I have, for the past 35 years, expressed my grave
concern for the future of America. The course we have
taken over the past century has threatened our
liberties, security and prosperity. In spite of these
long-held concerns, I have days – growing more frequent
all the time – when I'm convinced the time is now upon
us that some Big Events are about to occur. These
fast-approaching events will not go unnoticed. They will
affect all of us. They will not be limited to just some
areas of our country. The world economy and political
system will share in the chaos about to be unleashed.
Though the world has long suffered from the
senselessness of wars that should have been avoided, my
greatest fear is that the course on which we find
ourselves will bring even greater conflict and economic
suffering to the innocent people of the world – unless
we quickly change our ways.
America, with her traditions of free markets and
property rights, led the way toward great wealth and
progress throughout the world as well as at home. Since
we have lost our confidence in the principles of
liberty, self-reliance, hard work and frugality, and
instead took on empire building, financed through
inflation and debt, all this has changed. This is indeed
frightening and an historic event.
The problem we face is not new in history.
Authoritarianism has been around a long time. For
centuries, inflation and debt have been used by tyrants
to hold power, promote aggression, and provide "bread
and circuses" for the people. The notion that a country
can afford "guns and butter" with no significant penalty
existed even before the 1960s when it became a popular
slogan. It was then, though, we were told the Vietnam
War and the massive expansion of the welfare state were
not problems. The seventies proved that assumption
wrong.
Today things are different from even ancient times or
the 1970s. There is something to the argument that we
are now a global economy. The world has more people and
is more integrated due to modern technology,
communications, and travel. If modern technology had
been used to promote the ideas of liberty, free markets,
sound money and trade, it would have ushered in a new
golden age – a globalism we could accept.
Instead, the wealth and freedom we now enjoy are
shrinking and rest upon a fragile philosophic
infrastructure. It is not unlike the levies and bridges
in our own country that our system of war and welfare
has caused us to ignore.
I'm fearful that my concerns have been legitimate and
things may even be worse than I first thought. They are
now at our doorstep. Time is short for making a course
correction before this grand experiment in liberty goes
into deep hibernation.
There are reasons to believe this coming crisis is
different and bigger than any the world has ever
experienced. Instead of using globalism in a positive
fashion, it's been used to globalize all of the mistakes
of the politicians, bureaucrats and central bankers.
Being an unchallenged sole superpower was never
accepted by us with a sense of humility and respect. Our
arrogance and aggressiveness have been used to promote a
world empire backed by the most powerful army of
history. This type of globalist intervention creates
problems for all citizens of the world and fails to
contribute to the well-being of the world's populations.
Just think how our personal liberties have been trashed
here at home in the last decade.
The financial crisis, still in its early stages, is
apparent to everyone: gasoline prices over $4 a gallon;
skyrocketing education and medical-care costs; the
collapse of the housing bubble; the bursting of the
NASDAQ bubble; stock markets plunging; unemployment
rising; massive underemployment; excessive government
debt; and unmanageable personal debt. Little doubt
exists as to whether we'll get stagflation. The question
that will soon be asked is: When will the stagflation
become an inflationary depression?
There are various reasons that the world economy has
been globalized and the problems we face are worldwide.
We cannot understand what we're facing without
understanding fiat money and the long-developing dollar
bubble.
There were several stages. From the inception of the
Federal Reserve System in 1913 to 1933, the Central Bank
established itself as the official dollar manager. By
1933, Americans could no longer own gold, thus removing
restraint on the Federal Reserve to inflate for war and
welfare.
By 1945, further restraints were removed by creating
the Bretton-Woods Monetary System making the dollar the
reserve currency of the world. This system lasted up
until 1971. During the period between 1945 and 1971,
some restraints on the Fed remained in place.
Foreigners, but not Americans, could convert dollars to
gold at $35 an ounce. Due to the excessive dollars being
created, that system came to an end in 1971.
It's the post Bretton-Woods system that was
responsible for globalizing inflation and markets and
for generating a gigantic worldwide dollar bubble. That
bubble is now bursting, and we're seeing what it's like
to suffer the consequences of the many previous economic
errors.
Ironically in these past 35 years, we have benefited
from this very flawed system. Because the world accepted
dollars as if they were gold, we only had to counterfeit
more dollars, spend them overseas (indirectly
encouraging our jobs to go overseas as well) and enjoy
unearned prosperity. Those who took our dollars and gave
us goods and services were only too anxious to loan
those dollars back to us. This allowed us to export our
inflation and delay the consequences we now are starting
to see.
But it was never destined to last, and now we have to
pay the piper. Our huge foreign debt must be paid or
liquidated. Our entitlements are coming due just as the
world has become more reluctant to hold dollars. The
consequence of that decision is price inflation in this
country – and that's what we are witnessing today.
Already price inflation overseas is even higher than
here at home as a consequence of foreign central banks'
willingness to monetize our debt.
Printing dollars over long periods of time may not
immediately push prices up – yet in time it always does.
Now we're seeing catch-up for past inflating of the
monetary supply. As bad as it is today with $4 a gallon
gasoline, this is just the beginning. It's a gross
distraction to hound away at "drill, drill, drill" as a
solution to the dollar crisis and high gasoline prices.
It's okay to let the market increase supplies and drill,
but that issue is a gross distraction from the sins of
deficits and Federal Reserve monetary shenanigans.
This bubble is different and bigger for another
reason. The central banks of the world secretly collude
to centrally plan the world economy. I'm convinced that
agreements among central banks to "monetize" U.S. debt
these past 15 years have existed, although secretly and
out of the reach of any oversight of anyone – especially
the U.S. Congress that doesn't care, or just flat
doesn't understand. As this "gift" to us comes to an
end, our problems worsen. The central banks and the
various governments are very powerful, but eventually
the markets overwhelm them when the people who get stuck
holding the bag (of bad dollars) catch on and spend the
dollars into the economy with emotional zeal, thus
igniting inflationary fever.
This time – since there are so many dollars and so
many countries involved – the Fed has been able to
"paper" over every approaching crisis for the past 15
years, especially with Alan Greenspan as Chairman of the
Federal Reserve Board, which has allowed the bubble to
become history's greatest.
The mistakes made with excessive credit at
artificially low rates are huge, and the market is
demanding a correction. This involves excessive debt,
misdirected investments, over-investments, and all the
other problems caused by the government when spending
the money they should never have had. Foreign
militarism, welfare handouts and $80 trillion
entitlement promises are all coming to an end. We don't
have the money or the wealth-creating capacity to catch
up and care for all the needs that now exist because we
rejected the market economy, sound money, self-reliance
and the principles of liberty.
Since the correction of all this misallocation of
resources is necessary and must come, one can look for
some good that may come as this "Big Event" unfolds.
There are two choices that people can make. The one
choice that is unavailable to us is to limp along with
the status quo and prop up the system with more debt,
inflation and lies. That won't happen.
One of the two choices, and the one chosen so often
by government in the past is that of rejecting the
principles of liberty and resorting to even bigger and
more authoritarian government. Some argue that giving
dictatorial powers to the President, just as we have
allowed him to run the American empire, is what we
should do. That's the great danger, and in this post-911
atmosphere, too many Americans are seeking safety over
freedom. We have already lost too many of our personal
liberties. Real fear of economic collapse could prompt
central planners to act to such a degree that the New
Deal of the 30's might look like Jefferson's Declaration
of Independence.
The more the government is allowed to do in taking
over and running the economy, the deeper the depression
gets and the longer it lasts. That was the story of the
30s and the early 40s, and the same mistakes are likely
to be made again if we do not wake up.
But the good news is that it need not be so bad if we
do the right thing. I saw "Something Big" happening in
the past 18 months on the campaign trail. I was
encouraged that we are capable of waking up and doing
the right thing. I have literally met thousands of high
school and college kids who are quite willing to accept
the challenge and responsibility of a free society and
reject the cradle-to-grave welfare that is promised them
by so many do-good politicians.
If more hear the message of liberty, more will join
in this effort. The failure of our foreign policy,
welfare system, and monetary policies and virtually all
government solutions are so readily apparent, it doesn't
take that much convincing. But the positive message of
how freedom works and why it's possible is what is
urgently needed.
One of the best parts of accepting self-reliance in a
free society is that true personal satisfaction with
one's own life can be achieved. This doesn't happen when
the government assumes the role of guardian, parent or
provider, because it eliminates a sense of pride. But
the real problem is the government can't provide the
safety and economic security that it claims. The
so-called good that government claims it can deliver is
always achieved at the expense of someone else's
freedom. It's a failed system and the young people know
it.
Restoring a free society doesn't eliminate the need
to get our house in order and to pay for the extravagant
spending. But the pain would not be long-lasting if we
did the right things, and best of all the empire would
have to end for financial reasons. Our wars would stop,
the attack on civil liberties would cease, and
prosperity would return. The choices are clear: it
shouldn't be difficult, but the big event now unfolding
gives us a great opportunity to reverse the tide and
resume the truly great American Revolution started in
1776. Opportunity knocks in spite of the urgency and the
dangers we face.
Let's make "Something Big Is Happening" be the
discovery that freedom works and is popular and the big
economic and political event we're witnessing is a
blessing in disguise.