan (US$7.8 billion) to auto-makers Renault and PSA Peugeot-Citroen, provided they don't close any French factories.
"The priority is to keep industry in France. Have no doubt about that," said French Finance Minister Christine Lagarde today.
New US President Barack Obama's Buy American campaign will also be at issue when the G7 meets in Rome according to a Canadian delegate.
Looking ahead to central bank gold in 2009, rubber-stamping sales of 403 tonnes will be just "a formality" according to a spokeswoman from the International Monetary Fund.
"There are no plans to change the proposal," she said in an interview for Reuters. "The package of IMF governance reforms, including gold sales, was submitted to the US Congress last November, but will need to be reintroduced as a formality.
"The timeline will depend on the Congress' schedule."
During the IMF Gold Sales of 1976 to 1980 – when the central banks' banker sold 1,600 tonnes of gold – the spot gold price in US Dollars rose eight-fold regardless.
Note: Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK's leading financial advisory for private investors, Adrian Ash is the editor of Gold News and head of research at BullionVault, where you can buy gold today vaulted in Zurich on US$3 spreads and 0.8% dealing fees.
For details, log on to www.BullionVault.com
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(note: to be filed under section "links" new subsection "The Wisdom of Ron Paul")
What the Price of Gold Is Telling Us
The financial press, and even the network news shows, have begun reporting the price of gold regularly. For twenty years, between 1980 and 2000, the price of gold was rarely mentioned. There was little interest, and the price was either falling or remaining steady.
Since 2001 however, interest in gold has soared along with its price. With the price now over $600 an ounce, a lot more people are becoming interested in gold as an investment and an economic indicator. Much can be learned by understanding what the rising dollar price of gold means.
The rise in gold prices from $250 per ounce in 2001 to over $600 today has drawn investors and speculators into the precious metals market. Though many already have made handsome profits, buying gold per se should not be touted as a good investment. After all, gold earns no interest and its quality never changes. It’s static, and does not grow as sound investments should.
It’s more accurate to say that one might invest in a gold or silver mining company, where management, labor costs, and the nature of new discoveries all play a vital role in determining the quality of the investment and the profits made.
Buying gold and holding it is somewhat analogous to converting one’s savings into one hundred dollar bills and hiding them under the mattress – yet not exactly the same. Both gold and dollars are considered money, and holding money does not qualify as an investment. There’s a big difference between the two however, since by holding paper money one loses purchasing power. The purchasing power of commodity money, e.g., gold, however, goes up if the government devalues the circulating fiat currency.
Holding gold is protection or insurance against government’s proclivity to debase its currency. The purchasing power of gold goes up not because it’s a so-called good investment; it goes up in value only because the paper currency goes down in value. In our current situation, that means the dollar.
One of the characteristics of commodity money – one that originated naturally in the marketplace – is that it must serve as a store of value. Gold and silver meet that test – paper does not. Because of this profound difference, the incentive and wisdom of holding emergency funds in the form of gold becomes attractive when the official currency is being devalued. It’s more attractive than trying to save wealth in the form of a fiat currency, even when earning some nominal interest. The lack of earned interest on gold is not a problem once people realize the purchasing power of their currency is declining faster than the interest rates they might earn. The purchasing power of gold can rise even faster than increases in the cost of living.
The point is that most who buy gold do so to protect against a depreciating currency rather than as an investment in the classical sense. Americans understand this less than citizens of other countries; some nations have suffered from severe monetary inflation that literally led to the destruction of their national currency. Though our inflation – i.e., the depreciation of the U.S. dollar – has been insidious, average Americans are unaware of how this occurs. For instance, few Americans know nor seem concerned that the 1913 pre-Federal Reserve dollar is now worth only four cents. Officially, our central bankers and our politicians express no fear that the course on which we are set is fraught with great danger to our economy and our political system. The belief that money created out of thin air can work economic miracles, if only properly “managed,” is pervasive in D.C.
In many ways we shouldn’t be surprised about this trust in such an unsound system. For at least four generations our government-run universities have systematically preached a monetary doctrine justifying the so-called wisdom of paper money over the “foolishness” of sound money. Not only that, paper money has worked surprisingly well in the past 35 years – the years the world has accepted pure paper money as currency. Alan Greenspan bragged that central bankers in these several decades have gained the knowledge necessary to make paper money respond as if it were gold. This removes the problem of obtaining gold to back currency, and hence frees politicians from the rigid discipline a gold standard imposes.
Many central bankers in the last 15 years became so confident they had achieved this milestone that they sold off large hoards of their gold reserves. At other times they tried to prove that paper works better than gold by artificially propping up the dollar by suppressing market gold prices. This recent deception failed just as it did in the 1960s, when our government tried to hold gold artificially low at $35 an ounce. But since they could not truly repeal the economic laws regarding money, just as many central bankers sold, others bought. It’s fascinating that the European central banks sold gold while Asian central banks bought it over the last several years.
Since gold has proven to be the real money of the ages, we see once again a shift in wealth from the West to the East, just as we saw a loss of our industrial base in the same direction. Though Treasury officials deny any U.S. sales or loans of our official gold holdings, no audits are permitted so no one can be certain.
The special nature of the dollar as the reserve currency of the world has allowed this game to last longer than it would have otherwise. But the fact that gold has gone from $252 per ounce to over $600 means there is concern about the future of the dollar. The higher the price for gold, the greater the concern for the dollar. Instead of dwelling on the dollar price of gold, we should be talking about the depreciation of the dollar. In 1934 a dollar was worth 1/20th of an ounce of gold; $20 bought an ounce of gold. Today a dollar is worth 1/600th of an ounce of gold, meaning it takes $600 to buy one ounce of gold.
The number of dollars created by the Federal Reserve, and through the fractional reserve banking system, is crucial in determining how the market assesses the relationship of the dollar and gold. Though there’s a strong correlation, it’s not instantaneous or perfectly predictable. There are many variables to consider, but in the long term the dollar price of gold represents past inflation of the money supply. Equally important, it represents the anticipation of how much new money will be created in the future. This introduces the factor of trust and confidence in our monetary authorities and our politicians. And these days the American people are casting a vote of “no confidence” in this regard, and for good reasons.
The incentive for central bankers to create new money out of thin air is twofold. One is to practice central economic planning through the manipulation of interest rates. The second is to monetize the escalating federal debt politicians create and thrive on.
Today no one in Washington believes for a minute that runaway deficits are going to be curtailed. In March alone, the federal government created an historic $85 billion deficit. The current supplemental bill going through Congress has grown from $92 billion to over $106 billion, and everyone knows it will not draw President Bush’s first veto. Most knowledgeable people therefore assume that inflation of the money supply is not only going to continue, but accelerate. This anticipation, plus the fact that many new dollars have been created over the past 15 years that have not yet been fully discounted, guarantees the further depreciation of the dollar in terms of gold.
There’s no single measurement that reveals what the Fed has done in the recent past or tells us exactly what it’s about to do in the future. Forget about the lip service given to transparency by new Fed Chairman Bernanke. Not only is this administration one of the most secretive across the board in our history, the current Fed firmly supports denying the most important measurement of current monetary policy to Congress, the financial community, and the American public. Because of a lack of interest and poor understanding of monetary policy, Congress has expressed essentially no concern about the significant change in reporting statistics on the money supply.
Beginning in March, though planned before Bernanke arrived at the Fed, the central bank discontinued compiling and reporting the monetary aggregate known as M3. M3 is the best description of how quickly the Fed is creating new money and credit. Common sense tells us that a government central bank creating new money out of thin air depreciates the value of each dollar in circulation. Yet this report is no longer available to us and Congress makes no demands to receive it.
Though M3 is the most helpful statistic to track Fed activity, it by no means tells us everything we need to know about trends in monetary policy. Total bank credit, still available to us, gives us indirect information reflecting the Fed’s inflationary policies. But ultimately the markets will figure out exactly what the Fed is up to, and then individuals, financial institutions, governments, and other central bankers will act accordingly. The fact that our money supply is rising significantly cannot be hidden from the markets.
The response in time will drive the dollar down, while driving interest rates and commodity prices up. Already we see this trend developing, which surely will accelerate in the not too distant future. Part of this reaction will be from those who seek a haven to protect their wealth – not invest – by treating gold and silver as universal and historic money. This means holding fewer dollars that are decreasing in value while holding gold as it increases in value.
A soaring gold price is a vote of “no confidence” in the central bank and the dollar. This certainly was the case in 1979 and 1980. Today, gold prices reflect a growing restlessness with the increasing money supply, our budgetary and trade deficits, our unfunded liabilities, and the inability of Congress and the administration to reign in runaway spending.
Denying us statistical information, manipulating interest rates, and artificially trying to keep gold prices in check won’t help in the long run. If the markets are fooled short term, it only means the adjustments will be much more dramatic later on. And in the meantime, other market imbalances develop.
The Fed tries to keep the consumer spending spree going, not through hard work and savings, but by creating artificial wealth in stock markets bubbles and housing bubbles. When these distortions run their course and are discovered, the corrections will be quite painful.
Likewise, a fiat monetary system encourages speculation and unsound borrowing. As problems develop, scapegoats are sought and frequently found in foreign nations. This prompts many to demand altering exchange rates and protectionist measures. The sentiment for this type of solution is growing each day.
Though everyone decries inflation, trade imbalances, economic downturns, and federal deficits, few attempt a closer study of our monetary system and how these events are interrelated. Even if it were recognized that a gold standard without monetary inflation would be advantageous, few in Washington would accept the political disadvantages of living with the discipline of gold – since it serves as a check on government size and power. This is a sad commentary on the politics of today. The best analogy to our affinity for government spending, borrowing, and inflating is that of a drug addict who knows if he doesn’t quit he’ll die; yet he can’t quit because of the heavy price required to overcome the dependency. The right choice is very difficult, but remaining addicted to drugs guarantees the death of the patient, while our addiction to deficit spending, debt, and inflation guarantees the collapse of our economy.
Special interest groups, who vigorously compete for federal dollars, want to perpetuate the system rather than admit to a dangerous addiction. Those who champion welfare for the poor, entitlements for the middle class, or war contracts for the military industrial corporations, all agree on the so-called benefits bestowed by the Fed’s power to counterfeit fiat money. Bankers, who benefit from our fractional reserve system, likewise never criticize the Fed, especially since it’s the lender of last resort that bails out financial institutions when crises arise. And it’s true, special interests and bankers do benefit from the Fed, and may well get bailed out – just as we saw with the Long-Term Capital Management fund crisis a few years ago. In the past, companies like Lockheed and Chrysler benefited as well. But what the Fed cannot do is guarantee the market will maintain trust in the worthiness of the dollar. Current policy guarantees that the integrity of the dollar will be undermined. Exactly when this will occur, and the extent of the resulting damage to financial system, cannot be known for sure – but it is coming. There are plenty of indications already on the horizon.
Foreign policy plays a significant role in the economy and the value of the dollar. A foreign policy of militarism and empire building cannot be supported through direct taxation. The American people would never tolerate the taxes required to pay immediately for overseas wars, under the discipline of a gold standard. Borrowing and creating new money is much more politically palatable. It hides and delays the real costs of war, and the people are lulled into complacency – especially since the wars we fight are couched in terms of patriotism, spreading the ideas of freedom, and stamping out terrorism. Unnecessary wars and fiat currencies go hand-in-hand, while a gold standard encourages a sensible foreign policy.
The cost of war is enormously detrimental; it significantly contributes to the economic instability of the nation by boosting spending, deficits, and inflation. Funds used for war are funds that could have remained in the productive economy to raise the standard of living of Americans now unemployed, underemployed, or barely living on the margin.
Yet even these costs may be preferable to paying for war with huge tax increases. This is because although fiat dollars are theoretically worthless, value is imbued by the trust placed in them by the world’s financial community. Subjective trust in a currency can override objective knowledge about government policies, but only for a limited time.
Economic strength and military power contribute to the trust in a currency; in today’s world trust in the U.S. dollar is not earned and therefore fragile. The history of the dollar, being as good as gold up until 1971, is helpful in maintaining an artificially higher value for the dollar than deserved.
Foreign policy contributes to the crisis when the spending to maintain our worldwide military commitments becomes prohibitive, and inflationary pressures accelerate. But the real crisis hits when the world realizes the king has no clothes, in that the dollar has no backing, and we face a military setback even greater than we already are experiencing in Iraq. Our token friends may quickly transform into vocal enemies once the attack on the dollar begins.
False trust placed in the dollar once was helpful to us, but panic and rejection of the dollar will develop into a real financial crisis. Then we will have no other option but to tighten our belts, go back to work, stop borrowing, start saving, and rebuild our industrial base, while adjusting to a lower standard of living for most Americans.
Counterfeiting the nation’s money is a serious offense. The founders were especially adamant about avoiding the chaos, inflation, and destruction associated with the Continental dollar. That’s why the Constitution is clear that only gold and silver should be legal tender in the United States. In 1792 the Coinage Act authorized the death penalty for any private citizen who counterfeited the currency. Too bad they weren’t explicit that counterfeiting by government officials is just as detrimental to the economy and the value of the dollar.
In wartime, many nations actually operated counterfeiting programs to undermine our dollar, but never to a disastrous level. The enemy knew how harmful excessive creation of new money could be to the dollar and our economy. But it seems we never learned the dangers of creating new money out of thin air. We don’t need an Arab nation or the Chinese to undermine our system with a counterfeiting operation. We do it ourselves, with all the disadvantages that would occur if others did it to us. Today we hear threats from some Arab, Muslim, and far Eastern countries about undermining the dollar system – not by dishonest counterfeiting, but by initiating an alternative monetary system based on gold. Wouldn’t that be ironic? Such an event theoretically could do great harm to us. This day may well come, not so much as a direct political attack on the dollar system but out of necessity to restore confidence in money once again.
Historically, paper money never has lasted for long periods of time, while gold has survived thousands of years of attacks by political interests and big government. In time, the world once again will restore trust in the monetary system by making some currency as good as gold.
Gold, or any acceptable market commodity money, is required to preserve liberty. Monopoly control by government of a system that creates fiat money out of thin air guarantees the loss of liberty. No matter how well-intended our militarism is portrayed, or how happily the promises of wonderful programs for the poor are promoted, inflating the money supply to pay these bills makes government bigger. Empires always fail, and expenses always exceed projections. Harmful unintended consequences are the rule, not the exception. Welfare for the poor is inefficient and wasteful. The beneficiaries are rarely the poor themselves, but instead the politicians, bureaucrats, or the wealthy. The same is true of all foreign aid – it’s nothing more than a program that steals from the poor in a rich country and gives to the rich leaders of a poor country. Whether it’s war or welfare payments, it always means higher taxes, inflation, and debt. Whether it’s the extraction of wealth from the productive economy, the distortion of the market by interest rate manipulation, or spending for war and welfare, it can’t happen without infringing upon personal liberty.
At home the war on poverty, terrorism, drugs, or foreign rulers provides an opportunity for authoritarians to rise to power, individuals who think nothing of violating the people’s rights to privacy and freedom of speech. They believe their role is to protect the secrecy of government, rather than protect the privacy of citizens. Unfortunately, that is the atmosphere under which we live today, with essentially no respect for the Bill of Rights.
Though great economic harm comes from a government monopoly fiat monetary system, the loss of liberty associated with it is equally troubling. Just as empires are self-limiting in terms of money and manpower, so too is a monetary system based on illusion and fraud. When the end comes we will be given an opportunity to choose once again between honest money and liberty on one hand; chaos, poverty, and authoritarianism on the other.
The economic harm done by a fiat monetary system is pervasive, dangerous, and unfair. Though runaway inflation is injurious to almost everyone, it is more insidious for certain groups. Once inflation is recognized as a tax, it becomes clear the tax is regressive: penalizing the poor and middle class more than the rich and politically privileged. Price inflation, a consequence of inflating the money supply by the central bank, hits poor and marginal workers first and foremost. It especially penalizes savers, retirees, those on fixed incomes, and anyone who trusts government promises. Small businesses and individual enterprises suffer more than the financial elite, who borrow large sums before the money loses value. Those who are on the receiving end of government contracts – especially in the military industrial complex during wartime – receive undeserved benefits.
It’s a mistake to blame high gasoline and oil prices on price gouging. If we impose new taxes or fix prices, while ignoring monetary inflation, corporate subsidies, and excessive regulations, shortages will result. The market is the only way to determine the best price for any commodity. The law of supply and demand cannot be repealed. The real problems arise when government planners give subsidies to energy companies and favor one form of energy over another.
Energy prices are rising for many reasons: Inflation; increased demand from China and India; decreased supply resulting from our invasion of Iraq; anticipated disruption of supply as we push regime change in Iran; regulatory restrictions on gasoline production; government interference in the free market development of alternative fuels; and subsidies to big oil such as free leases and grants for research and development.
Interestingly, the cost of oil and gas is actually much higher than we pay at the retail level. Much of the DOD budget is spent protecting “our” oil supplies, and if such spending is factored in gasoline probably costs us more than $5 a gallon. The sad irony is that this military effort to secure cheap oil supplies inevitably backfires, and actually curtails supplies and boosts prices at the pump. The waste and fraud in issuing contracts to large corporations for work in Iraq only add to price increases.
When problems arise under conditions that exist today, it’s a serious error to blame the little bit of the free market that still functions. Last summer the market worked efficiently after Katrina – gas hit $3 a gallon, but soon supplies increased, usage went down, and the price returned to $2. In the 1980s, market forces took oil from $40 per barrel to $10 per barrel, and no one cried for the oil companies that went bankrupt. Today’s increases are for the reasons mentioned above. It’s natural for labor to seek its highest wage, and businesses to strive for the greatest profit. That’s the way the market works. When the free market is allowed to work, it’s the consumer who ultimately determines price and quality, with labor and business accommodating consumer choices. Once this process is distorted by government, prices rise excessively, labor costs and profits are negatively affected, and problems emerge. Instead of fixing the problem, politicians and demagogues respond by demanding windfall profits taxes and price controls, while never questioning how previous government interference caused the whole mess in the first place. Never let it be said that higher oil prices and profits cause inflation; inflation of the money supply causes higher prices!
Since keeping interest rates below market levels is synonymous with new money creation by the Fed, the resulting business cycle, higher cost of living, and job losses all can be laid at the doorstep of the Fed. This burden hits the poor the most, making Fed taxation by inflation the worst of all regressive taxes. Statistics about revenues generated by the income tax are grossly misleading; in reality much harm is done by our welfare/warfare system supposedly designed to help the poor and tax the rich. Only sound money can rectify the blatant injustice of this destructive system.
The Founders understood this great danger, and voted overwhelmingly to reject “emitting bills of credit,” the term they used for paper or fiat money. It’s too bad the knowledge and advice of our founders, and their mandate in the Constitution, are ignored today at our great peril. The current surge in gold prices – which reflects our dollar’s devaluation – is warning us to pay closer attention to our fiscal, monetary, entitlement, and foreign policy.
Meaning of the Gold Price – Summation
A recent headline in the financial press announced that gold prices surged over concern that confrontation with Iran will further push oil prices higher. This may well reflect the current situation, but higher gold prices mainly reflect monetary expansion by the Federal Reserve. Dwelling on current events and their effect on gold prices reflects concern for symptoms rather than an understanding of the actual cause of these price increases. Without an enormous increase in the money supply over the past 35 years and a worldwide paper monetary system, this increase in the price of gold would not have occurred.
Certainly geo-political events in the Middle East under a gold standard would not alter its price, though they could affect the supply of oil and cause oil prices to rise. Only under conditions created by excessive paper money would one expect all or most prices to rise. This is a mere reflection of the devaluation of the dollar.
Particular things to remember:
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If one endorses small government and maximum liberty, one must support commodity money.
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One of the strongest restraints against unnecessary war is a gold standard.
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Deficit financing by government is severely restricted by sound money.
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The harmful effects of the business cycle are virtually eliminated with an honest gold standard.
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Saving and thrift are encouraged by a gold standard; and discouraged by paper money.
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Price inflation, with generally rising price levels, is characteristic of paper money. Reports that the consumer price index and the producer price index are rising are distractions: the real cause of inflation is the Fed’s creation of new money.
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Interest rate manipulation by central bank helps the rich, the banks, the government, and the politicians.
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Paper money permits the regressive inflation tax to be passed off on the poor and the middle class.
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Speculative financial bubbles are characteristic of paper money – not gold.
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Paper money encourages economic and political chaos, which subsequently causes a search for scapegoats rather than blaming the central bank.
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Dangerous protectionist measures frequently are implemented to compensate for the dislocations caused by fiat money.
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Paper money, inflation, and the conditions they create contribute to the problems of illegal immigration.
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The value of gold is remarkably stable.
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The dollar price of gold reflects dollar depreciation.
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Holding gold helps preserve and store wealth, but technically gold is not a true investment.
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Since 2001 the dollar has been devalued by 60%.
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In 1934 FDR devalued the dollar by 41%.
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In 1971 Nixon devalued the dollar by 7.9%.
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In 1973 Nixon devalued the dollar by 10%.
These were momentous monetary events, and every knowledgeable person worldwide paid close attention. Major changes were endured in 1979 and 1980 to save the dollar from disintegration. This involved a severe recession, interest rates over 21%, and general price inflation of 15%.
Today we face a 60% devaluation and counting, yet no one seems to care. It’s of greater significance than the three events mentioned above. And yet the one measurement that best reflects the degree of inflation, the Fed and our government deny us. Since March, M3 reporting has been discontinued. For starters, I’d like to see Congress demand that this report be resumed. I fully believe the American people and Congress are entitled to this information. Will we one day complain about false intelligence, as we have with the Iraq war? Will we complain about not having enough information to address monetary policy after it’s too late?
If ever there was a time to get a handle on what sound money is and what it means, that time is today.
Inflation, as exposed by high gold prices, transfers wealth from the middle class to the rich, as real wages decline while the salaries of CEOs, movie stars, and athletes skyrocket – along with the profits of the military industrial complex, the oil industry, and other special interests.
A sharply rising gold price is a vote of “no confidence” in Congress’ ability to control the budget, the Fed’s ability to control the money supply, and the administration’s ability to bring stability to the Middle East.
Ultimately, the gold price is a measurement of trust in the currency and the politicians who run the country. It’s been that way for a long time, and is not about to change.
If we care about the financial system, the tax system, and the monumental debt we’re accumulating, we must start talking about the benefits and discipline that come only with a commodity standard of money – money the government and central banks absolutely cannot create out of thin air.
Economic law dictates reform at some point. But should we wait until the dollar is 1/1,000 of an ounce of gold or 1/2,000 of an ounce of gold? The longer we wait, the more people suffer and the more difficult reforms become. Runaway inflation inevitably leads to political chaos, something numerous countries have suffered throughout the 20th century. The worst example of course was the German inflation of the 1920s that led to the rise of Hitler. Even the communist takeover of China was associated with runaway inflation brought on by Chinese Nationalists. The time for action is now, and it is up to the American people and the U.S. Congress to demand it.
by Ron Paul
Business Intelligence (Middle East) - 02/12/2009
Source: BullionVault , Author: Adrian Ash
Gold hits seven-month high with fresh records for non-US buyers
INTERNATIONAL. The price of gold held steady ahead of the US opening on Thursday, recording the best London Gold Fix in seven months at US$944 an ounce.
World stock markets tumbled despite US lawmakers nearing final approval of their US$789 billion stimulus bill.
Eurozone, Indian, British, Canadian, Australian and Swiss investors all saw the gold price reach new all-time highs.
"Relentless buying....renewed fund buying interest....investment pouring into gold," is how three major gold dealers describe Wednesday's 3.1% jump in spot gold prices, the sharpest gain so far this year.
Crude oil meantime slipped below US$36 per barrel early on Thursday, while government bond prices rose, pushing 10-year US Treasury yields down to 2.75%.
New data showed European industrial production sinking by one-eighth in Dec. compared with a year earlier. Japanese wholesale prices fell for the first time in 5 years last month, slipping by 0.2% and marking the return of deflation.
Credit Suisse, the Swiss banking group, reported a record quarterly loss of CHF 6 billion (US$5.2 billion), while insurance giant Swiss Re lost its CEO, Jacques Aigrain. Shareholders in Belgium's ailing Fortis Bank rejected a US$20 billion takeover by BNP Paribas.
"[It was] the SPDR gold ETF that drove the spot market through resistance at US$930 yesterday to paint a very bullish picture," according to a technical note from Mitsui.
Wednesday was "the third largest daily addition to this fund since its inception at 1.3 million ounces," the gold dealer adds.
"Approximately US$4.5 billion has flowed into this fund since the start of the year – safe haven buying in force!"
All told, the gold ETF funds sponsored by marketing-group the World Gold Council (WGC) yesterday added 45.5 tonnes of gold – swelling by 4.3% – to reach a new record hoard of 1,107 tonnes.
The gold is held in trust, mostly at London's HSBC bank, with investors – led by institutional buyers – then holding shares in the trust.
Faced with a one-third collapse in the value of Russian Rubles, high-net worth individuals in Russia are also pouring money into gold, reports Reuters, demanding physical gold bullion – whether as bars or coins – as well as "gold accounts" at the government-owned Sberbank, Russia's largest lender.
"Russians opened 170,000 new accounts which track the price of precious metals last year," according to Sberbank's head of forex operations, buying the equivalent of 55 tonnes of metal and "taking the total number of such deposits to around 300,000."
Over in India, however – home to the world's hungriest gold jewelry market – "gold buyers are not forthcoming," says Daman Prakash, head of the MNC Bullion wholesalers in Chennai.
"I can only sit and wait for my customers, even though we are in the midst of a wedding season. Gold demand is not even trickling in. I am stuck with my gold and silver stocks since mid-December."
Gold has risen in value for India owners in 26 of the last 38 years. Today the gold price in Rupees leapt to new all-time highs above INR 14,500 per 10 grams, while the New Delhi government approved a capital injection of INR 38 billion (US$778 millio) into three major banks, staged over two years.
Staged over two years, the cash should "increase their capital adequacy ratio" according to Minister for Home Affairs P Chidambaram.
Across in Dublin, the Irish government announced a fresh €7 billion (US$9 billion) cash injection for Allied Irish and the Bank of Ireland, collecting warrants worth 25% of each lender in return.
"In terms of capital, I believe we got it right," claims Ireland's Finance Minister Brian Lenihan.
"No government in the world has been able to devise a totally satisfactory scheme of risk assessment. We will continue to work on that."
In London, City watchdog the Financial Services Authority (FSA) joined the row over risk management at now-failed mortgage lender HBOS by claiming it was concerned by the bank's behaviour both before and after it sacked global risk manager, Paul Moore, in 2004.
Moore claims he took a "substantial" pay-off after the group's CEO, Sir James Crosby, sacked him for warning that "the bank was moving too fast."
Sir James yesterday quit his new role as a non-exec' director of the FSA, claiming there was "no substance to [Moore's] allegations."
On the political front – and ahead of this weekend's emergency G7 meeting of leaders from the West's largest economies – German Finance Minister Peer Steinbrück accused France of "indirect protectionism" after it offered a €6 billion loan (US$7.8 billion) to auto-makers Renault and PSA Peugeot-Citroen, provided they don't close any French factories.
"The priority is to keep industry in France. Have no doubt about that," said French Finance Minister Christine Lagarde today.
New US President Barack Obama's Buy American campaign will also be at issue when the G7 meets in Rome according to a Canadian delegate.
Looking ahead to central bank gold in 2009, rubber-stamping sales of 403 tonnes will be just "a formality" according to a spokeswoman from the International Monetary Fund.
"There are no plans to change the proposal," she said in an interview for Reuters. "The package of IMF governance reforms, including gold sales, was submitted to the US Congress last November, but will need to be reintroduced as a formality.
"The timeline will depend on the Congress' schedule."
During the IMF Gold Sales of 1976 to 1980 – when the central banks' banker sold 1,600 tonnes of gold – the spot gold price in US Dollars rose eight-fold regardless.
Note: Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK's leading financial advisory for private investors, Adrian Ash is the editor of Gold News and head of research at BullionVault, where you can buy gold today vaulted in Zurich on US$3 spreads and 0.8% dealing fees.
For details, log on to www.BullionVault.com
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(note: to be filed under section "links" new subsection "The Wisdom of Ron Paul")
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