THE ALCHEMICAL GOLD STANDARDFebruary 8, 2012
As you know by now, I am a subscriber to that wonderful electronic newsletter from Great Britain, The Daily Bell, and often write and comment about their articles here, and I had to say something about this one:
We note of course the story we have covered here in previous blogs, namely, the move of the Asian powers - China, Russia, Japan, and India, and more recently, Iran, away from the dollar as their reserve currency, to direct currency exchanges, and not, according to The Daily Bell, rumors that they will also partially base their trade on gold. But there is a story hidden in this article, and it's this:
"Yet another story was about World Bank President Robert Zoellick, who has been promoting a Gold Standard for years, 'admitting' the demise of the dollar reflects 'a changing balance of power' in the world. Even Newt Gingrich has jumped aboard the gold train.
"These stories are framed as resistance against the dollar hegemony and of course that is only a part of the story ... But the decline of the dollar is only part of the story. The dollar is only the current vehicle the Money Power uses to rule international finance. It doesn't care for the vehicle itself, as long as it has a suitable successor and that will be Gold.
"And in the US itself there also is a strong drive towards Gold as currency. The onslaught by Austrian Economics in the Alternative Media comes to mind. And Ron Paul of course. He openly calls for Gold as currency. In this respect, he clearly is the ultimate internationalist candidate. This contrasts sharply with his patriotic 'constitutionalism'."(Italicized emphasis in the original, boldface emphasis added)
Well, first things first. Why would a return to the gold standard be part of the corporate elite's agenda?As I have noted elsewhere on this site, the gold standard had to be drastically modified in the wake of World War One and the vast expansion of credit and debt - all controlled by the banksters of course - that occurred because of it. This led to a vast expansion of central banking institutions to serve other central banks, the Bank of International Settlements or BIS at the head of the list. In the post-World War Two period, this led to the creation of further such institutions of dollar hegemony, the International Monetary Fund, the Bretton Woods agreement, and the World Bank among them. Then, in 1971, Nixon took the dollar off of this modified gold standard system, and we have been living under a system of floating currency values ever since, revolving around the dollar. And again, it was the pressures of the Vietnam War that led to this step.
We come to the heart of the matter: a return to the gold standard might mean a vast deflationary process, the reverse of the process that led to its abandonment. But there is a problem here, namely, that the gold standard did not prevent the inflationary expansion of credit and debt to begin with, expansions, as we have noted, due to the World Wars and subsequently Vietnam. In short, a gold standard is no measure of monetary stability. It was, and would be, just another tool in the bankster warchest for the manipulation of money for their own benefit.
We come then to the heart of The Daily Bell article:
"Some of this is good! Some of this, we've have pointed out in various articles ourselves. We think, possibly, that Money Power is deliberately breaking down the "old" economic order in order to create some sort of one-world currency. We think gold may be part of it – and we're surely not in favor of this sort of "directed history" when it comes to monetary schemes.
"But we also believe that money, historically, has proven out to be gold and silver; though as hard-money economist Murray Rothbard pointed out, money has ALSO been virtually anything that people have decided it is.
"However, Rothbard, from what we can tell, was mostly talking about commodity money – shells, salt, copper discs, etc., that are injected into economies via MARKET FORCES. The problem comes when certain monetary theorists want to use monopoly power (often of the state) to produce pure-paper money.
"Once the state (or its adjuncts) decides to assume the power to "print" money, the marketplace monitor that works so well for private money is disassembled. Those who work (for the state, especially) do not know how much money is "enough" money – nor can they."
But this is simply untrue. As I pointed out in Babylon's Banksters, the earliest form of money in Mesopotamia was simply clay tablets, bills and receipts of exchange that circulated as money, sometimes debt-free, sometimes not. But the real problem is who is doing the money-issuing. Money, as I noted in Babylon's Banksters represents two things, and not just one. It is, yes, a medium of exchange, and thus represents a "what." But is also represents a who, namely, who is ultimately behind its issuance, a fact hinted at in the following lines from the article:
"Mr. Migchels writes that, "Far from a 'solution', the coming Gold Standard is the logical next step in the Money Power plan of destabilization and order out of chaos. We will have a long and painful depression. Although it is not certain that Gold will completely replace paper, it is obvious that we will know scarce money and contraction for years to come."
"This is only certain if the powers-that-be are able to mandate a state-run gold standard. State power is always to be feared, especially in the context of a new monetary system. But we would argue, on the other hand, that no one has to fear money that is created within the context of the market itself."
The point is, we are entering a new era, caused both by the rapid expansion of technology, and shifting geopolitical and cultural centers. And in this shifting era, we need to have an open and public debate on what constitutes money, and who can issue it. With the emergence of so much money in the form of electronic transfers,as information, the possibility arises of local markets being able to create forms of money in response to local market conditions, and yet to trade on an international level. It would be possible to imagine an "Ithica Hours" local currency trading with local markets in Argentina, or India, or China, and bypassing the national currencies of such countries completely. In short, technology is raising the specter once again - the specter so hated by central banksters - of local debt-free currencies as receipts for goods and services. We therefore respectfully disagree that a free market my bullion system is necessary, though, like The Daily Bell, it would be a logical step to occur. The real point is, once again, that an open and public debate on the nature of money - and whether or not the world needs a class of monopolist central banksters - is what is really needed.
See you on the flip side.