Tuesday, November 16, 2010

Obama, the gold standard, and the Jewish Cassandra chorus

Obama and two of his wise Jews, Bernanke and Geithner

An interesting article (as always) by supply-side economist Paul Hoffmeister here: Obama Bets His Presidency On Bernanke, in Forbes magazine, appearing on 12th November, 2010. It's an excellent piece of analysis of America's economic problems (and their effect on Obama and the American political scene). What it doesn't mention, though, is the root cause of these economic problems: Jews.

To explain, I'll need to digress with some economic history. America, before 1971, was on the gold standard for 150 years; before then, Britain was on the gold standard for 200 years.

 Gold is, for all intents and purposes, money: the value of gold never changes, which is why gold has been used as a currency for thousands of years. So why not fix the value of one's national currency (the US dollar, the British pound) to gold? That's how the gold standard works. The central bank keeps the gold/dollar price stable, day after day, year after year. From 1933 to 1971, the US Federal Reserve kept gold at $US35 oz.

It's a simple enough process to understand. If gold costs only, say, $US35 an ounce, then the US dollar is very strong. But if gold shoots up to, say, $US850, then the US dollar has lost an enormous amount of value - it's been devalued.

 That's precisely what happened in the 1970s, when President Richard Nixon abolished the gold standard. Gold went from $US35 oz. to $US850 oz., triggering off hyperinflation and  a host of political crises and social problems. Most of the subsequent financial crises and economic slumps of the past forty years were due to that single act. (Not only did the break-up of Bretton Woods affect the US, it affected the rest of the world as well. The deutschmark, the franc, the pound, the yen, the Australian dollar, were all fixed to the US dollar; so when the US left the gold standard, the rest of the world did as well).

Under Obama and Bernanke today, history is repeating itself. It cost only $US800 to buy an ounce of gold in November 2008; now, it is around $US1400 oz. That's because, in response to the global financial crisis, Bernanke has steadily pumping huge amounts of US dollars into circulation, thus devaluing the US dollar. It's led to a steady economic decline, and a decline in Obama's political fortunes as well. In the future, Hoffmeister predicts, we'll see a rise in US inflation, but also, the stagnant economic growth, and high unemployment, so redolent of the terrible 1970s, will continue. (The same goes for the Eurozone and British economies, which are going down the same path as the American).

So, to return to our economic history lesson: why did Nixon abolish the gold standard? Nixon's economic advisors believed that the US Federal Reserve should inject as much dollars into circulation as possible. That would decrease the value of the US dollar, thus making US exports cheaper. A weak dollar would also, domestically, increase prices across the board, bringing about inflation. And, in the view of those economists, inflation is good. People see prices rising, and think that those price rises are due to an increase in economic growth and prosperity; so they work, and spend, more. It's more or less the same theory that animates Obama and Bernanke policy today.

One could blame a variety of people for Nixon's action, including the trade unions at the time (who lobbied Nixon to devalue the US dollar and make exports cheaper) and their contemporaries in the  economics profession (who held the same views as the unions). But I blame two of Nixon's top economic advisors, Jewish economists, Ben Stein and Milton Friedman. More than that, though, I hold all of the influential Jews of America as a whole responsible. Most of America's academic economists, financial journalists, political journalists, government policy-makers (for either the Republicans or Democrats), big bankers and financiers - all the people whose voices count when it comes to determining the direction of the US economy - are Jews. These are the people who steered Nixon towards a bad policy, because of an unerring racial instinct for what causes the maximum amount of chaos and ruin.

From left to right: Milton Friedman, Richard Nixon and Arthur Burns, Jewish economic advisor to Nixon and later Federal Reserve head

Circumstances haven't changed since the days of Nixon. One could point to the number of Jews advising Obama on the economy - Robert Reich, Larry Summers, Ben Bernanke, Timothy Geithner and others - but more significant is the Cassandra chorus of Jewish commentators in the US media and academia. These are the people who, in effect, control Obama, and who would howl down any suggestion of a return to the gold standard. Each of these Jews would have a different reason as to why the gold standard wouldn't work, but they would all be near-unanimous in rejecting it.

(Granted, there are a handful of Jews who do advocate a gold standard - Art Laffer, the founder of supply-side economics, springs to mind, and so does Robert Zoellick, head of the World Bank - but they are in the minority. (Zoellick recently called for a return to gold, but his proposal was scorned by the financial media)).

Why, though? Why would this Jewish-American political and economic Cassandra chorus oppose a return to a gold standard ? The answer is that the influence of Jews on a country's economic and political policies are nearly always tends to be destructive. That's even when Jews mean well. Simply put, if you want to wreck your country's economy, put two or three Jewish economic advisors in charge; also, make the country's business elite primarily Jewish as well. Then you are on the way to economic destruction. It's not that the Jews are a malign people who actively want to destroy things; it's that they can't help it - like in the fable of the frog and the scorpion, 'It's in their nature'. Ironically, Milton Friedman, a brilliant economist, a well-meaning, benevolent man, and, unfortunately, a great propagandist for his own economic theories, made a career out of selling ways of 'fighting inflation' in the 1970s and  the early 1980s, flying around the world peddling cures for the problem he, probably more than anyone else, created.

Jews meaning well, remaking the world in their own image ('tikkun olam') led to the Bolshevik revolution of 1917, and the neoconservative-inspired US invasion of Iraq. The Bolsheviks starved and murdered millions, the US invasion of Iraq killed (possibly) hundreds of thousands of Iraqis and led to a US military defeat; but, in both cases, the Jews behind both actually believed that they were doing good. It's hard to say what's worse: the malign, Israeli politician or soldier who murders in the national interest (the Israeli national interest), or the Jewish do-gooder of the neoconservative or Bolshevik variety.

What we can observe, from history, is that a country which is on the gold standard is a powerful country: economic power and geopolitical power go together. The British empire was built on the back of the gold standard, and American power started to wane, in the 1970s, when it left it. (Supply-siders are fond of quoting Reagan's remark, 'I know of no nation that has left the gold standard and remained a great nation'). Hoffmeister notes that Clinton and Reagan were popular, domestically, because the US dollar was strong at the time of presidencies; conversely, Carter and Obama were unpopular when the US dollar was weak. But the same can be said for geopolitical power as well: America was most dominant in the 1980s and late 1990s under Reagan and Clinton respectively, and was weak under Carter, and is weak (in terms of power and influence) under Obama today. 

The reason is that it's hard to argue, politically, with prosperity. Part of the struggle in Afghanistan is to persuade the recalcitrant Afghanis to allow themselves to be integrated into the US, and global, economy. It is a political battle, and in the end, the result will be determined, not by pretty words about liberal democracy, but by harsh economic realities. And the reality is that the US economy is sinking, mainly because of the declining value of the US dollar against other currencies and against gold. And the people of Afghanistan, on an unconscious level, do not want to affiliate themselves with an economic loser.

The same battle of competing ideologies and policies took place in South Vietnam. The choice the South Vietnamese faced was between a communist economic system, and an American-style capitalist system. By the early 1970s, with the advent of the global Nixon inflation, that American system was breaking down. Which led to a loss of faith, on the part of the South Vietnamese, in that system. Because of Nixon's breakup of Bretton Woods, the South Vietnamese currency became worthless, bringing about hyperinflation and economic chaos. That made the work of the North Vietnamese communist invaders that much easier. Why  fight communism and defend South Vietnam in order to save a political and economic system that was failing?

I myself remember the heady days of the late 1990s, when Clinton cut capital gains taxes and taxes on IRS/Roth accounts - a policy which triggered off the biggest bull market America (and the world) had ever seen. Australia followed American policy and cut its own capital gains taxes in 1999, leading to a boom in our stock market as well. And, let me tell you, it is hard - very hard - as a political activist to fight a political and economic system when it is leading to so much wealth and prosperity. Money makes many difficult things in life easier to accept.

It's a far cry from today. The US political élite knows, of course, that America is floundering - that America is doing bad, economically and geopolitically. It senses, intuitively, that the problem lies with Bernanke's monetary policy. So Hoffmeister records the opinions of establishment figures such as Zoellick, Palin, Pence, Hoenig, and hopes that this is a dawning recognition of the need to return to the gold standard. The Republicans, he believes, can use the issue to hammer Obama and steer America back to gold: 'The historical lessons are clear, and the political tides are rising. A weak dollar destroys presidencies, and the political sharks are beginning to smell blood in the water'.

I myself would be pessimistic if I were Hoffmeister. The reason is that countries run by white men tend to work; ones that are run by Jews don't. For hundreds of years, the white Western world was on gold, without really understanding the functionings of the system: that is, the economic-theoretical understanding of the system wasn't there, and wasn't articulated (except, perhaps, in the works of the classical economists, Smith, Ricardo, Mill, Marx and others). All they knew was that it worked. America, for instance, abandoned gold during the American Civil War - an act which brought about a ruinous inflation. On the basis of that experience, America decided to leave well alone and stay with gold. That was until Jews achieved their ascendency over American politics. Then, and only then, we saw enormous financial collapses brought by out of control monetary policy (and always, at the heart of the wreckage, a financial scandal and a crooked Jewish financier - Boesky and Milken in the 1980s, Kenneth Lay and the other Worldcom and Enron Jews in the 1990s, and then Bernard Madoff in the 2000s). In order to achieve true monetary reform, then, America has to systematically exclude Jews from positions of political power - that means excluding them, not only from government, but from the professions (journalism, finance, academia, law, medicine, entertainment, fashion, advertising) as well.

Bernard Madoff and friends

Until that time, the US will continue to suffer. Economic policy is divided up into two halves: fiscal and monetary policy. As Hoffmeister notes, America got fiscal policy right after the 1980s, when Reagan slashed tax rates on income, company profits and capital gains. The rest of the world followed suit, and politicians learned that the reverse policy - raising taxes, especially taxes on capital gains - is harmful. Contemporary politicians are supply-side economists in practice (although not in theory) when it comes to taxes. They are not, however, when it comes to gold and exchange rates. Supply-side economics advocates a return to gold and fixed exchange rates, but, so far, has achieved little success in persuading politicians to adopt its prescriptions for monetary policy. (The sole exception was the introduction of the euro, which is a fixed-exchange rate monetary system, and largely the inspiration of the founder of supply-side economist Robert Mundell). The present economic problems afflicting America, and the Western world, won't go away until the gold standard is reintroduced. The Republicans opposing Obama want to cut taxes to revive economic growth; but tax cuts won't do the job when monetary policy is out of control.

And so we have an economic problem, that could be solved quite easily: Ulysses Grant, were he alive today, would say, 'Do what I did after the Civil War - just go back on gold'. But the Cassandra chorus of opinion-making Jews in charge of America today would resist Grant's advice, despite the fact that the gold standard is as American as apple pie, and proved its effectiveness for a 150 years.

In their minds, these Jews would be perfectly to do this. Don't they know better? Don't articles come out, in Jewish newspapers, about scientific studies that "prove" that Jews have abnormally high IQs? Aren't Jews overachievers - which explains why so many Jews, in America, are in the top-paying jobs and have so much influence and power? Americans can't live without Jews, and should be feeling blessed that they have so many talented and clever Jews among them.

The answer is that Americans don't need their Jews, never needed them, and never will. The fast-talking, glib Jewish commentator, on the TV news and in the newspapers, is a fake and a know-nothing, and his advice, in the long run, is destructive.

Until it addresses that problem, America will continue to decline. It is on the threshold of losing two wars (Iraq and Afghanistan), the first military defeats since Vietnam. Its economy is very weak - at levels not seen since the early 1990s. Geopolitically, America (and its master, Israel) are ebbing away, slowly but surely. Certainly, America will not descend into an apocalyptic,  Turner Diaries scenario, with a complete economic and political collapse; instead, it will just do what it is doing now - it will stagnate. That is, until it remembers itself, it recalls to itself what it was before it handed itself over to the Jewish people.