1896: After McKinley Won Election, Populist Paper Money In Retreat

ΩΩHistory has hitched humanity like an ox or mule to this round grindstone.  We go over and over the same ground, endlessly.  We strain at the yoke, thinking we will free ourselves of History’s harsh restraints only to discover, we have gone over the same ground and ground the same fine wheat as previous generations have done for many, many years.  The Greater Cycles are obvious to any historian with a brain: the rise and fall of empires, the booms and crashes of banks, the various manias and wars of the masses, they all follow on the same track, over and over again..

ΩΩDetecting this is interesting for if we want to seriously try a new thing, we have to first determine if this is an old thing. Personally, I am very fond of old things and seek them out and like them rather a great deal.  It is most satisfying to comprehend and get into the mind frames of distant times so one thing I really like to do is read old, old newspapers.  This is better than history in that we can see the ‘thinking process’ much better this way: what sort of debates and opinions people had during actual events that were unfolding.

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ΩΩWhat comes out crystal clear is, we have barely changed as a society or as a culture in the last 150 years.  That is, the machinery of the Industrial Revolution are still working gears and still move events.  The entire business cycle system and our bankings system has barely changed even slightly over this last 150 years, for example.  Except in one regard: all the choices given to our Victorian ancestors and which they debated most energetically, has been made in favor of the very things the dynamic conservatives wanted to avoid at all costs and this has had a significant impact on us and not in a good way: nearly all of the fears of the gold conservatives have come to past thanks to our embrace of paper money.

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ΩΩI can easily see my great grandfather roaring from beyond the grave, ‘I told you so!  But did anyone listen?  Nooooooooo….’  Fading into silence of course.  Well, in today’s news are some interesting editorials written by fearful people who want to move things forwards no matter what, using various ‘new’ formulas which supposedly will fix our wretched easy credit excess bubble’s bursting by undoing the mess and replacing it with good times via various tricks and schemes none of which will work at all since they can’t work.

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ΩΩThat is, this brutal bubble popping can’t be erased by any magic wand waving.  All solutions reek of catastrophe as the dire downsides of these solutions lead us much deeper into the Cave of Wealth and Death where the Goddess of Zero lurks: she has been brutally wiping out the profits and excesses of the past decade and will double this process if we dare to jump over her downsizing of our wealth.  So far, the very rich have managed to escape this brutal downsizing by looting various governments and promising to resume the happy funny money days which caused this catastrophe in the first place.

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ΩΩInstead of growing up and being responsible adults, we are tempted to do these various things which will rebound very negatively in the long run (in a decade time span).  The entire bubble was caused by cutting taxes and increasing global free trade in the teeth of the US  being attacked on 9/11 and then going to war in distant lands.  This set the stage for the US to go bankrupt even faster.  People want to cling to the housing value rises of the demented decade and at the same time have ‘affordable housing’ which is insane: the real estate bubble’s easy lending made housing tremendously expensive!

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ΩΩFirst, here is Bill Gross who is a money genius but no historian, thinking that we can fix this stupid bubble via using government fiat to drop all loan rates to around 4%.  According to this fantasy, people will be ‘richer’ if they get this boon from the government and of course, the government will pay for the losses all the bond holders who bankrolled these mortgages.  Of course, these bonds were sold to many, many people in many countries.  If we pull a fiat financial rescue and force them to suck down the losses, we will see a much worse global financial collapse.  And if we save people who went too deep into debt during the housing boom, we reward recklessness and stupidity and NO civilization can survive this sort of thing.

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Famed Investor Bill Gross Calls For Massive Taxpayer-Backed Mortgage Refinance Initiative

Bill Gross, who runs Pacific Investment Management Co.’s $239 billion Total Return Fund, said that policymakers “should quickly re-engineer” a plan that would refinance all non-delinquent mortgages backed by the federal government. The rate on a 30-year fixed-rate mortgage averaged a record-low 4.44 percent in the week ending Aug. 12, according to taxpayer-owned mortgage giant Freddie Mac.

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Taxpayers guarantee the mortgages of 37 million households, or two-thirds of all homeowners with a mortgage, according to a July 29 note by David Greenlaw, Morgan Stanley’s chief U.S. fixed-income economist. That includes government agencies like the Federal Housing Administration as well as twin behemoths Fannie Mae and Freddie Mac. Greenlaw estimates about 18.5 million taxpayer-backed mortgages are at rates higher than 5.75 percent interest.

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By refinancing those mortgages at current, lower rates, Greenlaw believes those homeowners would save $46 billion a year. Gross said the refi scheme would spur some $50-60 billion a year in new consumer spending and raise home prices between 5-10 percent. Forecasters, including Fannie Mae, say home prices are set to decline the rest of the year and into 2011. Former Federal Reserve Chairman Alan Greenspan said this month that a so-called double-dip recession is possible “if home prices go down.”

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ΩΩWhy settle for 4%?  Why not 3% or 1% on a thirty year loan?  Of course, the concept of a 30 year home loan is insane in the first place.  The length of servitude has extended year by year from an average of 10 years in my grandfather’s day to 20 years in my father’s day and now is triple what it was when we had a gold standard.  Of course, many people couldn’t buy houses especially since banks asked for at least 20% down, years ago.  Second mortgages were nearly unheard of when I bought my first house in 1979, for example.

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The ability to pile on mortgages or to refinance with a much higher principal due to the house rising in value due to easy lending with no money down is a modern ‘innovation’ that should have been outlawed when it first showed up.  Bankers were competing with a government lending arm that gave loans with $0 down, after all!  As this behemoth government agency gave out loans like candy to the electorate, this encouraged everyone to do likewise especially since bank regulators refused to force bankers (unlike China!) to have reserve holdings of less than 0.33 instead of 10.0.  This turned out to be very foolish and fixing this is important, not playing the ‘drop the interest rate and reserve ratios to zero’ game which so many are now suggesting.

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Shamus Cooke: A Permanent Housing Collapse?

Interestingly, an op-ed article in The New York Times, entitled The 30 year Prison, actually took these realities into account when analyzing the housing crisis. The 30 year mortgage is the cornerstone of the residential housing market, which allowed millions of Americans to become homeowners.

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But the economic conditions that allowed such a mortgage are disappearing. (No kidding!) According to the op-ed author, Katherine Stone, one crucial problem of the housing crisis is that “…today’s mortgages are designed for yesterday’s borrowers.”

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Ms. Stone makes clear that “yesterday’s borrowers” are people who could expect to have job security and were paid a livable wage. Thus, 30 year Mortgages  “…work well as long as homeowners have stable, long-term jobs that enable them to regularly make their monthly payments.”

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“But these days such careers are increasingly scarce. Therefore, any effort to recover from the crisis must include more flexible mortgages that take today’s employment landscape, with its frequent job-hopping and episodic unemployment, into account.” (August 14, 2010).  Of course banks are never very eager to be “flexible” with loans.

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ΩΩThis article illustrates how insane people have become!  Of course, mobile America should never had gotten hooked on 30 year mortgages!  DUH.  That is beyond stupid.  Ms. Stone’s whining about how we need ‘flexible mortgages’ is childish.  What she is describing is a society that RENTS.  I was a landlady for many, many years.  People rented my apartments.  I fixed these things, paid the bills and protected the property from vandalism and fires, etc.  I did all the hard work including raising the capital to afford to buy, repair and run these properties.

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ΩΩMy tenants, on the other hand, could waft away without much warning and even could wreck the place and cause great grief and all I could do was hope not to rent to someone who was horrible.  The main thing is, if we are going to be a ‘move all over the place’ society, we must give up the ‘house with a picket fence’ fantasy and be realistic: if you are going to be suckered into a thirty year mortgage, you may as well rent!  After all, you are not only renting from the bank, you have to do all the landlord’s labor on top of it!

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ΩΩOf course, what we need is stable jobs!  And to do this, we have to have PROTECTION of these jobs and prevent them from flowing overseas, for example. And if we have lending, it must be directed into capitalist value creating industrial and systems services that increase the value of commodities and goods!  Medical care is the big ‘growth’ industry as we put our money into health systems which ultimately is a maintenance  system, not a value added capitalist system.  Keeping ourselves alive is great but it isn’t a growth industry that will increase the value added to commodities: it is CONSUMPTION.  And if we stay well, our zero dollar costs benefit the capitalist system and thus, doesn’t create ‘jobs’, either.

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ΩΩTeaching is good, too, but it is at least a value-added system which creates a better workforce but again, if there are no jobs for the educated youth, it is a waste of time.  Gaining wealth via teaching isn’t going to save our economy.  We have to educate for jobs that exist and these have to be value added jobs that ‘grow’ an economy.  Building houses is also a consumption thing and this was our #1 manufacturing business for quite a while now.  It, too, is NOT a capitalist value-added business, building a place to live is a luxury since we can live in hovels or caves or tents…I lived in a tent for ten years, for example!

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ΩΩWe like nice houses and we wanted to live in these things because it is fun.  But it is not productive and indeed, has been rather unproductive since we wanted our houses to be far from where there was real work.  That is, we don’t want to live near factories.  Generally speaking, the further a house was from a factory, the more valuable it was in the housing bubble.  Indeed, we moved our factories 3,000 miles away from our luxury houses and thought we could live and pay for these houses while our jobs were on the other side of the planet!

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ΩΩNow, let’s go to 1896, a key year in US politics:  I intend to write a long article about this period since it is a key time in the US economy and empire in many, many stark ways.  Below are several articles from right after the election of 1896 where McKinley pushed past the shooting star of Williams Jennings Bryan.  The famous speech about pressing a crown of golden thorns on the brow of farmers went a long way in August only to go down in flames in cold November winds.  Back in August, the debate about gold, silver or paper money raged.

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ΩΩAfter the Civil War, the government was pressured to take out of circulation the paper war money.  But many wanted this to continue and the paper versus metal debate suddenly morphed into a ‘more restrictive gold’ versus ‘cheaper silver’.  This election was in the middle of a very grinding depression.  Here is a selection of NYT articles from back then starting with a week after the election when the returns will still coming in, it was slower back then, but already, the NYT announced McKinley as the winner:

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THE FUSION IS ENDED.; Batemam Says Populists Herea… – View Article – The New York Times

ΩΩHere is the first open declaration on behalf of using only paper money.  It is highly important since Mr. Bateman proved to be right in the long run: time was on his side.  Eventually, paper money would displace all other money.  Disastrously so, in the long run, of course.  But even today, we have people like Ellen Brown offering people hope that if only a government lent us all money at ZIRP rates, we would pay off our debts easily (!!!!) and would not be tempted to go the road of the Weimar Republic, Zimbabwe or many South American nations that all went down in inflationary flames.

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The Populists who, like today, vote for the Democratic Party only to be badly burned, were just as angry back in 1896 as they are today.  Frustration after seeing the very rich freely spend paper money and then get bailed out, the cry is, ‘Why not me?  Bail me out!  Give me free money!’  Of course, the bankers succeeded in this heist due to their political power via bribing our politicians.

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Chris Coons, Dem Senate Candidate, Wants Lifetime Ban On Senators Becoming Lobbyists

Coons’ proposal does not go as far as legislation introduced by Sen. Michael Bennet (D-Col.) — who is also facing a tough election this year — which would prohibit not just senators but also members of the House from ever becoming lobbyists. It’s a popular proposal for Senate candidates: Alexi Giannoulias in Illinois, Brad Ellsworth in Indiana, and Robin Carnahan in Missouri also support banning members of Congress from K Street.

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The congressional revolving door spins frequently: More than 300 former members of Congress have decided to “go downtown” after leaving the Hill.

ΩΩBack in 1896, 30 millionaires were elected into Congress and it was noted even at that time that America didn’t have even 30 millionaires before the Civil War.  The ‘moneybags’ depiction of Congress from this election to WWI is due to the rising power of the oligarchs who got very rich off of the paper-money Civil War economic expansion and the resulting Imperial wars that sprang out of the Civil War victory of the North.  That is, when I read a number of articles from November, 1896, many were about pushing very hard for war with Spain (which finally came under McKinley) and taking Hawaii away from the Hawaiian queen who was deposed during this time, too.  And the Philippines were viewed already as a target of take over, too.

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ΩΩThe central hot-bed of the Progressive Party was in Kansas, a state today that is much more rightwing and pro-imperialist.  Here is an interesting article from early November, 1896:  POOR KANSAS. – View Article – The New York Times

ΩΩBankers boycotted the state.  This is the problem: if a state wants to make lending unprofitable, it ceases.  Of course, the magic of the money printing press is, the government can hand out loans to even the lousiest payers if it wishes but this dooms the economy to hyperinflation and destruction.  Many, many of the people in financial trouble today are in this state due to stupidity, greed and too-easy lending, not the opposite.

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ΩΩHere is a classic example from reality TV, that dark window into the diseased parts of our polity:  Teresa Giudice Blames Bravo for Financial Woes | PopEater.com

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ΩΩTeresa Giudice and her husband Joe owe creditors nearly $11 million in various debts, and the ‘Real Housewives of New Jersey’ star blames her fame for why she’s still bankrupt…..A few days ago, new evidence proved the couple went on a $60,000 shopping spree not long after they filed for bankruptcy.

ΩΩHer husband makes only $74.000 a year, yet these idiots managed to ring up $11 million in debt, $5 million of which was PROPERTY SPECULATION.  They are a classic couple who show us clearly that this ‘housing crisis’ isn’t a crisis at all, it is a deluded game whereby people on limited incomes speculated in real estate on borrowed money and got caught in the gears of the collapse.

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ΩΩThis is why I find it very, very hard to weep for the people losing homes. This catastrophe is mainly due to everyone buying up things they could not afford.  When I had money, I used it to pay off my debts and leave them behind forever.  I didn’t use it to party!  There was no way in any hell for these people to service the interest on $11 million in loans.  Note how, in court, they continued to spend money on frivolities while begging for bankruptcy protection!

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A KANSAS SILVER SCHEME.; Plan to Make the Mexican Dollar a Legal Tender.

ΩΩJust like today, we see desperate moves towards a silver coinage in the West.  Odd, isn’t it?  When I see headlines like this:  Georgians could pay future state taxes in gold – Atlanta Business Chronicle I laugh.  Georgia is just one state that wants to force people to pay taxes in gold coins!  HAHAHA.  I don’t see that flying anywhere since this means taxes have to fluctuate with the value of gold and this will make it very, very complicated especially since people usually pay taxes with checks, for example!

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ΩΩChecks, by the way, became a big item during the Civil War.  I own a Civil War check made out from the government to buy some saddles from a Troy, NY leather makers.  People didn’t like getting this IOU checks at all and wanted to immediately cash them for gold coin but couldn’t.  This is why the country was in an uproar after the Civil War with many conflicting monetary systems.

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ΩΩNote also that Kansas’ move towards paper money made the hard metal guys so pissed off, they wanted to move to Guatemala!  One of my own ancestors went to Guatemala and bought a large Hacienda there but was driven out by the natives during the Spanish American wars.  Yes, this is imperialism.  I see a lot of this today: disgruntled voters or borrowers or holders of gold dream of fleeing the US and going somewhere else and being a pest, there.

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ΩΩOf course, during depressions, countries close borders for their own protection and it was no different back then!  This is why the US decided to invade Spanish holdings.  In the NYT was an article back then saying that European emperors warned the US about a war with Spain with a headline, ‘Rulers Will Side With Spain’.

HOSTILE TO THE BANKS.; The Knights of Labor Want M… – View Article – The New York Times

ΩΩAs the gold/silver bugs itched to move to Guatemala, Labor was itching for paper money exactly as they do today.  That is, they wanted to have the government print more greenbacks like during the Civil War.

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ΩΩGovernment fiat money is alluring as well as a dangerous poison.  The EU’s currency still has value only because the paranoid Germans fear inflation.  But if Greece was running the EU’s finances, the euro would be worth one tenth of what it is worth today.

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ΩΩNow for another article examining Kansas which has some startling parts to is which perfectly echo cries today for a credit bubble to vanish like magic and wealth to flow again like water and this one is full of interesting details which are rather chilling:  WHAT IS THE MATTER WITH KANSAS?” – View Article – The New York Times

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ΩΩHere is an editorial from Ellen Brown, one of the more demented ‘free money for everyone who wants to be like a reality show housewife!’:

Homeowners’ Rebellion: Could 62 Million Homes Be Foreclosure-Proof?

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ΩΩShe celebrates a low level judge who claims that MERS, the entity that created and sheltered the stupid tranche business of the biggest bankers that sliced and diced all those mortgages is illegal and thus, no one has to pay a mortgage at all since no single entity owns the paperwork for the loans.

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ΩΩNow…it may be a good thing to kill this MERS monster once and forever.  I am pathetically conservative when it comes to property and believe that the old, old ways were very good and kept things clear and precise and we should kill the post-Reagan financial business forever.

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ΩΩBut…if we kill the beast while letting everyone get their houses for free, we kill the entire mortgage business forever.  That is, ‘foreclosure-proofing’ housing means no one will honor their loans and thus, like in the top NYT article  above, lenders won’t come anymore and no more loans will happen.  Ellen has a solution: the government takes on these loans and we have a semi-socialist system that hands out goodies to individuals who produce nothing but just want to suck down luxuries.  A catastrophe for an economic system!

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ΩΩNote the yellow parts of this article!  The lending in Kansas was not for production but consumption!  And the lenders were ‘gamblers’ and the people promising to pay these loans were more like prostitutes.

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ΩΩAnd yes, the bankers lent to US borrowers because of juicy interest rates.  These were extended into the future, that is, there was a lure of a two year window with super low rates which would reset.  The NJ House wives all wanted to ‘roll over’ houses and  collect the profits before the 2 years would set in and force them to pay through the nose.

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ΩΩI agree with this 100+ year old article’s conclusion that industry, economy and honesty are the best way out.  But what really got us going was imperialism: we expanded across the Pacific a mere three years later and took over Alaska and extended our reach very far indeed.

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WORK OF GOLD DEMOCRATS.; Official Returns Show The… – View Article – The New York Times

ΩΩThis is an end of November analysis of what happened in this election: many ‘solid money’ Democrats voted Republican.  This was a big, big deal back then and set the stage for the imperialist Roosevelt changes.  The purchase of Alaska meant the gold rush would replenish our gold reserves.

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ΩΩThe Civil War purchase of Alaska proved to be a major reason gold triumphed over silver and paper: there was more of it, quite frankly.  The crossover of Democratic voters swung the election and this was due to the majority of people being committed to the system.  Today, we have a huge rift between people who were careful with their finances and those who went deep into the debt hole, signing up for 30 year loans on immense principal amounts and the army of people who plunged deeper and deeper into debt, the more valuable their homes or the easier the loans.

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ΩΩThe thing I hate the most isn’t ‘underwater homes’ but rather, how our jobs went over the water to distant lands.  This reverse-imperialism has undone 100+ years of building our society and our empire.  That is, our empire is doomed.

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ΩΩThe US dollar back then was traded, by the way.  And here is an amusing article:  Our Dollar Now Allures. – View Article – The New York Times

ΩΩYes, this happens today all the time and it happens suddenly!  Why did the dollar suddenly become ‘valuable’?

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ΩΩIt was the election!  Once the ‘paper money’ Progressives and then the ‘Silver money’ inflationists were defeated, when the gold standard was reinforced, the value of paper money went up!  Not down.  How about that?  And so it goes: when Nixon cut the gold standard, the dollar lost 90% of its value.   It is painfully obvious that we pay a price for dropping the gold standard and this meant our nation was flooded with foreign goods and we are now as deep in debt to Asia as the NJ house wife is in debt to bankers.

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40 Comments

Filed under .money matters, Free Trade

40 responses to “1896: After McKinley Won Election, Populist Paper Money In Retreat

  1. Yes, but the solution can’t be gold right now. It has to be more fiat paper, only debt free and put in the hands of the working poor to reverse the suffering they’ve experienced for over 30 years AND THEN go back to gold.

    To go back to gold now would crystallize the counterfeiters’ relative wealth. The bankers would “win”.

    Ellen Brown’s suggestion of more debt to solve debt problems is madness, but she has a point – people are suffering because they are too indebted. This can be solved by widespread default and economic collapse or by inflation.

    There are no other choices.

    My suggestion:

    1. Nationalize the banks
    2. Issue debt-free fiat ($20k to all American citizens per year for two years).
    3. Back to gold.
    4. Break up and then pritivize the banks and implement free banking – currency can be whatever the people want to use as currency (e gold, e silver, whatever).

    This is the only way to discipline the banks.

    There really is no other long term solution.

  2. Pingback: The Final Solution « 2020 Speculator

  3. emsnews

    Give everyone $20,000 and a gallon of gas will cost around $20 a gallon.

  4. Absolutely. And the price of food, gold, clothes and everything will go up. And the US dollar may (temporarily) plummet.

    But prices are relative. The real incomes of the working poor will likely rise.

    And, crucially, you’re not going to get any political support for a return to gold if it just crystallizes the criminal gains the banksters have made in relative income terms in recent decades.

    Fiat money cannot work forever – look at the disasters we are facing today – but why not use it as a one-off inflationary DEBT-FREE blast before returning to gold to equalize the playing field slightly?

    Obviously all of this is hypoethetical. The political establishment won’t allow either debt-free money or gold as money to circulate.

    What is so clear is that they will suck the life out of the economy until every last sucker is an inch away from starvation and deep in unrepayable debt, they will leave for Geneva or the Cayman Islands, and the US will end up looking very much like Brazil.

    The “elites” will fly in to pay off politicians and pay for 18 year told hookers, and fly back to Europe with tax-free loot, more T-bonds and more Fort Knox gold.

    Sad.

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    ELAINE: How, pray tell, will working wages suddenly rise? During the high inflation seventies, it was the UNIONS who kept up with inflation! They are now dead and gone. All this would do is offshore more jobs.

  5. igneous

    This is interesting. A CBS report on a Soul Protest song. The journalists rip her to bits.

    Compare to the Spiegel version.
    http://www.spiegel.de/video/video-1080018.html

    And here is the complete clip.

    Pretty angry about this especially considering the near explicit clips by skanks like lady Gaga.

  6. igneous

    Sorry about posting off ticket btw. but wanted to post this.

  7. Aussie

    @ emsnews
    Re Give everyone $20,000 and a gallon of gas will cost around $20 a gallon.

    Excellent and insightful blog….history is indeed the same beer bottle with new labels.
    I agree with your $20 per gallon comment.

    Unfortunately, there is no easy way out.

    I suggest any strategy requires the following elements:

    1. Accept the fact that all debts have to be realized by bankruptcy, repayment in full with jail for the guilty.

    2. Decide a reindustrialization of the US with a firm time line.

    3. Negotiate with China and other sovereign creditors a do-able deal with emphasizing an economically sustainable US is better for everybody rather than a mad dog US torn by domestic upheaval with nukes.

    4. Put a safety net to ensure families and people survive without starving or being homeless.

    5. Take over insolvent FIRE then break up into good and bad parts as did Sweden in the recent pass.

    6. Copy China and create incentive to encourage FDI and US corporations to invest in the US and penalize imports within a transformation scheme negotiated with above sovereign creditors.

    7. Tear down the US Empire and initiate a phased withdrawal of the military and close down offshore bases matched to programs to employ ex military in programs. This will help mitigate a military takeover.

    8. Anyone protesting higher taxes or closing down military assets offshore can move to Israel or Dubai or China.

    9. No more free money for foreign countries or favors until the US house is in order.

    10. Go back to a gold backed currency.

    11. Go back to respecting the US constitution as intended by the founding fathers.

    12. Accept the awful deeds committed in the name of Empire and treat the “Shining light on the hill” as a psychotic era.

    13. Accept the historical reality that former US economic wealth was based on a richly endowed land; socialist and protectionist policies married to incentives rewarding individual innovation. Keep the cowboy where it belongs – on TV and comic books.

    14. Match education excellence and out put to jobs required to rebuild.

    15. Breakup the media/internet and device checks and balances including incentives to generate a critical thinking population.

    16. Identify core technologies supporting strategic new industries for the US to prevail in the future just as Japan and China did.

    17. Use common sense and avoid rhetoric and spin with its “PR Image” and the US will be OK again.

    There is nothing the US cannot recover from if the mindset and attitudes of your founding fathers were regained.

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    ELAINE: The Cave of Wealth and Death is very, very easy to go into and nearly impossible to escape. Indeed, we all die in the end. The lure of easy lending due to the Japanese carry trade (note how this topic has basically vanished from most narratives today!) was irresistible and we all rushed into this Cave of Death seeking false wealth and to get this fake wealth, we had to TRADE something so we traded our future (took on massive debts) and our industrial jobs (turned our economy inside out!).

    This mistake is epic, annoying (I yapped about this for decades now!) and very, very hard to exit. All exits require us chopping off some arm or leg and limping off and so I suggest we chop off our imperial bases especially the ones in top manufacturing rival countries such as Germany and Japan.

  8. JSmith

    How the heatwave in Russia is connected to floods in Pakistan

    This story is ripe for some explaining away… possibly with reference to The Coming Ice Age.

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    ELAINE: The earth’s climate has been amazingly unstable for the last 2.5 million years.

  9. charlottemom

    On a more geopolitical level — same goes for China lending to US. See below point made on clusterstock re china investing in US bonds:

    Side note: I wonder how many in DC realize that China has been giving us enough rope to hang ourselves with on purpose. And they’re about to hit us financially while we’re on our knees.

    China would happily vaporize $300 to $500 billion dollars any given day of the week in exchange for crippling the US. They would be confident in their longer term ascension, and would absolutely take that trade to knock us down several pegs faster. It would be such a small price to pay. By knocking us out financially, they can easily take Taiwan and push us out of their growing military sphere of power in Asia.

    Read more: http://www.businessinsider.com/treasuries-arent-supported-china-anymore-20-august-2010#ixzz0x9JMjGKS

    Also Elaine – agree that NJ housewife story is maddening and but think it’s a bit more complicated in that family’s income may be supplemented by underground sources (i.e. mafia?). So massive borrowing and defaulting and possibly criminal industry – all done on $78,000 TAXABLE income. crooks know best how to benefit from US broken economy!

  10. OK ,Elaine. I agree.

    Then there is no practical political solution to our problems.

    We’re all going to be subjugated and die of starvation or become direct prostitutes or slaves of the State.

    Sad but true, if there is no solution.

  11. Matheus

    Are you interested into giving online classes to me ? In exchange for cash ?

  12. wb

    @ ELAINE: The earth’s climate has been amazingly unstable for the last 2.5 million years.

    Erm, what relevance has that ? The Earth’s climate has been remarkable stable for the last 12,000 years, the Holocene, which has permitted the development of agriculture and cities and so-called civilisation.

    Now, because we have taken vast quantities of carbon out of the crust, and put it into the atmosphere, as CO2, we’ve screwed up the whole system, and made it unstable.

    There’s no plausible evidence indicating that anybody needs to worry about a returning Ice Age, but there’s irrefutable evidence that everybody ought to worry about Global Warming and the effects that it is having now, and will have during our lifetimes.

    Sadly, for the majority of Americans, seems elephants are completely invisible…

    http://www.mjrust.net/downloads/The%20Elephant%20in%20the%20Room%20Patrick%20Whitefield

    http://candobetter.org/node/2147

    ΩΩΩΩΩΩΩΩΩΩ

    ELAINE: 12,000 years is a blink of an eye compared to 2.5 million years. This is a classic Interglacial and this happened how many times since the Ice Ages began?

    Remember: WE EVOLVED INTO HUMANS due directly to climate changes when the Ice Age cycles began! This pushed our evolution tremendously and we changed greatly over a short time span, relatively speaking.

  13. Tony

    If we could explain all this stuff to all the people who just watch tv we could do some nice buisness in pitch forks and sharpening stones…
    Trouble is though have you seen people when they watch telly?
    Zombification of a Nation (through the aerial)
    I’m new to your wonderful site but sadly your preaching to the converted (I have a lovely sharp pitchfork), the real discussion should be how do we inform the X Factor viewers of such gems of truth.
    I think that is the next evolutionary step of the human race. You see them every day, monkeys that can speak.
    I’m feeling better after that rant….
    Now anybody got a bannana I’m feeling a bit peckish.

  14. wb

    “Given that emissions are growing faster than the IPCC has studied, that the world has been unwilling or unable to agree on any meaningful global treaty, with the largest emitters, China and the United States, in particular unwilling to make any meaningful attempt to limit emissions, I wanted to look at the question “How bad are things in a high emissions scenario?” In particular, in this post, I look at the period 2080-2100. My children were born in 2000 and 2002, so 2080-2100 represents the likely end of their lives, all being well. So this is a summary of the changes they will experience over the course of their lives.”

    http://earlywarn.blogspot.com/2010/03/us-in-high-emissions-scenario.html

  15. wb

    “American Empire provides bread, circuses, and all the toys we (think we) need, stolen from other countries and future generations. I can understand why people are reluctant to abandon the empire. In exchange for inhabiting a cubicle, you get to harvest the fruits of empire while avoiding any steps toward self reliance. You get to shower in the morning, kibitz at the water cooler with your friends, flirt with the hot thirty-something in the next cube, and dine on Thai take-out. What’s not to like, especially if, like most Americans, you couldn’t care less about the people we oppress to do your bidding or the costs to the living planet?”

    http://guymcpherson.com/2010/07/the-risks-of-fiddling/

  16. DrKrbyLuv

    Wright Patman –

    “When our Federal Government, that has the exclusive power to create money, creates that money and then goes into the open market and borrows it and pays interest for the use of its own money, it occurs to me that that is going too far. I have never yet had anyone who could, through the use of logic and reason, justify the Federal Government borrowing the use of its own money… I am saying to you in all sincerity, and with all the earnestness that I possess, it is absolutely wrong for the Government to issue interest-bearing obligations. It is not only wrong: it is extravagant. It is not only extravagant, it is wasteful. It is absolutely unnecessary.

    Now, I believe the system should be changed. The Constitution of the United States does not give the banks the power to create money. The Constitution says that Congress shall have the power to create money, but now, under our system, we will sell bonds to commercial banks and obtain credit from those banks.

    I believe the time will come when people will demand that this be changed. I believe the time will come in this country when they will actually blame you and me and everyone else connected with this Congress for sitting idly by and permitting such an idiotic system to continue. I make that statement after years of study.”

  17. DrKrbyLuv

    Eloquent words from a genius:

    “If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good also.

    …Both are promises to pay, but one fattens the usurers and the other helps the people. If the currency issued by the Government was no good, then the bonds would be no good either. It is a terrible situation when the Government, to increase the national wealth, must go into debt and submit to ruinous interest charges…”

    http://www.michaeljournal.org/appenD.htm

  18. j. addams

    –> B. i.x..Wier, ‘West plans
    to return to p.metals standards…’
    at some time. . . Frank ‘whats the
    matter w/ Kansas?” Bryan wanted
    silver, but in the Yu kon, S.Af. miners
    found more gold so 1 result was the
    same as what Bryan etc wanted…credit,
    inflation (a bit).
    J Stiglitz. “the $3T, trillion…war.”

  19. mike

    methinks that someone knows how to get the true value of a 74 thousand dollar income, not for peasants………….

  20. Gavin

    When offering remedies for our ailments, we have to wonder if in fact the ones who guide the course of empire really have any concern at all for the welfare of the American people. Do the ones who control the empire care about the people of America or do they just use America to serve the purpose of the empire, sort of like how a parasite might attack its host? If and when America becomes no longer of use to the empire, the interests of which lie globally and serve no nation state in particular, the organism of empire will find a life support somewhere else, maybe in Asia. Does anyone wonder this? The actions of leadership don’t seem as confusing when one considers this as their ulterior motivation.

  21. wb

    Trust banks, or, trust people…

  22. Aussie

    @ ELAINE:
    Re: …….This mistake is epic, annoying (I yapped about this for decades now!) and very, very hard to exit…..

    @ Gavin
    Re ….When offering remedies for our ailments, we have to wonder if in fact the ones who guide the course of empire really have any concern at all for the welfare of the American people…..

    In my opinion, both are interesting and pertinent comments to explore.

    Unfortunately, the epic mistake will cost an arm and a leg whether it is resolved by wisdom or by default.
    Resolution based on wise and timely decisions will return the US ordinary people to a better society and indirectly help the world become a saner place for everybody.
    The default pathway ensures misery for us all in varying degrees.

    I suggest the “leaders of empire” do have a concern for the welfare of the American people at heart….because they are born from its bosom.
    Unfortunately, they as imperfect human beings accustomed to hegemony and privilege “Elaine’s: because we can and therefore impose” acquired an ideology and mindset to go down the wrong pathway …empire and oligarchy and [magic thinking economics].

    Now they are trapped by Hobson choices and denial thru paralysis.

    I was a senior expatriate executive for a US multinational during the distant era when dinosaurs ruled the earth ..so as to speak.
    At the time most US multinationals were expanding across the globe because post WW II they “‘owned” capital, technologies, management expertise and corporate best practice…and we were arrogant conquistadors’ intent on growth.

    We entered backward newly de-colonized countries and used influence and bribed to push their bureaucracies to fast track their process to meet our project timelines.
    Their bureaucracies at the time were undeveloped and lacked educated people.

    We achieved our project timelines, more or less, and left behind a more corrupt host country and increased their proportion of despots.

    Many corporations reached a point were their US domestic revenue was equaled or exceeded by their offshore earnings.
    Therefore the political power within the US corporate HQ correspondingly flowed from their domestic entities to the offshore and with it priorities on strategic direction etc.
    Essentially the US corporations with greater offshore earnings became less “American” and more “International”.

    Another interesting change occurred in the psychology of executives such as I.
    The reality of running a entity is the need to adopt its institutional priorities and values to achieve mission.
    Overtime, most imperfect human humans end up with the institutional values ruling their private lives.

    Imagine what the effect of “conquistador” success reinforced with huge expense accounts, fabulous remunerations, chauffeured company cars etc have on an already entitled person?

    The “privileged” start to believe their wealth means they are smarter than the average Joe and because they were simply luckier in life’s roulette.

    The distance between the worldview of “privileged” and the man in the street becomes so much greater.
    Recently, I listened to some medical doctor acquaintances (privileged thru monopoly of service) privately state they deserved more money and refused to “bulk bill” (Australian medicare low rate) will charge the AMA higher fee because the poor were too lazy anyway.

    Fortunately, my life’s journey compelled me to remember my humble roots and made me a better person than in the above distant era.

  23. adamm

    Who is this mythical “we”… is it “we” the people, if so this is the elite who founded America as part of the London Coy, the 2 colonies north and south. It was a moneymaking scheme from the getgo, based on London ie. aristocratic, finance. That was 1606, the Bank of England founded 1694 so it was private venture capital.

    The USA is incorporated, as in “corporation”. So now its balance sheet is in bad shape. Time to go into Chapter 11, and reorganize itself as a going concern.

    So who are the lenders about to take the hit?
    Obviously, it is the people with the “money” otherwise, it would be under reorganization now instead of trying to patch up the existing mess. I am not talking about its balance sheet that is still deteriorating rapidly.

    Sounds like a job for Al “chainsaw” Dunlap.

  24. emsnews

    Sorry about not posting a story every day as per usual…being a forward looking person, I have been making major changes at my own home as well as other family member’s homes and must do all of this before WINTER (remember this time frame when it is wickedly cold????) tears in and makes work impossible.

    This labor hurts the fingers pretty badly so it is hard to type but I am nearly done!!! Yea! Whew! Will resume business as usual starting, I hope, tomorrow morning!

  25. zip

    Elaine,
    do you know how the banking worked around this period (around 1896)? was fractional reserve banking around? and if yes what ratio?

    by the way, great to look back to history and combine it with today’s ‘news’.

  26. zip

    off topic

    http://www.bbc.co.uk/news/business-11052076

    ‘Interest rates ‘may hit 8%’ by 2012 says think tank…’

    I don’t understand the article….
    I can imagine they want to print away the debt problem (which i read as inflation of 8% ..), but what does it have to do with the interest rate? the fastest economic growth, i doubt it.

    what happened in yhe 90’s with the high inflation exactly?

  27. emsnews

    Inflation lurks very nearby. The system hopes to keep things at ZIRP levels because of the immense $30+ trillion in US debts. England, on the other hand, is NOT the center of world trade so it will have to tighten the noose. More about that tomorrow.

    My fingers are better finally (had cuts and bruises from building things last week) so I will be able to type more stuff. Thanks for the patience here.

  28. JT

    @wb

    “Trust banks, or, trust people…”

    Nice video thanks.
    In one city parish here in Helsinki the people started their own money system (called a penni, the old finnish mark was 100 pennies).
    People traded lawn moving, roofgutter cleaning, fixing things, sowing etc.
    It worked perfectly well (older people are generally superior in sowing and fixing mechanical things compared to the younger generation. The younger inhabitants moved lawns, carried stuff and climbed roofs etc).
    They priced these services in pennies.

    Sadly this is of course totally illegal and they were prosecuted. Only governments can issue money.
    It never stopped though 😀 . They still do it every day.
    It is exactly what you said. Trust your neighbour.

  29. JT

    @wb

    It´s an old workers parish built in the 1950´s with lots of small wooden houses on small lots. The older inhabitants are great at fixings small problems with the houses.

  30. wb

    @JT

    “Sadly this is of course totally illegal and they were prosecuted. Only governments can issue money.”

    Gosh, that hasn’t happened in UK ( yet ?? ).

    There are many LETS schemes running.

    http://en.wikipedia.org/wiki/Local_Exchange_Trading_Systems

  31. JT

    @wb

    “There are many LETS schemes running.”

    56% overall tax is quite a push.
    Avoiding taxes is our national pastime here 😉

  32. JSmith

    Rereading this, I came on the following:

    “The main thing is, if we are going to be a ‘move all over the place’ society, we must give up the ‘house with a picket fence’ fantasy and be realistic: if you are going to be suckered into a thirty year mortgage, you may as well rent!”

    Are you discussing the economy with Rupert Murdoch? The Wall Street Journal made exactly the same point in an op-ed a couple of months back. A mobile workforce can’t be tied to a specific place the way homeowners are; better to rent and be able to follow the job market.

    (I don’t follow that thinking myself. We bought our house 20 years ago on a 15-year loan, paid it off in 12, and have no plans to live elsewhere.)

  33. JSmith

    “It was the start of a campaign: can we live without capitalism?”

    Sure. The Commies lived without capitalism (or much else, for that matter) for decades.

  34. wb

    @ JSmith

    “The Commies lived without capitalism (or much else, for that matter) for decades.”

    Sounds like you bought into the US/Pentagon/CIA propaganda, JSmith. Better check under your bed, eh.

  35. emsnews

    The State owned the housing and was the landlord in communist states. In the West, we can buy homes and pay them off and be free but many people didn’t want to do this, they wanted more money for spending fun and games or to make up for lost income opportunities.

    This made many slaves of the bank who became the landlord. A foolish choice. The older capitalist system worked just fine for those who were able to be steady and pay off things.

    But then, THIS REQUIRES JOBS and what have we lost in huge amounts?

    Jobs! We offshored them!

  36. PLovering

    The slave trade is alive and well.

    http://tinyurl.com/22mmgeo

  37. JSmith

    “Sounds like you bought into the US/Pentagon/CIA propaganda, JSmith.”

    Nope. Solzhenitsyn.

  38. politically we would have no solution.

    everyone has to think of living independedly from political news

  39. that is pretty cool and lame@ the same time lol !!!!!!!!!

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