Predicting Recession: Negative GDP, Business Cycles, and Money

Congressman Ron Paul gave a compelling speech before Congress on May 15, 2000 that predicted much of what has happened in global financial circles, and very likely much of what will come. It's not difficult to see, one hardly needs to extrapolate the data to see the writing on the wall. However, it is important that we have reliable sources of information.

Many in financial circles believe that economic statistics provided by the U.S. government are reliable and accurately portray GDP, for example. According to these statistics, the economy has not shown two consequtive quarters of negative GDP. However, this is only because the official reported numbers are false. If one tracks the statistics according to how they were tracked a couple of decades ago, using (more) real measures, then the truth will out. In fact, we have had at least 12 consecutive quarters of negative GDP. For example, have a look at John Williams' Shadow Government Statistics site.

In actuality, we're in a massive stagflation. And the full force of this tsunami has yet to hit home. Give it a couple more years, and when it does—look out! The efforts on the part of the U.S. government's media machine are almost exclusively for perception management and controlling public opinion, invariably with false information in an ultimately futile attempt to keep the masses pacified thinking everything is just fine.

Further, counter to conventional wisdom, business cycles are not a part of true capitalism. True capitalism has rarely been seen, except perhaps to some degree prior to the institution of the Federal Reserve in 1913, or it's various attempts in the 19th century to obtain a monopoly on money creation in the United States. True captitalism leaves the government to perform only one task as far as economics is concered: protect the free market—keeping it truly free. Laissez-faire Capitalism = True Capitalism.

And what about the argument that business cycles have also occured prior to the establishment of the Federal Reserve? Although this may be true to some degree, it is largely due to the same interests involved influencing economic policy that sought to create the Fed in the first place. Prior to the Fed these interest groups did not have the official sanction of government; afterwards they did. For more information read, "The Creature from Jekyll Island" by G. Edward Griffin as one reputable source; there are several others, including works by Ludwig von Mises, Murray Rothbard, and even Ron Paul.

Ron Paul almost prophetically spoke of a massive economic "pullback" in the years to come. However, quite contrary to what many think, he was not referring to the collapse of the technology bubble but something far more comprehensive and pervasive: he was referrring to a global economic crisis. One in which our entire global economic system would be in a shambles—due largely to the fact that a fiat debt-based U.S. currency has been the world's reserve currency for the better part of a century, coupled to the realization that there isn't enough liquidity to finance this massive "credit card bill." If one reads the Gold Anti-Trust Action Committee (GATA) with any degree of regularity, one will see that over the last 2-3 years many central banks all over the world have been trying very quietly to divest themselves of US dollars, and then downplaying this divestiture in public circles so that they don't overly affect the markets, whilst at the same time ensuring they don't shoot themselves in the foot for the next round of divestiture.

The only way to have real, solid, non-superficial growth is to change the way our money is fashioned. We must divest ourselves of a debt-based Keynsian system in favour of an asset-based Misesian system. And gold-backed, silver-backed or any other difficult to obtain commodity backing is ideal for this purpose.

Ron Paul's insights into the nature of coin, currency and economics, are frighteningly accurate. Much of the economics we learn in college and university is largely a scam to perpetuate the existing power structures, groom us into a deluded self-assured malaise to occupy various positions in these instutitions, with the dangling promise that we too might be powerful, important, and wildly successful. And who knows? If we play our cards right, perhaps one day we might even become the keepers of these houses of cards.

Turn on, tune in, drop out.

Is the Federal Reserve Legal?

It seems people are waking up as to the legality and constitutionality of the institution known as the Federal Reserve. Article 1, Section 8 of the Constitution gives congress the power to "[...] coin Money, regulate the Value thereof, [...]" not an independent non-transparent private institution. Congress is representative of the people. The Federal Reserve is not part of the government and does not represent the people. It is a private institution that operates behind closed doors. They were given the power to coin money in 1913, and this was a direct violation of Article 1, Section 8. One can reasonably conclude that those ultimately behind the Federal Reserve, in order to coerce the U.S. government to perform such an illegal and unconstitutional act, must have been quite powerful indeed, with an enormous amount of resources already at their disposal.

Also, Article 1, Section 10 states that "No State shall [...] make any Thing but gold and silver Coin a Tender in Payment of Debts [...]" The abandoning of the gold standard by the U.S. in 1933 was a direct violation of Article 1, Section 10. The combination of these two violations of the constitution set the stage for unbridled debt-based spending. Prior to 1933, expensive public undertakings such as war could only be financed by taxes which was only a partial limitation on government, as high taxes to fund public projects would become unpopular rather quickly. Incidentally, prior to 1913, there were no federal income taxes. The apportionment of federal income taxes was passed as law in 1913 as the 16th amendment to the constitution, coincident with the establishment of the Federal Reserve.

The propaganda on the Federal Reserve website, (incidentally it has a .gov address which is just another deception to lend it the aura of being a government institution) indicates that the seven members of the Board of Governors are nominated by the President and confirmed by the Senate. However, in reality this is a mere formality. The prospective members of the board are short-listed by the controlling interests of the Federal Reserve, which are then "selected" by the President and confirmed by the Senate. It's very much like our own so-called democratic process. As a citizen, if you are to select one of seven possible candidates for a government post, all of whom have been pre-selected by the powers that be, do you have any real choice?

For more information on this interesting topic read, "The Creature from Jekyll Island: A Second Look at the Federal Reserve" by Edward Griffin, "A Short History of Money and Banking" by William Gouge, "The Organization of Debt into Currency" by Charles Holt, and essentially anything by Ludwig von Mises, Rothbard, and Hayek. Also informative is the documentary entitled, "The Money Masters" by Bill Still. Slightly tangential but also related, the documentary, "America from Freedom to Fascism" by Aaron Russo.