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Compulsory savings? ..........201

As the production, exchanged for dollars, gets consumed the dollars accumulate and the ratio of dollars to production increases. As the volume of dollars exceeds the accumulated production of goods, more dollars are bid, per unit of production, In exchanges. The parity of commodities in terms of dollars Increases and, since this is commonly called "prices" we say I prices are rising.

The federal reserve act was passed with the justification that the federal reserve system would create and destroy dollars to maintain the volume of dollars in balance with the volume of production available for purchase. The Fed had no intention of destroying dollars once they are created. Dollars are simply numbers written in books of account, they have no substance. As numbers created, they are loaned to individual members of the public and are used by the borrowers as mediums of exchange in the marketplace. All dollars remain on the books 'earning' "Interest" and when repaid by one borrower are promptly reloaned to another. Wealth pledged to the bank, when making a loan, does not in any way become backing for the dollars borrowed, because the dollars borrowed are not redeemable at the banks. It is ridiculous to pledge wealth to a bank for a loan from a bank they did not give up anything to get the dollars. If as most of the public believes, dollars are only mediums of exchange, why can't we just tote a bucket to the bank and say, fill it up please, I ran out!

With the dollar as marks in a book and as purchasing power in the marketplace, only those that are bid for exchange, will actually effect the commodity vs dollar parity we call price". The more dollars bid per unit of commodity the lower the 'dollar parity' and the higher the "price."

The less dollars people have to exchange (spend) the less they will bid per unit of commodity. The more dollars people have to exchange the more they will bid per unit of commodity. The volume of dollars in the hands of the public reflects the amount of effort it took to retain that volume with respect to taxes etc. It is the amount of effort each individual expended in obtaining the dollars that influences the amount that will be bid; but since volume and effort are to some degree proportional it appears to the public that only volume has the influence on "prices", hence the "law of supply and demand."

The volume of dollars Vs the volume of units of production influences the general level of the commodity parities, in terms of dollars. The 'volume' of dollars actively engaged as I imaginary demand' (money) in the market place bidding for exchange (willing to be spent) for goods can be increased far more easily, than can the volume of goods. The public can sell their goods to get dollars to exchange and that would not effect the "balance." But a sudden withdrawal of "saved" dollars brought into the market will upset the balance unless it is offset by a like amount removed at the same time- This is the means employed by the federal reserve system.

With the bank's creation and distribution of newly created dollars, to borrowers, being the greatest contribution to the overall dollar volume, this is the area of the greatest activity of the fed in its attempt to control the 'money volume'. The federal open market committee (F.O.M.C.) is the agency of the fed that is the one with this responsibility. The F.O.M.C. sells U.S. treasury securities into the banking system to soak up purchasing power at the source before the public can borrow it; and buys them back when the fed desires to put back the purchasing power. IN this way they attempt to control the money volume and keep the purchasing power in balance with the goods available to be purchased. There are other devices also: reserve requirements, interest rates, discount rates etc., but the main idea is to "control" the amount of dollars in relationship with the amount of goods so as not to upset the "price level," (let the falling dollar parity become too noticeable).

……targets for the accounts investment operations are set by the federal open market committee in Washington, but it is up to Mr.. Holmes and his staff here at the New York federal reserve bank to try to hit the targets. It isn't easy .... in the past, Mr. Holmes has often missed his targets for reasons that puzzle both him and the committee…its hard to plan for the economy tomorrow," one official says, "if you don't really know where it was yesterday"

. . The federal reserve never knows exactly how much a given amount of new reserves will increase the money supply or just how long it will take for the increase to occur I wish we knew more about the reasons for the substantial month-to-month deviations," Mr. Holmes says ....the fed tries to keep its portfolio as balanced as possible,, so that it won't dominate any particular issue. That's no easy trick, in view of the fact that the system owns more than a quarter of all marketable treasury securities. "There's a lot of body English," one official says. Not surprisingly, the trading is highly profitable; the fed can pay for its purchases merely-by crediting a bank's reserve account..
Lindley H. Clark---W.Sj-W-9.-June-13,1973-

The total transactions of the F.O.M.C. for the year 1970 was $738 billion (more than three times the total transactions of the New York stock exchange for the same period) and fifty percent was handled by computer. In 1971 the volume mushroomed to $1.1 trillion and nearly sixty percent was handled by computers. At mid year 1972 the total stood at $968 billion with seventy six percent through the computer.

These sums are too vast to really comprehend, don't try! It is enough to realize the vastness of the volume. of dollars created that it requires that much effort at control. In fact it cannot be controlled, it is actually out of control, which brings us to the subject of this chapter. The regulatory facilities of the fed; income tax, social security, reserve requirements on banks, interest rates, and discount rate regulation, prime rates, etc. are no longer adequate and it is now necessary to have a direct regulation on how much the individual member of the public can spend out of what is earned. Before it was enough to regulate the immediate sources of the created dollars and as long as enough were being I saved' (funded i.e. not being used to bid in exchange for goods) the regulatory facilities were holding, to a degree, but now there are such vast sums under the control of the public that it also must be regulated. That is the reason for 'now banking' N.O.W. (negotiated order of withdrawal), also public law 91-151 (the credit control act) and the new scheme of compulsory savings.

The hardest part of writing these chapters on "money" is the waiting for the supporting testimony to be published by the media. It was several years ago when I first predicted compulsory savings in the U.S. then last year on December 1st 1972 in the "trends" publication of the first national bank of St. Louis:

.... now is the time to curb spending because further stimulation is not needed and the person who earns the money has also earned the right to spend a reasonable portion of it in his or her own way." George P. Shultz

There must be some mighty powerful catastrophic force hanging over us, for them to attempt this and the following may explain it.

The gross national product is reported to be $1 trillion and the amount of dollar accumulation to date is around $5 trillion 550 billion. The public has $55 billion in U.S. bonds and $450 billion in demand deposits etc. If the public was to cash 5% of its U.S. bond holdings and add it to their normal daily purchasing power, it could double "prices" in one day. just 6 / 10ths of I% of the public's demand deposits could do the same. This is the terror striking at the hearts of the "money" mismanagers. Once the panic of trying to get something tangible for the intangible, incorporeal, non-material dollar begins nothing human will be able to stop it and chaos would be the result. The fed must find ways to prevent the public from spending 'at will' more than the fed GUESSES the public should.

"Mr. Laird said the president has directed the treasury, the office of management and budget and white house domestic council "to go over this, to refine the proposition, and then it will be considered by him." W.Sj. Sept. 14, 1973

Compulsory savings? ..........203

 "I have no fixed views with respect to increased withholding for compulsory savings, although I imagine most taxpayers would view it as an increased tax' . . . . . . Wilbur Mills D.Ark W.S.J . Sept. 14, 1973

"A ways and means committee source said the prevailing mood within the committee after the Laird announcement was "one of puzzlement" . . . "Arthus Burns rekindled something that was dormant," commented one official. He said economic advisors presented .... a form of refundable tax . . . . during .... June and July, and Mr. Nixon rejected all options. At that time the administration thought that any tax change, . . . would be enacted too late to aid the inflation fight .... officials said there isn't any specific plan on paper for the refundable tax . . . . the theory would be to soak up purchasing power, , ,asked when the -loan- would be repaid the official said the president would decide. . . . . . .W.S.J. Sept 14, 1973

The key words are withholding for compulsory savings. The fed needs a way to immediately deflate the purchasing power of the public, at any time, in any amount to attempt to avert catastrophe.

Tremendous dollar accumulation exists in the U.S. today far exceeding the productive capacity to absorb their imaginary "demand" within the time frame of an emergency.

Dollars are created, in the billions with the stroke of a pen, but it requires capital, labor, and time to produce goods.

If dollars were 100% redeemable in a commodity then dollars in or out of active exchanges could not in any way, of themselves, cause increased bidding, they would represent wealth and be real demand by proxy.

COMPULSORY SAVINGS LIKE INCOME TAX, VIOLATES THE BILL OF RIGHTS!

WHY "PRICE" CONTROLS DO NOT WORK

 Now, here is what I will not do. I will not take this nation down the road of wage and price controls, however politically expedient that may seem. Controls and rationing may seem like an easy way out, but they are really an easy way in-to more trouble, to the explosion that follows when you try to clamp a lid on a rising head of steam without turning down the fire under the pot. Wage and price controls only postpone a day of reckoning. And in so doing, they rob every American of a very important part of his freedom."
Richard M. Nixon, June 17, 1970

Everyone seems to agree that "price" controls do not work. A hunt to find a scientific answer in print as to 'why n6t', was unsuccessful. To find the answer it was necessary to investigate and discover the facts by logical deduction. Vague allusions to the shortages and "black markets" caused by "price controls," but never any scientific approach, whenever controls are mentioned anywhere. Always the same agreement,, on the part of economists, that there isn't any science to economics, that there aren't any "real" laws of economics. It is the "real" that almost tells the story itself. It is because the mediums of exchange used in the world are not "real" anymore that make the exposure, of the real laws of economics, taboo.

It all has to do with whether or not currency, in use as a medium of exchange, is redeemable or nonredeemable. When a currency is one hundred percent redeemable controls are not to be found. When a currency is not redeemable it is inevitable that eventually, controls will be resorted to, but each and every time they fail, and no one wants to tell the victims why they do not work.

"Money" The Greatest Hoax On Earth ..........204

 Wealth can only be created by the people from natural resources by their labor and when they exchange their production with each other they are free to decide how much of the result of their labor (wealth) they will exchange for how much of the other producer's labor result (wealth). "Wealth" is anything created with human exertion having exchange value. When wealth form obtained is the form desired by each party to an exchange they have bartered. When the wealth accepted by any party to an exchange is not in the form desired but can be exchanged later to obtain the wealth form desired then the wealth form accepted is a medium of exchange. Wealth accepted "in lieu of form desired" is a medium of exchange. When only wealth is used as mediums of exchange all exchanges are determined by competitive bidding between producers and the maximum wealth that can be exchanged is the total production existing unconsumed.

As the division of labor progresses, a common commodity becomes accepted as a most versatile medium of exchange, usually coins of precious metal with fixed weight and fineness. Without going into detail concerning the possibilities of counterfeiting and debasement, because it is not important to this explanation, we can progress more rapidly. Precious metal coins are the most common, as an example of a common commodity generally accepted as a medium of exchange. Private banking evolved from the business of storing the producer's precious metal coin, wealth and providing bank notes as bearer certificates redeemable in the precious metal coins stored. The bearer certificates were used as the proxy "stand ins" for the precious metal coins they represented during the competitive bidding preceding-an exchange agreement.

The precious metal coin was owned by the -producer holding the certificate and he was bidding his "production" in the competition to decide on the terms of an exchange. The bidder was bidding his own production represented by a "warehouse certificate" that was a claim check" for it. Turning over the certificate or claim check to anyone in an exchange was surrendering wealth by proxy. The use of redeemable certificates did not alter the basic concept of wealth exchanging for wealth, as long as all certificates were claim checks on wealth (precious metal coins) already produced and stored. The producers were exchanging their own produced wealth, they owned it and controlled by competitive bidding the distribution of that wealth. Controls by government attempting to set the volume of his certificates, a producer must bid, were not in existence nor would they have been tolerated by the owners of the wealth being exchanged. It was their wealth and they would decide how much they would exchange for how much of what they desired.

When government allowed the charter of a monetary authority (the Fed) the public was unaware of what it would cost them in loss of freedom and wealth. The notes issued by the Fed were honored for redemption-(in the beginning)-of the precious metal stored in the government warehouse or at the various banks. As long as the producers were. still able to deposit precious metal coins at the bank and receive those uniform government printed Fed- issued -notes, and as long as they were honored for redemption in specie by the banks, the public was not aware of the consequences that were to come.

First of all, before the Fed, when a producer deposited precious metal coin in a private bank and received his certificate, it was his certificate, it was his certificate and if he wished to destroy it, it was his prerogative to do so. A Fed note redeemable in precious metal was referred to by government as its obligation and the certificate was "owned" by them, and there were penalties for wilfull mutilation or destruction of it.

Originally the amount of precious metal coins fabricated was determined by the amount of precious metal brought to the mint by the public to be made into coins. The producers for all practical purposes controlled the amount of coin minted and being used. The system was called "free coinage." The system that followed gave* the government the prerogative to determine how many precious metal coins would be fabricated and be available for the redemption of the Fed notes in circulation-These were subtle changes that the public was either not aware of, or did not perceive any significance in.

Why "price" controls do not work ..........205

 They did not, on the surface, alter the generally accepted procedures. Certificates were still bid in competition deciding exchanges of goods and services and were redeemable in precious metal coin. Producers still thought they were exchanging "their production" (precious metal coin deposited) in whatever amounts they wished, to obtain, the wealth (production of others) they desired.

When the "precious metal backing" (redemption for specie) was removed from the Fed notes it meant that all the producer's precious metal, he had deposited, had been confiscated by the monetary authority. Confiscated without compensation. Confiscated In violation of the Bill of Rights of the Constitution of the United States on at least two vital counts: 1. That no private property shall be confiscated without due compensation. 2. No state . . shall make anything but gold and silver coin a tender in the payment of debt. The wealth of the nation that had been held by the producers and used by them as a medium of exchange, represented by bearer certificates as claim checks, was gone. The producer's wealth that had been deposited as savings and accumulated capital had been confiscated by the monetary authority.

The confiscation of the wealth left nonredeemable Fed notes in existence and circulation that were not bearer certificates or claim checks on anything held in reserve (stored) for their redemption. But habit is hard to break and since the precious metal coins were replaced with cupro-nickel tokenage, and since the Fed notes could be exchanged at the bank for these tokens, nothing seemed much different than before. The producers went right on bidding the nonredeemable Fed notes as if they were redeemable and did not take into account, or were completely unaware of the imaginary nature of the "claim checks" they were bidding. The Fed notes were not claims on any production, already produced and stored, but were being used to ''be exchanged for" (purchase) the production of others.

"Producers were unknowingly induced to accept the promise that their wealth is both the production to be purchased and the "backing" for the Fed notes at the same time. Whether in ignorance or with total awareness; this is the only conclusion that can be drawn since the Fed notes are still in use!"

The only value that could be associated with these Fed notes now was the amount of wealth they could be exchanged for, because there wasn't any wealth stored and obtainable by their surrender to the banks or the Treasury. Therefore a Fed note being bid now for the production of others was not acting by proxy for wealth produced-except in the imagination of the bidder. The public was still giving up their production to get the Fed notes (unaware of the fraud) and so they expected others (unaware of the fraud) to accept them and that is exactly what was happening. Since the Fed note could only be obtained from its source, the Fed banking system by pledging wealth and promising to pay it back, the producers were fooled into believing it was worth the wealth they were pledging to get it. The notes exchanging in the economy were perpetrating, a hoax and continuing an expropriation of the producer's wealth. The new Fed notes being created and entering the economy, each in turn confiscate wealth as they become part of the circulation. Each new one created -is not-obtained by the Fed issuing it at any cost of wealth. The issuer gets it at no cost and will not give up any wealth to get it back (redeem it). However, the issuer insists upon a pledge of wealth as collateral before lending the Fed note and the "Interest" it "earns" is used to purchase the wealth of the producers.

This continuous drain on the production of the United States has caused the economy to decline. The ease with which anyone acquires the Fed notes governs the amount they will bid in competition to obtain wealth. That some bidders get them for "nothing" increases the amount they will bid for goods and the "value" of the Fed note, in terms of the wealth it can be exchanged for, must fall. The Fed note's parity falls. Since the unredeemable Fed note's "value" is only what it can be exchanged for; as it takes more of them to accomplish a given exchange with a given unit of wealth, it is evident their "value" is dropping. Since the amount of these notes required to obtain an exchange with a given unit of wealth is called "price," many people are fooled into accepting the statement: "prices are rising" instead of the true statement "the exchange value of the fed note is falling."

"Money" The Greatest Hoax On Earth ..........206

Since it is the continually increasing amount of Fed notes, continually confiscating wealth and lowering the wealth left in the economy, for the producers to exchange, and the 11 public" individuals are holders of increased amounts of these Fed notes it is evident that, as a result, larger bids will be made for smaller units of wealth and therefore "prices will rise" (Fed notes exchange value falling). Controls are tried to stop this condition by fixing prices" (the Fed note's exchange value). The effort is to try to legislate the. "value" of the Fed note and "fix it" similar to when it was redeemable-without the necessity of redeemability. The "control" is directed at the producer making the bid, trying to induce the bidder to bid the Fed notes at a "value" higher than the bidder placed on the wealth he gave up to get them; to bid them at an unreal value decided upon by authority. The public is being coerced to bid Fed notes at a higher value than they know they are worth in exchange.

When Fed notes were redeem-able certificates they were acting by proxy for the producer's wealth and he was free to decide how much of his wealth he would surrender in return for the wealth he desired in exchange. No "controls" would have been tolerated. Now he is asked to accept unredeemable notes for his wealth, in amounts far less than he has to bid to obtain the wealth of others, in free competition.

"Price" "controls" do not work because they attempt to induce producers to exchange their production, at less than the value they themselves place upon their production, and less than they would bid for that same production from others."

It would not be difficult to understand if it is remembered that the "controls" are "price" "controls" and that "price" is the word applied to the "value" of Fed notes in relation to wealth (the value of the wealth expressed in terms of Fed notes-the Fed note's parity') and trying to fix "prices" is trying to fix the relationship between "Fed notes" and the wealth being produced, by the producers, instead of the "Fed note" being a redeemable certificate and having a value in wealth set aside (stored in reserve) for its redemption.

"Price" "controls" do not work because they attempt to induce producers to accept the premise that their wealth is both the production to be purchased and the "backing" for the "Fed note" at the same time and at an unreal parity with itself!"

"Price" "controls" fail because they impose "Prices" that oppose parities set by competitive exchanges."

"Controlled" "prices" oppose competitive parities."

Chapter LXIV

"NOW BANKING"

The monetary authority through it's influence on government wishes to change the nations financial system, remove "interest" rate ceilings and authorize the "now" (Negotiable Order of Withdrawal) accounts. The significant observation to be made is that the banks could become competitive to a much greater degree than in the past. The fact of no ceiling could cause some really wild inducements to create new depositors and to cause existing depositors to 'switch' banks. The vacillation of the depositors could be regulated by the "now" provision. Once you chose a bank and became it's depositor you would have to negotiate with the banker before you could get you deposit back out again, to take to another bank with higher "Interest" or to spend.

The purpose stated for the change is to improve the financial conditions and cut down the "inflation". The idea is that be increasing "interest" rates more people would want to keep their "money" in the bank to earn the "interest" profit rather than take the "money" out to spend it and "hoard" items of food and energy.

"Now banking" ..........207

 HOARDING IS THE RESULT OF SHORTAGES DEVELOPING NOT THE CAUSE!

People are beginning to realize shortages are developing and will increase in the near future. However, taking "money" out of the active 'bidding for goods causes unemployment-always has and always will. It does not matter whether the "money" is removed from the consumer by higher taxes, investment In bonds, the stock market or by depositing it in a bank. By whatever means "money" funded it takes it out of active bidding for goods and services. A decrease in the bidding for goods, decrease need for additional production which decreases the number of people employed.

The thing that is happening is that more people are beginning to see the "dollar" decreasing in exchange value before their eyes. In their effort to get something tangible for them before they are completely worthless they are bidding higher amounts of "dollars" for goods (by accepting higher "dollar" volumes of cost per item). The increased bidding of the "dollars" (created and existing in volume hundreds of times greater than the daily production of goods) is causing the "dollar" parity with goods to fall faster (referred to in error as "rising prices"). The attempt is being made to entice people to leave their money in the bank to get the higher interest rates and so slow the dollars fall by lowering the number of dollars bid for goods in the market place.

Chapter LXV

WILL CENTRAL BANKS SELL GOLD TO GET PAPER?

Information received from outside the sphere of influence of our economic mis-managers has lead to some interesting thoughts concerning the "threat" by the central bankers to dump gold on the "free market." The "threat" is designed to confuse, confound and destroy the "speculators" by insisting they are going to be wiped out by a drop in the "dollar" price of gold. I have maintained for years to date, that it would be nonsense for anyone to sell gold for Certificates redeemable in gold. When gold jewelry is sold for certificates redeemable in gold, it is the workmanship in fabrication that is sold. The gold in the jewelry is replaced by a part of the gold redeemed the balance is for the labor and overhead. To sell gold bullion for gold bullion would be a ridiculous exercise. When gold is sold for "dollars" it is because the "dollars" are needed to exchange for U.S. production. It is well known today that central banks, all over the world are bursting with "dollars," so selling gold for "dollars" just doesn't ring true.

One informative letter recently described a reason why it could be possible for the central banks to actually "dump" gold on the "free market". The writer suggests that since the central banks of the world are owned by people just as our own corporate central bank (the Fed). The people themselves may be planning a personal takeover of the officially held gold of their respective central banks. The plot is that they would cause their central banks to sell "official" gold on the "free market" then they would buy "it" and the other privately held gold that would be caught in the "price fall" and end up holding most of the gold of the world and would be able to "raise" it's price later to whatever they wished and then allow a return to redeemable currency. I do not deny that this may be tried, in fact it makes more sense than imaginary gold (S.D.R.s). But, in considering how easily it could ''back-fire" it does not seem too likely. The important and most significant thing for all to consider is that it does not matter which idea you accept as likely to happen, the course of action to follow does not change. Gold holders must continue to hold full owned gold and hang on tightly through any downward price excursions for in the end currency redemption cannot be resumed unless it is at a greatly increased "minidollar" price for gold.

 "Money" The Greatest Hoax On Earth ..........208

There is talk going on now concerning new monetary rules to solve the monetary chaos loose in the world. Reports coming form the meeting of finance ministers from twenty nations, mentions nearness to agreement on new principles. The new "reserve currency .1 is to be perhaps S.D.R.s or maybe "something" based on a value relative to a group of other Currencies like the "dollar," D-Mark, or Yen. If a nation became "surplus" it would be penalized for having developed a surplus in the balance of payments.

LET ME MAKE THAT PERFECTLY CLEAR.

The surplus nations would have to pay penalties to the nations with deficits In the balance of payments. It sounds like the nations doing the most business and making the most profit would have to share that profit. Suggesting of course that there was something unfair about their having a "surplus" in the balance of payments. But that is not really what they are saying, it is what you may be thinking they are saying.

In truth-if all nations were bartering, deficits in the balance of trade could not develop.

If all currencies were 100% redeemable deficits in the balance of payments could not develop. If a deficit in the balance of payments does develop it means some nation has used an unredeemable currency is an unpaid bill. It is an unpaid bill because if the currency had Been redeemable, the material it had been redeemable in would have been the other product exchanged. Any exchange invokes exchanges of goods and/or services and if It is an exchange where currency is used as a medium of exchange and that currency, if redeemable, is redeemable in a commodity. If a currency Is not redeemable it isn't any different in value-than a bad check. Therefore a deficit in the balance of payments means the deficit nation bought things and paid the bills with bad checks.

The nation holding the "bad checks" BY A TWIST OF LANGUAGE becomes a surplus" nation. For having accepted "bad checks" the "surplus" nation is to be penalized by having to return the "bad checks" without compensation.

The 110 billion "dollars" held by the surplus" nations at this time were accepted by being claims on gold. The U.S. cannot honor those claims due to a lack of enough gold to cover them. Asking those holders of "dollars" now to buy our other goods as substitutes for the gold we do not have is one thing; but, to ask them to return the "bad Checks" and forget the whole thing after we have consumed the goods we purchased is ridiculous. Yet that is what they are reporting is the agreement they are in the process of negotiating.

ANY NATION THAT CAN "INDUCE" ANOTHER NATION TO ACCEPT A "BAD CHECK" IN PAYMENT FOR PURCHASES, CAN "INDUCE" THAT NATION TO RETURN THE- BAD CHECKS" WITHOUT COMPENSATION AS A PENALTY FOR HAVING ACCEPTED IT!

With all nations operating on that basis, there would not be any great lapse in time before all international trade would be in a hopeless condition of stagnation; but we are accepting what we think they are saying, with what we think the words they are using mean?-No! it does reduce down to:

"Any nation that can induce any other nation to accept its bad checks in payment for purchases, can induce that nation to return the bad checks without compensation as a penalty for having accepted them."

If we take this statement and examine it carefully then something quite significant can be read into IT. IF ANY NATION AGREED TO IT-THEY WOULD MAKE SURE THAT THEY NEVER AGAIN WOULD ACCEPT A BAD CHECK, OR AN UNREDEEEMABLE CURRENCY. That agreement would almost guarantee that all nations signing it would thereafter always insist on redeemable currency in future exchanges.

It is almost as if the 'group of twenty' is agreeing to return to redeemable currency but does not want the people to "know" it just yet and so they employ a sort of "code wording" to obscure their real intention. Our officials have admitted in the past that they had to lie to us to avoid panic. Perhaps this is another instance in the embryonic stage.

Sheiks Break Dirham tie to "dollar" for tie to gold!-Why? ..........209

Chapter LXV1

SHIEKS BREAK DIRHAM TIE TO "DOLLAR" FOR TIE TO GOLD! - WHY?

What does it mean?

Before the currencies of the I.M.F. member nations were tied to the "dollar" and the dollar only tied to gold, which allowed the irresponsible actions of the U.S. Monetary authorities to cause fluctuations in the parities of their currency s in relation to gold. Fluctuations that were not comparable with the relation to gold they would have had were the relationships determined by cross reference with their currencies' relationships to commodities.

The I.M.F. is in reality not functional now and has not been for sometime, but like it or not the I.M.F. members and Switzerland have had to use the "dollar" as an unreliable point of reference despite floating to bring average exchange rates (which are crucial for the joint floating) into harmony with the present parities of the currencies into commodities. Now, the Sheiks have tied their currency to gold directly.

Since August 15, 1971 when the "dollar" was relieved of its tie to gold and tied instead to the S.D.R. (imaginary gold) The D-Mark also has, along with other currencies, been tied to the imaginary gold (S.D.R.s).

We now have a precise confrontation. The Sheik’s currency is tied to the metal gold and the ''dollar", D-Mark and other currencies of I.M.F. member nations are tied to imaginary gold. The Sheiks are not allowing their currency (dirham) to leave their country. They do not want to allow foreign 'backed by imagination' currency to exchange for their 'backed by gold' currency except under their supervision and control. In that way they can limit the imagination backed' currencies to exchange in quantities that can be used to purchase goods they need and can use and in effect limit those currencies to usage as mediums of exchange-but not as reserve assets. This does not conflict with the French finance minister's statement that the "dollar'' for instance would be a main currency but would not be the reserve currency. The Sheiks are in effect saying: "As a reserve asset we will use the metal gold. ''

In those nations whose currencies were redeemable in gold, the currencies had parity to gold at the "free market" price (London fixing etc.) and the people could get the gold coin. The currency was redeemable but not at a fixed quantity per currency unit. To make that a little more understandable let's take some examples.

If the ''dollar" equals I / 35th of an ounce of gold 'official rate' and the D-Mark = 254: then 140 DMarks = I ounce of gold. If the D-Mark were redeemable in gold at its 'find rate then 140 D-Marks would exchange at the teller's window for I ounce of gold.

But that has not been the case! In actuality it went as follows: If the gold price in dollars" on the "free market" is $100.00 and the D-Mark = 254: then 400 D-Marks would exchange at the teller's window for one ounce of gold. In Mexico the same way a fifty peso Mexican note would not exchange for a fifty peso gold coin. The present 'peso exchange rate' with the "dollar" divided into the "dollar" price of gold on the "free market" would determine the number of pesos equal to an ounce of gold at the teller's window. The difference between being 'exchangeable for gold' and being 'redeemable for gold' at a fixed quantity per unit of currency' is extremely significant.

If by fixing the Dirham as 0.186 grams of fine gold it became redeemable for gold at that rate then the "government" would be extremely restrictive concerning the exportation of their nation's currency. If the Arab Sheikdoms allowed their gold coin to freely cross the border than an 'Imaginary-gold backed' currency could be exchanged for Dirham and the Dirham be redeemed for gold. The gold would have been obtained by the 'Imaginary-gold backed' currency indirectly; but never-the-less. Actually the Arab Sheiks would have redeemed" (exchanged in reality) 'Imaginary-gold backed' currency with metal gold. To prevent this sort of thing the nations of the world usually resort to Draconian controls.

"Money" The Greatest Hoax On Earth ..........210

The Arab Sheiks by fixing their currency to gold at a fixed amount per Dirham and Initiating Draconian controls have set the stage for a reversal of the usual process. Instead of losing purchasing power every time "gold goes up' they will maintain their purchasing power. Draconian controls when initiated direct the nation to not accept any 'Imaginary gold backed currency to exchange for it's currency unless its currency is to be spent within it's own borders. That way the nation is assured that all foreign currency coming in is of a 11 commercial" nature, and the currencies so received will be used by the Arab Sheiks to immediately import gold even though the currencies are 'unbacked' by metal gold.

The process by which the Arabs will be assured of being able to import gold in exchange for the 'Imaginary-gold backed' currencies is by reversing the original process. Before the Dirham was figured at it's parity to the "dollar" (254:). The Dirham's "dollar" parity divided into the "dollar" price of gold on the "free market" is what determined the number of Dirham to equal the value of one ounce of gold (the Dirham's 'gold parity'). Example: Gold = $100.00 per ounce, Dirham = 25 C, therefore $100.00 divided 254:

400 Dirham = I ounce of gold.

Now the process will be I Dirham = 0.186 grams of fine gold, I ounce divided by 0. 186 grams = 167.22 Durham’s = I ounce of gold, $ 100.00 = I ounce gold therefore $100.00 divided by 167.22 Dirham = I Dirham = $0.598.

The Sheiks by fixing the value of the Dirham directly to gold (I Dirham = 0.186 grams fine gold) it's 'dollar parity' of 25r, X 167.22 (Durham’s per ounce of gold) balances when the "dollar" price of gold is $41.80 per ounce. -The correct "official figure" It would be if the "dollar" had been devalued 10% in terms of metal gold from the $38.00 per ounce, as had been announced. Because the "dollar" was in reality devalued in relation to imaginary gold at 10% its relation to metal gold was a devaluation of 11.1% which ended up $42.22. The excursions of the "dollar" away from that fictitious "price" will automatically correct the parity of the Dirham in ''dollars" to maintain the Dirham's direct relationship to gold examples:

If gold is $ 41.80 per ounce one Dirham = $0.25

If gold is $100.00 per ounce one Dirham = $0.598

If gold is $150.00 per ounce one Dirham = $0.897 if gold is $200.00 per ounce one Dirham = $1.196

If the "dollar" "price" of gold "rises" between the time a contract with payment specified in "dollars" is written and the payment received by the Sheiks they suffer the loss because they get the number of Dirham arrived at by dividing the Dirham "dollar" parity into the number of "dollars" specified in the contract and lose the gold value they would have originally had.

Now if they should ask to have. all contracts written specifying payment in Dirham and then a rise in the "dollar" "price" of gold should occur between the time the contract is written and the payment received by the Sheiks-the sheiks would receive a greater number of "dollars" to make-up the difference. The Arabs get the number of "dollars" arrived at by multiplying- (the total ounces of gold, determined by multiplying the contract number of Dirhams by 0.186 grams) by the "dollar'' "price" of gold. Example:

Contract for 10,000 gallons of Arab oil for 16,722 Dirhams X 0.186 grams = 100 ounces of gold, gold at $41-80 an ounce X 100 ounces = $4,180.00.

Same contract gold price "up" to $100-00 ounce. Contract for 10,000 gallons Arab oil for 16,722 Dirhams X 0. 186 grams = 100 ounces gold, gold at $ 100,00 an ounce X 100 ounces = $10,000.W

This situation would force the other nations of the world, wanting to do business with the Sheiks, to "raise" the "official price" of gold to Justify the number of units of their currency they have to exchange for Dirhams. The nations of the world would have to acknowledge that the gold parity of their currencies had been quoted at a very unrealistically high parity for too long in time. The official rate would have to be brought more in line with the dictates of reality.

Sheiks Break Dirham tie to "dollar" for tie to gold!-Why? ..........211

"Raising" the price of gold in ''dollars" to justify the number we would have to give per Dirham contract to pay for a shipment of oil would certainly solve that problem, but would cause other problems. The average exchange rates mentioned earlier which were crucial to maintain harmony with the present parities of the currencies into commodities would still the crucial and have to be reconciled somehow. To "raise'' the price of gold and maintain the present parity between currencies involves a sequential exercise called deflation.

"Raising" the price of gold to $150.00 per ounce would make the Dirham go from a "dollar" value of 25 C to 89.7c and American goods would suddenly become very inexpensive to Arabs holding Dirham. To again bring the "dollar" value of a Dirham back to 25c it would be necessary to reduce the number of "dollars" until the value of the remaining ones was increased to where $41.80 would again buy one ounce of gold on the "free market". To do this would require the repudiation of "dollars" by some ratio of exchange and replace the ones collected by some new ones-less in volume-but greater in value in the vernacular of the system 'heavy dollars'.

Taking into consideration only the Arab currency Dirham and the figures developed here it would indicate an exchange rate of 3.58 to 1. This would mean that the U.S. would have to recall "dollars" in amount 3.58 and give back one new one. A loss to all "dollar'' holders of 72% of all their "dollar" savings. This was all based on the Arab Dirham having a realistic gold value of 0.186 grams of fine gold per unit of currency outstanding. The Sheiks may have been high or low with their evaluation of their currency and the figures might require a considerable adjustment to correct the Sheik’s judgment to the point where it will be confirmed in the "free market."

This text was written to help people understand why the final stages of "Inflations." it must be remembered that there are over 120 nations in the I.M.F. and that this type of exercise must be reconciled to where it is acceptable and compatible with all those nations. The exercise as outlined above is enough to 'sober' anyone still it must also be mentioned that there have been other deflationary exchanges before and that ours' may involve a considerably greater loss than indicated (3.58 to 1).

In Germany 1948 10 old for 1 new was a 9096 loss.

In France 1960 100 old for 1 new was a 9996 loss.

In Brazil 1967 1000 old for I new was a 99.9% loss.

There is no way to Know ahead of time which way the monetary authorities will guide our sinking "dollar." There is no information as to exactly how the Dirham will actually be used to force changes in exchange rates of other currencies. There is no way to know how far the monetary authorities will get trying to make a two-tier "currency" function. It would seem that the intention will be to have the people use the 'imaginary-gold backed' currency as mediums of exchange to facilitate the international exchanges, but the finally developed deficits in the balance of payment s would be settled by shipping metal gold between central banks as the reserve asset. The only difference between that and what we have now would be an increased "official price" for gold to facilitate central bank metal gold settlements which up to now have been impractical because of the unrealistic official price of gold.

In the end all nations will have to go to a direct gold relationship with their currencies to maintain the average exchange rates of their 'respective units because of the necessity to continue trading with each other or suffer very deep depression. When those nations who can go to direct gold parities as have the sheikdoms it will force the nations who cannot to accept their bankruptcies and deflate realistically.

"Money" The Greatest Hoax On Earth - ..........212

Chapter LXV11

THE S.D.R.: NONSENSE!

Paris 7-24-69: "Well we got this thing launched. Paul Adolph Volcker, U.S Undersecretary of the Treasury. W.Sj. 7-25-69:

"The S.D.R. value is defined in gold, but is not payable in gold ... S.D.R. payment will resemble settlements by transfer of gold.... S.D.R.s will really resemble "paper gold" . . . but that is only an illusion ... in reality ... gold is mined from the Earth ... S.D.R.s will be created effortlessly by discretion of the I.M.F.... thus gold is earned whereas S.D.R.s are allocated . . . unless a nation attains the blessed state of having a deficit, it cannot use it's drawing rights .... when a country receives drawing rights ... it receives a wholly artificial asset . . . governments will "play at special drawing rights" during a few months or years like it played with general borrowing agreements, swaps, Roosa bonds, and increasing quotas of the I.M.F."

Jacques Rueff Author, member academy, advisor to former president De Gaulle,

W.Sj. FRIDAY 6-6-69

"Paper gold is a nickname for Special Drawing Rights.''

Richard Dudman-Chief Washington correspondent of Post Dispatch-St. Louis

8-8-69

"It was no mean trick to get most of the world's nations to agree to create a new reserve asset literally out of thin air. . . . Paper gold is essentially a bookkeeping device, not a circulating medium." ......Editor W.S.J. 10-7-69

"Tricky little bookkeeping arrangement" ........Editor W.S.J. 11-18-69

"The case for S.D.R.s originally led by former Treasury secretary Henry H. Fowler, is that the world needs a reserve asset that can be deliberately created and rationally managed. Gold mining is too chancy a source of reserves, Mr. Fowler reasoned ....S.D.R.s will be bookkeeping entries credited to each member as a percentage of its quota or contribution to the I.M.F. which in turn is scaled to the size of it's economy. When a country in payments deficit wants to use S.D.R.s it would alert the I.M.F. headquarters here, which would require a country in payments surplus to accept them. In return, the surplus country would provide regular currencies-either its own or another nation's-which the deficit country can spend . . . a key U.S. planner says, "What we have to watch for is the psychological reaction of governments. Some may distrust S.D.R.s and dump them as quickly as possible to obtain dollars or gold.'' .......Richard F. Janssen Staff reporter W.Sj. 9-29-69

JUST THINK!

Special Drawing Rights (S.D.R.) Defined in gold-but not payable in gold. Nickname: "paper gold".
Payment of debt with S.D.R.s will resemble settlement by transfer of gold but is an ILLUSION.

Metal gold (tangible gold) is mined from the earth.

The S.D.R.: nonsense! ..........213

Paper gold (imaginary gold) is created effortlessly out of thin air.

Metal gold is earned.

"Paper gold" is allocated by discretion of the I.M.F. by writing numbers on paper in the accounts of members. (tricky little bookkeeping arrangement).

Metal gold (tangible gold) is negotiable anywhere, anytime, by anyone, (except in the U.S, and USSR where severe political 'investment and or speculation prohibitions for individuals exists).

"Paper gold" (imaginary gold) is only ''usable" by a nation in the "blessed state of having a deficit" and is a wholly artificial asset.

''Governments will 'play at special drawing rights' during a few, months or years. Jacques Rueff

S.D.R, born: 7-24-69-Died: ???? It is wounded-a mighty -projectile" launched by the Arab Sheikdoms has struck the blow, it may not be too long after all.

"Dollars" and S.D.R.s Unbelievable but true:

When the United States Congress chartered a private corporation to be the monetary authority of the United States, whether in ignorance or not, it created a force that has devoured the wealth of the people of the U.S., then went abroad to consume the-wealth of the peoples of the world. It was accomplished by the creation of the 'imaginary demand' ''dollar." U.S. "currency" that was accepted in exchange for the wealth of nations but was itself an evolution from a respected bearer certificate, redeemable in gold, that had earned the respect and admiration of the world, and had become the reserve currency of the world. By using "dollars" with complete abandon over many years we acquired the wealth of many nations, for which we cannot "During the decade of the 1960's American dollars overseas increased by a ratio of six to one over our gold reserve. It was pure fiction that the dollar was convertible into gold . .John Connally former secretary of the U.S. Treasury-London Mining journal Aug. 73,

"When it became known that we did not have enough gold to redeem our "dollars'' at 1/35th of an ounce each, and that the people, and the central banks of the world were stuck with the 'bad checks' (unredeemable "dollars") our officials suggested that since we do not have enough tangible gold-if everyone would agree that some 'asset' must change hands to settle debts, why not use 'Imaginary gold' that way, we could make-believe we had all we needed, whenever we needed it and all we had to do was 'manage' it well. The word used by Henry H. Fowler was 'rationally' (see above), but how as irrational a "thing" as . imaginary gold' can be managed 'rationally' escapes me! Anyway as Mr. Paul Adolph Volcker said they got the ''thing" launched, but they did not, and do not understand the natural laws of economics. They did not stop to consider that they were playing a game of make believe and that, as Jacques Rueff pointed out, it can only last a few months or years and then reality will have to be faced.

''The great free nations of the world must take control of our monetary problems if these problems are not to take control of us" .... John F. Kennedy June 1963

"We have awakened forces that nobody is at all familiar with." .. . . .John Connally W.S.J.. 8-14-71

"Money" The Greatest Hoax On Earth ..........214

In a previous chapter I explained that a surplus nation was one holding unredeemable currency". It isn't bad enough that a nation holding 'bad checks' is called "surplus" the its of the S.D.R. "game" permit the I.M.F. to direct that the "surplus" nation accept the S.D.R.s, when instructed to, and in return the "surplus" nation must give up it's or some other nation's 'regular currency' (bad check dollars?) from it's reserves to a deficit nation to spend. This way the surplus" nation can get to exchange the "bad checks" ("dollars") for S.D.R.s, but then she cannot spend the S.D.R.s until she herself becomes in deficit. It might be said that the I.M.F. can direct a nation, with "dollars" that she might spend at any time, to give those "dollars" to another nation and take the S.D.R.s in exchange that she cannot spend except under certain conditions, It is like a "Federal Reserve of the world" with each "surplus" nation forced to accept a 'reserve requirement'.

All this may seem complicated, but it really is not, it is just too unbelievable when it's simple nature is understood. Simply stated it is agreed that any nation that cannot pay its bills (is in deficit) and wishes to use imaginary gold (S.D.R.s) may petition the I.M.F. to select a country that must take them. The I.M.F. decides and the nation that cannot pay its bills (is in deficit) gives S.D.R.s to the nation selected by the I.M.F. and gets currency it can spend. The nation that gave up the spendable currency gets to hold the S.D.R.s (imaginary gold) until it becomes broke and then it will be their turn to petition the I.M.F. to designate a country to accept their S.D.R-s in exchange for some currency that they can use to pay their bills because being broke they are in deficit, that is the way the 'game' is played! Example:

Denmark is broke cannot pay its bills in tangible gold. Denmark petitions I.M.F. to let it use imaginary gold (S.D.R.s). I.M.F. designates Germany to accept S.D.R.s from Denmark. I.M.F. debits Denmark's account with usable currency from Germany's account. I.M.F. debits Germany's account with S.D.R.s from Denmark's account. Denmark now has currency it can spend. Germany now has S.D.R.s to hold until she goes broke.

It is Just a game and it is easy, once you understand the rules, but it is the consequences

that nobody is at all familiar with. The end result can only be seen when natural law is understood. If all nations agree that the one who goes broke the most will not have to pay in

the tangible gold. (That is what all this boils down to.) Then all of them will create their

currencies and spend all they can to go as deep in debt as possible, to try to be the one who is most in debt and will not have to pay' However, each time some "surplus" nation has to absorb more S.D.R.s that it cannot spend, until It goes broke, the games life span is shortened, and eventually everybody wants everything for nothing and that cannot be! A fundamental law of nature: Take away all that a man earns and he ceases to labor.

"Tangible progress towards a new and more realistic monetary system remains an essential. . . .

Mr. Anthony Barber Chancellor of the exchequer U.K. Financial times 7-30-73

Under one possible solution being canvassed to the problem, the U.S. would agree to make the dollar convertible again into primary assets within certain fixed limits. This would enable creditor countries to convert dollars they acquired until their reserves reached a prescribed level after which the dollar would become unconvertible again.''

Paul Lewis U.S. editor Financial Times 7-30-73

"Not only is the gold-foreign exchange standard established at Bretton Woods defunct, but also the dollar exchange standard created in Washington at the end of 1971 has meanwhile been buried. Instead of a currency system, the world now has' a currency confusion ... unfortunately, important voices are being raised in support of solving both problems by a single device, namely the special drawing rights, with the objective of making not only newly-accruing but also existing dollar holdings convertible into this artificial reserve medium. In practice, however, this method would only result in a substitution of the existing world surplus of dollars by a world surplus of S-D.R.s . .

The S.D.R.: nonsense! ..........215

After a relatively short period, we would encounter the same pressingproblems in respect to the special drawing rights as have befallen the dollar. We would then start all over again, although in that event it would hardly be possible to achieve a reform without a substantial increase in the price of gold . . .

Europe is ever more conscious of one fact; its fate and that of the entire free world are intimately lined to the United States. . . . The economic disintegration which has begun to manifest itself internationally, will reach a crescendo, with all the political consequences this would have for the U.S.A_ and the world as a whole."

Mr. R. H. Lutz member general management credit Suisse-Bank Bulletin summer 1973

One of the U.S. greatest gold manipulators before Paul Adolph Volcker, was Robert V. Roosa former assistant secretary of the treasury was quoted this past July:

"Having participated in the early phases of the United States fall from grace and having anguished over each new step with diligent concern for the need to return promptly to the condition of freedom for flows of goods and capital, I am beginning now to wonder whether I fully grasped the significance of what we were doing, at the time, and of the causes for the action we were Initiating." . . . . . .Robert V. Roosa July 73

... The monetary and trading system that provided the basis for the post war era has collapsed. There is no point in kidding ourselves about it, that it is Just shaky, that we will reconstruct it. . . . . . .John Connally London Mining journal Aug. 1973

You cannot make sense out of nonsense and all the talk reported by the news media concerning ‘primary assets' which are not defined, 'convertibility' (turning paper into gold which is beyond the wildest alchemist's dream) that is with certain fixed limits, and 'adjustable' 'fixed' exchange rates is too ridiculous to accept. The monetary authorities of the world do not know what to do and do not understand what they are doing, they are only or time before we have to return to reality, or they have been at it so long they have fooled themselves into believing in imaginary gold, (S.D.R.'s) and being that fooled, they are unaware that they are fooled, otherwise they would not be fooled.

The Arab sheiks are no fools they have tied the oil to gold through redeemable for gold currency and we shall have to do the same, if not now, then later!

Metal gold is tangible gold the kind they make Jewelry with. How would you like to go about showing everyone your imaginary gold charm bracelet They would 'charm' you right into a rubber room.

Chapter LXV111

A NEW "PRICE" FOR GOLD?

''In order for the new price to hold-it ought to be higher than the highest price on the free market. If the authorities plan to set gold, for instance at $140, they dare not let gold reach $140 on the free market. It would be to the interest of all central banks to keep the free market price of gold at a considerably lower level than the planned new price. No one knows what new official world gold price is planned$70-$100-$150-$200." . . . . . . C-V. MYERS Letter August 15, 1973

''In order to bring this about the central banks will need to exert influence in the market place to bring about a realistic figure where Arab countries-for example-would not be tempted to say: gold at this price Is a bargain, let's turn in our paper currencies. No, the price will have to be realistic." . . . . . . . C.V. MYERS Letter August 30, 1973.

"Money" The Greatest Hoax On Earth ..........216

To understand all the above and be able to reason along with Mr. Myers you would have to understand some fundamentals not included in Mr. Myers letter, or, for that matter, anywhere else today.

Parity: Value of any material thing expressed In terms of any other thing. . . . . M.M.E.J./M.R.

"Price": As used in above quotes is a word to refer to the parity of commodities in terms

of currency example: One ounce of gold = $35.00, one ounce of gold = '105 D-Marks, or one ounce of gold = 167.22 Dirham.

If we were to refer to the parity of "dollars ., in terms of gold it would be: $1.00 1/35th of an ounce of gold.

The parity of currencies In relation to each other are called 'exchange rates' examples: $1.00 = 3 D-Marks or $0.333 1 D-Mark, $1.00 = 4.00 Dirham or $0.25 = 1.00 Dirham.

Currencies are used primarily as mediums of exchange, in the market place, for purchasing commodities all over the world. All currencies have parities into all commodities and these parities are called "prices." To refer to "prices" of commodities at a time when commodities are stable in relation to each other, but the currencies 'parities' are failing, would hide the fact that the currencies 'parities' were falling.

A. $ .05 = I Apple = I Orange = I Peach

B. $ .10 = I Apple = I Orange = I Peach

C. $ .20 = I Apple = I Orange = I Peach

If we referred to the "price" of apples, oranges, and peaches in "dollars" during conditions A.B.C. we would have to conclude that the "price" of Apples, Oranges and Peaches is rising.

If we referred to the parity of Apples in terms of Oranges or Peaches we would conclude that the Apple's parity had remained stable, during conditions A.B.C.

If we referred to the parity of the "dollar" in terms of Apples, Oranges and Peaches during conditions A. B. C. we would conclude that the "dollar's" parity was failing. Example: Figure 1.

A. (Fruit is $.05 ea.) $1 .00 = 20 Apples or 20 Oranges or 20 Peaches

B. (Fruit is $.10 ea.) $1.00 = 10 Apples or 10 Oranges or 10 Peaches

C. (Fruit is $.20 ea.) $1.00 = 5 Apples or 5 Oranges or 5 Peaches

or Figure 2

A. $ .05 = 1 Apple or I Orange or 1 peach

B. $ .05 = 1/2 Apple or Orange or Peach

C. $ .0 5 = 1 Apple or Orange or Peach

"Price" is not rising ''Dollar" parity is Falling.

Whenever we refer to the "price" of anything we automatically, without realizing it, accept the -concept that the currency is stable. If the currency is falling-" Price'' reference--obscures the fact, .(example figure 1 above) if we refer to the parity of the currency in relation to several commodities it will reveal the true condition.

'Realistic' currency 'exchange rates' develop from freely competitive exchanges of currencies for commodities. 'Unrealistic' currency exchange rates are assigned by the central banks and are 'made' workable by cooperative international use of subsidies and tariffs. When we hear talk about 'raising the price' of gold, it is a misnomer because what they would do is adjust the "fixed" parity of the currencies in terms of gold. This entails trying to assign a parity that will be both ''realistic" (which would be variable with freely competitive exchanges) and unrealistic (fixed) at the same time.

A new "price" for gold ..........217

Declaring a fixed parity for a currency. (an intangible) in terms of a commodity (gold) is done so that the currency in use as a medium of exchange will "have'' the parity of the commodity in the market place during exchanges. The use of the currency is as a proxy representation of the gold redeemable in. Gold a commodity first, last, and always and It has realistic parities with all other commodities just as in our example of Apples, oranges and Peaches. Gold is historically one of the most stable commodities on Earth, (the extreme fluctuations of the gold "price" we have been experiencing was the non-redeemable "dollar's" parity FALLING. To explain the problem facing the monetary authorities In trying to set a new price for gold we will need a new example:

Figure 3

$ 40 oz gold - $.20 .005 oz gold = I Apple or I Orange or I Peach

s 8o oz gold - $.40 .005 oz gold = I Apple or I Orange or 1 Peach

$160 oz gold - $.80 .005 oz gold = I Apple or 1 Orange or I Peach

If the "price" of gold was fixed at $40.00 an ounce and the dollar was redeemable in gold and apples were $ .20 each, anyone would be satisfied to hold the paper dollars because they could buy just as many apples with the paper dollars as you could with the gold they (the paper dollars) are redeemable for. Let the new "price" of gold be fixed at $40.00 an ounce and the apples were $ .40 each, then anyone holding paper dollars would want to turn it in for the gold because gold would buy more apples, oranges or peaches than paper dollars would. Example:

Figure 4

s4o oz gold-I paper dollar (with apples at 401C ea.) would buy 2.5 Apples $1 = 1/40 oz gold (.025 oz)-(1 apples = .005 oz) would buy 5 Apples.

It is not difficult to understand why, under the conditions of Figure 4 why everyone would turn in paper dollars to get the gold before going shopping.

If at any time it developed that more could be bought with paper dollars, than with the gold it is redeemable for, then everyone would turn in gold to get paper dollars. This is as close as we can come to explaining what Mr. C. V. Myers means when he says they must exceed the free market "price'' to have the new fixing last any real length of time. Let the price" of gold be fixed at $160.00 and the Apples be $ .40 each then everyone holding gold would want to turn in. gold for the paper. Example:

Figure 5

$160 oz gold-$I paper (with Apples 40C ea.) would buy 2.5 apples. SI = 1/160 oz gold (.00625 oz)-(l apple = .005 oz) would buy 1.25 apples.

These examples are over-simplified to make them more readily understandable. It must be remembered that when people hold the paper dollars, they only hold promises of redemption for gold. As long as the pieces of paper have a legal tender exchange value, ,greater than the value of the metal gold they are redeemable for; people will be satisfied to hold them and use them in exchanges. The commodity gold is called a 'monetary metal' when it is used to "back" a currency. When the 'monetary Metal' 'as a commodity' on the market reaches a 'legal tender value' In excess of the amount of 'legal tender' it takes to get it by redemption, holders of paper would turn it in for gold by specie redemption and melt the coins to sell the gold as a commodity. Example: Gold coins with gold content of one ounce redeemed for forty paper dollars-but paper dollars so depreciated that it takes 100 of them to buy one ounce of gold as a commodity, people would turn in forty paper dollars to get an ounce of gold in coin form, melt it and sell the bullion for 100 paper dollars and go shopping.

If these examples are studied carefully and objectively they will make it clear why the dollar’s redeemability was removed in the first place. The unrealistic fixed paper dollar parity in terms of gold was being made so obviously ridiculous in the market place that eventually everyone would have wanted to turn in their paper dollars for gold and let the issuers have their paper back. So the use of gold as a medium of exchange was prohibited in the U.S. to facilitate the withdrawal of the gold coin or bullion redemption of paper dollars.

"Money" The Greatest Hoax On Earth ..........218

At the present time, throughout the world, at least 125 currencies have exchange rates that are not in any way compatible with the so called official "price" of gold or the, realistic' exchange rates they would have if the 'floating' was 'clean'. The 'unrealistic' exchange rates (parities) are made (usable) by the various support and tariff gimmicks being used to conduct a 'dirty float'! The system is in a shambles!

"Instead of a currency system the world now has a currency confusion.... Europe is ever more conscious of one fact: its fate and that of the entire world are intimately linked to the United States . . . the economic disintegration which has begun to manifest itself internationally, will reach a crescendo with all the political consequences this would have for the U.S.A. and the world as a whole. Mr. R. H. Lutz Credit Suisse

It has been made clear earlier that "Money" is an intangible. That paper "dollars" are tokens to represent the intangible. Imaginary "dollars" created as numbers on paper at the Federal Reserve Banks. For purposes of not causing confusion let us only refer to the paper dollar tokens and not to the great volume of imaginary "dollars" shifted about by check, for this explanation.

At the present time paper dollar tokens, to have exchange value in the marketplace, depend on people accepting them in exchange for goods-having confidence-that they will be able to exchange the tokens later for the production of others. In accepting the paper dollar tokens the people are also accepting the premise THAT THEIR PURCHASE IS BOTH THE PRODUCTION BEING PURCHASED AND THE 'BACKING' FOR THE PAPER DOLLAR TOKEN AT THE SAME TIME; whether in ignorance with total awareness or not. It is the only conclusion that can be drawn, since the paper dollar tokens are totally non-redeemable by the issuer.

It is this totally unrealistic condition that is going to cause the collapse that we expect, and after that collapse takes place, the only way paper dollars will ever have exchange value again in the marketplace is if it enters as a bearer certificate acting by proxy for the commodity it is redeemable it. It is the paper currency token's parities to commodities that are falling, all over the world. We have 'hyper falling currency parities' taking place.

In reality what must happen is that the currencies must be deflated in one way or another, by deflationary exchange or voluntary funding by the holders. When the volume has been reduced enough the parities of those units remaining will rise in relation to commodities. It is the commodities that have the power to satisfy human desires (worth) paper tokens only have exchange value when someone will give up wealth to get them. Silver and gold both are first, last and always commodities and as such, in reality, will always exceed paper tokens in real value.

Chapter LXIX

WHAT WILL THE NEW "PRICE" OF GOLD BE

The value of anything depends upon its' ability to satisfy the desires of humans. Since the value of anything to different people will vary because people's desires vary; the only comparative value means of expression we have is what we call ''prices.'' "Price" however, is a word that only has meaning if there is a commonly accepted commodity unit of exchange. We use the word "price" to express a parity of the commodity we are ., pricing'' in relation to the commonly accepted commodity unit of exchange, "Price" is a common term used to refer to the parity of any commodity in relation to the commonly accepted commodity unit of exchange (gold) that we called -"money".- Therefore everyone today uses ''prices" in units of "money" to excess value and have completely lost all touch with the actual reality of what determines the due of anything.

What will the new "price" of gold be? ..........219

This use of 'slang' words that have no direct meaning of their own, to replace the words that convey direct understanding has left the people subject to have the whole original meanings of the slang words completely changed without notice.

When the commonly accepted commodity was gold, all things were comparatively valued by various humans as to the amounts of gold the items would bring in exchange. A loaf of bread in 1933 would bring in exchange 1. 1611 grains of gold .999 fine. 'Grains', 'grams', and 'ounces' are all units of measure and when a commodity exchange takes place it is necessary to have some reference as to what quantity of 'this' exchanges for what quantity of 'that.' Therefore actually just saying one loaf of bread could be exchanged for 1. 1611 grains of gold .999 fine was not accurate enough, one had to know how much bread. Saying 'one loaf' was not descriptive enough. Bread always has a 'weight' marked on its' wrappings. One loaf weighing one pound was exchanged for 1. 1611 grains of gold .999 fine. All commodities must have a unit of measure to express quantity to facilitate accuracy of understanding and honesty in exchanges.

Ounces of gold was the commonly accepted unit of measure used to express comparative parity between commodities instead of a direct parity. Instead of saying one apple equals one orange it was understood that if one apple would exchange for .0024185 ounces of gold .999 fine and one orange would exchange for .0024185 ounces of gold .999 fine, it was very clear they were equal to each other. It was a great system for simplifying the expression of parity. If two different things were equal to the same amount of gold they were equal to each other. However, if you wanted to exchange gold for one apple you would need a very fine scale.

The answer was to have coinage that was premeasured and authenticated by government and these coins could be used in exchange easily. Coins were fabricated of gold and marked with the content and purity of the metal. Tokens were used for purposes of making change and were redeemable at any time for the gold coins. The system worked well until the word substitution came into play again and the word 'dollar' was adopted to represent a coin containing a specific amount of precious metal of specific purity. The word 'dollar' took its' place among the substitutions as a unit of measure for "money." We now had "prices" expressed as "dollars- of "money" instead of ounces of gold or other precious metal. Instead of a one pound loaf of bread exchanging for 1. 1611 grains of gold .999 fine we expressed the parity as a "price" of one loaf of bread is 5c, The token cents were exchangeable for a gold "dollar" coin at the rate of 100 cents = one "dollar." The substitution of words of no direct meaning for words of direct meaning had jumped another notch and now instead of 'dollar' being a word used to express a unit of measure for "money" the "dollar" had become the entity itself in confusion.

The amount of relearning the world must do in the future about value and how to express it is staggering to the imagination. We cannot just say that we will set a new "price" for gold and then have a deflationary exchange and go back to redeemability and reality. It is not that easy. We must realize that just using the word 'price' is unreality. Using the word 'money' is unreality. Using the word 'dollar' as the entity the word 'money' was used to represent was even more wild than using it as its original reference as a unit of measure for "money." 'Gold the commodity was referred to as "money" and the "dollar" was the reference unit of measure of "money" that was equivalent to 25.222 grains of gold .999 fine. until we accepted that a "dollar" was 23.222 grains of gold .999 fine. 'Dollar' was and is a word-23.222 grains of gold is 23.222 grains of gold.

To get BACK to REALITY we must know some things. And the first one is-what determined. in the first place, whether or not one pound of bread exchanged for 1. 1611 grains of gold or not. It is too easy to say a thing is worth what you can get for it. It is better to consider a few conditions that might effect the system of evaluation. A thing is worth less than what you can get for it, in a free market, because if it were worth the same the exchange would not have taken place. Worth is the degree of human satisfaction derived from the use or consumption of wealth and if things to be exchanged were of exactly the same worth to either exchanging party there would be no exchange because there would be no reason for exchange. To effect an exchange each party to it must expect a higher degree of satisfaction will be derived from what he is to receive than from that which he is giving up.

"Money" The Greatest Hoax On Earth.......... 220

If it is his personal exertion to obtain something, that gives a thing value, it should be seen that it was the degree of satisfaction to be derived from the use or consumption of that thing that caused the physical exertion to be expended. Then we must see that in reality all humans value things in relation to the amount of their human exertion that it would take to obtain them by direct labor or by exchanging something they had already produced by their labor. The parity of a loaf of bread is determined by how much of another's 'product of his labor' he will exchange for it in a free market. If an apple-grower will exchange one apple for one orange, and the orange-grower will exchange one orange for one apple, the parities resulting are-one apple equals one orange, and one orange equals one apple. The value of the apple to the orange-grower is higher than one orange because he has lots of them, but he hasn't any apples. The value of the orange to the apple-grower is higher than one apple because he has lots of them but he doesn't have any oranges.

Therefore a thing is not worth what you can get for it-it is worth less than what you can get for it or you would not give it up.

"Price" then refers to parity (the value of any one thing expressed in terms of another) not to any direct value or direct worth.

Worth refers to the degree of human satisfaction to be derived -from the use or consumption of wealth.

This brings us to some definite understandings. Humans will not give up something they value greater than the thing they would receive in return. The degree of human satisfaction any human could personally expect to derive from the use or consumption of a given item of wealth is his own conception. To express that worth in terms of a STANDARD VALUE, or an intrinsic value is impossible. Nothing existing or that ever existed was worth exactly the same to all humans. This point should be very easy to understand if we consider the relative value of a comb to a bald-headed man versus a man with a full head of hair. To express the worth of something an individual will bid in exchange-to purchase-or ask in exchange-to sell-wealth in another form in quantity enough to effect an exchange. In this manner, in a free market we arrive at realistic parities, between these two individuals during that exchange. Any other two people left alone to decide on an exchange of the very same two forms of wealth may decide on an exchange that establishes two entirely different parities.

Each and every individual determines for himself exactly how much of anything he worked to obtain he will exchange to acquire something that someone else worked to acquire. What "price" one man may accept and pay to obtain something, another may consider too high and pass up. "Prices" than are not a true measure of value but a reference only-to the generally accepted parity of that wealth form in relation to a standard commodity being used as a common reference to value by the majority of individuals. If two people are, each of them holding something that they value exactly the same as the thing the other is holding, they could not be expected to enter into an exchange. Which one would initiate an exchange? Why?

Value or worth can not be expressed in direct terms since value or worth is an individual conception. Worth is a human conception. Humans labor, to acquire the things they desire to obtain a degree of human satisfaction that can only be derived from owning and using or consuming the thing they desire. Humans seek to satisfy their desires with the least amount of effort. If bread and gold had an established parity and man desired bread, he would determine which was easier for him. To produce the bread himself or produce his own product to exchange for gold to exchange for bread. A baker would produce his own bread. the gold-miner would use his gold directly and the candle stick maker would sell candies for gold to exchange for bread. Each human is free to decide how much of his labor he will expend to acquire that which he desires and 'if the price Is too high he will not buy. No one man or group of men can set the value or worth of anything, they may set the ''price" but the value will be assigned by individuals according to the amount of labor they will expend to acquire it. When man sets the "price" too high it will lay on the shelf unpurchased. When man sets the "price" too low ("price" regulation) then a shortage develops. (continue)