Gold Speculator - Appenzell Daily Bell http://www.gold-speculator.com/ en Wed, 08 Sep 2010 02:09:19 GMT vBulletin 60 http://www.gold-speculator.com/images/misc/rss.jpg Gold Speculator - Appenzell Daily Bell http://www.gold-speculator.com/ TIME Spreads the Government-Wealth Meme... Combating HAARP Suspicions http://www.gold-speculator.com/appenzell-daily-bell/37563-time-spreads-government-wealth-meme-combating-haarp-suspicions.html Tue, 07 Sep 2010 18:02:23 GMT Tuesday, September 07, 2010 – by Staff Report


Anatole Kaletsky: How to Fix the Global Economy ... Kaletsky argues that capitalism has gone through three major eras punctuated by two near-death crises – the Great Depression of the 1930s and the stagflation of the 1970s – which forced the system to adapt in order to survive. In the aftermath of the Great Recession, he says, capitalism is morphing into a new, fourth era. Kaletsky spoke to TIME about what went wrong with the global economic system – and how to fix it. ... TIME: What will be the defining feature of capitalism 4.0? Kaletsky: In the fourth era we are going to recognize that both governments and markets can, at times, make serious – sometimes catastrophic – mistakes. There was a view after the Depression that markets were dangerous and needed to be tamed by an all-knowing, benign government. In the third phase [before the Great Recession] there was a reversal: the idea was that markets are perfect and governments need to be tamed. Now we know that both government and markets make mistakes, and we won't trust either of them. – TIME Magazine

Dominant Social Theme: Government is very helpful in the wealth building process and without an enlightened regulatory bureaucracy the Invisible Hand would be fumble-fingered indeed.

Free-Market Analysis: The Daily Bell analyzes the dominant social themes of the elite. In TIME, the Wall Street Journal and other major mainstream media, a new dominant social theme is being constructed in our opinion. It is one justifying the Western economic system and the massive government interference that has taken place. We have pointed this out in several articles recently, most recently in Libertarians Seek Rahn's Ideal State where we wrote the following ...

Two brand new dominant social themes in a very short space of time, or at least that is the way we see it. The state has come under tremendous attack in the 21st century and we believe the powers-that-be are pushing back. (Why wouldn't they?) In aggregate, the themes make a powerful argument that some level (perhaps a high degree) of state involvement in the economy is at least tolerable if not an unmitigated good.

We explored the first meme just the other day. It was, we believed, a sophisticated socioeconomic perspective promulgated by a brilliant young political observer, one Ian Bremmer – who had the perspicacity to focus on the idea that most of the major powers of the world today are practicing something called state capitalism ... Bremmer, we decided (whether he knows it or not) is essentially creating a new dominant social theme that justifies Western capitalism not just in previous free-market incarnations but as it is today. The argument he presents, we came to believe, is one that if taken to its logical conclusion implies that instead of criticizing Western capitalism, Westerners ought to devote their energies to combating state capitalism abroad. ...

Now the NEW meme (new to us anyway) buttresses what Bremmer is proposing. This suggestion is brought to us from the mainstream libertarian wing of the US sociopolitical dialogue. ... [Called the Rahn curve], it postulates that data shows governments are most effective at supporting economic growth and free-markets when they comprise no more than 15 to 25 percent of total GDP. Because today governments in the West are consuming so much more of GDP to provide "services," the "Rahn Curve" claims that government is basically out of control.

We can see in both of the above that there is an effort to incorporate the government as a natural part of the larger conversation. This interview with Anatole Kaletsky in TIME magazine parallels what we have already observed. Who is Anatole Kaletsky? Wikipedia tells us that he is "a journalist and economist based in the United Kingdom. He is Editor-at-Large and Principal Economic Commentator of The Times, where he writes a thrice-fortnightly column on economics, politics and financial markets."

And Wikipedia adds, "He was named Newspaper Commentator of the Year in the BBC's What the Papers Say awards for 1996. He has twice received the British Press Award for Specialist Writer of the Year, has won the Wincott Award for economic journalism administered by the Institute of Economic Affairs, and the First Cernobbio-Europe prize. Beginning in 1990 he was Economics Editor of The Times, responsible for all economic news and analysis, and resigning in 1996 to create his consultancy practice. He remains the paper's principal commentator on economic and financial affairs, and is now Editor-at-Large writing for The Times Comment pages on Thursdays and for the Times Business section on alternate Mondays."

This sounds most impressive, and yet we have this from Wikipedia as well:
Many of his economic predictions have been proven wrong by subsequent events, and this tendency was noted by the satirical magazine Private Eye. For example, Kaletsky wrote, "... I am one of the few economic commentators who has consistently made light of the anxieties about a "day of reckoning" for British homeowners and consumers ..." Predictions include that "the credit crunch seems to be ending" (June 2008) and that "there will be no US recession" (January 2008). His latest prediction is that in the United Kingdom general election, 2010, the Liberal Democrats may displace the Labour party as the "dominant party of the Left".

Wow. Here is a fellow who has won some of the most prestigious awards in his profession and yet on every significant economic event of the 2000s he was wrong. He didn't believe there would be a real-estate crash, a credit crunch or a recession – and said so in no uncertain terms. Yet not only has he kept his job, he is being held up buy TIME magazine as an economic "guru" whose words we ought to trust.

Should we? It is Kaletsky theory (as we can see from the article excerpt that began this analysis) that there have been three major eras in terms of the West's perception of capitalism. During the Great Depression, he argues that "markets were dangerous and needed to be tamed by an all-knowing, benign government." The second era was during the 1970s, an era of stagflation when capitalism had to readapt to survive. After that came a third era during which the idea took hold that "markets are perfect and governments need to be tamed." What has been the result of all this? A fourth era as follows: "Now we know that both government and markets make mistakes, and we won't trust either of them."

This fits right into the meme we have already discerned – arguments that go out of their way to incorporate government involvement in the marketplace. We would argue this is a pro-active theme, a fear-based promotion that is gradually building in power and persuasiveness via the mainstream media. Like many such themes it is being pursued at a number of levels and in a number of guises. The idea is always to suggest a number of possibilities and then see which is the best received. That is the one then to receive the most promotion.

We have an alternative point of view that we will suggest however. It is one that goes back to the Greeks and has as its basis the idea that government ought to be rigorously disciplined and pruned. This idea of severely limiting government found resonance in Britain with the Magna Charta and was soon married to the idea that the free-market itself was the driving force behind prosperity. Adam Smith suggested this with his concept of the Invisible Hand. Not much later with the founding of the Austrian School, the idea that the market was the fount of prosperity began to accumulate theoretical backing.

We now have some 200 years of neo-classical theorizing, beginning with the boundary between classical and neo-classical economics – the theory of marginal utility that shows comprehensively that wealth is created and accumulated via free-markets (the freer the better) not via the guidance of government. Ludwig von Mises presented this clearly in his great work Human Action, which postulated that it is the individual, operating freely and within the ambit of the larger marketplace, who makes the decisions that drive prosperity, not the government bureaucracy.

And then we have this – what we have pointed out ourselves – that the great Western nation-states seem to come from inchoate and small entities competing side by side and sharing the same language and culture. In such instances, governments are likely to be quite cautious because citizens can move from one region to the next and thus avoid draconian laws, regulations and taxes. We have pointed out this pattern as regards the Greek city states, the Seven Hills of Rome, the city states of the Italian Renaissance and of course the 13 US colonies.

These are all historically valid points in our view and their frame of reference is millennia. Why is it then that Kaletsky writes a book that attempts a historical analysis of capitalism in less than a century? If you read the interview, you will see for yourself, dear reader. Over and over Kaletsky returns to the idea that government is a necessary part of any economy. If one examines the economic and political history of thousands of years, one sees that this is not necessarily so. But Kaletsky, an astonishingly bright man, is determined for some reason to look at only about 100 years. We would argue this foreshortened frame of reference is partially responsible for what we consider to be flawed conclusions.

But we think unfortunately that it goes deeper than that. The usual mainstream suspects in Britain and America have launched yet another promotional campaign using various intellectual justifications to ensure that people are reminded that government is a necessary part of any economic adventure and that wealth cannot be gained without the presence of government. What does Kaletsky tell us? "The crisis has made it fairly clear that the deregulated, noninterventionist model of capitalism can't cope with extreme fluctuations. America will pragmatically conclude there is a need to invent a new system, crucially one in which government is necessary."

Kaletsky's solution is an aggressive one indeed and features another element of the West's current command-and-control economy – central banks. Here is what he proposes: "There is another alternative: monetary policy. Central banks could do more. We already have short-term interest rates near enough to zero all over the world. But there is still a view that this is a temporary emergency situation that isn't going to last very long. What central banks can do — and I think will do — in the next several months is offer clear assurances that interest rates are going to be at or near zero for many years to come, perhaps the rest of the decade. ... That's really the most plausible formula for a return to decent economic growth all over the world."

We disagree with this. We think central banks fix the price of money and always do so wrongly causing terrible booms and busts. We think central banks are a big part of the problem. Why doesn't Kaletsky? We have no idea. We are not even prepared to say that he is a knowing part of what we discern as a new elite dominant social theme for the 21st century. In fact, we have no idea how these promotions work at the upper levels. We are fairly sure that individuals such as Kaletsky are not given direct orders to pursue this or that intellectual endeavor. Kaletsky and the others may be therefore entirely sincere in their premises and conclusions. But nonetheless, these fear-based promotions evidently and obviously take place.

Conclusion: We believe the three examples cited in this article begin to show once again how these memes are promulgated and how sophisticated they can be. They do exist in our view and the solutions they offer are always, at least, quasi-authoritarian. The idea is ever to advance centralized governance and inevitably a global form of it. They worked better in the 20th century than today.


Combating HAARP Suspicions

Tuesday, September 07, 2010 – by Staff Report

Jesse Ventura

Pakistani Websites Accuse CIA of Causing Pakistan Flooding: U.S. Research Program HAARP is being Used in Pakistan [to Cause Artificial Floods]; They Can't Win a War with Nuclear-Armed Pakistan ... So They Have Other Ways to Do It ... Although the U.S. has been leading flood relief efforts in Pakistan, where nearly 20 million people have been affected by the worst floods in 80 years, the Pakistani media continue to publish anti-U.S. conspiracy theories regarding the floods. On August 6, 2010, a Pakistani website released a report titled "Pakistan Flood: HAARP Used in Pakistan? – Urgent," accusing the CIA and its alleged use of the High Frequency Active Auroral Research Program (HAARP), the Alaska-based U.S. Air Force program, to artificially cause the flooding. – MEMRI/Middle East Media and Research Institute

Dominant Social Theme: More unreliable conspiracy theories floated abroad.

Free-Market Analysis: Though hardly any of it seems to resonate with the American mainstream press, the rest of the globe is alive with conspiracy theories about American military power, 9/11, HAARP and other maleficent and perhaps mythical US schemes for global domination – full spectrum dominance as the Pentagon has called it.

Meanwhile, the dominant social theme in America might be: "Anyone abroad who mentions such things is an anti-American crackpot, especially if he or she is a Muslim." But the trouble with many of the conspiracy schemes that are making the rounds throughout the world – especially in Muslim countries – is that they are hard to combat. The Anglo-American axis has chosen to project its power so aggressively that conspiracy theories are an almost inevitable result.

One can deride the recent statements from Iran's President Mahmoud Ahmadinejad doubting the causes of 9/11. Yet how is one to justify the invasions of Iraq and Afghanistan when neither country appears to have had much to do with 9/11? True, Afghanistan did harbor Osama bin Laden, but he denied responsibility for 9/11, the US could not come up with evidence to convince the Taliban to hand him over and to this day the FBI has not named bin Laden as responsible for 9/11.

What has likely become most mentioned lately in Muslim circles due to the Pakistan flooding is the HAARP conspiracy, as we can see from the MEMRI excerpt above. The trouble with MEMRI, however, is that its founder Yigal Carmon served as Colonel in the Military Intelligence Directorate (Israel) from 1968 to 1988. So someone affiliated with Israeli military intelligence is providing US officials with an "insider" perspective on Islam. This does not necessarily bode well for objectivity.

The website concludes that the conspiracy theories being floated against the West come from websites set up by the Pakistan army. But the conspiracies in question surely have currency beyond that, in our view. In fact, if such theories are widespread within the Pakistan army, what does that say about the military's reliability when it comes to supporting the US war effort in Afghanistan? In any case, during the rest of this article, we want to focus specifically on HAARP and show why such conspiracy theories continue to circulate. Wikipedia tells us the following about HAARP:

According to HAARP's management, the project strives for openness and all activities are logged and publicly available. Scientists without security clearances, even foreign nationals, are routinely allowed on site. The HAARP facility regularly (once a year on most years according to the HAARP home page) hosts open houses, during which time any civilian may tour the entire facility. In addition, scientific results obtained with HAARP are routinely published in major research journals (such as Geophysical Research Letters, or Journal of Geophysical Research), written both by university scientists (American and foreign) or by US Department of Defense research lab scientists. Each summer, the HAARP holds a summer-school for visiting students, including foreign nationals, giving them an opportunity to do research with one of the world's foremost research instruments.

Yet earlier this year, former Minnesota governor and tele-conspiracist Jesse Ventura visited the HAARP site for his TV show in an attempt to probe the official claims. "PureEnergyNet," explains what happened as follows:

In his Conspiracy Theory series, movie star, professional wrestler, former Navy SEAL and former Minnesota governor, Jesse Ventura (left) and his team take on HAARP, the High Frequency Active Auroral Research Program. The official story of what the giga-watt broadcasting antennae array outside Gakona, Alaska is that it is for scientific research, primarily for communication studies: a premier facility for the study of ionospheric physics and radio science,' according to their official website. "Why all the secrecy, then?" asks Ventura. And "Why is the Army running the place?" The facility barred him from having access, even though he is a former governor and Navy SEAL.

The evidence that Ventura and his team uncover points to the facility actually being a weapon, with the ability to take down aircraft, manipulate weather (which is supposed to be illegal) and control your mind. The segment illustrated both the weather control and the mind control capabilities using much lower-power variations. Matt Imber asks and interesting question. "Where are they getting all the energy to run that place?" Noting that there are no apparent over-land transmission lines, he wonders if maybe they don't have some kind of zero point energy or other exotic sequestered technology providing power."

There would be less suspicion about the US government, Pentagon and its 16 separate spy agencies if the US governmental apparatus were less massive and less secretive. The Daily Bell covers the dominant social themes of the power elite, and we have our suspicions as well (or at least a justifiable logic chain). From our point of view, if HAARP is able to control weather in certain regions even rudimentarily, then the global warming promotion makes more sense – because theory could be buttressed by "events."

Right now, the science for global warming likely doesn't work and people don't believe in it. Thus the promotion is unusable in the larger context as we pointed out yesterday. But we would argue that the elite has other problems when it comes to the promotions it has continually launched. A lot depended on the government not being perceived as a force antithetical to civil society, especially in the West and in American and Britain. The Internet itself began to undermine that trust and the financial crisis much exacerbated it. The incessant warring and spying and ever-increasing domestic security arrangements have further eroded it.

Muslim suspicions as regards the West are fairly widespread at this point, so far as we can tell. And in fact skepticism continues and expands in the West. The best way to reduce this would be to pursue a policy of openness and transparency when it comes to military and intelligence matters as much as possible. It would also help if the Anglo-American axis generally reduced its domestic security apparatus.

Conclusion: The Washington Post itself recently pointed out that the US government has literally lost track of the number of employees involved in domestic security work, so vast has the effort grown. The paranoia on display gives rise to theories concerning such secretive initiatives as HAARP that tend to feed on themselves at home and abroad. The best ways to combat such theories is to pursue a policy of openness and tolerance. One hoped perhaps the Obama administration would move in that direction, but it hasn't happened yet. ]]> Appenzell Daily Bell GoldSpeculator http://www.gold-speculator.com/appenzell-daily-bell/37563-time-spreads-government-wealth-meme-combating-haarp-suspicions.html EU Treasury Overkill?.. Failure of the Famine Meme http://www.gold-speculator.com/appenzell-daily-bell/37515-eu-treasury-overkill-failure-famine-meme.html Mon, 06 Sep 2010 15:47:32 GMT EU Treasury Overkill?

Monday, September 06, 2010 – by Staff Report

Jean-Claude Trichet

Brussels plans 'treasury' for EU ... Brussels is to push for the creation of a form of "treasury" for the European Union with powers to issue bonds and reinforce fiscal integration ... "This will be a very effective tool to harmonise budget policies, but the way ahead may be very tough," he said. Germany is likely to balk at talk of an EU debt union, or "Transferunion" as it is described in Gothic terms by Germany's tabloid press. Jean-Claude Trichet (left), the head of the European Central Bank, called for a "quantum leap in terms of surveillance" to ensure that the financial crisis is never repeated. Mr Trichet said it would be extremely difficult to change the Lisbon treaty in the current climate but called on EU leaders to "exploit all possibilities" in the sub-clauses of existing legislation to advance policing tools. The EU institutions agreed last week on the creation of three super-regulators covering banking, markets, and insurance, each with powers to impose decisions by majority vote. This effectively deprives Britain of veto power over regulation of the City, although there is an "emergency break". The deal requires the assent of EU finance ministers next week. A spokesman for Chancellor George Osborne has already said the terms are "a very good outcome for the UK". – UK Telegraph

Dominant Social Theme: Thanks goodness the EU continues to acquire necessary powers.

Free-Market Analysis: In the other article in today's Daily Bell, we focus on how the elite back-story is in a sense falling apart with the foundering of the global warming promotion. We find much the same elements at work when it comes to the EU, which is being forced into existence as a super-state despite the resistance of those who will have to live under its increasingly pathological polity.

Of course there are plenty of justifications being floated for the EU's continued expansion, despite the evident incompetence and corruption of the Brussel's bureaucracy. These justifications are both practical and theoretical and can be found throughout the West – in Britain and the US as well as Europe. Some of it is blunt but some is quite elaborate.

We can see mechanism at work in a short excerpt from a review of Tony Blair's just published memoirs by Matthew d'Ancona in the UK Telegraph. Here he tries to explain why Blair did what he did: "Those who say Blair is a Conservative are plain wrong. His political roots lie in the ethical socialism of the philosopher John Macmurray and the traditions of Christian socialism espoused by F D Maurice, Charles Kingsley, R H Tawney and Archbishop William Temple."

We don't believe this for a minute. It is much too elegant. From our point of view Blair simply served the power elite as best he could, and was one of the best they had. The creation of New Labour may have been his idea or more likely may not have been. He had many of the qualities needed in today's political profession: He was tall, handsome, dynamic and he had a dramatic streak. Here is something from Wikipedia:

After attending The Chorister School in Durham in north-east England from 1961 to 1966,[16] Blair boarded at Fettes College, a prestigious independent school in Edinburgh in Scotland, during which time he met Charlie Falconer (a pupil at the rival Edinburgh Academy), whom he later appointed Lord Chancellor. He reportedly modelled himself on Mick Jagger. His teachers were unimpressed with him; his biographer, John Rentoul, reported that "All the teachers I spoke to when researching the book said he was a complete pain in the backside, and they were very glad to see the back of him."

Blair was arrested at Fettes, having being mistaken for a burglar as he climbed into his dormitory using a ladder after having been out late. After Fettes, Blair spent a year in London, where he attempted to find fame as a rock music promoter before reading jurisprudence at St John's College, Oxford. As a student, he played guitar and sang in a rock band called Ugly Rumours.

Blair had a dramatic streak that served him well as a politician. He expanded Britain's already dreadful government while making certain free-market gestures and went to war in both Iraq and Afghanistan with a show of great reluctance. The whole point of his time in office was to give Labour a palatable face so that Britain could retain a two-party system.

Just as in America, the difference between the two main parties is fairly tiny. New Prime Minister David Cameron will make some cosmetic changes but in essence Britain will continue on as she has, a vessel of a shadowy power elite that emphasizes military victory abroad and pursues ever-expanding despotism at home.
Always, we read in such papers as the Telegraph dire warnings about how Britain is giving her sovereignty away to Brussels. We read that most of Britain's laws are now manufactured in Brussels and that Britain's system of justice is giving way to Europe's more draconian Napoleonic code. Already it has been reported that British citizens are being held in European jails as they are presumed guilty until declared innocent – a reversal of the Anglo-American tradition.

The British financial system in the City is also said to be under attack from Brussels. Banks and other financial entities may soon move away from Britain as Britain fades as an independent nation-state. Britain is being subsumed by Europe after a nearly 2,000-year history as an independent entity. Within this context, one cannot help but see the Blair/Brown regime as a sideshow.

Like much Europe itself, Britain has NEVER had a conclusive referendum on whether the nation's citizens wish to be part of the sprawling, neo-fascist imperium that the EU is becoming. The reason of course is because an overwhelming majority of the British would reject such an idea. At this point, we would believe that most in Europe would do so as well.

The EU is an elite, fear-based promotion. A dominant social theme. "If we do not have the size and strength to confront China and the US, we will fall behind. We need a single currency and eventually a single state." But nations do not compete with each other based on size. Nations do not compete at all. People engage in trades and trading with each other as necessary, fulfilling the larger needs of the market and the Invisible Hand.

In the future, the EU's inevitable rise and gathering of evermore power will be explained as a natural function of the necessity of bigness in the "modern" world. It is no such thing. It is evidently and obviously an Anglo-American power grab. The aim is world government.

Europeans never asked for the kind of EU that is appearing. Most of them never voted for it anymore than the British did. The idea of forming an EU Treasury is no more legitimate than anything else that the EU has embarked on in the past few decades. But we have pointed out that the more the elite uses legislation to push its global agenda without the "buy in" of the larger populace, the more speculative the initiative becomes.

One might think the elite would be careful because in the age of the Internet people understand a good deal more about the manipulations taking place, but the elite seems curiously desperate at this point. We are left with the uneasy feeling that what is going on is in some sense arrogant. Or perhaps the mechanism is simply so hard to shut down that it grinds on regardless. Those involved in themes and the push for a "one world order" are so committed to it that they see no way out at this point.

All one has to do is read the Internet to see that virtually none of the machinations of the elite are secret anymore. Names, dates and all sorts of speculation – some informed and some not – are recreating a secret history of the world. There is plenty of speculation as to what is going to happen next as well.

Conclusion: This is no way to run a generational, familial conspiracy. The EU may soon have a Treasury, but in our estimation, unless the elite reclaims the allegiance of those "citizens" involved, none of this has been built on a strong foundation. And little, eventually, may go to plan.


Failure of the Famine Meme

Monday, September 06, 2010 – by Staff Report


Scramble for food companies a warning of crisis to come ... Much has been said about how BHP Billiton's bid for Potash Corporation and Canadian fertiliser company Agrium's play for AWB fit in with the growing issue of food security and food shortages. ... in his chilling book The Coming Famine, journalist and science writer Julian Cribb warns we are headed towards global food shortages in the next 40 years because of scarcities of water, good land, energy, nutrients, technology, fish and, significantly, stable climates. You can add to that population growth, consumer demand and protectionist trade policies. ... The world is running out of farmland. Advanced farming depends entirely on fossil fuels likely to become scarce, supplies of nutrients for farming have peaked and fresh water resources are finite. With global warming, up to half the planet faces regular drought by the end of the century. ... Cribb has several solutions; none will come easy. It could start with more free trade and diverting just a tenth of the $US1.5 trillion ($A1.7 trillion) global armaments spending to sustaining global food supplies. It will be costly, but not as costly as failing to create food and water security. The choice is clear. In the 21st century, we either eat – or we fight. – Sydney Morning Herald

Dominant Social Theme: Governments must work hard to avoid famine.

Free-Market Analysis: There are plenty of people who don't and never will believe in organized fear-based promotions orchestrated by a shadowy, familial power elite. But it is this publications raison d'etre to discuss these promotions, point them out to those who wish to accept their possibility and analyze them.

Herein, we wish to move beyond fear-based promotions themselves and trace some inter-linkages. Yes, if one is bold (and that is quality that the Bell occasionally aspires to) one can actually trace not only the rise of these fear-based promotions, but also the difficulties that the power elite is having in maintaining current promotions and building on them with promotions that are expanding or in-the-works.

It is the putative failure of the global warming meme – the pivot point of many power elite promotions – that in our view is bollixing up a number of other promotions as well. There are three promotions in particular that it has affected: peak oil, drought and famine. All three of these promotions were in our view to be predicated on the success of the global warming meme. Here is some more from the article:

"The coming famine is also complex, because it is driven not by one or two, or even half a dozen factors but rather by the confluence of many large and profoundly intractable causes that tend to amplify one another,'' Cribb writes. "This means that it cannot be easily remedied by 'silver bullets' in the form of technology, subsidies, or single-country policy changes, because of the synergetic character of the things that power it.'' ...

But as Cribb points out, human beings are remarkable. In the 20th century, they developed weapons that could destroy the world but developed systems and agreements not to do it. They damaged the climate but there are strategies, which may or may not be successful, to tackle global warming. The looming food crisis calls for us to better manage water, land, nutrients and other inputs. Green cities that grow food will need to be established and the real costs of food to the environment and society might be passed on consumers.

You see how Cribb assumes global warming? He can't help himself. This was the promotional plan in our estimation. Roll out the global warming meme, generate carbon trading, regulate people's energy use with Smart Grid (which we've written about) and then add famine and drought into the mix to put more pressure on people to alter their behaviors. The upshot would be an ever-escalating call for global government to deal with these "inter-linked" problems. The trouble is that the foundational meme – global warming is failing to lift off. It's a promotion and due in large part to the truth-telling of the Internet, it is increasingly problematic. Here's something from JunkScience.com:

The most important players on the greenhouse stage are water vapor and clouds. Carbon dioxide has been increased to about 0.038% of the atmosphere (possibly from about 0.028% pre-Industrial Revolution) while water in its various forms ranges from 0% to 4% of the atmosphere and its properties vary by what form it is in and even at what altitude it is found in the atmosphere. In simple terms the bulk of Earth's greenhouse effect is due to water vapor by virtue of its abundance. Water accounts for about 90% of the Earth's greenhouse effect ...

You see? Were there actually a "greenhouse effect" (itself problematic) water would be responsible. The manmade generation of "carbon" is at any rate of little consequence. This is a classic, fear-based power elite promotion. Create a crisis and then propose additional global governance. But it is not working well; there is growing doubt throughout the West and especially in the critical region of North America and the US. People simply are not panicked by it. Here's something from GlobalWarmingHoax regarding a Pew Research study about US perceptions from early 2010:

Global Warming Ranks Dead Last As An American Priority ... Barack Obama, are you paying attention? The American people ranked the global warming hoax dead last on its list of concerns, even below "Trade Policy" and "Moral Decline". In a Pew Research study (dated January 25, 2010) only 28% of American's believed that global warming should even be a budget priority. That is 10% points lower than what it was just 4 years ago, and this was before some of the recent fraud and corruption allegations against certain climate change scientists and the scandals at the U.N.

The specter of famine and drought can be ginned up in our opinion by various manipulations, unfortunately; but without the appropriate narrative, they lack impact. They are simply occurrences and don't support promotional goals. You will not read this elsewhere – because most of the alternative news on the Internet is focused on the power-elite as implacably powerful and endlessly inventive. We however do not believe that this is so. It is an intergenerational, familial conspiracy and as such is only as good as those future generations that inherit the plan and the power.

But over time, generations dissipate what has been initially created. The conspiracy over centuries has waxed and waned in our view. And this version may be coming to an end even as we write. Surely, the tool-kit itself, elaborated on over centuries or even millennia, is robust. But sometimes the tool-kit is less effective, and this is one of those times. The elite seems to have few answers when it comes mass communication breakthroughs like the Gutenberg Press or the Internet.

Certainly, one can ban the offending information (and rediscovered history) but "censorship" is the worst the way of reducing information flows because it inevitably triggers backlash. The reason that the elite spends so much time and money cultivating dominant social themes is to avoid backlash. There are great deal more non-elite than elite.

Is it a troublesome time? A good deal of the upcoming move toward global governance was to be based on global warming in our view. Since global warming has become devalued, fear-mongers like Cribb fall back on less persuasive analysis. The coming famine is seen as "complex" and the result of "large and profoundly intractable causes."

How satisfying is this? Not very. The opening act (global warming) has been muffed in our view. Scenes two and three have nothing to build on. The drama has been drained. The story is increasingly ineffective. Is there scarcity in the world? Of course; but human ingenuity combined with a viable, free-market system can likely overcome almost any challenge. The upcoming scarcity-based promotions have little real reason for existing. They are dangling in mid-air so-to-speak without justification.

Nonetheless, the promotion(s) will grind on. Think tanks write white papers; doctorial students write theses; prestigious journals accept papers; the mainstream media begins to cover the emergent promotion; NGOs and UN study groups lobby for action; legislators take an interest, etc. etc. The ultimate goal is to create a need for an authoritarian (and preferably global) solution that further deprives people of wealth and freedom. These large, international promotions are very difficult to halt. Changing direction is awkward. It is like turning an ocean liner (to mix metaphors) or a tanker on the high-seas.

This is, in fact, the reason that the Bell so often argues that the power elite is having significant difficulty moving the masses toward a predetermined globalist posture in the 21st century. We can certainly sense an increased urgency from the powers-that-be; at the same time, the very tools that they rely on are becoming less dependable and credible.

There are many who will not share our view, no doubt. But we are modest voice (if that) and our contribution is merely to analyze power-elite memes as best we can. So much depended on the global warming meme and upcoming scarcity-based promotions are bound to be chaotic given that the global warming theme itself seems less than captivating. The difficulties that the elite is having building on promotions that seem to be crumbling is reflected in the larger social and financial order.

From an investment standpoint all of this is important. We write regularly that competent and realistic appraisals of the success or failure of elite memes in the 21st century (as they collide with the truth-telling of the Internet) is a big part of investing. Central banking itself is under attack and the seemingly improvised solution of an IMF SDR/bancor currency to replace the dollar seems similarly challenged. Investing itself and the rules of the game are changing in the 21st century.

Conclusion: We are in no position to predict the future, but in this article we have tried to show logically how we believe the elite intended to progress from one fear-based theme to another in pursuit of the chimera of global governance and a fully international financial system – and how thanks to the foundering of the global warming meme this progression is in jeopardy. The idea that the powers-that-be are struggling to impose their agenda is perhaps a difficult one for many to accept. But we would argue these are unusual times indeed. ]]> Appenzell Daily Bell GoldSpeculator http://www.gold-speculator.com/appenzell-daily-bell/37515-eu-treasury-overkill-failure-famine-meme.html <![CDATA[Nathaniel Branden on Mastering the Six Pillars of Esteem and 'Honoring' One's-Self]]> http://www.gold-speculator.com/appenzell-daily-bell/37482-nathaniel-branden-mastering-six-pillars-esteem-honoring-ones-self.html Sun, 05 Sep 2010 19:57:44 GMT Sunday, September 05, 2010 – with

Ron Holland




Dr. Nathaniel Branden


The Daily Bell is pleased to present an exclusive interview with Dr. Nathaniel Branden (left).

Introduction: Dr. Branden (left) is a practicing psychotherapist in Los Angeles and also does corporate consulting. Dr. Branden offers workshops, seminars, and conferences on applying self-esteem principles to the problems of modern business. He addresses the relationship between self-esteem and such issues as leadership, effective communication, and managing change. Dr. Branden has a PhD in psychology and a background in philosophy and has written 20 books, which have been translated into 18 languages. More than 4 million copies are in print, including the classic The Psychology of Self-Esteem, originally published in 1969. In it, he explains the need for self-esteem, the nature of that need, and how self-esteem-or lack of it-affects our values, responses, and goals. His many books include Honoring the Self, The Six Pillars of Self-esteem, The Art of Living Consciously, and a personal memoir, My Years with Ayn Rand. Many of his books have been translated in to foreign languages, and worldwide have sold over 4 million copies. His most recent book- Self-esteem at Work – deals with the application of his work in the field of self-esteem to the challenges of business in an information age economy. This is a follow-up interview to one conducted late last year which can be read by clicking here.

Daily Bell: Please answer these questions as if readers were not aware of your famous books, your articles or frequently quoted opinions. Thanks for this follow up interview.

Nathaniel Branden: My pleasure.

Daily Bell: In the past interview we spoke a lot about Ayn Rand, soliciting your thoughts and opinions. In this interview we would like to focus on your tremendously successful work and books. Tell us what Mastering Self-Esteem is all about and why have you made a special offer regarding it.

Nathaniel Branden: Mastering Self-Esteem is an interesting distillation of my ideas for personal growth. This was not prepared by me but by a number of people who wanted to support it so that different aspects of the psychology of self esteem were brought into play. It is complex weaving together of different books and articles all presented in an audio format to provide people with a very powerful way to build their self esteem and personal development.

Daily Bell: Why is self-esteem so important generally?

Nathaniel Branden: It has to do with what we think about ourselves. We tend to make our positives or our negatives true. So, if I don't feel, for example, worthy of love, I am very likely to behave in ways that will not make me feel happy in loved relationships. Business people get promotions and then get terrified because they don't think they can live up to it. They may then pursue behaviors that are self-defeating. There are a whole range of behaviors that are in part, influenced by where your level of self-esteem is.

I would like to take this time to make one very important clarification. One of the mistakes that many people make, who want to support the idea of self-esteem, is that they make absurd, exaggerating claims as to what they can do. It's one force among many in the psychological system. It is one factor among many. Self-esteem as I describe it, is the experience that we are competent to cope with the basic challenges of life and are worthy of happiness. I can be very strong or competent in the area of business but a disaster in my private life. It's not that I have no self-esteem, but flawed self-esteem, an under-developed self-esteem.

Daily Bell: How do you know, other than your own feelings?

Nathaniel Branden: If the majority of your interactions are positive for yourself and the other person, chances are you know quite a lot on how to have successful relationships. If however, a lot of the time, you are not satisfied or pleased with your interactions with other people, chances are you have a problem with your relationships.

Daily Bell: How does it help with leadership and managing change?

Nathaniel Branden: One of the big misunderstandings among leaders in the business world is the failure to realize the extent to which the people that work under them are continually reacting to the role that the leader is playing. Leaders are meant to be teachers and inspire a champion for whatever the job of the business is to be. They don't necessarily realize to what extent the people under them are watching and absorbing their way of handling stress or pressure, etc. So the self-esteem of the leader can have very profound effects on what people around them do.

Daily Bell: Poor self-esteem leads to self-aggrandizement?

Nathaniel Branden: One of the problems with poor self-esteem in leaders, is they try to make themselves big and the people they are talking to small. Leaders with good self-esteem will tend to inspire confidence in the people that work with them. If they deal with people civilly, kindly, benevolently, fairly, justly, and project that they expect the best from people, then they make an enormous positive contribution. The great genius of leaders or managers, is not the great things they do, but the great things the people under them do. This is made possible by their attitude. In that attitude self-esteem is very important element, it's not everything but an important element.

Now, regarding managing change, every change is a challenge to self-esteem, to our ability to manage what's being thrown at us. So much depends upon whether or not we believe in people and we believe in what they can do. As a leader, you won't get the best results by attacking your employees' self-esteem but by inspiring them.

Daily Bell: Tell us more about your book Honoring the Self.

Nathaniel Branden: That title came to me because in earlier books, I heard people say, isn't this just encouraging selfishness, an excessive self pre-occupation? Why aren't we talking about honoring the world or honoring other people? So, I wanted to talk about the importance of self respect, the importance of self-esteem, the importance of personal autonomy.

Daily Bell: Which some people liken to navel gazing.

Nathaniel Branden: Suppose you saw someone running around the track or getting nutritional guidance in eating habits, you wouldn't say, look at him, that's so selfish of the person. But when it comes to psychological issues or philosophical issues, that sentiment certainly arises. Is a pre-occupation with one's personal development a sign of selfishness? I don't think there's anything to apologize for.

Daily Bell: Please explain how The Six Pillars of Self-Esteem, fits into this.

Nathaniel Branden: Over the years, I was always fascinated by the differences between people who obviously had self-esteem and those that did not? Between continually asking questions and watching, I found and came up with six practices which seem to me essential contributors to healthy self-esteem.

Daily Bell: So this is a kind of success equation?

Nathaniel Branden: Again it doesn't imply that there is nothing else in the world that can be beneficial for self-esteem. But I have found these six ideas always proved useful and productive, especially within a practice setting. I will name them very specifically but not elaborate for purposes of this interview. The practice of living consciously; the practice of self acceptance; the practice of self-responsibly; the practice of self assertiveness; the practice of living purposely; the practice of self integrity.

Daily Bell: You mentioned in our past interview that Ayn Rand wanted to stress that a rational code of morality was possible. Is it?

Nathaniel Branden: Oh yes. Emphatically yes. That is what many people found in reading Atlas Shrugged. Not that Rand covered everything, but she provided a great foundation for a rational code of morality.

Daily Bell: Why are compassion, kindness and empathy enormously significant within a pro-life code of ethics?

Nathaniel Branden: Well ask yourself would you rather live in a world which these are regarded as values or would you prefer to be in a world where they are regarded, not as sins but only marginally significant or important? I think we realize that if people understood and accepted the value of simple kindness of compassion, of empathy, it works for human relationships, it works for the way people relate to each other. It makes for an altogether superior society.

Daily Bell: Why are your books so successful? What chord are you touching?

Nathaniel Branden: I suppose the thing I hear the most is that people are relating to the stories. This guy understands me. And I am proud of this clarity. I take very complex ideas and communicate in a very clear way.

Daily Bell: Ayn Rand held that teaching "others above self" is evil. Agree or disagree?

Nathaniel Branden: I don't use the word evil as frequently as Ayn Rand did. I would rather say it's destructive.

Daily Bell: You have also stated that people don't understand that altruism actually DOES mean others above self .

Nathaniel Branden: That's right. The word was coined by Auguste Comte in the 19th century. Others above self is what he meant by altruism.



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Daily Bell: Why is self-sacrifice is our highest virtue? This seems to stand Rand on her head. Rand didn't provide much guidance on how to develop in a more rational and benevolent way. Why not?

Nathaniel Branden: Well, I think that she would first of all believe that she did. I think that she would believe that the applications in the direction of benevolence are obvious. And for some people it was. But it's not the best or the most powerful way to teach that particular method.

Daily Bell: What do you think of Ludwig von Mises great work Human Action?

Nathaniel Branden: I think that it is a masterpiece. It was one of the first books I read under Rand's guidance, when I wanted to understand capitalism. I think he was an extraordinary mind, I don't mean I agreed with every sentence in the book but I agree with the majority of it. I think it is brilliantly illuminating for understanding how the world works.

Daily Bell: What is happening to the West today? Where is it headed?

Nathaniel Branden: I think there is an undeclared war going on for the destruction of the Western world. I think the whole drift politically is away from almost all the values that made America that great country that is was. I think the news today is bad. I don't know what the long term consequences are going to be. I haven't yet read Forbes book on 'how capitalism will save us' but I would like to know!

Daily Bell: What is your opinion on capitalism?

Nathaniel Branden: I think it is the only political system that's ever been developed that produces conditions of well being for everybody who participates. Remember for all the years until the 19th century, the default condition of the world was poverty. Only in the 19th and more so in the 20th century, was most of the world lifted out of poverty. No other system ever did that.

Daily Bell: Does capitalism produces wealth for all?

Nathaniel Branden: There is overwhelming evidence that there is a clear correlation between freedom, productivity and wealth. So that, I would say, if you look at the empirical evidence, and not what your fantasies might be, you have to realize there is no substitute for capitalism. Unfortunately my fear right now is that people may have to learn the hard way, but I hope I am unduly pessimistic. I guess Monday, Wednesday and Friday I worry if the end of the world is coming. Tuesday, Thursday and Saturday, I'm more cheerful and optimistic we will land on our feet. That's a more honest statement on my position.

Daily Bell: How can people survive the current downturn psychologically?

Nathaniel Branden: They should be preoccupied with the question of their own options. It is important not to surrender to the feeling of being powerless. It takes great courage and great strength to keep going forward. I think self-esteem is very relevant there too.

Daily Bell: What do you think of libertarian Congressman Ron Paul?

Nathaniel Branden: I don't follow him close enough but the one thing I will say about Ron Paul is that the interest in his message is a good sign. It's an interesting crack in the wall.

Daily Bell: Do you think President Barack Obama is doing a good job?

Nathaniel Branden: If his goal is to destroy Western civilization, then he's doing a good job. He is spreading poison. So much dishonesty goes into his presentations to the world, both in the little things and the big things. My hope is that more people will wake up and be aware to the extent that they are being lied to and seduced and have to break free of their political addictions.

Daily Bell: In the past 50 years, good or bad, what has been most significant in your mind regarding western culture?

Nathaniel Branden: Firstly, in a negative sense, I can see the poisonous influence of the entitlement mentality, and the increasing abandonment of self-responsibility. So that comes to mind. Secondly, I can't think of anything worse than this administration we now live under.

Daily Bell: As the West turns increasingly authoritarian, how does this affect people's self-esteem?

Nathaniel Branden: That depends entirely upon what people conclude. If they see what the government is doing and they oppose it, they are in no way responsible for its destructiveness.

Daily Bell: What books would you recommend?

Nathaniel Branden: Six Pillars of Self-Esteem and Self-Esteem at Work. You will be glad I suggested it!

Daily Bell: Thank you Dr. Branden.





Self-esteem is an interesting issue for people because those who do not have it are doomed to struggle with numerous personality disorders. Chief among these disorders is paralyzing fear that one is worthless and unworthy of any of the blessings that life can bestow. Ironically, one might be posit that the more self-esteem one has, the less one is apt to act-out in a socially divisive way.

Perhaps Nathaniel Branden might disagree with this but we see some congruence between his pillars of self-esteem and Abraham Maslow's hierarchy of needs. For Maslow, people need to grapple with deficiencies to begin with: the need for friendship, love, security, and safety. But once these needs are fulfilled, the over-arching desire that remains is one for self-actualization – the attempt to realize one's full potential.

The strange thing about Maslow's hierarchy of needs however is that it does not necessarily sort through how one fulfills the need for self-actualization. We make this point because one of the role models that Maslow used was Eleanor Roosevelt.

Here's what Conservapedia.com points out about her: "The widely-read conservative columnist Westbrook Pegler assailed Eleanor (and FDR) regularly. In public Eleanor ignored him. In private in 1942 she asked the FBI to investigate Pegler suggestion a column he wrote involved 'sedition.' Her actions belied her public reputation as a champion of First Amendment rights when it came to leftists. In fact, she wielded her influence as First Lady to push the Bureau on this case. Dissatisfied with the FBI's initial report on the Pegler's column, she prodded J. Edgar Hoover to expand the investigation until it took on a voluminous scope. Recent scholars (including Betty Houchin Winfield, Kenneth O'Reilly, and Richard W. Steele) have exposed Franklin Roosevelt's political use of the FBI and traced how he ordered wartime sedition investigations of anti-New Deal newspaper publishers, such as William Randolph Hearst and the Chicago Tribune's Robert McCormick. In the Pegler's case, there was a willingness to use similar tactics against a prominent conservative columnist. Moreover, it also becomes clear that, despite her reputation as a champion of free speech rights, Eleanor Roosevelt resorted to similar methods against a media opponent."

Now it could well be that Eleanor Roosevelt suffered from a lack of self-esteem. Conversely, perhaps she was in a sense acting out because she suffered from a lack of love and physical closeness in her life. But the larger issue is one, in her case, of recorded behavior, which does not always seem to have been congruent with values attributed to her.

What great human observers like Nathaniel Branden and Abraham Maslow therefore offer us are tools. They are a skill set that we can work consciously to obtain with the idea that we shall be better-rounded persons after we have acquired the skills suggested. But can one be self-actualized and, in a sense, evil – manipulative and hurtful to those around him and or her? In order to make sure, one might have to use the precept of yet another fine thinker, Plato, who wrote, "Know thyself."
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]]> Appenzell Daily Bell GoldInvestor http://www.gold-speculator.com/appenzell-daily-bell/37482-nathaniel-branden-mastering-six-pillars-esteem-honoring-ones-self.html The Mind Conspirators http://www.gold-speculator.com/appenzell-daily-bell/37479-mind-conspirators.html Sun, 05 Sep 2010 19:39:19 GMT Saturday, September 04, 2010 – by

Nelson Hultberg



Nelson Hultberg

More and more Americans today are coming to understand the terrible truth about our Federal Government -- that it seeks to dominate us as citizens, to mold us into a society of dutiful Stepford Wives totally beholden to the wishes of elite politicians, bureaucrats and bankers. Those who study history, independent of the public school system, understand that this state aggrandizement process has been under way for the past 100 years in America in one form or another, and that it is taking place because too many of our citizens sanction such dictatorial usurpation and actually work diligently for its implementation.

This process has resulted in the lion's share of our earnings being annually confiscated by these governmental elites and then redistributed to despicable projects of waste and war to further their dream of world collectivism. It has led to the shocking debasement of our currency and an endless escalation in the cost of staying alive. It has brought about the degeneration of our economy from a robust engine of industry and personal self-reliance to an effete conglomeration of bloated consumers subsisting on financial gimmickry and debt addiction. As a result, America, once a proud land of muscular factories and productive people, has become a stuporous society of shopping malls and welfare crybabies.

Why this process is taking place is one of the most disheartening questions in all of history. What follows is an attempt to show why and how it is unfolding. There are other reasons as to "why and how" than the ones given here. Tyranny's evolution is always a complex process with many forces coalescing to bring about freedom's demise. This essay, however, is a look into the two most important of those forces -- ideas and money.

A very popular and frightening science-fiction movie in 1956, called Invasion of the Body Snatchers, is an apt metaphor for what is taking place in our country. In the movie starring Dana Wynter and Kevin McCarthy, a network of aliens is slowly and secretly taking over the bodies of the citizens of a small town by use of mysterious cadaver-like "pods" that are left in their backyards and basements. Once transformed into an alien, each citizen then tries to recruit the rest of his family and friends. It's absolutely chilling in its impact -- one of the great science-fiction movies ever.

Today's collectivists, working so assiduously to transform America, are like the aliens in that movie. They permeate our entire society and are after not our bodies, but the enslavement of our minds and souls. Ideological fallacies and moral inversions are the mysterious pods that these aliens leave in the cerebral backyards of our lives. They are aliens because they wish to destroy our system of natural liberty and limited government. And even though most of them believe what they are doing is right, they are far from innocent, for they have chosen to blank out on the horrendous ramifications of what they are doing.

Teaching a False Ideal

It begins in the school system. All modern authoritarian political movements have required recruitment of a disciplined, intellectual vanguard to proselytize the masses into accepting the authoritarian rule. This vanguard is recruited from the "best and brightest" minds of the nation involved. History shows how leading intellects of Europe used this strategy starting in the 1880's and 1890's to move Germany, Russia, and Italy into authoritarian political systems by the 1917-1930 period.

What history also shows is that the same thing has been going on in America for many decades, only on a more subtle level. The problem is that our media and our scholars lose their objectivity when analyzing their own political system and the ideas used to promote it. Thus, history's lesson is ignored in order to further the recruitment of the American intelligentsia into promotion of collectivism.

Instead of being objective forums for the transmission of the values of civilization to the young, our colleges and universities have now become fervent breeding grounds for this statist recruitment process, in which the better students get swept up in the "false ideal" of collectivism. These better students then proceed out into the world to positions of intellectual, political and economic leadership, to proselytize the masses into this alleged ideal just as church missionaries used to go out into the world to spread the gospel. The difference being that the missionaries were spreading good, while today's collectivists are pushing fallacies.

Such a vision very subtly conveys the notion that mankind is capable of achieving an egalitarian world where there will be no poverty, no disparity of wealth, no prejudice, no ignorance, no wars -- in short a heaven on earth. The requisites for bringing about such a world are to eradicate the "dangerous workings" of the free-market through centralization of government power in Washington, and then eventually move to some form of world governing body. This is necessary because it is allegedly capitalism and man's drive for profits that are responsible for the strife, wars and poverty from which the world suffers. Western civilization, having been built upon capitalism and profit, must be razed and replaced with a new civilization that will usher in this heaven on earth.

It is a powerful futuristic vision that is subtly instilled into callow minds who lack the necessary sophistication to resist. Being young and prone to idealism, they perceive "political centralization and a one-world government" to be an ideal just as the students in Marx's day mistook his "dictatorship of the proletariat" as some sort of ideal. Thousands of highly intelligent students spring forth from this brainwash every year to enter the world and spread their newly learned convictions that capitalism and Western civilization are the "roots of all evil."

These "best and brightest" of our youth advance over the years into prominent careers as teachers, journalists, publishers, movie directors, ministers, politicians, bankers, and businessmen -- all the time working for and promoting the collectivization of our society. Yet they don't see themselves as working for anything dictatorial. They think the political centralization and Keynesian economics taught to them by their mentors will cure the evils and inequities of the world. When they push for more centralized government, more taxes, more regulations, and more "liquidity injections" from the Fed, they are working for what they think will be a more benign civilization. They think they are working for an "ideal."

As the great philosophers tell us, it is ideals that are the primary movers of men throughout history. Our tragedy is that we are educating one generation after another with "false ideals," and the evidence that would expose the falsity of those ideals is not allowed a respectable place in our public schools due to those schools' control by government bureaucracies and the statist viewpoint.

The New World Order

One of the most influential institutions resulting from this indoctrination process is what is called the Trilateral Commission. This is an international group of about 300 elite intellectuals, statesmen, bankers, and businessmen founded in 1973 by billionaire banker David Rockefeller as a spin off from the older Council on Foreign Relations (CFR).

The Council on Foreign Relations is like the Trilateral Commission, only larger; it is composed of about 4,000 prominent leaders in business, government, and education, etc. It was formed in the 1920s by a group of progressive intellectuals of Woodrow Wilson's era led by the openly acknowledged socialist, Edward Mandell House, who was Wilson's chief advisor. Its official purpose was to coordinate America's foreign policy with other nations to create a more peaceful and orderly world.

The group today claims vague educational goals and the fomenting of more international co-operation as its purpose, but numerous public statements from its leaders indicate that its policies are clearly directed toward transforming U.S. sovereignty and national independence into some form of world government. It has, since the days of its inception, been patiently working for this goal, and its spin-off group, the Trilateral Commission, is doing likewise.

In his book, With No Apologies, the late U.S. Senator Barry Goldwater tells us that while David Rockefeller publicly launched the Trilateral Commission, the brains behind its formation was CFR member Zbigniew Brzezinski, whose 1970 book Between Two Ages set the tone for what is now referred to as a "New World Order," in which the major nations of the world -- the U.S., Europe, Japan, etc. -- link together to plan and direct the fortunes of the rest of the world. In short, Brzezinski condemns national sovereignty as outdated and unworkable, saying that we need to rewrite the American Constitution, and eliminate our system of federalism in favor of a more centralized government in Washington and eventually subordination to a world government. [1]

Here we have a profound demonstration of how ideas shape the unfolding of history. The Trilateral Commission and its parent, the Council on Foreign Relations, are the end results of many decades of ideological corruption in our colleges and universities beginning as far back as the late 19th century. The men of zeal who are inducted into the Trilateral Commission have been indoctrinated with false philosophical, political and economic theories that declare limited government and laissez-faire capitalism to be "chaotic, unworkable and morally wrong." These theories have their origin in the works of powerful collectivist thinkers such as Jean Jacques Rousseau, Auguste Comte, Karl Marx, and John Maynard Keynes.

The overwhelming majority of academics throughout the West have bought into these theories and have taught the Trilateral members in their youth this anti-individualistic conception of politics and economics. Is it any wonder then that the Trilateral members -- advancing in their careers and armed with the power of such views -- are driven to try and move humanity away from the "destructive evils of capitalism and limited government" by centralizing them under one rule. This is the nature of intellectuals; most of them will always attempt to further the cause of what they think to be politically and morally right.

Of course, it doesn't hurt the Trilateral members' motivation in all this that they see themselves as part of the leadership elite that is to organize, advise and run this future one-world government. Power has consumed men throughout history, and it is no different today. Its lure makes well-meaning men zealous and arrogant; it makes them believe that the Gargantua of government can be controlled once unchained from the bonds of the Constitution because it is in their "well-meaning hands."

"In my view," wrote Goldwater, "the Trilateral Commission represents a skillful, coordinated effort to seize control and consolidate the four centers of power -- political, monetary, intellectual and ecclesiastical....What the Trilaterals truly intend is the creation of a worldwide economic power superior to the political governments of the nation-states involved....As managers and creators of the system, they will rule the future." [2]

Former President Clinton's Deputy Secretary of State, Strobe Talbot (a Trilateral member), succinctly expressed the organization's long range goal recently in Time magazine: "In the next century," he declared, "nations as we know it will be obsolete; all states will recognize a single, global authority....National sovereignty wasn't such a great idea after all." [3]

Protectors of the Empire

In ancient Rome after the Republic had expanded into Empire, there evolved a super elite of ruthlessly skilled soldiers whose sole job was to look after the Emperor and protect him at all cost; it was called the Praetorian Guard, and its responsibility was to perpetuate the rule of the reigning despot in power, to guard him against all enemies, to use whatever means necessary to extend his power.

Goldwater likened the CFR and Trilateral Commission to a new Praetorian Guard for our age. The job of these highly influential academics, politicians, bankers, and businessmen is to insure the perpetuation of America's centralized state and pave the path for its merging into a World State by any means. "To accomplish this purpose," he writes, "they [mobilize] the money power of the Wall Street bankers, the intellectual influence of the academic community...and the media controllers represented in the membership of the CFR and the Trilateral." [4]

A very apropos analogy indeed. The combine of the CFR and the Trilateral Commission is a modern reincarnation of Caesar's corps of elite soldiers pledged to protect despotism -- not literally in terms of physical prowess as in Caesar's day, but much more sophisticatedly in terms of intellectual and financial prowess. The New World Order requires a new methodology of usurpation, and these ideological authoritarians have risen up to provide it in spades.

Their methodology has worked well for the past 75 years: Teach a subtle, socialistic serfdom to the more intelligent of our youth under the guise of an "ideal" society in which there will be no more poverty, hardship, and inequality in life if only we will construct a government that has a central bank with the ability to print money at will and is far reaching enough to control all the political-economic endeavors of man. Then sell this mess of pottage by throwing reason, history and the economic facts of reality down the memory hole.

The propagandistic "army of managers" that Aldous Huxley warned us about in Brave New World is now upon us. Such social engineers are the statist intellectuals in our high schools, colleges and grad schools. They have a powerful control over the minds of our best and brightest youth for 12 years, and they're turning them into the most dutiful of apparatchiks for a new world collectivism.

Sanity and Rationality Give Way

This then is one of the primary reasons for the disintegration of America over the past century. Philosophical fallacies and socialist falsifications of economics and history have gained sway in the school system to poison our citizens' minds against the American concept of freedom. Such fallacies have created a grossly distorted image for the man in the street about the way the world works. Freedom is now seen as inimical to human dignity. Creative entrepreneurship is portrayed as exploitation of the poor instead of their only hope. Gold is termed a "barbarous relic" instead of history's proven store of value. Wealth is thought of as a part of nature and static instead of created by free men and infinite.

All the values that sustain civilized life (freedom, strength of will, independence, honor) are endlessly denigrated in our schools and media. We are being conditioned to accept sloth as normalcy, servility as dignity, weakness of will as compassion, and government conveyed privilege as justice. The world of sanity and rationality gives way to regimental nightmares of Orwellian "newspeak" and "political correctness" in order for legions of middle-class sluggards to feel good about themselves while they live out their spiritually squalid lives queuing up to the entitlement troughs of the mega-state.



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Thank you in advance for your support. We look forward to working together with you to make "real" change a reality.


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Pretty bubbleheads preen daily on our financial networks, playing the shill to Wall Street and Washington in order to lure unsuspecting Americans into buying insanely overvalued stocks. The great market exchanges, once prudent arenas of investment where the engine of capitalism traded value for value, have become sham casinos staggering under decades of massive Fed created debt and lurching into oblivion on the greater fool theory.

Mole-like men posture as intellectuals with a perspective that extends no further than the previous decade. We now can have freedom without risk, plenty without work, and hope without heartache. Such are the illusions of modernity's short range mentalities. Such is the fate of those who believe knowledge is numbers and truth a remnant of primitive times, that technology is a substitute for values and security more precious than liberty.

These are the irrational pretensions of our age. These monstrous absurdities, being promoted today as humane social policies, are the result of deeply flawed theoretical doctrines that have slowly permeated our academic community over the past 100 years -- doctrines such as Jean Jacques Rousseau's absolutism of the general will, which leads to majoritarian despotism; Karl Marx's labor theory of value, which leads to massive wealth redistribution; Auguste Comte's philosophy of positivism, which leads to moral relativism; Thorstein Veblen's organic concept of society, which leads to the eradication of individual rights; and John Maynard Keynes' inflationary monetary policy, which leads to the degenerate bankruptcy of our nation.

Such doctrines have produced what historian, Clarence Carson, calls a "collectivist curvature of the mind." It is this collectivist intellectual warp that is setting the stage for the coming dictatorship. Once the Mind Conspirators have worked their ideological venom into the brains of our youthful intelligentsia during their formative years, they have recruited in most instances a lifelong apparatchik for their cause. If that apparatchik is brilliant and ruthless, he will attempt to rise in government and banking circles. He will seek to join elite organizations such as the CFR and the Trilaterals. He will strive to move the country toward the "collectivist ideal" of a one-world government.

The Role of Conspiracy

Many people on the political right today subscribe to the idea that not only are the elitist CFR and Trilateral organizations conspiring to establish a world dictatorship, they themselves are orchestrated from behind the scenes by a smaller, more secret conspiracy of mega-bankers. As this article shows, I certainly agree that collectivist elites are working to move us toward a one-world government, that these elites dominate the banking industry and bureaucracies of the nation, and that much of what they do is secret. But the banking / bureaucratic elites of modern collectivism are only part of the problem. The collectivist movement is a multi-faceted phenomenon of many levels and groups all pushing for bigger and bigger government because it furthers their power, status and wealth.

Obviously there are numerous conspiracies that take place within this push for bigger government. For example: The Plunge Protection Team, a crypto faction of the Federal Government's Working Group on Financial Markets, secretly manipulates both the Dow and the price of gold. [5] The World Trade Center attack was surely more involved than the whitewashed accounting provided by the 9-11 Commission. [6] And the North American Union is not a means to better coordinate trade between Canada, America and Mexico; it is a deceptive scheme to take us toward regional government. [7]

Conspiracies abound throughout the West to expand political control and shrink freedom. It has been this way for thousands of years. Thus it is quite logical to assume that powerful bankers and bureaucrats are conspiring to move America into a one-world government? This is the nature of men in power. Only the naïve and ignorant believe otherwise. But as Ayn Rand pointed out in the 1960s, no country can be moved into a dictatorship simply by a "cabal of insiders." History does not move on a singular axis. Ideology plays a paramount role. This is why Marx said, "Corrupt the money and the language, and capitalism can be brought down."

The mega-bankers and bureaucrats are not the only deceivers here. There is another group in America working to destroy our system of freedom that is equally, if not more, important. As I have endeavored to show in this essay, it is the intellectuals in our school system. They have control over the minds of our youth from grade school through graduate school, and they are instilling into them an array of fallacies that is shocking and disgusting. Thus we must not limit our diagnosis of why America is descending into a dictatorship simply to the intrigues of conspiratorial mega-bankers and bureaucrats.

Today's power elites are moving us into world government not just because of power lust and greed, but because of the ideological worldview that was laid down in their minds in their school years. It powerfully shapes their lives and makes them move in lockstep toward ever-increasing collectivism as they rise in their adult careers.

In other words, society is moved in much the same manner as the stock market. Just as there is a sentiment (i.e., an investor psychology) that moves prices up and down in the stock and commodity markets, there is also a sentiment or zeitgeist that permeates a society in any given era and moves its citizens one way or the other -- toward tyranny and corruption, or toward freedom and justice. The 20th century zeitgeist was world collectivism, and we are still mired deep in its thralls.

Financial and Ideological Conspiracy

What has resulted from this zeitgeist is that there are two factions of collectivist elites operating in the world today -- "political-financial" and "ideological." They both wish to bring about the end of national sovereignty and move all nations toward a one-world government to be run by endless streams of fiat money and political regimentation.

The political-financial elites dominate our society by means of a fascist banking cartel and the conveyance of privileges via Congress to large voting factions. The ideological elites dominate our university system by means of persuasive but false doctrines to mold the minds of our youth. Both of these elites believe that the Founders' constitutional system of free enterprise is unworkable, anachronistic, evil, exploitative, racist, and environmentally devastating. Thus in order to achieve a stable and just world, we must phase into a one-world government.

The political-financial elites do not overtly publicize their goal. They prefer to quietly smuggle our nation into a one-world government because they know there is too strong a tradition of freedom in America for her people to accept such a fate all at once. Thus it is implemented insidiously via deception, and therefore it is "conspiratorial." After all, these elite bankers, moguls, and bureaucrats do not divulge their true intentions to the people at large, and much of their activity is secret.

Good examples of the insidious and deceptive nature of their activities are found in the following three quotes by Richard N. Gardner, a member of the Kennedy and Carter administrations, and the infamous mega-banker, David Rockefeller:

Richard N. Gardner told the CFR in 1974: "In short, the house of world order will have to be built from the bottom up rather than from the top down. It will look like a great booming, buzzing confusion, to use William James famous description of reality, but an end run around national sovereignty, eroding it piece by piece, will accomplish much more than the old-fashioned frontal assault." [8]

David Rockefeller had this to say in 1991: "We are grateful to The Washington Post, The New York Times, Time magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during those years. But, the work is now much more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national autodetermination practiced in past centuries." [9]

Rockefeller also had this to say in 2002: "Ideological extremists...attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as 'internationalists' and of conspiring with others around the world to build a more integrated global political and economic structure -- one world, if you will. If that is the charge, I stand guilty, and I am proud of it." [10]

Our political-financial elites thus have a common objective of world government, which they are very patient and discreet about. This gives them a conspiratorial incarnation. Our ideological elites, are supposed to be open pursuers of the truth constructing Socratic forums for their students; but any rational observer soon realizes that this is not the case. Rabid sophistry abounds in the colleges today. Political correctness dominates. Most scholars openly teach world government as the ideal, but they do it in sophistical form in unison with fellow colleagues. The fact that their sophistry is not consciously promoted does not make it any less deceptive. The youth under their influence are still corrupted. Thus theirs is a tacit conspiracy, rather than formally planned.

What is crucial to grasp from all this is that nefarious elites are indeed working to destroy a free, sovereign America; and the two main powers moving them toward such tyranny are FIAT MONEY and FALSE IDEOLOGY. Our politicians, corporate moguls and mega-bankers are driven toward world government because they lust relentlessly for wealth and power, but also because they have been taught that world government is the ideal for modern times. This agenda of world collectivism didn't just spring full blown in their heads. It was hatched in the school system. Our political-financial elites are first prepared by collectivist ideology in their formative years by their teachers and professors. Without this ideological preparation, there would be no pervasive political movement toward a New World Order. There was no widespread enthusiasm for world government in America during the 19th century because collectivism was not taught in the schools. Our scholars taught their students philosophical individualism and the legitimacy of national sovereignty.

The powerful banking interests such as the Rothschilds have always been pushing the envelope to acquire more wealth and power. Griffin's wonderful book, The Creature from Jekyll Island, shows this. The Rothschilds were manipulating politics 200 years ago in order to gain more than they had a right to gain via free enterprise. But they were only after more wealth and power in their specific societies (as most bankers throughout history have been). They were not after a one-world dictatorship. This is because "national sovereignty" was still part of the prevailing ideology taught in everyone's formative years. Once the views of Marx had gained sway by the turn of the 19th century, however, this all changed. After 1900, the ideology of the schools was dramatically altered; world collectivism became the ideal for which to strive. The "best and brightest," who went into banking and politics, now wanted more than just wealth and power in their respective societies. They wanted the ability to govern the world. And the collectivist ideology being taught by the scholars gave them the zealotry and belief that such conquest was vitally necessary.

Who Controls Whom?

Therefore in my opinion, it is a mistake to view the financial / banking conspirators as primary in this drama. Those who hold this view admit that intellectuals teach false ideals in the schools poisoning the minds of the "best and brightest" coming through the system; but in their eyes, our intellectuals long ago were bought off by the powerful corporate and banking elites of the latter 19th and early 20th centuries. Men such as John D. Rockefeller, Andrew Mellon, and Henry Ford established prestigious foundations with billions of dollars to go toward grants to scholars who would teach the collectivist ethos. In this manner, the financial elites control and manipulate the intellectual elites into becoming their lackeys. They mold our scholars into salesmen for world collectivism. Thus the primary source of the evil taking over the world is the mega-bankers and corporate moguls whose reach stretches even into the hallowed halls of the academic arena.

This reasoning doesn't fly. Anyone who has a working knowledge of scholars knows that the big creative minds among them are moved by an all consuming desire for truth and the ideal. They would no more allow men like Rockefeller and Mellon to dictate that truth than they would allow witch doctors to perform surgery on them. The second line scholars (the popularizers) take their cue from the top scholars and mold their thinking accordingly. Thus it is this leadership of the top scholars that indoctrinates the second line scholars, who then indoctrinate the "best and brightest" students with the one-world ideal of collectivism.

From where do the top scholars get their motivation? From the super-minds of history -- the great philosophers, scientists, and economists. And super-minds like Isaac Newton, John Locke, Jean Jacques Rousseau, Adam Smith, Karl Marx, Auguste Comte, Ludwig von Mises, Albert Einstein and John Maynard Keynes do not bow and scrape before mega-bankers and corporate moguls. They revere the ideal of truth and seek it at all costs. They may grossly err in their discovery of it and plunge the world into terribly destructive fallacies (witness Marx and Keynes), but their motivation is cerebral rather than monetary.

Thus financial elites do not mold the intellectuals; the intellectuals mold the financial elites! The major foundations that the elites establish position themselves to be in line with the paradigms formed by the creators and super minds. "Second tier" scholars, of course, will often fashion their studies in ways to avoid biting the foundations' hands that feed them, but these intellectuals are not the creators, nor the super minds. They are the popularizers; they do not create new paradigms and visions. It is the big-picture thinkers who do that, and they are not for sale.

Refusal to accept this relationship between intellectual elites and financial elites stultifies our cause. Everyone caught up in the fight for freedom directs his efforts to the areas in which he feels most comfortable. Some will fight the ideas that are poisoning the minds of our youth, and some will fight the bankers who are corrupting the money and politics of our system. But it is crucial to understand the cause and effect process that determines what is really happening. We cannot reach our fellow citizens with the truth if we refuse to accept the "primacy of ideas." We don't all have to become experts in history, philosophy and economics to engage in this fight; but we do have to understand that ideological matters come first and learn as much as we can from the scholars of freedom in these fields. Failure to do this concedes the battle to the collectivist enemy who grasps such primacy very well and does not shirk from utilizing it.

The motive power behind history is the force moving all of us -- the ideas that are laid down in our minds during the all-important formative years of our youth. Tyranny cannot be brought about by political and monetary elites alone; it can only be brought about by first corrupting the minds and souls of the citizens when they are young. The intellectuals pave the way for the Hitlers and the Lenins.

The intrigues of politics and the conspiracies of elite bankers play a very important role in the torrent of history, but the grand directive of all their action is IDEOLOGY and the guiding ideals that it promotes. When this ideology is false, it leads to tyranny. When it is true, it leads to the Founding Fathers and America's original concept of freedom.

As the novelist Huxley profoundly put it, "It is in the light of our beliefs about the ultimate nature of reality that we formulate our conceptions of right and wrong; and it is in the light of our conceptions of right and wrong that we frame our conduct, not only in the relations of private life, but also in the sphere of politics and economics. So far from being irrelevant, our metaphysical beliefs are the finally determining factor in all our actions." [11]

End of America as a Sovereign Nation

To sum all this up, there are "two conspiracies" at work destroying the freedom of the West -- ideological and financial. Our drift into collectivist tyranny starts with the big thinkers of civilization such as Rousseau, Hegel, Comte, Marx, Keynes, etc. They create the tyrannical ethos, which then works its way through the academic arena to capture all levels of scholars, where it proceeds to poison each generation's "best and brightest" who then go out and become society's new power elites of mega-bankers, bureaucrats, and corporate moguls.

The goal of these intellectuals, and the power elites they spawn, is the cessation of America as a sovereign nation. The end of free enterprise and the Founders' constitutional system of liberty must naturally follow in order to complete their vision.

We have been overrun by alien Mind Conspirators who are turning America into a nation of sheep. Their nefarious ideas have, over the past 100 years, saturated all our important institutions -- from government, to the schools, to the churches, to Hollywood, to the media. These Mind Conspirators preach soothing words about the need for "stability, security and equality," but it is the same goal of all tyrannical collectivisms throughout history -- the enslavement of man justified by irrational ideology and sophistry. The only difference is that it is much bigger in ambition today; its goal is world domination instead of just societal control.

My book, The Conservative Revolution, delves into this ideological stream of collectivism that is corrupting America and puts forth a revolutionary plan for a third political party that will stop the carnage and restore sanity to our country. CLICK HERE to read a review and buy a copy.

A gargantuan crash of prosperity and freedom now looms up ahead as a result of our financial and intellectual corruption. Out of the crash will come a new society. Our only hope for that new society lies in whether we, who have kept the faith of our fathers, can inform enough of our fellow citizens as to what the requisites of freedom truly are. If we can, then a rebirth of America will take place out of the crash. If not, then some variant of Orwell's nightmare will descend upon the world to enslave and stultify life for the upcoming centuries.

Notes

1. Barry M. Goldwater, With No Apologies, (New York: Berkely Books, 1980), p. 294.

2. Ibid., pp. 297-299.

3. Strobe Talbot, "The Birth of the Global Nation," Time, July 20, 1992, p. 70.

4. Goldwater, op. cit., p. 300.

5. See Bill Murphy and Chris Powell at GATA, the Gold Anti-Trust Action Committee, Gold Anti-Trust Action Committee | Exposing the long-term manipulation of the gold market. Also Nelson Hultberg, "Cornered Rats and the PPT," Americans for a Free Republic. And Nelson Hultberg, "Is the PPT an Urban Myth," Americans for a Free Republic.

6. See Architects & Engineers for 911 Truth, AE911Truth.org.

7. See Eagle Forum's work on the NAU, TOPIC: North American Union.

8. Richard N. Gardner, "The Hard Road to World Order," Foreign Affairs, April 1974, p. 558.

9. David Rockefeller in an address to a meeting of The Trilateral Commission, Baden-Baden, Germany, June 6-9, 1991.

10. David Rockefeller, Memoirs (New York: Random House, 2002), p. 405.

11. Aldous Huxley, Ends And Means: An Inquiry into the Nature of Ideals (New York: Harper and Brothers, 1937), p. 11.
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]]> Appenzell Daily Bell GoldInvestor http://www.gold-speculator.com/appenzell-daily-bell/37479-mind-conspirators.html US Fed Gains Power, Loses Credibility? http://www.gold-speculator.com/appenzell-daily-bell/37478-us-fed-gains-power-loses-credibility.html Sun, 05 Sep 2010 19:37:35 GMT Saturday, September 04, 2010 – by

Staff Report





Ben Bernanke


Federal Reserve Chairman Ben Bernanke (left) defended the Fed's handling of the financial crisis in 2008 before a federal commission, saying the bailout averted a much greater crisis for the U.S. economy. Speaking before the Financial Crisis Inquiry Commission, Bernanke also explained the Fed's involvement in the collapse of Lehman Brothers in September 2008, saying the federal government did everything it could to avoid the company's death. He repeated earlier statements that the Fed did everything within its legal authority to avoid the company's death. "The only way we could have saved Lehman would have been by breaking the law," he said. "And I'm not sure I was willing to accept those consequences." – Politico

Dominant Social Theme: Ben Bernanke, apologetic, intends to do great things.

Free-Market Analysis: Despite such statements from Ben Bernanke, we would venture the observation that there is an ever-growing perception within the alternative news community (especially among the hard-money websites) that the Fed and central banking in general constitute an illegitimate institution. It is indeed a fine line that the elite walks in our opinion. Society needs to be controlled by money power as the elite seeks to realize its apparent goal of global governance. But such power is a blunt force instrument. An additional dominant social theme might be: "All of us need the centralization provided by a group of functional wise men, but it is not an easy task and we need to cut them some slack."

Why is there a perception that US laws are being broken? The 1913 law authorizing the Federal Reserve eventually gave rise to a Fed that would issue the nation's money and regulate its value. The criticism is that Congress cannot merely bestow constitutional powers on private entities. And yet we find this: the historically controversial final paragraph of Section 8 giving Congress the power to: "Make all laws which shall be necessary and proper for carrying into execution the foregoing powers and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof."

The US Constitution seems always to be written with substantive vagueness giving legislators seemingly broad powers. There are many ways to interpret it. Even within the ambit of its delegation (that what is not specified is forbidden) there is much that can be accomplished – and has been. Ultimately, it is our humble conclusion that the "understandings" surrounding the Constitution were likely almost as powerful as the Constitution itself.

These understandings included the ability of states to secede (that seems fairly clear) and when the Civil War came along and put that comprehension to the test, many other understandings were tested as well. With the conclusion of the war between the states, the federal government itself stood strong. The constitution would henceforth be interpreted in a manner that victors wished. And ever since then, the history of the US has been continually a more centralized power structure and a more aggressive regulatory democracy.

But each generation to some degree writes its own history. And in the era of the Internet, questions settled by the Civil War have become new again as the nation – and even the West – rediscovers history that has been denied to them by dysfunction and disinformation. (One only needs to read the disgruntled feedback attached to the Politico article excerpted above to see the process at work.)

As we have pointed out, the Internet itself has had a very specific effect on central banking and on the Federal Reserve. Because the latest financial crisis occurred "online" people really did have an opportunity to see how it unfolded and to realize, finally, that the Fed was basically printing money out of thin air and then giving it to various "crony banks" using the justification that these entities were too big to fail. The backlash was tremendous in our view and has not yet played out. Meanwhile, the Fed declined to print money to hand out to individual citizens.

It must have begun to dawn on people, in our view, that the banking system itself was a charade, merely a way of justifying money control. This is one reason in our view that the Fed is being so emphatic about the new powers it has just received in the last round of financial reregulation. The UK Telegraph has noted this recently, as follows: "Ben Bernanke, chairman of the Federal Reserve, yesterday told us what he thinks is the most important lesson to learn from the financial crisis. Drum roll. And the answer is? ... Putting a stop to banks that are 'too big to fail', according to the testimony he gave yesterday to the Financial Crisis Inquiry Commission in Washington."

And the article adds, "In the US, central bankers and regulators believe an end of too big to fail will result from changed and improved regulation, stemming mainly from the new Dodd-Frank legislation. There is now a framework in the US designed to address so-called 'systemic risk', where dangerous financial practices are identified and curtailed on an economy-wide basis, together with rules on how failing firms should be dismantled in an orderly way plus greater regulatory co-operation."

We are not surprised at the emphasis that Bernanke is placing on "too big to fail" banks. It is probably clear by now to the Fed brain-trust that average people, struggling with mortgages, taxes and unemployment believe what went on in the past two years is morally unpalatable and egregiously unfair. Trillions have been distributed to financial entities but the "little guy" has not received a share of the "free money" that the Fed has been printing by the boatload. The solution is to proclaim that in the future banks will not receive free money but will be broken up instead – punished for their failures.

In fact, what emerges here is a kind of underground conversation in which American central bankers acknowledge the unfairness of the system and vow to punish their friends and colleagues in the future. But it doesn't seem to occur to Bernanke et al. that it is too late. Just as it doesn't seem to occur to Congress, generally, that passing laws giving the Fed MORE power at a time when it is held in historically low esteem is not a way to offer the country satisfactory governance.

We have pointed out that the Fed has lost significant credibility and may not be able to recover. This goes for the larger central banking system and in fact for the entire Western money structure. The Great Recession of the early 2000s is much different than what came before and will eventually result in a different monetary structure, or so we believe. The Fed's credibility has been made worse not only by the new powers it has received but by its resistance to an audit of where and how it has spent the vast sums it has printed in the past few years.

Libertarian Congressman Ron Paul (R-TX) recently asked for an audit of the gold in Fort Knox. The mainstream media pooh-poohs such demands as paranoia. Yet the Fed and its enablers have resisted thorough ongoing scrutiny as well. Instead the institution has received significant additional powers. See the pattern? On the one hand, the Fed resists accountability. On the other, Bernanke et al. present an apologetic front and vow they will do better next time.

This is the kind of crisis control that the power elite practiced in the 20th century; it is today the kind of crisis control being applied to such failed dominant social themes as global warming. But we wonder if it will work in the 21st. In our view, people have already seen too much, know too much and are too upset. When it comes to the law and legislation, Bernanke and Congress may be in the right. But the law can only go so far. Sometimes, such ventures begin to look questionable regardless.

When people know too much, the law itself can begin to seem suspect; and this is how societal upheavals are created. This is in fact an inflection point for the powers-that-be. Creating fear-based promotions in order to generate societal consent for ongoing concentrations of power and wealth – the manufacturing of an authoritarian society in other words – has worked well for the PTB. But when the promotions begin to fail (due to information on the Internet in our view) and the elite continues its programs regardless, then the potential for social tension increases dramatically.

Conclusion: Is there, in fact, a subterranean war that is taking place between an increasingly disaffected Western public and an elite that is ever-determined to impose its will? We think so. It is important on so very many levels – from an investment standpoint, a societal standpoint, a political standpoint, even a historical standpoint. Bernanke may believe that by winning his legislative battles he has emerged with the larger victory as well. That perception may be premature.
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]]> Appenzell Daily Bell GoldInvestor http://www.gold-speculator.com/appenzell-daily-bell/37478-us-fed-gains-power-loses-credibility.html Bank Run 2011?.. Mises Shakes the World? http://www.gold-speculator.com/appenzell-daily-bell/37296-bank-run-2011-mises-shakes-world.html Thu, 02 Sep 2010 14:24:47 GMT Bank Run 2011?

Thursday, September 02, 2010 – by Staff Report

Ben Bernanke

Readers of my articles will recall that I have warned as far back as December 2006, that the global banks will collapse when the Financial Tsunami hits the global economy in 2007. And as they say, the rest is history. Quantitative Easing (QE I) spearheaded by the Chairman of Federal Reserve, Ben Bernanke (left) delayed the inevitable demise of the fiat shadow money banking system slightly over 18 months. That is why in November of 2009, I was so confident to warn my readers that by the end of the first quarter of 2010 at the earliest or by the second quarter of 2010 at the latest, the global economy will go into a tailspin. The recent alarm that the US economy has slowed down and in the words of Bernanke "the recent pace of growth is less vigorous than we expected" has all but vindicated my analysis. He warned that the outlook is uncertain and the economy "remains vulnerable to unexpected developments". Obviously, Bernanke's words do not reveal the full extent of the fear that has gripped central bankers and the financial elites that assembled at the annual gathering at Jackson Hole, Wyoming. But, you can take it from me that they are very afraid. -Global Research/Matthias Chang

Dominant Social Theme: Don't look now but things are not yet where they should be. A little prayer is all that's needed.

Free-Market Analysis: Here at the Daily Bell, we long ago adopted the position that the Great Recession of the late first-decade of the 2000s is nothing like previous economic downturns. Several years ago we came to the conclusion that this crisis marked the unraveling of the current dollar-denominated fiat money system and that honest money would rise in value substantially as the public's confidence eroded.

The only question we had and still have is when the dollar will reach the tipping point in its downward slide and head to the proverbial fiat-money graveyard that inevitably awaits all fiat currencies. Matthias Chang, who tends to see a glass half-empty, believesl that time is imminent and has written an interesting though apocalyptical article explaining his views over at Global Research.

We wouldn't count Global Research as a mainstream publication by any means – nor LewRockwell.com – but in both cases, the articles we have examined today deal with mainstream trends as we see it. The Rockwell article deals with issues having to do with free-market thinking and this Global Research article describes a scenario that might take hold if the Fed fails to stimulate the American economy long term.

We too believe an unravelling is feasible, as we mentioned above. The long-term view would hold that this unraveling actually began with the creation of the American Federal Reserve in 1913. Alternatively, you could argue that the starting point of the current system began after World War II with Bretton Woods when the dollar was effectively declared the world's reserve currency. You could peg it around the time Richard Nixon refused to honor gold convertibility. Finally, you could argue the current system's unraveling began with the bull market of the early 1980s.

Ultimately, it is immaterial exactly when it began – though the longest view is perhaps that the late 2000s marks the end not just of the dollar's supremacy but of the effectiveness of central banking itself. We pointed out over a year ago that the Federal Reserve was leaking credibility; the bailouts were inconveniently deployed in the Internet era, not reported on just by the Fed-biased mainstream media.

The result was swelling indignation that is depriving the Fed (and other central banks) of moral authority. Those at the Fed and at central banks generally still do not understand what has happened. They believe if they can just restimulate the economy with more fiat money that everybody in the US, and throughout the West will forget about the crisis and it will be back to business as usual.

It won't be though, in our opinion. Just as with the Gutenberg press, the modern era's communication revolution has punctured the power elite's promotional mechanisms. We see this most obviously on the Internet. What the power elite has lost, especially, is the hold it had previously over a portion of the intelligentsia and the young. In the 1930s, Leftism was a necessary position for intellectuals to adopt. Now even those on the Left, we would argue, are nowhere near as radical as they once were. The young too, steeped in free-market thinking based solutions have turned away from socialism (let alone communism) and a growing number in the US especially have embraced the common-sense classical liberalism of Congressman Ron Paul (R-TX).

What may be the proverbial final nail in the coffin – as this article points out – is that the US Fed is not going to be able to bring the economy back. Not only has the Fed lost moral authority, it may soon lose any claim to competence in the public mind. It is the economic downturn, as much as anything else, that has made the criticisms of the hard-money alternative press credible. If the Fed and central banking generally continues to fail, a day of reckoning will draw closer. Here's some more from the article:

Let me be plain and blunt. The "unexpected developments" Bernanke referred to is the collapse of the global banks. This is FED speak and to those in the loop, this is the dire warning. So many renowned economists have misdiagnosed the objective and consequences of quantitative easing. Central bankers' scribes and the global mass media hoodwinked the people by saying that QE will enable the banks to lend monies to cash-starved companies and jump start the economy. The low interest rate regime would encourage all and sundry to borrow, consume and invest. This was the fairy tale. ... The multiplier effect of fractional reserve banking did not take off. Bank lending in fact stalled.

When the ball hits the ceiling fan, sometime early 2011 at the earliest, there will be massive bank runs. I expect that the FED and other central banks will pre-empt such a run and will do the following: 1) Disallow cash withdrawals from banks beyond a certain amount, say US$1,000 per day; 2) Disallow cash transactions up to a certain amount, say US$10,000 for certain transactions; 3) Transactions (investments) for metals (gold and silver) will be restricted; 4) Worst-case scenario – the confiscation of gold AS HAPPENED IN WORLD WAR II. 5) Imposition of capital controls etc.; 6) Legislations that will compel most daily commercial transactions to be conducted through Debit and or Credit Cards; 7) Legislations to make it a criminal offence for any contraventions of the above.

We would tend to agree perhaps there is nothing left that the Fed can do (from their point of view) but continue to stimulate. But being students of dominant social themes, we have our antenna up for other solutions. There is also talk of a return to a quasi gold standard, and supposedly sample "golden" dollar bills are being printed even now. There is more substantial talk of making the IMF's SDR into a full-fledged global currency, presumably by converting it into John Maynard Keynes' one-world bancors. We would tend to believe these solutions are ephemera; we will not endorse a timeline either.

We do agree that the power elite will desperately try to keep the system aloft via laws, regulation and confiscation. But if it really gets to that point, what credibility will the system have left? Where will those responsible for the great deception of monetary fraud hide? What we have tried to emphasize over and over is that the elite needs its memes. They have to be effective for them to remain in control and now, more than ever, the ramifications for those responsible could be much more severe than just simply "losing control." When six billion people cease to believe in something it is OVER.

Conclusion: It is not necessarily true, in our view, that the powers-that-be in an aim to maintain power and avoid negative blowback from an increasingly angered citizenry will be able to impose a fully authoritarian culture on the US and the West – in the event of larger social and economic failures. Just as we do not believe that war will be a panacea at this point. We continue to believe that there is a possibility the system will unravel in such a way as to give rise to some sort of free-market based gold and silver standard. It would emerge spontaneously, at least to a degree and might be adopted serially by countries around the world. This is perhaps an optimistic scenario but it is not one to be ruled out. The worst does not always happen.


Mises Shakes the World?

Thursday, September 02, 2010 – by Staff Report

Ludwig von Mises

At the very least, the Journal is guilty of extremely uninformative and selective editing. One could also read this article, however, as an attempt to cast the Rothbardian school as irrelevant while propping up the Hayekian school as the "respectable" kind of Austrian Economics. This would be perfectly in line with the Wall Street Journal's generally conservative slant, and the Journal has shown itself to be a friend to neither Ron Paul nor any other serious or trenchant critic of the current kleptocracy. As Wenzel notes, the failure to mention Mises is odd at best. If there is a deliberate effort to obscure the importance of Mises or Rothbard, it is also certainly unlikely that a mere beat reporter sent to interview Boettke would insist on such a thing. Such a policy is far more likely to originate at the editorial level, where it can be absolutely guaranteed that a discussion of Austrian Economics will mention neither Mises nor Paul nor Rothbard nor anyone else who is presently central to the real-life political milieu surrounding the Austrian School today. ... So either the Journal is incompetent, or it has deliberately tried to disparage Ron Paul's Rothbard wing of the libertarian movement. I suspect the latter, although the former is always a possibility. None of this should surprise anyone who is familiar with the debate between the Hayekian branch and the Rothbardian branch. Twenty-eight years ago, Lew Rockwell was told in no uncertain terms that his efforts would be sabotaged by the existing libertarian establishment if he tried to name his new institute after Ludwig von Mises (left) who was labeled as "too radical." Rothbard's eventual inclusion in the effort only solidified the animosity toward what is now the Rothbard school. So ... the first question that crosses my mind with controversies like this is: "Should I even care about this?" – The Rothbardian School / LewRockwell.com/Ryan McMaken

Dominant Social Theme: Ignore 'em and they will go away.

Free-Market Analysis: We are returning to the "Spreading Hayek, Spurning Keynes" Wall Street Journal article to answer the question that Ryan McMaken asks in his fine article at LewRockwell.com (and then answers judiciously as well). We are returning as well because this is an incredibly important issue from our point of view as a periodical that analyzes power-elite dominant social themes from a free market perspective. We do have a slightly different take on the answer; in fact we feel, collectively, a tad passionate about the article from a libertarian standpoint.

The question, again: Why did the Wall Street Journal write an article about the history of Austrian finance without mentioning the Mises Institute or Lew Rockwell? Our answer to the question is not so eloquent as Mr. McMaken's but is almost as heartfelt. Our answer would be that "people who are interested in freedom should care very much about this article and the surrounding debate." Why? Because we think the Austrian economic movement is one of the longest-lived and most important intellectual and ideological conversations in history. And whatever misrepresents it is of similar import, especially if it represents a larger trend.

Here's an anecdote ... One of us walked into an Austrian "conference" in the late 1980s, perhaps. At the time, it consisted of a fairly rundown room, perhaps rented for the day. At a fold-out table, Joe Salerno was sitting next to Murray Rothbard who was cackling. Lew Rockwell was shaking hands with a deep-pocketed individual who had happened to drop by. Later on, Rockwell spoke and then Rothbard spoke. It wasn't anything special. It could have been a humid venue for selling vacuum cleaners. But for an hour or so all the truth in the world, relatively speaking, was suddenly confined to one room – one "phone booth" as Jonah Goldberg so eloquently put it a few years later (and he didn't mean it kindly).

Out into the sun to walk through a city crowded with lies. There is no way to describe the impact of the Austrian school on someone who wanted to know more and had the (mis)fortune of running into the Institute in the late 1980s or early '90s. It was a virtual out-of-body experience. The movie the Matrix is about as close as you can get. It was the red pill, only you had to swallow it without any support group and live the rest of your life, or so it seemed then, as an intellectual schizophrenic.

You begin to follow the argument. You see how the Institute is ignored and misrepresented. Gradually you realize the ambit of a conspiracy so gigantic it's hard to fathom. It ignores and misrepresents the entire history of human ideas. It is a fully manufactured world. What is black is white. What is up is down. When the Internet comes along you start to see how far back in time the conspiracy goes and how deeply it runs.

You notice with some surprise that for a while everything is labeled, so the paper trail is fully available. This is because the power elite did everything in the open so no charges could be laid. The names are all there on the annual reports, on the legislation, on the funding. Nobody ever expected all of it would show up in one place on the Internet. (And now, of course, it is being taken down and the paper trail is not quite so easy to follow. But if you know where to look, it's obvious.)

You understand it is a familial conspiracy. Eventually, you begin to believe it goes back to Venice, and then to Rome and even farther than that. Today, you decide, it is structured a little bit like the mafia. There are ties of blood and allegiance. But the ties don't extend to everyone and nobody talks – except to lie. It is the misleading methodology of Money Power. And the conspiracy floats a promotion that tars an entire religion when in actuality only a few benefit. That's the core, baseline misinformation. Even the religion itself may be different than what is purported. (And how can a family worth a reputed US$50 trillion be considered in any way normal?)

You observe that the intellectual currency of repression is built from dominant social themes relentlessly pounded into the public ear. You keep watching the patterns build and you keep getting headaches because after watching the patterns for 20 years, you've come to believe that it encompasses, or tries to encompass every country, every state, every individual on the planet, binding them to invisible chains of ignorance and servitude.

This is one "take" on the power elite and their methodologies. Even if you don't believe it, dear reader, you may have to grant that certain ideologies are promoted in the mainstream press and others are not. One of the ideologies that is NOT promoted is that of the Mises Institute. There is a virtual blackout on the Institute in the mainstream press. Not that it matters. The Internet has created a whole new world. But the way the elite deals with free-market thinking is still by ignoring it. So why this WSJ article now? All we could come up with initially was willful ignorance (bias) or antipathy.

Other information has emerged – much of it thanks to the fine bloggers at LewRockwell.com. The consensus seems to be that editors at the Journal conspired to leave out the "harder" and more uncompromising Misesian school. Meanwhile feedback conversations with such estimable GMU commentators as David Horowitz reveal that the author of the WSJ article had set out to write a profile of Austrian academics. The confusion is then seemingly the Journal's fault as nowhere in the lead of the article does the Journal make clear what the article is about. Thus, the entire article becomes confusing. It leaves out Mises with a seeming arbitrariness. Once the lead is muffed, the article degenerates.

What should the lead have been? Apparently it should have been something along the lines of: "Peter Boettke might seem an odd sort to be leading the charge for free-market academic purism." You would have to make the argument for a certain kind of purism as the Mises Institute has plenty of academics themselves who are noteworthy. The difference, as Peter Boettke pointed out in his blog, is that he and his department are focused relentlessly in publishing in certain mainstream academic journals. This sounds like a differentiating factor, or at least could be construed as one.

The estimable Lila Rajiva (who would be an ornament to any blogsite let alone her own) has been working day and night to compile a running commentary on the Wall Street Journal controversy. While we have had disagreements, her take on the article is that it was a willful attempt to set the parameters of the free-market conversation in such a way as it can be controlled by mainstream academia. In other words, (as we understand it) the relevant conversation is taking place amidst gatekeepers and no one else is to be allowed in.

This is a most credible observation. But we will stick to our analysis for now, as we have indicated previously: willful ignorance and/or antipathy. Until we know better, we will not believe the CIA had a hand in the article or even that the topmost editors at the WSJ micromanaged in it. (If they did, they sure did a lousy job.) We're not even sure the Kochs are directly involved. No, the larger elite strategy of message control aimed at the Mises Institute is evidently and obviously one of omission rather than commission – and we have not yet observed any change in that weather. (Or not until Lila finishes her compilation of links.)

These are generally well-thought and substantive promotions. They employ the massive, global power of the elite's tremendous resources. They are logical and evidently and obviously preplanned: The global warming promotion was very obviously strategic and thematic. In fact, they have a pattern as we have indicated – and once you understand it, you can begin to predict manifestations.

They (the promotions) begin in think tanks and academia and then migrate to the mainstream press. Eventually specially built NGOs and other sorts of organizational structures advance these promotions. As the rhetoric heats up, legislation is developed and authoritarian solutions are generated via the tools of modern-day regulatory democracy.

We don't see this happening yet as regards free-market thinking. We observe the promotional pattern is still one of negation. But if it does change; if the promotion becomes one of commission, promoting the idea regularly and in various mainstream avenues that Austrian economics is the provenance only of certain academic forums, then it will become obvious that the rhetoric has changed and that a promotion of omission has morphed to one of commission. That is a very big deal, we would argue. It has tremendous ramifications. In no way is it unimportant.

Conclusion: Lew Rockwell and his colleagues have done what few others in the history of the world have accomplished. They have led a modern thought revolution that has stabbed a vital empire. If Leviathan groans and gropes in response, it is no trivial matter. What began in a room now shakes the world. ]]> Appenzell Daily Bell GoldSpeculator http://www.gold-speculator.com/appenzell-daily-bell/37296-bank-run-2011-mises-shakes-world.html DC Begins the Bust Up... Thorium Cures the Free Market http://www.gold-speculator.com/appenzell-daily-bell/37213-dc-begins-bust-up-thorium-cures-free-market.html Wed, 01 Sep 2010 16:18:21 GMT DC Begins the Bust Up

Wednesday, September 01, 2010 – by Staff Report

Sheila Bair

FDIC sees rule early next year on dismantling firms ... U.S. regulators aim to have a final rule early next year that will lay out how the government can dismantle financial giants if they are headed toward collapse, bank regulator Sheila Bair (left) said on Tuesday. Bair, who heads the Federal Deposit Insurance Corp, the agency that will be responsible for this resolution authority, said the regulators will first issue an interim rule that will be a vehicle for getting more detailed comments. – Reuters

Dominant Social Theme: No bailouts anymore!

Free-Market Analysis: So now the government is to step in and undo companies that are "headed" for collapse. This seems to us yet another step forward into a kind of bizarre alternative universe where free-markets are controlled and free-enterprise is managed. Anyone who has lived more than a few decades on the planet in a Western regulatory democracy must know at this point that regulatory authorities consistently fail. A larger dominant social theme here is, "We just have to keep trying until we get it right."

But perhaps this dominant social theme itself is beginning to lose credibility. Regulation after all is simply nomenclature for government using force to tell people and businesses what to do. Each one of these modern omnibus bills provides more of a precedent to simply state the problem in arcane terminology while leaving the "details" up to regulatory authorities themselves. In practice this means that industry shows up on the doorstep and a great deal of behind-the-scenes horse-trading occurs before a finished product is unveiled.

In such leviathan bureaucratic environments as the European Union and America, the creation of legislation can go on for months and years before it is finally voted on, reconciled and signed by the president. But now in the modern model, that is only the beginning of the process. There is a whole regulatory overlay that is far more informal but just as important. As regulators are inevitably subject to "regulatory capture" by the largest entities that they attempt to regulate, what this process means in practice is that those private groups with the most money and power are the ones with the most influence.

The American exception has traveled from a republican democracy to a back-room exercise in influence peddling. It has gone from a fairly transparent system to one that lacks even the most elemental checks-and-balances at a fundamental level. No one will ever understand the horse-trading that goes on or loopholes that have been created via these behind-the-scenes regulatory exercises. This hardly can be called legislating anymore. It is a form of pocketbook law.

But all of the above pales in significance to the intent of the law itself. By putting in place central banking with its chaotic money surges and inflation, the powers-that-be guaranteed that they would end up with boom-busts cycles that would exacerbate bankruptcies. By continually centralizing power and influence via fiscal and monetary policy and an endless flow of financial regulations, the same groups created a highly centralized money industry with only a few massive players. This is the evolution of "too big to fail." And now those in Washington DC and others as well will be empowered to take these firms apart if it "seems" that they are headed toward failure. The kinds of bureaucratic blackmail and back-door infighting that such regulations promise is both expansive and disheartening. Here's some more from the article:

The law deals with the issue of banks perceived as "too big to fail," in part by forcing big financial companies to write living wills that regulators would use to dismantle them if they became insolvent. The lack of such a mechanism forced the U.S. government to treat shaky financial giants on an ad hoc basis during the crisis -- crafting massive bailouts for companies such as AIG (AIG.N) while letting Lehman Brothers (LEHMQ.PK) collapse. Financial companies, investors and counterparties are eager for details on how the resolution authority will work, including the treatment of creditors. They will also deploy substantial lobbying power during the rule-making process to influence the final regulation.

We can see from the above yet another exercise in "stakeholder" regulation in which private property is treated as a public good. The ownership system continues to be compromised on all economic levels. A small quasi-public group already has control over the price and quantity of money. Now, in some sort of vaguely coordinated way, regulators and legislators will exercise control over the life and death of the lumbering corporations that the system has produced.

It is disheartening to contemplate the place from which the United States began and where it has arrived at. The nation itself is reeling from a Great Recession and continued joblessness. Meanwhile, legislators across the country and especially in Washington DC continue to elaborate on the failed system of regulatory democracy that produces only further centralization of power without successfully anticipating or helping to avoid a single major crisis.

Conclusion: The democratic regulatory meme is one of the most persistent and successful of all power-elite dominant social themes. But it has been in place for over 100 years now and practically speaking has not exhibited success. Regulation, in the modern era, therefore, can increasingly be seen as a way-station to tyranny as there is little that is sensible to support its continued application but much that encourages increasingly authoritarian excesses. When an erstwhile republic comes to the point where "regulation" is passed that allows the government itself to monitor larger entities for "failure" and threaten them with liquidation, one must begin to wonder whether the "point of no return" has been reached between what was private enterprise and is now merely an evolving, merciless Leviathan.


Thorium Cures the Free Market

Wednesday, September 01, 2010 – by Staff Report

Barack Obama

Obama could kill fossil fuels overnight with a nuclear dash for thorium ... If Barack Obama (left) were to marshal America's vast scientific and strategic resources behind a new Manhattan Project, he might reasonably hope to reinvent the global energy landscape and sketch an end to our dependence on fossil fuels within three to five years. Dr Rubbia says a tonne of the silvery metal produces as much energy as 200 tonnes of uranium, or 3,500,000 tonnes of coal ... Dr Rubbia says a tonne of the silvery metal – named after the Norse god of thunder, who also gave us Thor's day or Thursday – produces as much energy as 200 tonnes of uranium, or 3,500,000 tonnes of coal. A mere fistful would light London for a week. Thorium eats its own hazardous waste. It can even scavenge the plutonium left by uranium reactors, acting as an eco-cleaner. "It's the Big One," said Kirk Sorensen, a former NASA rocket engineer and now chief nuclear technologist at Teledyne Brown Engineering. "Once you start looking more closely, it blows your mind away. You can run civilisation on thorium for hundreds of thousands of years, and it's essentially free. You don't have to deal with uranium cartels," he said. – UK Telegraph

Dominant Social Theme: Just another energy solution?

Free-Market Analysis: We have lost track of the new energy solutions being offered on the Internet, which is certainly large energy companies' worst nightmare. Solutions abound from cars that run on water or natural gas to more obscure and less immediately comprehensible presentations (many on Youtube) that involve the Universe's deeper "secrets." None of these seem to make an impact somehow, though at least a few of them are evidently and obviously workable, even on a mass scale, if given the chance. The dominant social theme here seems to be "don't look now," as the major media gives alternative energy short shrift unless it is the green kind.

And that is the point in our view. The energy conversation in the West has been badly compromised. First of all Western energy supplies are dominated by a handful of hyper-sized oil companies. Second (in our view) energy supplies have continually been manipulated via the Green movement itself; there is considerable evidence (as we have tried to show in past articles) that the oil companies helped fund the "conservation" movement of the 20th century in order to limit supplies and places to drill. This created a kind of artificial scarcity and reduced known supplies of oil. It also created barriers to entry as many big finds are discovered offshore these days where only the lagest entities can afford to drill.

The manipulation of the market in the 21st century saw the rise of yet another movement that we may refer to as Peak Oil – the idea the world was running out of fossil fuels and would soon starve in the dark. These movements, the conservation movement and Peak Oil were among some of the most perfect power elite dominant social themes every floated. They were highly-tuned, fear-based promotions designed to drive believers into waiting arms of elite-created, authoritarian solutions, many of them globalist in nature. Eventually, these two movements would be joined by a third promotion called global warming.

Together, these three promotions constituted an intellectual backbone for a rigorously authoritarian command-and-control structure. In fact, the "Smart Grid" concept that the Bell has reported on is a response to the hysteria over energy consumption. Smart Grid seeks to monitor every aspects of a homeowners energy consumption and the idea is to acquire a comprehensive data base of the person's energy habits and general lifestyle. The result is supposed to be a more efficient use of energy at the consumer level; in practice Smart Grid will simply create even more legal intimidation and new kinds of criminalization.

Those involved in these fear-based memes are still trying to move ahead with them, though they are having a difficult time, in large part due to Internet-based exposures, especially of the faulty figures underlying global warming. Just yesterday another expose of bad global warming science hit the mainstream media. Here's how the UK Daily Mail covered it:

Climate change lies are exposed ... The world's leading climate change body has been accused of losing credibility after a damning report into its research practices. A high-level inquiry into the Intergovernmental Panel on Climate Change found there was "little evidence" for its claims about global warming. It also said the panel had emphasized the negative impacts of climate change and made "substantive findings" based on little proof. The review by the InterAcademy Council (IAC) was launched after the IPCC's hugely embarrassing 2007 benchmark climate change report, which contained exaggerated and false claims that Himalayan glaciers could melt by 2035.

The panel was forced to admit its key claim in support of global warming was lifted from a 1999 magazine article. The report was based on an interview with a little-known Indian scientist who has since said his views were "speculation" and not backed by research. Independent climate scientist Peter Taylor said last night: "The IPCC's credibility has been deeply dented and something has to be done. It can't just be a matter of adjusting the practices. They have got to look at what are the consequences of having got it wrong in terms of what the public think is going on. Admitting that it needs to reform means something has gone wrong and they really do need to look at the science."

The global warming promotion has been so badly battered that the mainstream media cannot avoid covering the falsehoods anymore. But the larger problems associated with these promotions remain; most important is the significant reduction in understanding how a large marketplace works. The energy market itself is so deep and complex – worldwide – that almost certainly a solution would emerge were a clear energy drawdown to actually occur.

In fact, there are plenty of unused and under-utilized solutions, as this latest report on thorium would tend to show. If thorium can be used as an efficient power source, then many of the current energy scarcity problems that are being perceived might tend to go away. But reading the feedbacks to this article posted at the UK Telegraph is a useful exercise. We see already arguments mustering against it.

There are posts that mutter darkly about how even if thorium proved to be an extraordinarily successful fuel, it would only be applicable at a power-station level, leaving the utility of oil (and growing lack of product) untouched. One can only conclude from such statements that almost no free-market venture is going to be considered an anodyne for energy scarcity. For Peak Oilers, the market is a static environment that provides problems such as pollution but not solutions.

Thorium is not the only potential solution to energy problems. But it is hard to be overly optimistic about how quickly it might penetrate the larger energy grid – assuming its promise was realized – given the choke-hold of modern energy companies. Ironically, from our point of view, the energy conversation is one that is most easily resolvable via education about free-markets and supply and demand. It is a sad testimony to Western public education, that generations of otherwise intelligent individuals have grown up understanding so little about economics.

Conclusion: There are plenty of solutions to energy issues (were there problems to begin with) that can be brought to bear. The free-market is a wonderful tool even though modern-day citizens of the West have been taught to fear its putative "greed and waste" via meretricious elite fear-based promotions. It is only when people begin to reach a consensus about the corporate manipulation of energy supplies and the benefits of the Invisible Hand that the conversation itself will grow more comprehensible and, ultimately, rewarding.

Note: The Daily Bell, being free-market oriented does NOT endorse a "Manhattan Project" for thorium. The point in citing the article was only to show that there are plenty of energy solutions that have not entered what is actually in some sense a state-controlled and manipulated energy market. The Bell would be in favor of comprehensive deregulation that in our view would be an effective way of ensuring these additional solutions were offered. ]]> Appenzell Daily Bell GoldSpeculator http://www.gold-speculator.com/appenzell-daily-bell/37213-dc-begins-bust-up-thorium-cures-free-market.html <![CDATA[WSJ Discovers the Austrians & Boettke – but not the Mises Institute]]> http://www.gold-speculator.com/appenzell-daily-bell/37058-wsj-discovers-austrians-boettke-but-not-mises-institute.html Mon, 30 Aug 2010 22:47:24 GMT Monday, August 30, 2010 – by Staff Report


Peter J. Boettke of George Mason University is the emerging standardbearer for a revived Austrian school of economics. But the 50-year-old professor of economics at George Mason University in Virginia is emerging as the intellectual standard-bearer for the Austrian school of economics that opposes government intervention in markets and decries federal spending to prop up demand during times of crisis. Mr. Boettke, whose latest research explores people's ability to self-regulate, also is minting a new generation of disciples who are spreading the Austrian approach throughout academia, where it had long been left for dead. To these free-market economists, government intrusion ultimately sows the seeds of the next crisis. It hampers what one famous Austrian, Joseph Schumpeter, called the process of "creative destruction." Governments that spend money they don't have to cushion downturns, they say, lead nations down the path of large debts and runaway inflation. – Wall Street Journal

Dominant Social Theme: Finally, someone takes up the humble cudgel of Austrian finance.

Free-Market Analysis: Peter Boettke is a terrific spokesperson for Austrian economics and has been at it for years. He deserves all the credit he can get for being in the right place at the right time – and for being correct about economic history as well. We here at the Bell wish we had interviewed him already. He's a brilliant scholar and apparently a nice fellow to boot. But this Wall Street Journal article is another loopy piece of writing that shows fully – and once again – how unsophisticated the mainstream economic conversation really is. We cover elite promotions here at the Bell, but we don't see a meme here so much as ignorance, perhaps willful. We'll try to explain ...

The last time we wrote about Austrian economics and the Wall Street Journal it was in the context of a series of reports about up-and-coming young thinkers grappling with issues such as why mainstream economists had failed to see the growing financial crisis. We pointed out that proponents of the Austrian school had tried for years to sound the alarm and failed. What was interesting to us was that the Journal was pondering such speculations without ever mentioning this. It might have been acceptable 20 years ago, or even 10 years ago. But one merely has to do a quick search of the 'Net to find out all about the Austrian school and those who anticipated the Great Recession.

Just recently, we wrote about an article in Time Magazine that did the same thing. In an article entitled "Is Economics Ideological by Nature?" Time's economic writer Ms. Barbara Kiviat wondered about whether economics was a "real science." She turned to a new book by economist Roger Backhouse – The Puzzle of Modern Economics: Science or Ideology? that she wrote "helped her out."

Kiviat admits in the article that Backhouse had made her see that econometric projections are wrong because "people aren't always rational." We were puzzled and pointed out in an article of our own that people take Misesian human action to avoid problems and these actions make human behavior unpredictable. But for Kiviat and Backhouse trend projections tend to be inaccurate because people are influenced by "things like advertising and a sense of fairness." Even were this true, to write about econometrics without mentioning Austrian economics is incomprehensible in this day and age. Ms. Kiviat is just beginning to think about these issues? How is that possible? You can see the article here:
Time Figures Out Economics – Not!

And now comes this Wall Street Journal article on Austrian economics and professor Boettke. It's a great profile of a deserving subject. But on a deeper level, all it really tells us is that Rupert Murdoch, owner of the Journal and many other prestigious media properties around the world cannot ignore the subject anymore. The Journal, like any other mainstream media property, has until recently treated proponents of Austrian economics as the equivalent of academic lepers. Almost zero coverage. But now it is apparently impossible to ignore Austrian economics, the school's foundational beliefs and its overwhelming success. Rupert et. al scramble to catch up; and, yes, gradually the coverage HAS been increasing. Hence the article, and perhaps others like it.

In fact we are not surprised. The lack of prior reporting perhaps explains the current poor quality. Ignorance again. Throughout the latter part of the 20th century, the mainstream media avoided any mention of Austrian economics. FA Hayek, Ludwig von Mises – the entire Austrian school was missing in action. Today, it is just the opposite. Austrian economics on the Internet is fully the template of modern economics in America.

Congressman Ron Paul (R-Tex), one of the most influential politicians in America these days is an Austrian. His son Rand Paul, who is running for Senator in Kentucky, can probably to be considered an Austrian, or near to it. Peter Schiff who ran for Senator in Connecticut and has appeared on numerous national media programs is an Austrian. There are likely more cites of the Ludwig von Mises and his protege FA Hayek on the Internet than John Maynard Keynes. The "hard money" crowd with its hundreds, if not thousands, of Internet websites is pro-Austrian.

The Journal's corporate heart is not collectively in its work. While those who work there have commenced writing about the Austrian school, the institution as a whole is not yet up to speed. This is the only explanation that occurs to us (other than outright antipathy) given that the Journal can present an article about the modern history of the Austrian school (and Boettke) without a single mention of the global on-line Ludwig von Mises Institute or even Lew Rockwell who founded it along with his mentor Murray Rothbard. This is a little bit like writing a history of America without mentioning founding fathers. It is not just a reportorial lapse; it is a lacunae the size of a continent. We have interviewed prominent Mises' fellows at the Daily Bell and even a cursory review of the Internet would yield a plethora of information about the Institute.

And then there is this from the article: "To these free-market economists, government intrusion ultimately sows the seeds of the next crisis. It hampers what one famous Austrian, Joseph Schumpeter, called the process of 'creative destruction.'" Say what? Schumpeter is not in any sense a mainstream Austrian, free-market economist. A simple random search of the Internet would confirm this. What is it that the Wall Street Journal brain-trust doesn't understand about a keystroke? It's a kind of willful ignorance. They are generally not enthused.

Time magazine writes an article questioning econometrics without ever mentioning von Mises or Human Action. The Wall Street Journal writes an article about the history of modern Austrian economics without ever mentioning the Mises Institute – or the many free-market-oriented luminaries who are fellows there – and then turns Schumpeter into a full-fledged Austrian. This is not reporting in our view. Twenty years ago, or even ten, it might be comprehensible. But today it's ... indescribable.

Conclusion: These mainstream media writers and editors are paid six figure salaries. They have all the latest computer and Internet equipment. Even the briefest of Internet searches would educate them. It has to do with the culture of these media enterprises themselves. They lack practice with a free-market vocabulary. It all brings to mind Samuel Johnson's misogynistic but pithy remark in response to James Boswell's comment that he "had been that morning at a meeting of the people called Quakers, where [he] had heard a woman preach." Johnson's famous response: "Sir, a woman's preaching is like a dog's walking on his hind legs. It is not done well; but you are surprised to find it done at all."

Note: Because we still cannot quite believe what we have read, we are adding this cautionary addendum. It may be that the versions of the Boettke article we have scrutinized (at the Journal site itself and elsewhere) are somehow truncated and that perhaps we have not seen a latter portion of the article that mentions the von Mises Institute (or other groups such as the Independent Institute, etc.) and corrects the Schumpeter Austrian error. If so, we welcome feedback on this point, though it still will not change our modest, collective mind about the general shoddiness of mainstream coverage when it comes to Austrian economics. The Journal in particular (Time, too), even if its articles have mentioned the Mises Institute and other such Austrian enterprises in the fairly-recent past, can surely do a better job, as this article shows ]]> Appenzell Daily Bell GoldSpeculator http://www.gold-speculator.com/appenzell-daily-bell/37058-wsj-discovers-austrians-boettke-but-not-mises-institute.html BIS: Trading With the Enemy - The Whole Story http://www.gold-speculator.com/appenzell-daily-bell/36991-bis-trading-enemy-whole-story.html Mon, 30 Aug 2010 07:16:50 GMT This article presents the truth about the Swiss Nazi gold controversy and the involvement of U.S. banks and the Federal Reserve during the Second World War. This report opens up the sordid record of the American financial establishment and how our central bankers put trade before patriotism, profits before our troops during times of war and how this relates to our nation today in the "so called" latest conflict, The War on Terror. This special report links Switzerland's sometimes regrettable World War II activities with specific evidence suggesting a possible revenue trail from the Nazi gold sales to the Bank for International Settlements, located in Basel, Switzerland. This "bankers bank" was operated by the central banks of numerous other countries including certain American banks and possibly even the Federal Reserve! Here in this report we trace the profits and financial accountability of all parties involved in these wartime activities and urge that these be investigated. Although Switzerland, certainly looked after her best interests during the war, we believe the finger of blame and any financial restitutions should be shared by all nations and institutions involved in this web of deceit, even those parties in the United States. Further, we believe the nation of Switzerland has been made a convenient scapegoat by special financial interests in the United States for competitive reasons rather than any basis in fact. We call on the U.S. financial institutions associated with the Nazi gold cover-up and gold trading profits to come clean on their involvement. There is blame enough for all to share. Let's get to the bottom of the whole Nazi gold trading issue ... the whole story. *Trading With the Enemy * As the lone neutral democracy in Europe surrounded by the Axis powers, compromises were made by Switzerland to prevent invasion. Although stolen Nazi gold was liquidated at the Swiss National Bank, the deal making and trail of revenue from these activities may have flowed through the Bank for International Settlements (BIS) to their stockholder banks in New York City and Chicago. While not a pretty picture of how the financial elite made money during the war, it is obvious that the guilt and financial accountability for the wartime Nazi gold activities extend far beyond Switzerland, which I believe has been made a scapegoat in this controversy by special financial interests in the United States. Other BIS central bank owners, U.S. banks owning BIS stock fronting for the Federal Reserve, and possibly even the Federal Reserve System itself should be prepared to accept their share of the blame. Following are questions to be answered before the files are closed on the issue of the Nazi gold trading and "so- called" lost Swiss accounts. ("What does it matter, whether Switzerland has been able to give us the commercial advantages we desire, or has given too many to the Germans, to keep herself alive? Switzerland has remained a democratic state, standing for freedom in self-defense among her mountains, and in thought she has been, in spite of race, largely on our side." – Winston Churchill, 1944) It is clear that horrible injustices, as are characteristic of any war, were committed during World War II. However, those committed against the Jews (http://java_script:void%20showWindow(450,600,'../WindowlessArticle.asp?nid=722');) by the Nazi government were so abhorrent, they inspire an immediate emotional response from most people who regard the complete injustice of the situation. Particularly in light of revelations regarding possible Nazi gold and money stores placed in Switzerland by the Nazi government, many people around the world are prone to jump to the conclusion that Switzerland and Swiss banks, aided by their historic secrecy laws, have profited from millions of dollars of assets pilfered from Jewish victims of the Holocaust. Indeed, these victims were shamefully stripped of all material possessions, down to the heisting of gold teeth out of the victims' mouths in order to fund SS accounts and the German war effort. Ironically, however, the Swiss Banking Secrecy Law, which was enacted before the war ever began, was originally meant to protect those German citizens, including many wealthy Jews, who were hiding their assets in Switzerland to escape the far-reaching hand of the National Socialist government in the German Reich. Now persons and law firms seeking restitution on the part of these victims of Nazi crimes during the war are certain that these secrecy laws are allowing Swiss banks to benefit from these assets, which rightfully belong to Jewish victims and their heirs. There are many points not fully understood about the situation. Firstly, a majority of the gold, which the German government did exchange in Swiss banks during the war, came from the treasuries of conquered nations, not individual victims. This gold was certainly not generally funneled through any of the commercial banks now in existence in Switzerland. Most was done through an international bank located in Basel, a cooperative bank set up by the central banks of several countries, including the United States. Through this bank, The Bank for International Settlements (BIS), the Swiss National Bank and financial institutions and central banks of many other countries were closely tied financially with Germany and the other Axis powers. Additionally, most of the profiting done during the war was not accomplished by banks or countries in general, but rather by unscrupulous businessmen and the financial elites of many countries. By hedging all bets and covering all angles, they sought to assure themselves of profits during, as well as after, the conflict. A majority of the gold the German government did exchange in Swiss banks during the war came from the treasuries of conquered nations, not individual victims. While Switzerland did make concessions to Germany during the war, so did many other countries, some of them supposedly Allied nations, not neutral ones, like Switzerland. *The Bank for International Settlements – The Key Player* To understand this web of duplicity and deception one must begin with the Bank for International Settlements (BIS), the central bank for central banks, as it has been called."(1) This bank was set up by the victorious allied nations after World War I to allow Germany to repay the excessive war reparations placed upon them. Germany's economic system, strapped beyond reason by overwhelming reparations payments, was in a shambles. The debts other nations carried because of World War I, in addition to the depression and generally terrible economic conditions around the world, combined for a desperate world financial condition. (BIS, Bank for International Settlements, World War Two, 1929 Young Conference, J.P. Morgan) It is ironic that these extreme reparations helped cause the hyperinflation in Germany that brought Hitler to power in 1933. Then later the BIS, originally established to drain wealth out of defeated Germany, was used by Hitler during World War II as a major source of revenue for the war effort. Realizing that the devastated German economy was not in the best interests of any country, world leaders combined forces trying to solve the problems. In several separate conferences, most notably the Young Conference, which was convened in 1929 to solve the difficulties surrounding Germany's reparation payments, participants outlined guidelines for establishing an international bank, at the behest and acting under the authority of central banks throughout the world. The founding members of the BIS were the central banks of Belgium, France, Germany, Great Britain, Italy and Japan with groups of commercial banks from the United States and Japan, neither of which wanted their central banks to be directly involved. In the USA, then, a banking group, which included J.P. Morgan & Company of New York, The First National Bank of New York, and the First National Bank of Chicago, represented the country. (2) Interestingly, Owen Young, key in developing the plan for the BIS (3), was a banker for the J.P. Morgan Group. These banks are significant, as they were key to providing their clients access to trade in foreign countries during the Second World War, when all such trade should have been stopped by law. After the Young Conference, it took several other meetings to establish the bank. During these meetings the outline originally set forth in the Young Conference was altered to adjust to the political and economic facts of the chaotic world of 1930. One of the difficulties was deciding how much control the governments should have over the bank, and how much opportunity to interfere in its operations. (4) In fact, in 1930, Paul Einzig speculated, "Opinions are divided between those who fear that the bank will become a power independent of those governments to which it owes its existence, and those who are concerned lest it remain too much under the control of the political authorities. (5) In the end, both concerns proved to be true; directors from Germany were always very much under the control of its political leaders, while directors from other nations, including the American group, worked completely independent, and in fact, against, their own governments, in some situations. The area of the bank was defined thus: "To promote the cooperation of central banks and to provide additional facilities for international financial operations; and to act as trustee or agent in regard to international financial settlements entrusted to it under agreements with the parties concerned." (6) At the time of the bank's founding in 1930, this meant handling reparations payments and acting as the holding agent for the German annuities used to pay war debts twice yearly. However, by the time the "Hoover Debt Holiday" ended the need for the payments in a few years, the Bank for International Settlements was firmly ingrained, and had every motivation to stay that way. *The BIS – Always Business As Usual* Very significant in the original constituent charter of the BIS, is "said power" number 10, as follows: "The Bank, its property and assets and all deposits and other funds entrusted to it shall be immune in time of peace and it time of war from any measure such as expropriation, requisitions, seizure, confiscation, prohibition, or restriction of gold or currency export or import, and any other similar measures. (7) In other words, whatever happened in the world outside, inside the BIS it was going to be business as usual. In any case, the governors of these banks, or in the case of the commercial banking groups, an appointee, were on the board of directors of the BIS. Germany was given two extra seats on the board of directors. The board consisted of the governors, or heads, of the seven central banks/commercial conglomerates represented; also seven more people, "representative of finance, industry or commerce" and appointed by the governor of each country's bank; and one extra representative from Germany and France, for a total of sixteen members. This makeup of the board tended to make it difficult for the more distant non-reparation countries to have any influence unless they could unite with the countries historically and geographically closer to bank. Therefore, the countries of Germany, Italy and France had a great deal of influence at the BIS. (8) *The Banker's Bank* Of note in the statues of the BIS is that it is allowed to: “Act as an agent or correspondent of any central bank; (and) arrange with any central bank for the latter to act as agent..." Additionally, the BIS, "may enter into special agreements with central banks to facilitate the settlement of international transactions between." "For this purpose it [the BIS] may arrange with central banks to have gold earmarked for their account and transferable on their order, to open accounts through which central banks can transfer their assets from one currency to another and take such other measures as the Board may think advisable within the limits of the powers granted by these statutes." (9) Therefore, the BIS was ready to lend against gold without delay, and could sometimes reduce steps of utilizing gold credit from four steps to one over traditional ways, besides saving much in time and commissions. (10) Image: http://passportira.com/banners/CB-RothIRA-AdBanner2-120x600.jpg (https://passportira.infusionsoft.com/go/unleash/appenzel) Another item of note is that transferring gold to the account of the BIS did not necessarily mean it had to be physically moved by a central bank to the BIS. It would, however, be earmarked in the vaults of a central bank "for the BIS," when in reality, it was providing gold credit for another client country of the BIS. Therefore, the BIS name on the holding would grant it particular immunity, and at the same time, conceal the actual ownership of the gold. (11) In her treatise on the BIS, Eleanor Dulles commented that the representatives of several central banks and financiers from many countries met at the BIS and worked together in a friendly way, but "it is also true that they were seriously limited by political factors." (12) As Einzig said, "As to weaknesses and limitations ... the BIS is exposed to the pitfalls of political intrigues. Its important decisions are liable to be government largely by the necessity of political compromise. (13) This political compromise was necessary, even though the bank was forbidden to ever make loans or have deposits in the name of any government. The central banks were responsible for any monies that would be loaned or used by their countries. Thus the accounts at the BIS were held as "Central Banks for the account of others," thereby avoiding direct dealing with the governments. (14) However, these financiers were closely tied with each country's political leaders, and would exercise their influence in behalf of their own countries. *Per Jacobson, Emil Puhl, Reichsbank, Federal Reserve, German invasion of Switzerland* The bargaining was taken with good nature by the BIS board. For there was a very friendly and close-knit camaraderie joining the members of the BIS board of directors and staff of the BIS. They knew they could discuss their often similar and grim problems with one another. They could get advice, moral support, and help. (15) By the time war broke out in 1939 with the invasion of Poland, the ties and warm friendships binding this financial elite were too strong for so small a thing as a war to break. Erin Jacobsson, daughter and biographers of Per Jacobsson, the economic director of the BIS and influential policy maker there, said, "In the 1930s, the Bank for International Settlements functioned mainly as a club for central bankers; a club with a serious purpose ... ” "PJ (Per Jacobsson) loved the monthly meetings with the increasingly warm companionship, the exchange of ideas and opinions that took place, the inside information ... He found that he was dealing with influential people, and that, if he could convince them of the expediency of a policy, action would probably follow. (16) While Jacobsson was concerned with economic policy, the same fact held true for trade policy or anything else important to the task of making money. These people at the BIS and their friends could make things happen. These directors and board members kept coming to the BIS, even during the war. According to Jacobsson, the governors of nearly all the European central banks were regular visitors. This included the governors of the central banks in France, Hungry and Romania, Italy, Spain and Portugal, as well as regular visits by the vice- governor of the Reichsbank, Dr. Emil Puhl, especially during the second half of the war. This fact is significant in that the BIS gave Dr. Puhl a reason to be in Switzerland. Here he met, virtually unnoticed, with influential bankers from Portugal, a "neutral" country who did important trading with Germany, as well as contacts from the U.S. and other allied nations. Besides "business" of banking and trade, there was the "inside information" passed from one of these "friends" to another passed from one of these "friends" to another. PJ's brother-in-law was Sir Archibald Nye, Vice-Chief of the Imperial General Staff for the British Army. There is a record of at least one bit of information passed along by PJ to Nye, which was used to the benefit of British intelligence. There are family rumors of many other such messages." (18) If intelligences were flowing from the Axis powers to the Allies, then we can be absolutely certain the reverse was also true; probably many pieces of strictest intelligence which should never have been disclosed probably went in the other direction. *The Swiss Role in the Gold Transfers* Keep in mind the banks that were considered "Central Banks" – the Reichsbank in Germany, Central Bank of France, the Central Bank of Italy, the Swiss National Bank, as well as the First National and J.P. Morgan banks in the United States, (fronting for the Federal Reserve) come to mind. One can see how simple it would be for these members of the BIS board of directors to facilitate large exchanges of gold into Swiss francs and other currencies or surreptitiously channel large payments for war goods between citizens of countries who were at war, therefore making it appear that they were not trading with each other during the war, when, in fact, they were. Although this was not the reason for these provisions being put into the statutes of the bank in the beginning, they did facilitate the ability for secret and consistent trading with the enemy on both sides of the conflict. Yes, Switzerland is the location where most of the looted and legitimate Nazi gold sales were handled. But the reasons have more to do with Switzerland's neutrality than with any attempt to accommodate the Germans. At the outbreak of the war in Europe, President Roosevelt froze the gold holdings of most of the belligerent nations that were on deposit at Fort Knox here in the United States. The Swiss National Bank also held gold deposits for most major nations including the U.S. but however due to Swiss neutrality, Switzerland continued to transfer gold between all nations as the respective national governments dictated. Remember, as a major financial center, Switzerland alone in the world has never imposed exchange controls on its citizens, outside world investors or governments. As a neutral nation during the war, with all their Swiss National Bank storage vaults open to all trading nations during war or peace, the Swiss continued gold transactions and trading with all governments with gold on deposit at the Swiss central bank. So, if Germany wanted to sell gold to Portugal for grain or fuel, for example, the Swiss National Bank basically moved the gold from Germany's area of gold in the National Bank vault to the section reserved for Portugal's gold. The same type of transactions were carried out for all nations with gold on deposit including the United States. This is how Germany's gold was transferred, sold and liquidated to other governments as payment for agricultural, manufacturing and war materials. It's logical to assume that the Swiss National Bank charged a fee for this service; so the critics of Switzerland are correct. Switzerland helped launder looted Nazi gold but this was the result of international transactions and not some sinister plot to help the Nazi regime. Chances are some of this gold came from holocaust victims and from looted commercial and central banks of conquered nations but as we go into more of the story, we will learn how all the world's major central banks benefited from these transactions. *Switzerland's Unique & Honorable Role During World War II* There is no question that Switzerland did trade heavily with Germany during the war. It is apparent that to survive and forestall a Nazi invasion, Switzerland was forced to produce for the Third Reich. For example, in Oerlikon, located between Kloten airport and downtown Zurich, some of the best anti-aircraft guns in the world were produced during the war and some were exported to Germany. But let us set the stage for the tiny neutral nation of Switzerland during World War II. They have little in the way of natural resources and much of its land is totally unusable for agriculture. It's an exporting nation, very dependent on the exchange of manufactured goods with other countries. Switzerland must import all fuel, including coal and oil, plus much of its food. The country is landlocked and their only direct trading route for ocean commerce is through Germany. All the shipping of Swiss exports are sent down the Rhine river northward to the North Sea. During the difficult period of World War II, Switzerland stood alone in Europe. It stood as a single democracy surrounded by the victorious Axis powers; to the north was Nazi Germany, to the east was the Osterrich, formerly Austria and now a part of the German Reich, to the west were the German-occupied areas of France; and in the South was Hitler's fascist ally, Italy. The only window of trade not controlled by the Nazis was a narrow strip of territory stretching west from Geneva into the Vichy Republic of France. Even this export avenue was cut off in 1942, when the German army occupied the remainder of France. Switzerland was under constant threat of invasion during the war, although the German plan to invade was only close to activation twice, first in 1940 and later again in 1943. The real threat of invasion was in 1943 after the allied forces conquered North Africa from German and Italian armies. Hitler was concerned about Switzerland being located between an increasingly wavering Italian ally putting German troops at risk of allied invasion. If allied forces invaded Italy, German forces and reinforcements could be easily cut off as there were only three rail passes to access Italy from the German Reich. Austria's Brenner Pass was very vulnerable to allied air attacks and the other two were through Switzerland. This placed Switzerland between Germany and the survival of her forces in Italy. *Hitler Did Not Invade Switzerland for Three Reasons:* The Swiss plans were to fight to the death, if necessary, in the Swiss Alps where the vital north-south tunnels and communication links were located. If invaded the destruction of these tunnels would have been imminent and these plans were well known to the Germans. The demolition of these rail lines and tunnels would have cut off German access to their forces in Italy. Swiss manufacturing played a major role in the German war effort. In case of invasion, the Swiss army planned to fight only a delaying action in the populated Metelland region, the Swiss industrial area. Any fighting there would have destroyed the manufacturing capability of the Swiss thus affecting their exports to the German war effort. Swiss military and industrial exports were exchanged for badly needed fuel oil, coal, and food, and yes, sometimes, German gold. Swiss exports helped held off invasion and maintained their independence unfortunately at the price of accepting gold from Germany. The third, and most important reason, Germany did not invade Switzerland was the Bank for International Settlements was located in Basel, Switzerland. The BIS helped conclude the deals for much of the looted gold sales and transfers. Germany's invasion of Switzerland would have cut off their access to their forces in Italy, ended Swiss exports, closed the German gold window with the BIS and stopped the gold sales utilizing the neutral vault location at the Swiss National Bank. The price of Swiss invasion was just too great for Germany to bear. *The Secret Federal Reserve Role Regarding the Nazi Gold* Because of fear of Congressional overview and disapproval, the Federal Reserve had wisely not become an official stockholder of the BIS. Instead they had several major American banks front for the Federal Reserve as the official owners. Even though the Fed was technically not a member of the BIS, when PJ made a trip to the United States in 1941 at the request of BIS president Thomas McKittrick, (surprisingly a United States citizen), he met with and discussed post-war -debt and such things with the Federal Reserve President Allen Sproul. Surprisingly, the Federal Reserve remained listed in the Rand McNally directory as a correspondent bank for the BIS in Washington from Pearl Harbor on until the president. (19) Additionally, the Federal Reserve had the power to veto operations in America, and the BIS operated on principles which met the approval of those in charge of the Federal Reserve. (20) In 1931, the Federal Reserve began active participation in the BIS, by taking in credits from Austria and Hungry. More connections developed, and soon, more than two-thirds of the BIS funds in America were held at the Federal Reserve. Therefore it seems clear the Fed profited from transactions taking place in the BIS. However, it was the U.S. commercial banks, which had no injunction to protect the public welfare, but only the mandate to make a profit, which had the voting control in the BIS. They used their connections there to make money, regardless of how they did it or who was hurt in the process. Illustrating the close ties of BIS board members, regardless of nationality: In 1942, PJ was invited to visit the Reichsbank, as well as the Bank of England. He cleared the trip to Germany with Emil Puhl, asking and taking Puhl's advice on which cities to travel through and how to arrange his stay and speech in Germany. In his defense for taking Puhl's advice, Jacobsson said, "I didn't say one world in argument. I accepted what Puhl had said as definite. I knew full well to what extent the future of the BIS depends on Puhl's possibilities of holding the fort in Berlin." PJ also informed Puhl of his brother-in-law's appointment as Vice-Chief. Puhl responded, in part, "...These things are much easier to handle if one knows in advance." (21) After his trip to the U.S., Jacobsson reported to Puhl the attitudes and opinions of Americans regarding the war and the Germans. (22) Members of the BIS had fierce loyalty to one another and to the bank itself. They were intent that the BIS survive, and would do what was necessary to make sure it did. And it did survive largely because the central bankers, who knew it best, decided that they needed the institution. (23) While no one officially determined that the BIS should supplant other centers for discussion, there was a growing tendency for monetary and banking affairs to be referred to Basel. Because of this it became increasingly natural for the Central Banks to find out what was happening in other countries in times of crises. Inquiries by telephone could give them information as to gold movements and exchange rates in a number of countries. They could sometimes get the most direct news from New York through Basel. And each country's own representative in Basel could keep them in touch with the shaping of plans and theories, if they wished to do so. (24) Ironically, Dulles speculated on what might happen to the BIS in the case of war. "It is necessary for those at the BIS to act as if the treaties and exemptions regarding the Bank would be respected, even if there should be a break in the diplomatic relations between countries ... There is no reason to suppose, however, that even war would interfere completely with the work of the Bank. Governments at war would continue to need foreign exchange, and there is grounds for considering funds would be safer with the BIS than they would be in any one center. They should enjoy certain immunities and would be to a certain extent anonymous, and might therefore be less subject to seizure ... (25) Indeed, her words proved to be prophetic. According to Jacobsson, "The surprising result of the evacuation (of the city of Basel during the war) was the harmony in which the mixed international staff of the BIS, with belligerents on both sides, managed to live side by side, in the closest of quarters, with no dissension ... At the outbreak of war, all the staff had been told, by their own central banks, to work amicably together so as to keep the BIS running... (26) And keep it running they did. With the structure in place allowing for secrecy and quick communication between members, the BIS became a key factor in allowing "Business as Usual" to continue during the war. *Who Really Traded With the Enemy?* In the years leading up to and during the war, huge American business conglomerates and their corporate leaders were in cooperation with Nazi corporations. These connections continued even after Pearl Harbor. These companies were represented nationally by National City Bank or Chase National Bank, and by the Nazi attorneys, Gerhardt Westrick and Dr. Heinrich Albert. And all were connected to Emil Puhl, or the Reichsbank and the BIS. (27) These names, of course, will sound familiar as one of the founding banks of the BIS and as one of the directors of the BIS was Puhl. The other figures are connected to one another and thus develops the web of duplicity and illegal dealings which characterized the war years. For example, the first BIS president was Gates W. McGarrah, a former employee of both Chase National Bank (key in the Trading with the Enemy transactions) and the Federal Reserve. The second BIS president was Leon Fraser. He had many contacts high up in the business world, but no previous background in finance or economics. Still, when he left the BIS presidency in 1935, he took over as president of First National Bank of New York, one of the founding BIS banks. (28) We can see how all of these ties are interconnected, and allowed for the corruption which took place. *Nazi gold, Czech gold, Thomas McKittrick, Bretton Woods Conference* In March of 1938, when the Nazi's marched into Vienna, much of the gold of Austria was looted and packed into vaults controlled by the BIS. German board members, of whom there were three, asked that the seizure not be officially discussed, and it was not. The "neutrality" and close friendships of the BIS began at once to cover up the Nazi gold moves. The gold was immediately credited to Reichsbank accounts, where they could then receive credits in any country's currency from the BIS. (29) March 15, 1939 brought another dark day to the BIS. The Nazis invaded Czechoslovakia, and storm troopers entered the Czech central bank, holding them at gunpoint, requiring that they order the transfer of the national store of gold, which they had put for safekeeping in a BIS account in the Central Bank of England. The Nazis wanted the gold transferred to the Reichsbank account. After some discussion, the transfer was carried out. The entire Czech store of gold was passed on for the use of Hitler's war machine. In a feeble defense, Jacobsson said, "[Once the war broke out] the BIS had immediately to find means to remain in business. [Neutrality rules] at the bank included special protective measures in respect of all transactions, and especially gold transactions, from occupied countries ... Therefore there could be no repetition of the incident in March 1939 when the BIS received an authentic order to transfer Czech gold to the German Reichsbank, (and) only later discovered that the order had been extracted at the point of a pistol. The Czechs never held this against the BIS." As further evidence, she points out that the Czech delegation never voted to dissolve the BIS in later meetings, even though a certain Paul Einzig, editor of The Financial News, (and incidentally, author of a comprehensive book covering the formation of the BIS) made it a major point in his attacks on the bank. Nevertheless, Jacobsson said, "The neutrality rules were strictly adhered to." (30) *Defending the Undefendable* This defense is ridiculous; it implies that the people involved at the BIS should have no idea that an order to transfer a country's entire store of gold to the central bank of another country that had just taken them over was perhaps not a voluntary order. That is impossible to believe. These were intelligent and capable men very much aware of world conditions. They were certainly aware that Germany had invaded Czechoslovakia, uninvited, therefore could have easily surmised that the order to transfer a country's entire store of gold was forced. As further evidence, Paul Einzig, who uncovered the story with the help of a contact at the Bank of England, found that English banking and government leaders denied that the transfer had even taken place, when it clearly had. Its completion was reported by the Associated Press in Switzerland on May 31. (31) One of the leaders who denied the transfer was Neville Chamberlain, the Prime Minister of Great Britain. Interestingly enough, Chamberlain was a major shareholder in the Imperial Chemical Industries, a partner if I.G. Farben, whose Hermann Schmitz was on the board of the BIS. (32) This is the same Chamberlain, of course, whose policy of concession and compromise gave Nazi Germany a huge step up on Britain when real war broke out. Now we see that the ties that bind wound around the top heads of state. Many years later when Einzig asked J.W. Beyen, who had been the BIS president at the beginning of the Czech gold scandal, if the gold was transferred, he replied that it was, "Purely technical. The gold never left England." (33) This may be true, but of course, the way the BIS did business, gold did not have to be physically transferred. The amount was simply deducted from the Czech account and credited to the Reichsbank account held in the name of the BIS, "for the Reichsbank." The gold did not have to be physically transferred. Naturally, rules of neutrality held true during the was, as Jacobsson insisted. Neutrality is treating everyone equally, regardless of politics, nationality or affluence. So all that the BIS said when it insisted that "strict rules of neutrality were followed," during the war was that they continued to trade with all countries; trading gold into Swiss francs or U.S. dollars or English pounds for the Germans … and the Americans ... and the Czechs .. .and the French ... and the Italians – everyone equally. *McKittrick, American Traitor – President of the BIS* Thomas McKittrick, was the American BIS president from the time of the Czech scandal through the war. The Italian and German governments approved his continuing as president, once saying, "McKittrick's opinions are safely known to us." Apparently, those Axis powers liked what they knew. In 1940, McKittrick traveled to Berlin, meeting with Kurt von Schroeder of the BIS and the Gestapo to discuss doing business between the U.S. and German if war should erupt between the two countries. (34) McKittrick was also president when in June of 1940, a Belgian BIS director intercepted $228 million in gold sent by the Belgian government to the Bank of France, and had it shifted to Dakar in North Africa on its way to Reichsbank accounts. Later, in 1943, he was somehow able to obtain an Italian diplomatic visa, (despite not being Italian or a diplomat, and despite the fact that the government of his country was at war with Italy) and traveled to Rome, Lisbon, then to the United States. After visiting with Leon Fraser of First National Bank of New York and leaders of the Federal Reserve, he traveled back through Berlin, exchanging intelligence with Emil Puhl at the Reichsbank. (35) Several Americans, troubled by the rumors and facts they had heard regarding the BIS, introduced a resolution to dissolve the bank at the 1944 International Monetary Conference at Bretton Woods. *HELP US SPREAD **FREE-MARKET THINKING!* Image: http://images.arbp.ch/Foundation%20Logo.jpg When truth is discovered it is difficult not to want to tell others and help to spread awareness. ARBP has assembled an international team of leading free-market thinkers to provide you with a reliable and efficient conduit through which you can help make a positive change today and for future generations. Thank you in advance for your support. We look forward to working together with you to make "real" change a reality. *DONATE NOW * *The Foundation for the Advancement of Free-Market Thinking (http://fafmt.li/)* The BIS came under attack largely for the publicized Czech gold scandal. Other abuses were less widely known, and the motion was weakened by the fact that the Czech government did not support the resolution for dissolution, and neither did the Dutch delegation (led by former BIS president J.W. Beyen) even though Holland's national gold stores had also been looted by the Nazis. Ned Brown, an American tied to the Chase and First National banks, also vetoed the resolution to disband. Nevertheless, Morgenthau saw the BIS for what it was. At Bretton Woods, he said: "I think in the eyes of the Germans, they would consider this as the kind of thing which can go on, and it holds out to them a hope, particularly to people like Dr. Schaacht and Dr. Funk, (president of the Reichsbank) that the same [associations] will continue [between the U.S. and Germany] after the war. It strengthens the position of people like Mr. Leon Fraser and some very important people like Mr. Winthrop Aldrich, who have openly opposed dissolution." (36) Finally, Morganthau's delegation approved the dissolution of the BIS. However, McKittrick began immediately on a campaign to retain it. He sent letters full of one-sided information, insisting that in the post-war period, the help of the BIS would be necessary. In all his discussions and attempts to save the BIS, McKittrick let out many incriminating bits of information about the BIS and its directors. He said the German government allow the BIS to exist and continue working because, "... In the complicated German set-up, certain men who have their central banker' point of view are in very strategic positions and can influence the conduct of the German government with respect to these matters." (Here we are, a nation actually assisting an enemy in time of war, and not only that, but stating through our Ambassador, that we stand ready to continue and extend such help ...) He admitted that a group of German financiers had been certain from the outset of the war that Germany would eventually lose, and felt their contacts on the BIS would help them arrange post-war reconstruction loans. McKittrick would not name these men, except Emil Puhl. He insisted that Puhl did not share the Nazi point of view, even though the State Department knew it was Puhl who had authorized the looting of Allied gold and its transferal to Switzerland. In addition, McKittrick also admitted that the Belgian gold was in the Reichsbank. But that it was being held in safekeeping for Belgium until after the war. He insisted that all gold transactions within the BIS would be opened for review after the war, and that the gold was all carefully segregated and documented. The books were, of course, never released. And the German regularly melted down looted gold, restamping it with a date prior to the outbreak of hostilities." (37) Despite the efforts of Morganthau and others of his mind, the BIS was not closed down, nor was it audited, as they finally resolved to do. *Emil Puhl, Federal Bank of New York, BIS, Switzerland* However, after Bretton Woods, McKittrick was under pressure from Emil Puhl to ensure that looted gold would continue to flow into Europe. McKittrick was running scared at that point, realizing he had stuck his neck way out at Bretton Woods, and did not wish to authorize direct receipt of the gold. Instead, he had the Swiss National Bank, chair by Ernst Weber, BIS director, take it into their vaults. The Swiss National Bank had promised not to receive it, so they did sometimes disguise the loot as payments to the American Red Cross and German legations in Switzerland. The U.S. State Department, in the person of Orvis Schmidt, asked the Swiss National Bank executives about the looted gold. He was told that a member of the Reichsbank, whom they regarded to be trustworthy, had to authenticate each gold shipment, validating that it was from Germany's reserves, not looted gold. This "trusted member" was none other than Emil Puhl. (38) Under pressure from the U.S. Treasury, the BIS handed over only $4 million in looted gold to the Allies in 1948, and Thomas McKittrick, whose activities Morganthau insisted, "bordered on treason," was rewarded by the Rockefellers and Winthrop Aldrich. He was made vice-president of the Chase National Bank, where he served for many years after the war. He invited Emil Puhl to the U.S. as his guest in 1950. *The Deal Makers – Profits At Any Price* Of course the BIS was never dissolved. The BIS, finding its niche in the world racked by war, thus became a clearinghouse for all kinds of under-the-table activities, both between countries and between businesses. "While the BIS bought little gold from the Nazis itself, a scant $15 million – it was a crucial facilitator, lending the laundering an aura of honor among thieves. The BIS was a central transmission place where deals were struck, where deals were struck, where the Portuguese representatives would meet the Reichsbank representatives," says Harold James, a Princeton University historian. And that's what kept money flowing into Nazi coffers. (39) In 1943, gasoline and petroleum products equaling the full capacity of the Spanish tanker fleet were traveling to Spain. From there, they were going directly to Germany. In addition to oil, sulfate of ammonia and cotton, both commodities in short supply in the U.S. were being shipped in huge amounts to Spain and from there on to Hitler. Economist Henry Waldman said it like it was: "Here we are, a nation actually assisting an enemy in time of war, and not only that, but stating through our ambassador, that we stand ready to continue and extend such help ... Spain is an enemy, and yet we help her." Although the argument from that model of honesty, Dean Acheson, was that we were supplying neutrals like Spain with needed raw materials so they would not supply such things to the enemy. It was an outright lie – both on the part of Franco in Spain, who was collaborating 100 percent with Hitler, and the part of Dean Acheson, who was collaborating 100 percent with Standard Oil and related companies to provide petroleum products to Germany. Overcoming incredible opposition, honest members of the State Department presented such evidence of collusion to the President, showing that Franco in Spain was exporting oil, platinum, industrial diamonds and liver extract (from which Germany made a tonic for fliers). All were traveling from South America on Spanish ships straight through the British blockade on American licenses. In January 1944, the British cut off all oil, gasoline and other petroleum products to Spain. This embargo, though, lasted only a few short months. The oil interests lobbied hard, pulling all their considerable weight and influence, until they were allowed to resume shipments. In return, Franco agreed to expel Nazi agents from Spain, and did a half-hearted job of it. No one asked, and he never would have agreed, that he break off diplomatic relations with Germany. Soon after the embargo was lifted, oil and other vital raw materials found their way directly into Germany again. Why did the American government, which clearly had knowledge of most of these collusions and betrayals through the efforts of the State Department, never expose them or shut them down? The president used the executives concerned, keeping an eye on them and allowing them to indulge, under license or not, in their international trading. While his actions made winning the war a certainty, he also kept the public from knowing what is should not know. (What excuse, other than profits at any price, can certain U.S. financial interests use to defend their treasonous activities of trading and financial dealings with the Nazi's while our nation was fighting a war of survival?) Why did even the loyal figures of the American government allow these transactions to continue after Pearl Harbor? According to Higham, a logical deduction would be that not doing so would have involved a public disclosure and scandal. The procedure of legally disconnecting these alliances under the anti-trust laws would have resulted in a public scandal that would have drastically affected public morale, caused widespread strikes and perhaps even provoked mutinies in the armed forces. Moreover, as some corporate executive were never tired of reminding the government, their trial and imprisonment would have made it impossible for the corporate boards to help the American war effort. Therefore the government was powerless to intervene. After 1945, the Cold War, which the executive had done so much to promote, made it even more necessary that the truth of these collusions not be revealed. (41) (...We also forget the close connection the Federal Reserve had with the BIS throughout the war, making the U.S. government a conspirator in the whole messy process.) Following the war, those American patriots who tried to expose the conspiracy of business-as-usual men were destroyed, while those who were part of the group soon flourished again. The BIS, First National Bank and Chase Bank all not only survived, but escaped all censure and kept all profits resulting from their cooperation with Nazi Germany. In fact, the U.S. Federal Reserve Bank of New York gave the BIS a clean bill of health and McKittrick and the other leaders of the BIS moved on to their new cushy banking jobs. (42) (We also forget the close connection the Federal Reserve had with the BIS throughout the war, making the U.S. government a conspirator in the whole messy process. Did the Federal Reserve also profit from these business dealings and gold exchanges? Undoubtedly so.) How many times was the Federal Reserve a holding company for "German or Italian gold in the name of the BIS." Without a doubt immoral dealings were engaged in all around. While most research is available regarding the workings of this particular cartel and conspiracy of mostly American, German and South American business leaders, European countries, too, played a role in allowing the Nazis to continue their war efforts. Franco's Spain, as has been noted, was a key trading partner. Doubtless many millions of dollars worth of Swiss francs the Germans received in exchange for their gold went to Spain. Many millions more are known to have been given to the government and business leaders in Portugal. Portugal was know to have gathered raw materials from throughout the world, using its position as a neutral, then selling them directly to the German government in exchange for gold or Swiss francs, the only currency stable enough to be of value in the war years. "We acquired a lot of gold coming from Germany because, as you know, we sold a lot of goods and services to Germany," said Nuno Jonet, of the Portuguese Central Bank in Lisbon. "I suppose one or two bars are left with swastikas on them, but they're museum pieces." (43) "Neutral" Sweden also made many concessions to the German government, including allowing troops to march across her borders and facilitating trade arrangements under the Swedish flag. *There's Enough Blame To Go Around* Clearly we can see that while the neutral Swiss government during World War II does share some blame in hindsight for exporting and trading with the Nazi the blame also extends to most other major nations in the world. Also Switzerland, a surrounded nation, help buy its freedom from invasion and contributed substantial amounts of western intelligence through their policy of trading with Nazi Germany. In fact, the Swiss even stole and copied the secret German enigma machine during the war as the trains sped from Germany south through the Swiss rail passes to Italy. Looking at the United States, what excuse, other than profits during war time at any price, can certain U.S. financial interests use to defend their activities of trading and financial dealings with the Nazis while our nation was fighting a war of survival? The Nazi gold controversy centers on finding the gold that was funneled through Switzerland and the BIS, as well as the smaller amounts sent through France, Portugal and other countries. While some may be quick to condemn Switzerland for agreeing to participate in exchanges with Germany, we must remember the position Switzerland was in during the war. *Swiss Neutrality Also Helped the Allies* Switzerland was surrounded by the Axis powers. There was a very real threat of invasion from Germany, since if they refused to cooperate it would greatly hamper the Nazi supply effort to their armies. While Switzerland was valuable to Germany as a trading partner, the Nazis undoubtedly would have invaded if the Swiss cooperation faltered in any way. Public records in Switzerland at the time reveals that there were a few Swiss who were ambivalent, and perhaps even sympathetic to the Nazi cause. Most however, were not and there was a plan in place for ferocious resistance to any German invasion. The Swiss had built mountain fortresses high in the Alps for that very reason. Surely the Allies would have preferred to have Switzerland firmly committed to their cause; however, to have done so would have been suicide for the Swiss nation. Germany controlled all their sources of imports, upon which the Swiss are heavily dependent. While they are an active industrial nation, Switzerland has virtually no natural resources other than running water for hydroelectric power and the wits of their citizenry. The nation could not afford to have the Germans cut off their supply routes to the sea and other countries in Europe. It would have meant starvation as well as the threat of extinction in a German attack for Swiss citizens. Switzerland's conduct was not without blame during the war. While it did provide a haven for 27,000 German Jewish refugees, it also turned away 30,000 others; even requesting the Nazis stamp a "J" on their passports to identify them, as a concession to the Germans, who threatened them." (44) However, Switzerland also provided an invaluable base of operations for the CIA and Allen Dulles to gather vital intelligence about the German movements. They also harbored downed U.S. fliers who crashed or were shot down in Switzerland or the surrounding Axis territory. During the war, the International Association of the Red Cross also found Switzerland invaluable in aiding countless persons displaced by the war and in improving conditions for Allied prisoners of war. *What Happened to the Lost Swiss Bank Accounts of War Victims* Banking secrecy can, in fact, be a dangerous financial double-edged sword if the depositor with a "secret" account dies without revealing the existence of the account. Looking back to the World War Two years, we must remember the penalty in Nazi Germany for a foreign unreported bank account was death. Therefore with the death penalty facing the owner of a secret Swiss account, many Germans chose not to reveal the existence and location of their accounts to anyone, even a family member. After all, most expected to survive the Hitler regime, but then the war came. The Nazi agents often used deplorable tactics now copied by American government agents. For example, agents posed as clients requesting their funds or attempted to make deposits thereby exposing the existence of a secret bank account. Swiss bankers and insurance companies complied with demands by German agents. And Germans wishing to leave, many of them Jewish, refrained from opening bank accounts in Switzerland under their own name. Mr. E. Witzig, then director of Swiss Credit Bank branch in Kreuzlingen, always warned foreigners not to use their own name. He asked his friends whether they would open such an account in their name and act as fiduciaries. He believed this to be a measure of precaution, also where his employees were concerned, since he no longer absolutely trusted all of them given their personal ties to the new Germany. (45) Millions died during the war. Merchants and businessmen who had entrusted funds to Swiss banks went to their graves in internment and concentration camps without revealing their account information to their heirs. Sons, daughters and others who then tried to retrieve the accounts were unable to do so because of the Swiss secrecy laws that had been put in place for the benefit and safety of clients. It is certainly clear how Swiss bank privacy is indeed a double-edged sword, useful but not without risk. American investors foolishly choosing to break U.S. law and reporting requirements should realize the high penalties for failure to report a foreign financial account plus the risk of the assets one is trying to protect being lost forever due to an accidental death. *Will the U.S. Also Come Clean on the Nazi Gold?* Just as Switzerland is reappraising its actions during World War II, so should the U.S., the Federal Reserve and certain banking interests collaborating with the BIS during the war. Former President Clinton indicated that an independent committee under former Federal Reserve Chairman, Paul Volcker would conduct their own investigation. Even Under Secretary of Commerce Stuart Eisenstat stated, "We have to be willing to follow the trail of assets into our own treasury." (46) In the years that have passed since this promise to review the U.S. actions regarding the Nazi gold, it is apparent that a Fed chairman, and the Federal Reserve were unable to provide an objective account of U.S. banks actions during the Second World War. Since neither the U.S. government, the Federal Reserve or the American banks involved in this matter never owned up to their questionable actions, we view the attacks on Switzerland and Swiss banks to be quite hypocritical at the very least. It is extremely unfair to persecute Swiss banks and the nation of Switzerland for their roles in buying and moving German gold and in handling loot for the war while ignoring the roles played so many other European and western nations. While the Swiss record is less than spotless, so to is the record of every other nation during those times, including the United States, England, Germany, Portugal, Spain, Norway, Sweden, France just to name a few. Efforts should be made by all parties involved to recognize and try to mitigate, in whatever way possible, the suffering and financial loss caused to peoples and countries during this dreadful tine of our world's history. But rather than pointing fingers and casting blame on one particular country, shouldn't we all bear together the weight of allowing these crimes to take place? … Of not respecting Swiss neutrality? … Of not investigating individual victim's claims thoroughly immediately after the war? … Of allowing Nazi officials to regain office in Germany in the years following the end of the conflict? … Of allowing many Nazi officials to escape with millions of dollars to lead comfortable lives for the rest of their days? … Of allowing American and British businessmen and their banking partners to profit from gold sales and trade while consorting with high-ranking enemy officials while our troops fought and died on the battlefields of Europe? Yes, certainly there is blame enough to be place for the financial dealings during World War II. But it doesn't belong only to Switzerland. There is blame enough for all to share – enough to go around the world. *A Special Message From Ron Holland (http://java_script:void%20showWindow(450,600,'../WindowlessArticle.asp?nid=1300');)* The destruction, death and property confiscation during the Second World War is blight on the history of the world. Many evils were perpetrated on innocent civilians during the war and it is time we set the record straight. The Swiss should be congratulated on their efforts rather than attacked and the U.S. and all other countries involved should rightfully follow the Swiss example. The holocaust and Jewish property confiscation are extreme examples of what desperate and tyrannical governments can do to their own citizens. It is important to remember that democracy is no guarantee of good government as the Nazis were the legally elected government of Germany and they sadly received wide popular support for their activities prior to and during the early years of World War II. The scary lesson of Hitler and Nazi Germany shows that democracy does not provide total protection from tyranny when the government or politicians control the press and media outlets. *Government Is the Problem Not the Solution* In the German example, most of the looted gold sold, the civilian deaths resulting in lost bank accounts, and property confiscated were all the product of lawful government actions and extreme measures taken under wartime conditions. While these actions weren't right or moral, they were legal under the German legal system. Also most of the civilian deaths in German concentration camps and the millions killed in the Allied firebombing of German cities were all atrocities but considered legal by the various governments committing these actions again under wartime emergency conditions. *FOOTNOTES* 1 For a complete history of the Bank for International Settlements, see either Eleanor Dulles, The Bank for International Settlements at Work, Harvard Press, 1932, The Macmillan Company, New York, or Michael Eizner, The Bank for International Settlements, much of the history of the BIS found in this paper comes from these sources as noted. 2 Dulles, Eleanor, The Bank for International Settlements at Work, p.578 3 Higham, p.2 4 Dulles, p.2 5 Einzig, p.9 6 From the "Statutes for the Bank for International Settlements." 7 Dulles, p.580. 8 Dulles, p.49. 9 Dulles, p.586. 10 Dulles, p.79. 11 Dulles, p.81. 12 Dulles, p.499. 13 Eizner, p.10 14 Dulles, p.46 15 Jacobsson, p.190 16 Jacobsson, p.95 17 Jacobsson, p.152 18 Jacobsson, p.153 19 Trading with the Enemy, p.10 20 Dulles, p.50. 21 Jacobsson, p.165 22 Jacobsson, p.163 23 Jacobsson, p.192 24 Dulles, p.209 25 Dulles, p.97 26 Jacobsson, p.141 27 TWTE, p.xiv. For a fascinating and complete look at these interconnections, and many others, read Charles Highams complete book, Trading with the Enemy. 28 Higham, p.2 29 Higham, p.4 30 Jacobsson, p.140 31 Higham, p.6 32 Higham, p.6 33 Higham, p.7 34 Higham, p.7 35 Higham, p.8 36 Higham, p.14 37 Higham, p.16. Also found in the 1945 Senate Committee on Military Affairs Hearings. 38 Higham, p.17 39 Michael Hirsh, Newsweek, Nov. 4, 1996, p.48 40 Higham, p.61 41 Higham, p.xvii. 42 Hirsh, p.48 43 Hirsh, p.48 44 Henson, p.2 45 Bilanz, Schweizer Wirtschafts-Magazin, February 1997 46 Hirsh, p.47]]> Saturday, August 28, 2010 – by Ron Holland

Ron Holland Editor's Note: This editorial was originally published in 1997 during the Nazi Gold Controversy and Debate. Many of the issues discussed by Ron in this editorial are relevant to what is occurring today and we are therefore pleased to present his editorial for your reading pleasure. (We apologize for editorial errors that were initially included in this article, but which have been corrected now.) As follows:



This article presents the truth about the Swiss Nazi gold controversy and the involvement of U.S. banks and the Federal Reserve during the Second World War. This report opens up the sordid record of the American financial establishment and how our central bankers put trade before patriotism, profits before our troops during times of war and how this relates to our nation today in the "so called" latest conflict, The War on Terror.


This special report links Switzerland's sometimes regrettable World War II activities with specific evidence suggesting a possible revenue trail from the Nazi gold sales to the Bank for International Settlements, located in Basel, Switzerland. This "bankers bank" was operated by the central banks of numerous other countries including certain American banks and possibly even the Federal Reserve!


Here in this report we trace the profits and financial accountability of all parties involved in these wartime activities and urge that these be investigated. Although Switzerland, certainly looked after her best interests during the war, we believe the finger of blame and any financial restitutions should be shared by all nations and institutions involved in this web of deceit, even those parties in the United States.



Further, we believe the nation of Switzerland has been made a convenient scapegoat by special financial interests in the United States for competitive reasons rather than any basis in fact. We call on the U.S. financial institutions associated with the Nazi gold cover-up and gold trading profits to come clean on their involvement.


There is blame enough for all to share. Let's get to the bottom of the whole Nazi gold trading issue ... the whole story.


Trading With the Enemy



As the lone neutral democracy in Europe surrounded by the Axis powers, compromises were made by Switzerland to prevent invasion. Although stolen Nazi gold was liquidated at the Swiss National Bank, the deal making and trail of revenue from these activities may have flowed through the Bank for International Settlements (BIS) to their stockholder banks in New York City and Chicago.


While not a pretty picture of how the financial elite made money during the war, it is obvious that the guilt and financial accountability for the wartime Nazi gold activities extend far beyond Switzerland, which I believe has been made a scapegoat in this controversy by special financial interests in the United States.


Other BIS central bank owners, U.S. banks owning BIS stock fronting for the Federal Reserve, and possibly even the Federal Reserve System itself should be prepared to accept their share of the blame. Following are questions to be answered before the files are closed on the issue of the Nazi gold trading and "so- called" lost Swiss accounts.


("What does it matter, whether Switzerland has been able to give us the commercial advantages we desire, or has given too many to the Germans, to keep herself alive? Switzerland has remained a democratic state, standing for freedom in self-defense among her mountains, and in thought she has been, in spite of race, largely on our side." – Winston Churchill, 1944)


It is clear that horrible injustices, as are characteristic of any war, were committed during World War II. However, those committed against the Jews by the Nazi government were so abhorrent, they inspire an immediate emotional response from most people who regard the complete injustice of the situation.


Particularly in light of revelations regarding possible Nazi gold and money stores placed in Switzerland by the Nazi government, many people around the world are prone to jump to the conclusion that Switzerland and Swiss banks, aided by their historic secrecy laws, have profited from millions of dollars of assets pilfered from Jewish victims of the Holocaust.


Indeed, these victims were shamefully stripped of all material possessions, down to the heisting of gold teeth out of the victims' mouths in order to fund SS accounts and the German war effort. Ironically, however, the Swiss Banking Secrecy Law, which was enacted before the war ever began, was originally meant to protect those German citizens, including many wealthy Jews, who were hiding their assets in Switzerland to escape the far-reaching hand of the National Socialist government in the German Reich.


Now persons and law firms seeking restitution on the part of these victims of Nazi crimes during the war are certain that these secrecy laws are allowing Swiss banks to benefit from these assets, which rightfully belong to Jewish victims and their heirs. There are many points not fully understood about the situation. Firstly, a majority of the gold, which the German government did exchange in Swiss banks during the war, came from the treasuries of conquered nations, not individual victims.


This gold was certainly not generally funneled through any of the commercial banks now in existence in Switzerland. Most was done through an international bank located in Basel, a cooperative bank set up by the central banks of several countries, including the United States. Through this bank, The Bank for International Settlements (BIS), the Swiss National Bank and financial institutions and central banks of many other countries were closely tied financially with Germany and the other Axis powers.


Additionally, most of the profiting done during the war was not accomplished by banks or countries in general, but rather by unscrupulous businessmen and the financial elites of many countries. By hedging all bets and covering all angles, they sought to assure themselves of profits during, as well as after, the conflict.


A majority of the gold the German government did exchange in Swiss banks during the war came from the treasuries of conquered nations, not individual victims. While Switzerland did make concessions to Germany during the war, so did many other countries, some of them supposedly Allied nations, not neutral ones, like Switzerland.


The Bank for International Settlements – The Key Player


To understand this web of duplicity and deception one must begin with the Bank for International Settlements (BIS), the central bank for central banks, as it has been called."(1) This bank was set up by the victorious allied nations after World War I to allow Germany to repay the excessive war reparations placed upon them.


Germany's economic system, strapped beyond reason by overwhelming reparations payments, was in a shambles. The debts other nations carried because of World War I, in addition to the depression and generally terrible economic conditions around the world, combined for a desperate world financial condition. (BIS, Bank for International Settlements, World War Two, 1929 Young Conference, J.P. Morgan)


It is ironic that these extreme reparations helped cause the hyperinflation in Germany that brought Hitler to power in 1933. Then later the BIS, originally established to drain wealth out of defeated Germany, was used by Hitler during World War II as a major source of revenue for the war effort.


Realizing that the devastated German economy was not in the best interests of any country, world leaders combined forces trying to solve the problems. In several separate conferences, most notably the Young Conference, which was convened in 1929 to solve the difficulties surrounding Germany's reparation payments, participants outlined guidelines for establishing an international bank, at the behest and acting under the authority of central banks throughout the world.


The founding members of the BIS were the central banks of Belgium, France, Germany, Great Britain, Italy and Japan with groups of commercial banks from the United States and Japan, neither of which wanted their central banks to be directly involved.


In the USA, then, a banking group, which included J.P. Morgan & Company of New York, The First National Bank of New York, and the First National Bank of Chicago, represented the country. (2) Interestingly, Owen Young, key in developing the plan for the BIS (3), was a banker for the J.P. Morgan Group.


These banks are significant, as they were key to providing their clients access to trade in foreign countries during the Second World War, when all such trade should have been stopped by law. After the Young Conference, it took several other meetings to establish the bank. During these meetings the outline originally set forth in the Young Conference was altered to adjust to the political and economic facts of the chaotic world of 1930.


One of the difficulties was deciding how much control the governments should have over the bank, and how much opportunity to interfere in its operations. (4) In fact, in 1930, Paul Einzig speculated, "Opinions are divided between those who fear that the bank will become a power independent of those governments to which it owes its existence, and those who are concerned lest it remain too much under the control of the political authorities. (5)


In the end, both concerns proved to be true; directors from Germany were always very much under the control of its political leaders, while directors from other nations, including the American group, worked completely independent, and in fact, against, their own governments, in some situations. The area of the bank was defined thus: "To promote the cooperation of central banks and to provide additional facilities for international financial operations; and to act as trustee or agent in regard to international financial settlements entrusted to it under agreements with the parties concerned." (6) At the time of the bank's founding in 1930, this meant handling reparations payments and acting as the holding agent for the German annuities used to pay war debts twice yearly.


However, by the time the "Hoover Debt Holiday" ended the need for the payments in a few years, the Bank for International Settlements was firmly ingrained, and had every motivation to stay that way.


The BIS – Always Business As Usual


Very significant in the original constituent charter of the BIS, is "said power" number 10, as follows: "The Bank, its property and assets and all deposits and other funds entrusted to it shall be immune in time of peace and it time of war from any measure such as expropriation, requisitions, seizure, confiscation, prohibition, or restriction of gold or currency export or import, and any other similar measures. (7)


In other words, whatever happened in the world outside, inside the BIS it was going to be business as usual. In any case, the governors of these banks, or in the case of the commercial banking groups, an appointee, were on the board of directors of the BIS.


Germany was given two extra seats on the board of directors. The board consisted of the governors, or heads, of the seven central banks/commercial conglomerates represented; also seven more people, "representative of finance, industry or commerce" and appointed by the governor of each country's bank; and one extra representative from Germany and France, for a total of sixteen members.


This makeup of the board tended to make it difficult for the more distant non-reparation countries to have any influence unless they could unite with the countries historically and geographically closer to bank. Therefore, the countries of Germany, Italy and France had a great deal of influence at the BIS. (8)


The Banker's Bank


Of note in the statues of the BIS is that it is allowed to: “Act as an agent or correspondent of any central bank; (and) arrange with any central bank for the latter to act as agent..." Additionally, the BIS, "may enter into special agreements with central banks to facilitate the settlement of international transactions between."


"For this purpose it [the BIS] may arrange with central banks to have gold earmarked for their account and transferable on their order, to open accounts through which central banks can transfer their assets from one currency to another and take such other measures as the Board may think advisable within the limits of the powers granted by these statutes." (9)


Therefore, the BIS was ready to lend against gold without delay, and could sometimes reduce steps of utilizing gold credit from four steps to one over traditional ways, besides saving much in time and commissions. (10)




Another item of note is that transferring gold to the account of the BIS did not necessarily mean it had to be physically moved by a central bank to the BIS. It would, however, be earmarked in the vaults of a central bank "for the BIS," when in reality, it was providing gold credit for another client country of the BIS. Therefore, the BIS name on the holding would grant it particular immunity, and at the same time, conceal the actual ownership of the gold. (11)


In her treatise on the BIS, Eleanor Dulles commented that the representatives of several central banks and financiers from many countries met at the BIS and worked together in a friendly way, but "it is also true that they were seriously limited by political factors." (12)



As Einzig said, "As to weaknesses and limitations ... the BIS is exposed to the pitfalls of political intrigues. Its important decisions are liable to be government largely by the necessity of political compromise. (13)


This political compromise was necessary, even though the bank was forbidden to ever make loans or have deposits in the name of any government. The central banks were responsible for any monies that would be loaned or used by their countries. Thus the accounts at the BIS were held as "Central Banks for the account of others," thereby avoiding direct dealing with the governments. (14)


However, these financiers were closely tied with each country's political leaders, and would exercise their influence in behalf of their own countries.



Per Jacobson, Emil Puhl, Reichsbank, Federal Reserve, German invasion of Switzerland


The bargaining was taken with good nature by the BIS board. For there was a very friendly and close-knit camaraderie joining the members of the BIS board of directors and staff of the BIS. They knew they could discuss their often similar and grim problems with one another. They could get advice, moral support, and help. (15)



By the time war broke out in 1939 with the invasion of Poland, the ties and warm friendships binding this financial elite were too strong for so small a thing as a war to break. Erin Jacobsson, daughter and biographers of Per Jacobsson, the economic director of the BIS and influential policy maker there, said, "In the 1930s, the Bank for International Settlements functioned mainly as a club for central bankers; a club with a serious purpose ... ”


"PJ (Per Jacobsson) loved the monthly meetings with the increasingly warm companionship, the exchange of ideas and opinions that took place, the inside information ... He found that he was dealing with influential people, and that, if he could convince them of the expediency of a policy, action would probably follow. (16)


While Jacobsson was concerned with economic policy, the same fact held true for trade policy or anything else important to the task of making money. These people at the BIS and their friends could make things happen.


These directors and board members kept coming to the BIS, even during the war. According to Jacobsson, the governors of nearly all the European central banks were regular visitors. This included the governors of the central banks in France, Hungry and Romania, Italy, Spain and Portugal, as well as regular visits by the vice- governor of the Reichsbank, Dr. Emil Puhl, especially during the second half of the war.


This fact is significant in that the BIS gave Dr. Puhl a reason to be in Switzerland. Here he met, virtually unnoticed, with influential bankers from Portugal, a "neutral" country who did important trading with Germany, as well as contacts from the U.S. and other allied nations.


Besides "business" of banking and trade, there was the "inside information" passed from one of these "friends" to another passed from one of these "friends" to another. PJ's brother-in-law was Sir Archibald Nye, Vice-Chief of the Imperial General Staff for the British Army.


There is a record of at least one bit of information passed along by PJ to Nye, which was used to the benefit of British intelligence. There are family rumors of many other such messages." (18)



If intelligences were flowing from the Axis powers to the Allies, then we can be absolutely certain the reverse was also true; probably many pieces of strictest intelligence which should never have been disclosed probably went in the other direction.


The Swiss Role in the Gold Transfers


Keep in mind the banks that were considered "Central Banks" – the Reichsbank in Germany, Central Bank of France, the Central Bank of Italy, the Swiss National Bank, as well as the First National and J.P. Morgan banks in the United States, (fronting for the Federal Reserve) come to mind.


One can see how simple it would be for these members of the BIS board of directors to facilitate large exchanges of gold into Swiss francs and other currencies or surreptitiously channel large payments for war goods between citizens of countries who were at war, therefore making it appear that they were not trading with each other during the war, when, in fact, they were.


Although this was not the reason for these provisions being put into the statutes of the bank in the beginning, they did facilitate the ability for secret and consistent trading with the enemy on both sides of the conflict.
Yes, Switzerland is the location where most of the looted and legitimate Nazi gold sales were handled. But the reasons have more to do with Switzerland's neutrality than with any attempt to accommodate the Germans.


At the outbreak of the war in Europe, President Roosevelt froze the gold holdings of most of the belligerent nations that were on deposit at Fort Knox here in the United States. The Swiss National Bank also held gold deposits for most major nations including the U.S. but however due to Swiss neutrality, Switzerland continued to transfer gold between all nations as the respective national governments dictated. Remember, as a major financial center, Switzerland alone in the world has never imposed exchange controls on its citizens, outside world investors or governments.


As a neutral nation during the war, with all their Swiss National Bank storage vaults open to all trading nations during war or peace, the Swiss continued gold transactions and trading with all governments with gold on deposit at the Swiss central bank. So, if Germany wanted to sell gold to Portugal for grain or fuel, for example, the Swiss National Bank basically moved the gold from Germany's area of gold in the National Bank vault to the section reserved for Portugal's gold. The same type of transactions were carried out for all nations with gold on deposit including the United States. This is how Germany's gold was transferred, sold and liquidated to other governments as payment for agricultural, manufacturing and war materials.


It's logical to assume that the Swiss National Bank charged a fee for this service; so the critics of Switzerland are correct. Switzerland helped launder looted Nazi gold but this was the result of international transactions and not some sinister plot to help the Nazi regime. Chances are some of this gold came from holocaust victims and from looted commercial and central banks of conquered nations but as we go into more of the story, we will learn how all the world's major central banks benefited from these transactions.


Switzerland's Unique & Honorable Role During World War II


There is no question that Switzerland did trade heavily with Germany during the war. It is apparent that to survive and forestall a Nazi invasion, Switzerland was forced to produce for the Third Reich. For example, in Oerlikon, located between Kloten airport and downtown Zurich, some of the best anti-aircraft guns in the world were produced during the war and some were exported to Germany.


But let us set the stage for the tiny neutral nation of Switzerland during World War II. They have little in the way of natural resources and much of its land is totally unusable for agriculture. It's an exporting nation, very dependent on the exchange of manufactured goods with other countries.


Switzerland must import all fuel, including coal and oil, plus much of its food. The country is landlocked and their only direct trading route for ocean commerce is through Germany. All the shipping of Swiss exports are sent down the Rhine river northward to the North Sea.


During the difficult period of World War II, Switzerland stood alone in Europe. It stood as a single democracy surrounded by the victorious Axis powers; to the north was Nazi Germany, to the east was the Osterrich, formerly Austria and now a part of the German Reich, to the west were the German-occupied areas of France; and in the South was Hitler's fascist ally, Italy.


The only window of trade not controlled by the Nazis was a narrow strip of territory stretching west from Geneva into the Vichy Republic of France. Even this export avenue was cut off in 1942, when the German army occupied the remainder of France. Switzerland was under constant threat of invasion during the war, although the German plan to invade was only close to activation twice, first in 1940 and later again in 1943.


The real threat of invasion was in 1943 after the allied forces conquered North Africa from German and Italian armies. Hitler was concerned about Switzerland being located between an increasingly wavering Italian ally putting German troops at risk of allied invasion. If allied forces invaded Italy, German forces and reinforcements could be easily cut off as there were only three rail passes to access Italy from the German Reich. Austria's Brenner Pass was very vulnerable to allied air attacks and the other two were through Switzerland. This placed Switzerland between Germany and the survival of her forces in Italy.


Hitler Did Not Invade Switzerland for Three Reasons:


The Swiss plans were to fight to the death, if necessary, in the Swiss Alps where the vital north-south tunnels and communication links were located. If invaded the destruction of these tunnels would have been imminent and these plans were well known to the Germans. The demolition of these rail lines and tunnels would have cut off German access to their forces in Italy.


Swiss manufacturing played a major role in the German war effort. In case of invasion, the Swiss army planned to fight only a delaying action in the populated Metelland region, the Swiss industrial area. Any fighting there would have destroyed the manufacturing capability of the Swiss thus affecting their exports to the German war effort.


Swiss military and industrial exports were exchanged for badly needed fuel oil, coal, and food, and yes, sometimes, German gold. Swiss exports helped held off invasion and maintained their independence unfortunately at the price of accepting gold from Germany.


The third, and most important reason, Germany did not invade Switzerland was the Bank for International Settlements was located in Basel, Switzerland. The BIS helped conclude the deals for much of the looted gold sales and transfers.


Germany's invasion of Switzerland would have cut off their access to their forces in Italy, ended Swiss exports, closed the German gold window with the BIS and stopped the gold sales utilizing the neutral vault location at the Swiss National Bank. The price of Swiss invasion was just too great for Germany to bear.


The Secret Federal Reserve Role Regarding the Nazi Gold


Because of fear of Congressional overview and disapproval, the Federal Reserve had wisely not become an official stockholder of the BIS. Instead they had several major American banks front for the Federal Reserve as the official owners. Even though the Fed was technically not a member of the BIS, when PJ made a trip to the United States in 1941 at the request of BIS president Thomas McKittrick, (surprisingly a United States citizen), he met with and discussed post-war -debt and such things with the Federal Reserve President Allen Sproul.


Surprisingly, the Federal Reserve remained listed in the Rand McNally directory as a correspondent bank for the BIS in Washington from Pearl Harbor on until the president. (19) Additionally, the Federal Reserve had the power to veto operations in America, and the BIS operated on principles which met the approval of those in charge of the Federal Reserve. (20)


In 1931, the Federal Reserve began active participation in the BIS, by taking in credits from Austria and Hungry. More connections developed, and soon, more than two-thirds of the BIS funds in America were held at the Federal Reserve.


Therefore it seems clear the Fed profited from transactions taking place in the BIS. However, it was the U.S. commercial banks, which had no injunction to protect the public welfare, but only the mandate to make a profit, which had the voting control in the BIS. They used their connections there to make money, regardless of how they did it or who was hurt in the process.


Illustrating the close ties of BIS board members, regardless of nationality: In 1942, PJ was invited to visit the Reichsbank, as well as the Bank of England. He cleared the trip to Germany with Emil Puhl, asking and taking Puhl's advice on which cities to travel through and how to arrange his stay and speech in Germany. In his defense for taking Puhl's advice, Jacobsson said, "I didn't say one world in argument. I accepted what Puhl had said as definite. I knew full well to what extent the future of the BIS depends on Puhl's possibilities of holding the fort in Berlin."


PJ also informed Puhl of his brother-in-law's appointment as Vice-Chief. Puhl responded, in part, "...These things are much easier to handle if one knows in advance." (21) After his trip to the U.S., Jacobsson reported to Puhl the attitudes and opinions of Americans regarding the war and the Germans. (22)


Members of the BIS had fierce loyalty to one another and to the bank itself. They were intent that the BIS survive, and would do what was necessary to make sure it did. And it did survive largely because the central bankers, who knew it best, decided that they needed the institution. (23)


While no one officially determined that the BIS should supplant other centers for discussion, there was a growing tendency for monetary and banking affairs to be referred to Basel. Because of this it became increasingly natural for the Central Banks to find out what was happening in other countries in times of crises.


Inquiries by telephone could give them information as to gold movements and exchange rates in a number of countries. They could sometimes get the most direct news from New York through Basel. And each country's own representative in Basel could keep them in touch with the shaping of plans and theories, if they wished to do so. (24)


Ironically, Dulles speculated on what might happen to the BIS in the case of war. "It is necessary for those at the BIS to act as if the treaties and exemptions regarding the Bank would be respected, even if there should be a break in the diplomatic relations between countries ... There is no reason to suppose, however, that even war would interfere completely with the work of the Bank. Governments at war would continue to need foreign exchange, and there is grounds for considering funds would be safer with the BIS than they would be in any one center. They should enjoy certain immunities and would be to a certain extent anonymous, and might therefore be less subject to seizure ... (25)


Indeed, her words proved to be prophetic.


According to Jacobsson, "The surprising result of the evacuation (of the city of Basel during the war) was the harmony in which the mixed international staff of the BIS, with belligerents on both sides, managed to live side by side, in the closest of quarters, with no dissension ... At the outbreak of war, all the staff had been told, by their own central banks, to work amicably together so as to keep the BIS running... (26)


And keep it running they did. With the structure in place allowing for secrecy and quick communication between members, the BIS became a key factor in allowing "Business as Usual" to continue during the war.


Who Really Traded With the Enemy?


In the years leading up to and during the war, huge American business conglomerates and their corporate leaders were in cooperation with Nazi corporations. These connections continued even after Pearl Harbor. These companies were represented nationally by National City Bank or Chase National Bank, and by the Nazi attorneys, Gerhardt Westrick and Dr. Heinrich Albert. And all were connected to Emil Puhl, or the Reichsbank and the BIS. (27)


These names, of course, will sound familiar as one of the founding banks of the BIS and as one of the directors of the BIS was Puhl. The other figures are connected to one another and thus develops the web of duplicity and illegal dealings which characterized the war years. For example, the first BIS president was Gates W. McGarrah, a former employee of both Chase National Bank (key in the Trading with the Enemy transactions) and the Federal Reserve.


The second BIS president was Leon Fraser. He had many contacts high up in the business world, but no previous background in finance or economics. Still, when he left the BIS presidency in 1935, he took over as president of First National Bank of New York, one of the founding BIS banks. (28) We can see how all of these ties are interconnected, and allowed for the corruption which took place.


Nazi gold, Czech gold, Thomas McKittrick, Bretton Woods Conference

In March of 1938, when the Nazi's marched into Vienna, much of the gold of Austria was looted and packed into vaults controlled by the BIS. German board members, of whom there were three, asked that the seizure not be officially discussed, and it was not. The "neutrality" and close friendships of the BIS began at once to cover up the Nazi gold moves.


The gold was immediately credited to Reichsbank accounts, where they could then receive credits in any country's currency from the BIS. (29)


March 15, 1939 brought another dark day to the BIS. The Nazis invaded Czechoslovakia, and storm troopers entered the Czech central bank, holding them at gunpoint, requiring that they order the transfer of the national store of gold, which they had put for safekeeping in a BIS account in the Central Bank of England. The Nazis wanted the gold transferred to the Reichsbank account.


After some discussion, the transfer was carried out. The entire Czech store of gold was passed on for the use of Hitler's war machine.


In a feeble defense, Jacobsson said, "[Once the war broke out] the BIS had immediately to find means to remain in business. [Neutrality rules] at the bank included special protective measures in respect of all transactions, and especially gold transactions, from occupied countries ... Therefore there could be no repetition of the incident in March 1939 when the BIS received an authentic order to transfer Czech gold to the German Reichsbank, (and) only later discovered that the order had been extracted at the point of a pistol. The Czechs never held this against the BIS."


As further evidence, she points out that the Czech delegation never voted to dissolve the BIS in later meetings, even though a certain Paul Einzig, editor of The Financial News, (and incidentally, author of a comprehensive book covering the formation of the BIS) made it a major point in his attacks on the bank.


Nevertheless, Jacobsson said, "The neutrality rules were strictly adhered to." (30)


Defending the Undefendable


This defense is ridiculous; it implies that the people involved at the BIS should have no idea that an order to transfer a country's entire store of gold to the central bank of another country that had just taken them over was perhaps not a voluntary order. That is impossible to believe.


These were intelligent and capable men very much aware of world conditions. They were certainly aware that Germany had invaded Czechoslovakia, uninvited, therefore could have easily surmised that the order to transfer a country's entire store of gold was forced.


As further evidence, Paul Einzig, who uncovered the story with the help of a contact at the Bank of England, found that English banking and government leaders denied that the transfer had even taken place, when it clearly had. Its completion was reported by the Associated Press in Switzerland on May 31. (31)


One of the leaders who denied the transfer was Neville Chamberlain, the Prime Minister of Great Britain. Interestingly enough, Chamberlain was a major shareholder in the Imperial Chemical Industries, a partner if I.G. Farben, whose Hermann Schmitz was on the board of the BIS. (32)


This is the same Chamberlain, of course, whose policy of concession and compromise gave Nazi Germany a huge step up on Britain when real war broke out. Now we see that the ties that bind wound around the top heads of state.


Many years later when Einzig asked J.W. Beyen, who had been the BIS president at the beginning of the Czech gold scandal, if the gold was transferred, he replied that it was, "Purely technical. The gold never left England." (33) This may be true, but of course, the way the BIS did business, gold did not have to be physically transferred. The amount was simply deducted from the Czech account and credited to the Reichsbank account held in the name of the BIS, "for the Reichsbank." The gold did not have to be physically transferred.


Naturally, rules of neutrality held true during the was, as Jacobsson insisted. Neutrality is treating everyone equally, regardless of politics, nationality or affluence. So all that the BIS said when it insisted that "strict rules of neutrality were followed," during the war was that they continued to trade with all countries; trading gold into Swiss francs or U.S. dollars or English pounds for the Germans … and the Americans ... and the Czechs .. .and the French ... and the Italians – everyone equally.


McKittrick, American Traitor – President of the BIS


Thomas McKittrick, was the American BIS president from the time of the Czech scandal through the war. The Italian and German governments approved his continuing as president, once saying, "McKittrick's opinions are safely known to us." Apparently, those Axis powers liked what they knew.
In 1940, McKittrick traveled to Berlin, meeting with Kurt von Schroeder of the BIS and the Gestapo to discuss doing business between the U.S. and German if war should erupt between the two countries. (34)


McKittrick was also president when in June of 1940, a Belgian BIS director intercepted $228 million in gold sent by the Belgian government to the Bank of France, and had it shifted to Dakar in North Africa on its way to Reichsbank accounts.


Later, in 1943, he was somehow able to obtain an Italian diplomatic visa, (despite not being Italian or a diplomat, and despite the fact that the government of his country was at war with Italy) and traveled to Rome, Lisbon, then to the United States. After visiting with Leon Fraser of First National Bank of New York and leaders of the Federal Reserve, he traveled back through Berlin, exchanging intelligence with Emil Puhl at the Reichsbank. (35)


Several Americans, troubled by the rumors and facts they had heard regarding the BIS, introduced a resolution to dissolve the bank at the 1944 International Monetary Conference at Bretton Woods.
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The BIS came under attack largely for the publicized Czech gold scandal. Other abuses were less widely known, and the motion was weakened by the fact that the Czech government did not support the resolution for dissolution, and neither did the Dutch delegation (led by former BIS president J.W. Beyen) even though Holland's national gold stores had also been looted by the Nazis. Ned Brown, an American tied to the Chase and First National banks, also vetoed the resolution to disband.


Nevertheless, Morgenthau saw the BIS for what it was. At Bretton Woods, he said: "I think in the eyes of the Germans, they would consider this as the kind of thing which can go on, and it holds out to them a hope, particularly to people like Dr. Schaacht and Dr. Funk, (president of the Reichsbank) that the same [associations] will continue [between the U.S. and Germany] after the war. It strengthens the position of people like Mr. Leon Fraser and some very important people like Mr. Winthrop Aldrich, who have openly opposed dissolution." (36)


Finally, Morganthau's delegation approved the dissolution of the BIS. However, McKittrick began immediately on a campaign to retain it. He sent letters full of one-sided information, insisting that in the post-war period, the help of the BIS would be necessary. In all his discussions and attempts to save the BIS, McKittrick let out many incriminating bits of information about the BIS and its directors.



He said the German government allow the BIS to exist and continue working because, "... In the complicated German set-up, certain men who have their central banker' point of view are in very strategic positions and can influence the conduct of the German government with respect to these matters."


(Here we are, a nation actually assisting an enemy in time of war, and not only that, but stating through our Ambassador, that we stand ready to continue and extend such help ...)


He admitted that a group of German financiers had been certain from the outset of the war that Germany would eventually lose, and felt their contacts on the BIS would help them arrange post-war reconstruction loans.


McKittrick would not name these men, except Emil Puhl. He insisted that Puhl did not share the Nazi point of view, even though the State Department knew it was Puhl who had authorized the looting of Allied gold and its transferal to Switzerland.


In addition, McKittrick also admitted that the Belgian gold was in the Reichsbank. But that it was being held in safekeeping for Belgium until after the war. He insisted that all gold transactions within the BIS would be opened for review after the war, and that the gold was all carefully segregated and documented. The books were, of course, never released. And the German regularly melted down looted gold, restamping it with a date prior to the outbreak of hostilities." (37)


Despite the efforts of Morganthau and others of his mind, the BIS was not closed down, nor was it audited, as they finally resolved to do.


Emil Puhl, Federal Bank of New York, BIS, Switzerland

However, after Bretton Woods, McKittrick was under pressure from Emil Puhl to ensure that looted gold would continue to flow into Europe. McKittrick was running scared at that point, realizing he had stuck his neck way out at Bretton Woods, and did not wish to authorize direct receipt of the gold. Instead, he had the Swiss National Bank, chair by Ernst Weber, BIS director, take it into their vaults. The Swiss National Bank had promised not to receive it, so they did sometimes disguise the loot as payments to the American Red Cross and German legations in Switzerland.


The U.S. State Department, in the person of Orvis Schmidt, asked the Swiss National Bank executives about the looted gold. He was told that a member of the Reichsbank, whom they regarded to be trustworthy, had to authenticate each gold shipment, validating that it was from Germany's reserves, not looted gold. This "trusted member" was none other than Emil Puhl. (38)


Under pressure from the U.S. Treasury, the BIS handed over only $4 million in looted gold to the Allies in 1948, and Thomas McKittrick, whose activities Morganthau insisted, "bordered on treason," was rewarded by the Rockefellers and Winthrop Aldrich. He was made vice-president of the Chase National Bank, where he served for many years after the war. He invited Emil Puhl to the U.S. as his guest in 1950.


The Deal Makers – Profits At Any Price


Of course the BIS was never dissolved. The BIS, finding its niche in the world racked by war, thus became a clearinghouse for all kinds of under-the-table activities, both between countries and between businesses.


"While the BIS bought little gold from the Nazis itself, a scant $15 million – it was a crucial facilitator, lending the laundering an aura of honor among thieves. The BIS was a central transmission place where deals were struck, where deals were struck, where the Portuguese representatives would meet the Reichsbank representatives," says Harold James, a Princeton University historian. And that's what kept money flowing into Nazi coffers. (39)


In 1943, gasoline and petroleum products equaling the full capacity of the Spanish tanker fleet were traveling to Spain. From there, they were going directly to Germany. In addition to oil, sulfate of ammonia and cotton, both commodities in short supply in the U.S. were being shipped in huge amounts to Spain and from there on to Hitler.


Economist Henry Waldman said it like it was: "Here we are, a nation actually assisting an enemy in time of war, and not only that, but stating through our ambassador, that we stand ready to continue and extend such help ... Spain is an enemy, and yet we help her."


Although the argument from that model of honesty, Dean Acheson, was that we were supplying neutrals like Spain with needed raw materials so they would not supply such things to the enemy. It was an outright lie – both on the part of Franco in Spain, who was collaborating 100 percent with Hitler, and the part of Dean Acheson, who was collaborating 100 percent with Standard Oil and related companies to provide petroleum products to Germany.


Overcoming incredible opposition, honest members of the State Department presented such evidence of collusion to the President, showing that Franco in Spain was exporting oil, platinum, industrial diamonds and liver extract (from which Germany made a tonic for fliers). All were traveling from South America on Spanish ships straight through the British blockade on American licenses.


In January 1944, the British cut off all oil, gasoline and other petroleum products to Spain. This embargo, though, lasted only a few short months. The oil interests lobbied hard, pulling all their considerable weight and influence, until they were allowed to resume shipments. In return, Franco agreed to expel Nazi agents from Spain, and did a half-hearted job of it. No one asked, and he never would have agreed, that he break off diplomatic relations with Germany. Soon after the embargo was lifted, oil and other vital raw materials found their way directly into Germany again.


Why did the American government, which clearly had knowledge of most of these collusions and betrayals through the efforts of the State Department, never expose them or shut them down? The president used the executives concerned, keeping an eye on them and allowing them to indulge, under license or not, in their international trading. While his actions made winning the war a certainty, he also kept the public from knowing what is should not know.


(What excuse, other than profits at any price, can certain U.S. financial interests use to defend their treasonous activities of trading and financial dealings with the Nazi's while our nation was fighting a war of survival?)


Why did even the loyal figures of the American government allow these transactions to continue after Pearl Harbor? According to Higham, a logical deduction would be that not doing so would have involved a public disclosure and scandal. The procedure of legally disconnecting these alliances under the anti-trust laws would have resulted in a public scandal that would have drastically affected public morale, caused widespread strikes and perhaps even provoked mutinies in the armed forces.


Moreover, as some corporate executive were never tired of reminding the government, their trial and imprisonment would have made it impossible for the corporate boards to help the American war effort. Therefore the government was powerless to intervene. After 1945, the Cold War, which the executive had done so much to promote, made it even more necessary that the truth of these collusions not be revealed. (41)


(...We also forget the close connection the Federal Reserve had with the BIS throughout the war, making the U.S. government a conspirator in the whole messy process.)


Following the war, those American patriots who tried to expose the conspiracy of business-as-usual men were destroyed, while those who were part of the group soon flourished again. The BIS, First National Bank and Chase Bank all not only survived, but escaped all censure and kept all profits resulting from their cooperation with Nazi Germany.


In fact, the U.S. Federal Reserve Bank of New York gave the BIS a clean bill of health and McKittrick and the other leaders of the BIS moved on to their new cushy banking jobs. (42)


(We also forget the close connection the Federal Reserve had with the BIS throughout the war, making the U.S. government a conspirator in the whole messy process. Did the Federal Reserve also profit from these business dealings and gold exchanges? Undoubtedly so.)


How many times was the Federal Reserve a holding company for "German or Italian gold in the name of the BIS." Without a doubt immoral dealings were engaged in all around. While most research is available regarding the workings of this particular cartel and conspiracy of mostly American, German and South American business leaders, European countries, too, played a role in allowing the Nazis to continue their war efforts.
Franco's Spain, as has been noted, was a key trading partner. Doubtless many millions of dollars worth of Swiss francs the Germans received in exchange for their gold went to Spain.


Many millions more are known to have been given to the government and business leaders in Portugal. Portugal was know to have gathered raw materials from throughout the world, using its position as a neutral, then selling them directly to the German government in exchange for gold or Swiss francs, the only currency stable enough to be of value in the war years.
"We acquired a lot of gold coming from Germany because, as you know, we sold a lot of goods and services to Germany," said Nuno Jonet, of the Portuguese Central Bank in Lisbon. "I suppose one or two bars are left with swastikas on them, but they're museum pieces." (43)


"Neutral" Sweden also made many concessions to the German government, including allowing troops to march across her borders and facilitating trade arrangements under the Swedish flag.


There's Enough Blame To Go Around


Clearly we can see that while the neutral Swiss government during World War II does share some blame in hindsight for exporting and trading with the Nazi the blame also extends to most other major nations in the world. Also Switzerland, a surrounded nation, help buy its freedom from invasion and contributed substantial amounts of western intelligence through their policy of trading with Nazi Germany.


In fact, the Swiss even stole and copied the secret German enigma machine during the war as the trains sped from Germany south through the Swiss rail passes to Italy. Looking at the United States, what excuse, other than profits during war time at any price, can certain U.S. financial interests use to defend their activities of trading and financial dealings with the Nazis while our nation was fighting a war of survival? The Nazi gold controversy centers on finding the gold that was funneled through Switzerland and the BIS, as well as the smaller amounts sent through France, Portugal and other countries.


While some may be quick to condemn Switzerland for agreeing to participate in exchanges with Germany, we must remember the position Switzerland was in during the war.


Swiss Neutrality Also Helped the Allies


Switzerland was surrounded by the Axis powers. There was a very real threat of invasion from Germany, since if they refused to cooperate it would greatly hamper the Nazi supply effort to their armies. While Switzerland was valuable to Germany as a trading partner, the Nazis undoubtedly would have invaded if the Swiss cooperation faltered in any way.


Public records in Switzerland at the time reveals that there were a few Swiss who were ambivalent, and perhaps even sympathetic to the Nazi cause. Most however, were not and there was a plan in place for ferocious resistance to any German invasion. The Swiss had built mountain fortresses high in the Alps for that very reason.


Surely the Allies would have preferred to have Switzerland firmly committed to their cause; however, to have done so would have been suicide for the Swiss nation. Germany controlled all their sources of imports, upon which the Swiss are heavily dependent. While they are an active industrial nation, Switzerland has virtually no natural resources other than running water for hydroelectric power and the wits of their citizenry. The nation could not afford to have the Germans cut off their supply routes to the sea and other countries in Europe. It would have meant starvation as well as the threat of extinction in a German attack for Swiss citizens.


Switzerland's conduct was not without blame during the war. While it did provide a haven for 27,000 German Jewish refugees, it also turned away 30,000 others; even requesting the Nazis stamp a "J" on their passports to identify them, as a concession to the Germans, who threatened them." (44)
However, Switzerland also provided an invaluable base of operations for the CIA and Allen Dulles to gather vital intelligence about the German movements. They also harbored downed U.S. fliers who crashed or were shot down in Switzerland or the surrounding Axis territory.


During the war, the International Association of the Red Cross also found Switzerland invaluable in aiding countless persons displaced by the war and in improving conditions for Allied prisoners of war.


What Happened to the Lost Swiss Bank Accounts of War Victims


Banking secrecy can, in fact, be a dangerous financial double-edged sword if the depositor with a "secret" account dies without revealing the existence of the account. Looking back to the World War Two years, we must remember the penalty in Nazi Germany for a foreign unreported bank account was death. Therefore with the death penalty facing the owner of a secret Swiss account, many Germans chose not to reveal the existence and location of their accounts to anyone, even a family member. After all, most expected to survive the Hitler regime, but then the war came.


The Nazi agents often used deplorable tactics now copied by American government agents. For example, agents posed as clients requesting their funds or attempted to make deposits thereby exposing the existence of a secret bank account.


Swiss bankers and insurance companies complied with demands by German agents. And Germans wishing to leave, many of them Jewish, refrained from opening bank accounts in Switzerland under their own name. Mr. E. Witzig, then director of Swiss Credit Bank branch in Kreuzlingen, always warned foreigners not to use their own name. He asked his friends whether they would open such an account in their name and act as fiduciaries. He believed this to be a measure of precaution, also where his employees were concerned, since he no longer absolutely trusted all of them given their personal ties to the new Germany. (45)



Millions died during the war. Merchants and businessmen who had entrusted funds to Swiss banks went to their graves in internment and concentration camps without revealing their account information to their heirs. Sons, daughters and others who then tried to retrieve the accounts were unable to do so because of the Swiss secrecy laws that had been put in place for the benefit and safety of clients.


It is certainly clear how Swiss bank privacy is indeed a double-edged sword, useful but not without risk. American investors foolishly choosing to break U.S. law and reporting requirements should realize the high penalties for failure to report a foreign financial account plus the risk of the assets one is trying to protect being lost forever due to an accidental death.


Will the U.S. Also Come Clean on the Nazi Gold?


Just as Switzerland is reappraising its actions during World War II, so should the U.S., the Federal Reserve and certain banking interests collaborating with the BIS during the war. Former President Clinton indicated that an independent committee under former Federal Reserve Chairman, Paul Volcker would conduct their own investigation. Even Under Secretary of Commerce Stuart Eisenstat stated, "We have to be willing to follow the trail of assets into our own treasury." (46)


In the years that have passed since this promise to review the U.S. actions regarding the Nazi gold, it is apparent that a Fed chairman, and the Federal Reserve were unable to provide an objective account of U.S. banks actions during the Second World War.


Since neither the U.S. government, the Federal Reserve or the American banks involved in this matter never owned up to their questionable actions, we view the attacks on Switzerland and Swiss banks to be quite hypocritical at the very least.



It is extremely unfair to persecute Swiss banks and the nation of Switzerland for their roles in buying and moving German gold and in handling loot for the war while ignoring the roles played so many other European and western nations. While the Swiss record is less than spotless, so to is the record of every other nation during those times, including the United States, England, Germany, Portugal, Spain, Norway, Sweden, France just to name a few.


Efforts should be made by all parties involved to recognize and try to mitigate, in whatever way possible, the suffering and financial loss caused to peoples and countries during this dreadful tine of our world's history.
But rather than pointing fingers and casting blame on one particular country, shouldn't we all bear together the weight of allowing these crimes to take place?


… Of not respecting Swiss neutrality?


… Of not investigating individual victim's claims thoroughly immediately after the war?


… Of allowing Nazi officials to regain office in Germany in the years following the end of the conflict?


… Of allowing many Nazi officials to escape with millions of dollars to lead comfortable lives for the rest of their days?


… Of allowing American and British businessmen and their banking partners to profit from gold sales and trade while consorting with high-ranking enemy officials while our troops fought and died on the battlefields of Europe?


Yes, certainly there is blame enough to be place for the financial dealings during World War II. But it doesn't belong only to Switzerland.


There is blame enough for all to share – enough to go around the world.


A Special Message From Ron Holland


The destruction, death and property confiscation during the Second World War is blight on the history of the world. Many evils were perpetrated on innocent civilians during the war and it is time we set the record straight. The Swiss should be congratulated on their efforts rather than attacked and the U.S. and all other countries involved should rightfully follow the Swiss example.


The holocaust and Jewish property confiscation are extreme examples of what desperate and tyrannical governments can do to their own citizens. It is important to remember that democracy is no guarantee of good government as the Nazis were the legally elected government of Germany and they sadly received wide popular support for their activities prior to and during the early years of World War II. The scary lesson of Hitler and Nazi Germany shows that democracy does not provide total protection from tyranny when the government or politicians control the press and media outlets.


Government Is the Problem Not the Solution


In the German example, most of the looted gold sold, the civilian deaths resulting in lost bank accounts, and property confiscated were all the product of lawful government actions and extreme measures taken under wartime conditions. While these actions weren't right or moral, they were legal under the German legal system.


Also most of the civilian deaths in German concentration camps and the millions killed in the Allied firebombing of German cities were all atrocities but considered legal by the various governments committing these actions again under wartime emergency conditions.


FOOTNOTES

1 For a complete history of the Bank for International Settlements, see either Eleanor Dulles, The Bank for International Settlements at Work, Harvard Press, 1932, The Macmillan Company, New York, or Michael Eizner, The Bank for International Settlements, much of the history of the BIS found in this paper comes from these sources as noted.


2 Dulles, Eleanor, The Bank for International Settlements at Work, p.578
3 Higham, p.2
4 Dulles, p.2
5 Einzig, p.9
6 From the "Statutes for the Bank for International Settlements."
7 Dulles, p.580.
8 Dulles, p.49.
9 Dulles, p.586.
10 Dulles, p.79.
11 Dulles, p.81.
12 Dulles, p.499.
13 Eizner, p.10
14 Dulles, p.46
15 Jacobsson, p.190
16 Jacobsson, p.95
17 Jacobsson, p.152
18 Jacobsson, p.153
19 Trading with the Enemy, p.10
20 Dulles, p.50.
21 Jacobsson, p.165
22 Jacobsson, p.163
23 Jacobsson, p.192
24 Dulles, p.209
25 Dulles, p.97
26 Jacobsson, p.141
27 TWTE, p.xiv. For a fascinating and complete look at these interconnections, and many others, read Charles Highams complete book, Trading with the Enemy.
28 Higham, p.2
29 Higham, p.4
30 Jacobsson, p.140
31 Higham, p.6
32 Higham, p.6
33 Higham, p.7
34 Higham, p.7
35 Higham, p.8
36 Higham, p.14
37 Higham, p.16. Also found in the 1945 Senate Committee on Military Affairs Hearings.
38 Higham, p.17
39 Michael Hirsh, Newsweek, Nov. 4, 1996, p.48
40 Higham, p.61
41 Higham, p.xvii.
42 Hirsh, p.48
43 Hirsh, p.48
44 Henson, p.2
45 Bilanz, Schweizer Wirtschafts-Magazin, February 1997
46 Hirsh, p.47 ]]> Appenzell Daily Bell GoldInvestor http://www.gold-speculator.com/appenzell-daily-bell/36991-bis-trading-enemy-whole-story.html Tea Party Infighting? http://www.gold-speculator.com/appenzell-daily-bell/36990-tea-party-infighting.html Mon, 30 Aug 2010 07:04:01 GMT Tea Party Infighting?

Saturday, August 28, 2010 – by Staff Report

Splitting the Conservative Vote in Michigan's First District ... In the aftermath of the very close MI01 Republican primary, won by Dan Benishek of Crystal Falls by 15 votes, several things have transpired that has tested the friendships and trust of tea party members and patriots, and the movement itself. Glenn Wilson, a self-proclaimed independent, has entered the first district race and has co-opted former leadership of the tea party movement. In a Politico article Wilson is cited as being, "backed by several tea party groups." When in reality, he has hired the former leader of the Petoskey Tea Party and has the support of disgruntled libertarians. Rich Carlson is no longer the leader of any tea party group, and his friend, Randy Bishop, has completely alienated the tea party folks in Emmet County and many of the supporters he had in his bid to become State Senator to replace Jason Allen in Michigan's 37th. – Jennerationx

Dominant Social Theme: Fresh approaches will be the best.

Free-Market Analysis: This blog-article, while not "mainstream" of itself, touches on plenty of mainstream issues. It was also posted after being written on the "conservative" RedState website, and we found the discussion that took place there to be enlightening in terms of what is going on the Tea Party movement. The comments show quite clearly that Tea Party itself has significant rifts, as we wrote about months ago.

In fact, we would tend to believe those rifts are being exacerbated as mainstream pundits and politicians move decisively to try to capture its energy for themselves and their own viewpoints. Here's an additional dominant social theme: "The Tea Party is a movement of patriots and conservatives and the Republican Party provides a natural umbrella." In this article we want to examine some of those rifts and what they might portend.

The rift is emerging more powerfully now in our estimation. We recently commented on the seeming formal Tea Party takeover by former US House Majority Leader Dick Armey and his Freedomworks organization. With a pipeline into the Murdoch-owned Wall Street Journal, Armey has a powerful platform to reflect his views and he has been using it. One of Murdoch's publishing companies is printing a new book for Armey entitled, "Give Us Liberty: A Tea Party Manifesto."

You can see our article on Dick Armey here: Dick Armey's Tea Party Coup.
In the recent Wall Street Journal article also entitled A Tea Party Manifesto, Armey provided a powerful (if revisionist) history of the Tea Party. He claims (somewhat dubiously from our point of view) that Rick Santelli, the on-air commodities editor for the CNBC Business News network was the Tea Party catalyst when in February 2009 he called for a new "tea party" during an on-air rant against government-aid for private mortgages. Armey has also released a Contract From America that purports to be a distilling of the essential elements of a new free-market Tea Party movement.

The article we excerpted at the beginning of this analysis, "Splitting the Conservative Vote in Michigan's First District," is a real-life example of how the tension between the Armey-oriented Tea Party and the grass-roots effort is playing out. The gist of the article is that an independent "libertarian"-oriented candidate is going to be running in the Michigan First District.
The complaint on the Republican side is that the entrance of the independent candidate may result in throwing the election to Democrats. But the larger issue is the obvious tension. Here's a RedState comment on the article that we found most interesting. The article, posted by "Scope," is part of a larger post and the acronym C4L stands for the libertarian-oriented Campaign for Liberty organized by libertarian-Republican candidate for US president Ron Paul (R-TX):
The C4L had their panties in a bunch when Rick Santelli called for Tea Parties, and, they started happening. C4L claimed they were the first to start with the Tea Parties, and had the first ones. It is their goal to take over the Republican party, and have been very actively recruiting members and candidates since Paul's election loss in 08. Their candidates must pass a purity test, and the main qualifier is that the person follow Paul's isolationist national security/foreign policy dictates. There is no question they are growing in numbers, and they are in it to win it, no matter how long it takes. With the current shaky political atmosphere, and many not fully trusting the Republicans to do the right thing, even if they do win majorities in either/both houses, C4L is moving in for the kill, so to speak. They are trying to fill what they perceive as a vaccum in trust for either major party. They think this is their time to make their move. I believe they have taken over many of the local Tea Party groups, and have destroyed the purpose of the original Tea Party's. As Jaded had said, the Tea Parties are becoming irrelevant in one election cycle. We can thank Ron Paul, and his merry band of idiots for that. Glenn Beck, with his Libertarian claims hasn't helped the Republicans, or the Tea Parties.

This RedState reply hits many aspects of what we've been pointing out here at the Bell (along with many others on the blogosphere). It focuses directly on the split between libertarian and conservative Tea Party members and uses fairly apocalyptic language to do so: "C4L is moving in for the kill." Even more interestingly, the commentator writes, "The Tea Parties are becoming irrelevant in one election cycle. We can thank Ron Paul, and his merry band of idiots for that."

If the Tea Party movement has become irrelevant it is because unlike previous third-party movements, the Tea Party is likely somewhat immune to Republican party co-option. In fact, in our conclusion to the recent article on Dick Armey, we wrote, "The 21st century is unlike the 20th and 'control' is an increasingly contentious issue. It is difficult to co-opt a movement that is essentially amorphous and driven by the accelerating failure of the system itself rather than by populism or personalities."

We think we see signs of this. We note with interest that the Maine Tea Party movement has fallen into disarray in the past month as many in the movement mounted a kind of coup against one of the original founders who was accused of holding rallies that, as one participant pointed out, "are nothing more than a GOP promotion with little or no understanding gained for participants as to what the Tea Party Movement is about."

While we cannot vouch for what is actually occurring (and it seems things may have been smoothed over for the moment), the incident would seem to show that co-option of the growing numbers of those with libertarian, "constitutionalist"-oriented sentiments is not an easy process. The frustrated RedState commentator, above, makes the same point: "[Libertarians] think this is their time to make their move. I believe they have taken over many of the local Tea Party groups ..."

We personally have trouble figuring out why mainstream Republican-conservatives dislike their libertarian-Republican brethren. What is a libertarian but a person who, like founding father Thomas Jefferson, believes that smaller government is better, that most US government should take place at a state and local level and that "foreign entanglements" should be avoided? Of course, it is this last point that is especially contentious as the US has somewhere in the area of 1,000 overseas bases and a standing, volunteer army of hundreds of thousands.

We noted deficiencies in Dick Armey's Contract From America in our previous article. Finally, with the help of feedbackers we teased out four. The Contract made no mention of limiting or even doing away with the Federal Reserve. It said nothing about cutting back on American overseas ventures. It didn't mention the tragic and merciless "war on drugs" that has so empowered the US's increasingly quasi-police state, and finally it made no mention of public schools or the damage they are doing in terms of the increasingly statist curricula that is being taught.

We do believe this will be a different election cycle, or at least an era of different politics. Even if the libertarian and conservative elements of the Tea Party end up empowering some democratic candidates, this is probably not a long-term trend. In the long term, what is happening is that libertarian Republicans and libertarian (conservative) Democrats are beginning to find common ground. Those occupying common ground will wish to see the federal government trimmed back in terms of social activism, military power and economic interference.

Conclusion: Eventually, as this party "coalesces," (and we think it will) it will stand in opposition to liberal democrats (who want the state deeply involved in the economy) and patriot-conservatives (who celebrate the Anglo-American military axis and intelligence-industrial-security complex). Thus, if we are correct, the libertarian, anti-Leviathan party could gradually emerge as perhaps the largest of all American parties, or at the least the most committed and determined. We think this fundamental realignment may be underway now despite the efforts of the mainstream Republican party to control it and co-opt it. ]]> Appenzell Daily Bell GoldInvestor http://www.gold-speculator.com/appenzell-daily-bell/36990-tea-party-infighting.html False Lure of an Infrastructure Bank... More Vaccination Questions http://www.gold-speculator.com/appenzell-daily-bell/36910-false-lure-infrastructure-bank-more-vaccination-questions.html Fri, 27 Aug 2010 17:29:32 GMT False Lure of an Infrastructure Bank

Friday, August 27, 2010 – by Staff Report


The One Way Out Of The Recession ... Average Americans are noticing what wise economists have been arguing for quite some time: Bubble-driven economic downturns differ qualitatively from standard business-cycle recessions. Not only do they go deeper; GDP takes longer to rebound, and job creation proceeds more slowly. The mechanism is straightforward. As the value of assets used as collateral collapses, so does borrowing. This depresses consumption, and the real economy dips, making it much harder for businesses and households to service the debts incurred during boom times.
Household consumption remains sluggish until debt is reduced to a level that can comfortably be serviced out of current income, a process that cannot proceed without an increase in the household savings rate. The larger the debt overhang, the longer it will take to work off the excess. ... This is why we need a national infrastructure bank as the linchpin of a public investment strategy driven by economic analysis rather than congressional politics. Rather than bridges to nowhere, we need a bridge to the future. It's time for hide-bound appropriators to get out of the way. – The New Republic

Dominant Social Theme: Fresh approaches will be the best.

Free-Market Analysis: This is an interesting article because it acknowledges what free-market economic analysis has pointed out emphatically ever since the economic crisis began – that it was driven by a reckless and inflationary fiat money expansion. The New Republic article doesn't come right out and point fingers at central banking stimulation but it might as well. Central banks in this day and age are economic arbitrators, so when something goes wrong, the central bank gets the blame as well it should.

But what this article presents is the perspective that current Western (specifically US) state-spending solutions are not going to make a difference. We concur with this and, again, we think it is an important article. It appears in a thought magazine and American and British elites often used prestigious "thought" magazines in the past to float policies that are thus put in play for the larger mainstream media.

Of course we don't endorse The New Republic's solution, which seems like more of the same to us, though it appears to provide out-of-the-box thinking. This is what makes it noticeable. The dominant social theme espoused by the article might be: "These are difficult times and here on the Left we are not going to duck the problem but provide a new kind of solution that should be taken seriously as a result."

By actually acknowledging there is a problem, the article generates additional credibility. By embracing a dilemma it provides additional sincerity. The heavyweight nature of the article's author is also a selling point, as follows:
"William A. Galston holds the Ezra Zilkha Chair in the Brookings Institution's Governance Studies Program, where he serves as a Senior Fellow. He is also College Park Professor at the University of Maryland. He is the author of eight books in the fields of political theory, public policy, and American politics."
Here's a little bit about the Brooking's institute from Wikipedia: "The Brookings Institution is a nonprofit public policy organization based in Washington, D.C.
One of Washington's oldest think tanks, Brookings conducts research and education in the social sciences, primarily in economics, metropolitan policy, governance, foreign policy, and global economy and development. ... Brookings states that its scholars 'represent diverse points of view' and describes itself as non-partisan. The Foreign Policy Think Tank Index ranked Brookings as the #1 U.S. think tank in 2009. The organization's president, Strobe Talbott, was United States Deputy Secretary of State under President Bill Clinton."

Here is what Aim.org had to say about Strobe Talbott (2008): "Former Clinton Official Named as Russian Dupe ... The sensational charge against Strobe Talbott is made in a new book based on interviews with a Russian defector. The book, Comrade J, by veteran author and reporter Pete Earley, identifies Talbott as having been manipulated by a Russian official working for Russian intelligence ... Talbott himself has just written a book, The Great Experiment, describing his own background in the pro-world government World Federalist Movement and naming a network of friends and close associates that includes former President Bill Clinton and billionaire leftist George Soros. ... The purpose of Talbott's book is to promote 'global governance,' a euphemism for world government. It is defined in the subtitle as 'The Quest for a Global Nation.'"

Though the Brookings Institute has been named by the Foreign Policy Think Tank Index as the number one think tank in 2009, there are obviously controversies swirling about the group. While the Institute itself does not define its activities as coming from a leftist slant, it would seem that Talbott's associates such as George Soros are definitely left-of-center in terms of how they position their resources and rhetoric. And in fact the article in Free Republic magazine from Galston proposes what to us is a fairly statist solution to the ongoing economic crisis. This sort of bank was already proposed by the Obama administration, we learn from Wikipedia, and there is legislation on it pending in the House:

The creation of a National Infrastructure Reinvestment Bank was first proposed by Senator Christopher J. Dodd and Senator Chuck Hagel in 2007. Barack Obama backed this proposed legislation in February 2008. Obama suggested that the Bank would borrow US$60 billion of federal funding to invest in infrastructure over 10 years, while leveraging "up to $500 billion" of private investment. It would invest in high-speed trains to provide an alternative to air travel, energy efficiency and clean energy, among others.

According to Obama, the Bank's "work will be determined by what will maximize our safety and security and ability to compete" and it would "create nearly two million new jobs", mainly in the construction industry. According to the text of the proposed legislation funding for the bank would be taken from borrowed funds not to exceed one percent. The Bank would complement existing federal programs to fund infrastructure, such as the Highway Trust Fund or State Revolving Funds. It is expected to invest primarily in surface transport infrastructure, which is likely to include highways and mass transit. ...
The original version of the bill expired with the 110th Congress, a different version of the bill was introduced into the 111th Congress by U.S. Representative Rosa L. DeLauro, (D – Connecticut 3rd District) as H.R. 2521. Obama proposed the Bank as part of his $210 billion economic stimulus package. A similar bill has been introduced into the United States House of Representatives as House Resolution 3401 (H.R. 3401). The status of the bill can be tracked on THOMAS, the database of United States Congress legislative information. (-Wikipedia)

The significance of this article to us is the lack of feasibility and the way that it has been presented. The Obama administration has already tried to create this sort of bank without success and now apparently the idea is important enough to recycle. It is from our perspective important not just from a policy standpoint but more importantly from a promotional one. The braintrust around Obama has been trying to portray him as the second coming of Franklin Delano Roosevelt and these sorts of projects might be seen as offering a flavor of the Roosevelt administration.

That does not mean Galston is in any way knowingly involved in what might be characterized as an elite promotion, but the mechanism is undeniable. Such proposals, as we have pointed out many times, are often floated by "think tanks" to give them credibility and then further massaged in thought publications such as the New Yorker, Free Republic, Atlantic, etc. Like trial balloons, reaction is gauged and criticism is teased out. Eventually someone like Galston might find himself on TV talk shows or "Face the Nation." He might be interviewed for a business article in the pages of the New York Times, etc. Such publicity would make the actual legislation more feasible.

So ... the article is notable to us because it has from our point of view the profile of an elite promotion – and because of its viability or lack thereof. From a free-market economic standpoint, it is a lousy idea that once more involves the power elite controlled federal government in steering the economy through yet another unaccountable banking bureaucracy.

From a political standpoint, the notion is probably a non-starter (at least currently) as the US Congress is probably going to go through a major upheaval in November. The powers-that-be remain curiously out-of-step with the mood of the nation in our opinion. Web-of-Debt-pundit Ellen Brown's ideas for state banks (which we do not support either) are far more timely from a political-psychological point of view and may have proverbial "legs."

Conclusion: We think the performance of the Obama administration has been a terrible blow to the powers-that-be who hoped his charisma would carry over and help defuse the anger and frustration that is building in America today. From the standpoint of power-elite meme analysis, this infrastructure bank idea provides yet more proof that the elite is having difficulty identifying with the mood of the larger electorate. That may be more important than the seeming haplessness of the program itself.




More Vaccination Questions

Friday, August 27, 2010 – by Staff Report


The National Institute for Health and Welfare (THL) ordered to stop the use of Pandemrix swine flu vaccine to the public due the probable link to narcolepsy in children. According to THL, it stopped giving swine flu vaccine, until results of the probe on the possible correlation of the vaccine and the onset of narcolepsy are released. The agency received six reports of children who have developed chronic sleep disorders after they received the vaccine in January 2010, thus, they want conduct a probe to ensure that these cases of narcolepsy is correlated with the drug Pandemrix, developed by pharmaceutical company GlaxoSmithKline. – Seer News

Dominant Social Theme: Precautions must be taken, but there is probably nothing to worry about.

Free-Market Analysis: We were surprised that this story hit the mainstream headlines because pharmaceutical companies seem to make a good deal of money from vaccines (and certainly benefit from the credibility of providing them) and therefore anti-vaccine stories don't get much play in the mainstream media. This one is fairly important, however, and coverage is unavoidable.

Nonetheless, the coverage has not been exactly enthusiastic. While the story was widely reported in the alternative blogosphere, Google seemed to bury it. A check of headlines on the story yields little even though it is the kind of "alarmist" story that news services ordinarily love. At the time of this reporting, we could not find either an AP or Reuters story about it, which is quite remarkable. It was reported on Yahoo, in an AFP pickup. Huffington Post wrote about it as well, but that was an InfoWars pickup.

We think the story warrants more coverage than this (and maybe by the time you are reading this, it will have received it). Not only did Finland order the vaccine halted, but Sweden has opened an investigation as well. Given the level of controversy surrounding vaccines, that two Western nations would formally announce the investigation of a vaccine program is pretty big news.

Of course, an investigation is not a conclusion. The AFP news story tells us, "A cause-and-effect relationship between Pandemrix and narcolepsy is far from proven, with Finland's THL pointing out that the swine flu virus H1N1 itself could possibly cause the disease ... In the European Union alone, around 30 million people were vaccinated using Pandemrix. Sweden bought 18 million doses, which was enough to provide two injections for each of its 9.3 million inhabitants. According to Finland's National Health Institute, 2.5 million Finns were vaccinated against swine flu. Some 750 showed side effects, namely fevers, headaches and coughing, and one case was linked to narcolepsy."

Nonetheless, we cannot help thinking there is something more at work here. We are well aware of the controversy – and fear – that surround vaccination programs. We had the opportunity to interview Dr. Andrew Wakefield fairly recently, who is at the epicenter of the vaccine storm. Wakefield has indicated that vaccines, especially if taken in multiple quantities, may affect certain children who are predisposed to be injured by them. One of the results, he has suggested, that needs further study is a potential linkage between autism and vaccines.

To read that Daily Bell interview, click here.

As a result of suggesting this possibility, Wakefield has been pilloried. A research paper has been retracted without his cooperation and he has been barred from practicing medicine in Britain. He has written a book defending himself and his theories, which has been well received by the autism community and by the "alternative health" community generally. But the attacks continue. During the interview we asked him how his personal experiences had made him feel and whether there was "corruption throughout mainstream Western medicine." He answered as followed:

Yes, undoubtedly. Let me give you an ... example. In the Merck trial in Australia, Merck revealed how they were determined to deal with doctors who dissented from the use of Vioxx, or considered Vioxx unsafe. And those internal memos talked about how they would discredit them and neutralize them and the last internal memo to be read out had the following line, referring to those doctors, 'We may have to seek them out and destroy them where they live." Those are their own words. So sometimes it appears that it's corporate policy rather than conspiracy theory, but that is the environment in which doctors work and operate and the problems they face if they confront drug company policy. So in answer to your question is the corruption? Is there distortion? Is there manipulation? Absolutely.

It certainly seems to us that the powers-that-be standing behind many of these pharmaceutical companies and their "medical model" continue to do whatever they can to intimidate those who would raise questions about vaccines and their side effects. The Swine Flu epidemic never fully materialized and the World Health Organization, which issued such dire warnings urging people to get vaccinated for it, has been called (tepidly) to account. Yet like so many elite promotions, the vaccine industry rolls forward despite continuing questions and ever greater agitation from parents.

Conclusion: As we pointed out in the commentary following the interview with Dr. Wakefield, his treatment to us is reminiscent of the how global warming dissenters were treated. Papers were suppressed or retracted and the full weight of establishment institutions was brought to bear in terms of ridiculing those who dared question the "established science" of global warming. We are not surprised therefore that the moves by Finland and Sweden have not yet reached a critical mass of mainstream coverage. We would hope if the linkages are proven that the coverage is significantly deepened and widened. ]]> Appenzell Daily Bell GoldSpeculator http://www.gold-speculator.com/appenzell-daily-bell/36910-false-lure-infrastructure-bank-more-vaccination-questions.html The End of Global Banking Misery?.. Meme of the Mosque http://www.gold-speculator.com/appenzell-daily-bell/36821-end-global-banking-misery-meme-mosque.html Thu, 26 Aug 2010 17:08:17 GMT The End of Global Banking Misery?

Thursday, August 26, 2010 – by Staff Report


Unemployment is a global problem ... In South Africa this summer for the Global Forum hosted by Fortune, Time, and CNN in Cape Town, I was in a car driving northwest from Johannesburg in the pale winter sun, marveling at an endless landscape, when we suddenly came across what can only be described as a rural slum. It was the sort of place into which African workers had been cruelly decanted under the apartheid regime: row upon row of tin shacks, a few miserable roadside markets, kids trying to flag us down to sell soccer scarves and oranges. We didn't stop. It was a reminder that amid all the optimism about South Africa's prospects – and the justified plaudits for its hosting of soccer's World Cup – the nation has deep structural problems. The official unemployment rate is 25%; in North West province, where we were driving, only 35% of the working-age population has a job. Even allowing for a significant informal economy, those are staggering numbers. Little wonder that South African officials say weak "labor absorption" (a fancy way of saying growth is not generating enough jobs) is their key economic challenge. – Fortune

Dominant Social Theme: The West needs to try harder.

Free-Market Analysis: Western command-and-control systems are worldwide now. In fact, of course, this is a dominant social theme: "The West's economic perspective is a global one because of its efficiency and it is necessary to deal with it in a global way."

We disagree with this perspective. While the West may have a dominant economic model, this does not mean from our point of view that it is the best one or the only one. The West's model seems based on the discovery by a shadowy, ruling elite that they can print unlimited amounts of money and force other cultures to accept that system at the point of a metaphorical gun.
We can see this process at work in Iraq and Afghanistan. In both countries the Anglo-American elite has seemingly orchestrated invasions based on confronting the terror-purveyors that caused 9/11. Yet there is no direct evidence (that we know of) that either Iraq or Afghanistan were substantively involved in 9/11, while most of those that the FBI accused of taking part were Saudi Arabians.

It seems to us that the reasons for invading Iraq and Afghanistan were flimsy. But what has taken place in these countries since then is not at all flimsy. The Anglo-American axis and NATO have attacked hard, have reconfigured the sociopolitical fabric of these two countries and most importantly are in the midst of installing huge armies in both countries. The political establishment is dependent in both cases on these armies, which is one reason why the Western press itself can run so many articles about high level politicos begging Western troops not to leave.

In any event, along with installing a compliant bureaucracy and an army to support it, Western powers inevitably install the West's mercantilist central banking system as well. Both Afghanistan and Iraq will emerge (if the West has its way) from the violent process with mini-Anglo-American cultures. Women will be empowered (to work long hours away from the children); a federal income tax will be levied to fund the various corrupt practices of the central government and its patronage mechanism; and, finally and most importantly, a central bank will begin to spew money at the behest of the BIS, IMF and other Anglo-America financial authorities.

This is how the Anglo-American dollar reserve currency has taken hold. The dollar became widespread after the devastation of World War II and subsequent Anglo-American-designed Bretton Woods agreement. Since then, with various setbacks, it has been propagated via still more violence and nation-state destabilization. Installing the dollar around the world is one mechanism that the Anglo-American elite has used to gain a global advantage. But Bretton Woods itself designed a global infrastructure that the Anglo-American elite has put to good use.

The chief driving economic mechanism of the Western elite is the mercantilist, fiat-money central bank. The booms and busts of this enterprise drive Western economies toward fuller employment but then, during busts, create significant unemployment. In fact, the current Great Recession is not just another hiccup on the way to a gigantic, global recovery but a fundamental failure of the dollar-reserve fiat currency that the power elite has promoted for over a century. The result of this failure has in a sense bankrupted the citizenry of the West, the banking establishment itself and now, as the Great Recession unrolls, governments too.

How did this happen? When (fairly modern) central banks successfully penetrated the West at least 100 years ago, the great distortion of money and the economy began. We have written of this in the past and called it "Dreamtime." When vast money flows surge into the economy, people begin to believe they can have anything they want. They put money in the stock market, sell their generational farms, buy urban houses and change jobs. But then the money flows out and stocks go down, houses are forfeit, jobs are lost and suddenly even food is problem.

Sometimes the central bank can reflate but often it cannot do so, or not enough to prevent a contraction of the economy. And thus, like a boa constrictor, in stages, the central banking economy swallows the private economy. The banking sector itself, midwife to the central bank, waxes fat on the larger misfortune. The economy is continually centralized. Money and power flow to those who stand in the shadows behind the central banks and the Swiss-based BIS. Only certain elite-affiliated corporations thrive and every time there is a downturn more and more jobs are lost and government is empowered.

Ideally, from an elite point of view, this process might have continued until it forced a kind of inevitable global centralization of employment, property and authority. But as we continually point out, the Internet has come along and interrupted the various promotions that have surrounded the central banking mechanism and confused the reality of its destructive grasp. More and more "get it" – and as they do, the mechanism itself is increasingly paralyzed. Bold steps cannot be taken because the distrust and anger are too high.

What is left today after a century of Western economic depredations and globalization of the mercantilist central banking/dollar denominated economy? It has not likely proved an adequate substitute for what came before. There may have been poverty in tribal Africa but one has trouble believing that 70 percent of the African workforce had no way of finding sustenance. The European and American unemployment rates supposedly stand at 10 percent – but those numbers can easily be doubled as bureaucracies always lie about unemployment statistics. And certainly as the Great Recession drags on, these numbers may go up further.

The problem with central banking is that it leaves ruin wherever it goes. Currently, China is enjoying a boom and the central banking system there is being presented as a success. It is not. Eventually the hyper-stimulation of paper money that has produced so much growth will wane and the Chinese will emerge, blinking and bawling into the dawn of a new and far more painful reality. This is the fate of all who are exposed to mercantilist central banking economies. It has nothing to do with race or intelligence or industriousness. Central banking lifts economies up, then sets them back down, bleeding and wounded. In the process, more and more are "unemployed" and more "jobs are not coming back."

It is a cruel hoax. "Change" becomes the watchword because of the "creative destruction" of fiat money. Society is tortured. Parents can leave little or nothing to their children. Financial reversals are commonplace. Money loses values and then the pain is compounded by money scarcity and high interest rates that bankrupt even more. Central banking does not support employment or civil society. It is in fact an UNEMPLOYMENT system. It is an INFLATION manufacturing system. It is profoundly disruptive.

It is fortunate in our view that the Internet came along when it did to explain the system more fully to an ever-widening audience. We would tend to believe that the system's fiat-banking globalization will go a good deal more slowly as a result. We have predicted a return of some sort of gold standard – or more hopefully a private gold and silver standard. We have noticed lately there is much more chatter about such an occurrence and that the Federal Reserve apparently has some contingency plans along these lines.

Conclusion: We have been writing such things for more than a decade now and predicting their occurrence because of the inevitable degradation of elite memes. It is happening in our view even faster than we expected due to a combination of the current economic collapse and the availability of Internet information. We would tend to believe these trends, which are like great sluggish currents, will not be easily reversed and that the power elite will be forced to step back as it has before.




Meme of the Mosque

Thursday, August 26, 2010 – by Staff Report

Michael Bloomberg

Mayor Defends Mosque ... Mayor Michael Bloomberg (left) delivered an impassioned speech on religious freedom at a Ramadan dinner at Gracie Mansion Tuesday night, declaring there's "nowhere in the five boroughs of New York City that is off limits to any religion." Mr. Bloomberg, speaking at an annual Iftar dinner, said he understood the impulse to find an alternative location for the proposed mosque and Islamic cultural center near Ground Zero. But this kind of "compromise," as Gov. David Paterson and others have suggested, will not the end the debate, he said. "The question will then become, how big should the 'no-mosque zone' be around the World Trade Center site? There is already a mosque four blocks away. Should it be moved?" the mayor said. "This is a test of our commitment to American values. We have to have the courage of our convictions. We must do what is right, not what is easy.". – Wall Street Journal

Dominant Social Theme: Courageous Americans will speak up for the freedom of religion.

Free-Market Analysis: From our humble point of view, the controversy surrounding the mosque near Ground Zero has already done the job it is supposed to do. Its main duty might be seen, from a promotional standpoint, as one of bringing American's attention back again to the realization that Muslims are evil and that 911 was a heinous Muslim act. This is a kind of elite dominant social theme from our perspective: "The Jihad is underway and the West needs to protect itself."

Is there perfect proof? No, of course not. But we didn't have proof about global warming either. According to the notorious emails that came to light, information contrary to the global warming promotion was indeed being suppressed. Data was rigged, alternative viewpoints were ridiculed and the United Nations itself was utilized to promote additional false information – which the powers-that-be later explained were merely mistakes.

The global warming promotion was – and is – intended, in our view (and others) to usher in a kind of carbon currency and to provide a justification to control and track the energy usage of citizens. It is not complex. It is, bluntly, an empowering meme that enables the elite to leverage legislation and data flows. There is, in fact, a new, intrusive technological system being created throughout the West called Smart Grid, and we have written about it before. The idea, apparently, is to monitor (and control) people's consumption of energy in great detail. You can see the article here: Smart Grid Trojan Horse of the New World Order?

Who do we find behind Smart Grid-type suggestions? Believe it or not, when we lift the curtain we discover M. King Hubbert, the developer of the Peak Oil Theory. Way back in 1932, he established a detailed framework for such innovations as Smart Grid. According to Hubbert, as we wrote then, "the distribution of energy resources must be monitored and measured in order for the system to work – and this is the key: monitoring and measuring."

What are the chances that the developer of the Peak Oil panic happens to be a leader of a philosophical school known as Technocracy, popularized in the early-to-mid 1900s? Sure it could all be coincidence. But for those who are concerned with the ever-increasing intrusiveness of state power, and the constant expansion of such coincidences that may be seen as a bit too coincidental for comfort. And now comes the meme of the mosque. A feedbacker of ours forwarded a "mosque" post from one Anthony Tomei of FutureDataBank.com, which we excerpt as follows:

My prediction is that this mosque issue is staged to bring out three feelings in the general public:

1. To get Americans both left and right to feel some new animosity toward Muslims and Muslim people as a whole.
2. To inject elements of the "official 9/11 story" back into the national consciousness.
3. Iran pre-game.

Tomei points out what many others have, that the Imam behind the mosque Feisel Abdul Rauf runs the American Society for Muslim Advancement, which is the recipient of a virtual who's who of prestigious non profits including Carnegie and Rockefeller foundations. Additionally, he points out that Imam Feisal is a member of the elite World Economic Forum Council of 100 Leaders.

Now it may be that none of these non-profits are directly involved in the construction of the downtown New York mosque, but Saudi Arabian money apparently is. Even the mainstream media gets this point. Funny man John Stewart reported on his US TV show the other evening that the mosque may be partially funded by Saudi Prince Alwaleed bin Talal, a major shareholder in Fox News Corporation.

Another coincidence? (Maybe the powers-that-be just don't care after so much exposure?) Anyway, the main point of this putative promotion, in our view, would be to relink once again mosques with 9/11 and thus with Muslims and Islamic terror. Now New York Mayor Michael Bloomberg, an insider's insider, has weighed in on the issue from a "free-speech" point of view (see article excerpt above). Bloomberg, of course has bankrupted pubs all over New York by insisting that patrons not be able to smoke cigarettes indoors, but regarding the mosque, he is suddenly a free-speech champion.

Ultimately, we would posit, the issue may return to 9/11, just as Tomei writes, and hypothetically combating skepticism about aspects of the mainstream story. There remain, generally, plenty of questions about 9/11 and some of the 9/11 Commission members themselves have virtually disavowed their report. You can read the Daily Bell article here: Washington Times Covers 911 Controversy.

The fallout from 9/11 has led America into two wars and provided the military industrial complex with manifold justifications for more authoritarian societies, warrantless wiretapping, doing away with habeas corpus, etc. If one believes in a power elite that is continually trying to centralize power and wealth while moving toward global governance, then 9/11 and the consequent "war on terror" have provided ample justification to help the elite realize both of these goals. Reminding people about these issues would serve a purpose.

Conclusion: It seems to us that the mosque would be a perfect kind of provocation for those who want to reinforce the meme of the "Mulsim Bogeyman" that we wrote about just recently. It is very convenient for the powers-that-be to continually incite hatred against Muslims and to relink 9/11 with Islam and mosques in the public mind. It provides continued justification for the "war on terror" and for removing civil liberties at home. ]]> Appenzell Daily Bell GoldSpeculator http://www.gold-speculator.com/appenzell-daily-bell/36821-end-global-banking-misery-meme-mosque.html Is It an Elite Depression?.. Political Paralysis Spreads to Australia? http://www.gold-speculator.com/appenzell-daily-bell/36713-elite-depression-political-paralysis-spreads-australia.html Wed, 25 Aug 2010 16:58:06 GMT Is It an Elite Depression?

Wednesday, August 25, 2010 – by Staff Report


Economy Caught in Depression, Not Recession ... Positive gross domestic product readings and other mildly hopeful signs are masking an ugly truth: The US economy is in a 1930s-style Depression, Gluskin Sheff economist David Rosenberg said Tuesday. Writing in his daily briefing to investors, Rosenberg said the Great Depression also had its high points, with a series of positive GDP reports and sharp stock market gains. But then as now, those signs of recovery were unsustainable and only provided a false sense of stability, said Rosenberg. Rosenberg calls current economic conditions "a depression, and not just some garden-variety recession," and notes that any good news both during the initial 1929-33 recession and the one that began in 2008 triggered "euphoric response." – CNBC

Dominant Social Theme: All is well? Or maybe not?

Free-Market Analysis: In analyzing the memes of the Anglo-American power elite and its seemingly berserker attempts at creating global governance, we face the conundrum of whether what is going on is part of a larger plan or the crumbling of a plan. This is not just a question for the Daily Bell but for readers, feedbackers and others who see the Western world from the standpoint of elite control of financial, military and sociopolitical mechanisms.

When it comes to the economy, we believe the outstanding, or pre-eminent dominant social theme is "the Western world faces an economic crisis but with a steady hand at the top from wise central bankers and with citizens willing to take the tough medicine of austerity all will be well."

But is this so? The Great Recession as it is now called, has spawned numerous cliches in the mainstream media, many of them medical terminology – as the powers-that-be struggle to maintain control of the message. Thus far we would argue they are holding, but barely. And if the larger global economy continues to unravel, we would guess that the more optimistic messages themselves will come under increasing strain.

What is the messaging? The West, and especially the spendthrift European PIGS, are likened to patients with pathologies and the cure, of course, is seen as one of discipline and "getting back to the basics" of thrift and saving. This perspective is commingled, of course, in this day and age, between the state and the individual, so that there is unfortunately no clear distinction. Greece, for instance, is portrayed as a nation of spendthrifts and its government merely representative of the larger problem.

Currently, as we stated above, the viewpoints of many citizens of the West when it comes to the economic crisis are colored by mainstream reporting. (How could they not be?) But this does not mean the reporting is in any sense accurate. In fact, the Bell's perspective, and one that seems to have touched a nerve within the blogosphere, is that the powers-that-be attempt to maintain control of civil society via fear-based promotions that are in a sense marketed by an elite-dominated mainstream media.

These promotions of necessity provide an authoritarian solution that has previously been put in place, often some sort of UN-oriented "fix" via that organization's myriad dysfunctional agencies or affiliations. However, there are also global solutions available via "non-governmental organizations" and quasi-independent bureaucracies set up to enforce treaties, trade agreements, etc. As we regularly point out, people are induced to give up power and control over their lives via these fear-based promotions and thus become more amenable to the command-and-control enterprises that are conveniently provided.

Over time, we've placed one more overlay on our perspective. We concluded after a good deal of study of historical elements that the history of humankind is in large part one of effective communication. Those who wish to control society – and there have been elites trying to do this since the rise of city states – depend on the creation of various memes (and the conflicts that result from such belief systems). These memes (religious, political and military, etc.) generally tell a story that organizes society to the benefit of its leaders.

But once in a while, especially in modern history, communicative technology begins to outpace the themes that the powers-that-be have inculcated. An alternative message begins to circulate and people begin to question not just what they are told day-to-day but even their fundamental or core societal beliefs. These beliefs may have to do with the inevitability of state control, the competence of current leadership, the reality of deities or a deity and many more. It is hard for people to question their core programming but we would argue that during an era of significant communication upheaval, such questioning occurs.

The precursor for such questioning is the availability and information and points of view that have not been available previously due to elite suppression. This may have happened, as the Bell has pointed out during the era of the Gutenberg press (spawning the Renaissance, Reformation, etc.) and it is perhaps happening now as well during the era of the Internet. The process, we would argue, could be so far advanced in the modern era (having moved far faster that we expected) that it may not be reversible. While it would be easy for us here at the Bell to remain agnostic about elite promotions, we have taken up the challenge of trying to analyze the results of the collision between the Internet and elite dominant social themes as we have analyzed them.

We are trying to do what we suggest investors do in the 21st century, which is to evaluate whether elite memes remain believable (and thus viable tools for social organization) or whether they are beginning to crumble. What has been the result? The Internet is a most democratic place; the ever-increasing streams of traffic to the Bell would indicate that our perspectives on the economic crisis are, if not popular, at least compelling to a certain stratum of electronic readership.

We are not surprised, of course. We think such a historical perspective is a compelling one and is far more viable long-term than historical perspectives that emphasize sociopolitical trends, the "great man" theory of history etc. No, for us and for those feedbackers who stop by here (and educate us every day) modern history especially is a struggle between a powerful, monied, familial elite that uses an intergenerational toolkit to help control society and new technologies that broadcast information antithetical to elite theses.

So let us now return to the question we asked at the beginning of this article: Whether what is going on is part of a larger plan or the crumbling of a plan. Having decided NOT to be agnostic, we will answer tentatively, as we have before, that the elite plan insofar as the economy is concerned is "crumbling." There is no way that the powers-that-be in our estimation do not understand fully the ramifications of the fiat-money, central banking boom-bust system that has been foisted on the West over the past 40 years. But we think, as we have stated before, that the elite miscalculated the impact of the inevitable results.

Not for us is the prevailing point of view among the Internet's "conspiracy" sites that the powers-that-be are infallible or all-powerful. Enormous amounts of money and the ability to control governments (which we too perceive the elite has) are great advantages but the invisible hand of the marketplace itself is even stronger than elite control. This is yet a third overlay of analysis that we have offered and a most important one. If one concludes that the free-market itself is overwhelming the elite promotional agenda then further complexities arise and additional judgments have to be made.

It is our humble opinion that a market backlash against the West's central banking economy when combined with the truth-telling of the Internet is causing a historical rupture in terms of elite planning. We think it may even cause the elite to take a step back at some point, and to abandon what would seem their plans and timelines regarding ever-more-centralized Western governance.

We do not believe at this point that the elite is in control of events. It is a fact that the powers-that-be were panicked by the swirl of radicalism and discontent caused by the Great Depression. It is our perspective that World War II was possibly, in part, an elite solution to the discontent caused by the failure of the elite's central banking-oriented economy. But we do not believe that the elite is capable at this moment of fomenting another world war.
The wealthiest, elite families apparently seek control, not more "money."
Control, in fact, is an organizational force that likely guides their actions. But they are confronted today by forces beyond their control. The market itself is undermining the West's central-banking (boom-and-bust) economy. And the truth-telling of the Internet is undermining the credibility of the system itself and the rationale for its configuration. In both Europe and America the same question arises: How can tiny groups of men (central bankers) predict the volume and rate of money necessary for complex economies? In fact, they cannot. Central banking is a form of price fixing that ultimately causes queues, scarcity, rationing and economic ruination.

Sometimes those in charge of this perverse system can "re-stimulate" by printing yet more money but not in this case. In this case, as we have argued previously many times, the bust is a generic one. Fiat money itself – and especially the reserve currency of the dollar – has been compromised. Inevitably, some sort of new economic and monetary system is going to arise. We have argued that it may well be gold based, or gold-and-silver-based and we see no reason to revise our perspective.


In the CNBC article excerpted above, we can see questions continue to percolate about what really is happening during this Great Recession. In fact, in America especially, unemployment is estimated at 20 percent or more. (We think it is even higher.) In Europe, the economic crisis has not abated and frustrations are building over "austerity" measures in Greece and elsewhere. Countries like Spain are taking desperate measures to prop up bond markets. Here is what the UK Telegraph had to say on the matter just yesterday:

Spain uses social security fund to prop up the bond market ... Spain is putting all its eggs into one basket, and if it carries on like this, we may start to see a lot of Basques and Catalans crowding into one exit. The state pension fund – the €64bn Fondo de Reserva, known as the 'hucha de las pensiones' – is buying Spanish sovereign debt at a vertiginous pace. The financial daily Cinco Dias reports that the share of the Fondo's total portfolio invested in Spanish government bonds rose from below 50pc in 2007 to 76pc in 2009. ... Evidently, Spanish savers are underpinning Madrid's Treasury auctions, whether they like or not. It is they who are mopping up the debt along with the European Central Bank as foreign creditors stay away. The Bank of New York Mellon said that its iFlow data on bonds reveal that foreign demand for Spanish debt has "dried up" again after a brief recovery in July. There has also been some "net selling" of French bonds. ... We will hear more of that Gallic sub-plot over the next year.

In America the situation does not seem much better. While it is always difficult to divine Federal Reserve intentions, we began arguing well over a year ago (long before it was popular) that the Fed was losing credibility and that it would come under significant pressure in terms of its operations. We would argue this has indeed happened and that the result is increasingly one of stagnation. The Fed, and Ben Bernanke himself, are afraid to take bold steps because of the pressure of the attacks that are underway. The Fed as an institution is somewhat paralyzed at this point. Yesterday an interesting article was issued in the US Philadelphia Bulletin on this matter, as follows:

The Federal Reserve's Historic Announcement ... Mark it down. At 2:15 p.m. on Tuesday, August 10, 2010, the U.S. Federal Reserve made a historic announcement. It signaled that the central bank was going to "preserve the size of its balance sheet." The announcement didn't sound all that dramatic, but don't be fooled. In the two subsequent days, the stock market fell over 300 points, and the price of gold rose $20. The Fed's balance sheet, which historically consisted of nearly 100 percent U.S. Treasury securities, has grown in size from about $850 billion to a towering $2.3 trillion (or $2,300 billion) currently. In the middle of the financial crisis two years ago, the Fed expanded its holding of securities by purchasing lower-quality, mortgage-backed debt securities primarily from our nation's domestic banking system. The need for this balance sheet expansion was to provide massive liquidity for our entire financial system. ...

The political class in Washington will see the Fed's announcement as a potential gold mine. They will no doubt attempt to mine it for all it's worth. The significantly rising risk is that the accumulation of future government debt attended to this process will result in hyperinflation rather than a garden-variety, modest inflation. Hyperinflation occurs when there is a total collapse of confidence in a currency. A central bank that is willing to simply print money out of thin air to finance unlimited amounts of debt will eventually undermine the confidence in the currency being managed as lenders eventually seize on the realization that they will never be paid back in anything other than worthless paper. The road to hell is indeed paved with good intentions.

In this article we have presented an argument that the current economic system is not rebounding as the mainstream media has advertised. The twin forces of the Internet and the free-market itself have provided a powerful countervailing force to "recovery" (or even claims or recovery) – and we expect this state of affairs to continue. The power elite that has evidently and obviously organized the current Western economic system has a stake in its survival; we would argue that while a certain amount of chaos is appreciated by the elite as it strives for evermore financial consolidation, the kind of chaos that now threatens the system is beyond what was expected.

What can the elite do? A world war would doubtless kick-start the Western world's monetary engine (as books like General Smedley Butler's "War Is a Racket" explain) but in the nuclear age such a war is difficult to mount. The unraveling of the current system may eventually give rise to calls for a new economic system, but this is not the 20th century. A convocation of wise men will only fuel the current anger and disdain that many have for the current central banking economy. The alternative, as we see it, is to take piecemeal steps toward "something else" – and this the elite may be trying to do through the IMF and its SDRs. But even here, there has already been considerable speculation as to what the IMF powers-that-be have in mind. Where has the speculation occurred – on the Internet of course.

Conclusion: The apparent tools of the elite – war, economic chaos and dominant social themes – are increasingly of questionable value in the 21st century. We do not argue that such tools are useless or that the elite will not succeed in maintaining the control it already has. But we do submit that things are not getting any better and that they may even get worse. If they do, the ramifications could be as meaningful as anything that happened 500 years ago with the advent of the Gutenberg press. This is what we think people should be paying attention to. The next few years – even the next few months – could be a critical time for Western economies and even for the larger elite configuration of society itself.




Political Paralysis Spreads to Australia?

Wednesday, August 25, 2010 – by Staff Report


Australia's independent "kingmaker" MPs Wednesday called for detailed cost analysis of pre-election promises as they weigh up which party to put into power after polls failed to produce a winner. Tony Windsor, Bob Katter and Rob Oakeshott, suddenly in the spotlight after the closest election in decades, made the surprise demand as they prepared for talks with Prime Minister Julia Gillard and opposition leader Tony Abbott. ... Windsor warned he would not support either party if he did not see enough "goodwill", potentially sending Australia's 14 million voters back to the polls in a matter of months. "If there is no goodwill displayed by both leaders and their party members, and if we can't see a future in terms of some longevity... of the parliament itself, I won't support either of them," he said. "There's a third option (other than Labor and the coalition), and that's another poll." The Australian Electoral Commission's latest running tally gives Labor 70 seats and the coalition 71, with both short of the 76 needed for a majority and relying on the independents and lone Greens MP Adam Bandt. – AFP

Dominant Social Theme: While democracy is messy, it is the best system that the West has got and we will muddle through.

Free-Market Analysis: We have spent time in the past several years analyzing the ongoing unraveling of the power elite's "democracy" meme. This of course is a widespread perception now; in America has even caused a new political movement – the Tea Party movement. Many people in America and throughout the West are increasingly dissatisfied with their political choices. The dominant social theme of course is that one must vote for those individuals or parties that best represent one's belief system and professional and personal preferences.

What is both odd and compelling about this political promotion is that it dovetails with the larger political programming that people in the West receive over time. One could make the argument that the entire academic system is geared to inculcate a certain set of beliefs. This is a pervasive system found not just in America or Britain but throughout Europe and in Australia too. The belief system, curiously, from what we can tell, is prevalent in Japan and China. The only place where it is not widely accepted is within Muslim society.

What is the belief structure? It is a somewhat complex one but can be summed up as follows: "People are destroying the planet and only global governance by wise men can ensure the future of the human race." We would argue this is the perhaps the biggest dominant social theme of all and it is one that every other power elite fear-based promotion stems from. It is the biggest meme because it encapsulates what may be the ultimate goal of the power elite, which is apparently to extend Western dominance (by banking entities) throughout the entire world, including Asia and the Muslim world as well.

In the West, the various sub-themes that connect to this largest-of-all promotion are also fear-based: Peak oil, global warming, Islam-as-terror-storm, over-population, looming economic chaos, widespread financial fraud, environmental degradation, plagues, hurricanes, etc. – all of these memes are presented by the powers-that-be as having only one solution, more and better and larger government.

One may accept the totality of the above promotional menu, but most people are apt to pick and choose. The media itself and various think tanks and the professional "thinking" class that includes professors, pundits and politicos provide yet another layer of promotion by organizing the elite's fear-based themes in opposition to one another. Thus, segmented and cleverly organized sub-meme menus are offered for Western consumption.

The organization tends to run along resource-based lines. Democrats and Labour often adopt those fear-based promotions that emphasize resource depletion and over-population. The antidote of course is seen as more government to prevent the depredations of the free-market and to ensure that "resources" are left untouched for future generations. Republicans and Tories seem to focus on defense issues and protection of the realm, often over resource issues. Exterior threats are seen as necessitating the modern Western state, which will provide the bulwark and (military) safety that will ensure the security of the nation and of the larger West itself.

The system is a clever one because no matter what concerns people have decided to hold, the solution ends up being more state control, and even global governance. This is why US politicians such as Ron Paul (R-Tex) are so threatening to the current process. Ron Paul and others increasingly are able to point out that the two-party system inevitably only calls for one solution – more state control. The Libertarian alternative, of course, emphasizes free-markets and less state control.

What we long ago predicted was that as the Internet itself began to expose the difficulties with government and governance in general, people would begin to get fed up with the statist alternatives that they were being offered and would begin to consider non-statist (free-market) ones. We didn't know what the result would be, but we think we are seeing the effects now.

What is increasingly clear to us is that people's increased disaffection for political choices is beginning to put the proverbial sand in the gearbox of modern Western democracy. In Britain and now in Australia, the choices have obviously proven increasingly difficult for the electorate to make. The results are "hung" governments that may have little mandate to govern. We would argue that something similar might take place in America during the upcoming Congressional elections in November.

Conclusion: At some point, there may well be an upswelling of support generally for LESS government. If it catches hold, it would surely be a reversal of a trend that has been in place throughout the West for decades, if not a century or longer. It is no longer beyond the realm of possibility, we would argue. ]]> Appenzell Daily Bell GoldSpeculator http://www.gold-speculator.com/appenzell-daily-bell/36713-elite-depression-political-paralysis-spreads-australia.html Falsity of Creative Destruction... Muslim Bogeymen http://www.gold-speculator.com/appenzell-daily-bell/36666-falsity-creative-destruction-muslim-bogeymen.html Wed, 25 Aug 2010 00:31:16 GMT Falsity of Creative Destruction

Tuesday, August 24, 2010 – by Staff Report


From the Ashes ... The most dynamic economies rely on creative destruction to grow. As the world continues to recover from the Great Recession, governments and businesses are focused on how to spur economic growth. But if they really want to create jobs, raise incomes, and lift living standards, they should From the Ashes ... The most dynamic economies rely on creative destruction to grow. As the world continues to recover from the Great Recession, governments and businesses are focused on how to spur economic growth. But if they really want to create jobs, raise incomes, and lift living standards, they should devote more energy to figuring out how to generate economic dynamism over the long term. At times like this, governments tend to champion particular sectors like manufacturing, or industries like green technology. But true dynamism flows from continuous innovation, experimentation, adaptation, and change, all of which raise productivity over time. Those productivity gains, in turn, lift incomes and drive consumption. This fuels more innovation—and a dynamic economy thus expands in a healthy, sustainable way. Unfortunately, economic dynamism can also cause dislocation and turmoil as workers lose jobs in failing companies or in fading industries. Change in the ranking of companies has accelerated in many countries, including the United States, over the last century. The 90 names listed on Standard & Poor's index of major U.S. companies in the 1920s remained there for an average of 65 years. By 1998 a company listed on the S&P 500 could expect to stay there for an average of only 10 years. – McKinsey Institute, Newsweek

Dominant Social Theme: Capitalism constantly reinvents itself.

Free-Market Analysis: This is a very interesting article that appears in Newsweek by James Manyika, Susan Lund and Byron Auguste. Manyika is a director of the global management and consulting firm McKinsey & Co, (Newsweek tells us), and of the McKinsey Global Institute, where Lund is the director of research; while Auguste is the director of McKinsey & Co.'s social-sector office. From our point of view, the article espouses a kind of dominant social theme – that the Great Recession and the pain it is causing is part and parcel of the natural evolution of capitalism.

While an Austrian analysis would arrive at much different conclusions in our view, The McKinsey article does make use of a quasi-free-market oriented perspective which is obviously Schumpeterian. While Joseph Schumpeter can certainly be seen as something of a free-market economist, his theory of capitalism departed considerably from the monetary emphasis of more mainstream free-market analysis offered by the Austrians of his day. (His lifespan spanned the first part of the 20th century and he taught at Harvard.)
The von Mises Institute tells us this about Schumpeter: "He ... aspired to be the greatest economist, lover, and horseman in the world — but then would add that he was having trouble with the horses. Although he was of Austrian descent and was a student of Eugen von Böhm-Bawerk, Schumpeter cannot be considered part of the Austrian School. He never opposed government intervention like his classmate Ludwig von Mises."

Schumpeter, apparently, is continuously cited by current economic heavyweights in the West, especially in Washington DC. Here is an excerpt from a bio in Wired magazine (2002) giving us some insight into his continued popularity. "In a paper presented at a recent Fed retreat, former treasury secretary Lawrence Summers and his ex-deputy Bradford DeLong observed that 'the economy of the future is likely to be "Schumpeterian,"' with creative destruction the norm and innovation the main driver of wealth. Products based on ideas – music, software, pharmaceuticals – require an enormous investment to develop but very little to keep making. And they're often subject to network effects, which reward those that achieve critical mass. Together, these factors – high cost to create, minimal cost to produce, and a winner-take-all environment – tend to generate natural monopolies, at least until the next innovation comes along."

The article itself may be seen as partaking of the above point of view. It postulates that the current pain that Western citizens are feeling as a result of the Great Recession and government "austerity measures" are part and parcel of dynamic capitalism. The trio also have a well-defined idea of what makes a successful Western nation-state, one that it presented toward the end of the article:

How exactly do we foster economic dynamism? Twenty years of McKinsey Global Institute research shows that the mix of sectors within an economy explains very little of the difference in a country's GDP growth rate. In other words, dynamism doesn't turn on whether an economy has a large financial sector, or big manufacturers, or a semiconductor industry, but instead on whether the sectors are competitive or not. Instead of picking winners and funneling subsidies to them, countries must get the basics right. These include a solid rule of law, with patents and protections for intellectual property, enforceable contracts, and courts to resolve disputes; access to finance, particularly for startups; and an efficient physical and communications infrastructure.

From our point of view, the argument being espoused here is convenient for those who want to explain the current economic disaster in terms of creative destruction rather than monetary failure. Schumpeter, of course, was knowledgeable about Austrian monetary theory and business cycles. But somehow he didn't see the need to apply business cycle theory to his perspective on how economies work, preferring to focus on the entrepreneur as his agent of creative destruction. He also believed that ultimately capitalism was doomed to turn into socialism as a result of governmental interferences, but that part of his vision is not convenient to the argument being postulated by McKinsey and Co. writers.

This article takes an economic theory and applies certain parts of it to modern circumstances to come up with a justification for the current economic disaster. By focusing on creative destruction, the article does not have to deal with the overwhelming monetary failure of central banking that brought the West to this place. That is also, probably, why Schumpeter is popular with the bankers at the Federal Reserve. He provides them with a template (if they massage his perspectives) that allows them to avoid talking about the monetary disasters that they tend to inflict upon the world.

Not only does the article use Schumpeter's theories to disguise the failures of central banking, it then proposes the predictable statist nostrums when suggesting what is necessary for success in the modern era. Patents, of course, are a government-created entrepreneurial status; meanwhile, the "solid rule of law" would tend to revolve around Western monopolistic legal practices in which the laws, judges, prosecutors and prisons are all run by the same authorities, leading to conflicts of interest and abuses.

Finally, the article suggests that "access to finance" is important. The reference here is to Wall Street and other financial centers. As we have pointed out in past articles, such financing mechanisms are essentially statist in the modern era, with winners and losers being sorted out not by the government but by power elite elements that have inserted themselves into an increasingly mercantilist marketplace.

What we have then in Newsweek is an article that misrepresents a man and his economic theory in order to try to divert attention away from the monetary failures of the central banking business cycle. Further, the solutions offered by the article are predictably statist and partake of the same failed authoritarian model that has brought us the current misery.

Conclusion: It is perhaps fitting that such an article should appear in Newsweek magazine which was just sold, perhaps for as little as a single dollar. While we have admiration on a purely intellectual level for the way the authors have constructed this article, it devalues truth and has found a fitting home.


Muslim Bogeymen

Tuesday, August 24, 2010 – by Staff Report


Islam is the New Communism ... Paul Hsieh wrote an excellent article about America's weakness in regards to the war against terrorists. However, he claimed that the mosque is distracting us from the real issue of Iran's nuclear weapons program. I respectfully disagree. The real issue is that we are fighting a war with Islam. The mosque, rather than distracting America, has brought her full attention to it. The mosque has refocused us on the fact that we were brutally attacked on 9/11, and Americans are starting to talk about it again. Videos about 9/11 are circulating the internet and discourse is taking place about who was responsible. People are learning about Islam and decisions are being made about who is to blame. – American Thinker

Dominant Social Theme: Islam is just the worst.

Free-Market Analysis: Both in terms of feedback to the Daily Bell and in the larger Western (American) society, we see an uptick of Islamic demonization. From our point of view, as we have expressed many times, this demonization of the "other" is a kind of power-elite dominant social theme. While the American Thinker is not exactly a mainstream 'Net publication, it does represent a certain strand of thinking that partakes of this meme. It might be characterized as "Islam is a fascist and bastardized belief system that is not a religion but a state-philosophy of mayhem and murder that demeans women and keeps societies in poverty."

We are on record as disagreeing with this point of view. We do have to admit that like any good meme it is continually being refined and that this refinement is the product of many brilliant minds. Originally, as we recall, the main criticisms of Islam focused on the Koran itself and its supposedly bloody incitements against foreign (non-Muslim) elements. But now the meme has morphed from what we can tell. Islam's critics today apparently claim that the religion cannot exist extant of the state and that it therefore a theocracy posing as a religion.

Of course we would like to point out that Islam seems to have existed in secular countries in various parts of the world for long periods of time without overt violence, or more than many Western communities, anyway. In Afghanistan, for instance the Pashtuns are Islamic but the religion has breen practiced in a way that is subordinate to the culture. Indonesia, with all its many government problems, is not an entirely theocratic state, even now. There are certainly other examples as well, to a greater or lesser degree.

What is also clear to us is that the more extreme forms of Islam have been cultivated in such places as Saudi Arabia which has a good deal of commerce with the West and which has supported and exported the kind of extremist Islam that certain Western intellectuals are now finding they despise. We have termed this trend "neo-authoritarian intellectualism" and the American Thinker article excerpted above may be seen within that context. Here's a little more from the article:

This is has been a difficult road, because Americans are benevolent and naïve concerning Islam. They are used to freedom of religion and they find it hard to condemn one. And that is precisely the problem, Americans see Islam as only a religion. It is not just a religion, it is also a sophisticated, detailed political ideology with the expressed goal of taking over the entire world by any means at its disposal, even if it includes lying and killing. Americans need to think of it as a social/political ideology, but they are so used to separating religion from politics (which was a first at the time of our country's founding) that they keep giving Islam the benefit of the doubt.

What is so striking about this sort of verbiage is that it partakes of the sort of condemnation of "anti-Semitic" sites aimed at Talmudic Jews. Here is an excerpt from the "epilogue" of a site entitled, TalmudUnmasked:

In this [site], I have quoted from only a very few of the Talmudic books which refer to the Christians. For the sake of brevity, and to spare your sensitive soul, I omitted many others which could have been included. These texts, however, which I have quoted should be sufficient to demonstrate how false are the statements of the Jews when they claim that there is nothing in the Talmud which teaches hatred and enmity for Christians. If it revolted you, Christian reader, to study the horrible blasphemies in this book, do not vent your anger on me. I did not state in the beginning that I was going to narrate something pleasant, but merely to show you what the Talmud really teaches about Christians, and I do not think I could have done so in a more suitable way.

I realize, however, that, since the truth does not please everyone, there are many who will become my enemies for thus having borne witness to the truth. And I have been reminded of this, both by the laws of the Talmud itself which threatens death to "traitors," and more so, by the warnings of those who have had experience of the actions which Jews take against those who make known things which are not favorable to them.

We have pointed out before, and will continue to point out that a religion of itself is a cultural environment not a political one. It is only when the power of the state itself is invoked via a theocracy, that the murders, torturing and mayhem begin in earnest and as polity. One could make the same arguments about Catholicism and even Hinduism and Judaism that are now being made about Islam. The texts of all great religions are replete with violent language. But that does not mean that worshipers incorporate that violence into their every day lives. Most people are not sociopaths and prefer to concentrate on the uplifting sentiments that major religions have in abundance.

The reason that Islam is being misrepresented as an intrinsically evil religion is in our view seemingly because the West itself needs a bogeyman. Our position on this point is certainly clear enough. The West is run by a power-elite that comprises a kind of inter-generational, conspiracy of extraordinarily wealthy families that endlessly seek more centralized governance for the West and even for the world. The terrible events of 9/11 seem to have provided a platform for energetic consolidations of authority in the US and Europe. As time goes on, Islam itself is increasingly demonized as a "terrorist" religion of fascist evil so that freedom may be squeezed from Western civil society.

Conclusion: Many Muslim countries are poor and from a Western perspective "backward" – even the non-theocratic ones. But are they replete with institutionalized violence? The case is made that women in such countries are abused beyond measure, but the West has plenty of domestic violence against women (and children). Violence and cruelty against those who are weaker is ultimately an affliction of the human spirit not the provenance of religious texts. ]]> Appenzell Daily Bell GoldSpeculator http://www.gold-speculator.com/appenzell-daily-bell/36666-falsity-creative-destruction-muslim-bogeymen.html <![CDATA[The Artificiality of Corporations... Obama's Royal Retinue]]> http://www.gold-speculator.com/appenzell-daily-bell/36523-artificiality-corporations-obamas-royal-retinue.html Mon, 23 Aug 2010 17:04:24 GMT The Artificiality of Corporations

Monday, August 23, 2010 – by Staff Report


The End of Management ... Business guru Peter Drucker called management "the most important innovation of the 20th century." It was well-justified praise. Techniques for running large corporations, pioneered by men like Alfred Sloan of General Motors and refined at a bevy of elite business schools, helped fuel a century of unprecedented global prosperity. But can this great 20th century innovation survive and thrive in the 21st? ... "Modern" management is nearing its existential moment. Corporations, whose leaders portray themselves as champions of the free market, were in fact created to circumvent that market. They were an answer to the challenge of organizing thousands of people in different places and with different skills to perform large and complex tasks, like building automobiles or providing nationwide telephone service. – Wall Street Journal

Dominant Social Theme: The modern age poses special challenges to corporations.

Free-Market Analysis: There is fairly clear evidence that the rise of the corporation, a basically Anglo-American concept has run into rougher waters in this era of the Internet – as the Wall Street Journal points out. But the Journal for all its skepticism takes the rise of Western corporatism for granted, no matter how many "debunking" articles it presents. Authors may be dubious about whether corporations survive in their current form or not, but ultimately the bigness and intricate nature of such large people-pooling is not really in question and is in fact likely seen as an inevitable evolution of the market.

We are not so sure. It seems to us that a fundamental building block of regulatory democracy is the corporation, and that within this reference the corporation is a kind of artificial construct. We are not necessarily going to get support from formal Austrian economics on this point either. Classical (modern) Austrian perspective seems pro-corporation. Murray Rothbard, in particular, argues that corporations are "free associations of individuals pooling their capital." Thus Dr. Rothbard sees corporations as a free-market solution to various industrial conundrums.

It is certainly an interesting argument, and one fraught with questions in our view. Elsewhere, for instance, Dr. Rothbard and others argue that fractional reserve central banking is a crime. It seems to us something of a tautology that one can issue a proclamation absolving oneself of liabilities in one case, but cannot in another. Here is a larger Rothbard quote on corporations:

It should be clear...that corporations are not at all monopolistic privileges; they are free associations of individuals pooling their capital. On the purely free market, such men would simply announce to their creditors that their liability is limited to the capital specifically invested in the corporation, and that beyond this their personal funds are not liable for debts, as they would be under a partnership arrangement. It then rests with the sellers and lenders to this corporation to decide whether or not they will transact business with it. If they do, then they proceed at their own risk. Thus, the government does not grant corporations a privilege of limited liability; anything announced and freely contracted for in advance is a right of a free individual, not a special privilege. It is not necessary that governments grant charters to corporations. – Murray Rothbard, in Man, Economy & State

Is private fractional reserve banking really a crime? What about letting the market decide things? We would gladly apply Dr. Rothbard's dictum to corporations – let the counterparty decide. But there is a catch. When we look at the history of corporations we see little if no evidence that people dealing in such capital pools voluntarily agree to such terms. From what we can see historically, corporations (with limited liability) have always been the product of some regulatory enabling. Certainly this is the case in America where corporations only really became popular after the Civil War when power generally began to be centralized by the state. Corporations, in this view, can be seen as an instrument of the state, and certainly the penumbra of regulations and laws that support and guide their activities are vast.

A book on the subject, available for free download on the Internet, is called, Gangs of America, The Rise of Corporate Power and the Disabling of Democracy, and is written by Ted Nace. This book traces the rise of corporations and shows how state power has always supported them. It is an unusual book to our mind and fairly well documented with footnotes and a bibliography. It is not just a pile of assertions. Where it falls down, unfortunately, is at the end when inevitably it recommends more government as a cure for what government has wrought. As free-market types, we'd rather go the other way – practicing a judicial disenfranchisement of the corporation and then letting the business model stand (in all its artificial ruthlessness) without state support, if it can.

Certainly, the book documents intensive state involvement in the creation of the corporate model throughout history. Here is how the author describes it: "When we pan in closer with our historical lens, tracing how the institution known as the corporation was constructed piece by piece, the looming shape comes into focus as a specific legal contraption, a thing made of nuts, bolts, wheels, belts, and wiring." While the book goes back thousands of years to trace corporate evolution, we found the chapters on the emergence of the American model most compelling. As with the central bank, it seems that prior to the Civil War the instinct was to rein-in bigness. Here is a description of pre-Civil War American corporate development:

After the (US) Constitutional Convention, the system that emerged for chartering corporations flipped the English system upside down. Instead of the monarch using corporate charters to grant special monopoly privileges to men of wealth, the American system placed the chartering function in the hands of the various state legislatures and placed an emphasis on restrictions and accountability measures, rather than on privileges. State constitutions and statutes reinforced the restrictive stance toward corporations. Under this system, charters tended to be granted sparingly, in keeping with the widespread belief that the potential for corporations to accumulate power rendered them inherently dangerous to democracy.

Not only were pre-Civil War populations suspicious of corporations, we found much evidence in the book of assertions that the Bell has made in the past regarding business practices. It has always been our assertion that without state involvement businesses would be much smaller – and that even industrial development of great magnitude would take place within a flexible arrangement shared among many smaller entities. Here is what Nace tells us: "It is important first to note that the corporate form, characterized by a charter and joint-stock ownership, was not the typical way businesses were organized in the colonies. Most businesses were owned by families or partnerships. They had no corporate charters, nor did they need them. ..."

And Nace adds, "In Wealth of Nations (1776), Adam Smith saw the corporation as a decrepit and ill-conceived institution, a remnant of medieval privilege that was too prone to mismanagement to be useful for any but a handful of contingencies. In The Communist Manifesto (1848), Karl Marx ignored corporations altogether. Smith was thinking mainly about the situation in Britain, where virtually all the giant trading companies had collapsed by the mid-1700s. For the most part, the Industrial Revolution in England flourished under quite simple institutional forms, mainly family-owned enterprises, partnerships, and unincorporated joint-stock companies."

We won't rehearse the whole book, but there's quite a lot of information in it. Nace shows that the Revolutionary war's causes, for instance, involved the looming specter of the arrival of the East India Company in the United States. The "Tea Party" was not a symbolic act but a fiercely determined effort to get rid of the tea that the East India Company intended to use as a kind of corporate wedge issue. "In Philadelphia, New York, and Boston, pamphleteers laid out the scenario in precise detail, warning that if the British were to succeed in bringing the tea distribution system under the sole control of the East India Company, they would inevitably repeat the same scheme for other imported commodities."

Thomas Jefferson apparently had no higher admiration for corporations than central banks. "I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country," Thomas Jefferson wrote in 1816. It was not to be, of course. Post Civil War, the US Federal government's reach and power began to redefine America's psyche and business operations. Nace summarizes as follows:

For a time, it seemed that America had found a working balance where the corporation was allowed to perform certain functions for which it was well suited, but where corporate political power was kept firmly under the thumb of democracy. Yet as attractive as this finely balanced combination might be, it was not to last. Beginning in the 1850s, and particularly after the Civil War, legislators sympathetic to the wishes of the rapidly growing railroad corporations effectively dismantled the restrictive features of the charter system, replacing it with a non-restrictive system of automatic chartering known as "general incorporation." By the 1880s the old system was in near collapse, and by 1900 it had effectively vanished. A revolution had occurred, a dismantling of a key institutional framework. In its place, a new system was created, a revolutionary reinventing of the corporation. Even today, the impact of this quiet revolution is little appreciated, and the specifics of how it took place are even less understood.

We have nothing against corporations freely conceived and offered. But we would argue that in the current statist environment corporations themselves are, in a sense, another element of state power, just a little further removed than say, central banking itself. These two elements, mercantilist central banking and the judicially-initiated corporation, are important elements of the West's modern sociopolitical and economic structure and increasingly oppressive regulatory democracy.

Inevitably, the power elite can express considerable control through such large organizations and does. Corporations also are primary beneficiaries of central bank money flows and thus benefit inordinately from the current fiat-money environment. There is, as well, a dominant social theme to all of this – that the current system of Western regulatory democracy has evolved as the best of all possible worlds, and this includes the corporation.

There is, in fact, a great deal of secret history when it comes the West's larger financial and political structures. The Internet, fortunately, has allowed us to peel back the mask and gather some facts. When we do so, we almost inevitably find that the flow of history, corporate and otherwise, seems manipulated to benefit the few at the expense of the many. Perhaps we should not be surprised by this evolution, but we are always taken aback by the determination and forcefulness with which it occurs.

Conclusion: The Wall Street Journal can treat corporations as a given and attempt to offer forward-thinking solutions to the dilemma of corporate bigness. One solution would be simply to remove the intricate web of legal support that surrounds them – in order that they may stand or fall on their own merits. Rather than reinventing corporations as the Journal writes, we would suggest a bit of deconstruction.



Obama's Royal Retinue

Monday, August 23, 2010 – by Staff Report

Barack Obama

Vacationing Obama can't shed White House entourage ... President Barack Obama (left) had a simple task for his first morning on vacation: shoot over to a Martha's Vineyard bookstore to fill out his daughters' summer reading list and grab himself a novel. Easier said than done. His SUV, part of a 20-vehicle motorcade, passed through a cordon of Massachusetts State Police motorcycle officers, in a protective cocoon of Secret Service agents. Tagging along for the quick trip Friday were White House communications trucks, an ambulance and two vans full of reporters and photographers. It was the same drill Saturday when he went to the beach for a picnic lunch with his family. This may be down time for Obama, but like all modern presidents, celebrities and some wannabes, he must move about with a not insignificant entourage. It includes security officers and their array of arms, as well as advisers, friends in and out of politics, and a cook who doubles as a golfing buddy. – AP

Dominant Social Theme: It is all necessary.

Free-Market Analysis: It is not a novel observation, but it probably bears repeating. The vacations that President Obama takes are like some sort of royal procession. It wasn't so obvious under George Bush because he had his own "ranch" to go to. But like Bill Clinton, Obama is a wanderer when it comes to vacation destinations and thus much is made of his travels. Is there a kind of sub-dominant social theme here? We think so. "This is the most important man in the world and he travels in style that befits his position."

Of course, we don't think that Obama is the most important man in the world. We believe he is a kind of manufactured individual who carries the water for a shadowy power elite that evidently and obviously stands behind him. It turns out that, as with George Bush, many of his vague campaign promises degraded into business as usual when it came time for governance.

George Bush, as a titular, small-government republican, did almost everything seemingly in his power to expand government and make use of big-government levers. He went to war on two and even three fronts and maintained the wars for his entire presidency. He attempted (or succeeded) in expanding the federal government's reach in public education, in religious affairs and most importantly when it came to US domestic spying. His efforts at removing habeas corpus, at combining a dozen or more intelligence agencies under one Homeland Security roof and his determination to rip down walls between agencies to create a unified KGB-type architecture ran counter to the small government, free-market principals he espoused on the campaign trail.

But Barack Obama's stay in the White House has produced similar disappointments for his followers. Obama abandoned universal health care when the political costs became difficult to bear, and he has not moved aggressively on either immigration or cap-and-trade, "green" issues as his leftist base once hoped he would. He has proven an even larger disappointment as regards foreign policy, removing troops from Iraq but still keeping some 50,000 stationed there. In Afghanistan, he has actually expanded the war in hopes of "winning" it or at least making it difficult for the Taliban to impose their version of victory.

What is clear, when one examines the two most recent presidential regimes, is the remarkable amount of continuity between them. In fact, George Bush had confused Republicans everywhere by attempting to "solve" the immigration problem by in a sense legalizing South American immigrants already in the United States and then by suggesting some sort of guest worker program. His proposals, in fact, can be seen as more radical than what Obama has thus far suggested on the subject.

When it comes to overseas wars, there is almost no difference between the two presidents. Nor is there when it comes to the more shadowy "war against terror." American intel agencies are still vastly funded; Homeland Security remains an ever larger bureaucratic bungle, sucking in resources like a black hole. Congress, generally, appropriates vast sums for the intel-industrial and military-industrial complex, and this sort of funding remains even as presidents come and go.

If one agrees therefore, at this point, that it makes little difference who is in office – as the state apparatus functions regardless – then we would suggest the outward pomp and ceremony is in a sense compensating for the president's larger lack of power. The American president's actual ability to forge a new a course may be limited, but the show surrounding him continually gets bigger. The idea, perhaps, is to create a sense of significance that he actually doesn't have. He is to be presented as the Great and Powerful Oz so that no one notices the men behind the curtain.

Obama certainly does travel in style. He doesn't drive himself anywhere. He has a helicopter that he uses even for very short trips within Washington DC. For longer trips there is Air Force One. The retinue he travels with his is extravagant and the press coverage that he receives on his trips, especially the vacations, is downright foolish. One is treated, in the mainstream media, to recitations of menus, golf scores and reading material. It is as if no detail is too minute to cover and no luxury too large to provide.

Conclusion: Like a titular head-of-state, Obama rushes from vacation to vacation with breathless coverage throughout. And while people may speculate as to why he is taking so many vacations, we think we know: There's just not very much he can do on the job, and his power is actually fairly circumscribed, not by the office but by circumstance and sociopolitical evolution. Picking a vacation destination may be the clearest and most unencumbered decision he gets to make. But then again, perhaps Michelle and the children do the choosing. ]]> Appenzell Daily Bell GoldSpeculator http://www.gold-speculator.com/appenzell-daily-bell/36523-artificiality-corporations-obamas-royal-retinue.html