Sunday, September 2, 2012

On The Edge - American GDP, fact or fiction?

Sep 1, 2012 by

In this edition of the show Max interviews Dan Collins from He talks about whether the United States economy is really larger than the world's second, third, and forth-largest economies combined?

Dan is the Founder/Editor of He is an MBA graduate of Rutgers University. He got his BA degree in economics from Michigan State University and was an exchange student at Tsinghua University in Beijing in the 1990's. Dan is also a contributing author to publications such as Financial Sense and The China Business Herald. He is a frequent guest on financial television programs such as The Keiser Report as well as radio shows like the Schiff Report.

Counting the Cost - Who stole the American Dream?

Sep 1, 2012 by
While billions of dollars are spent on presidential election campaigns in the US, tens of millions still live in poverty - and it is not just the poor falling through the cracks.

Spaniards unhappy about rise in sales tax

Sep 1, 2012 by

As part of Spain's strict austerity measures, shoppers will now face a sharp increase in taxes on goods and services. But most Spaniards are not happy about the tax increase. And many supermarkets have promised not to pass on the extra cost to consumers, with some people saying the government should change the tax system.

For Silver, The New World Order is the Old World Order

Originally posted on

Original source

“Scenes are now to take place as will open the eyes of credulity and of insanity itself, to the dangers of a paper medium abandoned to the discretion of avarice and of swindlers.” – Thomas Jefferson 1814

The history of civilization is comprised in significant regard of the rise and fall of empires, a story of the victors and the vanquished. There are innumerable observations to heed when examining the similarities, differences, causes and effects in the timeline of these many empires. For millennia, these empires have played a game of musical chairs that has decided who the victor was and who the vanquished in any given time and place. Oftentimes the winners and in this game of musical chairs has been predetermined. Over the centuries, victims have become vanquished and vice versa, and an abundant body of work bearing witness and analyzing this has been born.

All of these empires, however, were not the largest embodying structure giving rise to man’s society and culture. An overarching civilization, first and foremost, lent its caste serfdom to the way things are and have always been. This has decreased the options available to all countries – empire or not, victor or vanquished – when dealing with the conflicts and disasters of civilization’s gait.

In many ways, and not just in regards to silver, is the New World Order, even with its mighty high technology, similar to the Old World Order.

To cite one example in history before touching on the metal the devil hates, let’s look at a couple of population trends. First in Rome:

Note that one obstacle the Roman Empire (27 BC-476AD) faced was population decline, which debilitates a society’s ability to produce. As Rome focused on conquest, soldiers died. These wars opened up Rome to attack and civilian death. Further, Roman soldiers acquired the plague. The uptick in population at the chart’s end is the population boom spurred by the Industrial Revolution, which caused a paradigm shift across the world regarding population. And now, due to the unhealthy ways of civilization served up by demise-of-the-state transnational corporations and their support via government policy aimed towards sustainability, fertility rates are in decline across the world:

So, a surplus left by Antoninus Pius in 161 AD of approximately 2.7 billion denari in the treasury was reduced to about 1 million under Commodus by 193 AD amid a declining population. The same is true today for the United States, where, as fertility rates decline and baby boomers begin their reliance on state welfare, the debt load has reached unmanageable proportions for the failing empire and collapsing country.

There was increasing hunger and plagues during the 3rd century. Between 180 AD and 280 AD, Rome’s population seems to have declined by 30 percent, thus leading to a contraction of agricultural labor, the largest sector in the Roman economy. This is one of the most important causes of the declining Roman economy.

There were shortages and higher expense by the government as supplies grew scarce. Since the treasury had already been greatly reduced, Rome began debasing its currency. A shortage of supplies, including government treasury reserves, helped lead Rome towards debasement.

Can’t you taste the empty promises of Roman politicians and the spoiling indifference and anger of the Roman population, as if you were there?

In order to keep on funding aggressive military conquest and a slave force, the government had to either mint coin, tax aggressively or default. If they defaulted there was a chance the military would revolt. And so, as today, inflation was the easier pill to swallow, which worsened as workers died and trade declined. Trade by the third century was dismal not only due to the debilitated population, but also due to rapid debasement of the coinage, as indicated in particular during the reign of Valerian in the chart below.

The inflation intensified as emperors produced more-and-more coinage, which was magic they pulled off through the no-magic-at-all of increasingly mixing the silver of the coins with base metals such as bronze or iron. Throughout the process they lowered the weight of the coin so as to use less silver. As will be later covered, this was a process also done by the United States, though the United States debased its circulated coinage of its silver content in lightning time compared to Rome.

So, to be sure, debasement, and the lack of confidence which ensues, is when the circulated coinage of a land are compromised of their precious metals content. All civilizations that, at one time used precious metals for their coins, have debased their coinage.

Currency debasement caused a further loss of confidence in the Roman currency. The decline of Rome took centuries, and the silver content of Roman coins was decreased in an incremental manner. You see below that just passed the midpoint of the first century Roman coins had more than 90% silver in them, according to the chart. By the third century this was, for all intents and purposes, basically zero.

First, coins debased were viewed as the same value as those less debased. Over time this trend changed, and those coins severely debased became undesirable and sometimes worthless. With this debased money, trade became more-and-more difficult for Rome as goods rose in price. Wealthy individuals sought to hedge themselves by hoarding those coins not debased.

Silver In Popular Culture, A Trend of Centuries: Silver & Gresham’s Law 

It was a financial agent of the English Crown in the city of Antwerp after whom was coined (pun intended) the term “Gresham’s law” so as to explain to Queen Elizabeth I what her father, Henry VIII, was doing to the English shilling. Henry VIII had by then replaced 40 percent of the silver in the coinage with base metals as a means of increasing the government’s income without raising taxes.

Just as came to pass in the United States in the sixties when similar took place, clever individuals saved the silver shillings and circulated only the bad ones. This caused an increase in the circulation of the new coinage and a disappearance of the silver.

The phenomenon had been observed much throughout history before the time of Gresham. In the year Gresham was born, in 1519, the process later termed Gresham’s Law was described by Nicolaus Copernicus in his treatise entitled Monetae cudendae ratio: “bad (debased) coinage drives good (un-debased) coinage out of circulation.”

Copernicus knew that individuals were using feverishly their “bad” coins and hoarding the good ones in order to melt them down or send them abroad. Indeed, they were the topic of a report which he presented to the Prussian Diet in 1522.

According to the economist George Selgin in his paper “Gresham’s Law”:

As for Gresham himself, he observed “that good and bad coin cannot circulate together” in a letter written to Queen Elizabeth on the occasion of her accession in 1558. The statement was part of Gresham’s explanation for the “unexampled state of badness” England’s coinage had been left in following the “Great Debasements” of Henry VIII and Edward VI, which reduced the metallic value of English silver coins to a small fraction of what it had been at the time of Henry VII. It was owing to these debasements, Gresham observed to the Queen, that “all your fine gold was convayed out of this your realm.”[8]

Queen Elizabeth heeded the lesson of Gresham and instituted a plan to restore the shilling with silver. The English shilling thereafter became a much sought-after coin in international commerce and put Britain on the road to become the superpower that it was. The schilling would once more be debased in the twentieth century, and for good.

The United States, the most recent Empire, did similar to its currency as Rome and Britain. Two times did the federal government debase its coinage, the most well-known example taking place in the twentieth century, the other towards the end of the nineteenth.

Prior to 1933, silver and gold coins were common in the course of commerce. The Crash of 1929 caused Franklin D. Roosevelt to cease production and issuance of gold coins by executive order. This action sent many coins to be melted by the Mint, and a great many sent abroad or hoard domestically. Effectively, all silver and gold coinage was nationalized by the federal government and ownership thereof made illegal.

Then another debasement in 1964. By 1965 the circulated coinage of the United States had been totally debased. As history had taught, the sure signs of death throes for a falling empire. Debase the currency, kick up wars – history had seen this before. Below is the speech given by Lyndon B. Johnson regarding the coinage act which debased coinage of silver:

Distinguished Members of Congress, ladies and gentlemen:

We are gathered here today for a very rare and historic occasion in our Nation’s history.

Before I make some observations that I have made note of here, I want to say to the Congress again, as I do almost daily these days, in the words of the Navy–”Well done.”

When I have signed this bill before me, we will have made the first fundamental change in our coinage in 173 years. The Coinage Act of 1965 supersedes the act of 1792. And that act had the title: An Act Establishing a Mint and Regulating the Coinage of the United States.

Since that time our coinage of dimes, and quarters, and half dollars, and dollars have contained 90 percent silver. Today, except for the silver dollar, we are establishing a new coinage to take its place beside the old.

My Secretary of the Treasury, Joe Fowler, is a little stingy about making samples, but I have some here. Joe made sure that I wouldn’t put them in my pocket by sending them over here in plastic.

Actually, no new coins can be minted until this bill is signed. So these strikes, as they are called, are coins that we will never use. On one side is our first First Lady, Martha Washington. On the other, a replica of Mount Vernon.

The new dimes and the new quarters will contain no silver. They will be composites, with faces of the same alloy used in our 5-cent piece that is bonded to a core of pure copper. They will show a copper edge.

Our new half dollar will continue our silver tradition. Eighty percent silver on the outside and 19 percent silver inside. It will be nearly indistinguishable in appearance from our present half dollar.

All these new coins will be the same size and will bear the same designs as do their present counterparts. And they will fit all the parking meters and all the coin machines and will have the same monetary value as the present ones.

Now, all of you know these changes are necessary for a very simple reason–silver is a scarce material. Our uses of silver are growing as our population and our economy grows. The hard fact is that silver consumption is now more than double new silver production each year. So, in the face of this worldwide shortage of silver, and our rapidly growing need for coins, the only really prudent course was to reduce our dependence upon silver for making our coins.

If we had not done so, we would have risked chronic coin shortages in the very near future.

There is no change in the penny and the nickel. There is no change in the silver dollar, although we have no present plans for silver dollar production.

Some have asked whether our silver coins will disappear. The answer is very definitely-no.

Our present silver coins won’t disappear and they won’t even become rarities. We estimate that there are now 12 billion–I repeat, more than 12 billion silver dimes and quarters and half dollars that are now outstanding. We will make another billion before we halt production. And they will be used side-by-side with our new coins.

Since the life of a silver coin is about 25 years, we expect our traditional silver coins to be with us in large numbers for a long, long time.

If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content.

The new coins are not going to have a scarcity value either. The mint is geared to get into production quickly and to do it on a massive scale. We expect to produce not less than 3 1/2 billions of the new coins in the next year, and, if necessary, twice that amount in the following 12 months.

So, we have come here this morning to this, the first house of the land and this beautiful Rose Garden, to congratulate all of those men and women that make up our fine Congress, who made this legislation possible–the committees of both Houses, the leadership in both Houses, both parties, and Secretary Fowler and all of his associates in the Treasury.

I commend the new coinage to the Nation’s banks and businesses and to the public. I think it will serve us well.

Now, I will sign this bill to make the first change in our coinage system since the 18th century. And to those Members of Congress, who are here on this very historic occasion, I want to assure you that in making this change from the 18th century we have no idea of returning to it.

We are going to keep our eyes on the stars and our feet on the ground.

The propaganda leading into the debasement was flagrant and pushy. Therefore, the government must have viewed it as a radical move to debase the coinage of silver. In the summer of 1955, Business Week claimed that “No one seems to want the metal,” probably at the behest of powerful industrial interests who knew the importance and scarcity of the metal.

Today, it is well-documented that financial institutions like HSBC Bank, Bank of Nova Scotia and J.P. Morgan are the paramount silver shorts. This suggests the importance of silver not only as an industrial application but also a monetary metal.

The Silver Users Assocation, a non-profit conglomerated of leading industrial and financial powerhouses, has shown concern over silver investment demand. In American Metal Market dated November 9, 1998, an article entitled, “India Silver Hoarding Worries Users Group,” Walter Frankland, SUA spokesperson commented:

“Is there a role for the Silver Users Association–in conjunction with groups in other countries–to take action that would focus on India and see if their market can be opened to freer trade,” Walter Frankland, executive vice president of the association, asked members at a meeting here. “There’s no reason to wait around until volatility hits the market again, in my opinion.”

Frankland was championing for “free trade,” that oh-so liberalizing concept that historically leads to market domination by the well-endowed capital-wise interests in utter contempt of the working poor. Basically, this was a plea to secure India’s silver, which had been hoarded by that country for centuries. The Engineering & Mining Journal published in 1908 an article regarding this proclivity of the Indians:

“As has been the case from time immemorial, the great bulk of the silver sent to India is practically withdrawn from commerce and remains in that country.”

Silver has been in a bear market for 600 years. Below is a favorite chart of mine for recourse on low-esteem nights as its seems all four walls are caving in on me as ghettobirds fly outside my window with message of warning, such as: “attention residents! Beware of a black male in jeans and a sweatshirt.” The Monty Python absurdity is lost on my brethren.

Where from is this price action arisen? The discovery of the New World made possible Baroque, for without the precious metals discovered in the New World, the Old World was facing the possibility of a looming metal shortage. Did this lead to a decline in the silver price? I do not think so. The silver price was already in decline before the discovery of the New World. Also, despite the discoveries, the price of gold remained steady, which is presumably in good reason that it is considered the best safehaven asset in the Age of Crisis.

The discoveries in the New World alone do not sufficiently explain this 600 year bear market in silver. Perhaps this bear market of time immemorial is handed to us by the pall-bearers of civilization, the forever market manipulators of man, and those today behind finance capital and central banks: the ruling class.

Silver has been systematically taken out of the hands of the people in each-and-every nation where, at one time, it was in the money – indeed, where it was the money. Three major examples in history of empire, as even mainstream academia cites, are the Roman Empire, the British Empire & the American Empire. In each of these nations silver was a component of the coinage used by the people, only to later be taken out.

Silver has played a role in the rise of many empires. Only when the empire over-extends itself is silver taken out of the equation and a much more deceptive System instituted. In today’s world, however, it seems that totalitarian winds have sought to homogenize global rule making, and it is clear the silver manipulation of time immemorial persists in a manner more total than before.