The Good Guys Are NOT Coming To Save Us

Apr 23rd, 2013

FREEMANSPERSPECTIVE

A lot of Americans know that the US government is out of control. Anyone who has cared enough to study the US Constitution even a little knows this. Still, very few of these people are taking any significant action, and largely because of one error: They are waiting for “the good guys” to show up and fix things.

Some think that certain groups of politicians will pull it together and fix things, or that one magnificent politician will ride in to fix things. Others think that certain members of the military will step in and slap the politicians back into line. And, I’m sure there are other variations.

There are several problems with this. I’ll start with the small issues:

1. It doesn’t happen. A lot of good people have latched on to one grand possibility after another, waiting for a good guy to save the day, and it just doesn’t happen. Thousands of hours of reading, writing and waiting are burned with each new “great light” who comes along with a promise to run the system in the “right” way, and give us liberty and truth. (Or whatever.) Lots of decent folks grab on to one pleasant dream after another, only to end up right back where they started… but poorer in time, energy and finances.
2. Hope is a scam. It’s a dream of someday, somehow, getting something for nothing. People who hope do not act – they wait for other people to act. Hope is a tool to neuter a natural opposition: they sit and hope, and never act against you. Even the biblical meaning of hope is something more like expectation (or sometimes waiting) than the modern use of hope.
3. Petitioning an abuser for compassion. The “good guys” are considered to be a few people inside the abusive government. But if the good guys were really good, wouldn’t they have dissociated themselves with an abuser some time ago? By pleading for the good guys to rise up, people are asking one sub-group of the abusers to save them from the rest of the abusers. However, they all work for the same operation; they all get paid out of the same offices; according to the same rulebook. And if the good guys are so willing to turn against their employers, why would they have waited until now?
4. Movies. We all grew up in the company of movie heroes who rode in at the last minute to save the noble victims. From John Wayne to Star Trek to Bruce Willis, the story line differs little. These are pleasant stories, of course, but cinema is not reality, and hoping for it to become reality is something that we should get over prior to adulthood.

But, as I say, those are the smaller issues. Let’s move on to the serious ones.

The Magic System

A lot of Americans believe that the American “Founders” created a system that automatically fixes itself. They talk about the “balance of powers,” and think that it will always save them from a tyrant. The balanced powers of the US Constitution, however, were trashed within fifteen years and doubly-trashed just a century ago.

In the Constitution, the states balanced the power of the national government (the one now in Washington, DC.) Not only did the states control half of the legislature, but they decided if and how they would implement the edicts of the national government. And that included deciding whether a law was constitutional or not.

This changed in 1803 with the Marbury v. Madison ruling. This ruling – taught as a work of genius in American schools – was a fraud against the US Constitution. In it, the Supreme Court held that they understood the Constitution better than James Madison, the man who wrote it!

But worse than even this, they held – with absolutely no basis – that it was they who would decide what was constitutional or not. The states were tossed aside. Even the sitting President of the United States, Thomas Jefferson, called it “a very dangerous doctrine indeed, and one which would place us under the despotism of an oligarchy.”

Marbury’s Judicial review (the Supremes ruling on constitutionality) merely involves one branch of the national government providing a check on the other branches of the national government. After Marbury, no one could check the national government.

Washington DC was unleashed with Marbury v. Madison. What made it almighty was the 17th Amendment of 1913, which took the powers of the states and transferred them to Washington, by mandating the popular election of senators.

With senators being elected directly by the populace, the states were cut-out of the equation. In their place, political parties gained massive power, and nearly all power was consolidated in the city of Washington.

And so it is today. Washington is an unfettered beast. The system will NOT fix itself; the mechanisms to do that were lost a long time ago.

The Easy Way Out

Standing up against a beast like Washington DC is scary, to be sure. Understandably, not many people want to do such a thing. But if the beast is abusing you, what other choice do you have? You can certainly avoid or evade the beast, but we all know that the beast hurts people it catches avoiding it, so the risk of doing this isn’t zero either.

So, what’s a person to do? They hate their abuse, but outright disobedience would be scary. Unfortunately, many people have come up with a third option: Get someone else to do it for you.

Lots of writers have done this, for example: Write flamboyantly about the abuses people face and stir them to “rise up against the power.” Fairly seldom does the writer take big risks himself – he just stirs up others to do the scary stuff.

Something very similar happens to basically moral people who don’t want to risk pain and suffering: they imagine good guys riding in to save them.

But, as I say, these are genuinely decent people, and they are willing to take smaller risks to help the good guys: They will spend time and money promoting them, and they will even accept name-calling in many cases. They just don’t want to become full-blown rebels and outcasts.

The result of this is predictable: abuse by the political class. If the politicians show them a viable possibility every election cycle, they’ll keep voting their way forever… and the hero never really has to show up.

The Sad Truth

Let’s just say it:

No one is going to ride in and save you.

If you want things to get better, then YOU will have to make them better. YOU will have to stand up and take the arrows, yourself. Liberty, at this stage of human development, requires risk and pain.

I trust that you will remember the end of Jesus’ famous Sermon on the Mount: That it is not those who call upon his name who will be saved, but only those who DO the things he said.

Likewise in this situation, our only hope of salvation lies in DOING.

Paul Rosenberg
FreemansPerspective.com

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Federal Reserve’s Attack on Gold & Silver A Warning Sign All Patriots Should Heed

April 24, 2013

By Paul Craig Roberts

For Americans, financial and economic Armageddon might be close at hand. The evidence for this conclusion is the concerted effort by the Federal Reserve and its dependent financial institutions to scare people away from gold and silver by driving down their prices.

When gold prices hit $1,917.50 an ounce on August 23, 2011, a gain of more than $500 an ounce in less than eight months, capping a rise over a decade from $272 at the end of December 2000, the Federal Reserve panicked. With the United States dollar losing value so rapidly compared to the world standard for money, the Federal Reserve’s policy of printing $1T annually in order to support the impaired balance sheets of banks and to finance the federal deficit was placed in danger. Who could believe the dollar’s exchange rate in relation to other currencies when the dollar was collapsing in value in relation to gold and silver?

The Federal Reserve realized that its massive purchase of bonds in order to keep their prices high (and thus interest rates low) was threatened by the dollar’s rapid loss of value in terms of gold and silver. The Fed was concerned that large holders of U.S. dollars, such as the central banks of China and Japan and the OPEC sovereign investment funds, might join the flight of individual investors away from the dollar, thus ending in the fall of the dollar’s foreign exchange value and thus decline in U.S. bond and stock prices.

Intelligent people could see that the U.S. government could not afford the long and numerous wars that the neoconservatives were engineering or the loss of tax base and consumer income from off-shoring millions of U.S. middle-class jobs for the sake of executive bonuses and shareholder capital gains. They could see what was in the cards, and began exiting the dollar for gold and silver.

Central banks are slower to act. Saudi Arabia and the oil emirates are dependent on U.S. protection and do not want to anger their protector. Japan is a puppet state that is careful in its relationship with its master. China wanted to hold on to the American consumer market for as long as that market existed. It was individuals who began the exit from the U.S. dollar.

When gold topped $1,900, Washington put out the story that gold was a bubble. The presstitute media fell in line with Washington’s propaganda. “Gold looking a bit bubbly” declared CNN Money on August 23, 2011.

The Federal Reserve used its dependent “banks too big to fail” to short the precious metals markets. By selling naked shorts in the paper bullion market against the rising demand for physical possession, the Fed was able to drive the price of gold down to $1,750 and keep it more or less capped there until recently, when a concerted effort on April 2-3 drove gold down to $1,557 and silver, which had approached $50 per ounce in 2011, down to $27.

The Federal Reserve began its April Fool’s assault on gold by sending the word to brokerage houses, which quickly went out to clients, that hedge funds and other large investors were going to unload their gold positions and that clients should get out of the precious metal market prior to these sales. As this inside information was the government’s own strategy, individuals cannot be prosecuted for acting on it. By this operation, the Federal Reserve, a totally corrupt entity, was able to combine individual flight with institutional flight. Bullion prices took a big hit, and bullishness departed from the gold and silver markets. The flow of dollars into bullion, which threatened to become a torrent, was stopped.

For now it seems that the Fed has succeeded in creating wariness among Americans about the virtues of gold and silver, and thus it has extended the time that it can print money to keep the house of cards standing. This time could be short or it could last a couple of years.

For the Russians and Chinese, whose central banks have more dollars than they want, and for the 1.3B Indians in India, the low dollar price for gold that the Federal Reserve has engineered is an opportunity. They see the opportunity that the Fed has given them to purchase gold at $350-$400 an ounce less than two years ago as a gift.

The Fed’s attack on bullion is an act of desperation that, when widely recognized, will doom its policy.

The Fed is creating 1T new dollars per year, but the world is moving away from the use of the dollar for international payments and, thus, as reserve currency. The result is an increase in supply and a decrease in demand. This means a falling exchange value of the dollar, domestic inflation from rising import prices and a rising interest rate and collapsing bond, stock and real estate markets.

The Federal Reserve’s orchestration against bullion cannot ultimately succeed. It is designed to gain time for it to be able to continue financing the federal budget deficit by printing money and also to keep interest rates low and debt prices high in order to support the banks’ balance sheets.

When the Fed can no longer print due to dollar decline which printing would make worse, U.S. bank deposits and pensions could be grabbed in order to finance the federal budget deficit for a couple of more years. Anything to stave off the final catastrophe.

By its obvious and concerted attack on gold and silver, the U.S. government could not give any clearer warning that trouble is approaching. The values of the dollar and of financial assets denominated in dollars are in doubt.

How the Fed Tanked Gold & Silver

By Paul Craig Roberts

I was the first to point out that the Federal Reserve was rigging all markets, not merely bond prices and interest rates, and that the Fed is rigging the bullion market in order to protect the U.S. dollar’s exchange value, which is threatened by the Fed’s quantitative easing. With the Fed adding to the supply of dollars faster than the demand for dollars is increasing, the price or exchange value of the dollar is set up to fall.

A fall in the dollar’s exchange rate would push up import prices and, thereby, domestic inflation, and the Fed would lose control over interest rates. The bond market would collapse and with it the values of debt-related derivatives on the “banks too big to fail” balance sheets. The financial system would be in turmoil and panic would reign.

Rapidly rising bullion prices were an indication of loss of confidence in the dollar and were signaling a drop in the dollar’s exchange rate. The Fed used naked shorts in the paper gold market to offset the price effect of a rising demand for bullion possession. Short sales that drive down the price, trigger stop-loss orders that automatically lead to individual sales of bullion holdings once their loss limits are reached.

According to bullion trader and whistle-blower Andrew Maguire, on Friday, April 12, the Fed’s agents hit the market with 500 tons of naked shorts. Normally, a short is when an investor thinks the price of a stock or commodity is going to fall. He wants to sell the item in advance of the fall, pocket the money, and then buy the item back after it falls in price, thus making money on the short sale. If he doesn’t have the item, he borrows it from someone who does, putting up cash collateral equal to the current market price. Then he sells the item, waits for it to fall in price, buys it back at the lower price and returns it to the owner who returns his collateral. If enough shorts are sold, the result can significantly drive down the market price.

A naked short is when the short seller does not have or borrow the item that he shorts, but sells shorts regardless. In the paper gold market, the participants are betting on gold prices and are content with the monetary payment. Therefore, generally, as participants are not interested in taking delivery of the gold, naked shorts do not need to be covered with the physical metal. In other words, with naked shorts, no physical metal is actually sold.

Consider the 500 tons of paper gold sold on April 12. At the beginning gold price that day of about $1,550, that 500 tons comes to $24.8B. Who has that kind of money?

What happens when 500 tons of gold sales are dumped on the market at one time or on one day? It drives the price down. Investors who want to get out of large positions would spread sales out over time so as not to lower their sales proceeds. The sale took gold down by about $73 per ounce. That means the seller or sellers lost up to $73 dollars 16 million times, or $1.2B. [Over the next two days it dropped $200 per ounce. That equals a $3.2B fall.—Ed.]

Who can afford to lose that kind of money? Only a central bank that can print it.

Paul Craig Roberts is a former assistant undersecretary of the U.S. Treasury and former associate editor of The Wall Street Journal. He is the author of many books including The Tyranny of Good Intentions, Alienation and the Soviet Economy, How the Economy Was Lost and others.

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