THE VILLAIN OF THE 20th CENTURY
The ills of the present day trace their roots back to last century. You need to understand why economic disparity is rapidly increasing, why most households require two incomes to sustain itself, why speculation is favored over hard work and saving, why the American Dream and new opportunities for prosperity feel like they are slipping away, why asset price bubbles are increasing in frequency and magnitude, and why societal tensions are growing in people all over the world. The cause of today’s many societal diseases is the debauching, i.e. cheapening, of our nation’s currency. Modern day economic policy traces its roots back to John Maynard Keynes of Great Britain. Lord Keynes advocated the use of inflationary fiscal and monetary policies by governments and their central banks to increase the total spending in the economy to mitigate the inevitable effects of economic recessions and depressions. This idea was a revolutionary change in economic thinking in the 1930s and was in direct opposition to the free markets that historically determined spending, employment and production levels in the economy. Keynes recognized Vladimir Lenin’s (Russian revolutionary) belief that the best way to destroy the capitalist system was to debauch the currency and by process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. The quote from Keynes’ The Economic Consequences of the Peace follows.
“Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
Both Lenin and Keynes were well aware of the negative consequences of the policies that they advocated for. One could logically assume that their deceptive and malicious practices intended to cause great harm to the rising United States of America and western civilization. During the 1930s and the decades that followed, central bankers and governments in the leading Western economies began to adopt the Keynesian policies of creating inflation, i.e. money printing, with the false pretenses that the additional money supply would create sustainable economic growth and prosperity. As history has proven with certainty, there are no free lunches. The American citizens would pay dearly as the rampant inflation of the 1970s accelerated the US dollar’s decline in purchasing power. American economic policy has foolishly followed Lord Keynes’ beliefs for almost a century now, and the Federal Reserve’s recent money printing, quantitative easing, bond market interventions, zero interest rate policy (ZIRP), and overall collusion with governments and Wall Street bankers looks more like socialism than the free market capitalism that once made America great. Perhaps this debauching of the paper money currency is exactly what Keynes and Lenin had envisioned to subtly destroy the United States of America!
Fortunately, there is a solution to fight the 20th century villain and his successors. There is hope for a glorious future that requires all paper money to be backed by gold, which is how things were in America prior to Executive Order 6102 signed by President Franklin D. Roosevelt in 1933 that forbid the hoarding of gold coin, gold bullion, and gold certificates within the continental United States. Gold coins cannot be debauched, i.e. cheapened and overprinted, by central bankers around the world. Given America’s insane debt burden, permanent interventions in bond and equity markets, and insatiable desire to print unlimited paper money in an attempt to stimulate spending and growth, the only possible outcome is for the ultimate destruction of our fragile currency. The US dollar is mortally wounded and GOLD is the only protection that the American and global citizens have against the inevitable collapse of the green paper money. The supply of Bitcoin and other digital currencies can be increased as easily as the magic printing press process and in accordance with the Keynesian inflation policies. However, the supply of gold cannot be that easily increased, which is why gold has served as the ultimate money for the last 5,000 years.
Physical gold is your only true store of wealth, which is why everyone needs to have some percentage of your overall investment portfolio allocated to this precious metal money. You must own gold over paper money to achieve financial freedom in the 21st century. The current gold price is below $1,700 per ounce and is extremely undervalued considering the Keynesian groupthink at the Federal Reserve Bank and global central banks that are committed to massively expanding the money supply (aka creating inflation). The upside for the gold price is unlimited as so many countries around the world have experienced over the last century or two. Now is the time to buy your first or your hundredth gold coin. Be excited, be enthused, be empowered, and be hopeful for the future of gold backed currencies! If every citizen of the world bought a few gold coins each year, then the Keynesian bankers would be forced to halt or stop their printing presses and market interventions. What a glorious 21st century that would be with financial equality for all people, a sound money system, limited government interventions, balanced budgets and the defeat of the villain Keynes. GOT GOLD? Be a part of the Green Paper Revolution.
To better understand the last several decades of monetary and fiscal policy in the United States and the influence of John Maynard Keynes, consider the timeline below. Sadly, the modern era central bankers do not have the morality, intelligence or courage to implement the right free market capitalist policies that our nation needs more than ever. Their chronic failures assure that the price of gold will continue its relentless upward march and the dollar will continue to be printed and borrowed into oblivion.
1969: Milton Friedman (American economist) quote:
“Let us suppose now that one day a helicopter flies over this community and drops an additional $1,000 in bills from the sky, which is, of course, hastily collected by members of the community. Let us suppose further that everyone is convinced that this is a unique event which will never be repeated.”
1974: Henry Kissinger (U.S. Secretary of State) quote:
“Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world.”
1980: U.S. National Debt: Approximately $1 Trillion dollars
1987: Black Monday stock market crash (Bubble #1). Alan Greenspan takes office as Chair of the Federal Reserve of the United States and serves five terms as Chairman until 2006. The onset of direct market interventions and multi-decade lowering of interest rates to zero and even negative begins in the United States, which spreads to global markets around the turn of the century.
1988: U.S. President Ronald Reagan creates the President’s Working Group on Financial Markets, aka Plunge Protection Team, by Executive Order 12631. Maintaining investor confidence is one of the stated objectives of this elite group of government officials. The powerful idea of a stock market “wealth effect” and its influence on consumer and business spending gains a foothold in economic policy. John Maynard Keynes would have been proud of this interventionist measure that continues to damage free market capitalism.
1999: Gold price (US dollars): Approximately $400 per ounce
2000: U.S. National Debt: Approximately $6 Trillion dollars
2000: Dot.com Bubble and the Nasdaq Composite stock market crashes 78% from its peak to October 2002 (Bubble #2)
2002: Ben Bernanke (Federal Reserve Board Governor) delivers his Deflation: Making Sure “It” Doesn’t Happen Here speech to the National Economists Club in Washington D.C. His infamous quote follows, which resulted in his nickname of “Helicopter Ben.”
“Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”
2006: Ben Bernanke takes office as Chair of the Federal Reserve of the United States and serves two terms as Chairman until 2014. The onset of unconventional monetary tools like Quantitative Easing begins in the United States.
2007: The Great Recession caused the Dow Jones Industrial Average to crash over 50% from its peak to March 2009 (Bubble #3). The powerful idea of global central banking institutions being in “collusion” to support global stock markets gains a foothold in economic policy. John Maynard Keynes would have been proud of this interventionist measure that continues to damage free market capitalism.
2008: Gold price (US dollars): Approximately $1000 per ounce
2008: Ben Bernanke (Federal Reserve Chair) announces a new monetary policy called “Quantitative Easing”. The Fed begins buying $500 billion in mortgage-backed securities and $100 billion in other debt. The Fed would announce three additional Quantitative Easing measures after 2008, and this interventionist policy continues to the present day. John Maynard Keynes would have been proud of these interventionist measures that continue to damage free market capitalism.
2015: U.S. National Debt: Approximately $20 Trillion dollars
2016: Gold price (US dollars): Approximately $1100 per ounce
2020: The U.S. stock market crashes almost 40% and amazingly recovers all of its losses before the year 2020 ends (Bubble #4). The powerful idea of “forward guidance” from the Fed to stoke inflation gains a foothold in economic policy. The Fed announces substantial revisions to its policy framework in its updated “Statement on Longer-Run Goals and Monetary Policy Strategy”, dated August 27, 2020. John Maynard Keynes would have been proud of this interventionist measure that continues to damage free market capitalism.
2020: U.S. National Debt: Approximately $27 Trillion dollars
2020: JP Morgan Chase & Co. agrees to pay $920 Million in connection with schemes to defraud precious metals and U.S. Treasuries markets. The settlement involved thousands of instances of unlawful trading in the precious metals futures contracts between 2008 and 2016.
2021: Gold price (US dollars): Approximately $1700 per ounce. Will this price level be the low water mark for decades to come?