Allison Bricker
In the self aggrandizing banter following last night’s Vice-Presidential debate, the punditocracy’s own, Chris Matthews committed a giant verbal faux pas. As soon as the word “depression” left his lips, Mr. Matthews froze. Viewers could literally witness his face glaze over, trying to process the gravity of his own words. Mr. Matthews then attempted a course correction, nervously fumbling over, “recession”.
Make no mistake, now that this bailout bill has passed and is on its way to the President, our American republic is headed towards a multi-year economic depression, instead of just a shorter less painful recession. Contrary to the condescending tones from the financial “gurus” about how “We the average People” just do not understand the complexities or necessity of the bill, it does not take a rocket scientist to figure out that you do not fix a debt problem by shoveling on more debt.

Americans knew all too well twice before that central banks were bad for the country. Both “The First and Second Banks of the United States” were ripe with corruption, caused wild speculation in markets and, were not renewed at the times their 20 year charters came up for review before Congress1.
However, unlike “The Third Bank of the United States”, i.e “The Federal Reserve” the first two central banking schemes utilized sound money to back the currency. Where once the American Dollar bore the words “Gold” or Silver Certificate”, meaning the Dollar was legally convertible into actual gold or silver on demand of the bearer. Today’s Dollar only bears “Federal Reserve Note” on its face, and are thus nothing more than paper backed by the full faith and credit of the United States of America.
From 1800 to 1933 the average daily price of one Troy ounce gold, chugged along steadily at $20.00/ounce2. Thus a Dollar in 1800 basically bought the same amount of goods in 1912. However, on March 9, 1933, in an effort to “stabilize agricultural crop prices”, Franklin Delanor Roosevelt signed Presidential Executive Order 6102 which invoked his authority to make it unlawful to own or hold gold coins, gold bullion, or gold dollar certificates3. By the end of that year gold rose 62% to $32.00/Troy ounce.

As the “Great Depression” continued, the government tried all sorts of measures, such as the 1933 “Agricultural Adjustment Act”4. The AAA even paid a subsidy to farmers to plow under their crops in order to “stabilize crop prices”, whilst 7 million+ Americans starved. All so “Prices” could remain stable on the “open” market. Only after inflating the currency even further via the “Lend/Lease” scheme of World War II and being in charge of the massive rebuilding of a devasted Europe, would America climb out of the “Great Depression”.
Following World War II, the Federal Reserve and the U.S. Government continued its effort to move totally away from a sound currency. Finally, in 1973, President Nixon put the final nail in the coffin, and removed the dollar completely, 100% off the Bretton Woods gold standard5.
Since that day, our money’s value has been based on one thing; the peoples ability to perpetuate the borrow/repay cycle needed to sustain a wholly fiat currency. This time however we are propping up “home prices” by buying up these failed mortgage backed securities at an over valued price, from the criminal financiers who recklessly packaged said instruments in the first place. It sometimes seems like we never learn, and hence why my philosophy on the importance of history is: “You cannot know where you are going, if you do not know where you have been.”

Please do not misconstrue my analysis that we are headed into another depression as yet another condescending statement to “We the People”. The difference now is that in previous borrow/repay cycles, the creditors were fellow Americans, in the form of local banks, business, etcetera, etcetera. However, now the creditors are wholly foreign as we no longer produce much of any real assets, instead we consume. We consume all the wonderful distracting gadgets, such as plasma televisions, iPhones, and clothing to name a few.
In the final analysis, let us say you take a credit card with a $50,000.00 limit and spend until the card is completely maxed to its limit. You then fall behind on a couple of “minimum payments on the National Debt”. Which leads you to the bright idea to call the credit card company and explain to them to raise your credit limit so you can buy/invest in some more consumable not durable goods or real assets, which will then allow you to make a profit to pay off the originally purchased items “sometime in the future” - maybe.
What do you think that credit card company would say? This is exactly what this bailout is in essence requesting. However, even more despicable, is that this bill will print the money out of thin air and then try to sell these Treasury I.O.U’s to our master creditor, the Chinese government.
My fellow Americans, this is the situation we now find ourselves in thanks to the wholly uncaring, selfish, corrupt, and deviant government that runs amok in Washington. It spread its “Consume until bloated” mentality to both the state governments and the American people. Unfortunately, the “United States Credit Card” has officially just been Declined” for the inability to repay. My fellow readers, our country is bankrupt. Perhaps Mr. Peter Schiff’s words from an interview on Thursday says it more succinctly, stating “we’re screwed” in response to the question, “What will happen if the bailout passes?” Mr. Schiff, as our loyal readers already know, warned us two years ago exactly where this current debt based bubble was taking the U.S. economy.

Unfortunately, I have no direct answer on how to solve this crisis. If our family was wealthy enough we would invest in foreign gold and silver markets. However, this malfeasance threatens our Republic’s very existence, and even if that opportunity were available, it is only a matter of time before the government outlaws the possession of gold yet again.
Perhaps there will be a groundswell of Americans finally ready to repeal the charter of the Federal Reserve and thus a demand to return to sound money. If not, there is always that tree, and it seems more and more to be in need of a serious refreshment.
Source(s): 1 Central banking functions of the United States Treasury, 1789-1941 published: 1943- 2 World Gold Council - 3The American Presidency Project/University of California - 4The Depression in the United States–An Overview/University of Illinois - 5Commanding Heights by Daniel Yergin and Joseph Stanislaw, Published 1997 - “Purchasing Power of Federal Reserve Notes”/Consumer Price Index/Bureau of Labor Statistics