Politics! And Your Money!

[CrimsonKairos]

I don't think you understand that even fiat money is backed by assets other than gold.

For the FED's part, they own huge assets in gold and real estate and other commodities which they can liquidate on the international market at any time should they need to.

For the U.S. government's part, they own the most assets of all: the national parks. If the U.S. government sold a portion of the real estate they now hold in national parks, the national debt could be paid off and leave us with billions to spare (though the environmentalists would never let their precious trees be hugged by anyone else).

So this notion that FRN's aren't backed by anything just because they're not convertible to gold upon demand is the real lie that is circulating. The dollar is indeed backed by assets held by the FED and the government. Thus, it is an illusion that our physically inconvertible currency is unbacked.

Even if China chose to dump their trillion dollars back into our economy, all the government has to do is sell more Treasury Securities/bonds to soak up the excess paper while reallocating assets and investments to compensate. This is one of the main ways the money supply is regulated: sell bonds when there is an excess of paper money and buy bonds when there is a shortage of paper money in circulation. This is best done on a national level by a central bank, which was a lesson the USA learned well by 1913.

You apparently subscribe to the "quantity theory of money" which states that as the money supply is increased, inflation results. This is not necessarily true.

The "real bills doctrine" attributes inflation to the currency being inadequately backed by assets (other than metal), while the "quantity theory of money" claims that inflation results when the quantity of money outruns the economy's aggregate output of goods.

However, the FED and U.S. government both retain assets to back the FRN's, and whenever a loan is made by a bank, as long as the borrower pledges assets as collateral, there is an equivalent amount of dollars' worth of assets traded for each new bill injected into the economy via loaning. Hence all FRN's are backed, and hence inflation is not the automatic result of printing more money. Even the FED must pledge collateral to the various printing and coining agencies within the Treasury Department upon requesting that the TD print and coin more currency.

So even though the FRN's are technically "fiat currency" in that they are not "representative currency" convertible to specie upon demand, FRN's are nonetheless backed by the assets of the FED and the U.S. government, and hence printing more money is accompanied with allocating more assets to back the newly printed currency, providing assurance to foreign and domestic borrowers and investors that the value of the dollar will remain reliable within a given range of acceptable fluctuation.

Even if and when the FED injects currency into the economy without physical assets to back it, it is actually backed by the bonds of the Treasury Department, which are essentially promises that the U.S. government will continue to operate and manage this great country of ours. I don't see America going anywhere anytime soon.

My point about gold lacking inherent value is still sound. Suppose our economy crashes, the FED disappears, paper currency becomes worthless or in other words the assets backing them disappear...in that instance, gold won't mean a dang thing. Food, land and guns will matter. You can come to my store and offer to give me a lump of gold in exchange for some clothes, but I'll tell you "no thanks" while the man who offers to give me a couple gallons of milk will get my business.

In other words, assuming the U.S. economy miraculously crumbles, we will revert to a barter system, not a Gold Standard. Even if we revert to a Gold Standard, the FED and U.S. government have so much gold bullion that we'd be able to offer our gold as collateral to foreign economies in return for credit from them to tide us over until we get our feet back under us.

I just don't get what all the hype is about. a-train, give me a specific scenario in which FRN's become worthless and our economy crumbles.

[drjme]

I just don't get what all the hype is about. a-train, give me a specific scenario in which FRN's become worthless and our economy crumbles.

Sorry... it's long , but a very interesting perspective.....

The deflation time bomb

Mike Whitney

Counterpunch

Monday January 14, 2008

"Is there anyone who still does not understand that talk of 'inflation' by officialdom is just a red herring intended to distract us from the far more dangerous dragon of deflation?" --Mike Shedlock; Mish's Global Economic Trend Analysis

We are to about see how much George Bush really believes the “supply side” mumbo-jumbo he's been spouting for the last seven years.

Last week's Labor Department report confirmed that unemployment is on the rise (5 percent) and that corrective action will be required to avoid a long and painful recession.

There's a good chance that the Chameleon in Chief will jettison his “trickle down” doctrine for more conventional Keynesian remedies like slashing interest rates, government programs, and tax relief to middle and low-income people. Last Monday, Bush announced that his team of economic advisors was patching together an “Economic Stimulus Package” that will be unveiled later this month in the State of the Union Speech. The goal is to rev-up sagging consumer spending and slow down business contraction. Ironically, the UK Telegraph dubbed the stimulus plan Bush's “New Deal.” It's a shocking about-face for a president that has been clobbering the middle class since he took office and who balks at even providing temporary shelter for disaster victims. Now Bush is going to have to give away the farm just to keep the economy from crashing. Good luck. Clearly, the prospect of a system-wide meltdown in banking, real estate and equities has become a "Road to Damascus" moment for lame-duck George.

The uptick in unemployment is just the final part of an otherwise bleak economic picture. Manufacturing is hurting too. The December ISM Manufacturing Index plunged to 47.7, its lowest level in five years. The news put the stock market into a 200-plus nosedive and sent gold soaring over $800 per ounce. Since then, the news has gotten progressively worse. The market fell another 200-plus points on the Labor Dept's repor, followed by 238 point jolt last Tuesday on rumors of (potential) bankruptcy at mortgage lending giant, Countrywide Financial, and a 2.6 percent plunge in pending housing sales from the National Association of Realtors. By the time ATT announced its fears of “reduced consumer spending” the market was already barrel-rolling towards earth in a sheet of flames.

The Dow Jones is now 10 percent off its yearly high, the official sign of a correction. More important, equities blew through their support levels indicating a basic change in the market's trajectory. It's a primary bear market now and any rebound will be temporary. There's still a lot of fat to be trimmed before overvalued stocks return to the mean. No wonder Bush is nervous.

The constant rate cuts and geopolitical jitters have sent gold skyrocketing. Since August 2007, gold has gone from $650 per ounce to $887 -- a whopping $237 in just five months. If that is not a indictment of the Federal Reserve and their “loosey-goosey” monetary policy; then what is? According to the Wall Street Journal “gold and oil have run almost in perfect tandem. The price of gold has risen 239 percent since 2001, while the price of oil has risen 267 percent. That means if the dollar had remained as 'good as gold' since 2001, oil today would be selling at about $30 a barrel, not $99.” [WSJ; 1-4-08]

That's right; the price of gas today is attributable to war, tax cuts and the relentless expansion of credit by the Federal Reserve -- NOT OIL SHORTAGES!

Escalating energy prices are increasing the cost of food production which creates a self-reinforcing inflationary cycle. Additional rate cuts will only weaken the dollar further and put an even greater burden on maxed-out consumers.

Before he left on his “Victory Tour” of the Middle East, Bush said, "When Congress comes back, I look forward to working with them, to deal with the economic realities of the moment and to assure the American people that we will do everything we can to make sure we remain a prosperous country."

The economic realities that Bush will be facing are the anticipated “hard landing” from a nationwide housing slump coupled with a credit crunch that is strangling the banking and financial industries. The country is lurching recklessly into a deflationary death-spiral while Bush makes a pointless junket to the scene of his biggest foreign policy flop. What a joke. When he returns, Bush will find that he is constrained in his “stimulus” plan due to massive fiscal deficits which are the result of the enormous tax cuts and gluttonous military budget.

“This isn't like 2000 when the US was running a large fiscal surplus of $300 billion or 2.5 percent GDP,” said economist Nouriel Roubini. “Now that all the fiscal stimulus bullets have been spent on the most reckless and unsustainable tax cuts in history -- the administration is left with very little room [to maneuver] in bad times . . . We are now stuck in a situation where the room for any meaningful fiscal stimulus . . . is gone. . . . We did indeed waste all our macro policy bullets in 2001-2004 in 'the best recovery that money can buy' and now we are left with relatively limited room for monetary and fiscal policy stimulus. This is one of the main reasons why the recession of 2008 will be more severe and protracted than the mild 2001 recession.” [Nouriel Roubini's Global EconoMonitor]

Still, there will be a stimulus package -- however meager -- and there'll also be more rate cuts by the Fed. That means that gold and oil will continue to soar and the dollar will continue to get hammered. Bernanke's options are limited; as are Bush's. The system is grinding to a halt and the Fed chief will have to use the tools at his disposal to try to stimulate economic activity. It won't be easy. Presently, he faces a number of challenges. Home prices are falling, retail spending is off, commercial real estate is in a sharp downturn, and many of the major investment banks are capital impaired from their poor investments in mortgage-backed bonds. If the Fed's "low interest" smelling salts don't revive the comatose American consumer -- and get the cash registers at Target and Billy McHale's ringing again -- the world will face a global slowdown. That's why the Fed Funds' rate will probably get hacked by 50 basis points by month's end and Comrade Bush's economic team will concoct a fiscal bailout plan worthy of Fidel Castro.

Are we there, yet?

A growing number of market analysts believe we're already in recession. David Rosenberg of Merrill Lynch put it like this: "According to our analysis, this [recession] isn't even a forecast any more but is a present day reality."

Rosenberg argues that a weakening employment picture and declining retail sales signal the economy has tipped into its first month of recession. . . ."Mr. Rosenberg points to a whole batch of negative data to support his analysis, including the four key barometers used by the National Bureau of Economic Research (NEBR) -- employment, real personal income, industrial production, and real sales activity in retail and manufacturing.” [uK Telegraph]

Whether one chooses to call it a recession or not is irrelevant. When the two behemoth asset-classes -- real estate and securities -- begin to cave in, there's bound to be some ugly fallout. Housing stayed strong during the dot.com bust. Not this time. No way. The whole system is keeling over and it could take the bond market along with it. As the two gigantic equity bubbles lose gas; consumer spending will stall, business activity will slow, more workers will get laid off, and prices will tumble. Equities and commodities will be hit hard (even gold) and housing prices will dive to new lows as the pool of potential buyers grows smaller and smaller.

These problems will be further aggravated by the lack of personal savings and the huge debt-load which will push increasing numbers of homeowners, credit card customers, even student loan recipients into default. By 2009, bankruptcy will be the fastest growing fad in American pop-culture.

contd......

[drjme]

............................

Housing doom

Many experts are now predicting that home prices will dip 30 percent by the end of 2008. That means that nearly 20 million homeowners will be “upside-down,” that is, they will owe more on their mortgage than the current value of the house. (Imagine owing $400,000 on a home that is currently worth $325,000!) 40 percent of all homeowners in the US will be upside-down by the end of next year. This is a grave systemic problem that will have widespread implications. Experts already know that when mortgage holders have “negative equity” they are much more inclined to put their keys in the mailbox and skip town. Hence, the name for this increasingly common practice -- “jingle mail.”

Secretary of the Treasury Henry Paulson is desperately trying to put together a national “rate freeze” to avoid, what could be, the most devastating surge of foreclosures the world has ever seen. Paulson's rate freeze does not offer “New Hope” as promised but, rather, a lifetime of servitude paying off an asset of ever-decreasing value. Underwater homeowners are better off taking the hit to their credit and letting the bank repo the house. Let the bank worry about it. They created this mess.

The housing bubble is deflating faster than anyone had anticipated. Overall sales have slipped more than 40 percent from their peak in 2005, whereas prices have gone down a mere 6.5 percent. Prices, which are a lagging indicator, have a lot further to drop before they touch bottom. Robert Schiller, Professor of Economics at Yale University and author of “Irrational Exuberance,” predicted that there was a very real possibility that the US would be plunged into a Japan-style slump, with house prices declining for years.

Professor Shiller, co-founder of the respected S&P Case/Shiller house-price index, said, “American real estate values have already lost around $1 trillion [£503 billion]. That could easily increase threefold over the next few years. This is a much bigger issue than sub-prime. We are talking trillions of dollars’ worth of losses.” [Times Online]

Schiller's on the right track, but his estimates are way too conservative. After all, in 2002, the median price of a single-family home in Los Angeles was $270,000. But, by 2006, the cost of that same house had doubled to $540,000 -- “pushed by unbridled speculation fueled by unparalleled access to mortgage capital.” [LA Times] The problem was cheap credit that was readily available to anyone who could fog a mirror. All that has changed. The banks have tightened up their lending standards, and jumbo loans (loans over $417,000) are nearly impossible to get. So, why doesn't Schiller believe that prices will return to 2002 levels? They will. And they'll go even lower; much lower. In fact, real estate is quickly becoming the leper at the birthday party; everyone is staying away. That means that prices will fall -- and more rapidly than anyone imagined. The word is out on housing and it's not good. The blood is in the water. Get out before the pool of mortgage applicants dries up entirely.

Banking tsunami

The US banking industry has never faced greater challenges than it does today. Many of America's largest and most prestigious investment banks are seriously under-capitalized and buried beneath hundreds of billions of dollars in complex, structured investments that are being downgraded on a weekly basis. On top of that, many of the banks main sources of revenue have vanished as investor interest in sophisticated mortgage-backed bonds and derivatives has disappeared altogether. For example, the sales of collateralized debt obligations (CDOs) “plunged 85 percent to $15.69 billion in the fourth quarter.” Also, “The value of Alt-A mortgages . . . issued in the third quarter fell 64 percent to $39.3 billion from the second quarter’s record high of $109.5 billion . . . S&P said the dramatic drop is the result of ‘unprecedented credit and liquidity disruptions’ for both borrowers and lenders.” [Dow Jones] These are steep declines and represent a serious loss of revenue from the banks' bottom lines.

Many of the banks are simply in “survival mode” trying to conceal the magnitude of their losses from their shareholders while attempting to attract capital from overseas investors to shore up their sagging collateral. [via Sovereign Wealth Funds]

The banks are now struggling to fulfill their function as the main conduit for providing credit to consumers and businesses. They have curtailed their lending as their capital base has steadily eroded through persistent downgrading. The Federal Reserve has tried to resolve this issue by opening a Temporary Auction Facility (TAF), which allows the banks to secretly borrow billions from the Fed without the embarrassment of disclosing the transaction to the public. The banks are also free to use mortgage-backed securities (MBS) and commercial paper (CP) as collateral for securing the Fed repos. It's a sweetheart deal and more than 100 financial institutions have already taken advantage of the Fed's largesse.

This is a bad sign. It indicates that the banks are seriously overextended, “capital impaired,” and need a handout from the Central Bank to keep from defaulting. It means that the vaults are stuffed with worthless mortgage-backed slop that they are deliberately hiding from their shareholders and depositors. If there were adequate regulation, then the banks would never have been allowed to dabble in such risky debt-instruments as subprime loans and toxic CDOs. The whole catastrophe could have been avoided. Instead, hundreds of billions of dollars will be wiped out, a number of banks will fail, and public confidence in their institutions will be shattered.

Last week, the Federal Reserve announced that it “will increase the size of two scheduled auctions of emergency loans by 50 percent to $30 billion as part of a global attempt by central bankers to restore faith in the money markets.” [AP] In other words, the Fed will provide an even bigger begging bowl to prop up the banks to maintain the appearance of solvency. It is an utter sham.

Inflation vs. deflation

The size and scale of the approaching recession is impossible to forecast. The real estate and stock markets will undoubtedly see trillions of dollars in losses, but what about the estimated $300 trillion dollars of derivatives, credit default swaps and other abstruse counterparty options? Will the global economy freeze up when that ocean of cyber-capital suddenly evaporates? Will that virtual wealth simply vanish into the ether when the underlying assets (CDOs, MBSes, ABCP) are downgraded to pennies on the dollar, or when the number of home foreclosures catapults into the millions, or when the dollar slips to a fraction of its current value?

No one really knows. But Atlanta Fed President Dennis Lockhart summarized what we can expect in a speech he gave last week, titled “The Economy in 2008.” He said, “A sober assessment of risks must take account of the possibility of protracted financial market instability together with weakening housing prices, volatile and high energy prices, continued dollar depreciation, and elevated inflation.”

Amen.

What the upcoming recession “will look like” has been the topic of a fierce debate on the Internet. Everyone seems to agree that this is not a typical economic downturn resulting from overproduction, under-consumption or malinvestment. Rather, it is the crashing of humongous equity bubbles that were generated by the Fed's abusive expansion of credit and the unprecedented proliferation of opaque structured-debt instruments. Many believe that the unwinding of these bubbles will trigger a round of hyperinflation, which is already evident in soaring food, energy and health care costs. These prices are bound to increase substantially as the Fed continues to cut rates and further undermine the dollar.

But the real issue (it seems to me) is the unfathomable loss of market capitalization, the growing insolvency of maxed-out consumers, and the inability of the banks to freely extend credit to responsible loan applicants. These three things are likely to drag down all asset-classes, slow business activity to a crawl, and compel consumers to hoard rather than spend. The dollar will strengthen in a deflationary environment. (if that is any consolation?)

[drjme]

...................

Paul L. Kasriel, Sr. V.P. and Director of Economic Research at The Northern Trust Company, answers some typical questions about deflation in a recent interview with economic guru Mike Shedlock (Mish).

Mish: Would you say that consumer debt in the US as opposed to the lack of consumer debt in Japan increases the deflationary pressures on the US economy?

Kasriel: Yes, absolutely. The latest figures that I have show that banks' exposure to the mortgage market is at 62 percent of their total earnings assets, an all time high. If a prolonged housing bust ensues, banks could be in big trouble.

Mish: What if Bernanke cuts interest rates to 1 percent?

Kasriel: In a sustained housing bust that causes banks to take a big hit to their capital it simply will not matter. This is essentially what happened recently in Japan and also in the US during the Great Depression.

Mish: Can you elaborate?

Kasriel: Most people are not aware of actions the Fed took during the Great Depression. Bernanke claims that the Fed did not act strong enough during the Great Depression. This is simply not true. The Fed slashed interest rates and injected huge sums of base money but it did no good. More recently, Japan did the same thing. It also did no good. If default rates get high enough, banks will simply be unwilling to lend which will severely limit money and credit creation.

Mish: How does inflation start and end?

Kasriel: Inflation starts with expansion of money and credit. Inflation ends when the central bank is no longer able or willing to extend credit and/or when consumers and businesses are no longer willing to borrow because further expansion and/or speculation no longer makes any economic sense.

Mish: So when does it all end?

Kasriel: That is extremely difficult to project. If the current housing recession were to turn into a housing depression, leading to massive mortgage defaults, it could end. Alternatively, if there were a run on the dollar in the foreign exchange market, price inflation could spike up and the Fed would have no choice but to raise interest rates aggressively. Given the record leverage in the U.S. economy, the rise in interest rates would prompt large-scale bankruptcies. These are the two "checkmate" scenarios that come to mind. (Read the whole interview.)

[a-train]

CK,

The scenario is right here in our face. The Gold US Dollar fluctuated and rebounded naturally without any government intervention for over 100 years. Then, while in trouble from the ravages of WWI, the FED was created and the dollar was slowly converted to fiat. The dollar has lost around 95% of its value since the FED was created and it is still headed south.

Are you saying that is meaningless? Are you saying that the longest sustained inflation of the dollar EVER just happened by some complete coincidence to begin just after the FED was created and has yet to rebound? And even if it had been a coincidence, should we imagine that the FED is doing some great service to us having not yet corrected this?

If the FED is doing a good job, what IS that job? If you think the ruin of the dollar is their job, then I will agree with you quickly. But if their endeavors have been to retain value in the US Dollar, they have almost completed a full century of absolute failure.

Now, I know you are hard to accept a conspiracy theory involving the Rothschilds, Morgan, and all that. And I know that you have differing views than the brethren of this Church on various issues, but just know that Ezra Taft Benson who was the President of the Church and spent a lot of time in Washington subscribed to this.

President Benson said: 'I wish that every citizen of every country in the free world and every slave behind the Iron Curtain might read this book.'

And he said it of this book. Now, you may not believe it. But just know that this is NOT just the frantic fears of college kids on youtube.

-a-train

[CrimsonKairos]

The dollar has lost around 95% of its value since the FED was created and it is still headed south.

The goal of the FED is not to keep the value of the dollar the same all the time. A healthy economy keeps enough dollars in circulation to fight deflation (more on this later).

And even if it had been a coincidence, should we imagine that the FED is doing some great service to us having not yet corrected this?

The FED's job has never been to keep the value of the dollar static! The FED's primary job has been to keep prices stable, and you can't do that with a finite amount of currency...you must be able to increase or decrease the money supply whenever necessary.

Consider this bit from investopedia.com:

While gold has fascinated humankind for 5,000 years, it hasn't always been a guarantee of wealth. A true international gold standard existed for less than 50 years (1871 to 1914) - in a time of world peace and prosperity that coincided with a dramatic increase in the supply of gold. But the gold standard was the symptom and not the cause of this peace and prosperity.

The events of the Great War changed the political, financial and social fabric of the world - the international gold standard would be no more. While a gold standard continued in a lesser form until 1971, the death of it had started centuries before with the introduction of paper money - a much more flexible instrument for our complex financial world.

But if their endeavors have been to retain value in the US Dollar, they have almost completed a full century of absolute failure.

The FED's job has never been to keep FRN's equal to their past values or equal to gold's value. If that is what you thought it was for, no wonder you think the FED is failing so miserably!

The FED's purpose is to regulate the amount of currency circulating in such a way as to stimulate production and/or maintain prices and velocity of money circulation.

It seems that "inflation" is the buzz word that keeps popping up, but inflation is actually normal, to be expected and even necessary. What is absolutely horrible to endure is deflation, as this bit from nvestopedia.com shows:

[Deflation is a] general decline in prices, often caused by a reduction in the supply of money or credit. Deflation can be caused also by a decrease in government, personal or investment spending. The opposite of inflation, deflation has the side effect of increased unemployment since there is a lower level of demand in the economy, which can lead to an economic depression.

Declining prices, if they persist, generally create a vicious spiral of negatives such as falling profits, closing factories, shrinking employment and incomes, and increasing defaults on loans by companies and individuals. To counter deflation, the [FED] can...increase the money supply and deliberately induce rising prices, causing inflation. Rising prices provide an essential lubricant for any sustained recovery because businesses increase profits and take some of the depressive pressures off wages and debtors of every kind.

History has shown us that gold-backed currencies have deflation built-in to the economies they support. Why?

The world's population is always increasing, and so is the demand for gold. But the supply of gold is not always increasing, let alone at the same rate as the demand/need. So as the demand for gold increases, the supply proportionally decreases by virtue of its static nature; there's less and less gold to go around.

This finite amount of people who can spend gold cannot sustain a vast economy like ours unless we devalue the dollar and make each ounce of gold worth more dollars than it previously was worth.

The only way to avoid deflation is to devalue the dollar. Here's an example I created for our purpose:

THE CASE OF GOLDTOWN

Goldtown has a population of 50 people. All the gold has been mined, and the total amount of gold available is 1,000 ounces. Their dollar is set at $1.00/oz. which means that on average, each citizen has $20 to spend ($1,000 / 50 people = $20/person). This supply of money is sufficient in their limited economy, since we'll say milk costs about $0.05/gallon and wages equal about $0.25/hr.

Then, a bunch of people are born and more suddenly move to Goldtown. Now there are 1,000 people living there. Yet there are only $1,000 backed by gold valued at $1.00/oz. and that has to suffice for 1,000 people.

Let's assume that somehow the money gets distributed evenly. On average, each person in Goldtown would now have $1.00 to spend instead of $20, since the amount of gold is limited and no more dollars can be printed ($1,000 / 1,000 people = $1.00/person).

With wages in Goldtown previously running at $0.25/hr, a single employer who now only has $1.00 to spend can only afford to pay a single worker for just four hours of labor ($0.25 x 4 = $1.00). So jobs disappear overnight since there's not enough money to pay for the wages of all the laborers needed to make the economy run (commodities, goods, services).

Since there's less money being injected back into the economy via wages, spending drops dramatically as well. Since spending drops, goods aren't bought (the demand vanishes). Since goods can't be bought, the supply ceases to be maintained and goods aren't produced. Hence production jobs disappear. The economy shudders and grinds to a halt. Goldtown is officially knocked out by deflation caused by a static supply of gold backing their dollars.

There's only one thing they can do: They devalue their dollars. The 1,000 residents of Goldtown agree that from now on, gold will not be valued at $1.00/oz. but instead, gold will be valued at $20.00/oz. In so doing, they multiply by twenty the amount of dollars they can print (1,000 ounces x $20.00/oz. = $20,000 total, versus the original $1,000 total at $1.00/oz.)

So if there are 1,000 ounces of gold valued at the new rate of $20.00/oz. then the residents of Goldtown now have $20,000 to spend among themselves, giving each resident the original amount each of them used to have ($20,000 / 1,000 people = $20/person).

What Goldtown has done is fight deflation by increasing the money supply. And how did they increase the money supply when there was only a set amount of gold to go around? They devalued their dollars by inflating their gold to twenty times its original value.

I hope you can see that as an economy and nation expands, devaluing currency is a necessity. Even with a Gold Standard, you have to continually inflate each ounce of gold's value (hence devaluing each dollar) just to keep enough money circulating for everyone to have money to buy life's necessities.

That is what the FED does: it devalues the dollar in order to increase the money supply when facing a deflation, and it contracts the money supply when there is too much inflation (since some amount of inflation is necessary).

How does the FED add more money to the economy? By buying government bonds and securities. And what is the advantage to backing dollars with government bonds versus gold? While there is a fixed physical amount of gold in the world, there is no limit to how many bonds a healthy government can issue.

One other important point: If people were to hoard gold certificates and no more could be printed because there was no more gold, you'd be sunk; but if people hoard FRN's then the FED can simply inject more into the economy to compensate...something you can't do with currency backed by a finite amount of gold.

This is what all nations had realized by the time Bretton Woods was set up. After all the international debt arising from WWI, they discovered there wasn't enough gold to go around. They literally had to print more money than they could back with gold. It was a pragmatic necessity.

We would not have the vast economy we have today if we were on the gold standard, unless we continually inflated the value of each ounce of existing gold to keep up with the ever-increasing number of people who need dollars to spend. In that case, I could complain too about the fact that the dollar would have been consistently dropping in value.

Can you see that devaluing currency is a natural consequence of a growing nation needing more money to spend? In that respect, certificates backed by gold are no better or different than fiat currency backed by other assets and bonds: They both must decrease in value to increase the money supply as the number of people increases.

This happened in 1934 when the U.S. government revalued the dollar from $20.67/oz. to $35.00/oz. Even though we were still on a Gold Standard, the value of each dollar dropped in relation to the amount of gold it could be redeemed for.

[a-train]

CK,

I am aware of all that blather put out by the financial world. Deflation is a mortal sin to them only because it means that the hard working honest people get an INCREASE in the value of their dollar over time. Now, if we like paying inflation tax, that is one thing. I however, am not into the slavery of myself or my children.

Your goldtown story is a perfect example of what I am talking about. What they did is NOT inflation. A person holding one dollar when the new value was set didn't loose anything. He now has $20 at the new value. This is why the gold standard IS not only possible, but necessary to curb the tyrannical practices of a central bank who imposes an inflation tax. This story represents the true meaning of the Constitutional power of the Congress to 'coin money and regulate the value thereof'.

The breaking of the currency into smaller units in goldtown did NOT fight deflation. It continues it. Gold is still becoming MORE valuable. Deflation is a good thing and the century of the gold standard in this country came to us because honest men kept attempts on the part of dishonest men to establish a central bank at bay.

In a fiat system, the person holding a dollar LOSES value as more fake money is spilled into the system. But in a standard of real value, those who hold money at the time of a value readjustment lose nothing, they only break that value into smaller units. Can't you see the difference?

Did you read that book? We have to start being more vocal about all this and turn the tide. We face the loss of everything to globalization.

-a-train

edited, I did mean deflation

[CrimsonKairos]

Devaluation is a mortal sin to them only because it means that the hard working honest people get an INCREASE in the value of their dollar over time.

You must not have understood my post. Devaluation means you lose value on your dollar, not get an increase. How do you see devaluing each dollar as increasing the value of that dollar? It's a contradiction in terms.

I however, am not into the slavery of myself or my children.

How are you a slave? If FRN's suddenly stopped working tomorrow and everybody and every business declared bankruptcy, your debt is gone, but your ability to work and labor is not gone. I don't get this "slavery is upon us" mentality.

Your goldtown story is a perfect example of what I am talking about. What they did is NOT inflation.

I said they devalued the dollar, not inflated it.

A person holding one dollar when the new value was set didn't loose anything. He now has $20 at the new value.

Wrong. At the beginning of my example, you could take one dollar and trade it in for one ounce of gold.

At the end of my example (after devaluation to increase money supply) you would need twenty dollars to trade in for the same one ounce of gold that a single dollar used to represent.

That means your dollar went down to a twentieth of its previous value. That is devaluation. You don't see that?

This is why the gold standard IS not only possible, but necessary to curb the tyrannical practices of a central bank who imposes an inflation tax.

Devaluation would happen to the dollar even in a gold standard system, and it seemed you were decrying the dollar's drop in value as the main crime of the FED.

This story represents the true meaning of the Constitutional power of the Congress to 'coin money and regulate the value thereof'.

To-may-to, to-mah-to. They're still devaluing the dollar in my example (even on a gold standard), so how is that different than what the FED does when they increase the dollar supply to combat recession and deflation? By the way, Congress authorized the creation of the FED with the Federal Reserve Act of 1913, so how is that not Congress coining money and regulating the value thereof?

The breaking of the currency into smaller units in goldtown did NOT fight deflation. It continues it.

How does introducing more dollars into the economy cause deflation which is, as you know, a decrease in the amount of money caused either by curtailed spending or lack of gold?

I don't think you understand what deflation is. Don't confuse deflation with devaluation.

Deflation is a decrease in the amount of money in an economy; there's less to spend (whether due to hoarding or whatever).

Devaluation is where it takes more of your dollars to buy what only one dollar used to be able to buy. Devaluation leads to inflation, which is necessary to fight deflation.

Gold is still becoming MORE valuable.

But as each ounce of gold becomes worth more dollars, each dollar decreases in value. You do see that, right? That's devaluing the dollar.

Deflation is a good thing...

Oh...my...gosh. To say deflation is a good thing is perhaps the most ignorant thing you've said yet. Seriously. Every economist and economic theory I know of...even pro-gold standard economic theories...all agree that deflation is a million times worse than inflation. Deflation is never good!

...and the century of the gold standard in this country came to us because honest men kept attempts on the part of dishonest men to establish a central bank at bay.

So you dislike a central bank, huh? I guess you would've argued against Hamilton too when he sought to establish a National Bank that dealt in securities...a move which, by the way, led in 1796 to America exporting three times what they were exporting in 1791 before the National Bank was established.

In a fiat system, the person holding a dollar LOOSES value as more fake money is spilled into the system.

First, I think you meant "loses" and not "looses."

Second, this is only true when there are no assets backing the fiat currency. Fiat currency isn't a term meaning there are no assets backing the money. Fiat currency simply means you cannot redeem the currency for specie on demand.

I don't think you're getting this distinction. As long as there is an acquiring of asset collateral equal in value to each new dollar printed, no one loses any value.

But in a standard of real value, those who hold money at the time of a value readjustment lose nothing, they only break that value into smaller units. Can't you see the difference?

No, because you're wrong. If one day you can trade in one dollar bill for one ounce of gold, and the next day it takes twenty dollar bills traded in to get the same ounce of gold, your dollars have decreased in value. Don't you see that?

Did you read that book? We have to start being more vocal about all this and turn the tide. We face the loss of everything to globalization.

Dude, I'm sorry, but this is the same hysteria that Jefferson stirred up against Hamilton's plan for a National Bank, and Jefferson turned out to be soooooo wrong. History shows that the establishment of a National Bank dealing in securities ("speculation") grew America's economy to the point that it soon rivaled England's economy around 1880.

History is not on your side. History is what it is, and it is not supportive of sticking to a strict gold standard.

I'm not arguing--by the way--for printing as much money as we want without collateral or assets backing it. America and the FED have assets backing our dollars. If necessary, they can liquidate real estate and other commodities/assets on the international market.

[a-train]

I'm over it. You've convinced yourself. Did you read that book?

-a-train

[CrimsonKairos]

I'm still reading through it. I confess it is hard with all the misspellings and sentences that repeat halfway before finishing out.

Not to mention it is aimed against liberals, and I'm conservative. I'll keep reading it though, just to keep an open mind.

What amazes me is that you, who are so skilled and deft in reasoned and rational discussion, in this instance resort to, "Whatever, you're wrong," and can't argue the facts and figures as they stand. You're spouting theory and parroting catch-phrases, instead of examining the evidence and seeking to understand the--admittedly--complex economic models and principles involved.

But I'll keep reading that book so we're on the same page if and when we continue this discussion.

[a-train]

I would love to clear up whatever ambiguity is going on here, but I am struggling to do so.

Yes, I think that whatever the process whereby the book was made a PDF, it was given to errors. All the photos are also mangled.

With a gold standard, as the money becomes too valuable to remain fluid, it must be broken into smaller units. This is what Goldtown did. They did not have inflation. They did have deflation which is why they are readjusting their dollar. But in this process, nobody loses any value. They have an honest system.

A person who held one dollar before the value readjustment now holds $20. Don't let this fool you. This is very different from what the FED is doing to us right now.

Right now, as the value of the dollar goes down, I don't suddenly get a $20 bill for my $1 bill, but that IS what happened in Goldtown. People traded in their old $1 bills for new $20 bills. Of course, they made no $19 profit because the old dollars are worth the new twenties. They neither lost nor gained any value.

In a paper system, I hold a dollar and it drops in value. I don't get to trade it in for a new dollar that has the same value as my old one did when I got it.

If you today have a 1913 dollar it will buy a soda. It would have bought almost 30 sodas in 1913. You don't get to trade that 1913 dollar in for 30 fresh 2008 dollars. Had we been on a gold standard, there would have been readjustments like the one Goldtown did. I would have been able to get thirty 2007 dollars for a 1913 dollar.

That is the difference. Does that make sense?

-a-train

[CrimsonKairos]

[Goldtown] did have deflation which is why they are readjusting their dollar. But in this process, nobody loses any value. They have an honest system.

Let me put it this way. Goldtown residents used to be able to trade in one dollar bill for one ounce of gold. On the international market, let's say one ounce of gold could buy one British pound.

At the end of my example, in Goldtown it took twenty dollar bills to trade for that same one ounce of gold that internationally could buy one British pound.

What that means is that the dollar would then be one twentieth of the value of a British pound. That is the dollar dropping value. So if America's economy existed in a vacuum, we could devalue the dollar against gold all we wanted and not have any problems.

But that is the problem: we are part of a global market, we do not exist in a vacuum, what we do effects other economies and what other economies do effects us. So while we devalue our dollar against gold, if other countries aren't devaluing their currency at the same time, we lose value compared to them and this hits us hard in international transactions (imports, exports, etc.).

[a-train]

I'm sorry, but I still don't see any problem there. So if the value was reset on the dollar 20 to 1. Then it would be 20 dollars to 1 pound instead of 1 dollar to 1 pound. This poses no currency trade problems. It especially wouldn't if both currencies were on a gold standard.

Here is the value of the dollar since Independence:

Notice the great rebounds after the war of 1812 and the Civil War. We didn't get a rebound after WWI. The Fed has systematically ruined the dollar since 1913 and look at where it is now.

If one of your ancestors were given a paper dollar in 1830, it would have bought x amount of wheat. Today, that same dollar would buy only 1/40th as much wheat.

Now look at the value of gold since the 1830s.

http://www.escapistskateboarding.com/gold.bmp

If you had an ounce of gold given to your ancestors in 1830 it would by x amount of wheat. Today, it would buy about as much wheat.

In the twentieth century, with gold not playing any role as a currency, it became highly overpriced and volitale because of speculation in markets based on fiat units. But the reason it looks so high is not because gold went up, but because the dollar has fallen.

I wish our dollar looked more like the bottom chart. Don't you?

-a-train

[CrimsonKairos]

Not really. I mean, I don't have any problem buying what I want and need, and getting paid wages if and where I work.

My FRN's work fine for me. I've never had gold, and I don't ever anticipate needing it. Do I think you shouldn't buy gold personally? Heck, you can buy whatever you want. Gold does look pretty cool.

But America is the leading economy and nation in the world (though China is indeed rearing its massive head lately). I'd rather live here than anywhere else. Is there a better economy in the world?

[a-train]

So we don't mind losing a percentage of our dollar's worth every year to a group of elite businessmen looking to undermine our liberty?

The same corrupt, globalist, communists that control our dollar control most of the economies of the world. We can save a lot of dollars, but when we go to spend them they will be worth a lot less than they were when we got them.

Where does that worth go? It goes to whatever cause the powers that be want it to. It is a tax that is taken without our consent and spent without our consent. It is the inflation tax. This tax is a great source of power in the hands of our enemies.

We have in this year, the greatest opportunity in our lifetime to take the power they have over our currency back.

Did you read that book?

-a-train

[CrimsonKairos]

So we don't mind losing a percentage of our dollar's worth every year to a group of elite businessmen looking to undermine our liberty?

Dude, that flaxen cord is just so soft though...

The same corrupt, globalist, communists that control our dollar control most of the economies of the world.

Could you give me the names, addresses and email addresses of these corrupt, globalist communists? I'd like to ask them for their side of the story.

We can save a lot of dollars, but when we go to spend them they will be worth a lot less than they were when we got them.

If a few elite businessmen control economies and hence governments, owning gold is no use either, because governments will just confiscate gold citing an emergency, as was done in 1933.

As I said before, the only inherently valuable commodities are: Food, land, guns. The day the government tells me I can't own those three things (within reasonable limits, i.e. I don't need to own a grenade launcher...or do I?), then I'll start being worried.

We have in this year, the greatest opportunity in our lifetime to take the power they have over our currency back.

Wrong. Gold will always be subject to seizure by the powers that be. The only safe and valuable commodities are those you can live off of, and those are: Food, land, guns.

Did you read that book?

I'll confess that I'm having a dickens of a time getting through it. They spend the first tenth of the book priming the reader to believe that there is this huge conspiracy, and using comparisons with Columbus and football teams and other analogies to set the stage. I'm like, "Just get to the freakin' data and make your point already!"

It reads like anti-mormon literature: First, the author establishes that there's a conspiracy or "secret body of knowledge" that the reader isn't supposed to know; then, the author establishes their objectivity (I used to be a liberal but now I've seen the light, etc.); then the author lists other specialists and/or experts who support the author's position (which we don't know yet); and so on, ad infinitum.

I'll get through it though; if I could get up at 5:30 a.m. for seminary for four years, I can finish this ebook.

I think.

[PentiumInside]

Wrong. Gold will always be subject to seizure by the powers that be. The only safe and valuable commodities are those you can live off of, and those are: Food, land, guns.

QFT

[a-train]

Could you give me the names, addresses and email addresses of these corrupt, globalist communists? I'd like to ask them for their side of the story.

The Council on Foreign Relations Council on Foreign Relations

The Trilateral Commission trilateral.org

Any member of these groups our person working with them is not a friend to national sovereignity and individual liberty. There are but two Republican candidates running in this year's Presidential election who are not members.

If a few elite businessmen control economies and hence governments, owning gold is no use either, because governments will just confiscate gold citing an emergency, as was done in 1933.

Certainly, but the only reason they have such control is because we are out of touch with our elected leaders and when they betray us we do nothing. We have good men running for election who will fight all this, we need to support them and stop supporting our enemies.

As I said before, the only inherently valuable commodities are: Food, land, guns. The day the government tells me I can't own those three things (within reasonable limits, i.e. I don't need to own a grenade launcher...or do I?), then I'll start being worried.

It will be too late.

The only safe and valuable commodities are those you can live off of, and those are: Food, land, guns.

They are working on efforts to take huge amounts of land through eminent domain right now to establish the North American Union.

I'll confess that I'm having a dickens of a time getting through it. They spend the first tenth of the book priming the reader to believe that there is this huge conspiracy, and using comparisons with Columbus and football teams and other analogies to set the stage. I'm like, "Just get to the freakin' data and make your point already!"

Skip ahead. I read the whole thing in a little over an hour. C'mon.

The book says basically that world bankers established the FED and got rid of the Gold Standard to impoverish and enslave America. Soon, they will introduce the Amero for the North American Union and ruin the dollar. Then, later, they will introduce a global economy. Our government has been hijacked by these. The Gold Standard was devised to protect us from the power misused by central banks in Europe before our Independence.

We have a candidate that wants to turn this all around and put us on a path back toward our constitution. Google it. Our national sovereignty, or personal liberty, all we have is being sought to destroy.

-a-train

[drjme]

And if you can't be bothered reading a book, then Watch this:

America: from freedom to fascism

"I am a most unhappy man. I have unwittingly ruined my country.

A great industrial nation is controlled by its system of credit.

Our system of credit is concentrated. The growth of the nation,

therefore, and all our activities are in the hands of a few men.

We have come to be one of the worst ruled, one of the most completely

controlled and dominated governments in the civilized world.

No longer a government by free opinion, no longer a government by

conviction and the vote of the majority, but a government by

the opinion and duress of a small group of dominant men."

-Woodrow Wilson. 1916. In relation to the Federal reserve act 1913.

He said this stating his regret as to what he had inflicted upon his nation after he signed it.

The Prophets of the Church Have been extremely vocal about these Issues (UN, get out of debt (WHY???), Food storage, Secret Combinations etc etc.) Why do so many LDS disregard them? Why Do LDS disregard their comments as conspiracy theories?

[a-train]

Why do so many LDS disregard them? Why Do LDS disregard their comments as conspiracy theories?

It is the scariest part of it all drjme. It is the saddest and most painful part of it all. A great many of the honest good people both LDS and non-LDS are looking the other way and doing nothing. 'All is well in Zion!' proclaims the false prophet, as we march in to captivity.

-a-train

[CrimsonKairos]

"I am a most unhappy man. I have unwittingly ruined my country..."

This just shows what an idiot he was. Unless he considers vaulting the USA into being the world's dominant superpower as equivalent to "ruining it."

The Prophets of the Church Have been extremely vocal about these Issues (UN, get out of debt (WHY???), Food storage, Secret Combinations etc etc.)

So I must have slept through the conference where the prophets talked about the U.N. Care to show me what they've said? I actually agree that the U.N. is a joke, but I refuse to let people assert LDS prophets have said stuff without providing the sources for it.

That's why conspiracy theories warrant such mockery...there's rarely documentation or credible sources.

A great many of the honest good people both LDS and non-LDS are looking the other way and doing nothing.

I agree, and the goldbugs are some of the worst offenders. They look to gold as the source of the salvation of our economy and country, when Jesus alone can save us. The Book of Mormon is clear that if and when this great nation falls, it will be because of iniquity, not because of questionable fiscal and monetary policy.

Since we're airing our conspiracy theories, I have one of my own. I assert that the goldbugs and the die-hard proponents of the Gold Standard being the ultimate economic tylenol, are in fact the conspirators and tools of Satan. Why? Its in the scriptures. Let's start in Revelation 13:

4 And they worshipped the dragon which gave power unto the beast: and they worshipped the beast, saying, Who is like unto the beast? who is able to make war with him? (Rev. 13:4)

Here, the beast is the Gold Standard. All you goldbugs constantly argue: "What can overcome the Gold Standard if we're allowed to stick to it? There is no economic emergency or phenomenon that cannot be cured by using gold currency."

16 And [the second beast] causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:

17 And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.

18 Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six. (Rev. 13:16-18)

So this shows that the second beast who rose after the first (the Gold Standard) would cause all to receive a mark without which they could not transact business (buy or sell). And what is this mark? It is the number of the beast. What number? Six hundred sixty-six, or 666.

Now verse 18 also says this is the number of a man. Which man? Solomon. Let's turn back to 2 Chronicles to see that 666 actually is a symbol for gold:

Now the weight of gold that came to Solomon in one year was six hundred and threescore and six talents of gold; (2 Chr. 9:13)

Hmmm, how much gold was that? Six hundred sixty-six talents of gold, or 666. Who was the man who received it? Solomon. So 666 is the number of the man Solomon and his gold.

So in the Last Days, the mark of the beast or 666 (which is gold) is what the second beast who serves Satan will force all the world to use to buy or sell.

The conspiracy we're walking towards is the belief that gold is all we need to be free from economic and global threats. Wrong. We need to obey the Lord, follow his prophets to salvation, and merit the protection of Heaven and citizenship in Zion.

Remember, in the Last Days, Zion (Missouri, in America) alone will be untroubled by war by virtue of the might of its inhabitants (not because of the Gold Standard):

66 And it shall be called the New Jerusalem, a land of peace, a city of refuge, a place of safety for the saints of the Most High God;

67 And the glory of the Lord shall be there, and the terror of the Lord also shall be there, insomuch that the wicked will not come unto it, and it shall be called Zion.

70 And it shall be said among the wicked: Let us not go up to battle against Zion, for the inhabitants of Zion are terrible; wherefore we cannot stand. (D&C 45:66-67, 70)

So you can bandy about terms like "communism" and "fascists" and "secret combinations" all day long, but that doesn't change the fact that trusting in the Gold Standard is trusting in the riches of the earth and the corruptible things thereof, whereas we are to trust in the Lord, not the arm of flesh.

My God will save me, not gold or silver. I shall not be troubled nor faint as the woes of the world increase, for I know in whom I have trusted and in whom I shall find exaltation.

[drjme]

This just shows what an idiot he was. Unless he considers vaulting the USA into being the world's dominant superpower as equivalent to "ruining it."

replace 'USA' with 'A small group of dominant men'. Mate, seems you only read the parts you want to and then change the whole meaning of the quote to suit your purposes ???

He must have been an idiot in the first place to change it. (if he were such an idiot). The system of credit controlled by these few small men is what has allowed the expansion.

So I must have slept through the conference where the prophets talked about the U.N. Care to show me what they've said? I actually agree that the U.N. is a joke, but I refuse to let people assert LDS prophets have said stuff without providing the sources for it.

That's why conspiracy theories warrant such mockery...there's rarely documentation or credible sources.

Refer to their opposition to 'the league of nations' which was the first attempt at the UN.

“Wherever possible I have tried to speak out. It is for this very reason that certain people in Washington have bitterly criticized me. They don’t want people to hear the message. It embarrasses them. The things which are destroying the Constitution are the things they have been voting for. They are afraid of their political careers if these facts are pointed out. They therefore try to silence any who carry the message—anyone who will stand up and be counted.” (The Teachings of Ezra Taft Benson, p. 684.)

The very first purpose claimed for the United Nations in Article 1 of the UN Charter reads as follows: "To maintain international peace and security." The UN has always promoted itself as a champion of peace. The word "peace" (or "peaceful") appears five times in the very first sentence of Article 1. And the UN's claim that it stands only for "peace" has been repeated by journalists and government officials throughout the world ever since the organization was founded.

In 1945, however, at the very moment the world organization was being created, former U.S. State Department official J. Reuben Clark read the United Nations Charter and immediately stated:

... there is no provision in the Charter itself that contemplates ending war. It is true the Charter provides for force to bring peace, but such use of force is itself war.... The Charter is built to prepare for war, not to promote peace.... The Charter is a war document, not a peace document.

Not only does the Charter organization not prevent future wars, it makes it practically certain that we shall have future wars, and as to such wars it takes from us the power to declare them, to choose on which side we shall fight, to determine what forces and military equipment we shall use in the war, and to control and command our sons who do the fighting.

J. Reuben Clark's assessment of the UN Charter was correct in every detail. But so great was the horror of the still uncompleted World War II (it did not end in the Pacific until several weeks after the UN Charter was approved) that only two of the 96 senators then serving in the U.S. Congress opposed our nation's entry into the United Nations. The conspirators seeking world government and tyrannical rule had failed in 1919 to get the United States entangled in their League of Nations web. But they succeeded in 1945 when America joined the United Nations.

Elder Ezra Taft Benson, GC conference 1961:

Tenth: Concerning the United States, the Lord revealed to his prophets that its greatest threat would be a vast, worldwide "secret combination" which would not only threaten the United States but also seek to "overthrow the freedom of all lands, nations, (Ether 8:25.)

Eleventh: In connection with attack on the United States, the Lord told the Prophet Joseph Smith there would be an attempt to overthrow the country by destroying the Constitution. Joseph Smith predicted that the time would come when the Constitution would hang, as it were, by a thread, and at that time "this people will step forth and save it from the threatened destruction." (Journal History, Brigham Young's Speech, July 4, 1854.)

It is my conviction that the elders of Israel, widely spread over the nation will at that crucial time successfully rally the righteous of our country and provide the necessary balance of strength to save the institutions of constitutional government.

Twelfth: The Lord revealed to the Prophet Nephi that he established the gentiles on this land to be a free people forever, that if they were a righteous nation and overcame the wickedness and secret abominations which would arise in their midst, they would inherit the land forever. (1 Nephi 14:1-2.)

Thirteenth: But on the other hand, if the gentiles on this land reject the word of God and conspire to overthrow liberty and the Constitution, then their doom is fixed, and they ". . . shall be cut off from among my people who are of the covenant." (1 Nephi 14:6; 3 Nephi 21:11, 14, 21; D&C 84:114-115, 117.)

It is time, therefore, that every American, and especially every member of the priesthood, became informed about the aims, tactics, and schemes of socialistic-communism. This becomes particularly important when it is realized that communism is turning out to be the earthly image of the plan which Satan presented in the pre-existence. The whole program of socialistic- communism is essentially a war against God and the plan of salvation--the very plan which we fought to uphold during "the war in heaven." Up to now some members of the Church have stood aloof, feeling that the fight against socialistic-communism is "controversial" and unrelated to the mission of the Church or the work of the Lord. But the President of the Church in our day has made it clear that the fight against atheistic communism is a major challenge to the Church and every member in it.

Ezra taft Benson, I testify, 1988:

I testify that wickedness is rapidly expanding in every segment of our society. (See D&C 1:14–16; D&C 84:49–53.) It is more highly organized, more cleverly disguised, and more powerfully promoted than ever before. Secret combinations lusting for power, gain, and glory are flourishing. A secret combination that seeks to overthrow the freedom of all lands, nations, and countries is increasing its evil influence and control over America and the entire world. (See Ether 8:18–25.)

War against wisdom

Still earlier the First Presidency warned the Saints that "Satan is making war against all the wisdom that has come to men through their ages of experience. He is seeking to overturn and destroy the very foundations upon which society, government, and religion rest. He aims to have men adopt theories and practices which he induced their forefathers, over the ages, to adopt and try, only to be discarded by them when found unsound, impractical, and ruinous. He plans to destroy liberty and freedom--economic, political, and religious, and to set up in place thereof the greatest, most widespread, and most complete tyranny that has ever oppressed man. He is working under such perfect disguise that many do not recognize either him or his methods. . . . Without their knowing it, the people are being urged down paths that lead only to destruction. Satan never before had so firm a grip on this generation as he has now." ("Message of the First Presidency," The Improvement Era, Nov. 1942, p. 761.)

"The position of this Church on the subject of Communism has never changed. We consider it the greatest satanical threat to peace, prosperity, and the spread of God's work among men that exists on the face of the earth.

"In this connection," President McKay continues, "we are continually being asked to give our opinion concerning various patriotic groups or individuals who are fighting Communism and speaking up for freedom. Our immediate concern, however, is not with parties, groups, or persons, but with principles. We therefore commend and encourage every person and every group who are sincerely seeking to study Constitutional principles and awaken a sleeping and apathetic people to the alarming conditions that are rapidly advancing about us. We wish all of our citizens throughout the land were participating in some type of organized self-education in order that they could better appreciate what is happening and know what they can do about it.

And just in case you think by 'communism' threat they mean 'Russia', they don't................

[drjme]

...........................

Today the devil as a wolf in a supposedly new suit of sheep's clothing is enticing some men, both in and out of the Church, to parrot his line by advocating planned government guaranteed security programs at the expense of our liberties. Latter-day Saints should be reminded how and why they voted as they did in heaven. If some have decided to change their vote they should repent--throw their support on the side of freedom--and cease promoting this subversion.

The object of the Gadiantons, like modern communists, was to destroy the existing government and set up a ruthless criminal dictatorship over the whole land.

One of the most urgent, heart-stirring appeals made by Moroni as he closed the Book of Mormon was addressed to the gentile nations of the last days. He foresaw the rise of a great world-wide secret combination among the gentiles which " . . . seeketh to overthrow the freedom of all lands, nations, and countries; . . ." (Ether 8:25. Italics added.) He warned each gentile nation of the last days to purge itself of this gigantic criminal conspiracy which would seek to rule the world.

Now I could keep spoon feeding Info to you, Or you can look into these issues with a more open mind, with the guidance and reason of past prophets, counselors etc. Or just disregard it and hope someone else takes care of it.

[CrimsonKairos]

What's funny is that I probably have been exposed to these conspiracy theories at a younger age than you. I used to believe them. Then I started learning how to think, not what to think, and realized its not all doom and gloom like some would have us believe.

I am proud of America, the greatest nation on earth. I am proud that I can worship here freely. I am proud that we enjoy the greatest freedoms and prosperity in the world. That's why I don't worry about all this "the sky is falling" garbage, because people have been saying it since 1916 and look what's happened: nothing. We're fine.

So no, you needn't spoon feed me anything since I've been tasting it since I was quite young. I simply realized its false panic. and we know that perfect love casteth out all fear. I have faith in America and in the American people. A few wealthy businessmen can never overpower the spirit of the American people. Yet every year its the same thing: some conspiracy is going to steal all our liberties in the next decade...yet decade after decade this fails to happen.

The world is going to get worse before the Second Coming, yes. But I plan on qualifying for citizenship in Zion where none shall dare to molest the saints of the Most High. If I die before then, in some government take-over, then I know that this mortal experience was but a fleeting moment in my eternal progression and doesn't affect me in the least.

Now if this life was all there was and once you died that was it, then perhaps I'd start hyperventilating about inflation taxes and fascist shadow regimes and credit-mongers and communists in democrat's clothing, etc.

But its hard for me to fear and tremble when I serve the Living God and bear the name of His Only Begotten in the flesh. Sorry, I just can't get in the bunker with you and shake in the shadows. I'm too busy living and loving and enjoying my time here on earth.

p.s. I'll save you the time and say what you'll say in your next post: "But if we don't oppose and fight these shadow regimes, we won't have these liberties you're so fond of!" Blah, blah, blah. Moderation in all things, friends. Yes, be wise and prudent. Yes, be aware of the goings on in the world around us. I'm not arguing against any of that. All I'm saying is that I do what I can and leave the rest to God. I needn't wring my hands for America's future. Its in God's hands. All I have to do is vote for the candidates for public office who espouse the values that I do, and all the rest is already written.

[drjme]

So you can bandy about terms like "communism" and "fascists" and "secret combinations" all day long, but that doesn't change the fact that trusting in the Gold Standard is trusting in the riches of the earth and the corruptible things thereof, whereas we are to trust in the Lord, not the arm of flesh.

My God will save me, not gold or silver. I shall not be troubled nor faint as the woes of the world increase, for I know in whom I have trusted and in whom I shall find exaltation.

Where on earth would you get the idea that We trust Gold more than God? . You're funny...

The conspiracy we're walking towards is the belief that gold is all we need to be free from economic and global threats. Wrong. We need to obey the Lord, follow his prophets to salvation, and merit the protection of Heaven and citizenship in Zion.

Gold isn't the answer to the problems, or the conspiracy, Electing officials who are measured against two things. Adherence to Gospel Standards, and if Not that then Adherence to The Constitution. Which has been described by most Prophets as:

' It is my conviction that only in this land, under this God-inspired Constitution, under an environment of freedom, could it have been possible to have established the Church and kingdom of God and restored the gospel in its fulness. It is our responsibility, my brethren and sisters, to see that this freedom is maintained, so that the Church can flourish in the future. ("Our Duty as Citizens" 920, 922)'

I've got a quote for you to on that attitude of 'as long as I'm living the gospel, I'll be fine:

Wherefore, honest men and wise men should be sought for diligently, and good men and wise men ye should observe to uphold; otherwise whatsoever is less than these cometh of evil. (D&C 98:10.)

Now that is a commandment to his Church and to his Saints. To me it means that we have a responsibility as Latter-day Saints to use our influence so honest men and wise men and good men will be elected to public office in the community, in the county, in the state, and in the nation. To me this commandment of God is just as binding upon the Latter-day Saints as is the law of tithing, or the Word of Wisdom, or any other commandment which the God of heaven has given us.

As I read that for the first time some years ago I thought, "What an indictment of corrupt would-be political leaders in many parts of the world—demagogues who deal in half-truths, innuendos, and falsehoods! Here the God of heaven has pointed out the type of men he wants elected to public office among his people." It is not enough, my brethren and sisters, just to stand on the sidelines and criticize what is taking place, and to point the finger of scorn at some political leader. It is our job, our duty, and our responsibility to take an active interest in these matters, and carry out the admonition and the commandment which God has given us to see to it that men of character—good men, as measured by the standards of the gospel—are elected to public office.

So, today, I would like to throw out a challenge to the elders of Israel, my brethren of the priesthood, that we put forth an effort to prepare ourselves for statesmanlike work. The Prophet Joseph, as you will recall, had something to say regarding the important part which the elders of Israel would play in the safeguarding, if not the saving, of the Constitution of this land.

("Our Duty as Citizens" 920, 922)