"The Destiny of Mankind Hinges upon Gold"
September 30, 2011
Once fiat money is in place, all
becomes illusion and gambling and people give up trying to make sense of
life. Pretty soon they take illusions to be realities.By Hugo Salinas Price
Hugo Salinas Price, 75, is a successful, retired businessman who lives in Mexico. He has been a follower of the Austrian School of Economics since his youth. He has written three books in Spanish on how and why silver should be instituted as money in Mexico, in parallel with paper money, and numerous related articles in English and Spanish, posted at his website. His organization, the Mexican Civic Association Pro Silver, is actively lobbying the Mexican Congress to approve legislation, which will institute the pure silver "Libertad" ounce as money.
I must have read fifty accounts, in the FT and others of that ilk, about what went wrong with the Euro. I have yet to read one that comes out with the plain, unvarnished truth. The whole bloody Establishment of bankers, politicians, economists and journalist whores sings the same song: "The euro came to grief because there was no fiscal union". Therefore, the solution to be inferred is that fiscal union would remedy the case of the European Union's imminent collapse.
Let's face it: the euro is a fiat currency and fiat always ends up in disaster.
Our civilization is in evident decline. If it weren't, we would find several eminent economists of the stature of Jacques Rueff in the halls of power; he was the French economist who wisely counseled General Charles de Gaulle to remove France's gold from the cellars of the NY Fed and transfer it to France.
Jacques Rueff was a man capable of understanding the fundamentals of how the world works. His vision was clear, and his intellectual scope was capable of taking in the details of local commerce as well its international workings. Men and women of his capacity are still around today, but they are not welcome in the higher reaches of politics.
Rueff wrote a little book in 1963, "L'Age de L'Inflation" ("The Age of Inflation") made up of some articles he had written. He wrote an "Introduction" to his book, and the very first words are these:
"LE SORT DE L'HOMME SE JOUE SUR LA MONNAIE"
A loose translation:
"THE DESTINY OF MANKIND HINGES UPON GOLD"
Europe is a great mess today because those in power made the wrong choice when deciding what currency the European Union should use. They chose a fiat currency instead of the Gold Standard and currency redeemable in gold at sight. That is the Original Sin of the euro.
Rueff was also active when the European Union was being forged. His book's fifth essay ends with these prophetic words:
"L' EUROPE SE FERA SUR LA MONNAIE, OU NE SE FERA PAS"
Translated loosely:
"EUROPE WILL BE BUILT UPON GOLD, OR IT WILL NOT BE BUILT"
Indeed, United Europe is falling apart. By the time you read this, it may already have collapsed. But it is falling apart not because of a lack of "Fiscal Union". It is collapsing because of the absence of the fundamental means for free international collaboration, based on the realities of each nation of Europe: there is no gold standard at work.
Somewhere in his books, Ludwig von Mises states that the end of the Austrian Empire came when the gold coin stopped circulating. It was this stable and trustworthy money that had held together an Empire made up of several nations with very different cultures. When the gold coin disappeared, the unifying factor was gone as well.
FIAT CURRENCY = WELFARE STATE PONZI SCHEME
Gold is the money for societies made up of men and women who wish to live in the real world.
This is part of the trouble in our declining civilization: men and women in these times wish to live in illusions, and the politicians, the bankers and their economist lapdogs have been providing those illusions for many decades now.
Those illusions were enabled by the "Welfare State": Comfort and security from cradle to grave, with no requirement of hard work to merit them. On the other hand, it would also be reasonable to say that men and women today live in illusions, because they were forced to do so by the fiat money they had to use. Once fiat money is in place, all becomes illusion and gambling and people give up trying to make sense of life. Pretty soon they take illusions to be realities.
Wolfgang Münchau in the FT of September 26 writes in the editorial page: "I have never seen Europe's politicians as scared as I saw them in Washington last week".
Europe's politicians have good reason to be scared stiff; if the euro cracks up and the European Monetary Union collapses, then the viability of the Welfare State is in question. Without the perpetual deficits that the Welfare State entails, how will it be possible to maintain the populations of Europe in their illusion of perpetual untrammeled bliss?
If the peoples of Europe are to wake up one morning to find themselves once again in the real world, where survival means hard work and personal privations, the political upheaval will be gigantic. This is why the politicians are scared.
If the continued existence of the Welfare State is in question, then so is the Democratic State, because Democracy - or what passes for it - can only be simulated where the voting population is constantly appeased with ever greater hand-outs from the Welfare State, the Siamese twin of Democracy.
If the euro cracks up and the European Monetary Union goes the way of all fiat we can expect a political convulsion of the first order in Europe as the ingrained illusions vanish. Perhaps that would not be a bad thing. Bill Bonner has written, with his usual wry humor, "Give Collapse a Chance".
CONCLUSION
The world is not coming to an end just because illusions have vanished. The world will adjust, individuals will adjust, the behavior of multitudes will adjust. Those intellectual and moral midgets, who think that the world ends if their particular plans for the world are scrapped, will go to the dustbin of history - at least for a while. That would be a healthy relief.
Central Banks were invented with the express purpose of eliminating volatility in the business of banking. That was a mistake, because today, instead of relatively small bankruptcies of imprudent banks we have the menace of wholesale collapse of banking systems. Unfortunately, no one on the global political scene seems to have grasped this insight.
So we continue to watch the evolution of this European crisis - by implication also a world crisis - with great interest. If a convulsion besets Europe, authoritarian régimes are not out of the question. Authoritarian régimes, despite the bad name given to them by the so-called partisans of "Democracy", are not necessarily bad. After all, the family is an authoritarian organization, and it functions well - when it is allowed to function. Every private business concern is an authoritarian organization. An authoritarian régime oriented to order, property rights, the rule of law and sound money is actually more stable and viable than an authoritarian régime that wishes to install a socialist society. Incidentally, the Founding Fathers of the US did seriously consider establishing a Monarchy...
The present crisis will offer possibilities that can be either good or bad. Let us remember that the Chinese symbol for "crisis" means "Danger/Opportunity"
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Makow comment: I'd like Price's response to these criticisms: 1. There isn't enough precious metals to make them the medium of exchange. Doing so would result in a huge deflation and depression. 2. Governments are broke. How are they going to buy the metal for currency? The only problem with fiat currency as a medium of exchange, is that it is private, not public.
More by Price : Why Silver Should be Currency
Mexican Central Bank Rejects Price Plan
http://www.vnnforum.com/showthread.php?t=14320
Carl said (October 2, 2011):
"Authoritarian régimes, despite the bad name given to them by the so-called partisans of "Democracy", are not necessarily bad."
This is comedy: "Leninist theory holds that Communist states must always be authoritarian when on the path to "socialism", because of the "special repressive force" needed to attain their goals."
That worked out well didn't it? Just ask the Christian leaders in Russia. The problem is its almost always "bad." Maybe we can get Maitreya to run it, or Henry Kissinger?
"That's exactly what Rothschild's gold did to the American colonies bringing on the war for independence from Rothschild's already impoverished England."
Tony gets it, and this is a problem that has already been solved by some of the Presidents (Lincoln) and recently by many such as Bill Still. Gold won't work because its owned by a small group who will oppress everyone. The root of the problem is FRACTIONAL RESERVE BANKING. Watch "The Money Changers" if you don't already intuitively know that the banks need to be lawfully controlled and a debt/usury free currency printed.
Then we can deal with real problem of how everyone who tries to implement this gets murdered. Enjoy, you will get more out of this than Price.
Wouldn't it be nice if people would watch a little less NFL and occupy Wall Street or perhaps the FED?
http://video.google.com/videoplay?docid=-515319560256183936