Archive for June, 2008

Fiat Money & The Federal Reserve System Explained…..

June 27, 2008

The United States Fiat Money & The Federal Reserve System
Darryl Schoon


Fiat money is an oxymoron. Traditionally, money has been both a storehouse of value and a medium of exchange. Fiat money exists by mimicking both; but when its ability to do so ends, fiat money exposed for what it is, reverts to what it is – government issued coupons with expiration dates printed in invisible ink.

Fiat money distorts the time value of money and in so doing destroys both money and the economies that use it. Real money like gold and silver has value over time, the greater its value and the longer it endures, the more likely it will be accepted as money.

Throughout history, gold and silver have demonstrated such utility and as a consequence both have been used as money for thousands of years. Unfortunately, throughout history governments have either debased, sic diluted, the amount of gold and silver in their coins or attempted to circumvent gold and silver entirely by mandating the use of paper money, sic fiat.

This is why:

Wealth, e.g. money, is power in a stored state. Unleashed, wealth is capable of doing its possessors’ bidding for better or worse. Wealth can exacerbate suffering or alleviate it and its power to do both – usually the former – has been coveted by governments since governments existed.

While productivity is doing more with less, fiat money allows governments to do more with nothing. Fiat currencies are a way for governments to spend what they don’t have; and while counterfeiting by individuals is a crime, passing government coupons off as money is legal because governments make the laws.

WHOSE LAWS – WHOSE BENEFIT

The issuance of fiat money by governments is, in truth, a white collar crime; and, as happens when white collar crimes are discovered, a highly visible paper trail leads directly back to the wrongdoers – in this case, the central banks.

Central banks are the mechanism by which society’s productivity is drained and indebted. Credit-based money issued by central banks turns into debt, debt which immediately begins to accrue compounding interest paid by productive members of society, e.g. workers, businessmen, farmers, savers and taxpayers. The interest, of course, is paid to bankers, non-productive members of society.

The motives for the co-conspirators in this crime are different but equally fulfilling. Governments get to spend what they don’t have and bankers get to collect interest on money that is not theirs – a win/win for the governments and bankers and a lose/lose for citizens and savers.

FIAT MONEY IS A CANCER ON THE ECONOMIC BODY

The longer a fiat money system exists, the greater the odds of economic collapse. Over time fiat credit money destroys economies because time exacerbates the systemic flaws of credit-based, sic capital, markets.

Capital is but the polite word for credit and that is why it is used. Capitalism sounds so much better (and more like money) than creditism. The word capital implies a “moneyness” that does not exist.

Credit turns into debt and over time in fiat money systems the growth of debt overwhelms the ability of producers and savers to service it. This is why debt markets, e.g. bond markets, are now so much larger than equity markets and why defaults involve increasingly larger and larger amounts. In the current fiat money system, time is running out.

COMPOUNDING DEBT + TIME = INCREASING DEFAULTS

Time also contributes to the destruction of the “value” of fiat money. The continual issuance of fiat credit money expands the amount of fiat “money” in circulation and thereby lowers the value of all previously issued currency.

This is why savers are penalized in fiat credit based economies. Savings, measured in terms of constantly declining dollars, are worth less over time. In the 95 years since the creation of credit based money by the Federal Reserve, the US dollar has lost 95 % of its purchasing power.

In fiat credit-based economies, savers are penalized and speculators are rewarded. And while this is welcomed by Wall Street, it is a death warrant for Main Street. In the US over the past twenty years, while Wall Street has expanded, Main Street has contracted.

The shift in America from a productive to a speculative economy is evidenced by the recent growth and dominance of financial “services” companies, e.g. Goldman Sachs, JP Morgan Chase, BofA, Morgan Stanley, Lehman Bros, Wachovia, etc. – their only “service”, of course, is a uniquely destructive and deadly form of “self-service”.

Over time, parasites will kill the body on which they live and this can be seen in the current decline of the United States. The decline of America was not caused by outside forces, e.g. communism, terrorism, illegal immigration, currency manipulation or product dumping as the US corporate controlled media would have Americans believe. The decline of America was an inside job.

The collapse of the US came from within. In 1913, the US replaced its savings based currency with fiat debt-based money issued by the Federal Reserve System, a consortium of European and US private banks whose intent was to profit from the growing productivity of America – and profit they did but to the detriment of America.

Since 1913, the Federal Reserve System has helped Wall Street bankers leach and indebt the productivity of American businesses and workers until America is now but a shadow of its former self. As the fortunes of Wall Streets rose, America’s fortunes declined.

THE FIAT MONEY 3-STEP: CREDIT (step forward) DEBT (stumble) DEFAULT (fall)

It’s been 95 years since the Federal Reserve System and its credit based money took over the US economy. Now, the United States, once the world’s only creditor is by far its largest debtor. A report from the Federal Reserve in 2006 stated the US is technically bankrupt with $65.9 trillion in irreconcilable obligations. Currently, the US can only pay its debts by issuing new debt. Default comes next.

THE US CENTENNIAL CELEBRATION OF FIAT MONEY

In 2013, in only five years the Federal Reserve System will celebrate its 100th birthday in America, the celebration of 100 years of bankers, financiers and corporate CEOs dismantling the productivity of America for personal gain.

It is my belief the next five years will determine America’s destiny. Once seen as a beacon, it is now distrusted and feared and rightly so. Those who bled this nation dry are still in control and the American people, America’s only hope, are not even aware of what has happened; and, if America is to be saved, there is not much time left in which to do so.

The odds aren’t good and Americans, heavily indebted and addicted to credit, are still hoping the Federal Reserve can save them, much as a patient hopes doctors will provide the right medicines, not knowing the doctors are getting kickbacks from the pharmaceutical companies and are skimming prescriptions for their own benefit.

In fiat based economies, time is the enemy and 95 years have passed since fiat money was introduced into the US. In America and elsewhere time is passing and the clock is ticking and recently it’s been sounding more and more like a time bomb.

It is hoped the election of a new president will save America. It won’t. Democracy, once the hope of the world, is now its greatest disappointment. Money – and fiat money at that – has subverted the democratic process everywhere; and today, in all nations, politicians from both conservative and liberal parties dance to fiat money’s funereal beat – in a mockery of democracy’s original intent.

DEMOCRACY – A CONTROLLED DANCE REQUIRING TWO PARTIES TO PERFORM

Nations, as well as people, can pass away in their sleep; and unless the American people wake up and wake up soon, their slumber will be the death rattle of what was recently the greatest nation on earth.

On July 4th 2008, the United States will celebrate its 232nd birthday. But during its last 95 years, fiat money courtesy of the Federal Reserve System has steadily eroded the economic foundations of America. Once the wealthiest nation in the world, it is no longer. The cause is clear. So is the cure.

Copyright © 2008 Darryl Schoon

“How To Survive The Crisis And Profit In the Process”

Contact Information
Darryl Schoon | Personal Website | Survive the Crisis

FoundingFather1776 humbly asks his curious readers to watch the award-winning documentary below…..it clearly illustrates that the “Federal Reserve System” is NOT Federal and there are NO “Reserves!”  Wake-up.  Learn.  Understand.  Behold one of the Keys to the Matrix…..

True Patriots

June 24, 2008

Ron Paul and Dwight D. Eisenhower – True Patriots
Jim Quinn

“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hope of its children.”

These must be the words of some liberal Democratic Senator running for President in 2008. But no, these are the words of Republican President Dwight D. Eisenhower, the Supreme Allied Commander during World War II, five decades ago. The United States, the only superpower remaining on earth, currently spends more on military than the next 45 highest spending countries in the world combined. The U.S. accounts for 48% of the world’s total military spending. Where did the peace dividend from winning the Cold War go?

The United States spends on its military 5.8 times more than China, 10.2 times more than Russia, and 98.6 times more than Iran. The Cold War has been over for 20 years, but we are spending like World War III is on the near-term horizon. There is no country on earth that can challenge the U.S. militarily. So, why are we spending like we are preparing for a major conflict? The impression on the rest of the world is that we have aggressive intentions. The administration is posturing like Iran is a threat to our security. Iran spends $7.2 billion annually on their military. We could make a parking lot out of their cities in any conflict. Does anyone really believe that they would create a nuclear weapon and use it on Israel? Their country would be obliterated.

Country Military Spending (Billions of $)

United States

$711.0

China

$121.9

Russia

$70.0

United Kingdom

$55.4

France

$54.0

Japan

$41.1

Germany

$37.8

Italy

$30.6

Saudi Arabia

$29.5

South Korea

$24.6

India

$22.4

Australia

$17.2

Source: International Institute for Strategic Studies

Defense spending had peaked at just under $500 billion in 1988. The fall of communist Russia did result in a decline to the $350 billion range from 1995 through 2000, and an economic boom ensued. Since 9/11 we have doubled our spending on defense. This seems like an overly extreme reaction to 19 terrorists attacking our country. Bin Laden and his terrorist network numbered less than 10,000. The initial response of invading Afghanistan, defeating the Taliban, and cornering bin Laden in the mountains was supported by the entire world. The success of this response was sufficient to deter any other country from allowing terrorist organizations to operate freely within their borders. The natural response of the United States should have been to increase spending on border protection, upgrading the CIA, and increasing our ability to gather intelligence. Instead, we spent billions on weapons, aircraft, tanks, and missiles. The neo-cons, led by Cheney, Rumsfeld, and Wolfowitz, saw the 9/11 attack as their opportunity to change the world. They’ve gotten their wish. Of course, we took our eye off of bin Laden and Afghanistan. The Taliban has experienced a resurgence, recently freeing 800 fighters from a prison. Bin Laden continues to issue videotapes exhorting his followers to continue the fight.

(FoundingFather1776 Comments: “While I have great respect for the research and thought Jim Quinn has put in this essay, and I agree with his overall analysis,  I  *must* point out that all the evidence indicates the attacks on 9/11 were facilitated and carried out by criminals within our own Government.   This makes the attacks on 9/11 even MORE reprehensible as they were clearly used to vastly expand the military-industrial complex!  See my posts on “Things that make you go Hmmmm?”  Check out my other posts dealing with 9/11.  Go to Google video or YouTube and watch “Loose Change” or “Alex Jones Interviews Aaron Russo” or hundreds of other eyewitness and expert accounts that reveal the “official” Govt. account of 9/11 is pure BS!)

Dwight D. Eisenhower’s farewell speech in January 1961 is a brilliantly perceptive analysis of the future of our country. “Throughout America’s adventure in free government, our basic purposes have been to keep the peace; to foster progress in human achievement, and to enhance liberty, dignity and integrity among people and among nations. To strive for less would be unworthy of a free and religious people. Any failure traceable to arrogance or our lack of comprehension or readiness to sacrifice would inflict upon us grievous hurt both at home and abroad.” This last sentence describes what George Bush has managed to do in the last 5 years. The arrogance of believing that we could invade a country on the other side of the world and expect to be treated as liberators is beyond comprehension. Our reputation abroad has been grievously damaged. The voluntary sacrifices we’ve made in the U.S. were to receive tax cuts and multiple tax rebates, paid for by our grandchildren. President Bush has sacrificed by not playing golf for the last 5 years. How noble. Not exactly the Greatest Generation, quite yet.

Did President Eisenhower envision that the U.S. would have troops stationed in 70% of the world’s countries? According to the Defense Department’s latest “Personnel Strengths” report, the United States now has troops stationed in 147 countries and 10 territories. This is the greatest number of countries that the United States has ever had troops in. Why are we policing the world? What is the point of having 57,000 troops in Germany and 33,000 troops in Japan? Germany and Japan each spend $40 billion per year on their military. Can’t they defend themselves at this point? We defeated them 60 years ago. It is time to leave. This is a prelude to decades of occupation in Iraq. Don’t believe the blather about withdrawal. The military has no intention of withdrawing.

Country Military Personnel

U.S. & Territories

840,808

Iraq – Deployed

218,500

Germany

57,080

Japan

32,803

Korea

27,014

Afghanistan – Deployed

25,240

Africa

7,929

Asia – Other

12,902

Italy

9,855

United Kingdom

9,825

Europe – Other

9,640

Other

127,955

TOTALS

1,379,551

Source: Department of Defense as of Sept 2007

It is a shame that after 9/11, George Bush didn’t read President Eisenhower’s farewell speech. I wonder if he has ever read the speech. Instead he chose to follow the “wisdom” of Dick Cheney, Donald Rumsfeld, and Paul Wolfowitz. President Eisenhower’s words describe the crisis that occurred on September 11, 2001. “Crises there will continue to be. In meeting them, whether foreign or domestic, great or small, there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties. A huge increase in newer elements of our defense; development of unrealistic programs to cure every ill in agriculture; a dramatic expansion in basic and applied research – these and many other possibilities, each possibly promising in itself, may be suggested as the only way to the road we wish to travel.” A spectacular and costly response is what the Iraq invasion has turned out to be. We have now spent more money on this venture than any war in history except for World War II. And there is no end in sight.

U.S. War Historical Cost (in 2007 dollars)

World War II

$3.2 trillion

Iraq & Afghanistan To Date

$695.7 billion

Vietnam War

$670 billion

World War I

$364 billion

Korean War

$295 billion

Persian Gulf War

$94 billion

Civil War (both Union & Confederate)

$81 billion

Source: Congressional Research Service & Office of Management and Budget data

I live in Pennsylvania. Taxpayers in Pennsylvania have paid $20 billion for our share of the Iraq war, so far. This amount of money would pay for 1,650,000 scholarships for University students for one year. Does a $20 billion investment in rebuilding Iraqi bridges that we blew up with $1 million cruise missiles make more sense than investing in our best and brightest young people? $20 billion would provide 24,000,000 homes with renewable electricity for one year. That is 20% of all the homes in the United States. After paying their utility bills this coming winter, I think I know what the majority of Americans would choose. Some further perspective on this out-of-control spending is provided in the following chart:

Time Frame Spending on Iraq & Afghanistan

Per Month

$12.3 billion

Per Week

$2.9 billion

Per Day

$410 million

Per Hour

$17 million

Per Minute

$284,722

Per Second

$4,745

Source: Congressional Research Services

President Eisenhower, as a former commanding general of Allied forces in World War II, knew exactly what the implications of having a permanent armaments industry were to the United States. He was also worried about the implications. “Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations.” These words were spoken 5 decades ago, but are just as true today.

Contractor

2006 Defense Revenue (mil)

2000 Defense Revenue (mil)

% Change

2006 Profit (mil)

2000 Profit (mil)

% Change

Lockheed Martin

$36,090

$18,000

101%

$1,825

$382

378%

Boeing

$30,800

$17,000

81%

$2,572

$2,309

11%

Northrop Grumman

$23,649

$5,600

322%

$1,400

$467

200%

Raytheon

$19,500

$14,033

39%

$871

$404

116%

General Dynamics

$18,769

$6,542

187%

$1,461

$880

66%

Totals

$128,808

$61,175

111%

$8,129

$4,442

83%

Source: Defensenews

The top five U.S. defense contractors generated almost $129 billion in revenues and $8 billion in profits in 2006, double the revenue and profits in 2000 when George Bush became President. The War on Terror has been a windfall for the defense industry and their shareholders. These companies have intertwined themselves into the fabric of our government and defense department. They contribute tremendous amounts of money to Congressional candidates and have thousands of lobbyists pushing for more defense contracts. Many politicians end up working for defense contractors (e.g., Dick Cheney) after they leave public service. This leads to conflicts of interest negatively impacting the American public.

Contractor

2007 CEO Pay (mil)

2000 CEO Pay (mil)

% Change

2007 # of Employees

2000 # of Employees

% Change

Lockheed Martin

$37

$6

517%

140,000

125,000

12%

Boeing

$15

$20

-25%

159,000

171,000

-7%

Northrop Grumman

$10

$7

43%

123,600

100,000

24%

Raytheon

$17

$8

113%

72,000

87,200

-17%

General Dynamics

$60

$10

500%

83,500

43,300

93%

Totals

$139

$51

173%

578,100

526,500

10%

Source: Defensenews

It appears that the biggest winners of the War on Terror are the CEO’s of the defense contractors. I wonder if they realized how rich they would become as they watched the Twin Towers crumble to the ground. They have virtually tripled their annual income, while the average American scratched out a 20% increase over 6 years. They have managed to generate the tremendous profits and personal wealth while only employing 10% more employees. Boeing and Raytheon were actually able to reduce their workforce. How productive. These contractors will do everything in their power to retain and increase these fabulous profits.

President Eisenhower clearly understood the moral implications of a huge armaments industry and the costs to a free society. “This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence – economic, political, even spiritual – is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.” We have some of the brightest engineers in the country developing weapons to kill human beings more efficiently. There is an opportunity cost that is being paid. These engineers could be concentrating their brilliance on developing alternative energy solutions which could free us from our drug dependence on the Middle East. Which effort would benefit our country more, weapons development or energy independence?

President Eisenhower’s final words are the most chilling. “In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.” We did not heed his wisdom. Laurence Vance, author of “What’s Wrong with the U.S. Global Empire?”, contends that our foreign policy “is not right, it’s unnatural, it’s very expensive, it’s against the principles of the Founding Fathers, it fosters undesirable activity, it increases hatred of Americans, it perverts the purpose of the military, it increases the size and scope of the government, it makes countries dependent on the presence of the U.S. military, and finally, because the United States is not the world’s policeman.” War and non-stop conflict benefit the military industrial complex. It is in their best interest for them to support candidates that favor an aggressive foreign policy. This could lead to Defense companies using their influence to provoke conflict throughout the world.

In conclusion, I again turn to the wisdom of Ron Paul, the only presidential candidate speaking the truth to the American public. In a speech before Congress several months before the Iraq invasion, his words were reminiscent of President Eisenhower’s.

“The basic moral principle underpinning a non-interventionist foreign policy is that of rejecting the initiation of force against others. It is based on non-violence and friendship unless attacked, self-determination, and self-defense while avoiding confrontation, even when we disagree with the way other countries run their affairs. It simply means that we should mind our own business and not be influenced by special interests that have an ax to grind or benefits to gain by controlling our foreign policy. Manipulating our country into conflicts that are none of our business and unrelated to national security provides no benefits to us, while exposing us to great risks financially and militarily.”

“If we followed a constitutional policy of non-intervention, we would never have to entertain the aggressive notion of preemptive war based on speculation of what a country might do at some future date. Political pressure by other countries to alter our foreign policy for their benefit would never be a consideration. Commercial interests and our citizens investing overseas could not expect our armies to follow them and protect their profits.”

If as a country we continue to allow our politicians and their military industrial complex corporate sponsors to spend $700+ billion per year on weapons, to the detriment of higher education, alternative energy projects, and national infrastructure needs, we will be paying an extremely high price. We are in a classic guns or butter scenario. The Bush Administration has decided to choose guns while borrowing from our grandchildren and the Chinese to pay for the butter. This can work for a while, but as deficits accumulate, the dollar plummets, and inflation rears its ugly head, our great country will decline as other empires who overstepped their bounds declined.

June 18, 2008

Jim Quinn [send him mail] is Senior Director of Strategic Planning, The Wharton School, University of Pennsylvania.

 

Trivia Quiz!

June 20, 2008

OK Boys & Girls……Lets put on our thinking caps and go back to the year 2002.  Ready?

Question: Who was the FIRST person in charge of the Government’s 9/11 investigation?

BZZZTTT…..Times up!  Did you say “Henry Kissinger?”  Cause if you did, we have a winner!!!

Yes, that lovable German-Born “Dark Lord of the Sith” Henry Kissinger originally got the job to PROVE that those wascally tewwowists did 9/11.

Unfortunately, a bunch of narrow-minded cry-babies got upset with the idea that the good Doctor was in charge of the investigation!  How dare they question this honorable man.  Just take a look at his background:

Dr. Henry Strangelove Kissinger

Dr. Kissinger, wanted war criminal, winner of the Nobel peace prize, Nixon adviser, leader of project paperclip to help the Nazis escape from Germany,… This man was originally in charge of the 9-11 investigation. Even the ultra-right John Birch society thought the idea is ludicrous. He resigned on 2002-12-13

.

The man is a war criminal — wanted for questioning in Chile, Argentina and France (concerning French citizens who disappeared in Chile). He cannot travel to Britain, Brazil and many other countries because they cannot guarantee his immunity from legal proceedings.

on depopulation

“Depopulation should be the highest priority of foreign policy towards the third world, because the US economy will require large and increasing amounts of minerals from abroad, especially from less developed countries.”
~ Henry Kissinger, reported by Leuren Moret

on democracy:

“I don’t see why we need to stand by and watch a country go communist due to the irresponsibility of its people. The issues are much too important for the Chilean voters to be left to decide for themselves.”
~ Henry Kissinger

on the constitution:

“The illegal we do immediately. The unconstitutional takes a little longer.”
~ Henry Kissinger

on American imperialism:

“The US must carry out some act somewhere in the world which shows its determination to continue to be a world power.”
~ Henry Kissinger

“Oil is much too important a commodity to be left in the hands of the Arabs.”
~ Henry Kissinger

Cited in Halliday and Sponneck 2001-11-29

on wagging the dog:

“I can think of no faster way to unite the American people behind George W. Bush than a terrorist attack on an American target overseas. And I believe George W. Bush will quickly unite the American people through his foreign policy.”
~ Henry Kissinger

“Today Americans would be outraged if U. N. troops entered Los Angeles to restore order; tomorrow they will be grateful! This is especially true if they were told there was an outside threat from beyond, whether real or promulgated, that threatened our very existence. It is then that all people of the world will plead with world leaders to deliver them from this evil. The one thing every man fears is the unknown. When presented with this scenario, individual rights will be willingly relinquished for the guarantee of their well being granted to them by their world government.”
~ Henry Kissinger

“Military men are dumb, stupid animals to be used as pawns for foreign policy.”
~ Henry Kissinger

“Power is the ultimate aphrodisiac.”
~ Henry Kissinger

And these malicious slanders………

http://www.slate.com/?id=2074678

http://www.thenation.com/blogs/capitalgames?pid=176

http://www.commondreams.org/views02/1201-01.htm

Here is Kissinger with his Glasses on:

Here is Kissinger (aka “Dark Lord of the Sith”) with his Glasses off:

Here is the news regarding the brilliant decision to appoint “unbiased” Kissinger to investigate 9/11:

Some “Crazy 9/11 Conspiracy Kooks” the Mass Media will not show you…

June 16, 2008

Stubblebine

Major General Albert Stubblebine, U.S. Army (ret) – Former Commanding General of U.S. Army Intelligence and Security Command, 1981 – 1984. Also commanded the U.S. Army’s Electronic Research and Development Command and the U.S. Army’s Intelligence School and Center. Former head of Imagery Interpretation for Scientific and Technical Intelligence. 32-year Army career. Member, Military Intelligence Hall of Fame.

  • Video 7/11/06: “One of my experiences in the Army was being in charge of the Army’s Imagery Interpretation for Scientific and Technical Intelligence during the Cold War. I measured pieces of Soviet equipment from photographs. It was my job. I look at the hole in the Pentagon and I look at the size of an airplane that was supposed to have hit the Pentagon. And I said, ‘The plane does not fit in that hole’. So what did hit the Pentagon? What hit it? Where is it? What’s going on?” http://www.und

Col. Ronald D. Ray, U.S. Marine Corps (ret) – Deputy Assistant Secretary of Defense during the Reagan Administration and a highly decorated Vietnam veteran (two Silver Stars, a Bronze Star and a Purple Heart). Appointed by President George H.W. Bush to serve on the American Battle Monuments Commission (1990 – 1994), and on the 1992 Presidential Commission on the Assignment of Women in the Armed Forces. Military Historian and Deputy Director of Field Operations for the U.S. Marine Corps Historical Center, Washington, D.C. 1990 – 1994.

  • Article 7/1/06: “The former Deputy Assistant Secretary of Defense under the Reagan Administration and a highly decorated Vietnam veteran and Colonel has gone on the record to voice his doubts about the official story of 9/11 – calling it ‘the dog that doesn’t hunt.’ ‘I’m astounded that the conspiracy theory advanced by the administration could in fact be true and the evidence does not seem to suggest that’s accurate,’ he said.” http://www.propagandamatrix.com

    The specific quote follows. A subscription is required to access the audio recording.

    Alex Jones: Colonel, is it safe to say or is the statement accurate that you smell something rotten in the state of Denmark when it comes to 9/11?

    Col. Ray: I’m astounded that the conspiracy theory advanced by the administration could in fact be true and the evidence does not seem to suggest that that’s accurate. That’s true.

  • Bio: http://www.firstprinciplespress.org

Lt. Col. Robert Bowman, PhD, U.S. Air Force (ret) – Director of Advanced Space Programs Development under Presidents Ford and Carter. U.S. Air Force fighter pilot with over 100 combat missions. (PhD in Aeronautics and Nuclear Engineering, Cal Tech). Former Head of the Department of Aeronautical Engineering and Assistant Dean at the U.S. Air Force Institute of Technology. 22-year Air Force career. Also taught Mathematics and English at the University of Southern California, the University of Maryland, and Phillips University.

  • Video 9/11/04: “A lot of these pieces of information, taken together, prove that the official story, the official conspiracy theory of 9/11 is a bunch of hogwash. It’s impossible. … There’s a second group of facts having to do with the cover up. … Taken together these things prove that high levels of our government don’t want us to know what happened and who’s responsible.…

    Who gained from 9/11? Who covered up crucial information about 9/11? And who put out the patently false stories about 9/11 in the first place? When you take those three things together, I think the case is pretty clear that it’s highly placed individuals in the administration with all roads passing through Dick Cheney.

    I think the very kindest thing that we can say about George W. Bush and all the people in the U.S. Government that have been involved in this massive cover-up, the very kindest thing we can say is that they were aware of impending attacks and let them happen. Now some people will say that’s much too kind, however even that is high treason and conspiracy to commit murder.” http://video.go

  • Signatory: Petition requesting a reinvestigation of 9/11:
    “We want truthful answers to question. … As Americans of conscience, we ask for four things:

    • An immediate investigation by New York Attorney General Eliot Spitzer
    • Immediate investigation in Congressional Hearings.
    • Media attention to scrutinize and investigate the evidence.
    • The formation of a truly independent citizens-based inquiry.” http://www.911truth.org/article
  • Member: Pilots for 9/11 Truth Association Statement: “Pilots for 9/11 Truth is an organization of aviation professionals and pilots throughout the globe that have gathered together for one purpose. We are committed to seeking the truth surrounding the events of the 11th of September 2001. Our main focus concentrates on the four flights, maneuvers performed and the reported pilots. We do not offer theory or point blame. However, we are focused on determining the truth of that fateful day since the United States Government doesn’t seem to be very forthcoming with answers.”
  • Website: http://www.thepatriots.us

Col. George Nelson, MBA, U.S. Air Force (ret) – Former U.S. Air Force aircraft accident investigator and airplane parts authority. Graduate, U.S. Air Force War College. 34-year Air Force career. Licensed commercial pilot. Licensed airframe and powerplant mechanic.

  • Essay: “In all my years of direct and indirect participation, I never witnessed nor even heard of an aircraft loss, where the wreckage was accessible, that prevented investigators from finding enough hard evidence to positively identify the make, model, and specific registration number of the aircraft — and in most cases the precise cause of the accident. …

    The government alleges that four wide-body airliners crashed on the morning of September 11 2001, resulting in the deaths of more than 3,000 human beings, yet not one piece of hard aircraft evidence has been produced in an attempt to positively identify any of the four aircraft. On the contrary, it seems only that all potential evidence was deliberately kept hidden from public view. …

    With all the evidence readily available at the Pentagon crash site, any unbiased rational investigator could only conclude that a Boeing 757 did not fly into the Pentagon as alleged. Similarly, with all the evidence available at the Pennsylvania crash site, it was most doubtful that a passenger airliner caused the obvious hole in the ground and certainly not the Boeing 757 as alleged. …

    As painful and heartbreaking as was the loss of innocent lives and the lingering health problems of thousands more, a most troublesome and nightmarish probability remains that so many Americans appear to be involved in the most heinous conspiracy in our country’s history.” http://www.physics911.net

  • Editor’s note: For more information on the impact at the Pentagon, see General Stubblebine, Commander Muga, Lt. Col. Kwiatkowski, Lt. Col. Latas, Major Rokke, Capt. Wittenberg, Capt. Davis, Barbara Honegger, April Gallop, Colonel Bunel, and Steve DeChiaro.
  • Member: Scholars for 9/11 Truth and Justice Association Statement: “Scholars for 9/11 Truth and Justice is a non-partisan organization consisting of independent researchers and activists engaged in uncovering the true nature of the September 11, 2001 attacks.”
  • Member: Pilots for 9/11 Truth Association Statement: “Pilots for 9/11 Truth is an organization of aviation professionals and pilots throughout the globe that have gathered together for one purpose. We are committed to seeking the truth surrounding the events of the 11th of September 2001. Our main focus concentrates on the four flights, maneuvers performed and the reported pilots. We do not offer theory or point blame. However, we are focused on determining the truth of that fateful day since the United States Government doesn’t seem to be very forthcoming with answers.”
  • Member: Scientific Panel Investigating Nine-Eleven Association Statement: “We have found solid scientific grounds on which to question the interpretation put upon the events of September 11, 2001 by the Office of the President of the United States of America and subsequently propagated by the major media of western nations.”

Lt. Col. Shelton F. Lankford, U.S. Marine Corps (ret) – Retired U.S. Marine Corps fighter pilot with over 300 combat missions flown. 20-year Marine Corps career.

  • Letter to the Editor 2/5/07: Regarding 9/11 “Our government has been hijacked by means of a “new Pearl Harbor” and a lot of otherwise good and decent people who are gullible enough to think that the first three steel-framed buildings in history fall down because they have some fires that the fire fighter on the scene said could be knocked down with a couple of hoses and through which people walked before they were photographed looking out the holes where the plane hit . One of these – bldg 7, was never hit by a plane and even NIST is ashamed to advance a reason for its collapse. And, miracle of miracles, these three buildings just happened to be leased and insured by the same guy who is on tape saying they decided to “PULL” the last one to fall.” http://michigandaily.com

    [Editor's note: WTC Building 7 was 610 feet tall, 47 stories. It would have been the tallest building in 33 states. Although it was not hit by an airplane, it completely collapsed into a pile of rubble in less than 7 seconds at 5:20 p.m. on 9/11, seven hours after the collapses of the Twin Towers. However, no mention of its collapse appears in the 9/11 Commission's "full and complete account of the circumstances surrounding the September 11, 2001 terrorist attacks." Watch the collapse video here. And six years after 9/11, the Federal government has yet to publish its promised final report that explains the cause of its collapse.]

  • Statement to this website 2/20/07: “This isn’t about party, it isn’t about Bush Bashing. It’s about our country, our constitution, and our future. …

    Your countrymen have been murdered and the more you delve into it the more it looks as though they were murdered by our government, who used it as an excuse to murder other people thousands of miles away.

    If you ridicule others who have sincere doubts and who know factual information that directly contradicts the official report and who want explanations from those who hold the keys to our government, and have motive, means, and opportunity to pull off a 9/11, but you are too lazy or fearful, or … to check into the facts yourself, what does that make you? Scholars for 9/11 truth have developed reams of scientific data. Michael Ruppert published an exhaustive account of the case from the viewpoint of a trained investigator. David Ray Griffin provides a context for the unanswered or badly answered questions that should nag at anyone who pretends to love this country.

    Are you afraid that you will learn the truth and you can’t handle it? …

    Do a little research. Google is a wonderful tool.

    What does it all add up to? The Commission was, as was the Warren Commission before it, a dog and pony show … ” Link to full statement

  • Member: Pilots for 9/11 Truth Association Statement: “Pilots for 9/11 Truth is an organization of aviation professionals and pilots throughout the globe that have gathered together for one purpose. We are committed to seeking the truth surrounding the events of the 11th of September 2001. Our main focus concentrates on the four flights, maneuvers performed and the reported pilots. We do not offer theory or point blame. However, we are focused on determining the truth of that fateful day since the United States Government doesn’t seem to be very forthcoming with answers.”

Lt. Col. Karen U. Kwiatkowski, PhD, U.S. Air Force (ret) – Former Political-Military Affairs Officer in the Office of the Secretary of Defense. Also served on the staff of the Director of the National Security Agency. 20-year Air Force career. Member adjunct faculty, Political Science Department, James Madison University. Instructor, University of Maryland University College and American Public University System. Author of African Crisis Response Initiative: Past Present and Future (2000) and Expeditionary Air Operations in Africa: Challenges and Solutions (2001).

  • Contributor to 9/11 and American Empire: Intellectuals Speak Out 8/23/06: Account of Lt. Col. Karen Kwiatkowski, Pentagon employee and eyewitness to the events at the Pentagon on 9/11. “I believe the Commission failed to deeply examine the topic at hand, failed to apply scientific rigor to its assessment of events leading up to and including 9/11, failed to produce a believable and unbiased summary of what happened, failed to fully examine why it happened, and even failed to include a set of unanswered questions for future research. …

    It is as a scientist that I have the most trouble with the official government conspiracy theory, mainly because it does not satisfy the rules of probability or physics. The collapses of the World Trade Center buildings clearly violate the laws of probability and physics. …

    There was a dearth of visible debris on the relatively unmarked [Pentagon] lawn, where I stood only minutes after the impact. Beyond this strange absence of airliner debris, there was no sign of the kind of damage to the Pentagon structure one would expect from the impact of a large airliner. This visible evidence or lack thereof may also have been apparent to the secretary of defense [Donald Rumsfeld], who in an unfortunate slip of the tongue referred to the aircraft that slammed into the Pentagon as a “missile”. …

    I saw nothing of significance at the point of impact – no airplane metal or cargo debris was blowing on the lawn in front of the damaged building as smoke billowed from within the Pentagon. … all of us staring at the Pentagon that morning were indeed looking for such debris, but what we expected to see was not evident.

    The same is true with regard to the kind of damage we expected. … But I did not see this kind of damage. Rather, the facade had a rather small hole, no larger than 20 feet in diameter. Although this facade later collapsed, it remained standing for 30 or 40 minutes, with the roof line remaining relatively straight.

    The scene, in short, was not what I would have expected from a strike by a large jetliner. It was, however, exactly what one would expect if a missile had struck the Pentagon. …

    More information is certainly needed regarding the events of 9/11 and the events leading up to that terrible day.”

  • Editor’s note: For more information on the impact at the Pentagon, see General Stubblebine, Colonel Nelson, Commander Muga, Lt. Col. Latas, Major Rokke, Capt. Wittenberg, Capt. Davis, Barbara Honegger, April Gallop, Colonel Bunel, and Steve DeChiaro.
  • Member: Scientific Panel Investigating Nine-Eleven Association Statement: “We have found solid scientific grounds on which to question the interpretation put upon the events of September 11, 2001 by the Office of the President of the United States of America and subsequently propagated by the major media of western nations.”
  • Bio: http://militaryweek.com/

Lt. Col. Guy S. Razer, MS Aeronautical Science, U.S. Air Force (ret) – Retired U.S. Air Force command fighter pilot. Former instructor; U.S. Air Force Fighter Weapons School and NATO’s Tactical Leadership Program. As an Air Force weapons effects expert was responsible for wartime tasking of most appropriate aircraft/munition for target destruction to include steel and concrete superstructures. Former aeronautical structures flight test engineer with McDonnell Douglas, working on advanced DC-9 autopilot systems and DC-10 flight envelope expansion stress and flutter analysis. Tactical aircraft flown: General Dynamics F-111 Aardvark fighter/bomber, McDonnell Douglas F-15E Strike Eagle, General Dynamics / Lockheed Martin F-16 Fighting Falcon, McDonnell Douglas F-18 Hornet, Boeing B-1 Bomber, MiG-29 (Russian fighter), and Su-22 (Russian fighter/bomber). 3,000+ fighter hours. Combat time over Iraq. 20-year Air Force career.

  • Statement to this website 3/25/07: “After 4+ years of research since retirement in 2002, I am 100% convinced that the attacks of September 11, 2001 were planned, organized, and committed by treasonous perpetrators that have infiltrated the highest levels of our government. It is now time to take our country back.

    The “collapse” of WTC Building 7 shows beyond any doubt that the demolitions were pre-planned. There is simply no way to demolish a 47-story building (on fire) over a coffee break. It is also impossible to report the building’s collapse before it happened, as BBC News did, unless it was pre-planned. Further damning evidence is Larry Silverstein’s video taped confession in which he states “they made that decision to pull [WTC 7] and we watched the building collapse.” [Editor's note: WTC Building 7 was 610 feet tall, 47 stories. It would have been the tallest building in 33 states. Although it was not hit by an airplane, it completely collapsed into a pile of rubble in less than 7 seconds at 5:20 p.m. on 9/11, seven hours after the collapses of the Twin Towers. However, no mention of its collapse appears in the 9/11 Commission's "full and complete account of the circumstances surrounding the September 11, 2001 terrorist attacks." Watch the collapse video here. And six years after 9/11, the Federal government has yet to publish its promised final report that explains the cause of its collapse.]

    We cannot let the pursuit of justice fail. Those of us in the military took an oath to “support and defend the Constitution of the United States against all enemies, foreign and domestic”. Just because we have retired does not make that oath invalid, so it is not just our responsibility, it is our duty to expose the real perpetrators of 9/11 and bring them to justice, no matter how hard it is, how long it takes, or how much we have to suffer to do it.

    We owe it to those who have gone before us who executed that same oath, and who are doing the same thing in Iraq and Afghanistan right now. Those of us who joined the military and faithfully executed orders that were given us had to trust our leaders. The violation and abuse of that trust is not only heinous, but ultimately the most accurate definition of treason!”

  • Member: Scholars for 9/11 Truth and Justice Association Statement: “Scholars for 9/11 Truth and Justice is a non-partisan organization consisting of independent researchers and activists engaged in uncovering the true nature of the September 11, 2001 attacks.”
  • Member: Pilots for 9/11 Truth Association Statement: “Pilots for 9/11 Truth is an organization of aviation professionals and pilots throughout the globe that have gathered together for one purpose. We are committed to seeking the truth surrounding the events of the 11th of September 2001. Our main focus concentrates on the four flights, maneuvers performed and the reported pilots. We do not offer theory or point blame. However, we are focused on determining the truth of that fateful day since the United States Government doesn’t seem to be very forthcoming with answers.”
  • Signatory: Petition requesting a reinvestigation of 9/11, signed by more than 400 Architects and Engineers:

    “On Behalf of the People of the United States of America, the undersigned Architects and Engineers for 9/11 Truth and affiliates hereby petition for, and demand, a truly independent investigation with subpoena power in order to uncover the full truth surrounding the events of 9/11/01 – specifically the collapse of the World Trade Center Towers and Building 7. We believe that there is sufficient doubt about the official story and therefore that the 9/11 investigation must be re-opened and must include a full inquiry into the possible use of explosives that may have been the actual cause behind the destruction of the World Trade Center Towers and WTC Building 7.” http://www.ae911truth.org/joinus.php

  • Website: http://www.myspace.com/supereagle69

Commander Ralph Kolstad, U.S. Navy (ret) – Retired fighter pilot. Former Air Combat Instructor, U.S. Navy Fighter Weapons School (Topgun). 20-year Navy career. Aircraft flown: McDonnell Douglas F-4 Phantom, Douglas A-4 Skyhawk, and Grumman F-14 Tomcat. Retired commercial airline captain with 27 years experience. Aircraft flown: Boeing 727, 757 and 767, McDonnell Douglas MD-80, and Fokker F-100. 23,000+ total hours flown.

  • Statement to this website 8/20/07: “I started questioning the Sept 11, 2001 “story” only days after the event. It just didn’t make any sense to me. How could a steel and concrete building collapse after being hit by a Boeing 767? Didn’t the engineers design it to withstand a direct hit from a Boeing 707, approximately the same size and weight of the 767? The evidence just didn’t add up. …

    At the Pentagon, the pilot of the Boeing 757 did quite a feat of flying. I have 6,000 hours of flight time in Boeing 757’s and 767’s and could not have flown it the way the flight path was described.

    I was also a Navy fighter pilot and Air Combat Instructor, U.S. Navy Fighter Weapons School and have experience flying low altitude, high speed aircraft. I could not have done what these beginners did. Something stinks to high heaven!

    Where is the damage to the wall of the Pentagon from the wings? Where are the big pieces that always break away in an accident? Where is all the luggage? Where are the miles and miles of wire, cable, and lines that are part and parcel of any large aircraft? Where are the steel engine parts? Where is the steel landing gear? Where is the tail section that would have broken into large pieces?

    I also personally knew American Airlines Captain “Chick” Burlingame, who was the captain of Flight 77 which allegedly hit the Pentagon, and I know he would not have given up his airplane to crazies!

    And at the Shanksville Pennsylvania impact site, where is any of the wreckage?!!! Of all the pictures I have seen, there is only a hole! Where is any piece of a crashed airplane? Why was the area cordoned off, and no inspection allowed by the normal accident personnel? Where is any evidence at all?

    When one starts using his own mind, and not what one was told, there is very little to believe in the official “story”. …

    Every question leads to another question that has not been answered by anyone in authority. This is just the beginning as to why I don’t believe the official “story” and why I want the truth to be told.” Link to full statement

  • Member: Pilots for 9/11 Truth Association Statement: “Pilots for 9/11 Truth is an organization of aviation professionals and pilots throughout the globe that have gathered together for one purpose. We are committed to seeking the truth surrounding the events of the 11th of September 2001. Our main focus concentrates on the four flights, maneuvers performed and the reported pilots. We do not offer theory or point blame. However, we are focused on determining the truth of that fateful day since the United States Government doesn’t seem to be very forthcoming with answers.”

Joel M. Skousen – Former U.S. Marine Corps fighter pilot. Commercial pilot. Aircraft flown: McDonnell Douglas F-4 Phantom, Douglas A-4 Skyhawk, Grumman F-9 Cougar, North American T-2C Buckeye, various civilian planes. Member, Experimental Aircraft Association. Member, Aircraft Owners and Pilots Association. Former Chairman of the Conservative National Committee in Washington DC and Executive Editor of Conservative Digest. Author of Essential Principles for the Conservation of Liberty (1984), The Secure Home–Architectural Design, Construction and Remodeling of Self-Sufficient Residences and Retreats (1982, 1999), How to Implement a High Security Shelter in the Home (1996), Strategic Relocation–North American Guide to Safe Places (1998), Foundations of the Ideal State (2007).

  • Essay Debunking the Debunkers 2/14/05: “For over a decade now, the PTB [Powers That Be] have used an odd vehicle to do their debunking on a variety of issues - Popular Mechanics Magazine (a Hearst publication). I suppose they are targeting the back-yard mechanic and auto-enthusiast crowd, who are often prone to accepting conspiracy facts and theories.

    In the March 2005 issue, PM magazine singled out 16 issues or claims of the 9/11 skeptics that point to government collusion and systematically attempted to debunk each one. Of the 16, most missed the mark and almost half were straw men arguments – either ridiculous arguments that few conspiracists believed or restatements of the arguments that were highly distorted so as to make them look weaker than they really were. …

    I am one of those who claim there are factual arguments pointing to conspiracy, and that truth is not served by taking cheap shots at those who see gaping flaws in the government story …

    There is significant evidence that the aircraft impacts did not cause the collapse [of the Twin Towers] …

    The issues of the penetration hole [at the Pentagon] and the lack of large pieces of debris simply do not jive with the official story, but they are explainable if you include the parking lot video evidence that shows a huge white explosion at impact. This cannot happen with an aircraft laden only with fuel. It can only happen in the presence of high explosives.” http://www.rense.com

  • Member: Pilots for 9/11 Truth Association Statement: “Pilots for 9/11 Truth is an organization of aviation professionals and pilots throughout the globe that have gathered together for one purpose. We are committed to seeking the truth surrounding the events of the 11th of September 2001. Our main focus concentrates on the four flights, maneuvers performed and the reported pilots. We do not offer theory or point blame. However, we are focused on determining the truth of that fateful day since the United States Government doesn’t seem to be very forthcoming with answers.”
  • Website: http://www.joelskousen.com/

Capt. Russ Wittenberg, U.S. Air Force – Former U.S. Air Force fighter pilot with over 100 combat missions.  Retired commercial pilot.  Flew for Pan Am and United Airlines for 35 years.  Aircraft flown: Boeing 707, 720, 727, 737, 747, 757, 767, and 777.  30,000+ total hours flown.  Had previously flown the actual two United Airlines aircraft that were hijacked on 9/11 (Flight 93, which impacted in Pennsylvania, and Flight 175, the second plane to hit the WTC).

  • Video interview 9/11 Ripple Effect 8/07: “I flew the two actual aircraft which were involved in 9/11; the Fight number 175 and Flight 93, the 757 that allegedly went down in Shanksville and Flight 175 is the aircraft that’s alleged to have hit the South Tower. I don’t believe it’s possible for, like I said, for a terrorist, a so-called terrorist to train on a [Cessna] 172, then jump in a cockpit of a 757-767 class cockpit, and vertical navigate the aircraft, lateral navigate the aircraft, and fly the airplane at speeds exceeding it’s design limit speed by well over 100 knots, make high-speed high-banked turns, exceeding — pulling probably 5, 6, 7 G’s.  And the aircraft would literally fall out of the sky.  I couldn’t do it and I’m absolutely positive they couldn’t do it.”  http://americanbuddhist.net
  • Article 7/17/05: “The government story they handed us about 9/11 is total B.S. plain and simple.” … Wittenberg convincingly argued there was absolutely no possibility that Flight 77 could have “descended 7,000 feet in two minutes, all the while performing a steep 280 degree banked turn before crashing into the Pentagon’s first floor wall without touching the lawn.”… 

    “For a guy to just jump into the cockpit and fly like an ace is impossible – there is not one chance in a thousand,” said Wittenberg, recalling that when he made the jump from Boeing 727’s to the highly sophisticated computerized characteristics of the 737’s through 767’s it took him considerable time to feel comfortable flying.” http://www.arcticbeacon.com

  • Audio Interview 9/16/04: Regarding Flight 77, which allegedly hit the Pentagon.  “The airplane could not have flown at those speeds which they said it did without going into what they call a high speed stall.  The airplane won’t go that fast if you start pulling those high G maneuvers at those bank angles. … To expect this alleged airplane to run these maneuvers with a total amateur at the controls is simply ludicrous…

    It’s roughly a 100 ton airplane.  And an airplane that weighs 100 tons all assembled is still going to have 100 tons of disassembled trash and parts after it hits a building.  There was no wreckage from a 757 at the Pentagon. … The vehicle that hit the Pentagon was not Flight 77.  We think, as you may have heard before, it was a cruise missile.” http://911underground.com

  • Editor’s note: For more information on the impact at the Pentagon, see General Stubblebine, Colonel NelsonCommander Muga, Lt. Col. KwiatkowskiLt. Col. Latas, Major RokkeCapt. Davis, Barbara HoneggerApril Gallop, Colonel Bunel, and Steve DeChiaro.
  • Member: Pilots for 9/11 Truth Association Statement: “Pilots for 9/11 Truth is an organization of aviation professionals and pilots throughout the globe that have gathered together for one purpose. We are committed to seeking the truth surrounding the events of the 11th of September 2001. Our main focus concentrates on the four flights, maneuvers performed and the reported pilots. We do not offer theory or point blame. However, we are focused on determining the truth of that fateful day since the United States Government doesn’t seem to be very forthcoming with answers.”
  • Member: Scientific Panel Investigating Nine-Eleven Association Statement: “We have found solid scientific grounds on which to question the interpretation put upon the events of September 11, 2001 by the Office of the President of the United States of America and subsequently propagated by the major media of western nations.”

To read about MORE “Crazy Kooky 9/11 Conspiracy Theorists” that actually are silly enough to question what our loving Government tells us…..please check out:

http://patriotsquestion911.com/

http://patriotsquestion911.com/engineers.html

http://patriotsquestion911.com/pilots.html

http://patriotsquestion911.com/professors.html

http://patriotsquestion911.com/survivors.html

http://patriotsquestion911.com/media.html

War & Inflation

June 15, 2008

This article originally appeared at www.silverbearcafe.com

Article by Llewellyn H. Rockwell Jr.

Note by: “Johnny Silver Bear”

Note: The Federal Reserve is the single largest threat to the freedom and liberty of America. The Federal Reserve is evil. For the sake of our children, we need to abolish the Federal Reserve immediately. This talk was delivered at the Future of Freedom Foundation‘s conference on “Restoring the Republic: Foreign Policy and Civil Liberties,” on June 6, 2008, in Reston, Virginia. – JSB

The U.S. central bank, called the Federal Reserve, was created in 1913. No one promoted this institution with the slogan that it would make wars more likely and guarantee that nearly half a million Americans would die in battle in foreign lands, along with millions of foreign soldiers and civilians. No one pointed out that this institution would permit Americans to fund, without taxes, the destruction of cities abroad and overthrow governments at will. No one said that the central bank would make it possible for the U.S. to be at large-scale war in one of every four years for a full century. It was never pointed out that this institution would make it possible for the U.S. government to establish a global empire that would make Imperial Rome and Britain look benign by comparison.

You can line up 100 professional war historians and political scientists and talk about the twentieth century, and not one is likely to mention the role of the Fed in funding U.S. militarism. And yet it is true: the Fed is the institution that has created the money to fund the wars. In this role, it has solved a major problem that the state has confronted for all of human history. A state without money or a state that must tax its citizens to raise money for its wars is necessarily limited in its imperial ambitions. Keep in mind that this is only a problem for the state. It is not a problem for the people. The inability of the state to fund its unlimited ambitions is worth more for the people than every kind of legal check and balance. It is more valuable than all the constitutions ever devised.

The state has no wealth that is its own. It is not a profitable enterprise. Everything it possesses it must take from society in a zero-sum game. That usually means taxes, but taxes annoy people. They can destabilize the state and threaten its legitimacy. They inspire anger, revolt, and even revolution. Rather than risk that result, the state from the Middle Ages to the dawn of the central banking age was somewhat cautious in its global ambitions simply because it was cautious in its need to steal openly and directly from the people in order to pay its bills.

To be sure, it doesn’t require a central bank for a state to choose inflation over taxes as a means of funding itself. All it really requires is a monopoly on the production of money. Once acquired, the monopoly on money production leads to a systematic process of depreciating the currency, whether by coin clipping or debasement or the introduction of paper money, which can then be printed without limit. The central bank assists in this process in a critical sense: it cartelizes the banking system as the essential conduit by which money is lent to the public and to the government itself. The banking system thereby becomes a primary funding agency to the state, and, in exchange for its services, the banking system is guaranteed against insolvency and business failure as it profits from inflation. If the goal of the state is the complete monopolization of money under an infinitely flexible paper-money system, there is no better path for the state than the creation of a central bank. This is the greatest achievement for the victory of power over liberty.

The connection between war and inflation, then, dates long before the creation of the Federal Reserve. In fact, in America, it dates to the colonial era, and to the founding itself. The fate of the Continental currency, printed massively during and after the Revolutionary war, for example, was a very bad omen for our future, and the whole country paid a very serious price. It was this experience that later led to the gold clause in the U.S. Constitution. Except for the Hamiltonians, that entire generation of political activists saw the unity of freedom and sound money, and regarded paper money as the fuel of tyranny.

Consider Thomas Paine: “Paper money is like dram-drinking, it relieves for a moment by deceitful sensation, but gradually diminishes the natural heat, and leaves the body worse than it found it. Were not this the case, and could money be made of paper at pleasure, every sovereign in Europe would be as rich as he pleased…. Paper money appears at first sight to be a great saving, or rather that it costs nothing; but it is the dearest money there is. The ease with which it is emitted by an assembly at first serves as a trap to catch people in at last. It operates as an anticipation of the next year’s taxes.”

But the wisdom of this generation, subverted by Lincoln, was finally thrown out during the Progressive Era. It was believed that an age of scientific public policy needed a scientific money machinery that could be controlled by powerful elites. The dawn of the age of central banking was also the dawn of the age of central planning, for there can be no government control over the nation’s commercial life without first controlling the money. And once the state has the money and the banking system, its ambitions can be realized.

Before the creation of the Federal Reserve, the idea of American entry into the conflict that became World War I would have been inconceivable. In fact, it was a highly unpopular idea, and Woodrow Wilson himself campaigned on a platform that promised to keep us out of war. But with a money monopoly, all things seem possible. It was a mere four years after the Fed was invented under the guise of scientific policy planning that the real agenda became obvious. The Fed would fund the U.S. entry into World War I.

It was not only entry alone that was made possible. World War I was the first total war. It involved nearly the whole of the civilized world, and not only their governments but also the civilian populations, both as combatants and as targets. It has been described as the war that ended civilization in the 19th-century sense in which we understand that term. That is to say, it was the war that ended liberty as we knew it. What made it possible was the Federal Reserve. And not only the U.S. central bank; it was also its European counterparts. This was a war funded under the guise of scientific monetary policy.

Reflecting on the calamity of this war, Ludwig von Mises wrote in 1919 that “One can say without exaggeration that inflation is an indispensable means of militarism. Without it, the repercussions of war on welfare become obvious much more quickly and penetratingly; war weariness would set in much earlier.”

There is always a price to be paid for funding war through the central bank. The postwar situation in America was a classic case. There was inflation. There were massive dislocations. There was recession or what was then called depression, a direct result of capital dislocation that masked itself as an economic boom, but which was then followed by a bust. The depression hit in 1920, but it is not a famous event in United States economic history. Why is that? Because the Federal Reserve had not yet acquired the tools to manufacture an attempt to save the economy. Instead, neither the Fed nor Congress nor the President did much of anything about it – a wholly praiseworthy response! As a result, the depression was brief and became a footnote to history. The same would have happened in 1930 had Hoover not attempted to use the government as the means of resuscitation.

Sadly, the easy recovery of 1920-1922 tempted the central bank to get back into the business of inflation, with the eventual result of a stock market boom that led to bust, then depression, and finally the destruction of the gold standard itself. FDR found that even fascist-style economic planning and inflation could not restore prosperity, so he turned to the ancient method of looking for a war to enter. Here is where the history of the United States and the Fed intersects with the tragic role of the German central bank.

The German government also funded its Great War through inflation. By war’s end, money in circulation has risen fourfold. Prices were up 140%. Yet, on international exchange, the German mark had not suffered as much as one might expect. The German government looked at this with encouragement and promptly attempted to manufacture a complete economic recovery through inflation. Incredibly, by 1923, the mark had fallen to one-trillionth of its 1914 gold value. The U.S. dollar was then equal to 4.2 trillion marks. It was an example of currency destruction that remains legendary in the history of the world – all made possible by a central bank that obliged the government and monetized its war debt.

But did people blame the printing press? No. The popular explanation dealt directly with the Treaty of Versailles. It was the harsh peace imposed by the allies that had brought Germany to the brink of total destruction – or so it was believed. Mises himself had written a full book that he hoped would explain that Germany owed its suffering to war and socialism, not Versailles as such. He urged the German people to look at the real cause and establish free markets, lest imperial dictatorship be the next stage in political development. But he was ignored.

The result, we all know, was Hitler.

Turning to Russia, the untold truth about the Bolshevik revolution is that Lenin’s greatest propaganda tool involved the sufferings by the Russian people during World War I. Men were drafted and killed at a horrific level. Lenin called this capitalist exploitation, based on his view that the war resulted from capitalist motives. In fact, it was a foreshadowing of the world that socialism would bring about, a world in which all people and all property are treated as means to statist ends. And what made the prolongation of the Russian role in World War I possible was an institution called the State Bank of the Russian Empire, the Russian version of the Fed.

The Russian war itself was funded through money creation, which also led to massive price increases and controls and shortages during the war. I’m not of the opinion, unlike the neocons, that the Russian monarchy was a particularly evil regime, but the temptation that the money machine provided the regime proved too inviting. It turned a relatively benign monarchy into a war machine. A country that had long been integrated into the worldwide division of labor and was under a gold standard became a killing machine. And as horrific and catastrophic as the war dead were for Russian morale, the inflation affected every last person and inspired massive unrest that led to the triumph of Communism.

At this juncture in history, we can see what central-banking had brought to us. It was not an end to the business cycle. It was not merely more liquidity for the banking system. It was not an end to bank runs and bank panics. It certainly wasn’t scientific public policy. The world’s major economies were being lorded over by money monopolies and the front men had become some of the worst despots in the history of the world. Now they were preparing to fight each other with all the resources they had at their disposal. The resources they did not have at their disposal they would pay for with their beloved machinery of central banking.

In wartime, the printing presses ran overtime, but with a totalitarian level of rationing, price controls, and all-round socialization of resources in the whole of the Western world, the result of inflation was not merely rising prices. It was vast suffering and shortages in Britain, Russia, Germany, Italy, France, Austria-Hungary, the US, and pretty much the entire planet.

So we can see here the amazing irony of central banking at work. The institution that was promoted by economists working with bankers, in the name of bringing rationality and science to bear on monetary matters, had given birth to the most evil political trends in the history of the world: Communism, socialism, fascism, Nazism, and the despotism of economic planning in the capitalist West. The story of central banking is one step removed from the story of atom bombs and death camps. There is a reason the state has been unrestrained in the last 100 years and that reason is the precise one that many people think of as a purely technical issue that is too complicated for mere mortals.

Fast-forward to the Iraq War, which has all the features of a conflict born of the power to print money. There was a time when the decision to go to war involved real debate in the U.S. House of Representatives. And what was this debate about? It was about resources, and the power to tax. But once the executive state was unhinged from the need to rely on tax dollars, and did not have to worry about finding willing buyers for its unbacked debt instruments, the political debate about war was silenced.

In the entire run-up to war, George Bush just assumed as a matter of policy that it was his decision alone whether to invade Iraq. The objections by Ron Paul and some other members of Congress and vast numbers of the American population, was reduced to little more than white noise in the background. Imagine if he had to raise the money for the war through taxes. It never would have happened. But he didn’t have to. He knew the money would be there. So despite a $200 billion deficit, a $9 trillion debt, $5 trillion in outstanding debt instruments held by the public, a federal budget of $3 trillion, and falling tax receipts in 2001, Bush contemplated a war that has cost $525 billion dollars, or $4,681 per household. Imagine if he had gone to the American people to request that. What would have happened? I think we know the answer to that question. And those are government figures; the actual cost of this war will be far higher—perhaps $20,000 per household.

Now, when left-liberals talk about these figures, they like to compare them with what the state might have done with these resources in terms of funding health care, public schools, head-start centers, or food stamps. This is a mistake because it demonstrates that the left isn’t really providing an alternative to the right. It merely has a different set of priorities in how it would use the resources raised by the inflation machine. It’s true that public schools are less costly in terms of lives and property than war itself. But the inflation-funded welfare state also has a corrosive effect on society. The pipe dream that the inflation monster can be used to promote good instead of evil illustrates a certain naïveté about the nature of the state itself. If the state has the power and is asked to choose between doing good and waging war, what will it choose? Certainly in the American context the choice has always been for war.

It is equally naïve for the right to talk about restraining the government while wishing for global war. So long as the state has unlimited access to the printing press, it can ignore the pleas of ideological groups concerning how the money will be raised. It is also very silly for the right to believe that it can have its wars, its militarism, its nationalism and belligerence, without depending on the power of the Federal Reserve. This institution is the very mechanism by which the dreams of both the fanatical right and the fanatical left come true.

The effect of the money machine goes well beyond funding undesirable government programs. The Fed creates financial bubbles that lead to economic dislocation. Think of the technology bubble of the late 1990s or the housing bubble. Or the boom that preceded the current bust. These are all a result of the monopolization of money.

These days, the American consumer has been hit very hard with rising prices in oil, clothing, food, and much else. For the first time in decades, people are feeling this and feeling it hard. And just as in every other inflation in world history, people are looking for the culprit and finding all the wrong ones. They believe it is the oil companies who are gouging us, or that foreign oil dealers are restricting supply, or that gas station owners are abusing a crisis to profit at our expense.

I wouldn’t entirely rule out the possibility that price controls are around the corner. When Nixon imposed them in 1971, neither he nor his advisors believed that they would actually result in controlling inflation. Rather, the purpose was to redirect the target of public anger from the government and its bank over to retailers, who would become scapegoats. In this sense, price controls do work. They make people believe that the government is trying to lower prices while the private sector is attempting to raise them. This is the real political dynamic at work with price controls.

The question is whether you will be taken in by these tactics. It is long past time for us to take note that the cause of the real trouble here is not the manufacturers or even the war as such but the agency that has been granted a legal right to counterfeit at will and lower the value of the currency while fueling every manner of statist scheme, whether welfare or warfare. We need to look at the Fed and say: this is the enemy.

Note that the Federal Reserve is not a political party. It is not a recognized interest group. It is not a famed lobby in Washington. It is not really even a sector of public opinion. It seems completely shielded off from vigorous public debate. If we truly believe in liberty and decry the leviathan state, this situation cannot be tolerated.

I say to the sincere right, if you really want to limit the state, you will have to give up your dreams of remaking the world at the point of a gun. Wars and limited government are impossible. Moreover, you must stop ignoring the role of monetary policy. It is a technical subject, to be sure, but one that we must all look into and understand if we expect to restore something that resembles the American liberty of the founders.

I say to the sincere left, if you really want to stop war and stop the spying state, and put an end to the persecution of political dissidents and the Guantanamo camps for foreign peoples, and put a stop to the culture of nationalism and militarism, you must join us in turning attention to the role of monetary policy. The printing presses must be unplugged. It’s true that this will also hit programs that are beloved by the left, such as socialized health care and federalized education programs. But so long as you expect the state to fund your dreams, you cannot expect that the state will not also fund the dreams of people you hate.

And let me say a few words to libertarians, who dream of a world with limited government under the rule of law, a world in which free enterprise reigns and where the state has no power to interfere in our lives so long as we behave peacefully. It is completely absurd to believe that this can be achieved without fundamental monetary reform. And yet, until the most recent Ron Paul campaign, and aside from Murray Rothbard and the 26-year-long work of the Mises Institute, I don’t recall that libertarians themselves have cared much about this issue at all.

In 1982, the Mises Institute held a large academic conference on the gold standard, and we held it in Washington, D.C. (There were scholarly papers and Ron Paul debated a Fed governor. Ron won.) Even back then, I recall that D.C. libertarians ridiculed us for holding such a meeting to talk about the Fed and its replacement with sound money. They said that this would make the Mises Institute look ridiculous, that we would be tarred with the brush of gold bugs and crazies. We did it anyway. And all these years later, the book that came out of that conference remains a main source for understanding the role of money in the advance of despotism or resistance to it, and a blueprint for the future.

Of course the Austrian tradition fought paper money and central banking from the beginning. Menger was an advocate of the gold standard. Bohm-Bawerk actually established it as finance minister to the Habsburg monarchy. Mises’s book on the topic from 1912 was the first to show the role of money in the business cycle, and he issued dire warnings about central banking. Hayek wrote powerfully against the abandonment of gold in the 1930s. Hazlitt warned of the inevitable breakdown of Bretton Woods, and advocated a real gold standard instead. And Rothbard was a champion of sound money and the greatest enemy the Fed has ever had. But generally, I’ve long detected a tendency in libertarian circles to ignore this issue, in part for precisely the reasons cited above: it is not respectable.

Well, I will tell you why this issue is not considered respectable: it is the most important priority of the state to keep its money machine hidden behind a curtain. Anyone who dares pull the curtain back is accused of every manner of intellectual crime. This is precisely the reason we must talk about it at every occasion. We must end the conspiracy of silence on this issue.

I was intrigued at how Ron Paul, during his campaign, would constantly bring up the subject. Most politicians are out to play up to their audiences, so they say things that people want to hear. I promise you that early in the campaign, no one wanted to hear him talk about the Federal Reserve. But he did it anyway. He worked to educate his audiences about the need for monetary reform. And it worked. For the first time in my life, there is a large and very public movement in this country to take this topic seriously.

Monetary economist Joseph Salerno was called the other day by C-Span, which wanted to interview him on television on the need to restore gold as the basis of our currency. As I watched this excellent interview, I was struck by what a great triumph it truly is for liberty that this topic is again part of the national debate. In the 19th-century, this was a topic on everybody’s minds. It can be again today, provided we do not eschew the truth in the formation of our message.

It might be said that advocating privatization is politically unrealistic, and therefore a waste of time. What’s more, we might say that by continuing to harp on the issue, we only marginalize ourselves, proving that we are on the fringe. I submit that there is no better way to ensure that an issue will always be off the table than to stop talking about it.

Far from being an arcane and anachronistic issue, then, the gold standard and the issues it raises gets right to the heart of the current debate concerning the future of war and the world economy. Why do the government and its partisans dislike the gold standard? It removes the discretionary power of the Fed by placing severe limits on the ability of the central bank to inflate the money supply. Without that discretionary power, the government has far fewer tools of central planning at its disposal. Government can regulate, which is a function of the police power. It can tax, which involves taking people’s property. And it can spend, which means redistributing other people’s property. But its activities in the financial area are radically curbed.

Think of your local and state governments. They tax and spend. They manipulate and intervene. As with all governments from the beginning of time, they generally retard social progress and muck things up as much as possible. What they do not do, however, is wage massive global wars, run huge deficits, accumulate trillions in debt, reduce the value of money, bail out foreign governments, provide endless credits to failing enterprises, administer hugely expensive and destructive social insurance schemes, or bring about immense swings in business activity.

State and local governments are awful and they must be relentlessly checked, but they are not anything like the threat of the federal government. Neither are they as arrogant and convinced of their own infallibility and indispensability. They lack the aura of invincibility that the central government enjoys.

It is the central bank, and only the central bank, that works as the government’s money machine, and this makes all the difference. Now, it is not impossible that a central bank can exist alongside a gold standard, a lender of last resort that avoids the temptation to destroy that which restrains it. In the same way, it is possible for someone with an insatiable appetite for wine to sit at a banquet table of delicious vintages and not take a sip.

Let’s just say that the existence of a central bank introduces an occasion of sin for the government. That is why under the best gold standard, there would be no central bank, gold coins would circulate as freely as their substitutes, and rules against fraud and theft would prohibit banks from pyramiding credit on top of demand deposits. So long as we are constructing the perfect system, all coinage would be private. Banks would be treated as businesses, no special privileges, no promises of bailout, no subsidized insurance, and no connection to government at any level.

This is the free-market system of monetary management, which means turning over the institution of money entirely to the market economy. As with any institution in a free society, it is not imposed from above, and dictated by a group of experts, but is the de facto result that comes about in a society that consistently respects private-property rights, encourages enterprise, and promotes peace.

It comes down to this. If you hate war, oppose the Fed. If you hate violations of your liberties, oppose the Fed. If you want to restrain despotism, restrain the Fed. If you want to secure freedom for yourself and your descendants, abolish the Fed.

June 9, 2008

Llewellyn H. Rockwell, Jr. [send him mail] is founder and president of the Ludwig von Mises Institute in Auburn, Alabama, editor of LewRockwell.com, and author of Speaking of Liberty.

 


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