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("Clyde may look like a local electrician, but he's really
only one of
6 or 8 people in the world capable of pulling off
this $97 Quintzillion
trade which is now being held up by the
European bankers . . .")
Date: Sun, 29 Apr 2001 19:20:11 -0000
Subject: [doveofo] Why Gold Standard is Important for New
Treasury Bank
System
Message-ID: <9chphb+uee9@egroups.com
Hello Dear Friends,
Below is an article that several lenders sent me in the
last few days - thanks to everyone who forwarded this interesting
article to me.
I'm told by a lender that World Net Daily is an excellent
source of information on what is actually happening in the
world and is being kept out of the controlled mainstream media.
This article gives us more information about the powerful
people who support having a gold-backed currency system, and
how such a gold-backed system makes our economy more stable.
Regarding the artifically depressed price of gold, I was told
years ago that a certain powerful banking family dictates
the daily price of gold. Regardless, having a relatively low
and controlled price of gold for years might have actually
been helpful to our cause. It's a circumstance that
has probably helped the purchase of the large amounts of gold
we need for our Treasury Bank system to be purchased over
time, in my opinion.
For those of you who can read between the lines, this article
is encouraging for all of us.
Blessings and Love,
Dove
A 1966 newsletter article written by Alan Greenspan supporting
a gold-based U.S. economy is reflective of the Federal Reserve
chairman's beliefs even today, WorldNetDaily has learned,
even though his Fed policies are diametrically opposed to
those that would support a gold standard economy. The article,
entitled, "Gold and Economic Freedom," was written
for the July 1966 issue of The Objectivist newsletter, a publication
that also featured authors Ayn Rand and Nathaniel Branden.
In it, Greenspan discusses "the specific role of gold
in a free society," as well as the importance of a tangible
monetary "standard."
"If men did not have some commodity of objective value
which was generally acceptable as money, they would have to
resort to primitive barter or be forced to live on self-sufficient
farms and forego the inestimable advantages of specialization,"
he wrote.
A congressional source told WorldNetDaily that Greenspan
still agrees with the premise of his article today, even though
the U.S. went off the gold standard in 1972.
According to the source, Greenspan -- following a March House
Banking Committee meeting -- told one lawmaker that if given
a chance to add any "disclaimers" to the 34-year-old
article, Greenspan said he still "would not change a
single word."
He could not be reached for comment.
In his article, Greenspan wrote that "a logical extension
of the creation of a medium of exchange [monetary system]
is the development of a banking system and credit instruments
(bank notes and deposits) which act as a substitute for, but
are convertible into, gold."
"... Under the gold standard, a free banking system
stands as the protector of an economy's stability and balanced
growth," he said.
Disclosure of the article comes as one group, the Gold Anti-Trust
Action Committee, has charged that the Federal Reserve, the
U.S. Treasury Department, the Bank for International Settlements,
and various investment houses, have all conspired to manipulate
-- that is, artificially depress -- the price and value of
gold.
Last week, one GATA analyst, Reginald Howe -- who has filed
suit against the U.S. and international financial agencies
and investment houses -- said he discovered Federal Reserve
Board meeting minutes dated Jan. 31, 1995, that he says indicates
proof of GATA's allegations.
His suit alleges that the Treasury Department's Exchange
Stabilization Fund, or ESF, has been, as GATA long has alleged
and as the Treasury Department has denied, surreptitiously
intervening in the gold market by lending gold, Howe wrote
in a statement.
The meeting minutes feature a question asked by then-Federal
Reserve Board governor Lawrence Lindsey, who asked J. Virgil
Mattingly, the Fed's general counsel, about the ESF's legal
authority to engage in a financial rescue package for Mexico.
"It's pretty clear that these ESF operations are authorized.
I don't think there is a legal problem in terms of the authority.
The statute [31 U.S.C. s. 5302] is very broadly worded in
terms of words like 'credit' -- it has covered things like
the gold swaps -- and it confers broad authority. Counsel
at the White House called the Treasury's general counsel today
and asked, 'Are you sure?' And the Treasury's general counsel
said, 'I am sure.' Everyone is satisfied that a legal issue
is not involved, if that helps," the minutes say.
Whether the Fed, the Treasury Department, and others have
been engaged in market manipulations of the price and value
of gold will eventually be decided by a court. But according
to Greenspan's own words, he defends the use of gold as the
underlying supportive value for the U.S. dollar and the U.S.
economy.
And, according to his article, Greenspan said that gold --
in the past -- was responsible for stopping "the unbalanced
expansions of business activity," salient points which
are relevant in today's sagging, over-speculative economy
and markets.
"Periodically, as a result of overly rapid credit expansion,
banks became loaned up to the limit of their gold reserves,
interest rates rose sharply, new credit was cut off and the
economy went into a sharp, but short-lived, recession,"
he wrote. "Compared with the depressions of 1920 and
1932, the pre-World War I business declines were mild indeed."
Greenspan explained that at the time of the creation of the
Federal Reserve in 1913, "the process of [monetary policy]
cure was misdiagnosed as the disease. ."
"If shortage of bank reserves was causing a business
decline, argued economic interventionists, why not find a
way of supplying increased reserves to the banks so they never
need be short," he wrote. "If banks can continue
to loan money indefinitely, it was claimed, there need never
be any slumps in business."
The result of such thinking, he said, was the creation of
the Fed.
"Credit extended by these banks is in practice (though
not legally) backed by the taxing power of the federal government,"
he wrote. Technically, the U.S. "remained on the gold
standard; individuals were still free to own gold, and gold
continued to be used as bank reserves. But now, in addition
to gold, credit extended by the Federal Reserve banks ("paper"
reserves) could serve as legal tender to pay depositors."
Even then, Greenspan seemed to understand the kind of negative
implications associated with the creation of credit based
on no tangible asset.
"Under a gold standard, the amount of credit that an
economy can support is determined by the economy's tangible
assets, since every credit instrument is ultimately a claim
on some tangible asset," he said. "But government
bonds are not backed by tangible wealth, only by the government's
promise to pay out of future tax revenues, and cannot easily
be absorbed by the financial markets.
"A large volume of new government bonds can be sold
to the public only at progressively higher interest rates,"
he said. "Thus, government deficit spending under a gold
standard is severely limited."
Also, he said the "abandonment of the gold standard
made it possible for the welfare statists to use the banking
system as a means to an unlimited expansion of credit."
Even then, he said, "the fact is there are now more claims
outstanding than real assets" to redeem those claims.
"In the absence of the gold standard, there is no way
to protect savings from confiscation through inflation,"
he concluded. "There is no safe store of value"
for the dollar.
"This is the shabby secret of the welfare statists'
tirades against gold," he wrote. "Deficit [government]
spending is simply a scheme for the 'hidden' confiscation
of wealth. Gold stands in the way of this insidious process.
It stands as a protector of property rights."
A congressional source told WND, "There is no doubt
in my mind that the current monetary system is not only impractical
in an economic sense, as well as being unconstitutional, it
is immoral and dishonest from a biblical viewpoint."
As GATA has reported, the "short" positions held
by many investment houses outstrips the available above-ground
supplies of gold several hundred-fold, as well as the annual
production level of gold from all producers for the next several
years.
A sharp increase in the price per ounce of gold would bankrupt
these investment houses, GATA says, causing losses in the
hundreds of billions of dollars.
In January 2000, soon-to-be Democratic vice presidential
candidate Sen. Joseph Lieberman, D-Conn., asked then-Treasury
Secretary Lawrence Summers and Federal Reserve Chairman Alan
Greenspan to answer a series of questions about national gold
policy, in response to an inquiry from GATA.
In a letter, Lieberman mentioned GATA's unsuccessful bid
for answers about possible gold market manipulation and asked
if both men would address them "at your first opportunity."
Neither official responded -- at least no responses that
Lieberman has made public.
Purchase WorldNet magazine's March issue, "The Fed:
How your money -- and your life -- are controlled by America's
banking system."
Related stories:
Proof of Fed's gold market intervention?
Trouble in the gold market?
Gold and Greenspan
'Gold rush' pricing threatens banks
What's going on in the gold market?
Gold price manipulation?
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