How the Internet and the Global Power Elite Are Causing a Financial Hurricane — and How to Profit from It

Initial Praise for “High Alert”

“‘High Alert’ is an exceptionally well-conceived and executed book. It is both scholarly and accessible, which is not easy to do or commonly achieved. I enjoyed it immensely.” —G. Edward Griffin, author, “Creature From Jekyll Island” Founder, Freedom-Force.org

“If you would like you and your family to enjoy a good life in every way and you would like your grandchildren to have a better life overall, you must read this book. The world can change with just one concept — ‘personal responsibility.’ Thank you for having the guts to tell the world what they really need to do.” —Patrick C. Gorman, President of Resource Consultants. Host of "Hard Money Watch"

"I think ‘High Alert’ is a wonderfully provocative book. You have your own voice, your writing is clear and concise, the book is well organized, and rather than simply scaring a reader with your extremely intriguing theories you've suggested actions and tips so as to not leave him/her hanging in fear.” —Pamela Browne

"‘High Alert’ puts the reader in the center of the global transformation providing insights, cautions, history and personal financial solutions. Important, you bet. While the Internet encourages freedom, the financial elite are losing ground with their ‘money games.’ A must read!” —David Morgan, publisher, Silver-Investor.com More Praise for “High Alert”

“‘High Alert’ will be the subject of much discussion and debate within the freedom movement over the next year so.” —Tom Knapp, Founder RationalReview.org

“Bravo! Every few years I hear about some ‘must read’ financial text. In fact, this is the first book in ages with truly original thinking, and insights I can’t find anywhere else. ‘High Alert’is a masterfully prescient perspective of the financial and sociopolitical effects of the Internet, and the snowballing financial earthquake it is generating. For anyone who wants to know the causes of our rapidly decaying economic system this is the book to read. For those who want to become wealthy, ‘High Alert’s’ strategies are the ones to follow. Prepare to have your eyes opened!” —James Braha, investment commentator

“Not since Jim Rodgers’ ‘Hot Commodities’ has there come along a more accessible – and compelling – sneak preview of things to come in the global marketplace, and how to profit from the whirlwind ahead. Information is one of the currencies of this new era, but silver and gold will return as currencies as well, as the scales fall from the public’s eyes and the current fiat-money system is seen for the naked emperor that it is. ‘High Alert’ explains [these issues) in elegant, page-turning prose and puts both the present and the future in intelligent context.” —David Bond, editor, SilverMiners.com

“Wile and Fadiman propose an ingenious hypothesis. If it’s right, their VESTS will get you through the coming storm.” —Jim Babka, President, DownsizeDC.org HIGH ALERT

How the Internet and the global power elite are causing a financial hurricane — and how to profit from it. anthony wile founder of free market news network FMNN.COM

THIRD EDITION With Mark Fadiman

ABP Appenzeller Business Press AG All rights reserved. No part of this publication may be reproduced, stored in a special system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without prior permission of the publisher. This publication contains the opinions and ideas of its authors and is designed to provide useful advice in regard to the subject matter covered. However, this publication is offered with the understanding that neither the authors nor the publisher is engaged in rendering legal, accounting or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. The authors and publisher specifically disclaim any responsibility for liability, loss or risk, personal or otherwise, that is incurred as a consequence, directly or indirectly, of the use and application of this book or any of its contents. Notwithstanding anything to the contrary set forth herein, Appenzeller Business Press AG, its officers and employees, affiliates, successors and assigns shall not, directly or indirectly, be liable, in any way, to the reader or any other person for any reliance upon the information contained herein, or inaccuracies or errors in or omissions from the book, including, but not limited to, financial or investment data. Any specific repetition in various published works from the publisher or others, unless noted, is unintentional and may be the result of the nature of financial terminology and the fairly narrow focus of the financial writing and editing in which the publisher and authors are involved.

First-person statements in the narrative of this book are Anthony Wile’s.

Mandarin Chinese and German versions now available

Copyright 2006-2008 © Appenzeller Business Press AG •THIRD EDITION ISBN: 978-3-905874-00-6 This book is dedicated to the blessings in my life (and the reason I remain at “high alert”), my lovely wife Hillary and my three wonderful children — Gabrielle, Jesse and Julian. —Anthony Wile A NTHONY W ILE

Acknowledgments Harry Browne: You lent your name and spirit to Free Market News Network, Corp. (FMNN) long before it was a success. You were an inspiration throughout and you have left many behind to carry on your great work. G. Edward Griffin: “The Creature From Jekyll Island” was one of the most important and truthful books of 20th-century financial history. Thank you for your counsel and guidance in helping make this book a reality. Mark Fadiman: What is left to say but Hallelujah! Other free-market thinkers I would like to thank for aid or inspiration, personally or professionally: Jim Babka, William Bonner, Douglas Casey, Terry Coxon, Richard Daughty, Dr. Richard M. Ebeling, Marshall Fritz, Pat Gorman, Richard J. Maybury, David Morgan, William Murphy, Bernard von NotHaus, Dr. Lawrence Parks, Dr. Ron Paul (R-Texas), Lew Rockwell, David Smith, Dr. Helen Szamuely and Christian Wirth. —Anthony Wile

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AUTHOR’S NOTE

Early in the 2000s, I became convinced of two things. First, precious metals were going to go up in price a good deal. Second, thanks to the Internet, sociopolitical coverage and hard-money analysis were being combined to offer a new and truthful communications medium that represented a tremendous business opportunity. We were right about “honest money” — gold and silver; we are being proven right about the promise of the new Internet site we started, as well. After about four years, FreeMarketNews.com — Free Market News Network, Corp. (FMNN) — is closing in on five million viewers a year. Give it another 10-12 months and viewership may be north of 10 million. While I am no longer involved with FMNN as chairman or CEO, I feel blessed by the many friends I’ve made among FMNN’s commentators and viewers. Thanks to all of you who have been so patient while I struggled with this book, “High Alert”— especially those who made such generous offers to help when I was “stuck.” And thanks, especially, to those whom I have called my sounding board — including FMNN’s sadly departed president and free-market champion Harry Browne, Federal Reserve historian G. Edward Griffin, and hard-money economist Dr. Lawrence Parks among others. The best herein is theirs. Only the defects are mine. —Anthony Wile

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FOREWORD

When High Alert first came to my attention in 2006, it was a particularly hectic time for me, and I was not able to read the book in its entirety. I checked the index for critical topics, read selected portions pertaining to my special interests, and was impressed by its scope and scholarship. A year later, when Anthony invited me to write the Introduction to the second edition I picked up the book once again and, this time, plowed through it cover to cover. What a delightful journey it was. This is an investment guide book that probes deeply into the political and economic issues that are shaping our future. It shows where the economic break points are going to occur and what you can do to ride out the financial crisis that now is building around us. High Alert is similar to a coffee-table book in that you can flip through the sections and, starting at almost any page, you will find something of interest. Yet, this is not just for casual reading. There is a lot of history here, and you will discover thousands of factual treasures along the way. The message of this book is simple: You don’t have to be a victim of the system. You don’t have to be defeated by a rigged stock market. You don’t have to be crushed by inflation. The first step toward financial survival is to wake up to the reality of the world in which you live, a world that is quite different from the images created by our mass media. The second step is to take charge of your life through strategic decisions involving your economic and political well being. This book will get you up to speed with both of these steps. An incredible amount of history has been crammed into these pages and presented in a highly accessible form. Eventually, you may want to learn more about the events described here, and that will lead you to the fifty volumes contained in the bibliography; but when you reach page 244 of

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this single volume, you will have a sufficiently clear view of the historical landscape to make correct decisions. At the end of each chapter you will find a summary that clarifies your course of action. The only significant point on which Anthony and I have different views is that I am not enthusiastic about investments in China. My reasons involve moral and strategic issues. Morally, I cannot endorse profit-seeking from slave labor (which is widespread in China) and, strategically, I do not trust Chinese leaders to keep their agreements. Until they truly renounce Leninism, I believe they will use Western capital to build China to where it can dominate the world. At that point, I believe they will confiscate Western business assets from those who naively gave them the money. Other than this, I find myself nodding in agreement on every page. Anthony has done an amazing job of pulling it all together and getting it right. The stores are full of books that offer advice on how to benefit from an economic collapse, how to get rich while others are pauperized, how to make a fortune on the downfall of America. As I wrote in my book, The Creature from Jekyll Island; A Second Look at The Federal Reserve: What is disturbing about this investment concept is that it actually may help to make matters worse. By focusing on finding clever ways to avoid the effects of inflation or of making a profit from it, we are doing nothing to stop it and, thereby, encouraging its continuation. Those who are gaining from inflation are not likely to offer serious resistance to it. As they watch their profits pile up, they may become its most ardent supporters – even though they know deep in their hearts that it will destroy them in the end. There is nothing wrong with trying to preserve one’s capital in hard times, but the only real solution is to use one’s capital to stop the present trends. In the long run, there is no way to profit from the destruction of one’s country. There is no way to protect your assets, your home, your job, your family, your freedom. There is no refuge from totalitarian systems that are the inevitable consequence of economic collapse. The only real solution is to stop and then reverse the destructive forces that are described in this study. Anthony understands this reality and, even though his focus in this book is on how to survive and benefit economically, he has demonstrated his commitment to reform by his membership in Freedom Force International, an organization dedicated to optimum freedom and inflation-proof money. The members of Freedom Force are not mere complainers. They have a plan and are determined to change the course of history. I invite you to join with us in this historic mission. G. Edward Griffin Founder, Freedom Force International www.Freedom-Force.org

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CONTENTS

AUTHOR’S NOTE 5

FOREWORD 6

SOME DEFINITIONS 10

PREFACE • CONTENT AND THEMES 16

CHAPTER 1 THE HURRICANE ARRIVES 26 Reasons for the financial storm upon us.

CHAPTER 2 THE LOOMING INFLATIONARY EYE 37 Focus on inflation — and hyperinflation.

CHAPTER 3 RISING MONEY POWER 49 How the power elite got their money and power.

CHAPTER 4 WAR IS PEACE — AND PROFITABLE 82 Ruining lives for fun and profit.

CHAPTER 5 BANKING SURGE 96 How the banking industry’s money power grew through the ages.

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CHAPTER 6 EUROPE, DIFFUSION AND DESTRUCTION 114 Free societies — and what is necessary to keep them that way.

CHAPTER 7 U.S. TSUNAMI 134 Power elite interference in the U.S. Republic — and economy.

CHAPTER 8 ONSLAUGHT OF THE FED 155 How the Federal Reserve has wrecked America.

CHAPTER 9 EXPANDING ‘NET 168 The Web versus money power.

CHAPTER 10 COUNTERCURRENTS AND TWO PERCENTERS 183 How the Internet is adding to the world’s free-market thinkers.

CHAPTER 11 POWER ELITE PROMOTIONS 195 How the power elite gets rich by scaring you.

CHAPTER 12 PROFIT FROM THE FINANCIAL HURRICANE 222 Sociopolitical and economic solutions to the money power problem.

CONCLUSION 236

SOME FMNN FREE-MARKET THINKERS 245

AFTERWORD 249

SELECTED NOTES & WEB REFERENCES 255

BIBLIOGRAPHY 262

INDEX 266

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SOME DEFINITIONS

Age of Promotion: The 20th century saw two world wars and the construction of a massive, international apparatus, ostensibly to mediate quarrels between nation-states and create international standards. But what seems the work of many is actually the brainchild of a very few — the global power elite. Today international organizations such as the United Nations, World Bank, World Trade Organization and the World Health Organization act as a kind of echo chamber, each reinforcing certain messages and discarding others. Concepts such as bird flu, Islamofascism and peak oil are pushed relentlessly until people unquestioningly accept their fearful premises and demand action. Those with the wherewithal to provide solutions — products, services and corporate offerings via public markets — generate vast profits. Conveniently, those who are most vociferous about these fearful global messages are often in a position to flog solutions via products, services and public offerings. These may not ultimately “save the planet” but certainly create great wealth for those involved. As the Internet continues to expose the reality of this global apparatus, the Age of Promotion may well begin to lose momentum. Tomorrow, historians may speak of it in the past tense.

Age of Connectivity: More and more people turn to the Internet for their information and news, especially young people. The information on the ‘Net is radically different than that of the controlled “mainstream media.” Eventually, this must result in a kind of cultural cognitive dissonance.

Alternative ‘Net media: Mostly Internet-based, free-market oriented, or at least skeptical of commonly accepted memes. Alternative ‘Net reporting often focuses on the power elite in a way that the mainstream media does not. For this reason, among others, critics

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have attempted to marginalize the message as being the result of “conspiracism” (see below). So far the labeling has had little effect, with the alternative ‘Net Media gaining power and viewers at the expense of mainstream media. The mainstream media subscribes to the mainstream money model. This involves a belief in a central banking- oriented, government-backed currency system, one in which “wise men” make decisions as to interest rates, money supply and other issues having to do with where the economy is headed and how it will perform.

Business cycle: This is a descriptive term for the full gamut of economic options including boom, bust and the varying conditions in between. Government-backed paper-money regimes — now prevalent throughout the world — overstimulate the economy through the issuance of too much money and credit. After a while, this causes a distortive boom in one or several asset classes. Eventually, the boom turns rapidly into a bust (recession, depression), and those without the wisdom or foresight to remove themselves from the “cycle” usually lose most, if not all, of what they have gained. Investors can take advantage of business cycles to buy or sell certain securities or commodities, depending on their reading of where the cycle is. At the beginning of the cycle, stock in manufacturing companies may be appropriate, while at the end of the cycle, especially in a recessionary inflation, commodities and other tangible goods may prove worthwhile investments. Any unbiased appraisal of the global economy shows that the business cycle has mini-, major- and even super-cycles. These cycles may vary from country to country. In the United States in the 2000s, the economy has exhibited behavior that one would expect from a business super-cycle offering a recessionary inflation verging on soft or hard hyperinflation.

Central bank: Empowered with the franchise to generate debt-based money on behalf of the government, the modern central bank is a creature of the banking industry. Since it is not encumbered by any formal commodity ratio, free-market thinkers often refer to such a product as “fiat,” and it is distributed through other large banks called “commercial banks.” The American central bank is the Federal Reserve. Thanks to the Internet, controversy is again growing in the United States over the fairness of the system and the real reasons for its implementation. More and more understand that inflation is the result of too much credit and too many paper bills issued by central bankers who pretend to be “inflation hawks” even as they flood their countries with “money,” the value of which degenerates.

Common law: Descended from Roman law, expanded by unwritten local customs and cultivated by private adjudication or informal gatherings of the local public, British common law emphasized precedent — previous decisions. Its best aspects were its purposeful simplicity, adversarial configuration and emphasis on obvious crimes needing relief (stealing, murder, etc.). Under this system, the finer points of social interaction were

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negotiated, not litigated. After the 1500s, common law was regularized by the Crown with trial by jury and a further appeal, if warranted, to the king himself. American common law predates the government-run judiciary established by the founding fathers, many of whom were lawyers.

Conspiracism: One who is a conspiracist is supposed to “suffer” from conspiracism, the mental state of seeing conspiracies everywhere. Given the state of the world today, that might not be such a bad idea. But many do disapprove of such an outlook.

Conspirati: A “home-grown” term similar to “literati.” It refers to a growing Internet-based — and conspiratorially-oriented — intellectual elite.

Devolution of electoral control: The closer to the local body politic that decisions are made, the better. In fact, at a fundamental level, conflicts of all sorts have been resolved, historically, by private means. The current system is not destiny; it is driven, instead, by the visible global power elite — money power. Those societies that exhibit the strongest civil respect for intimate communal preferences are those in which investments may best be placed with the most reasonable expectation of success. One should not, therefore, expect too much of the European Union, which is moving in exactly the wrong direction. The regional agglomerations in the Americas, if they progress further, past managed trade and into governance, will surely exhibit similar dysfunction.

Dominant social themes: Notions launched by the power elite that grow into archetypes after much repetition. They are issued from the domiciles of the elite’s global architecture, the United Nations, World Bank, World Trade Organization, World Health Organization, etc., and are picked up and trumpeted by various forms of the mainstream media. Usually motivated by fear (global warming, etc.), these themes are eventually addressed by “solutions” controlled by the same elite that generated the initial theme and facilitated its promotion.

Free market: A system of voluntary commerce (trading). Government rules and laws, whether “worthy” or not, must be seen within the parameters of economic literacy as a marketplace distortion, creating scarcity, queues, or both.

Free-market thinkers: These individuals seek to implement the above definition as a basis for an improved, freer social order. Free-market thinkers are financially literate and unafraid to face the realities of the world around them. They have been self- actualized by their independent studies of the market and how humans relate to each other within the ambit of private and public commerce. They seek to make the most of their abilities and talents within a realistic framework, rather than a money-power promotional meme.

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Free-market economics: Its history is in part the history of what is called Austrian economics. The “Austrian” school is fairly modern — neo-classical as opposed to classical. Many economists who promoted this sort of economics were Austrian — thus the name. Ludwig von Mises was the Austrians’ prime 20th century exponent. Perhaps his greatest work, “Human Action,” shows clearly that people can — and do — take action to remold economic circumstances and better their lots in life. Such perspectives invalidate the logic of central planning and of the modern sophistries of Western law in general, which tend to assume that trends are static and human behavior inelastic and unadaptive. For this reason, among others, von Mises never received wide circulation in America during the 20th century. It is only thanks to a stubborn few, aided now by the Internet, that his thought, and that of the Austrian free-market school itself, is becoming better known.

Intimate communal preferences: These are charitable, caring activities toward which humans may be seen to have a genetic predisposition (neolithic tribal entities supported both private property and survival most efficiently) in extended familial and community configurations. Contrast this to impersonal communal preferences, which humans exhibit in larger groups (tribes battling over scarce resources, also a survival trait) — aggression, hostility, warlike behaviors. Those crafting current sociopolitical and economic configurations ignore these predispositions at their own — and society’s — risk.

Laissez-faire: French for “let it be,” this concept advocates free, or fairly free, markets.

VESTS: Visible Elite Super Tendencies Strategy (VESTS) brings together the business cycle, observation of the power elite’s regional and generational money flows and the immutable reality of free-market economics to predict investment opportunities in regions, securities and commodities. VESTS is not a formal system. Its practitioners would tend to be free-market thinkers.

Self-actualization: A term used by the psychologist Abraham H. Maslow to describe the instinctual need of humans to make the most of their unique abilities and be the best they can be. Maslow believed that only 2% of the population had the internal resources and intelligence to become self-actualized, and he referred to these individuals as two percenters. Today, there is an emerging subset of two percenters who are known, for purposes of this book, as free-market thinkers.

Soft and hard hyperinflation: Orthodox economics defines inflation as rising prices — but free-market economists of the Austrian school believe rising prices are just a symptom, and that inflation is caused by a controlled or uncontrolled expansion of the money supply beyond what the economy can absorb. Although there is no generally- accepted view in the “mainstream” literature concerning when inflation becomes “hyper,” in his classic analysis Philip Cagan puts the cut-off at a monthly inflation rate of

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50%. The American dollar is certainly not at that point yet. However, even considerably less than a monthly rate of 50% would be difficult if not intolerable for most Americans — thus the term “soft hyperinflation.” Central bankers inevitably err on the side of producing too much rather than too little money and credit. The overabundance of money, while dangerous of itself, becomes known to the general public as “inflation” when its presence is recognized by those who use it. Once the public believes that its money is losing value, a whole host of behaviors are manifested. People spend quickly rather than save and currency thus afflicted may not hold value from one day to the next. It also is the premise of this book, increasingly shared by the alternative ‘Net media if not the mainstream, that the business cycle, which includes constant stimulation of the money supply, has entered a period where inflationary forces may do great damage. The ability of the world’s and America’s central bankers to control inflation is limited by the recessionary impact of rate increases. It is possible, if not probable, that the amount of dollars unlocked from institutional coffers and flooding the world’s currency markets (and the dollar is currently the world’s anchor currency) will so greatly exceed what is necessary that the result will be hyperinflation, soft or hard.

Power elite (visible) (AKA modern money power): The visible power elite has elicited few scholarly analyses in the modern day. In times gone by, this group went by the collective name “money power.” (This nomenclature has been resurrected for “High Alert.”) There are various theories as to the composition of the power elite, its operative principles and goals. This book advances one hypothesis that has been the subject of academic analysis and mainstream media profiles, but does not rule out the veracity of other, more complex, ancient and epochal speculations involving the invisible elite. While there is no direct evidence, for the most part, for the invisible elite, its presence is manifest on the ‘Net where whole sites of great complexity are devoted to such elusive groups as the “Illuminati,” the “black church,” the “black nobility,” etc. It is not necessary for the purposes of this book to establish the veracity of any of these, even were it feasible, as what is visible — modern money power — suffices; what is invisible is subject to more than enough scrutiny from the increasing “conspirati.”

Thesis versus antithesis: Known either as an outstanding way to develop new propositions or a nefarious one. It is attributed to philosopher Georg Wilhelm Friedrich Hegel, though he in turn apparently attributed the concept, or at least the phrase, to philosopher Immanuel Kant. According to Wikipedia, “The idea was subsequently extended and adopted by [the fathers of communism] Karl Marx and Friedrich Engels.” It is the involvement of the latter two that render conspirati suspicious. Many see it as methodology of social manipulation, as follows: First a thesis is presented, then an opposing point of view, an “antithesis,” and finally the conflict is resolved by synthesis. Inevitably, the synthesis lies between thesis and antithesis. Thus, by controlling the statement or thesis, the placement of the synthesis can be predicted. A democratic state may move in fits and starts, for instance, toward “gun control” via this programmatic

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strategy. One candidate endorses the common-law sociopolitical position that no gun control is the ideal, while the other postulates the antithesis, that full gun control is necessary. The predictable synthesis — some gun control is good — will fall in between. During the next election, one candidate may take the position that partial gun control is good while the other candidate may present the unchangeable antithesis, that full gun control is best. The synthesis will again resolve itself more closely to the latter position. In this way, in a single lifetime, a democratic republic, especially one constructed along the lines of a two-party system, may move from republican principles to socialist ones.

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PREFACE • CONTENT AND THEMES

“High Alert” is a personal investment book dealing with the world’s ongoing, deepening financial crisis. Its thesis is as follows: A “visible power elite,” challenged by the Internet, causes increased problems for the global economy while struggling to implement its agenda. Throughout, the narrative elaborates on this and offers economic action points. Each chapter is written as a self-contained unit, featuring a particular money-power problem. But the chapters are also placed in a historical narrative so that, taken together, the reader is exposed to the visible power elite’s history and how it is battling the Internet to save century-old internationalist plans. The last chapters of the book propose a non-traditional and intuitive investment solution to power elite-generated economic problems. In aggregate, the visible “global power elite” possesses a considerable amount of the world’s wealth and resources, and controls a good deal more. This elite is actively involved in financial manipulations on a vast scale through the creation of “dominant social themes.” The themes selected are picked up and repeated within the power elite’s vast echo chamber of globalist enterprises. Their veracity is attested to by prominent “think tanks;” their scientific validity is confirmed (often fallaciously) by power elite-controlled journals. Their presentation is abetted by the mainstream media and Hollywood. Their inevitability is attested to by their appearance in school textbooks. The themes themselves have kernels of truth, surrounded by layers of mushy exaggeration and outright prevarication intended to intimidate people into doing something with their money that will be either unnecessary or unwise — but which will

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provide a profit for those involved in the promotions. “High Alert” suggests certain defensive strategies based on a free-market analysis of the business cycle, the moves of money power itself and the inevitable reaction of the marketplace. Fooling oneself into believing economic laws have been suspended — just for this decade — is perhaps comforting but ultimately not effective and even self-destructive. Before waving about the label “conspiracy writer,” please note that modern money power actively announces its intentions via conferences, workshops and white papers. Its leadership serves continuously in administra- tions in both America and Europe. The positions of its white papers and journals are, in many cases, implemented as policy. True, the power elite does not explain the mechanism of its promotional scheme. But the mechanism — its buildings and acronyms — is proudly on display. And its supposed humanitarian rationale is mostly lauded, even if it works poorly, or not at all. For the body of its argument, “High Alert” sticks to the “visible power elite,” the one that has made its presence known and its intentions fairly obvious. Follow what the visible power elite says and does, bearing in mind the reality of economic fundamentals, and the ramifications of economic trends will become clear as well. Also, hopefully, the possibility for increased personal financial success.

Conflict With the ‘Net How do we track modern money power? We live in a high-tech era, and increasingly the Internet is giving more and more people information about the visible power elite’s sociopolitical and economic strategies. The concept of the visible power elite was worked out before the Internet. At the time, there was no harm in revealing oneself, one’s plans and actions, because few could understand the totality of what was going on, and those who could were not usually in any position to explain to others. The Internet has changed that. “High Alert” has been written with this in mind, to help readers take advantage of the Internet’s interaction with the visible power elite and to apply sound, free-market principles and economic laws to the trends they isolate. Much will be found, as we enter this process, that is not good practice. Suggestions will be made to create a safer portfolio and a more effective asset allocation. These are necessary, given the business cycle, the increasing agitation of the power elite and the extended run of the West’s latest paper money regime, which is nearing its end.

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Power Elite, Personal Responsibility and profit Government-backed paper money, bureaucratic overspending, inevitable business-cycle difficulties caused by too much money and credit — the West’s economy, especially America’s, is seemingly set up to sink. At worst, such an irresponsible monetary system can end in either a soft or hard hyperinflation, or a “hard” landing — a euphemism for murderously high credit, joblessness, bank failures, pension and private bankruptcy and even more corrupt government meddling in the market. At best, we get a soft landing where joblessness climbs gradually, inflation is driven up steadily but not at a hyperinflationary rate. We grow poorer by degrees rather than all at once. Grimmer possibilities, long-term: stagflation, full-scale hyperinflation, depression. For some, the idea of first acknowledging a “visible power elite,” and then

visible power elite invisible power elite

realitytipping point controversy

“High Alert”deals with the manipulations and promotions of the visible global power elite (money power). From an investment standpoint, analyzing an obvious “open conspiracy” is far easier than trying to guess at the actions of, say, an invisible “Illuminati.” The visible power elite maintains a presence on the ‘Net. Its methodology is clear; little or no guesswork is involved. Any controversy is avoided or, at least, minimized. The most cogent argument that can be mustered against the sociopolitical and economic influence of a visible power elite is that there is no direct mechanism for control. However, open-minded analysis will likely grant that the visible power elite utilizes the public sector to work its will — and funds the aggressive growth of the public sector via central banking. This is one reason why, in the 20th century, public sectors throughout the West expanded rapidly, and why an international public sector (the U.N., etc.) came into being. Public sector employees are apt to enforce regulations almost without question, their salaries being dependent on government. The combination of money power and an expansive public sector explains not only the aggressive growth of bureaucracy in the last 100 years but also why failed policies, nonsensical laws and even military

adventurism continue to be implemented when logically such destructive activities

would have been abandoned almost upon inception, or not entertained to begin with.

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seeking to analyze its workings with an eye toward generating a viable investment strategy, is overly utilitarian. The implied absence of a moral stance is disturbing. In fact, this is not the case. If the presence of modern money power is acknowledged, then an argument may be made that it is something of a moral imperative for readers to use this information to secure their futures, and their families’ futures. More and more information on the ‘Net suggests ways that individuals can take action to either frustrate or rationalize the power elite’s activities. In this book, via the VESTS strategy, readers will be given the tools necessary to analyze and react to power elite promotions. Forewarned is forearmed. Mirrors are helpful! Read this book and then stand in front of one. You are responsible for making your way in this world. No one else, not your family, not your parents and certainly not the strangers who run the government or stand behind the government. You may believe deep down that you “know” Hillary or feel like an FOB (“friend of Bill”) or are sympathetic to George Bush and the challenges he seems to be facing — but this is not quite the case. You are probably reacting to a series of carefully crafted public personas that have nothing to do with the reality of the power elite’s manipulations of the sociopolitical and economic process. At the back of this book are sources that utilize the information contained in “High Alert.” Also helpful is the FMNN site itself, which containes up-to-the- minute news and information focusing on the visible power elite, the drive toward globalism, and appropriate wealth solutions via the VESTS investment approach. The power elite tends to operate through the use of dominant social themes generating either fear or greed. While much of this manipulation is out of our control, as is the market reaction, the investor who has read “High Alert” can put the information to good use — and possibly make huge profits as a result. The information and systems described herein are not merely defensive, and the reader may find himself or herself struggling as much with the moral component of the process as its investment application. Is it moral to generate wealth by tracking money-power strategies? Each reader will have to come to his or her own conclusion on the subject. “High Alert” describes the process and offers readers the theoretical framework necessary to defend their portfolios and even, over time, to generate great wealth. The implementation, obviously, is up to each individual.

Idiosyncratic Investments, Historical Precedent “High Alert” is an idiosyncratic investment book. It does not seek to “cover the waterfront” when it comes to offering specific investment options. Many “Money magazine”-type suggestions focus on minor business-cycle reconfigura-

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tions, recommending inflation-adjusted savings bonds for instance as a way to combat portfolio erosion. But such instruments are provided by government authority and can be removed, or watered-down by the same legislative process. “High Alert” does offer a specific investment strategy — VESTS — though it is surely not a mainstream one. Overlay business-cycle allocation with a strategy focused on the financial placements of the global power elite. Then conduct a free- market analysis of the elite’s overall promotional effort, and you may be able to come out ahead, even in the face of gale-force economic headwinds. The best investments, especially at this point in the business cycle, are probably those featuring “honest money” — gold and silver — in some form. Gold and silver, if held physically, are anonymous wealth-generators over time, and “High Alert” presents the history and explains the value of such money metals. “High Alert’s” thesis, previously presented, is that a visible power elite, challenged by the Internet, causes increased problems for the global economy while struggling to implement its agenda. This does not mean that the Internet and its information flows are about to overwhelm the visible global power elite; only that the increased amount of information is detrimental to its promotions and destructive to its message. There is certainly a possibility that the Internet will introduce an Age of Connectivity — and increased freedom and free markets — that will supersede what “High Alert” calls the 20th century’s Age of Promotion. Time will tell. Certain subspecies of newsletters encourage readers to follow the asset allocations of the wealthy. In some cases, this sort of advice makes sense, as when Bill Gates, Warren Buffet and George Soros all bought either silver or large positions in mature silver companies, only to see the price of silver triple in the 2000s. On the whole, sleuthing to find where the individual rich are invested is a kind of monetary dysfunction akin to peering in a window to catch a glimpse of a glamorous party. What is being proposed within these pages is neither fashionable nor facile. Modern money power has a specific agenda that can be isolated and analyzed. Once it is understood, free-market principles can be utilized to determine what parts of a specific strategy or manipulation will stand, and also what will fall. This advance knowledge can be seen as “money in your pocket” if properly applied. While “High Alert” deals mostly with U.S. markets, much of what is mentioned in this book is theoretically applicable across a broad range of sociopolitical and economic regimes. These areas include Europe, South America, etc. The places where the book’s message might not fully apply are mainly in Third World countries and, curiously, China, which has not yet been entirely swallowed by the current system. China, unfortunately for the Chinese, is probably the next course “on the menu.”

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Modern Gutenberg Press “High Alert” argues that the Internet is at least partially comparable to the Gutenberg press. With the advent of the Gutenberg press, mass literacy became possible and people could read the texts around which their lives had been structured — chiefly, or at least especially, the Bible. The resulting revelations reconfigured the social structure, led to the Reformation and ultimately the migration to the New World and the founding of the American republic. The increasing understanding of the unfairness of the current structure, as well as its reoccurring accidents and inherent instability, have been driven by this wonderful communications network, one arguably comparable to the Gutenberg press 500 years ago. Detractors will note otherwise, of course. History yields to numerous interpretations and few emphasize the Gutenberg press’s role as much as “High Alert.” Certainly, the press’s effect was accompanied — and reinforced — by numerous other factors. These include the Black Death, the advance of the Turks into the West, the Venetian strategies to foment war in Europe based on the expanding religious furor; even the creative destruction of the Renaissance itself. Yet, it was the press’s efficiency that allowed people to read the Bible for the first time and come to their own conclusions about the corruption of the Roman Catholic Church, which in turn helped undercut social acceptance of the church-sanctioned “divinity of kings.” The power of the Gutenberg press is manifest within the historical record. The circumstances surrounding it — war, politics and plague — are those that mainstream historians might wish to scrutinize again, given the presence and nature of the Internet.

Difficulty the ‘Net Causes the Power Elite — And What We don’t Know ... Is the Internet already having an impact on the power elite? These days, some of its goals seem further from realization, rather than closer. The current U.S. administration forced through the Central American Free-Trade Agreement (CAFTA) only with the greatest difficulty. The 9/11 attack, which has served as a trigger for the kinds of regulations the elite uses to realize its strategies, continues to raise up unpleasant questions about culpability that goes beyond Middle East “terrorists.” The administration’s hate-crime legislation that would attack the freedom of the Internet never made it out of Congress (to this point anyway). Such setbacks do not bode well for globalist priorities, at least not as they are currently organized. The epoch of the Internet would try any secretive, globalist’s patience. Type in the word

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“Bilderberg” and almost two million cites come up on Google alone. The global chaos that may be brought on by the dollar dilemma and the activities of the “Anglosphere,” especially the Bush administration, remains a possibility and poses tremendous challenges. Meanwhile, the Age of Promotion, as it has been described in this book — whether you agree with it or not — explains the monetary incentives behind the expanding global infrastructure. A more generalized awareness may provide the trigger that begins at least a partial unravelling of the non- essential sociopolitical and economic regulatory bureaucracy of the 20th century. Given human nature, the idea of a rigidly controlled supra-national “conspiracy” overseen by a single individual and his lieutenants, might be considered simplistic. Likewise, the idea that has taken hold (with some justification) that a single individual or a tight group of plotters, has in mind to wipe out billions — for whatever reason. One can spend years investigating such hypotheses and come away without definitive answers. “High Alert” has been written from a theoretical point of view. Certain sections provide detail to flesh out the argument, but the end result is still the same: Either readers (especially free-market thinkers belonging to a larger group of “two percenters”) will perceive that the world-view of this book provides a template for a viable sociopolitical and economic perspective or they will not. “High Alert” presents patterns that seem increasingly obvious and argues emphatically for their viability, but each reader will make up his or her mind on the matter. As an author, educator and financier, I am aware of the consequences of sounding the alarm about a perceived financial crisis. However, having founded an Internet-based news network that boasts some of the world’s leading free-market, social, political and economic thinkers, and having been privileged to spend numerous enlightening hours conversing about the topics presented in this book with most of them, my pronouncements are made with good conscience and due diligence. Criticism is the lot of anyone who attempts to “make a difference” in public discourse. At this point I am used to it and expect it. I hope you enjoy this book and find its wealth-preservation and enhancement strategies useful. It is my wish that “free-market thinking” becomes a model you employ in all aspects of your decision-making process. Chapter Summaries

“High Alert” is an investment book that bluntly confronts today’s economic realities. In no way is it intended to endorse the power elite. However, if one is to

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A H LERT IGH A NTHONY W ILE

preclude these possibilities and educate the accepting reader as to what is actually occurring sociopolitically and economically. Chapter 2 deals with the “inflationary” — perhaps hyperinflationary — eye of the onrushing economic hurricane. Inflation is caused when a government- backed fiat-money system generates too much money and credit. The overhang of money and credit washing through the system now threatens to devalue savings, ruin companies, wipe out jobs, render mortgages unstable and evolve into a soft or hard hyperinflation if not handled properly. Chapter 3 focuses on defining the power elite in order to better understand what it is and how it interacts, influences and takes charge of economies and monetary policies around the world. The analysis of this “visible” or “global” power elite is not undertaken merely to expose the influential among us, but to lay the groundwork for the implementation of a clear, yet almost entirely unused, strategic investment approach. Free-market thinking — economic literacy — can help individuals stay afloat in this time of turmoil, and help investors protect their portfolios. Chapter 4 extends the book’s analysis of money power. It shows how war is part of the toolkit that the elite uses to maintain control, expand influence and generate vast wealth. The so-called Third World is mostly the target of the power elite, but its depredations, and the system itself, inevitably has an impact on the West, in Europe and, today, strikingly, in America. Chapter 5 explains the history of money and how the banking industry — run by the power elite — gradually took over the coinage and distribution of money on behalf of the government. The symbiotic relationship between the inefficient command-and-control structures of even the most democratic government and those who supply its funding is responsible for a good deal of the sociopolitical and economic chaos the West faces today. Chapters 6, 7 and 8 deal with the power elite’s historical penetration in Europe and America. Chapter 6 focuses on how modern money power has distorted economies or, in the case of the European Union, created fictitious regional entities out of quarrelsome nation-states as a stepping stone to a consolidated worldwide government. Chapter 7 traces the growth of government in America, and the demise of the republic. Chapter 8 returns to the book’s banking analysis to focus on the U.S. Federal Reserve. Chapters 9 and 10 focus on the effect the ‘Net may be having on the power elite’s operations. First, it seems to be making the power elite nervous about its agenda. Second, it is teaching a broad cross-section of the world’s population, the so-called two percenters, about the value of free-market thinking — including

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economic and financial literacy. This is bound to be disturbing to the power elite, which thrives on ignorance of such matters. The chapters also provide insight into the VESTS system. Chapter 11 focuses on the ways that the power elite is striking back at the ‘Net and its creation of financially literate critics who are attuned to the power elite’s money manipulations and use the Internet to spread these views. The power elite’s choices involve shutting down or, in some other way, regulating the free flow of information. Eventually, perhaps, the power elite will have trouble maintaining even the global network it has already put in place, as it becomes increasingly clear this network is part of a 20th-century Age of Promotion, and acts as a kind of megaphone for money-power messages — bird flu, peak oil, Islamofascism, etc. As these messages are disseminated, corporate organs of the power elite go to work to supply the products that these artificial crises have stimulated. The chapter includes additional information on VESTS. Chapter 12 sums up the “storm warnings” that have appeared at the end of every chapter and then provides the reader with a summary of the book’s economic action alerts. This last full chapter also suggests other ways that free- market thinkers (two percenters) can structure their assets to capitalize on the movement of the business cycle rather than be run over by it. The conclusion restates the book’s premise and adds some final thoughts.

< 25 > A NTHONY W ILE 1 Reasons for the financial storm upon us. THE HURRICANE ARRIVES

“In case you ever wondered what it must have been like when the Roman Empire fell apart, let it be known you’re at the beginning of the end for the United States as the world’s biggest economic power. America is on the cusp of economic and political upheaval, unlike anything it has experienced in its entire history! The days of robbing Peter to pay Paul are coming home to roost.” — May 2006, Resource Investor, What a Difference a Week Makes

High Alert A financial hurricane is washing over America and, to a lesser extent, the entire West. To label it the “downstroke” of a super business cycle does not do it justice. These events occur in cycles, with the last one taking place in the 1970s — a mild storm compared to what is occurring today. Then interest rates rose to almost 20% as the U.S. Federal Reserve nearly shut the economy down to regain control of the currency. Who knows what will happen this time? The currency bubble is bigger, and could grow bigger still if foreign countries begin to “dishoard” their dollars. Aggressive inflation could turn into a soft or hard hyperinflation that would spell the end of the dollar’s dominance as the world’s anchor currency — and very possibly of the dollar itself. Central bankers must be careful not to puncture the various speculative bubbles caused by easy credit too rapidly. If they do, the results could unravel the housing market and lop billions off the values of the Dow and Nasdaq. The boldest action the Fed has taken thus far is to do away with its broad-based M3 dollar statistic, which makes it more difficult to ascertain the expansion of the money supply.

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Unfortunately, disguising the problem won’t make it go away. The United States is in line to bear the brunt of the coming economic dislocation because it has lost its productive republican moorings, and because the current administration has been especially spendthrift, almost unbelievably so — embarking on a misguided policy of nation building. Now major powers such as China and Russia are contemplating ways to disentangle their economies from an increasingly shaky “mono-power” and its equally suspect currency. For 50 years or more, countries have purchased dollars in order to buy oil, but all this may be coming to an end. Iran’s leaders, for instance, have signaled that they are willing to de-emphasize the dollar’s role as the world’s anchor currency — and exchange oil for other currencies or even precious metals. Some have maintained, especially in the alternative ‘Net press, that the United States went to war with Iraq over Saddam Hussein’s stated intention to do the same. They speak of it in both Asia and South America. It is only the American people themselves who have not been informed by their major media that the dollar is ceasing to be the world’s foundational currency. When will China and other countries tire of holding American dollars in the form of Treasuries and seek to “repatriate” them? How many more times will China be denied the ability to spend some of their billions of dollars on real assets in the United States or Canada before its bankers stop showing up at the U.S. Treasury auctions? The fallout from Amerca’s largest creditor actually starting to get rid of dollars would mean economic chaos. An outflow of dollars could not come at a worse time, as the Fed has to print a great deal more money and offer even more credit to keep up with ongoing deficit spending. A solution to monetary oversupply exists, one that can protect the big institutions and modest personal portfolios: the purchase and retention of money metals. Commodities, especially gold and silver, tend to keep their value or appreciate in times of financial crisis. Even as stock market investments in ordinary portfolios spiral down, money metals rise. This happened in the late 1970s when gold rose to an inflation-adjusted $1,500 an ounce and silver to $100. Today, hundreds of millions of buyers around the world value these money metals more than ever. Many of these individuals wear their wealth directly on their persons as fine jewelry, or secure it in some fashion, in a vault, private bank or even underground. During an inflationary currency crisis, people’s confidence in paper money erodes. Such hyperinflationary episodes have taken place before. China, during its days as a great, expansionist empire saw perhaps six of them or more. The Austrians and Germans had their nations’productivity drained by the very same mechanism not 100 years ago. Early in the 20th century, Austrians carted wheelbarrows full of paper bills to the grocery just to buy a loaf of bread, and the value of paper money was equal to that

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of firewood in the end. The majority of seniors living in those countries at that time lost everything overnight. The middle and upper-middle class were reduced to rumaging through garbage cans, just to feed their families.

Fundamentals of the Financial Hurricane A strong inflation, even a soft hyperinflation, already has a grip on Western currencies, most notably in the United States — as anyone who buys groceries is aware. The dollar’s plunge may be delayed by a kind of “race to the bottom” as other central banks adjust their currencies to reflect the weakness of the dollar. But if central banks, including the Federal Reserve, are able by some chance to stem hyperinflation, they and the bankers behind them will only do so by making a great deal of credit available to the very wealthy and by expanding government welfare and workfare programs, as well. The result will still involve a great deal of inflation, plus an ever-larger government sector, more income disparity, increased joblessness and a disproportionate weakening of the private sector. Those on fixed incomes will have a difficult time reacting. That includes many of society’s elderly. The 1970s — the Jimmy Carter years of 20% interest rates — were merely a precursor. In his “Great American Depression,” free-market economist Murray Rothbard explains the ramifications of hyperinflation as follows: “Hyperinflation, on any count, is far worse than any depression: It destroys the currency — the lifeblood of the economy; it ruins and shatters the middle class and all fixed income groups; it wreaks havoc unbounded. And furthermore it leads finally to unemployment and lower living standards since there is little point in working when earned income depreciates by the hour.” Technologies such as the Internet can make a difference in terms of letting people know what is really going on. The power elite’s Great Game has been played out for many centuries, but not for several generations has it been so exposed. The Internet has acted as a huge magnifier. One of the reasons, it can be speculated, for President George W. Bush’s often-miserable ratings in his second term of office is because too many people are viewing a kind of machina ex deus — courtesy of the Internet — that was never visible before. And they do not like what they see. President Bush’s behavior has been reckless. There is no other way to describe it. Threatening Iran with an imminent nuclear attack is not out of character for this administration. But the real impact may be seen in the damage to the domestic economy. The balance of trade is worse than ever. The dollar has moved down markedly —especially against gold and silver, but also against numerous currencies. Most of the monetary flexibility that could have counteracted the current situation is not available.

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Reality Byte: Fed Money-Measurements

• M1 includes physical monies such as coins and currency. Also includes demand deposits (checking accounts) and NOW accounts (interest-earning bank accounts within which the client may write drafts against deposited monies). Another synonym for M1 is “narrow money” because the M1 category is considered to be the narrowest idea of money. • M2 includes all M1 categories, time-related deposits (such as CDs), savings deposits and non-institutional money market funds. Economists use the M2 category to not only quantify the amount of physical money in circulation, but also to try explaining various economic monetary conditions. • M3 includes all M1 and M2 categories along with large time deposits (such as lengthy CD terms), institutional money market funds, short-term repurchase agreements (short-term borrowing agreement for government securities dealers) and other large liquid assets.

Source: From the Wilderness, paraphrased from Investopedia.com.

Financial Instability Worse Than Ever We have had nearly a full century of internationalism in all areas of the West’s economy. Yet, global financial instability regularly worsens and living standards around the world — Asia, Argentina, etc. — fluctuate with alarming regularity. Whatever promises have been made by the wise men running our global institutions, they are not working. We cannot count on them. Lacking such flexibility, Federal Reserve officials have seemingly resorted to hiding the inflationary countermeasures on which they must embark. In announcing that the Fed would no longer report one dollar-circulation statistic — M3 — officials were telegraphing a solution already evident to most. Here’s what MSN Money’s Jim Jubak had to say:

I'm not generally a believer in Federal Reserve conspiracy theories. But in this instance, the conspiracy theorists make an intriguing point. The Federal Reserve decided to kill off M3, they argue, because it is the measure that shows the fastest growth in the money supply. For the 12-month period that ended in February 2006, for example, M3 grew at annual rate of 8%, but M1 grew by just 0.4% and

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M2 by 4.7%. Certainly, getting rid of M3 makes it harder to argue that the short-term inflation fighters at the Federal Reserve are actually very soft on long-term inflation. Maybe so soft that you could say they love long-term inflation.

Inflation and currency debasement causes tremendous monetary distortions. When the pressure becomes intolerable, the power elite turns to conflict, or the threat of conflict, to redirect the public’s attention away from the system’s financial failure. The power elite is composed of a fairly small group of inter-related wealthy families along with leaders of corporate, banking, charitable and even religious institutions. Thanks mainly to the Internet, the amount of information about the power elite is growing every day. But even before the creation of the Web, many of the individuals and organizations referred to in these pages had been well-documented in magazines and books. Not only does the power elite exist, it publishes (some of) its intentions openly and proclaims (many of) its actions clearly. The avowed goal — certainly not the only one — is to wipe out war, poverty and the other afflictions of humankind. Their methodology includes the creation of what has been called “global governance”or “The New World Order.” FMNN commentator Ron Paul (R-Texas) has written extensively on globalism and its internationalist institutions. From his point of view, free-trade deals such as the Central American Free Trade Agreement (CAFTA) are deeply flawed, badly administrated and have little do with “freedom.” In a June 2005 Texas Straight Talk column, he wrote: “It is absurd to believe that CAFTA and other trade agreements do not diminish American sovereignty. When we grant quasi-governmental international bodies the power to make decisions about American trade rules, we lose sovereignty plain and simple.” Conspirati It is important that you know that the members of the Skull & Bones Order take an oath that absolves them from any allegiance to any nation or king or government or constitution, and that includes the negating of any subsequent oath of allegiance which they may be required to take. … [Their other oaths] mean nothing. —PlausibleFutures.com

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Fundamentals … Government Overspending The current bout of out-of-control U.S. federal government spending began in the 1980s when America assumed its first trillion dollars of debt. Five years later, the nation added a second trillion, and in 1990, a third trillion. By 2006, the U.S. government had assumed a staggering $10 trillion in debt. Financial analyst and “hard-money guru” James Puplava points out that inflation does not disappear simply because it is being ignored by monetary authorities. In fact, it only gets worse when it is not confronted. A February 2005 column posted on his Financial Sense Web site includes this warning: “During the latter stages of inflation, money velocity increases because people no longer have faith in their currency. … Money velocity is a direct reflection of the degree of confidence that people have in their currency. A sharp increase in velocity normally takes place during the final stages of an inflationary crisis.” America has hollowed out its industrial capacity. Now U.S. corporations have left the building. They are looking in India, China, Eastern Europe, seeking skilled and unskilled labor unencumbered by the massive regulatory baggage of the U.S. labor markets. The dollar has supposedly lost 50% of its purchasing power in the last two decades — as American central bankers have flooded the world with dollars. Until recently, mortgage rates were low; credit was easy. Owners and builders “flipped” houses, especially in regions such as South Florida and greater Los Angeles. But how much of this was due to demand and how much due to inflation? Stories about condos doubling in price in six months and house trailers suddenly going for $1 million in California were evidence of what “High Alert” calls soft hyperinflation. Obviously, inflation is preferable to soft hyperinflation, as soft hyperinflation is preferable to full-blown hyperinflation. And while we are not in the final stages of an inflationary crisis yet, we certainly seem to be headed in the wrong direction — as the prices of money metals climb, and the dollar bumps lower.

Fundamentals … The Housing Bubble In a post on the left wing e-journal Counterpunch, Doomsday Approaches, Mike Whitney told of selling his house last year in anticipation of “Economic Armageddon” in the United States. “I sold my home for one reason: George W. Bush. He and his protégé at the Federal Reserve have submerged the country into a morass of ‘unsustainable’ debt, disrupted the nation’s economic equilibrium and thrust us towards fiscal disaster. They’ve also generated a

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humongous housing bubble through their irresponsible and self-serving manipulation of interest rates.” Whitney believed that the Fed rate hikes would eventually spell doom for the housing market — in this he was not alone — making it almost impossible for buyers to borrow and sellers to sell. In a November 2005 FMNN post, With Real-Estate, This Time It Really Is Different, commentator Peter Schiff points out, “By insuring increasingly risky mortgages under the presumption of an implied Federal Government guarantee, Fannie Mae and Freddie Mac enabled the origination, resale, and securitizations of mortgages, which otherwise never would have been possible. The moral hazard inherent in separating lenders from the ultimate holders of the paper results in the irresponsible extension of mortgage credit, to non-creditworthy borrowers, on liberal terms and with insufficient collateral, fueling the speculative run-up in housing prices.” Schiff also wrote a white paper on diversification out of America, which includes these U.S. statistics: • Personal savings: Down from 12% after-tax to about nothing in two decades. • Federal budget deficit: $521 billion in 2005, 4.5% of GDP. • Federal debt limit: Pushed to $8.18 trillion as of this writing. • Imports: 50% more than exports. • Borrowing: $2.1 billion per day. • Debt to foreigners: $2 trillion — and rising.

Fundamentals … Fannie Mae, Freddie Mac, Derivatives Schiff and others have pointed out that the two largest home mortgage lenders (both backed by implicit federal government guarantees) — Fannie Mae and Freddie Mac — have benefited greatly from the easy money of the 1990s and the early 2000s, and are at risk for massive defaults in the latter 2000s as rates rise. In an article, Hedge Fund Monsters? late last year, FMNN commentator David Chapman had this to say: “The prime beneficiary of defaulted mortgages besides the bank that lent the money could also be Fannie Mae and even Freddie Mac. The regulator of the giants has [notified] Fannie Mae there could be more accounting issues. The issues centre on internal control and manipulation of income and expense.” Both Fannie Mae and Freddie Mac are large derivatives dealers. Issues have been raised about the accounting of their hedges, but of course derivatives difficulties extend far beyond Fannie Mae and Freddie Mac. Greg Silberman, a

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London “City” accountant, spelled out the danger inherent in derivatives in a GoldEagle.com interview. “This derivative thing is an absolute monster. It dwarfs almost everything else in size and impacts on every financial market. … The global, dollar-based economy needs to make a gigantic retrenchment, of that there is no doubt.” According to hard-money financial observer Krassimir Petrov, Ph.D., the United States could experience a long-term inflationary cycle of several years before the inevitable “end game.” In a late 2004 ‘Net posting, Petrov cautioned, “The intelligent investor is advised to position himself accordingly. Cash and bonds are obviously good for deflation, but a terrible investment choice in an inflationary environment. The obvious choices are hard assets, such as precious metals [and] industrial commodities.” Petrov agrees with Schiff about precious metals with one caveat: “Even though gold is the ultimate choice, I believe that over the next decade, silver will outperform all investments, whether boom or bust, inflation or deflation; for more on silver, I refer the reader to the excellent work of Dave Morgan and Ted Butler.” The David Morgan of which Petrov writes is the editor of the Morgan Report, and a long-time FMNN commentator. Morgan, along with several others, began to preach the virtues of precious metals early in the 2000s, sensing the trends that have now come into play. His writing and analysis are acknowledged in the industry as having helped set the stage for the first round of positive revisionist thinking about silver and its value. Arguably, the early-in analysis of Morgan — perhaps before anyone else — attracted free-market thinkers such as superstar investors Warren Buffet, George Soros and Microsoft founder Bill Gates to the white metal. Another FMNN commentator who wrote about the precious metals surge- to-come is recently-deceased FMNN president and two-time libertarian candidate for president of the United States, Harry Browne. Browne was a best-selling author of hard-money investing and independent lifestyle books in the 1970s. The following excerpt is taken from one of these books and depicts the monetary chaos that was in fact a hallmark of that decade, “You Can Profit from a Monetary Crisis.” Much of the analysis is similar to that in this book and to the analysis of other books and articles about the profligate and unfortunate monetary system the West has adopted. The difference is Browne was first.

Today, the U.S. government is running out of time. The inflationary cycle has reached the point where it doesn’t respond to fine tuning anymore. The elaborate structures the government is

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trying to protect are becoming more and more vulnerable to the slightest mistakes. Much has been said about how close the United States came to a banking panic and a stock market crash in 1970. These incidents have often been cited as proof that the crashes and panics can be avoided. To me, they’re proof that the system is so shaky that it was saved in each case only by the best luck imaginable. I don’t wish to be dependent upon such a vulnerable system. We’re obviously getting very close to the depression that’s been in the works for thirty years now. When it will begin, if it hasn’t already, no one can say. But the drop of the dollar, the flight to gold and silver, disasters like Penn Central, Lockheed, the credit crunches of 1970 and 1973 indicate that it can’t be far off. In addition, the government is flirting dangerously with runaway inflation. The built-in spending programs of the government mean that there’s practically no chance of budget reductions, deflation, or even a let-up in the constant expansion of inflation. Further, the U.S. dollar is no longer backed by any precious metal. The government refuses to pay out gold to anyone in exchange for dollars. Of course, if it did it would quickly lose its small hoard of $10.4 billion — since there’s at least eight times that much in dollar claims against the gold held by nervous central bankers throughout the world. What we have seen in recent years is just the beginning. There are millions of economic mistakes the market must liquidate. The dollar has a long way to go downward before it reaches a realistic level relative to its gold content. If the mistakes accumulated so far weren’t bad enough, consider the fact that the government is doing nothing to change all this. Quite the contrary, it is talking about “free” medical care for everyone, guaranteed annual incomes, more aid to underdeveloped nations. Things aren’t getting any better; they’re continuing to get worse — even before the crash comes. Elite Retreat …

“Remember Epicitus, who said, ‘The extreme of any position will ultimately become its opposite.’ Greenspan says we don't have inflation — yet every chart tells a different story. A rather strong & evident different story. The position in reality is now the opposite of what the Fed and the government keeps telling you. Now, whom do you believe, Greenspan or Epicitus ?” —Dinl.net, March 2004

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35 > <

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• Millions in unnecessary public works projects from Army Corps of Engineers. of Corps Army from projects works public unnecessary in Millions •

• $60 billion on corporate welfare, versus $43 billion on homeland security. homeland on billion $43 versus welfare, corporate on billion $60 •

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A H LERT IGH A NTHONY W ILE

economy is an astounding retrogression — and irresponsible as well. For reasons pointed out above, the Fed is hopeful that its inflationary ways will now receive little mainstream coverage. But no matter what the Fed does, no matter what other central banks do around the world, the inflationary pressures that have been building up for the past decades will not be denied. There will be much happy talk, of course, in between bouts of increasing pain. We have conjured up the endless ranks of our opponents ourselves, printed them, stamped them “In God We Trust” and sent them on their way by the billions and hundreds of billions. And now they return. When it gets ugly, look for political finger pointing to begin — and perhaps for more real-life military actions to mysteriously present themselves with or without violent preliminaries. However, the difference between now and yesterday is the Internet. The ‘Net’s all-seeing electronic eye makes it more difficult to draw attention away from serious sociopolitical and economic issues. Perhaps a bigger war would suffice — but nuclear weapons make this problematic. More regional wars are surely in the offing, but they may not do the trick.

Economic Action Alert Keep an open mind as you read this book. The primary action that can be taken when investigating a new phenomenon or adding to one’s knowledge base is to put aside disbelief. Knowledge is key. Before any moves can be taken, a realistic appraisal of current events must be generated and maintained. As individual issues begin to become clear, appropriate action may be considered.

< 36 > H IGH A LERT 2 Focus on inflation — and hyperinflation. THE LOOMING INFLATIONARY EYE

“It is democracy run amok here. … We have a fiat currency, produced by excess creation of credit and debt by the banks … which flows to the rich, creating obscene income disparity, and the attendant woes, one of which is the inflation in prices and social unrest that is going to consume us in a roaring bonfire.” — May 2006, FMNN, Richard Daughty e-economic newsletter

High Alert We have discussed the preliminaries of the financial hurricane. Having come on shore, it is gaining momentum, and is striking hard. So that we may better understand the explosive forces, we will examine, in this chapter, the basics of inflation and hyperinflation and their sociopolitical and economic impact. A “little”inflation has often been defended as necessary to keep the economy running smoothly — a defense that could only be mustered by government apologists in a government-backed, paper money environment. Truly, there is no saving grace at all to inflation, certainly not to hyperinflation, which can sap savings in a single day or, if “softer” rather than “harder,” can steal continuously for months or even years. Additionally, the velocity of money becomes a factor during an inflationary or soft hyperinflationary period such as the one we seem to be in. When people feel secure, they tend to save money and keep it at home or in banks. But when people are insecure about the value of money, they tend to spend it at ever-faster intervals. The more money finds its way back into the economy, the less the individual paper scrip is worth.

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Reality Byte: Weimar Bread-Price History

“Berlin, August 11, 1922: One of the comedy-tragedy episodes of the visit of the Committee of Guarantees to Berlin was the payment by the German Government of their railway expenses, including their special car, which waited here six weeks. This was done in 20-mark notes, and it required seven office boys with huge waste-paper-baskets full of these notes to carry the full sum from the office down to the railway station.” —Lord D'Albernon, 'An Ambassador of Peace'

At the conclusion of World War I, Germany slid into an era of turmoil. … When war broke out in 1914, one German mark was equal to U.S.25 cents. By the end of the war, the ratio was U.S. 1:18 marks and sliding.

1918: Loaf of Bread History: 0.63 marks. The Weimar Government was conceived in 1918, and the Allies forced it to concede to the crippling Treaty of Versailles, including reparations to the victors; Britain and France wanted to rebuild their nations and needed to repay their loans to the United States. The total figure was not determined at the time.

January 1921: Loaf of Bread History: 10 marks. The reparations figure arrived in May 1921: £6.6 billion or 132 billion German marks. Germany was to pay reparations until 1987. For a while there, it looked as though it was going to make it.

January 1922: Loaf of Bread History: 163 marks. Afraid of a backlash at the polling booth, taxes were never raised, and never exceeded 35% of expenditure. But

spending was never cut, because reducing services would anger the voters. There

wasn't a mark to spare.

As a republic, America amassed a gigantic industrial base that propelled the nation and its people to great power and wealth but then also helped support the political class’s adventurism and international military meddling in the last century. Now a century of income taxes and fiat money have gravely weakened the fabric of a once vital, laissez-faire society. The capital that America has lived off as it transformed itself into an empire is nearly exhausted. Industry

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February 1922: Loaf of Bread History: 250 marks. Consumers began to realize that something was amiss and tried to withdraw their bank notes as gold, only to realize that they weren't allowed. Everything that had hitherto happened continued to happen, only a lot more prominently.

July 1922: Loaf of Bread History: 3,465 marks. Germany could not afford the crippling reparations. It was due to pay coal and timber to France that it simply didn't have … Without factories, Germany lost its primary source of trade and income.

September 1923: Loaf of Bread History: 1,500,000 marks. The value of the mark plummeted. When single mark notes became worthless, the Treasury minted 200 mark coins, then 1,000 cloth notes, then 20,000 mark bonds, and these became worthless too. “By the end of the 1923 hyperinflation,” said historian Jonathan Tennenbaum, “the total nominal national debt of Weimar Germany was worth the equivalent of a few pennies or less.”

November 1923: Loaf of Bread History: 200,000,000,000 marks. Menus in restaurants bore no prices because the currency fluctuated so rapidly that a meal could triple in value between ordering it and paying for it. A clergyman came to Berlin from a suburb with his monthly salary to buy a pair of shoes for his baby; he could only buy a cup of coffee.

1924: Loaf of Bread History: 0.5 Rentenmarks. Gustav Stresemann became the Chancellor of Germany in 1924. … He re-evaluated the German currency by abolishing the mark and introducing a new currency known as the Rentenmark; one Rentenmark was worth 1,000,000,000,000 marks. He stopped mass currency production and encouraged foreign investment.

Abridged from www.Answers.com has been shuttered by high taxes. Jobs have been inflated away. Technological ascendancy is decreasing. In perhaps 90 years, the greenback has lost substantially all of its purchasing power and whatever remains is rapidly being dissipated as a result of additional profligate wars and massive emergency mobilizations.

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Uncontrolled Expansion The free-market definition of inflation is a controlled, or uncontrolled, expansion of the money supply — paper money and credit. The most difficult idea for many investors to comprehend is that the government and central banking process is behind the booms and busts that afflict modern-day capitalism. The famous Austrian economist Ludwig von Mises was perhaps the first to propound the theory that government monetary policy was responsible for the boom-bust cycle of Western-style economies. Von Mises and his disciple Friedrich A. Hayek held that without such government intervention, capitalism would be subject to so-called fluctuations caused by entrepreneurial activity, but that great inflations and depressions would be mitigated or even dissipated. This free-market view is, unfortunately, still controversial. And in the past it is certainly not one that has served as a fulcrum of economic thought. Economists and pseudo-economists have maintained that capitalism gave rise inevitably to booms and busts and that it was the job of the state to alleviate them. Karl Marx’s ideas were perhaps the most radical response to the boom-bust view of capitalism while John Maynard Keynes’s less extreme solutions gained credence, sadly, in the West throughout the mid- and late-20th century. According to Austrian theory, most everything that governments do to allay recessions has the reverse effect, making matters worse. The Great Depression is only the most extreme example. Still, knowledge is power. Investors who understand how central banking policies and government wage and welfare policies stimulate and exacerbate the business cycle may be able to predict for themselves — in at least a general way — in which direction interest rates are headed and how severe a given recession may be. Inflation surfaces only as the public becomes aware there is too much money circulating and changes behaviors. Instead of saving money, a public aware of inflation spends it. Instead of valuing the currency, the public is suspicious of it. Remember, inflation is not the reason that the economy breaks down; it is only a symptom of what causes it — cheating the public by counterfeiting currency and artificially increasing the money supply as a means of stealing the public’s wealth. A currency crisis results from an increase in the public’s consciousness of the fraud.

No Forgiving Grace There is no forgiving grace to hyperinflation — it is always, everywhere, regarded as destructive. It effectively wipes out the purchasing power of savings held as paper assets of the country afflicted with it, distorts the economy in favor of

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extreme consumption and hoarding of real assets — causes the monetary base, whether specie or hard currency — to flee the country and makes the afflicted area anathema to investment. Despite these dreadful results, society continues to face episodes of inflation and hyperinflation. It is part of fiat money’s life cycle. The root causes of hyperinflation have to do with the point in time when the

1923 bank-notes provided by Frankfurt-based gold analyst Oliver Frank.

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Alternative Reality Byte: Optimistic View

There is of course another side — an argument to be made, for instance, for a certain kind of “balance of power” that portrays a less grim monetary scenario than the one presented extensively in these pages.

• Dollar: The Fed can always bring the dollar up by raising rates and printing fewer dollars. Meanwhile, a lower dollar makes it easier for manufacturers to sell abroad. Outside of an attack on American soil, not much can genuinely damage the dollar, as it remains a flight- to-quality currency. When America invaded Iraq, the dollar strengthened. If the United States were to bomb Iran, the dollar would likely strengthen again.

• Deflation: If there were an economic blow-off of any size, its impact would not be long lasting. Japan’s stubborn, 20-year deflation probably cannot happen in America. The Japanese leadership was always afraid to print enough money to heat up the economy, even though it was recommended repeatedly. Hierarchical and fixated on control to the exclusion of almost any other issue, the Japanese power elite would rather have an economy that limps along and causes pain than an economy that heats up, creates a new class of wealthy entrepreneurs and upsets a social structure in place for hundreds of years.

• Euro: The euro is not worrisome to U.S. policymakers. They welcome it as providing a more efficient tool to measure balance-of-trade. Also, it cannot provide serious competition to the U.S. dollar, in their view. First, the euro-zone is not really a country and therefore reactions to monetary policy by the populace are apt to be less homogenous than in the United States. Second, citizens in the euro zone are not as entrepreneurial as Americans and thus eurozone bankers are somewhat restricted in terms of how high they can drive money creation. Third, eurozone bankers are inherently cautious about money creation and tend not to take advantage of the central bank’s ability to stimulate economic growth. Fourth, individual countries can still hold currencies outside of the euro. There is a good deal of demand for dollars in Germany and England.

• Gold and silver: The prices of precious metals will advance with those of other

commodities as they did in the 1970s. increase in money supply, or drop in basic money stock, makes it impossible for a government to improve its position via ordinary money-printing or credit-granting means. One reason is that often the alternative to hyperinflation is depression. In late 2001, the Argentine peso collapsed in value. International economists predicted the

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country would have to either get a new loan from the IMF and institute shock therapy, or else hyperinflate. Currency controls were imposed, tariffs instituted, and the economy was allowed to fall into a severe recession: Unemployment hit 25 percent; homelessness and crime spiraled upward and the poverty rate peaked at more than 50%. Hyperinflation cannot exist without paper money — but can be seen as the logical outcome of decades of currency debauchery. The 1834-1839 debasement of the akçe, the standard silver coin of the Ottoman Empire, resulted in a fivefold value drop, increasing the nominal amount of money in circulation. Episodes of hyperinflation produce staggering increases in price — and bank notes denominated in millions, billions, and trillions. Hyperinflation is often the result of governments using unbacked currency during wartime to pay the expenses of the conflict: the United States in the 1770s, the Republic of China in the 1940s and the United States again today. In the United States, hyperinflation was seen during the Revolutionary War and during the Civil War on the Confederate (losing) side. The Northern “Greenback” annual inflation rate indicated what might be called soft hyperinflation — about 25% in 1863 and 1864. Cases of extreme social conflict encouraging hyperinflation can be seen in Germany after World War I, Hungary at the end of World War II and in Yugoslavia after the death of “strong man” Marshall Tito. The hyperinflation episode in the Weimar Republic in the 1920s is, in many respects, the paradigmatic example and the one that made economists and others aware of hyperinflation as a phenomenon unto itself. While it was not the first example of hyperinflation, it was perhaps the first recognized as such. Following World War I, the Treaty of Versailles forced Germany to pay significant reparations (compensation) to the nations that won the war, starting in 1919. However, Germany had a very weak economy at this time; in effect, the young republic of Weimar had no money. To pay its reparations and rebuild the economy, the German government printed money. The inflation reached its peak by November 1923, but ended when a new currency (the Rentenmark) was introduced. Hyperinflation did not directly bring about the Nazi takeover of Germany; the inflation ended with the introduction of the Rentenmark and the Weimar Republic continued for a decade afterward. The inflation did, however, call into question the competence of liberal institutions. It also produced resentment of Germany's bankers and speculators, who were blamed for the inflation and the crippling of the German economy.

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Conspirati The fakery of the outgoing Alan Greenspan administration, in burying the M3 report, was clearly intended to conceal the fact that the rate of increase of world prices of primary materials has the world as a whole currently on the same kind of “least-action pathway” curve of hyperinflation which gripped Weimar Germany during the second half of the year 1923. —Uncensored.co.nz

Velocity, Too Hyperinflation involves both the supply and velocity of money. During a period of hyperinflation, the return to use of gold, silver or even barter becomes common. Many of the people who hoard gold today expect hyperinflation and are hedging against it by holding specie. This is sometimes met with capital controls, an idea that has swung from standard to anathema and back into semi-respectability. All of this constitutes an economy that is operating in an “abnormal” way, which may lead to decreases in real production. Once the vicious circle of hyperinflation has been ignited, dramatic policy means are almost always required — as simply raising interest rates is insufficient. Bolivia, for example, underwent a period of hyperinflation in 1985, where prices increased 12,000% in less than a year. The government raised the price of gasoline, which it had been selling at a huge loss to quiet popular discontent, and the hyperinflation came to a halt almost immediately since it was able to bring in hard currency by selling its oil abroad. The confidence crisis ended, and people returned deposits to banks. Investors who fared best during great hyperinflations of the early 20th century were the small minority who had the foresight to purchase foreign currency or gold and silver. And those who profited beyond their wildest dreams in the 1970s were those positioned in the best companies in the world to own during a currency collapse — gold and silver mining stocks. Why did some profit while others did not? It’s a matter of anticipation — of understanding the way the world really works and having the resolve to take the necessary action. The information exists. Finding it is difficult. And even when one does stumble on a truthful presentation, it may be vitiated by a reluctance to mention certain matters, such as who or what is behind the social, political and economic problems that vie for attention with increasing urgency.

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FMNN commentator and free-market thinker David Morgan understood the opportunity for precious metals in the 1990s and has been preaching it to an expanding group of subscribers for nearly a decade now. The following is from a December 2005 FMNN post, How to Buy Gold for $252 Per Ounce.

Over the years [Stone Investment Group] has gotten many inquires about confiscation of precious metals, and yet it seems no one asks the more important question of confiscation of purchasing power. … One reason the secular bull market will continue is that a few more people worldwide will discover the simple truth that $500 yesterday does not equal $500 today. The ongoing destruction of all currencies is being evidenced by gold showing strength in almost all currencies. Yes, be prepared to understand the basic principles of sound money, real profit, and the politics of illusion and you will earn the conviction required to think, study and act on fact rather than emotion.

The more money is printed, the more crises occur, and the less the currency is worth. In the late 20th century the procedure was so obvious that the Economic Intelligence Review reported that billionaire-financier George Soros is said to have called it “the wall of money policy” at a Davos financial conference in 1999. Printing money and offering ever-expanding credit lines may solve short- term problems, but the problems will inevitably reoccur. “Managed” economies with managed monetary policies limp from one disaster to the next, as a brief timeline of the late 20th century illustrates: 1970s — Decade-long inflationary crisis: During an inflationary currency crisis people’s confidence in the paper money diminishes and their preference for precious metals strengthens. The monetary bureaucracy will resort to almost any kind of stunt to confuse the issue. During the great 1970s U.S. inflationary decade, Gerald Ford wore a Whip Inflation Now (WIN) button. Supporters were encouraged to reduce inflation by declining to consume. 1981-’82 — Steep recession: This was the direct result of Federal Reserve chief Paul Volcker’s monetary tightening, which included interest rates near 20%. Volcker overdid it. U.S. stock markets ground nearly to a halt. American commercial banks almost defaulted and unemployment moved up hard while Western economies, especially America’s, stagnated. 1987 — Stock market crash: Oct. 22, 1987. Apparently only the American political elite wanted to see the nation’s loose monetary policy continue. The rest of the world was terrified. The crash was severe and brought down other markets in a kind of daisy-chain from which capital markets did not recover until the mid-1990s.

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Reality Byte: Inflation — and Disinflation

This chapter has thus far examined two economic scenarios for the rest of the 2000s. One scenario, the most developed, focuses on two flavors of hyperinflation; another examines an “optimistic” view. Here are three more scenarios. None are mutually exclusive and certainly the 2000s have already experienced a kind of stagflation. • Disinflation was mentioned in the “optimistic scenario” above, but not as an economic model, but as one of a variety of factors. In fact, disinflation can become a dominant feature within a business supercycle such as this one. Disinflation occurs when the rate of inflation is going down, but money creation continues to create inflation — thus, disinflation, as the price of money continues to cheapen but at a slower rate.

• Deflation occurs when inflation subsides entirely and money suddenly starts to become more rather than less expensive. Deflation is said to be the bane of central bankers’ existences, as the economy becomes resistant to tools the central bankers have in their arsenal. Instead, in a “race to the bottom,” prices move down and goods and services become less expensive. Due to monetary complications, international purchasing might lessen as well. The combination of a slowing economy and downward moving prices could aggravate economic instability, unravelling credit arrangements, contracting equity markets and causing increased joblessness. All this creates yet further downward pressure on prices, and the cycle may be hard to break — a kind of fiscal “death spiral.”

• Stagflation is a free-market money model suited to this part of the business supercycle. Under the socialist, fiat-money policies of government-backed central banking, stagflation was not seen as a possibility as recently as the beginning of the 1970s. But that decade definitively marked its debut. In a stagflation, inflation remains a factor, but the increasing money supply does not seem to stimulate the economy. Thus the worst of both worlds are present: inflation verging on a soft or hard hyperinflation and substandard or negative growth. Ed. Note: Some two years after

this analysis was written, the unfolding debacle of subprime lending, with its dis-

inflationary effects is giving rise to strengthened stagflation, just as predicted.

1996 — Asian crisis: European banks demanded that Asian “tigers” pay back their national debts in gold, not paper. Government officials in several countries literally went door to door collecting gold and silver heirlooms. At the same time, the International Monetary Fund was loudly advocating the printing of mass quantities of afflicted countries’ paper money to counter deflation. 1997 — Hedge fund bankruptcy: Late 1990s bankruptcy of giant hedge fund

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Long Term Capital Management. This, in turn, yielded to perilous financial conditions in Central America. 1999 — Y2K: Fear that the turn-of-century date change in certain “legacy computer systems” — the so-called Y2K phenomenon — would paralyze the data- driven economy led to massive overprinting of money. When the fallout from Y2K proved minimal to non-existent, the Federal Reserve quickly removed the “punch bowl” setting off a currency crunch that collapsed the Nasdaq high-tech market. 2000 — U.S. Nasdaq crash: The Fed’s credit tightening after the Y2K scare caused the sickening loss of Nasdaq equity. Media and print commentators, faced with the spectacle of valuations seemingly cut in half overnight, often speak of wealth “going away.” (Note: The above Nasdaq correction should have affected both exchange averages equally. In fact, the lack of decline of NYSE companies might be due to the activities of the so-called Plunge Protection Team set up in the United States after the 1987 stock market crash by then-Treasury Secretary Robert Rubin. If this is the case, then even now, NYSE values are considerably inflated, with all the attendant risk and economic distortion that implies. It is being propped up in order to maintain the confidence of the public which, coincidentally, is paying for the illusion.)

Storm Warning The velocity of money increases. Even if the U.S. federal government begins to trumpet “balanced budget” numbers, as it well may do in the waning years of the Bush administration, the likelihood that people holding dollars will continue to do so is diminishing — especially foreigners. As the Internet’s flow of information continues to expand, more and more will come to comprehend what David Morgan has noted, “the simple truth that $500 yesterday does not equal $500 today.”Velocity undoubtedly increases as a result and the threat of a hard hyperinflation looms. This is a new complication in an old game. Call it the Internet X factor. The patterns of hyperinflation, soft and hard, are clear. We have already seen California live-in trailers priced at US$1 million and up. Even “fixer-uppers” can sell for $1 million or more. The average investor takes rising prices in stride, especially if these rising prices are passed on to others. But in a real hyperinflation, prices will rise far faster than people’s ability to keep up. Already the ravages of irresponsible fiscal and monetary policies have hit home, but most don’t know it. Drive around the United States and see how the middle region of the country, the place where the “silent majority”resides, is being hollowed out by fast-rising prices that diminish value, destroy business and ultimately send jobs and workers overseas. America’s great cities have not yet felt the brunt of the inflation that is to come. But

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Elite Retreat ...

“It is my belief that we are now embarked on a journey that will take us into a hyperinflationary depression. There may be brief deflationary spurts that punctuate this journey along the way, but an examination of history leads me to conclude hyperinflation is much more likely than deflation. Unlike the U.S. economy during the 1930s or Japan in the 1990s, the U.S. economy is no longer self-sufficient in capital, manufacturing, and energy. And unlike the 1930s, our currency is no longer backed by gold. The U.S. is now the world’s largest debtor nation versus the world’s largest creditor nation as we were in the ’30s. We are no longer self sufficient in energy as we were during the last depression. … In contrast to the 1930s, U.S. oil and natural gas production decline each year. This forces the U.S. to import more of its energy needs, energy we pay for with dollars. When the world no longer accepts those dollars as payment, the full impact of inflation will hit home.” —FinancialSense.com, Jim Puplava, September 2004 just as in the 1970s, the cycle is playing out bit by bit. What is scary is that it is a far more powerful financial storm than Americans have experienced before — exacerbated by the Internet and the increased velocity of money for which it will be responsible.

Economic Action Alert Convert paper money assets, especially U.S. dollars, into precious metals to counteract the clearly premeditated lack of Fed transparency regarding inflation. When faced with the prospect of hyperinflation, the obvious move is to purchase so-called “honest money” — gold and silver. As hyperinflation moves toward reality — and there is no doubt the direction in which it is headed — leverage afforded by silver- and gold-based investments will also become more valuable. Mining stocks may become quite extraordinary investments. Toward the end of a commodity super-bull run such as this, whether it takes a decade or longer, such equity usually begins an extraordinary run-up. In fact, the lack of evidence in this regard tells us only that the market of which we speak has a good deal of time left.

< 48 > H IGH A LERT 3 How the Visible Power Elite got their money and their power. RISING MONEY POWER

“If the world is to be returned to the Dark Ages, the Protestant middle class must be destroyed. Socialist-communism accomplishes this, having yielded its bitter fruit in both Great Britain and the United States.” — Excerpted at Whale.to, “Vatican Assassins”

High Alert The idea of a global power elite operating in concert is controversial. It would be nice to avoid the whole subject and move on. But an assumption that the global elite exists, is active and has goals is necessary to the argument of this book. In fact, it may be necessary to a realistic understanding of what is going on in the world today — as well as to what went on before. The former president of FMNN was Harry Browne, writer of numerous sociopolitical and economic New York Times’ best-sellers. He broke new ground by writing unapologetically about the manifold ways that government can turn success into failure and, basically, complicate and delay any project on which it embarks. He advocated responsibility for one’s self and one’s money and urged that people leave government out of their lives whenever possible. In bringing back the age-old conversation about money power as a factor in this world, and attempting to gauge its activity and influence, we merely follow in his footsteps. There are actually two main conspiratorial strands in the world — or at least on the ‘Net. One presents the current-day “New World Order” in apocalyptic terms and tracks back the history to Babylon. The narrative also includes a variety of secret societies such as the Knights Templar and, of course, the

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Illuminati. There is also a fairly energetic focus on Jews, Israel, the Rothschilds, the British Royal Family, the “City” of London and finally Armageddon. This is difficult to “unpack,” to say the least. What is far easier to discuss, and to establish as true from a historical and academic standpoint, is a kind of condensed version of the globalist enterprise to which we are all seemingly subject. That is the subject of this chapter.

‘Philosopher Kings’ and Financial Instability Money power exists. A group of individuals hailing from ancient, wealthy families, religious orders, banking dynasties and international corporations has for generations caused sociopolitical instability, economic dislocation, hyperinflation and even war to advance its cause. The above may bring to mind “conspiracy-monger.” In fact, this is why many in the financial industry shy away from such admissions, even though they will agree in private that a global, generational conspiracy exists. Often they are able to catalog the troublesome results historically, and in detail. Yet they are worried about their jobs, about risking their earning ability. They do not grasp they are participating in a conspiracy of silence as damaging to them as that which they fear. What will the world look like if the power elite has its way? Those whom we might characterize as the power elite share the goal of putting in place a kind of Platonic Republic in which “philosopher kings” (or in this case, enlightened corporate leaders, financiers and bankers) run the world from behind the scenes. It is a “brave new world” administered by a single government entity alongside one omnipotent central bank with various powerful appendages such as an international judicial system and massive cabinet entities in health, education, etc. International corporations will provide the bulk of employment, but there will also be a very large public sector that regiments individuals’ daily lives. You don’t have to believe in an active power elite that is driving us toward one-world internationalism. But if you wish to survive with some semblance of a lifestyle and an intact family, you probably do have to accept and internalize the consequences of the policies that are being put in place — policies generating the kind of financial instability that will ease the way for global government and consolidate economic power. The road to such unity is to be realized via a number of smaller consolidations. In the United States, treaties such as the North American Free Trade Agreement (NAFTA) and the Central American Free Trade Agreement (CAFTA) smooth the transition from superpower to hemispheric union. The outcome of

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this effort is to be similar to what has occurred in the European Union and is not easily stopped. While the EU Constitution was rejected by several major constituents, those charged with the responsibility of moving the EU forward are implementing constitutional powers piecemeal despite the rejection. That few have any idea what is really going on must be a great satisfaction to those in the forefront of such manipulation — the powerful families, bankers and global corporations involved in the suffusion of the poison that G. Edward Griffin, author of the Federal Reserve history “Creature From Jekyll Island,” has famously called the “Mandrake Mechanism.” And certainly it is magic, too, but dark magic of a most calculating kind. Over time it bankrupts all but those close to the magical money mechanism itself. Eventually it bankrupts whole nations in a cascading flood of debt, default and ruination. Meanwhile, those who have orchestrated the catastrophe are on to the next region, the next victim, the next country.

Government Pillars of Financial Control The three pillars of money power are government, information and religion. Of these three, lately, government and information have been the most powerful levers. The two main mechanisms whereby the power elite intended to generate what it needed were a central bank and a graduated income tax. In fact, the power elite needed only a central bank, but if people were not taxed as well, the banking mechanism would seem far more obvious. All three pillars work more effectively as power is centralized, and, together, the system provides a “knockout blow.” Decentralization threatens a loss of control. See concepts of “diffusion” and “centralization,” chapter six. In the early 20th century, Americans were still very wary of a central banking system thanks in part to founding father Thomas Jefferson’s influence. For this reason, the founders of the American central bank — and they were some of the wealthiest and most powerful families and industrialists around — decided to call the bank a Federal Reserve. They justified the name and the concept on the grounds that the American banking system needed a lender “of last resort” — and that was to be a “reserve” of money center banks with a good deal of influence and power centered in New York. The Federal Reserve Act became law in 1913, along with a federal income tax shortly thereafter. In fact, the income tax apparently remains unconstitutional on a number of grounds — including most saliently that the Constitution itself forbids it, but that has not prevented it from becoming the law of the land. Much of what the president, Congress and the judiciary system does today in

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America would, in fact, be construed as unconstitutional in pre-Civil War America. This is why we can say with some certainty that society simply didn’t “evolve” this way — it was pushed, and built. Piece by piece, brick by brick, a “democratic” America has been established, one in which “equal rights” are enforced by the federal government and public life and “service” often take pre-eminence over private accomplishments. It is a big accomplishment to move hundreds of millions of citizens away from republican roots in a mere 100 years. Today, America — the biggest obstacle of all to an international, “globalist” economy — could more rightly be characterized as having a system of democratic socialism or even fascism rather than republicanism. The power elite-controlled federal government spends $2.5 trillion of the nation’s gross national product of some $12 trillion. There is almost nothing that the power elite via government does not seem to have a hand in, from the environment, to public schools, to private business, even small business. On top of federal government mandates and tributes are overlaid state and even local ordinances, regulations and taxes. Truly a citizen of the United States of America no longer can claim he or she lives in a republic, or anything resembling a republic, with anything similar to limited government. The evolution, as has been indicated, comes from what would seem to be a simple, but incredibly powerful engine of social change. That engine is the central bank and the endless flow of money it generates. Money can be printed at will by a central bank and credit can be issued at any time and in any fashion; however, the result in almost all cases, almost all of the time, is inflation. Central banks help produce inflation the way industrial plants produce exhaust fumes — as part of the process. As taxes rise, the central government — or its private banking facility — prints more money, further eroding the value of the paper notes that its citizens use in place of gold and silver — by law. Citizens get poorer and the power elite gets richer. Now some, or maybe a large part, of the money that the central government receives may be wasted, but a good percentage goes to hiring more bureaucrats. The bureaucrats are not there to serve the people; they are there to serve the “law.” And the law is whatever the power elite decides it is. How many “servants of the state” are there? In Europe, as in America, there are public unions, public school systems, the military, the police forces, even private unions to a large extent. Of course, without the power of the central bank and without graduated taxation, the power elite would not have the necessary state control over money to generate such a large group of people indebted to it. It is only the monetary system itself — the sheer overwhelming amount of money at the state’s disposal — that makes it possible. It is government-backed fiat money that creates the modern nation-state. It is fiat money that gives the law its “credibility.” Why else would people put up with such a system? In America, as in Europe, the central government spews out thousands, even hundreds of thousands of laws and regulations each year, many of which are surely unenforceable, frivolous or even downright contradictory. Where does it end?

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With so much work, there is very little time for anything else — including an investigation of just why one’s lot is so miserable. Meantime, the other 50% of citizens are either on welfare of some sort or actively working in the bureaucracy and thus dependent on the state itself for sustenance. This is how the chains of money power gradually encircle a nation state, confine its citizens, empower an already powerful sociopolitical and financial elite, and create a democratic socialist society out of a republic. All with the intent of draining the targeted nation’s productivity — and subsequently the wealth of its citizens.

Religious Pillar While we have dealt at length about the pillar of “government”(and its subset, central banking), we will try to be a bit briefer when it comes to religion. Once religion was indeed a strong pillar of money power, but with the Reformation some 500 years ago, the centralizing influence of the Catholic Church eroded along with its usefulness to the power elite. Once religion was not available to endorse the “divine right of kings” — to make a godhead of the power elites’ highest officials in the eyes of the public, the religious pillar became something of an impediment. So what happened? If you look around today, you will notice that much of formal religion seems “under attack.” If you accept that the sociopolitical trends of the day are not accidental but rather put into motion by this intergenerational money conspiracy, then the reason for so much anti-religious feeling becomes fairly clear: The power elite apparently has decided to use religion as a unifying force. It is using it as a target and rallying the public against it. This has been going on for some time. In America, religious “fundamentalists” are mocked or attacked; in Europe, religion has Conspirati The Illuminati want their global fascist structure in place by 2012, but they seem to be behind schedule. Whenever that happens they seek to increase the speed of change by orchestrating major events that they blame on others — like 9/11. Look at how the agenda of control has moved on as a result of that horrific day and the orchestrator was not Osama bin Laden, but the force that has used it as the excuse to take away a stream of freedoms. It is a technique I have dubbed problem-reaction-solution — covertly create the problem, get the public to say “something must be done,” and then openly offer the solutions to the problems you have covertly created. —Interview with leading Illuminati researcher AboveTopSecret.com

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been seriously on the wane for at least a century (among the more prominent democracies, anyway) while China regularly attacks the quasi-religious sect the Falung- Gong. It’s important to remember that in order to keep people numbly attached to their beloved television sets and movie theaters, they need to keep raising the shock barrier. And most of the shock value is achieved by producing ever-racier programming. People need to be constantly super-charged with an ever-increasing level of mental stimulation or their attention fades. Perhaps the most clever use of religion lately can be seen in what is surely the power elite’s fomenting of a kind of religious war between the West and the Muslim East. September 11 and other Muslim-ascribed provocations have been used to try to whip Western democracies into a frenzy of hate. In both Europe and America, the meager freedoms that have remained untouched by the West’s voracious democratic governments are in jeopardy. Gun control is pursued with vehemence by authorities around the world; an unarmed populace is far more malleable than an armed one. Meanwhile, wire taps of all kinds, high-tech photography, electronic tracking and “chipping” threaten to turn first Europe and then the United States into virtual police states. Is all of this mere coincidence? Or would it behoove a powerful, monied elite to gain control of citizens before upsetting them with the implementation of increasingly robust internationalism? In analyzing modern money power, I have come to the depressing conclusion that those in the power elite, including those who are Jewish by birth, have no compunction about manipulating other Jews in pursuit of their globalist ambitions. One has to look no further than the emplacement and continued operation of the so-called Jewish state to see how the “Jewish question” has been manipulated in such a way as to cause bloodshed and violence across the latter half of the 21st century. (If this shocks you or seems improbable, please go and read about the Balfour agreement and the founding of Israel.) Even today there is a large — growing — contingent of Jews who believe that the Jewish state is a disaster, that it should never have come into being and that it has caused the very hate and anger that it was supposed to rectify. In a July 2006 article, Net commentator Joel Skousen described this mechanism, and put it in the context of the latest Mideast violence:

The reason [for the latest Israeli-Palestinian violence] is because the international community (UN and Anglo-American globalists) don’t want a solution based upon the normal exercise of a nation’s military sovereignty. They use and foment continued

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conflict in order to maneuver still-sovereign nations into a corner that will justify an internationally-imposed "solution" ala Kosovo and the Balkans. No nation would voluntarily accept such imposition (which never reverts to independence), and that is why they get continual warfare until they have no choice but to accept international control. Most often, the globalists target nations that have racial and ethnic competing minorities (natural source of conflict), and for nations that don’t, they foment ethnic migrations (false free trade gimmicks) in order to induce future conflict. That is what has been happening in Europe and the U.S. over the past 20-30 years. Even Arab and Persian nations, despite their anti-democratic regimes, still want to be free from international control. So do the people of Israel, who don’t realize their own leaders are negotiating away their security in order to force an international settlement upon them. But the Israelis are also pampered by periods of peace, and have a short span of tolerance for the hardships of the reserve call-ups and mounting military deaths that these escalations impose. The Israeli globalists know that within a month of wartime hardships, the Israeli public will be ready to accept another "victory" that always falls short of eradicating the problem – thus, setting the stage for more conflict later on when change is not forthcoming by political maneuvers.

Did the power elite have a hand in the creation of the Jewish state? Did it in fact anticipate that the founding of Israel must inflame sectarian tensions — eventually providing justification for what has, today, become a “war on terror” with the resultant diminishment of Western freedoms and all that entails? Those of Jewish birth who are set on this course — of exploiting other Jews for the sake of internationalism — are not Jews in the religious sense, not even in the spiritual sense so far as I am concerned. I ask that other Jews — American and European Jews — begin to make a distinction between the handful of globalist Jews of the power elite and the rest of the millions of ordinary Jews whose cares, troubles and triumphs are no different than anyone else’s.

Information Pillar With the pillars of government and information safely in its grasp, the power elite made a good deal of progress toward its goals in the 20th century. But how fast things change. Here in the 21st century, control over information has slipped away and

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Conspirati It has been said that the effort to establish a central bank here caused the American revolution. ... British Parliament ordered the colonists to give up their currency, and the colonists soon found themselves encumbered by a circulation strapped with 30-percent annual interest. Benjamin Franklin summarized the causes of the war thus: “We would have gladly borne the little tax on tea and other matters, if it had not been that they took from us our money — which created great unemployment and dissatisfaction. Within a year, the poor houses were filled. The hungry and homeless walked the streets everywhere.” Immediately upon conclusion of the revolution, agents of the same bankers appeared amongst the fledgling government, attempting still to establish a central bank. … The ensuing century and a quarter were rocked by repeated efforts to establish and to thwart the establishment of central banks here. —People For Mathematically Perfected Economy, Cause of the American Revolution PerfectEconomy.com

now its control over government is jeopardized as well. Religion is no help to it — or only insofar as it can be manipulated to foment terror and chaos that can then be taken advantage of. If the information pillar should crack or crumble, then control of government itself — along with its central banking money machines — is jeopardized. The whole finely tuned system is in danger of falling down. The Internet must certainly be a blow to modern money power — for the pillars relied on the most today are information and government. Fear is perhaps the most important tool. As Adolf Hitler noted, “The one means that wins the easiest victory over reason: terror and force.” In the 20th century, anyway, the power elite virtually cornered the media market — by spending huge advertising dollars with magazines, radio stations and TV networks capable of generating an audience. So the media have been competing for those banks and bank-financed companies — most of which make up America’s fortune 500. Remember, he who writes the checks writes the rules and since the bankers had control over the money supply, it was their “game.” Throughout the 20th century, the cooperation between the nation’s mainstream media and the government grew closer, choking off independent thought and restricting the kinds of opinions that could be disseminated to the larger public. This process even grew to have a name: “political correctness.” Of course the U.S. press — including radio and TV — has never been a controlled press as it is in communist countries. There, each story had to be handcrafted to the bureaucracy’s

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liking — a fairly obvious and clumsy sort of control. In the West, the process proved more subtle, leading to control of media via buyouts and advertising support — then gradually restricting information flow rather than falsifying it. Now, I have not made a thorough study of European media, but I am fairly certain of the evolution of the power elite’s control in Canada — and far more importantly in the United States. I can say with confidence that as soon as the airwaves were declared “public,” the U.S. government began regulating — and (by inference) controlling — content. In America, with three fairly controlled channels all reporting approximately the same kinds of stories from the same vantage point, television could never be said to have been independent at all. It is hard to say what the next act will bring. Certainly, the establishment press will continue to show sympathy for the established order — which is unraveling, nonetheless. The Internet could possibly be controlled, as is being done in China, but not necessarily with any great thoroughness. The West has a tradition far different from China’s and the American tradition is even further removed. Were the U.S. government to step in and simply ban the free exchange of information over the 'Net, the public reaction would be quick and harsh. Given the need for information retrieval and the necessity for untrammeled modern technology, there is little Western governments can do without creating a two-track regulatory system. This would allow big business to play by one set of rules on the ‘Net and the “public” by another. That is a difficult concept to present in the populist West.

Conspirati Now after 56 years the truth emerges. The Israelis were waiting for an opportunity to expand beyond the partition borders. The Palestinians did not flee but were driven out. There was not one but 24 massacres. “Transfer” or “Ethnic Cleansing” was (Israeli PM) David Ben Gurion's unwritten policy. An Israeli historian Benny Morris has access to IDF archives and the integrity to speak. In a January 8 interview in Haaretz, Morris says: “Twenty-four [massacres]. In some cases four or five people were executed, in others the numbers were 70, 80, 100. ... That can't be chance. It's a pattern. Apparently, various officers who took part in the operation understood that the expulsion order they received permitted them to do these deeds in order to encourage the population to take to the roads. The fact is that no one was punished for these acts of murder. Ben-Gurion silenced the matter. He covered up for the officers who did the massacres.” —SaveTheMales.ca

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The 20th-century fixed-cost barriers-to-entry that served the interests of big media conglomerates in the United States and overseas have been turned upside down. Instead of providing competitive protection, the enormous complexity and sizeable investments necessary to run a vast media company have transformed virtually overnight into “sunk costs” that are probably never to be recovered. More problematic for the power elite is not the loss of capital, but the potential loss of control over the entire operative construct of Western democracy. This is similar to the collapse of religion’s usefulness as a lever of control after the invention of Gutenberg’s press.

Conspiracy History We’ve examined the pillars of the power elite. Let’s take a closer look at the elite’s makeup and history. One of the most legitimate sources of information about the power elite is deceased historian Carroll Quigley — whom alternative ‘Net journalist Steven Yates described in a post on LewRockwell.com as “a highly respected senior-level professor of political history at the Foreign Service School at Georgetown University. He specialized in macro-history, or the study of large-scale, global developments and trends. … It was Quigley’s powerful connections that obtained for [President William Jefferson Clinton] the Rhodes Scholarship.” An academic prodigy, Quigley was written up in “Ripley’s Believe It or Not” for becoming youngest-ever Ph.D. at Harvard, where he graduated magna cum laude. He taught at both Harvard and Princeton before joining Georgetown University’s Edmund A. Walsh School of Foreign Service, where he refined his highly regarded course, Development of Civilization, and eventually became dean of the school. During his career, he consulted to such U.S. agencies as the Department of Defense, Navy and the Smithsonian Institute. Quigley was obviously successful and well-regarded by the D.C. “establishment”— an “insider”on familiar terms with what would seem to be a cross-section of the power elite. Importantly, he wrote two extensively sourced books, “The Anglo-American Establishment,” and “Tragedy and Hope,” establishing inarguably the existence of a transatlantic secret “Anglophile”society. In Quigley’s own words from “Tragedy and Hope:”

There does exist an international Anglophile network which operates, to some extent, in the way the radical Right believes the Communists act. In fact, this network, which we may identify as the Round Table Groups, has no aversion to cooperating with the Communists, or any other groups, and frequently does so. I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960s, to examine its papers and secret records.

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Quigley identifies the founder of the Round Table Groups — and thus the U.S. Council on Foreign Relations (CFR) as well — as the “fabulously wealthy” Cecil Rhodes. Today, he points out, Rhodes exercises his influence from the grave via seven wills establishing his Rhodes scholarships and funding the formation of two powerful, semi- secret societies, one each in Great Britain and the United States. In American Rhodes Scholarships, Frank Aydelotte, American secretary to the Rhodes trustees, wrote: “If [the selected American scholar] has the capacity for assimilation, if he can become a part of what he meets, he may return from Oxford to the United States a citizen of the world.” Alternative ‘Net journalist William F. Jasper explains, “Aydelotte was writing to obfuscate and conceal, not to reveal. Rhodes was not interested in spending his fortune merely to promote slobbery sentimentalism about universal brotherhood. He had grander and more concrete aspirations. As biographer Sarah Gertrude Millin put it: ‘The government of the world was Rhodes’ simple desire.’” That desire was apparently placed in Rhodes by internationally celebrated art critic and Oxford professor John Ruskin. As the first Slade Professor of Fine Arts at Oxford in 1870, Ruskin “hit Oxford like an earthquake,” according to Quigley, “not so much because he talked about fine arts, but because he talked also about the empire and England's downtrodden masses, and above all because he talked about all three of these things as moral issues.” Ruskin himself confided some of his most revolutionary thoughts to his newsletter, Fors Clavigera: “I am myself a Communist of the old school — reddest also of the red.” Inspired by Ruskin, Rhodes set forth, Quigley writes, to “spread the English ruling class tradition throughout the English-speaking world [and to] bring all the habitable portions of the world under [its] control.” Quigley relates that Rhodes was fortunate to find considerable support in his quest from Lord Rothschild and Alfred Beit, and “to monopolize the diamond mines of South Africa as DeBeers Consolidated Mines and to build up a great gold mining enterprise as Consolidated Gold Fields. In the middle 1890s, Rhodes had a personal income of at least a million pounds sterling a year (then about five million dollars), which was spent so freely for his mysterious purposes that he was usually overdrawn on his account.”

Mills and Money Power The term “power elite”comes from a book published 40 years ago by Columbia University sociologist C. Wright Mills who, ironically, wrote it to dismiss the “conspiracy theory” of modern political history. Although Mills claimed to find no conspirators in high places, he nonetheless admitted, “There is … little doubt that the American power elite — which contains, we are told, some of ‘the greatest organizers in the world’ — has … planned and plotted.”

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Mills recognized the existence of a definable network among elites in politics, academia, the military, the media and foundations. He admitted, “Certain types of men from each of the dominant institutional areas, more far-sighted than others, have actively promoted the liaison before it took its truly modern shape.” While many elements of this network are visible and identifiable, according to Mills, “the power elite is not altogether 'surfaced.’ … Many higher events that would reveal the working of the power elite can be withheld from public knowledge under the guise of secrecy. With the wide secrecy covering their operations and decisions, the power elite can mask their intentions, operations, and further consolidation.” Furthermore, Mills noted, the power elite provides for its own continuity and “new men Conspirati

Globalization, a form of world-wide elimination of the sovereign nation-state which is already far advanced, is a process of transfer of the power of sovereign nations to global syndicates of giant blobs of private financier interests, such as those typified by the globally predatory system of hedge-funds today. Today, hedge funds composed of consortia representing world-wide assortments of private financier interest, are gobbling up, and often obliterating entire national private industries and public investments, from around the world. The ideological hard-core of this is traced to figures such as the same, notorious Alexander Helphand “Parvus” who indoctrinated his dupe Leon Trotsky in the Synarchist (e.g., anarcho-syndicalist) doctrine of “Permanent War, Permanent Revolution.” You could also look up the facts concerning Trotsky’s doctrine of “Neither Peace Nor War” at Brest- Litovsk. This influence of Parvus over Trotsky was the genesis of the Trotskyist neo- conservatives associated with the circles of Carl Schmitt protégé Professor Leo Strauss of the University of Chicago and the doctrine of those followers of the Carl Schmitt dogma of Thrasymachus associated with the present-day U.S.A.’s Federalist Society.

The modern notion of financier-ruled world empire, takes its origins in the role of the Martinist freemasonic cult of Count Joseph de Maistre, which orchestrated the French Revolution through the hoax of the 1785 affair of the Queen’s Necklace, the July 1789 Siege of the Bastille, the Danton and Marat regimes, the Jacobin Terror, and the reconstruction of the personality of Jacobin Napoleon Bonaparte, a Robespierre asset, into the “Roman Imperial” image of Napoleon Bonaparte. This Thrasymachus-like image of Napoleon as emperor was the model of G.W.F. Hegel’s theory of the state, for the pre-fascist Romantic school of law of Hegel and his Berlin university crony Savigny, and such outgrowths of that as the modern fascist doctrines of Nazi Crown- Jurist Carl Schmitt. —Lyndon LaRouche

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come readily into it and assume its existence without question.” The continuity of this elite was also examined by historian Michael H. Hunt in his 1987 study, Ideology and U.S. Foreign Policy. Hunt described the typical member of the Eastern Seaboard “Anglophile” elite into whose hands American foreign policy has been trusted for more than seven decades: “His formal education [comes from] private schools and Ivy League colleges and law schools. … He practiced corporate law until gaining public office, usually by appointment. His soundness on foreign-policy questions was insured by the values inculcated in elite social circles, in exclusive schools and in establishment clubs and organizations of which the Council on Foreign Relations … was the most important.”

CFR Power To have influence, one must be near the seat of power. Council on Foreign Relations members have reportedly been part of every presidential administration since Woodrow Wilson’s. The first CFR member to have the president’s ear was actually one of its founding members, Edward Mandell House. A dedicated socialist by conviction and circumstance, House was so close to Wilson that he was reportedly known as “Wilson’s brain.” In 1912, House wrote “Philip Dru: Administrator,” a book that was destined to disappear just as thoroughly as Carroll Quigley’s “Tragedy and Hope.” House had simply revealed too much and the book was apparently allowed to go out of print. Available once again, the book shows us, step by step, how a socialist regime could take over the United States by controlling the political parties and through the implementation of a central bank to control the currency and a graduated income tax to alleviate income disparities. Installed with Wilson in the White House, House did as Dru would have — helped pass legislation in 1913 that put in place both the Federal Reserve central banking system and a graduated income tax. CFR members surround the president, are intimately involved in day-to-day decisions and are said to be a kind of “Secret Team” closely aligned with the State Department, as well as federal intelligence and policing agencies. CFR members George Kennan, Walter Lippmann, Paul Nitze, Dean Achenson, and Walter Krock were among those who helped position the Marshall Plan and North Atlantic Treaty Organization, which defined the United States’ international post-war role. At least five presidents (Eisenhower, Ford, Carter, Bush and Clinton) have been members of the CFR. Supreme Court Justices Stephen Breyer, Ruth Bader Ginsberg and Sandra Day O'Connor were all CFR members. Being involved with CFR does not necessarily mean endorsing CFR goals and objectives. But controversy about the council’s real purpose and use of power was stirred

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up again in 2005 with a CFR white paper that, as Phylis Schlafly wrote, “let the cat out of the bag about what’s really behind our trade agreements and security partnerships with the other North American countries.” Schlafly’s article put the spotlight on a 59-page CFR document that, astonishingly enough, spells out a five-year plan for the “establishment by 2010 of a North American economic and security community” with a common “outer security perimeter.” “Community,” Schlafly wrote in a post on her Web site, “means integrating the United States with the corruption, socialism, poverty and population of Mexico and Canada. Common perimeter means wide-open U.S. borders between the United States, Mexico and Canada.” And she added, “The CFR goal is clear: a common economic space … for all people in the region, a space in which trade, capital and people flow freely.”

Building a North American Community This CFR document, called Building a North American Community, asserts that George W. Bush, Mexican President Vicente Fox, and (former) Canadian Prime Minister Paul Martin “committed their governments” to this goal when they met at Bush’s ranch in Waco, Texas, on March 23, 2005. The three adopted the “Security and Prosperity Partnership of North America” and assigned “working groups” to fill in the details. It should be noted that current Canadian Prime Minister Stephen Harper is a member of the secretive Bilderberg group, whose global ambitions are closely aligned with those of the CFR. The CFR document calls for creating a “North American preference” so that employers can recruit low-paid workers from anywhere in North America. No longer will illegal aliens have to be smuggled across the border; employers can openly recruit foreigners willing to work for a fraction of U.S. wages. Just to make sure that bringing cheap labor from Mexico is an essential part of the plan, the CFR document calls for “a seamless North American market” and for “the extension of full labor mobility to Mexico.” In an Internet post at RealityZone.com, entitled United States of North America, University of South Carolina Upstate philosophy professor Steven Yates commented on the plan, as follows: “It would require that U.S. citizens effectively surrender their citizenship in the independent constitutional republic founded in 1787.” Yates reminds readers that Mexican President Vicente Fox was quoted directly after his election in 2000 as saying his government would “use all our persuasion and all our talent to bring together the U.S., Canadian and Mexican governments so that in five or ten years, the border is totally open to the free movement of workers.” Yates also quotes Fox as telling an audience in Madrid in 2002: “Eventually, our long-range objective is to establish with

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Conspirati

Many American conservatives believe as a matter of faith that the Rockefellers and the Council on Foreign Relations exercise absolute control over the government and the people of United States. This thesis can be accepted as a working formula if one remains conscious of the larger issues . ...

It is true that the American colonials have "free elections", in which they have the absolute right to vote for one of two opposing candidates, both of whom have been handpicked and financed by the Rockefeller syndicate. This touching evidence of "democracy" serves to convince most Americans that we are indeed a free people . ... We are free to invest in a stock market which the daily quantity, price and value of the monetary unit is manipulated and controlled by a Federal Reserve System which is answerable only to the Bank of England.

The realization that we do indeed live under the dictate of the "Rockefeller Syndicate" can well be the starting point of the long road back of a genuine struggle for American independence. In exposing "the Rockefellers" as agents of a foreign power, which is not merely a foreign power, but a genuine world government, we must realize that this is not merely a group dedicated to making money, but a group which committed to maintaining the power of a colonial form of government over the American people . Thus the ancient calumny of John D. Rockefeller as a man obsessed by greed (a category in which he has plenty of company) obscures the act that from the day the Rothschilds began to finance his march towards a total oil monopoly in the United States from their coffers at the National City Bank of Cleveland, Rockefeller was never an independent power, nor does any department of the Rockefeller Syndicate operate as an independent power . —Eustace Mullins

the United States, but also with Canada, our other regional partner, an ensemble of connections and institutions similar to those created by the European Union.” Yates concludes by reminding readers clearly what some puzzled supporters of President George W. Bush just don’t seem to understand. “[Bush] has long been a proponent of amalgamating the United States with Mexico, and is an unabashed proponent of regional integration as well.”

Trilaterals According to historian Patrick M. Wood, founder of the August Corporation, the CFR has lost some power because — in an increasingly global era — it draws its

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membership primarily from North America. Wood has specialized for many years in tracking another organization of the power elite, the Trilateral Commission, which he claims has gained clout as the CFR has diminished. Along with professor Antony Sutton, formerly a senior fellow at the Stanford University-based Hoover Institution, Wood has written “Trilaterals Over Washington” — Vol. I and “Trilaterals Over Washington” — Vol. II. By founding the Trilateral Commission in 1973, David Rockefeller and Zbigniew Brzezinski acknowledged the shortcomings of the CFR. According to Wood,

Rockefeller represented Corporate and Brzezinski represented Academic. Together, they chose approximately 300 members from North America, Europe and Japan, whom they viewed as being their “birds of a feather.” These members were at the pinnacle of their profession, whether Corporate, Academic, Political or Press. Both Brzezinski and Rockefeller backed Jimmy Carter for president and used considerable political muscle to advance his cause. Once inaugurated, Carter brought no less than 18 fellow members of the Commission into top-level cabinet and government agencies.

The Trilateralists are organized around three arenas: corporate, political and academic. Corporate creates the goals; academic the articles, studies and white papers; while it is the responsibility of political to turn the proposals into reality via publicity and legislation. Wood believes the press is not directly involved because it cannot initiate, only report. However, he believes members of international corporations, political leaders and academic executives sit on the various boards as directors of major press organizations.

The Permanent Revolution — Fabians In the last few years another view of the above issues has emerged as a result of ‘Net posts by Terry Hayfield. These maintain, in one way or another, that Carroll Quigley actually wrote “Tragedy and Hope” to deflect attention away from the real globalist engine of world change — the British Fabian Society. Hayfield believes that the Fabian Society is an extant and powerful Trotsky-ite institution intent on promoting one- world-ism via Leon Trotsky’s “Permanent Revolution and the continuous process of War, Revolution and Terror.” Hayfield sees the Fabian Society behind the CFR and affiliated organizations; he also points out that the current American president, George W. Bush, is surrounded by members of the CFR and has entered into a surprisingly strong alliance with the powerful Fabian, Tony Blair. Hayfield’s contention is seemingly supported by a post (among others)

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from the London School of Economics — (itself a Fabian institution). The London School’s post — A Piece of Fabian History Unveiled — describes the return of a famous stained-glass window designed by George Bernard Shaw in 1910. “The Fabian window — lost for more than 25 years — was unveiled by Prime Minister Tony Blair today during the centenary year of the Labour Party in its new home, the Fabian-founded London School of Economics and Political Science. … Now, after a fascinating history, the window is finding a home in the heart of London at LSE, the social science university institution founded by Sidney Webb, Beatrice Webb and Shaw in 1895.” It is indeed remarkable that a stained glass window of this sort should be unveiled by the prime minister of England within the confines of that country’s most prestigious economic school. There is no doubt that the Fabian Society remains a socialist organization. In fact, it describes itself on its Web site as “the U.K.’s only membership-based left of centre think tank. Providing an arena for open-minded debate, the Society's programme aims to explore the political ideas and the policy reforms which will define progressive politics in the future.” Hayfield concludes that “Tragedy and Hope” was written to divert a well- meaning, 1960’s patriot movement that was “gradually zeroing in on the Fabian Society as the puppet master for the occupants of the White House.” He believes that Quigley is responsible for a massive derailing of the truth and that as a result, those behind the current push toward globalism have never been properly identified. Conspirati There are layers upon layers involved in the global conspiracy, each connecting with the others. At its most simple a network of interbreeding bloodlines going back to the ancient world sit atop a pyramid of global power. They control and manipulate the political system, banking, transnational corporations, media conglomerates, oil and pharmaceutical cartels, the legal system and all the areas of society necessary to control the people. They are the force behind the incessant centralization of power in all areas of our lives and they want a world government, central bank, currency and army that would dictate to a micro-chipped population. We are moving ever closer to this by the day. Oh yes, and the whole thing takes place in the holographic version of a virtual reality game that we call the “world.” But that would take more space to explain than we have here. —Interview with leading Illuminati researcher AboveTopSecret.com

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Had “Tragedy and Hope” not been published, that growing patriot movement (highlighted by the 1964 Barry Goldwater presidential campaign) might have focused on the Fabians. It is imperative for the future existence of this Republic that the “defenders” of American patriotism rebuke the lie of “Tragedy and Hope” and recognize the reality of the Permanent Revolution. It is time to recognize American/British Capitalism (under the guidance of the Fabian Society) is the true enemy of this Republic. Patriots, release yourselves from the bondage of Cognitive Dissonance, accept and include the reality of the Permanent Revolution in your analyses of American history and the present reality.

Power Elite at Work in America Hayfield’s contentions (and Ed Griffin’s too) are rooted in original sources — which is a good reason to mention them in a book containing information about the elusive nature of what used to be called “money power.” Hayfield has certainly shed further light on how modern money power seems to work — though so much has come out now via the Internet that the mechanism seems fairly evident even without the addition of Fabian Trotskyism. In the United States, a main driver of global governance and international free trade has been David Rockefeller, along with the CFR and the Trilateralists who, like the Fabians, actively seek a “one-world order.” Even the strategies of these organizations are aligned. They use “regionalism,” the lumping together of nation-states into larger geographical entities in order to achieve desired goals. The trouble with this sort of global adventurism is that it is not subject to any sort of checks and balances. It is being driven by the very wealthy who have either inherited great riches or are self-made men enamored of their fortune-building abilities and scornful apparently of most other sorts of skills. Wood writes, “Collectively, they have taken a self-induced quantum leap above national law, into an elevated position of making their own rules as they go. We see some direct evidence of such an attitude, for instance, when President Bill Clinton had no particular legal qualms (or consequences) of giving (free or for money) top-secret missile technology to Communist China.” Wood is concerned about the inroads made into the highest reaches of power by the Trilateral Commission. He claims it has taken over from the CFR in terms of influence because it comprises representatives from Europe and the Far East as well as America. The CFR remains mostly a United States-oriented group. Wood sums up this way: “Every bit of thirty-five years of research indicates that there is a relatively small yet diverse group of global players who have been the planners and instigators behind globalization for many decades. The primary driving force that

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moves this ‘clique’ is greed; the secondary force is the lust for power. In the case of the academics who are key to globalism, a third force is professional recognition and acceptance (a subtle form of egoism and power). It is also important to understand that core globalists have full understanding of their goals, plans and actions.”

More Fabians Unlike what FMNN commentator Ed Griffin has termed the “Stalinist” wing of the globalist enterprise, the Fabian Society seems to believe in a relatively peaceful transition to ever-greater internationalism. This sort of approach was also recommended by Italian Marxist Antonio Gramsci who, once jailed, discovered, according to alternative ‘Net reporter Anthony C. LoBaido, that “Italian peasants valued their faith, family and nation more than increasing their economic status. They had no ‘Marxist class envy.’They did not resent the rich … Gramsci soon came to realize that the culture of a nation (including novels, books, plays, newspapers, art, education, science and other aspects), would have to be slowly taken over for a Marxist-Leninist revolution to succeed. This is known as ‘The Gramscian Strategy.’” The gradualism of the Fabian and Gramsci schools would explain much about how current events evolve on the sociopolitical and economic scene. Blair and Bush are an unlikely pair to begin with — Blair the thespian son of a doctor and Bush the privileged Texas-bred heir of a powerful political family — yet something has drawn them together and remains a powerful magnet. In addition to explaining the unlikely pairing of Bush and Blair, Fabianism also explains the “endless war for endless peace” that has come to be an unfortunate but distinctive element of Western culture. Hayfield writes, “Society evolves slowly toward ‘social efficiency’ all by itself; society under stress, however, evolves much faster! Thus the deliberate creation of crisis is an important tool of evolutionary socialists. Does that help you understand the government school drama a little better, or the well-publicized doomsday scenarios of environmentalists?” Hayfield’s list of Fabian-influenced enterprises and individuals is sweeping:

The London School of Economics was initially a Fabian creation. Rock legend and lead singer for the Rolling Stones Mick Jagger spent time there; so did John F. Kennedy. Once elitist, the Economist, now a worldwide pop- intellectual publication, is Fabian, as is The New Statesman and Ruskin Labor College of Oxford. The legendary Royal Institute of International Affairs and the Tavistock Institute for Human Relations, premier mind- bending institutions of the world, are Fabian. Theodor Adorno, an important if barely visible avatar of the therapeutic state, and a one-time eminence at Tavistock, traveled the Fabian road as well. … The United

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States, too, has its share of Fabian enterprises. Some organizations heavily influenced by Fabianism are the Ford Foundation, the Russell Sage Foundation, the Stanford Research Institute, the Carnegie Endowments, the Aspen Institute, the Wharton School, and RAND. … Tavistock underwrites or has intimate relations with thirty research institutions in the United States, all which at one time or another have taken a player’s hand in the shaping of American schooling.

Guarantors of Rights Hayfield has identified the International Democratic Union as the Fabian Society’s working group. Its homepage at IDU.org describes the organization this way: “The International Democrat Union (IDU) is the Freedom International, a working association of over 80 Conservative, Christian Democrat and like-minded political parties of the centre and centre right.” The “about” page of the site elaborates on the founders, which include Jacques Chirac, president of France, and former German Chancellor Helmut Kohl. The language and perspective of the IDU are peculiar for a “centre right” organization. The Web page descriptions include such phrases as “work towards ever- closer co-operation among all the peoples of democratic nations” … “International Young Democratic Union” … “a society of individuals working together in partnership for the common good.” What is particularly disturbing to those who espouse Misesian-oriented free- market principles is the Union’s declaration that it is committed to the “values” of the “Universal Declaration of Human Rights,” which is also the declaration on which the United Nations is founded. The trouble with this declaration is that, unlike the Declaration of Independence, it does not provide any authority for its statements. Thomas Jefferson attributed the rights in the Declaration of Independence to a “Deity” and wrote they were “self-evident.” The great Austrian economist Murray Rothbard was always careful to ascribe freedoms to “natural rights” inherent in the human condition. The Universal Declaration of Human Rights (UDHR), however, is vague about the ultimate guarantor of the rights it is asserting. This has led to further clarifications. The 1948 UDHR encompasses two major categories of human rights: civil and political rights, and economic, social and cultural rights. But as the Human Rights Law Resources page points out, “During the course of drafting the International Bill of Rights, and in the context of the Cold War, it was decided to address two categories of rights in separate instruments. This resulted in the drafting and adoption by the U.N. General Assembly of: International Covenant on Economic, Social and Cultural Rights, and International Covenant on Civil and Political Rights.” The Human Rights Law Resources Web site describes the “Preamble to both

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Covenants” as emphasizing “the interdependence of the two categories.” The preamble recognizes that, “ … in accordance with the Universal Declaration of Human Rights, the ideal of free human beings enjoying civil and political freedom and freedom from fear and want can only be achieved if conditions are created whereby everybody may enjoy his civil and political rights, as well as his economic, social and cultural rights … ” The site also explains that “Economic, social and cultural rights, are ‘positive’ or ‘distributive’ rights; an active response is required by the State to devise and implement strategies and programs and to commit resources to promote the progressive

This is a black-and-white replica of the famous stained-glass window that

served as a kind of iconic centerpiece for the Fabian movement. Notice the wolf

in sheep’s clothing in the crest in the upper right.

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realization of economic, social and cultural rights. It is no longer accepted wisdom that any clear distinctions can be made between the two categories of human rights. Both categories entail legal obligations on the part of States. Issues of measurability arise in relation to both.” A number of additional declarations have seemed necessary to affirm “human rights.” The Human Rights Law Resources pages lists several of them, concluding with, “The Vienna Declaration and Programme of Action, adopted on June 25, 1993 at the World Conference on Human Rights, by consensus, by representatives of 171 States.”This declaration states in part that, “All human rights are universal, indivisible and interdependent and interrelated. The international community must treat human rights globally in a fair and equal manner, on the same footing, and with the same emphasis. While the significance of national and regional particularities and various historical, cultural and religious backgrounds must be borne in mind, it is the duty of States, regardless of their political, economic and cultural systems, to promote and protect all human rights and fundamental freedoms.” We can see the problem clearly here. It runs through every single human rights declaration of the 20th century, including the failed, 300-page European Union constitution: The question, who will guarantee the “duty of the states” to enforce “universal human rights?” is never answered anywhere in thousands of pages of declarations and explanations of declarations.

Problematic Histories and Atheist Revisions We have examined 20th century organizations set up by the power elite — also its attempts at configuring rational entities to ensure “the rights of man.” The conspirati, however, would waste little time on such rights, being at least partially of the opinion that most secret societies are more concerned with their own. Certainly, there are many societies from which to choose, going back in time: the Knights Templar, Masons, Freemasons, Illuminati, and many additional secret groupings, fraternities (Skull and Bones) and mysterious subcultures. There is plenty of commentary stitching these various groups together under the rubric coined by conspiracy historian Noah Webster, “the Occult Theocracy.” However, an interesting post by the Atheist Society’s Conrad Goeringer takes us in the opposite direction. It is Goeringer’s contention (and the Society’s as well, it seems) that many of the accusations aimed at the ancient mystery orders such as the Masons and Illuminati were actually leveled by proponents and agents of the Roman Catholic Church. Goeringer takes the Illuminati’s founder Adam Weishaupt at his word. He points out that it is perfectly possible the secrecy that Weishaupt employed was due to

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the enormous power of the Roman Catholic Church at the time. Also, being Jesuit- trained, it is understandable that Weishaupt would have formed his society along ecclesiastical (Jesuit) lines. Nor, from Goeringer’s point of view, is there anything unordinary about Weishaupt’s “Rousseauian vision” — as such an infatuation of a young man at the time would have been quite understandable. Rousseau’s vision of the noble savage, communing with nature in a state blissful, rural freedom, attracted an enormous following in Europe, and Weishaupt would not have been alone in being enamored of him, and it. For Goeringer, Weishaupt’s efforts were both noble and doomed, and in fact contain a tragicomic element. “Weishaupt wrote to [a fellow Illuminatus] Cato in August, 1783: ‘I am deprived of help. Socrates, who would insist on having a position of trust amongst us, and is really a man of talent, of the right way of thinking, is certainly drunk. Augustus' reputation could not be worse. Alcibiades does nothing but sit all day long with the vintner's pretty wife and spends his whole time in sighing and pining with love. … Tiberius attempted to ravish the wife of Democides, and her husband took them in the act.” Nor does Goeringer believe that the Illuminati survived the ban that the Bavarian government leveled against the secret society when its existence came to light. Goeringer may be correct in his analysis of the historical Illuminati. Certainly it solves puzzles having to do with occult interests of founding fathers such as George Washington, Benjamin Franklin and Thomas Jefferson. These men and their compatriots were steeped in both Reformation and Enlightenment sympathies and they no doubt looked with disfavor on what Goeringer calls the American states’ “feudal theocracies.” According to Goeringer, each colony had, in effect, an established and tax- funded Christian church. In Virginia, there were laws that provided the death penalty for speaking against the divinity or tenets of the Christian faith. Delaware prohibited anyone who was not a believer in “Trinitarian Christianity” from holding a public office. South Carolina officially declared “the Christian protestant” form of superstition to be “the established religion of the State,” adding: “That God is publicly to be worshipped” and “That the Christian Religion is the true religion.” The founding fathers with their deistic persuasions no doubt looked with disfavor on the constant feuding within assorted Christian sects, each of which sought dominance over the others. One can also find that these prominent deists and skeptics were often Freemasons, among them Franklin, Washington and Jefferson. Revolutionary America was a period of official disestablishment of the assorted state religions. Virginia enacted a Declaration of Rights on June 12, 1776, which provided for “free exercise of religion,” and not favoring any one religious sect. That

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same year, state religions were disestablished in Delaware, New Jersey and Pennsylvania; in 1777, New York, Georgia and North Carolina followed suit. Local and state laws against theatre were repealed, along with censorship laws.

Modern Conspiracy, Bilderbergs and China Grant that Goeringer is right about a tragicomic Weishaupt and his well- meaning utopian vision. Does it mean that other more modern, “open conspiracies” do not exist? Rhodes’ many wills are real, are they not? His scholarships are real. As is Quigley’s 1,000-page tome, along with a companion book that traces the history of the Anglosphere convincingly, whether or not he sought to throw off suspicion about the Fabianists as part of a larger effort. (And, anyway, it strains credibility to believe that Quigley wrote two books at enormous personal and professional cost merely to provide Reality Byte: Some Visible Elites — Their Own Words

“The Council on Foreign Relations is a nonpartisan and independent membership organization. Throughout the year, we hold a variety of meetings at which world leaders, government officials, academics, and other foreign-policy specialists discuss and debate world affairs. Transcripts of on-the-record meetings are available here. The Council is also home to a highly regarded think tank, whose fellows conduct research on international subjects ranging from national security to children’s issues.” See CFR.org

“The Fabian Society has played a central role for more than a century in the development of political ideas and public policy on the left of centre. Analysing the key challenges facing the U.K. and the rest of the industrialised world in a changing society and global economy, the Society's programme aims to explore the political ideas and the policy reforms which will define progressive politics in the new century.” See FabianHome.com

“The Trilateral Commission was formed in 1973 by private citizens of Japan, Europe (European Union countries), and North America (United States and Canada) to foster closer cooperation among these core democratic industrialized areas of the world with shared leadership responsibilities in the wider international system. The ‘growing interdependence’ that so impressed the founders of the Trilateral Commission in the early 1970s is deepening into ‘globalization.’ The need for shared thinking and leadership by the Trilateral countries, who (along with the principal international organizations)

remain the primary anchors of the wider international system, has not diminished but,

if anything, intensified.” See Trilateral.org

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false leads to the John Birch Society. ) The most modern incarnations of what the constitutionalist/republican John Birch Society has called the “open conspiracy” also include very powerful meetings of global groups such as the Bilderbergs. These conventions are difficult to catalog within the parameters of Quigley’s identifiers, but they are no less compelling examples of modern money power. It is possible that the Bilderbergs, a European-initiated convocation of the power elite that meets just once a year, is an offshoot of some other conspiratorial element or organization. But many of the faces are the same and the discussions seem along the same lines as well. Something is going on. Consider the half-century of global sociopolitical and economic consolidation presented herein and the urge to label it as something beyond, or outside of, the norm becomes nearly irresistible.

“Chatham House [Rhodes’ British Round Tables] is one of the world’s leading organizations for the analysis of international issues. It is membership-based and aims to help individuals and organizations to be at the forefront of developments in an ever-changing and increasingly complex world. Founded in 1920, and based at Chatham House in London, the Institute works to stimulate debate and research on political, business, security and other key issues in the international arena. The Chatham House Rule, famous worldwide for facilitating free speech and confiden- tiality at meetings, originated here.” See Chathamhouse.org.uk

“The Club of Rome has decided to adopt a global perspective, to seek a deeper understanding of interactions within the tangle of contemporary problems, to suggest effective solutions and to take a longer term perspective in studies than governments do. Environment is one of the main concerns of the Club of Rome, expressed in its first Report ‘Limits to Growth’ in 1972, one of its main focuses. Mostly man-made damage to nature has expanded to such an extent that it might put at stake the very survival of Humankind. … It is the responsibility of each government, but also of each individual, to act in order to eradicate the macro-pollutions which are affecting water, air and earth and endangering the health of human beings. The population explosion has been spectacular for the last century: … The impact of this demographic growth has had tremendous consequences on environment, employment, health, food and water availability.” See ClubofRome.org

Bilderberg Group: No Web site, no description. But the conspirati are glad to oblige.

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In doing so we can refer to a growing body of literature that gives information about why “globalism”and international entities might be attractive to the power elite for reasons that have little to do with the uplifting of the human condition. One such book that caused a stir recently is “Confessions of an Economic Hit Man,” which, according to the literature, has sold more than 150,000 copies and is a New York Times best-seller. According to author John Perkins, “Economic hit men are highly paid professionals who cheat countries around the globe out of trillions of dollars. Their tools include fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as Empire but one that has taken on terrifying dimensions during this time of globalization.” This is interesting because we begin to sense that the gigantic, humanitarian mechanism of globalism does indeed have another, more sinister purpose. Perkins writes that though he supposedly worked for a number of international corporations over his career, in actuality he was working for the U.S. National Security Agency. It was his job, by any means necessary, to convince foreign governments to accept loans from the World Bank, the IMF and other such global entities to build the support, the complex, unnecessary infrastructure that the governments of these countries could not support. Often the deals included the services of American corporations so that the funding from the IMF never even reached the company involved but went directly to the Unites States. The capital flows, though enormous, were casually handled by wire; corruption was endemic, bribes to higher-up country officials were commonplace. Once the government in question was broke, the global banking bureaucrats would step in to begin dictating terms. Often certain country assets, up to and including the basics such as water rights, might be sold off privately — not surprisingly — to American corporations. Taxes would be raised and services cut. Eventually, though, the bill would have to be paid and the country’s now increasingly impoverished citizens would have to reach into their pockets to fund higher taxes alongside a much diminished living standard. It was, according to Perkins, a clever way for America to gain control over a country’s resources for its private sector while extending military and political hegemony throughout the Third World.

Global Age What is startling about Perkins’s book is the degree to which American citizens are uninformed about their own government’s practices and what is done in their name. The extent of Madonna’s piercings and tattoos are well catalogued, but an understanding of how the world really works and the United States’ role in it is severely limited among U.S. citizens. The highlights that follow provide an eye-opening summary of a global

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evolution — the power of which has not been fully communicated to ordinary Western citizens. Is it so hard to gather facts and put them together? The mainstream press obviously finds it difficult. But for the enterprising ‘Net reporter Joan Veon, who compiled the information from which this list is drawn, it was not. 1947 — The WTO: United States signs the General Agreement on Trade and Tariffs, which became the World Trade Organization in 1994. 1947+ — Global superstructure erected: Formation of the International Monetary Fund/World Bank, United Nations. The International Criminal Court creates an increasingly borderless world. 1971 — U.S. regional government: President Richard Nixon issues Executive Order No. 11647, which divides the United States into 10 regions, each with its own administrator who then reports directly to the president. Described as “metro government”or “regional government,”it apparently centralized decision-making in the White House. 1990 — Emergence of PPPs: Prince Charles, Prince of Wales, creates the Prince of Wales International Business Leaders’ Forum, supporting public-private partnerships (PPPs) between governments, business and non-governmental organizations. Basically, public-private partnerships provide a way for corporations to become “co-managers” with government in policy-making. 1992 — U.N. Rio Earth Summit: 30,000 attendees agree to Agenda 21 demanding that the earth’s resources be controlled, and monitored for “future generations.”Fifteen years later, “sustainable development”is carried out worldwide. One of the treaties encompassed in Agenda 21 is the U.N. Biological Diversity Treaty calling for much of the planet to be “rewilded.” Movement spawns New Urbanism, also known as Smart Growth. 1994 — NAFTA: The controversial North American Free Trade Agreement wins U.S. congressional approval. Some 1,000 pages long, it is obviously a “managed trade” document rather than a free-trade one. 1995 — “In Our Global Neighborhood” is published by the Commission on Global Governance: Looks forward to a time when “regionalism becomes more ascendant worldwide, and [the United Nations] must even help the process.” 1997 — Maryland legislature approves Smart Growth legislation: Designates areas of growth that a state will allow infrastructure to be developed. With this legislation, Maryland basically becomes the first state in the union to approve the U.N. Biological Diversity Treaty. 2000 — United Nations overhaul: More power granted to the secretary- general and the General Assembly, including the right to a rapid defense force. United Nations unveiled the Millennium Development Goals to reduce poverty, hunger and disease worldwide.

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2002 — 250 PPPs formed at the World Summit for Sustainable Development: Unprecedented activity on a vast scale. The Congo Basin Forest Partnership alone involves 14 governments and includes the Unites States and eight African countries, eight environmental groups along with the American Forest and Paper Association, which represents 200 companies. The partnership affects 74 million acres in Africa. Others include partnerships to manage schools, sewer systems, transportation, water, utilities, etc. The proposed U.S. Trans Texas Corridor, a superhighway running from Canada to Panama will be supervised by a PPP. 2004 — Global tax proposed: The Group of Eight meeting in Sea Island, Ga., and then at the 2005 World Economic Forum in January, planned a global tax to aid the poor. In an annual meeting in Davos, Switzerland, French President Jacques Chirac specified a tax on airline tickets. Just before Christmas 2005, the French government passed a levy tax on such to generate $236 million a year for health programs aimed at helping the world’s poorest countries. 2005 — CAFTA follows NAFTA: More controversial even than NAFTA, the Central American Free Trade Agreement comes to the floor of the Congress and is narrowly passed. The bill is more of the same “managed trade” and is fairly obviously aimed at opening up not only markets between the United States and Central America, but in splintering natural economic barriers that exist between the two regions. Opponents claim that both CAFTA and NAFTA are actually aimed at furthering the global power elite’s goal of combining nations into trade regions for the ultimate purpose of advancing sociopolitical and economic internationalism. Because of the opposition to this bill, President Bush makes a special trip to Capital Hill to “twist arms,”granting more than 6,000 pork barrel requests in the process. NAFTA and CAFTA are not directly related to the Free Trade Areas of the Americas (FTAA), which involves all 34 countries in the Americas and is being implemented gradually. 2005 — Kelo vs. New London: U.S. personal property rights were dealt a severe blow with a Supreme Court ruling that local governments have the right to use eminent domain as they see fit for “the public good.” 2005 — New Urbanism in the United States: Mississippi Governor Haley Barbour brings together a team of 110 urban planners in architecture, regional and community planning, civil and transportation engineering, environmentalism, codes and laws, retail, economics, public process and communication to restructure 11 coastal cities and 120 miles of coastal region.

Basic Schism We’ve covered a great deal of ground, but let us retrace our steps and conclude with a few more words about the two different versions of power-elite history on the ‘Net.

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It may be possible, as some hold, that Rothschild money manipulations do indeed date back to Babylon. And it may be that the CFR is nothing but a talking shop. It may even be that the John Birch Society is one more example of the thesis-antithesis paradigm that the global power elite apparently likes to use. The trouble with opening up the door to this kind of information, as accurate and or provocative as it may be, is that proof is hard to come by. When it comes to the so-called visible power elite, the evidence is far less murky. The Bilderbergs, for instance, do meet every year. The CFR, Trilateralists, British Round Tables, Rhodes, his will, etc. are all factually verifiable. The basic schism may have to do with Illuminati/Freemasonry. While much is presented as regards these groups, little is perfectly proven. Of course, power is in the hands of many who are not evident on any world stage. Perhaps there is a formal Illuminati. Perhaps there is regularized child abuse, child sacrifice, black magic, etc. Or maybe the reality is slightly more mundane, though hardly less worrisome — that extremely wealthy and powerful people seek to create global government to generate greater and more controllable business opportunities and implement wealth gathering strategies. That is reason enough to study it, and to propose conclusions.

Club of Rome Yet another member of the visible elite seems to illustrate a different kind of schism within the visible power elite. The Club of Rome is an emphatically European power elite organization that does not seem to fit directly into the Anglosphere model. Also, this group seems more focused on a single area — population and consumption reduction — than some of the other visible power elite organizations. The Club of Rome represents what may fairly be called “the dark side” of the visible power elite. In Environmental Genocide, July 2001, posted at TheNewAmerican.com, William F. Jasper documented the power elite’s involvement, including the Club of Rome in passing the United Nations’ Convention on Persistent Organic Pollutants. Known as POP, the convention greatly restricted the use of DDT (dichlorodiphenyltrichlorethane), “a pesticide that has proven to be a veritable godsend to mankind, even as it has been subjected to a campaign of vilification over the past four decades.” Jasper predicted that the passage of POP would be a virtual death sentence for some of those living in Third World areas where malaria was common. Notwithstanding DDT’s success in wiping out malaria, POP made the use of DDT so expensive for Third World countries that other substances have been substituted to date, mostly ineffective. Jasper’s article blamed the CFR, Trilateral Commission and a variety of “CFR- dominated, tax-exempt organizations such as the Sierra Club” for helping to generate POP, but his article also went into some detail about the Club of Rome’s

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Conspirati To achieve world empire, as Prince Philip has admitted, 80% of the world population must be eliminated within two generations. Over four billion people are to die to realize the Windsor/Club of the Isles New Dark Age! Treat this report as a combat manual for a war against the British Empire. The survival of all nations, and billions of human beings, depends on victory over this new empire, and that victory begins with knowledge of the nature of the enemy. —1997 post at The American Almanac, The Largest Empire In the History of the World

involvement. “Consider Maurice Strong, for instance, billionaire honcho at the World Economic Forum and the Club of Rome and secretary-general of the United Nations’ Earth Summit. It was Strong who welcomed Cousteau, Gorbachev, and Castro to Rio and elevated them to demigod status in the United Nations’ green pantheon. At the Earth Summit, Strong deplored the world’s ‘explosive increase in population,’ and warned, ‘We have been the most successful species ever; we are now a species out of control.’ He thundered: ‘Population must be stabilized, and rapidly.’” Jasper adds, “Just prior to the Earth Summit, the Club of Rome, in which Strong has been a prime mover, had issued its startling report, The First Global Revolution. That report declared: ‘In searching for a new enemy to unite us, we came up with the idea that pollution, the threat of global warming, water shortages, famine and the like would fit the bill. … All these dangers are caused by human intervention. … The real enemy, then, is humanity itself.’” In a follow-up article about the POP-generated DDT reductions, February 2005, author Dennis Behreandt also mentioned the Club of Rome: “Economist and syndicated columnist Walter Williams notes that Alexander King, founder of the Malthusian Club of Rome ... deplored DDT’s lifesaving capabilities. In a 1990 biographical essay, King wrote: ‘My own doubts came when DDT was introduced. In Guyana, within two years, it had almost eliminated malaria. So my chief quarrel with DDT, in hindsight, is that it has greatly added to the population problem.’”

Paranoia and the Power Elite In fairness to the conspirati, when statements such as these are made, the idea that the visible power elite (never mind the invisible elite) has in mind some form of radical population reduction becomes less “far out” and more frighteningly

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immediate. It is also an unfortunate fact that both the European and American elite have a historical fascination with eugenics and have endowed a number of think tanks and research facilities focusing on this area. The funding and scientific pursuit continues today. Also, when buildings are unveiled, such as that of the Supreme Court in Israel, reportedly designed secretly by the Rothschild banking family without the involvement of the Israeli government, paranoia is apt to move even higher. What is one to make of all this — occult symbolism apparently built into Israeli state buildings and bluntly worded statements about radical population depletion? From an investment-strategy standpoint, skepticism is at least an option. After all, if the visible power elite is evaluated even cursorily, one element immediately strikes home: It is composed of busy business people with vast wealth and formidable industrial interests. Destroying part or most of the customer base (at least in the West) would seem to be bad for business, at the very least. In any event, it might be considered poor investment strategy to plan on a wholesale reduction — even with the backdrop of a supposed bird-flu mutation into a 21st century version of the 1920s’ killer influenza. (More on power-elite investment strategy toward the back of “High Alert” where VESTS and its subsidiary approaches are presented.)

Storm Warning The sociopolitical confrontation intensifies. Fears of ‘Net alternative- news and even the conspirati seem to be pushing forward modern money power’s globalist agendas at a dangerous pace. The manipulation of the economy, the rise of central banking, the sociopolitical machinations leading to quasi-controlled wars, these were bad acts before the ‘Net allowed for discovering and monitoring. But yesterday’s bad acts are today’s front-page news, Conspirati “One of George W. Bush's ‘thinkers’ is Richard Perle. I interviewed Perle when he was advising Reagan; and when he spoke about ‘total war,’ I mistakenly dismissed him as mad. He recently used the term again in describing America's ‘war on terror.’‘No stages … This is total war. … If we just let our vision of the world go forth, and … our children will sing great songs about us years from now.’” —HiddenAgendas.com, by John Pilger

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courtesy of the ‘Net, which will relentlessly cover a story until the mainstream media finally picks it up. For those who are able to internalize what is being written here, the next step suggests itself along with the possibility of significant profit. Simply watch what they do. Observe the messages they send, the regions to which they are sending their banking executives, the kinds of problems that become generally recognized by their endless exposure within the media. Identify the next dominant social theme and you can become rich as surely as if you just met a young Bill Gates and, impressed by his youthful enthusiasm and competitive spirit, decided to invest a bundle in a tiny West Coast company called Microsoft.

Economic Action Alert Monitor the global power elite and its dominant social themes. Power is in the hands of many who are not evident on any world stage. The media will not cover

Israeli Supreme Court building — funded, designed and built by the Rothschild family. Israeli officials were not allowed to approve of the plans and the construction was carried out in secret. Building is said to include numerous

occult symbols, including the pyramid in the upper-left-hand portion of this

photo. Why this sort of building at this time in this place?

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Elite Retreat …

“It was a brutal battle on the floor of the U.S. House of Representatives. Complete with arm twisting, badgering, and backroom deal making, the final vote landed in favor of the Central American Free Trade Agreement (CAFTA). At 12:03 a.m. on Wednesday, July 28, the pro-CAFTA forces pushed through a razor-thin victory of 217-215. Designed to bring about continued job loss, increased illegal immigration — but more importantly — the continued erosion of American independence to a faceless international bureaucracy, CAFTA is simply the dress rehearsal for a larger and more destructive agreement: the Free Trade Area of the Americas (FTAA). The FTAA, if passed, will encompass 34 countries of the Western Hemisphere, and has been correctly referred to as ‘NAFTA on steroids.’ … However, there is great reason to be optimistic. This hard- fought CAFTA battle, even in defeat , has greatly improved our chances for defeating the FTAA. … The closeness and fierceness of the CAFTA battle points to the growing opposition to these ‘free trade’ pacts. Now the momentum is swinging our way.” —Jbs.org, June 2005 them. You will not know them. The best solution is monitoring its activities and following its lead. Get to know publications and ‘Net sites that make a habit of following the ins and outs of money power. Use the services they use. Watch the trends they are setting, the countries they are making inroads into, the sectors and products in which they are investing. Follow mainstream government sanction and fear campaigns. Look for the inevitable power-elite solutions to the very fears it promotes.

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How the power elite ruins lives for fun and profit. SPOILS OF WAR

“The Ministry of Truth — Minitrue, in Newspeak — was startlingly different from any other object in sight. It was an enormous pyramidal structure of glittering white concrete, soaring up, terrace after terrace, 300 metres into the air. From where Winston stood it was just possible to read, picked out on its white face in elegant lettering, the three slogans of the Party: War Is Peace, Freedom Is Slavery, Ignorance Is Strength.” —Chapter One, George Orwell, “1984”

High Alert Are wars avoidable? And are they often prosecuted not for sociopolitical and economic reasons, but to make a few extraordinarily wealthy individuals, groups and corporations even wealthier? There has been plenty of speculation, for instance, that the ratcheting up of tensions between the United States and Iran had as much to do with the creation of an Iranian bourse, which trades oil for non U.S.-currency and commodities, as it does Iran’s nuclear ambitions. Saddam Hussein, many on the ‘Net have pointed out, started trading oil for euros just before the American invasion. Criticisms of the current geopolitical scene go far deeper than this, however. Critics such as Michael Meacher, former U.K. environmental minister, who published “The War on Terrorism Is Bogus,”believe that America’s current state of national “high alert” is aimed more at cowing its own citizens than those across the sea. The tenor of these arguments have remained the same for years. One can find them in the literature dealing with World wars I and II, and even the Korean and Vietnam wars. Much of the more extreme criticism is offered up today by the conspirati, some of whom believe that additional inevitable wars in the near

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future are meant to tear at the fabric of nation-states and speed up the “New World Order.”

From Surplus to Deficit When President George W. Bush was elected in 2000, the United States was “out of deficit” and at peace. Now the country’s debt has swelled. It is active militarily on several fronts overseas, with yet another crisis looming in the Middle East in the form of Iran, which has just formed a stock-and-oil bourse. This could well be another factor in the increased tension between the two countries. Currently, the U.S. dollar is known as the “petrodollar” because Middle Eastern oil-rich nations only do business in dollars. But as was pointed out in a special report, Iran in the Crosshairs, by international blogger-commentator Ryan McGreal, such a bourse “facilitate[s] oil purchases in currencies other than the U.S. petrodollar.” Explains, McGreal, “While this may seem innocuous, it [poses] a grave risk to continued American global hegemony.” Iraq was invaded after Hussein publicly switched oil sales from dollars to euros. In fact, as McGreal points out, one of the very first economic actions by the United States after the initial takeover was to switch the sale of Iraqi oil back to dollars. It is never clear what motivates the actions of elected or appointed officials at the top of an economy as complex as that of the United States. However, the Bush administration would not be in the position of having motives questioned were the currency healthy. It’s the dollar’s weakness that has led countries — and they are not all in the Middle East by any means — to consider other monetary avenues. One reason that anti-Americanism is apparently rising around the world is because people in other countries can see more clearly than U.S. citizens, how often the United States uses military muscle to inflame secular and religious tensions. Such confrontations allow the United States to use the one clear advantage it has left: military might. Conveniently, tensions abroad tend to distract citizens at home from the administration’s seemingly irrational, and often damaging, domestic agenda, the failing economy, the hollowed-out industrial sector. The violence, or impending violence, can be useful in encouraging patriotic sentiments as well. “War is the health of the state,” free-market commentator Randolph Bourne wrote in a great unfinished essay just before his death in 1918. “With the shock of war … the State comes into its own. … The Government, with no mandate from the people, without consultation of the people, conducts all the negotiations, the backing and filling, the menaces and explanations, which slowly bring it into collision with some other Government, and gently and irresistibly slides the country into war. For the benefit of proud and haughty citizens, it is fortified with a list of the intolerable insults

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which have been hurled toward us by the other nations; for the benefit of the liberal and beneficent, it has a convincing set of moral purposes which our going to war will achieve.” The Bush administration certainly came into its own after 9/11. It did indeed “conduct all the negotiations [with Pakistan at the time] … which gently and irresistibly slid the country into war.” Certainly it was “fortified with a list of the intolerable insults hurled toward” America by Osama Bin Laden, who apparently produced both audio and video threats from his cave. Finally, the administration was able to offer “a convincing moral purpose which … going to war will achieve.” And thus it occurred, “gently and irresistibly.” Off went adolescent American soldiers to Afghanistan, looking to capture or kill the former CIA asset and “terrorist,”Bin Laden — whose family was a longtime business partner of the Bushes. Then into Iraq, looking to capture or kill the former CIA asset and “modern-day Adolf Hitler,” Saddam Hussein. Now war games are said to involve resistance that might be offered by Iran and its current president — who has been compared by Bush to — surprise — a Middle- Eastern Hitler-in-the-making.

Manipulation, Identified? As mentioned above, late in 2003, Michael Meacher, former U.K. environmental minister, published “The War on Terrorism Is Bogus”in the Guardian newspaper. In it, he claimed the real reason for America’s Middle Eastern wars may have been “a blueprint for the creation of a global Pax Americana … drawn up for Dick Cheney (now vice- president), Donald Rumsfeld (defence secretary), Paul Wolfowitz (Rumsfeld’s deputy), Jeb Bush (George Bush’s younger brother) and Lewis Libby (Cheney’s chief of staff). The document, entitled, Rebuilding America's Defences, was written in September 2000 by the neoconservative think tank, Project for the New American Century (PNAC).” The crux of the article is Meacher’s statement that, “The plan shows Bush’s cabinet intended to take military control of the Gulf region whether or not Saddam Hussein was in power. It says ‘while the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein.’” He adds,

The PNAC blueprint supports an earlier document attributed to Wolfowitz and Libby which said the U.S. must “discourage advanced industrial nations from challenging our leadership or even aspiring to a larger regional or global role.” It refers to key allies such as the U.K. as “the most effective and efficient means of exercising American global leadership.” It describes peacekeeping missions as “demanding American political leadership rather than that of the U.N.” It says, “even should

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Conspirati In 1859, Albert Pike, who was fascinated with the idea of a one-world government, was chosen to coordinate Illuminati activities in the United States. He said they needed to create a political party that would keep the world fighting, until they could bring peace. Pike said it would be done “with tongue and pen, with all our open and secret influences, with the purse, and if need be, with the sword.” … The First World War must be brought about in order to permit the Illuminati to overthrow the power of the Czars in Russia and of making that country a fortress of atheistic Communism. … The Second World War must be fomented by taking advantage of the differences between the Fascists and the political Zionists. … The Third World War must be fomented by taking advantage of the differences caused by the “agentur” of the Illuminati between the political Zionists and the leaders of the Islamic World. —TheTruthSeeker.com

Saddam pass from the scene,” U.S. bases in Saudi Arabia and Kuwait will remain permanently … as “Iran may well prove as large a threat to U.S. interests as Iraq has.” It spotlights China for “regime change,” saying “it is time to increase the presence of American forces in SE Asia.” … Written a year before 9/11 — it pinpoints North Korea, Syria and Iran as dangerous regimes, and says their existence justifies the creation of a “worldwide command and control system.” This is a blueprint for U.S. world domination.

What is disheartening for someone like myself, a Canadian who has lived in America for many years, on and off, is that while U.S. officials preach non-violent diplomatic engagement, they are in actuality quite willing to use violence to gain policy objectives. Khalid Mish’al, head of the political bureau of Hamas, the violent but duly- elected Palestinian political party, had this to say in a January 31, 2006 editorial in the British Guardian: “The day Hamas won the Palestinian democratic elections the world’s leading democracies failed the test of democracy. Rather than recognize the legitimacy of Hamas as a freely-elected representative of the Palestinian people, the U.S. … threatened the Palestinian people with collective punishment for exercising their right to choose their parliamentary representatives.” India is not a signatory to the nuclear Non-Proliferation Treaty but the Bush administration is using India as a counterweight to China’s growing influence in the region, and is not averse to bending some rules. In a November 3, 2005 interview in the

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Council on Foreign Affairs magazine, arms control expert Lawrence Scheinman pointed out the contradictions of such actions, saying the administration’s pursuit of a trade agreement with India “rubs up against the longstanding policy that we have had on nuclear proliferation.” But the Bush administration is eager, apparently, for China’s Reality Byte: War is for Lower Orders ...

A recent well received book “Before the Dawn,” by Nicholas Wade, a New York Times science writer, makes a case for evolution that would seem by many measures to be sensible, if still debatable. In the book, which seems to be this century’s “Naked Ape,” he brings together the current science of evolution which is focused a great deal on DNA mapping of the species. What seems evident from Wade’s writing is something that others have speculated on for years – that there are two kinds of evolutionary processes In the first process, fauna is on the edge of extinction and any survival traits are quickly spread throughout the remaining population. The second kind of evolution seems to be a sort of genetic drift in which certain favored traits over time are simply exaggerated.

One such drift is sheer size – which would explain why some dinosaur species seem to have trended ever-larger over hundred of thousands or millions or years. In the last 50,000 years, humans have likely been growing both less robust and taller, even as brain size has been expanding. What does this mean, practically? That humankind may be evolving away from the endless, active warfare of prehistory.

According to Wade, one of the dirty secrets of anthropology is how violent-seeming was humanity’s past. He points out the prevalence of “hand-axes” that have been discovered at stone-age sites and how anthropology has remained vague on their usage. Obviously, Wade suggests, so many hand axe were not simply for curing leather or cutting fishing line; an axe is an axe – a weapon of war. Wade backs up this line of logic with physical evidence. The skeletons of our ancestors bear marks of great violence, bones broken and rebroken, etc. While some of this might be explained by hunting accidents, the sheer number of physical injuries would seem to lend credence to the hypothesis that humanity’s inter-tribal relationships were market by a series of almost constant skirmishes – and worse.

Now all that may be changing. Over time, humans have become more peaceable and

“tamer,” according to Wade. The human race is pacifying itself. Stocky, smaller humans,

rugged and violent, have given way to a less thick, less sturdy, gracile type with still-

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leaders to know that numerous nuclear weapons are shortly to be pointed in their direction, or at least can easily be brought to bear. Contrast the position of America’s leaders as regards India with Iran — its nuclear ambitions and recently configured oil bourse. Iran may want to possess evolving brains. According to Wade, this may account for a kind of instinctual certainty shared by many (despite affectations of doom) that humanity is making “progress.”

Despite the above analysis, controlled war seemingly continues to be a preferred economic weapon in the early 21st century. What is the evidence of this? Wars are often apt to happen on an economic downstroke. The First World War, largely manufactured in the eyes of many, came as the old economic order was dissolving. The Second World War arose from the first and was fairly obviously used to set up the seeds of global government via the establishment of the United Nations, etc. Most wars, regardless of their stated reasons, can be seen as operating on behalf of an agenda that is ultimately sympathetic to the money power.

Free-market thinkers are well aware that those who wish to move mainstream society toward radical “leveling” and strong-man politics often attempt to do so via social upset, including, importantly, war. It is also apparent that the global money elite has reasons to create political tension, if not outright war, between various nation-states in order to impose further international solutions and build out global governance. Finally, it may not be coincidence that the advent of nuclear weapons coincided with the final world war, World War II. Nuclear weapons have made it much more difficult to wage world war. Bereft of the ability to wage world wars, nation states have conducted endless, bloody skirmishes. However, it is questionable as to whether such regional warfare has the convulsive effect of a world war.

The Internet and the advancement of science show clearly that the way to progress and a civil society is through peace, not war. Those who seek to use war as a weapon of sociopolitical change may come under increased pressure in the 21st century. Their subterfuges will surely become greater, at any rate. The insistence on regional warfare as a just and noble enterprise when engaged in by the West will also likely come under additional scrutiny. Nicholas Wade’s important book has provided anti-war free-market thinkers with an entirely new platform for their arguments. Not only is war divisive and likely engineered by money power – making many miserable and enriching a few – it now can be seen as a behavior that humankind is evolving away from.

—Anthony Wile, August 2006, FMNN

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“nukes,” but the United States already has them and is apparently considering using tactical “bunker busters” to blow up the machinery of Iran’s nuclear program. According to the UK Telegraph: “The Bush administration is planning to use nuclear weapons against Iran, to prevent it acquiring its own atomic warheads. ... President George W. Bush is said to be so alarmed by the threat of Iran’s hard-line leader, Mahmoud Ahmedinejad, that privately he refers to him as ‘the new Hitler.’” While such a scenario seems unlikely as this book is being finished, the Bush administration has proven perfectly willing to use America’s vast military arsenal in the past, and there is no guarantee that it will not do so again in whatever manner it chooses.

Conflict, No Option? China, currently the fastest growing major power, provides yet another example of how U.S. diplomacy responds to economic challenges in the early 2000s. The PNAC document already mentioned called for “regime change” in China — and that was before 9/11. Since then, the Bush administration has seemingly taken action on both economic and military fronts, complaining about the imbalance of trade between the two countries and the strength of China’s currency, and embarking on what appears to be a campaign of military encirclement using regional proxies including India. Meanwhile, America’s Harvard-centric Eastern establishment has pursued a different angle. Harvard Law’s International Financial Systems (PIFS) sponsored a Financial Systems symposium (21st Century Agenda for China and the United States), which was summarized and posted on the ‘Net. The conclusion reads:

Looking ahead fifteen years, there was a bullish consensus as to where China will be positioned. Among the predictions by participants were the following: the RMB will be a reserve currency; Shanghai will be the financial center in China; and China will be the largest investor in Asia. One U.S. participant put things in historical context: When Deng Xiao Ping opened up China in 1978, people worried about whether the Chinese economy could survive; it did. When China recently joined the WTO, many predicted that Chinese industries would be wiped out by multinationals; so far, the situation in China does not appear so bad. If you believe in markets and that the Chinese people and government can handle the current problems regarding the liberalization of China’s capital controls and currency exchange rate, then over the long run Chinese companies should be able to adjust and benefit.

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Alternative Reality Byte: U.S. Vs. Iran, Circa 1970s?

Rumor has always had it that former U.S. President Jimmy Carter had tried to negotiate to have the U.S. hostages, held for 444 days by the Islamic Republic which he had helped establish in Iran, released just before the November 1980 election date, but that opposition (Republican) candidate Ronald Reagan had subverted, taken over and blocked the plan. An eye-witness account of the seizure by “students” of the US Embassy on November 4, 1979, in Tehran confirms a different scenario. The mostly “rent-a-crowd” group of “students” organized to climb the U.S. Embassy walls was spearheaded by a mullah on top of a Volkswagen van, who with a two-way radio in one hand and a bullhorn in the other, controlled the speed of the march on the Embassy according to instructions he received over the radio. He would slow it down, hurry it up and slow it down again in spurts and starts, triggering the curiosity of an educated pro-Khomeini vigilante, who later told the story to a friend in London.

When asked by the vigilante for the reason of this irregular movement, the stressed cleric replied that he had instructions to provide the U.S. Embassy staff with enough time to destroy their most sensitive documents and to give the three most senior U.S. diplomats adequate opportunity to then take refuge at the Islamic Republic Foreign Ministry rather than be taken with the other hostages. Someone at the Embassy was informing the Foreign Ministry as to progress over the telephone and the cleric was being told what to do over his radio. The vigilante then asked why the Islamic Government would bother to be so accommodating to the Great Satan and was told that the whole operation was planned in advance by Prime Minister Mehdi Bazargan’s revolutionary Government with President Carter in return for Carter having helped depose the Shah and that this was being done to ensure Carter got re-elected. “He helped us, now we help him” was the matter-of-fact comment from the cleric.

President Carter reportedly responded that Khomeini was a religious man — as he himself claimed to be — and that he knew how to talk to a man of God, who would live in the holy city of Qom like an Iranian “pope” and act only as an advisor to the secular, popular revolutionary Government of Mehdi Bazargan and his group of anti-Shah executives, some of whom were US-educated and expected to show preferences for U.S. interests.

— “Defense & Foreign Affairs Daily,” March 2004, by Alan Peters. The name “Alan Peters” is a nom de plume for a writer who was for many years involved in intelligence

and security matters in Iran. He had significant access inside Iran

at the highest levels during the rule of the Shah, until early 1979.

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Almost a year after the symposium, on June 9, 2005, Henry Kissinger weighed in with an editorial in the International Herald Tribune entitled, Conflict Is Not an Option. Kissinger wrote in part: “In early May, I spent a week in China, much of it as a guest of the government. The rise of China — and Asia — will, over the next decades, bring about a substantial reordering of the international system. … Paradoxically, the best strategy for achieving anti-hegemonic objectives is to maintain close relations with all the major countries of Asia, including China. … As a new century begins, the relations between China and the United States may well determine whether our children will live in turmoil even worse than the 20th century or whether they will witness a new world order compatible with universal aspirations for peace and progress.” The Bush administration remains an enigma when it comes to China. Harvard is supporting symposia and Kissinger is urging outreach. One would hope the administration would not wish to add one more overt enemy to its swelling list. A country well down this path must eventually engage in the most destructive sort of power politics — taking new territories and acquiring additional resources and skilled populations to extract and refine them because it has no private industry left at home.

Very Expensive Wars Every day America greedily slurps up 80% of the world’s available lending. The country’s position is unhealthy. Its credit is exhausted, its currency is questionable and its monetary policy is indecipherable, even to insiders. President Bush and the “wise men”around him may believe the weakening dollar poses no lasting problems, but they have no real response other than to continue to print, borrow and spend (or maybe that is the plan). Either way, action will have to be taken. Consequences could be severe as the world’s bankers mull radical changes to the global financial system. What might be the result? In an article entitled, The Bank for International Settlements Calls for Global Currency, international financial sleuth and ‘Net reporter Joan Veon suggests that BIS-affiliated central bankers are beginning to come around to a full-scale halt of the current system of floating currencies because of “cyclical volatility” distorting international wealth flows.

They cite three such cycles of highs and lows. The first began in the 1970s when the dollar was taken off the gold standard. … The second cycle began in the mid-1980s, ending in a property bust; and the current cycle began in the mid-1990s. All Americans should be concerned about this report for the world’s bankers are signaling the end of the third cycle which can only end with higher interest rates as money is taken out of the market.

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Meanwhile, the bank’s economic advisor, William White, is on record stating the time has come for “a measured withdrawal of the stimulus that has been put into the [economic] system.” In January 2006, White apparently went on record as calling for either a return to the gold standard or global or regional currencies to help with “global imbalances.”The part about gold was probably not serious. Central bankers on the whole despise gold, which is anonymous, malleable, and generally uncontrollable. Whatever changes get made, they will probably involve consolidation of existing currency into “regional blocks” or some other similar scheme. Veon reminds us of a comment made a year ago by former U.S. Federal Reserve Chairman Volcker: “A new mechanism was needed for the world financial system … in a globalized world, we should have an international currency.” Veon then comments, “Global feudalism is [to be] created as the rich and powerful continually skim off the top of the world’s economic imbalances so as to even it out—for them!”

Iran, the Next Neocon Target FMNN commentator and free-market thinker Dr. Ron Paul (R-Texas) is well aware of how the authority to declare and make war is passing from the constitutional- ly mandated legislative branch to the executive branch. This is excerpted from Iran, the Next Neocon Target, posted at FMNN, April 2006.

It’s been three years since the U.S. launched its war against Saddam Hussein and his weapons of mass destruction. Of course now almost everybody knows there were no WMDs, and Saddam Hussein posed no threat to the United States. … Even with the horrible results of the past three years, Congress is abuzz with plans to change the Iranian government. There is little resistance to the rising clamor for “democratizing” Iran, even though their current president, Mahmoud Ahmadinejad, is an elected leader. Though Iran is hardly a perfect democracy, its system is far superior to most of our Arab allies about which we never complain. Already the coordinating propaganda has galvanized the American people against Iran for the supposed threat it poses to us with weapons of mass destruction that are no more present than those Saddam Hussein was alleged to have had … Even though the Taliban was removed from power in Afghanistan, most of the country is now occupied and controlled by warlords who manage a drug trade bigger than ever before. Removing the Taliban from power in Afghanistan actually served the interests of Iran,

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the Taliban’s arch enemy, more than our own. … A policy of trade and peace, and a willingness to use diplomacy, is far superior to the foreign policy that has evolved over the past 60 years. It’s time for a change.

Storm Warning Middle East violence intensifies. Will America go to war with Iran? Will violence escalate in Syria, Korea or elsewhere? Is military conflict and tension a necessary part of the modern world, or is it part of a larger, globalist manipulation? Certainly the pattern is repetitious. The economic distress in America is likely no different (except in scale) than it was in the late 1960s and early 1970s when the Vietnam War drained resources from the United States even as President Johnson struggled to shore up and expand his so-called Great Society programs. The combination of inordinate domestic spending with the waste of supporting a war, or series of wars, is always going to result Alternative Reality Byte: Khomeini Put in his Place?

Khomeini was born in the town of Khomein as Ruhollah Mousavi on May 17, 1900. Although Khomeini claims he is from a family that claimed descent from the prophet Muhammad and that he was entitled to use the style Seyyed before his name, the fact of the matter is that Khomeini's father was born in Kashmir, India and was a man named “Hendi.” Khomeini's father was an illiterate magician-healer who extracted money from the poor in India. Around this time, a famous dancer in India dies and upon her death she dedicated all her money to Islam. The British took her inheritance and established a fund through which they founded schools of Theology in Qom and Baghdad. As part of this fund, the English provided money to Indians to encourage them to become mullahs and dispatched them to Iran and Baghdad. Khoemini's father was the recipient of one of these lifelong stipends. Upon receiving the stipend he headed for Gom in Iran, but because he was untalented, he was kicked out of Gom. He then settled near the town of Khomein and took the name of the town and entered into trade with a partner. They began to sell jewelry and other sundry items around town. Eventually, Khoemeni's father kills his partner, takes all the money and escapes. As a fugitive from the law, he traveled from one village to another practicing his art and stealing women's jewelry. Eventually, he was arrested for the murder of his partner and hanged during Reza Shah's regime.

Upon his death, he left three boys. It was at this time that Reza Shah was requiring all

Iranians to select a surname. So, each son picked a name: his oldest son selected the name

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in a strain on a nation’s resources that will lower living standards without commensurate gain — except for perhaps a few at the top of the hierarchy. For Bush, struggling initially with a presidency that seemed “too large” for him, 9/11 was a self- proclaimed galvanizing event. His presidency “changed,” he said. He became a war president and found a simple, straightforward way of handling his office that conflict provided. Was it in some way planned? The conspirati, and increasingly more mainstream media, have much to say — and their reasoning and proofs can be found on numerous sites dedicated to debunking “official” accounts of the 9/11 attacks. Some cite historical precedent, arguing that most if not all of the Western wars of the 20th century, especially World War I and World War II, were manufactured for similar reasons. The old order was breaking down around the time of World War I and, if you are of a certain frame of mind, you could muster a sincere speculation that both world wars served as a distraction that took people’s eyes off what was actually taking place, economically speaking.

of his father “Hendi,”the second selected the name 'Khomeini’which was the name of the town, and the third selected the name “Pasandideh.” In Khomein, Pasandideh opened a small business providing certificates and serving as notary. Khomeini in his youth married a young girl and divorced her, then he married a 12 year old girl (his brother provided a marriage certificate for him) which was illegal during the Pahlavi administration, so Khomeini was thrown in jail. In addition, Khomeini was arrested in Baghdad for sexually assaulting a young boy and later became a closet homosexual, a common practice among the mullahs. He was a notoriously corrupt person. After his father's death, the English selected Khomeini for training. Khomeini was given a lifelong stipend to help him become a mullah. Khomeini had three children, two sons and one daughter. One son died of overeating and alcoholism, the second son Ahmad is a cleric in Qom and receives a life long stipend, and a daughter, Ashragh, who is still alive. Khomeini, a man of Indian stock, had little affection for Iran. In fact, he hated Iran. He was against education. When he came to power, he closed all the universities and medical schools, stating that Iran did not need educated people or doctors. He criticized Reza Shah for building schools and giving rights to women among other things. His books on Islamic guidance are about sex and anal hygiene. With the help of the British, Khomeini reinvented himself.

The preceding unsigned comment was added February 2006 with the following

attribution: “My source is ‘Massacre of ‘67’ by Masoud Ansari published in 2002. He is a

professor, an Iranian Scholar.” (Khomeini discussion at Wikipedia.com.)

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Do people need a similar diversion now? Europe struggles with integration and the United States struggles with an economy that offers more and more service jobs. Meanwhile, the power elite is on its way to India and China, where real productivity exists. Here is value to be skimmed off via central banking and tax manipulations. Here, the power elite hopes to again do what it has so often done before: help itself to wealth that otherwise would belong to those who generate it. Britain was extraordinarily wealthy in the 1800s with an empire on which the “sun never set.”America in the 1800s and for a good part of the 1900s was wealthy too. But that wealth is gone in large part, at least numerically speaking. The United States has borrowed trillions worldwide, and still goes back for more every day. And Britain ceased to be a leading economic power more than a half century ago. Very strange, how fast these two empires peaked. Athens, Rome, Renaissance Italy, these societies retained their wealth and power for centuries. Not so for modern America and 19th century Britain. It is not actually hard to comprehend if proper economic analysis is applied. Fiat money from central banks, currency manipulations and income taxes all contribute to ruination. They are the culprits and the only additional question then is whether such nation-wrecking monetary and fiscal strategies are applied with malice aforethought or unwittingly. Unfortunately, history seems to indicate these fiscal manipulations are not naive and that they have been put in place to strip the wealth of the citizens. Not only do they enrich those who are controlling the exercise, they also weaken the social order and make society ripe for amalgamation into larger, regional financial compacts, leading eventually to global governance. The trick is to hide the manipulations efficiently enough so no questions are asked. The working class, the professional class and, most importantly, the intelligentsia

Elite Retreat …

“President Bush heads into his second term amid deep and growing public skepticism about the Iraq war, with a solid majority saying for the first time that the war was a mistake and most people believing that Defense Secretary Donald H. Rumsfeld should lose his job, according to a new Washington Post-ABC News poll. While a slight majority believe the Iraq war contributed to the long-term security of the United States, 70% of Americans think these gains have come at an ‘unacceptable’ cost in military casualties. This led 56% to conclude that, given the cost, the conflict there was ‘not worth fighting.’” —WashingtonPost.com, December 2006

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are to be misdirected by “isms” — communism, socialism and capitalism, among others. All are to be instructed that these comprise, in some part, the social order, yet in reality each is meant merely to distract the conversation and delay necessary realizations. War is indeed the ultimate weapon. Let it stretch on long enough, no matter who started it or how, and those paid hacks who come to the forefront of their professions during the time of the nation’s need will begin to lob literary bombshells. They will write of the necessity to destroy the enemy, no matter the initial reason. They will write that it has gone too far now, that the polarization and destruction that has occurred can only be rationalized by total victory. They will dehumanize the opposition and declare if it is not wiped out to the last man, that victory is in doubt. Those who still object, they will be called unpatriotic. But ask only (if only you could), would you go? Would you give your life, your child’s life, your sibling’s life for what you ask of others? Take everything a man or woman has — his or her life — and leave the body to rot in a fetid jungle or on littered city streets in a despairing foreign country for reasons that are neither clear nor compelling. Would leaders die this way for these causes, and for reasons that change every month, as if they are being tried out like jokes at a nightclub? Meanwhile, the question lingers at the beginning of the 21st century, rising slowly like a bad odor: What country will be next? Whose children will be blown up? What nation’s top man will be called “the next Hitler” by media that refer to America’s largest bureaucracy as “Homeland Security?” Is it Iran, possibly Syria or Lebanon, even Palestine or North Korea? Korea has been making ugly noises again. It will most likely be a candidate from the Middle East — a region that is gradually melting into a bloody stew of seething violence and anti- Americanism.

Economic Action Alert Take possession of at least some assets via physical delivery. Actions have consequences. If the international banking community has its way, Bush and Co.’s dollar farce will “get the hook.” How messy that will be, how much agony that will cause, how much pain those not privy to this sort of planning will have to undergo, is not yet clear. Some things are. No one attending the banking meetings noted above will miss a paycheck, and as Veon points out, the central banking community will no doubt manage to help itself to a bit of the “skim,” wherever it may be. Creating a new currency is hard work. Given a change of this magnitude, if it were to come, one wants to be holding precious metals, especially silver. Physical delivery is a plus.

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How the banking industry’s money power grew through the ages. BANKING SURGE

“The Austrians in the Mises-Rothbard tradition have never called for a gold standard except as a market-created standard of monetary exchange. It is a market standard in gold, not a gold standard. Gold will probably win in international exchange, they both believed, but silver or other metals may operate side by side gold domestically, which Mises and Rothbard described as parallel standards. The gold standard is, in this view, the market standard.” —September 1999, LewRockwell.com, Money Gold Standards

High Alert We read in an earlier chapter of John Perkins and how the global banking infrastucture was used for purposes other than what we might consider the “common good.”What Perkins was involved in was a promotion. That is, he utilized money, promises and persuasion to reap a greater reward. The global power elite’s promotions are so vast that it is difficult to ascertain where they begin and end — and this is where free-market thinking can prove most helpful. A free-market thinker who understands economic laws is much better able to discern the difference between an operative business and a promotion, between fantastical claims and realistic outcomes. Why is this important? Free-market thinkers — and it is the contention of this book that there are more of them every day thanks to the ‘Net — wish to function as much as possible in an adult capacity. They can best understand and manage their lives if they are not the victims of prevailing myths about the way the world works. This is true on a personal and professional level, and it is true

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when it comes to their financial environment as well. Free-market thinkers want to understand the reality behind the reasons the financial system is set up this way or that, and why the business cycle does what it does, and how inflation steadily rises even though the Fed “fights it.”

Control the Money, Control the Market When it comes to understanding their financial environment, such free- market thinkers are usually aware that nothing is more important to the current system than central banking. On the surface, the central bank is expected to manage money and ensure the economy perks along. But in fact central banks perform admirably as promotional vehicles — giving the world a sense of surety and comfort even though they are controlled by the bankers behind them. When the Group of Six — or Eight or Ten or Twelve — meet to discuss world economic matters, the results are played out in all the mainstream media. The simple creation of national and international institutions, and their funding, provides great promotional theatre, regardless of whether the organization in question actually does anything. In the case of central banks, of course, the institution does a great deal. The creation of money is an extremely powerful lever, and when central bankers speak, they are usually careful to avoid the subject, talking instead about velocity, interest rates and other aspects of monetary calculation and control. But at its core, the central bank is a money-making machine, and the closer you are to the spigot, the better off you are going to be, financially. Additionally, the central bank is at the heart of the larger promotional machinery of modern money power. Without the capacity to make and circulate money, the rest of what the power elite has accomplished would be relatively unworkable. In fact, it wouldn’t have had the money to do it in the first place. When one controls the money, one controls the market. We saw this in the late 1920s when an upward trend in money creation pushed the investors and speculators into a final frenzy of buying . In the late 1990s, central banks stockpiled money to smooth out the rough patches from Y2K. Some was put into circulation and may have helped the Nasdaq market head for outer space — before crashing and burning. Another Fed misstep? A little free-market thinking would have helped many of the investors piling into tech stocks in the late 1990s. Aware of the 1920s experience, and other similar activities, a free-market thinker might have investigated governments’ plans for Y2K in America and Europe, concluded too much money was sloshing around and taken steps to secure his or her portfolio against a market blow-off —

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which actually happened in the case of the Nasdaq, though not the Dow. Understanding financial mechanisms is absolutely necessary to growing up as a mature, confident, in-control individual in the 21st century. Without doing so, it will be difficult to make informed decisions.

The True Lynchpin Central banks, as stated earlier, are perceived as lynchpins of the world’s larger economic system. The banking industry helped to construct this system in all its initial glory and subsequent decay. First there was honest money, then paper money and finally, government-backed “fiat money” — supported by nothing but the faith and credit of the government itself. Today, there are rapid business cycles, predatory inflation and the looming threat of hyperinflation. What are other issues for which free-market thinkers ought to be on the lookout? The unwinding of the current system, because of the abuses we have been cataloguing, and a great run-up in commodities, especially money metals such as gold and silver. Precious metals ran up over US$700 earlier in 2006, before subsiding, but many metals insiders believe we have not yet seen the great surge in pricing that is to come. By the time it is over, so the theory goes, gold will be lodged upward of US$3,000 an ounce; the dollar, and indeed all fiat currencies, will be finished. A gold market standard — one in which the price of gold is fixed by the market, not the state — may eventually rule the day. Silver especially is a metal to watch because the ratio of silver-to-gold is at a historical low, with silver being atypically undervalued compared to gold. This is one way, of course, to ascertain that the silver market remains manipulated when it comes to price discovery. But nonetheless, such market manipulations, which seem endless at the time, have fairly short lives in the scheme of things. When silver finally does rise, it will move fast and hard, faster even than gold.

Banking and Government Throughout this chapter the free-market thinker ought to note the growing interactions between government and the banking industry. It is the quasi-public nature of modern banking, and thus modern money, that has been responsible for so much mischief. Unfortunately, a true understanding of money is hard to come by because of all the untruths that have been told and continue to be told — in academia, on Wall Street, in newspapers and magazines and, of course, within the material disseminated on the ‘Net or printed by either the banking industry, the Federal Reserve or the U.S. government. Where is someone to go? Until recently, nowhere. The fine free-

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market work of the von Mises Institute was known to a very small group of individuals and secondary, popularly-oriented sources such as this book were virtually non- existent. It is, of course, the Internet that has changed everything. But absent the information conduit of the ‘Net, sources of information about monetary and banking policy remain unreliable. Theory is related in such a way as to make no distinction between government interference with money and honest money itself. Articles about monetary policy start with assumptions that the central banking system and the larger, international system are sound when they are not. Throughout the world a tremendous fraud has been perpetrated. Gradually, a global power elite has substituted its own paper scrip for the gold and silver that circulated in freer times. These individuals and groups have been able to keep precious metals for themselves — or lacking possession, suppress the value of them for others. Imagine the power you would have if you could do this: First set up a printing press, then convince government to make you the monopoly provider of paper money while banning, outright, the use of honest money. Now everyone has to use your paper money, and you can print as much of it as you want. It sounds like a fairy tale, but it is real. This is what has happened around the world, and a very few, very rich individuals own the printing presses that provide the paper money. Of course, despite owning printing presses, it cannot simply print money, put that money in its collective pocket and walk away. The system is more subtle than that, giving enormous purchasing power to those near the credit spigot where money is printed or loaned. But, nonetheless, much of the money actually has to go out to commercial banks, which then put it into circulation. The current manipulations were developed over centuries as various powerful authorities gradually figured out that great fortunes could be built by controlling and issuing the money circulated throughout society. The manipulations started innocently enough with coin shaving, but eventually became intricate and increasingly poisonous to the body-politic. Like a serpent, these machinations crept through society, gradually strangling fairness, honesty and decency.

From Barter to Cash It is generally agreed that money began as barter — a very ancient kind of exchange of valuables that was probably the predominant way of trading goods and services during the long formative period when humans traveled up and out of Africa turning either toward Asia or spreading north and west throughout Europe. These nomadic clans needed little in the way of specialized stores of value at a time when

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hunting, fishing and the gathering of edible fruits and legumes provided tolerable sustenance. In such a nomadic society, males generally hunted while females made the clothing, kept the house, tended the children and added to the diet. As farming became established, migrations became less frequent, clans grew in population and permanent agricultural communities expanded. As these urban agglomerations increased in size, complexity and raw population, they no doubt came under attack, necessitating a wide range of defensive measures including strategic treaties and a new kind of specialization — the professional warrior class serving the interests of the merchants and more successful clans warring for influence and power in the urban trading communities. Out of this no doubt chaotic and confusing time came first tribal, then regional clans, complete with the leadership of “big men” — chiefs and kings — and gradually individuating languages. At this point, the urban trading environments far exceeded the rural settlements surrounding them. Something else happened as trading communities evolved. Specialization ensued. Urban areas must eventually have been dominated by those with more specialized non-agricultural skills such as metals-smelting, pottery-making and Conspirati Although many people today would not view the CFR as a secret society it was originally set up as part of a secret society and it was kept secret for many years, in spite of its awesome power. Carroll Quigley, professor of International Relations at the Jesuit Georgetown University, exposed the Round Table Group with his book Tragedy and Hope. The Rothschilds supported Rhodes to form De Beers. Later, Rhodes made seven wills which established a secret society modelled after the Jesuits and Masons to help bring in a One- World Government centered upon Britain, and the Rhodes Scholarships. The inner group was established in March 1891 and consisted of Rhodes, Stead, Lord Esher (Brett), and 33* Mason Alfred Milner. A secondary circle of "potential members of the Circle of Initiates" consisted of the Jew Lord Balfour, Sir Harry Johnson, Lord Rothschild, Lord Grey and others. The Fabian Socialists dominated the staff at Oxford when the Rhodes Scholars began arriving. These scholars then received indoctrination and preparation to become part of an international socialist New World Order. The Round Table Group developed from the inner executive circle of Rhode’s secret society. The outer circle was established after the start of the 20th century. The Round Table Group was extended after WW I by organizing a front organization, the Royal Institute of International Affairs. The Council on Foreign Relations was the American part of this front. The inner circle continues to direct the outer circle and its two front organizations RIIA and CFR. —Fritz Springmeier, Bloodlines of the Illuminati

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carpentry along with the “merchants” — specializing in the marketing of various goods and services. Technologies would have evolved more quickly in urban areas as those with like skills and interests competed with each other or shared better ways of accomplishing individual tasks. We imagine the ancient societies to be “primitive,” but even such — by our standards — rudimentary environments demanded a good deal of specialization. The complex of skills, for instance, that it took to throw and cure a pot, smelt metals for a horseshoe or sword, or to build a wooden fence or skiff is far more formidable when examined in detail.

Mediums Developed As the need for money developed, so too did the accepted medium that society used. People needed a store of value that could be relied upon to hold its value, something that was malleable, portable and most important, limited by nature such that no artificial supply could vitiate the money supply and create inflation. People sought, in other words, an honest monetary unit of exchange that could satisfy their need for indirect exchange and that could not be counterfeited. It was also imperative that it reflect value because it required labor to create it. Gold and silver exist in the earth’s crust, and both labor and investment capital are needed to explore, develop and process the ore. This is where the invisible hand will moderate the money supply, but only effectively if control of the money supply is left free from government interference. Many things were historically and temporarily used as money over the past millennia. These include beads, sugar, salt and even cigarettes, which still today are an acceptable means of trade in America’s overloaded prison system. Eventually, gold and silver emerged as the natural store of value for many societies around the world because they are, as one famous financial writer has summarized, “durable, divisible, convenient, consistent” and a reliable store of “value.” Let’s take these attributes one at a time. Gold and silver are indeed durable, yet both are soft metals, easily divisible. Are they convenient? That neither are light metals probably aided in their selection since money, in its natural sense, is the product of weight — divisible in ounces. A heavy, valuable metal allows the individual to transport a fairly small amount, yet still move significant capital. Storage is important too, and since both metals hold a good deal of value in fairly small amounts, a great deal of wealth can be stored in a very modest space. Gold and silver also provide consistency, in that they do not vary in their natural state and impurities are relatively easily flushed from them. Finally, both metals are in demand in a practical sense. There is another important requirement that we have not yet reviewed and, that is, money stuff must be plentiful enough for commerce — and indeed gold and

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silver are. What emerges in the present day, time and again, as a criticism of the idea that society could return to the use of precious metals as a direct substitute for paper bills, is that neither metal, but gold especially, is present in enough abundance to satisfy the demands of modern commerce. In fact, gold and silver are like any other commodity and thus will be supplied in greater measure if the price starts to rise due to a shortfall of some sort. Will we ever run out of gold and silver? Since both occur as the result of geological processes, more of these two precious metals is being geologically created every day. Additionally, one has to consider just how much of either commodity has actually been used throughout the ages. Economists have speculated, astonishingly, that all the gold ever mined from the earth could probably fill a few boxcars on a freight train. The silver/gold ratio has varied throughout recent years and currently stands at an astounding 50-to-1, considering the historical average for thousands of years was more like 16-to-1. For purposes of our argument, multiply a few boxcars of gold by 15 — say five of them. Seventy-five boxcars, perhaps — that’s the amount of silver that has been mined throughout the ages, even in this day of high-tech uses when silver’s applications are broadening. Quite an eye-opening exercise, isn’t it? Precious metals are indeed “precious,” but not in such a limited supply as to deter the free market from choosing them as the best form of “honest money.”

Private Minting — Coin Shaving, Too Initially, gold and silver coins were no doubt “minted” privately. Raw gold and silver was refined into coins bearing the name of the mint and the amount of metal each coin contained. If the public trusted the coin maker, then the coins would be accepted as monetary instruments. The confidence of the public was essential to the coins’ acceptability, therefore, it was important for the issuer to have an impeccable reputation for honesty. If so, people would willingly trade their valuable goods and services for the coins. To begin with, there were no legislative or other man-made decrees involved in the process of creating or minting money; and thus, as unscrupulous individuals began to “shave” or “clip” coins, private concerns sprang up to guarantee honest weights and measures. Eventually, those who had established themselves as society’s leaders began to mull ways to increase personal wealth and saw the easiest way was simply to seize control of the money supply. And thus it was that eventually the “big men” came to be in charge of the institutions guaranteeing honest weights and measures, just as they had come to be in charge of the minting and issuing facilities as well. Now the mischief really began. Having taken over the responsibility for honest

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coinage, those in charge wasted little time in becoming dishonest by issuing that which they had denounced into the marketplace: debased coins. The debasement in this case was not from shaving or clipping but from adding cheaper alloys to the coin along with the gold and silver. Consider the baker who came into possession of some of the government’s newly debased coins as payment for his bread, thus receiving less gold or silver than his labor was worth. Soon he starts to charge more for his bread to compensate. Today, this would be called inflation — and it is the inevitable outcome of dishonest money. People need to charge a certain price for goods and services, and they will gradually charge more as the value of their money declines. The public always pays the price for theft by the powerful. Older people, especially those on fixed income streams such as annuities or pensions, are especially vulnerable. In the United States, for instance, certain government and private payments are supposed to be inflation adjusted. But how is this possible when food and energy are often excluded from the calculation? Justification: Such items are especially volatile and might give false readings, which is all the more reason to include them. The damage done by monetary debasement takes years, even generations, to undermine civil society. In the meantime, officials work hard to maintain the fiction that the state must be the “honest broker” of money stuff, providing uniform weights and measures for a marketplace that is otherwise prone to chaos and corruption. The arrogation of monetary manipulation is at least partially responsible for the tension between authorities and the free market. While leaders’ antipathy to the marketplace might seem strange given that the market provides support for the state through taxes, in truth it is absolutely necessary. Freud had a term for this sort of activity: transference. Actually, the state is fundamentally dishonest, not private enterprise. Competition disciplines private enterprise. What disciplines the state?

From Paper to Fiat The concept of paper money could not have been implemented without the development of bullion banking, for it was this evolution that called for the first credits or customer receipts, and it is these that laid the groundwork for the paper note. The initial note doubtless evolved as depositors found it inefficient to go to the bullion bank to redeem their metal deposits and instead began to use bullion bank receipts to settle transactions. As this process matured, it became codified within the private banking system. The issuance of notes became routine and bullion banks had only to take care that there was no cause to doubt the amount of gold or silver that lay behind their paper receipts. In order for a bank to be trusted as an issuer of paper money, it had to possess

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three characteristics. First, the bullion bank had to have a good reputation or its customers would not find its receipts easy to offer in lieu of gold or silver. Second, the gold and silver had to be redeemable on demand — meaning that bearers of receipts must be able to present them at any time to the bank and receive the full amount of gold and silver. Third, the bank must not issue paper receipts exceeding the amount of gold and silver it has on deposit, as doing so would render the bank technically insolvent and unable to satisfy all the depositors’ claims. The market itself enforced monetary discipline on most bullion banks. Were a bank to issue more receipts than it had gold and silver on hand, and the public were to find out about it, the bank undoubtedly ran the risk of a “run”as the fraud was exposed. This forced citizens to accept responsibility for their decisions about where to bank and whom to trust. Due diligence was part of life and poorly managed or dishonest banks would likely not survive in a market that demanded “full and true disclosure” over all aspects of its operations. The free market, by definition, is constantly moving businesses of all types toward more “disclosure” as free-thinking citizens reward those who provide such information with their confidence and, subsequently, their business. This system works just fine as regards monetary issues so long as the government stays out. Unfortunately, once government-sponsored banks became the norm, manipulations increased and free-market thinking decreased since critical evaluations of government-backed banks mattered little.

Modern Monetary Control Around 1500, the modern system of monetary control began to take shape. The initial breakthroughs came as a result of the creation of such state-run bullion banks — an outgrowth of making the state the honest arbiter of honest weights and measures. Still impediments remained to total monetary control. The power elite of the day had built the engine but lacked the fuel. However, it was only necessary to take one more ruthless, false step — and that was not long in coming. What those charged with increasing the king’s treasury finally decided to do was print additional certifications of bullion storage well above what had actually been received. As the process evolved, states began to issue more scrip backed by less gold and silver. Today this practice, known as “fractional reserve banking,” is practiced virtually everywhere — and is unfortunately the province of government-backed central banks . In fact, government-secured fiat money, fractional reserve banking and central banks are the mainstays of financial systems around the world. Money, thus, is no longer generated by the free-market, but has become a quasi-public — and thus undisciplined — commodity.

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Conspirati It has been said that the effort to establish a central bank here caused the American Revolution. For the benefit of Rothschild’s Bank of England, British Parliament ordered the colonists to give up their currency, and the colonists soon found themselves encumbered by a circulation strapped with 30% annual interest. Benjamin Franklin summarized the causes of the war thus: “We would have gladly borne the little tax on tea and other matters, if it had not been that they took from us our money — which created great unemployment and dissatisfaction.” —2005 post PerfectEconomy.com, Cause of the American Revolution

Monetary Innovation and Central Banks Central banks print as many receipts — today known as “money” — as their managers deem necessary, and offer as much credit as they believe is appropriate. But very little of the “money”created is backed by anything other than government’s faith and credit. Economists mostly accept the current structure without question and if pressed will probably maintain that the competition between nations keeps issuance honest. Yet, mainstream economists have another question to answer if one is willing to grant any credence to the argument that a fully international system of banking is the preferred configuration. They must explain who would determine the appropriate level of credit issuance within a one-world government and how a monetary system comprising a single standard certificate would avoid massive — ruinous — inflationary run-ups. The above questions are not framed out of idle curiosity. Current Western banking policy indeed seems focused on reducing monetary denominations to a single, standard certificate — the euro being a point in case. Also, the competition between nations to sustain value is mostly a race to the bottom. Each nation prints as many receipts as its managers deem necessary and the result is endless inflation and erosion of the value of receipts (money) already in hand. The win-win for the state and the power elite has been nearly total, though in fact, it has taken a fairly long time to implement and has occurred in stages. Yet, the mechanism remains the same as it did in the 1600s. Central banks print money and issue credit (“out of nothing”) and because of the success of the model, governments all over the world harvest proverbial golden eggs. Today, money issued (“printed”) by a central bank is nothing but an electronic transaction — a notation of credit offered.

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Inflationary Printing In simplest terms, central banks inflate by printing money. The more money they print, the cheaper money becomes, and the less a government’s debt becomes. By cheapening money, the government deprives individual citizens of part of the value of that money. As the value is eroded, the citizen becomes poorer, even if he or she doesn’t notice it right away. One of the first of the central banks operating along lines we would recognize today was founded in Sweden in 1656. According to numeous monetary sources, the so- called Bank of Palmstruch was set up by Johan Palmstruch under the authority of the king, who gave permission to its operations “according to stated regulations.” Acting as a harbinger of what was to come, the Palmstruch bank issued too many notes against its underlying assets and went insolvent. A new bank took its place, managed under the direct control of the Riksdag of the Estates “to prevent the interference of the king”and was called Sveriges Riksbank. Palmstruch was condemned to death over the bank’s losses but later received clemency. The Riksbank has stood ever since and is today the Bank of Sweden. It was in Britain, perhaps, that the real breakthroughs were made with the understanding that a national emergency such as a war could be used as a justification for the creation of a central bank administered by subscribers supervising loans to the Crown. The rough outline of what was to come is evident even in 1694 when King William III — fighting a prolonged war against France — asked a group of wealthy merchants for a loan of more than a million pounds. Those approached were willing to lend the Crown the money with two conditions. First, they wanted to found a private bank but give it a very public name — the Bank of England. And second, they wanted the king’s permission to issue bank notes . There was actually a third wrinkle. The king’s mercenaries were to be equipped and paid with notes issued against stores of gold and silver in the bank. Once the king agreed to this, the pattern of modern central banking can be clearly seen. While notes were not official tender until 1833, and then only for sums above £5, those involved had garnered for themselves a formidable advantage. England’s goldsmiths (London private banks, that is) gradually ceased to issue their own notes following the Bank of England’s establishment, unable to compete with such a privileged neighbor. (Beyond London, “country”banks issued their own notes freely until their issues were limited by Peel’s Act of 1844: The last country bank notes were withdrawn in 1921.) Today, central banks print as many receipts (money) as their managers deem necessary, and offer as much credit as they believe is appropriate. But very little of the “money” created is backed by anything other than their government’s faith and credit.

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Tipsy Superstructure With the advent of the 20th century paper-money banking emphasis, a banking superstructure rose up supported by nation-states and controlled by central banking. A good deal of it emerged alongside the United Nations — much of it little known to the general public and a good deal of it involving enormous privilege and questionable stability. Three of the chief international banking players include the following: The International Monetary Fund (IMF) is a kind of hall monitor for its 180- plus nation-states. According to its pamphlet, A Global Institution: The IMF’s Role at a Glance, the bank monitors exchange rates and international payments, and watches for signs that an individual country is having difficulty meeting its bills. When a country is in trouble, the IMF will dip into its “fund”to assist, but also, at the same time, urge the country to adopt responsible budgetary processes. The IMF refers to itself as the “lender of last resort” but the IMF doesn’t create its own fiat money. It relies on grants from various governments (and thus you and me). Thus, the actual last-resort lenders are the contributing governments. The IMF is actually a “quasi” or “pseudo” lender of last resort. The World Bank is divided into two banks: the International Development Association (IDA), and the International Bank for Reconstruction and Development (IBRD). The IDA is for very poor nations and the IBRD is for the more credit-worthy nations. The World Bank has more than 180 member countries but borrows money for its operations, issues bonds and then loans the proceeds to poorer countries. Both the IDA and the IBRD lend strictly through governments. Under its most imaginative leader, Robert Strange McNamara, the World Bank began to emphasize its role in wiping out poverty. But, in fact, the bank is in the business of making loans to developing countries whose citizens or government officials will then make purchases of varying necessity from the global corporations introduced to the now-flush country by the bank. Often, if the country ends up in trouble from its unnecessary purchases, the poor will end up with higher taxes or inflated currency. The Bank for International Settlements (BIS) deals only with other central banks. It helps money move around the world, often via bridge loans to central banks of countries waiting for loans from the IMF or World Bank. These bridge loans are then repaid when the other funding comes in. In “Tragedy and Hope,” Carroll Quigley has described the reason for the formation of the BIS this way:

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The power of financial capitalism had another far reaching plan, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalistic fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks, which were themselves private corporations.

A Most Unusual Bank James C. Baker, author of “The Bank for International Settlements: Evolution and Evaluation,” explains that, “The BIS was formed with funding by the central banks of six nations, Belgium, France, Germany, Italy, Japan, and the United Kingdom.” The Hague Agreement of 1930 gave the BIS its operative international charter and established its headquarters in Basel, Switzerland. According to the agreement, “The objects of the Bank are: to promote the co-operation of central banks and to provide additional facilities for international operations; and to act as trustee or agent in regard to international financial settlements entrusted to it under agreements with the parties concerned.” The BIS is a most unusual bank in that its directors, officers, employees and members live in a “legal bubble.” BIS reportedly stands above Swiss law and above the law elsewhere as well. BIS couriers apparently have diplomatic immunity. BIS-affiliated individuals and businesses have the right to use codes and encrypt documents. There are immigration and emigration exemptions. They are free of legal jurisdiction and taxes; not liable for civil or criminal charges unless the offense is egregious. Wood makes another point as regards the BIS. “On March 10, 2003, the BIS abandoned the Swiss gold franc as the bank’s unit of account since 1930, and replaced it with the SDR. SDR stands for Special Drawing Rights and is a unit of currency originally created by the IMF. Baker defines the SDR as follows: “An international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries. SDRs are allocated to member countries in proportion to their IMF quotas. The SDR also serves as the unit of account of the IMF and some other international organizations. Its value is based on a basket of key international currencies.’” There is no doubt, according to Wood, that the BIS expects to supervise a transition to regional and then a global currency — perhaps using the SDR. “The Brandt Equation, 21st Century Blueprint for the New Global Economy” notes, for instance, that “since the SDR is the world’s only means of meeting international payments that has

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been authorized through international contract, ‘The SDR therefore represents a clear first step … ’” But maybe it is not so complicated as all that. FMNN commentator and free- market thinker Bernard von NotHaus has already founded and put into circulation the Liberty Dollar, a “money”now distributed in the millions and “owned by the people and not the Federal Reserve.”Without millions at his disposal and an army of assistants, von NotHaus is the epitome of human action, creating a new currency and circulating it on Reality Byte: Gold and Economic Freedom

Defense of the Gold Standard — Selected Points, Condensed (Former Fed Chairman Alan Greenspan wrote the paper from which these points are excerpted when he was in his late 20s and an acolyte of famous free-market novelist Ayn Rand.)

MONEY • Market Value: Money provides a standard of market value and a store of value. • Savings: Without savings, neither long-range planning nor exchange would be possible. • Medium of Exchange: A medium of exchange should be durable, divisible and homogenous. • Single Medium: The use of a single medium is highly advantageous for it makes exchanges possible on an incalculably wider scale. • Credit Claims: Every credit instrument is ultimately a claim on some tangible asset. • Amount of Credit: Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets.

GOLD STANDARD AS PROTECTOR OF SAVINGS AND CREDIT • Repels Deficit Spending: A gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). • Repels Expansion of Credit: Abandonment of the gold standard made it possible for welfare statists to use the banking system for unlimited expansion of credit. • Repels Confiscation of Savings: In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. • Protects Wealth: The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

• Protects Property: Gold stands as a protector of property rights. Thus, the statists’

antagonism.

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his own. This is excerpted from Competition Comes to the Fed, posted at FMNN, February 2006.

Most Americans don’t realize the depth of America’s current monetary crisis, and those who do don’t stop using money in protest. Most people just shrug their shoulders instead. As the old saying goes, “you can’t fight city hall.” So for years, Americans have stood by and watched as the Internal Revenue Service has dipped deeper and deeper into our paychecks, and the Federal Reserve has entrenched itself into the economy. … Are people who attack the Federal Reserve just conspiracy theorists? Definitely not. Many don’t believe a conspiracy has taken place — they simply feel that the current system is out of control. … On the other hand, hundreds of authors and commentators have gathered an impressive body of facts and documentation that show how the U.S. Constitution was deliberately circumvented to allow the central bankers control over our money, and how the IRS uses scare tactics and even violence to browbeat American citizens. These students of the nation’s monetary system aren’t kooks — they’re professors, political scientists, judges, Congressmen and Presidents.

A Word About GATA No present-day chapter on the history of money would be complete without a word about one specific FMNN commentator, William Murphy, president of the Gold Anti-Trust Action Committee (GATA), and a free-market thinker mentioned elsewhere in this book. Along with a partner, Murphy founded GATA to agitate against what he and others, including certain well-known hard-money economists, considered to be the blatant manipulation of precious metals prices, specifically gold. Over the years, Murphy has spoken out tirelessly against what he considers to be a virtual conspiracy to invalidate gold as a barometer of financial health and a store of value. GATA has filed lawsuits against certain financial institutions and named others as party to the perceived manipulations including various central banks, the Federal Reserve, the Bank for International Settlements, and various commercial banks such as J.P. Morgan Chase, Citigroup, Deutsche Bank and Goldman Sachs. The result of the activities of these institutions, according to Murphy, is that gold settled in around US$300 an ounce in the early 2000s when it should have been around US$750 if it had just kept pace with the stated inflation rate. Although, based on the massive amount of fiat currency that the central banks have injected into the economy, it is seemingly inevitable that the

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price of gold shall soon far surpass US$750 an ounce. Murphy gave a most enlightening speech at the 2006 World Gold Investment Conference in Vancouver, Canada, GATA Keeps Its Promise. His main point was that the central banking/power elite conspiracy to damp the price of gold was finally unwinding. In his Vancouver speech, Murphy was careful to point out that most of the allegations made by GATA had already been admitted by top individuals. • Federal Reserve Chairman Alan Greenspan said in a July 24, 1998, speech to the U.S. Congress that, “Central banks stand ready to lease gold in increasing quantities should the price rise.” • The Reserve Bank of Australia produced a 2003 annual report including this line: “Foreign currency reserve assets and gold are held primarily to support intervention [manipulation] in the foreign exchange market.” • The Bank for International Settlements’ William White said in a June 2005 speech in Basil, Switzerland, that central banks provide “international credits and joint efforts to influence asset prices, especially gold and foreign exchange, in circumstances where this might be thought useful.” Murphy also mentioned that executives at the giant conservative bank Cheuvreux, a division of France’s Credit Agricole, were on the record as stating that GATA was correct regarding gold manipulation claims. And Murphy adds, “It gets better. GATA revealed an IMF paper which corroborates GATA’s claims that much of the central bank gold has been double counted and that the central banks are not properly accounting for the gold no longer in their possession.”

Storm Warning Market volatility increases. What Murphy has done in the past few years to expose the massive rigging of the gold price is both admirable and courageous. But we are now entering more dangerous territory. The price of gold may well get a lot more volatile from here on in (both ways). While the power elite is losing the public argument, its great power and wealth allows it to continue to do — behind the scenes — what Murphy claims it has been doing in any case for at least this last decade. Careful monitoring of the market’s reaction to gold and silver is a preferable stance at this time. As of this writing gold has been as high as US$700 and also fallen well below US$550 — within a single month. A swing of US$150 constitutes volatility in the area of 25% at the low end. Silver, which usually trades in a ratio with gold, has been similarly active. And this kind of price movement is significant for those who are planning on buying or selling gold and silver.

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It would be naive to believe that price manipulations have ceased. In fact, to outside observers, the vast price differentials are but faint echoes of a fierce battle being fought far away by gigantic entities of great wealth. On one side, probably, Russia, Iran and China are arrayed, and on the other is the Western power elite, the central banks, multinational corporations and individual investors such as George Soros, known to support the financial system of fiat and government-backed fractional banking. Any close contact with these financial behemoths would carry the danger of a trampling or even worse. Great forces are being unleashed. This battle is destined to continue not for months but years. The Internet itself is forcing some of it, for individuals such as Murphy and groups such as GATA would be nowhere nearly as effective without the ‘Net. So many it seems are ready to consign money manipulation to the Dark Ages — and to even more ancient times when tyrants shaved coins and then issued them at higher values to their subjects. What Murphy shows us is that the ancient struggle over money — honest money — and power is as active as ever. There is very obviously a titanic struggle being waged over gold’s future. Modern money power is determined to maintain control, to continue the suppression in the hopes that finally people will be persuaded that precious metals have no value as monetary units but are merely bright trinkets of variable worth. Yet the idea that any sort of market manipulation, no matter how long sustained in the modern era, is going to have any real impact on people’s perception of gold and silver is a futile one. It is born from arrogance, fueled by great wealth and is obviously being pursued by a power elite that cannot stand to lose control of any single area where it still has some ancient sway.

Elite Retreat ...

“GATA has been saying all along that the central banks do not have the gold they say they have — most likely less than half the gold listed in their reserves. The missing gold has been swapped or lent out and is not being properly accounted for as the new IMF study says it should be. Why? Because the missing gold has been used to suppress the gold price. … The more this suppression of the gold price is made known, the more countries and big financial interests will want to own gold — and the faster gold will soar toward $3,000 and then $5,000 an ounce.” —Bill Murphy GATA Presentation, GATA.org, June 11, 2006

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Conspirati The threat posed by U.S. terrorism to the security of nations and individuals was outlined in prophetic detail in a document written more than two years ago and disclosed only recently. What was needed for America to dominate much of humanity and the world's resources, it said, was “some catastrophic and catalysing event — like a new Pearl Harbor.” The attacks of [9/11] provided the “new Pearl Harbor,” described as “the opportunity of the ages.” —December 2002 post at HiddenAgendas.com by John Pilger

There is no need for these battles. The continual launching and relaunching of propagandistic promotions — even military campaigns — aimed at devaluing beautiful metals in order to make people psychologically pliable and accepting of government-backed paper money is a fool’s errand. The problems are manifold, and they will continue to multiply. Why don’t these enormously powerful, energetic and intelligent individuals put their time and effort into more substantive pursuits? What, in fact, will they gain if they win? The battle over gold is a mere skirmish compared to what lies ahead as ‘Net-based critics raise awareness about the Western system’s lack of credibility.

Economic Action Alert Put enough time and effort into sociopolitical and economic analysis to reach a determination as to where you stand on these issues. For so long the term “money power” has been whispered fearfully and people have been warned against confronting it. But times are changing. If it ever gets to the point where there is public debate on these issues and the conversation includes a level of credible information, the power elite will lose. Any honest explanation will ensure the system’s downfall.

< 113 > A NTHONY W ILE 6 Free societies — and what is necessary to keep them that way. EUROPE, DIFFUSION AND DESTRUCTION

“People cannot belong to the United Nations. Only governments can belong. The delegates to the United Nations are simply politicians who have been appointed by the member governments. And it is in the nature of the United Nations that it will look after the governmental interests of its members. Hence, the things that the member governments desire to do will become the policies of the United Nations. But the thing all member governments desire to do is to rule their own people and to collect money from them. This is inherent in their natures. So the United Nations, perforce, will aid and abet the member governments in their universal desire to maintain a coercive hold over their individual subjects.” — November 2005, Mises.org, Nature of Man and His Government (1959)

High Alert This chapter is one of the most important of “High Alert,” though it is also perhaps the most theoretical. The reader should not skip past it, or quickly skim it, because it is very important — from a profit perspective — to understand what kind of sociopolitical structure encourages and nurtures freedom. Liberty is intrinsic. Freedom is not. Few who are enslaved ever grow wealthy, nor do those who invest in such societies. Freedom allows what free-market thinkers call “human action” — and the result of human action can provide benefits that result in a better quality of life and generate profitability that enrich all those involved in building a successful society. Yet the mechanisms underlying freedom are not well understood, even by many free-market thinkers who have

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spent a good deal of time studying the issue. Comprehending the fundamentals of freedom is more important today than ever because the sociopolitical environment, worldwide, is in flux. The world’s most populous country, China, seems to be headed toward more freedom. Meanwhile, the bureaucrats driving the European Union maintain that only by acting in concert, and by breaking down trade-barriers, can Europe become more prosperous and better able to compete with the United States. Is this so? Throughout history, as we shall see in this chapter, the most prosperous societies have been the freest. These are the kinds of societies that people want to invest in because they can yield greater rewards than closed societies where human action is frustrated. Would you have made more money investing in North or South Korea over the years? Would you have done better, in the 20th century anyway, investing in Taiwan or China? Is the European Union going to overtake America as the world’s great power? Why do certain countries and regions at certain times have ages of “greatness”? The key to wealth-building is to be able to understand what company, community or country is best positioned for a profit explosion. Internalize the real foundations of freedom to generate a better understanding of this process. Don’t be taken in by mainstream manipulation of the truth about freedom. Learn how to identify antifreedom trends that pose an immediate and obvious inconvenience — and possibly ruination at a later date. Keep in mind that the concept of “diffusion”of power is an accident of history. When it is buttressed by decentralized political power — republican systems of governance — the resultant multifaceted density of sociopolitical and economic options provides even average citizens with wealth-building opportunities.

Republics and Progress In reading history it soon becomes clear that much of the greatest and freest cultures and societies have an affinity to, and were founded within, “republics” and republican forms of government. This does not mean that such forms of government are the best, only that in these cases, such a form of government laid lightly on citizens and impeded their activities less than other kinds of governments. The Greeks were among the first — if not the first — to configure a so- called republican government, one that included separate executive, legislative and judicial branches. The Greek city-state that was most successful as a republic was Athens. So successful was Athens, so independent its citizens, so brilliant its playwrights, so beautiful its architecture, so powerful its philosopher/scientists —

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Plato, Socrates and Aristotle among others — that municipalities and nations elsewhere in the world down through the ages have envied Greek achievements and aspired to create cultures rivaling theirs. The Romans, too, during the republic’s expansionary years, set up a tripartite government. And the Italian city-states during the Renaissance devised similar forms of government. The United States was founded along Greek lines with a “separation of powers” that might be intact today but for the Civil War, which changed the complexion of the federal government and the way it related to the states.

Freedom and Leaders It is important to understand what freedom is and how it is best preserved and expanded. Freedom does not expand when countries are more efficiently run or widened into regional consortiums. It is not the product of governmental oversight, better legislation or grand, international forums where bureaucrats can mingle freely and trade bribes. Wealth is not generated when bureaucrats supervise the marketplace. The idea that bureaucracy, national “leaders,” etc. can provide the “vision” that makes a country prosperous is founded in a misunderstanding about what generates wealth. Many times, in American political campaigns, an incumbent will boast about how many “jobs” he or she created. In truth, people created the jobs; not politicians, but individuals involved in individual human actions. And they did not create the jobs for their country, or even the company for which they work. They created jobs, or expanded businesses, because it was profitable for them to do so and provided an individual benefit. The most successful or “great nations” are those that have sociopolitical and economic systems that interfere with individuals the least. Of course, for many, this sort of statement smacks of “libertarianism,” which is often confused with another word entirely — “libertine.” Yet, a libertarian society — one in which the individual’s human action is unimpeded by the state and adjudicated privately — should be conservative. Public displays of intoxication and sexual gratification, and other overt behaviors, would have little place in such a society. Lacking a litany of government regulations to keep people’s behaviors in check, individuals would revert to the normal tools used in private life — religion and ostracism — to maintain public order.

Codes of Honor Instead of government-enforced “politically correct” behaviors, libertarian societies (the few we have had down through history) have tended to rely on elaborate

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Conspirati The British Empire is very much alive and well today. [But] the United Kingdom itself has very little to do with the new British Empire. England, Scotland, Wales, and, especially, Northern Ireland, are today little more than slave plantations and social engineering laboratories, serving the needs of a collection of families, numbering no more than 3,000-5,000 people, who live and work in and around the City of London, a one-mile-square financial and corporate district, which represents the greatest concentration of financial power ever assembled in one location. These families constitute a financier oligarchy; they are the power behind the Windsor throne. They view themselves as the heirs to the Venetian oligarchy, which infiltrated and subverted England from the period 1509-1715, and established a new, more virulent, Anglo-Dutch-Swiss strain of the oligarchic system of imperial Babylon, Persia, Rome, and Byzantium. —August 1997 post at The American Almanac, The Largest Empire In the History of the World

“codes of honor,” privately enforced by ritualistic displays of violence — duels — between the offended party and the one who committed the offense. Contrast this with the current climate of forced socialism in America and elsewhere. Free-market economist von Mises argued in “Socialism” that state-enforced communalism cannot work. Eventually, the economic calculus is so distorted that society collapses, much as the Soviet Union and even “Red China,” which is now a socialist state in name only. Disregard the economic calculus and the sociopolitical one still looms large. Coarseness overwhelms sensibility as people’s adult sense of self is eroded by the “nanny state.” People mourn for a time of “respectability” long gone by and call for yet more rules and regulations to discipline an increasingly restive, sullen, impoverished population. Ironically, it is the socialist state, with all of its ambition to regulate and rationalize every human behavior that is the “libertine” one. The “libertarian republic” turns out to be the one that is orderly, mannered, modest and moral. Rome’s many great historians and public orators gave voice to this when they mourned for the “virtues of the Republic” during the later, longer, unfortunate days of empire. Even a little freedom is better than the tyranny of bureaucracy and concentration of power without the constraining “invisible hand” of the market. William Everdell, for instance, dean of humanities at St. Ann’s School in Brooklyn, New York, has written in “The End of Kings,” about the solution — “competing power

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centers,” making it difficult for tyranny to take hold. The more of these power centers, the harder it is for the society (Rome, for instance) to end up with a single, all- powerful emperor. Everdell points out that founding father James Madison’s definition of a republic as “representative government” in the Federalist Papers, Number 10, has helped create confusion. Madison later corrected himself with the term “confederated republic” — implying that a republic’s salient characteristic (as Samuel Johnson wrote in his “ Dictionary of the English Language”) is a “government of more than one.” Everdell makes distinctions between kinds of republics, identifying some, for instance, as aristocratic and others as democratic. In the Ashbrook Center’s Federalist Post, 1989, author R. F. Hassing quotes directly from the Federalist Papers to define these terms. “A democratic republic is one in which the delegated representatives are drawn ‘from the great body of the society’ so that the government … derives all its powers directly or indirectly from the great body of the people. … In contrast, an aristocratic republic is one in which an elite minority, ‘a favored class’ with a special, permanent and distinct interest is represented either exclusively or along with the majority of the people. In an aristocratic republic, the representation of the favored class [the aristocracy] cannot be changed or removed by popular elections.” Note how Hassing seems to have adopted Madison’s initial use of “representatives” to define a republic rather than the more meaningful characteristic of participation. It is a most important concept to understand. The United States, the most powerful nation on earth (militarily anyway), is still nominally a republic. Other nations adopting the name, if not the system, have had a fairly powerful effect on history as well.

Examples of Diffusion For purposes of this book, let us call a republic “diffused government.” By analyzing some famous examples of diffused government, we will try to come to some conclusions about why these kinds of societies seem to be more creative and cohesive than most. 600-400 B.C. — Athens (Mediterranean-based): Around 460 B.C., leaders of the great city-state of Athens “presided over a radicalization of power that shifted the balance decisively to the poorest sections of society,” according to the British Broadcasting Corp. (BBC). “This was the democratic Athens that won and lost an empire, that built the Parthenon, that gave a stage to Aeschylus, Sophocles, Euripides and Aristophanes, and that laid the foundations of Western rational and critical thought.” The BBC also admits that the democratic system had its critics. By the very early 400s, democracy was under attack by Athenian oligarchs supported by Sparta.

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The insurgency won the day but could not hold on. Democracy resumed in Athens for nearly another century until the kingdom of Macedon under Alexander the Great became “the suzerain of all Aegean Greece [and] terminated one of the most successful experiments ever in citizen self-government.” While the Athenian experiment in democratic-diffused government was both innovative and egalitarian, free-market economist Murray Rothbard provides a somewhat different perspective in “It All Began, As Usual, With the Greeks.”

The privilege of citizenship was reserved to descendants of citizens. While Greek city-states fluctuated between outright tyrannies and democracies, at its most “democratic” Athens, for example, reserved the privileges of democratic rule to 7% of the population, the rest of whom were either slaves or resident aliens. (Thus, in Athens of the fifth century B.C., there were approximately 30,000 citizens out of a total population of 400,000.)

For Rothbard, the real miracle of Greece was its “great burst of economic thinking [that] covered only two centuries — the fifth and the fourth B.C. — and only in one country, Greece. … ” He adds, “There is no way that historians of thought can ever completely penetrate the mysteries of creativity in the human soul, and thus completely explain this relatively brief flowering of human thought. But it is surely no accident that it was Conspirati The best way to understand the evil of Venice is to look at the great poets' portrayal of the unbelievable duplicity that Venice represented: portrayals by Marlowe in The Jew of Malta, and by Shakespeare in The Merchant of Venice and especially in Othello, the Moor of Venice. The quintessential Venetian is Iago. Yet the most brilliant portrait of the Venetian method was done by Friedrich Schiller in his The Ghostseer. You can never understand Venice by studying what positions the Venetians took on an issue. The Venetians did not care what position they took. They always took all positions. Their method was one of looking for the weak point and corrupting the person. At this form of evil, they were the masters. Their diplomatic corps was the best in the world at the time, and the British diplomatic corps was trained by the Venetians. —The Venetian Takeover of England, The Executive Intelligence Review, April 15, 1994.

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the Greek philosophers who provided us with the first fragments of systematic economic theory. For philosophy, too, was virtually non-existent in the rest of the ancient world or before this era in Greece. The essence of philosophic thought is that it penetrates the ad hoc vagaries of day-to-day life in order to arrive at truths that transcend the daily accidents of time and place.” Rothbard cannot fully explain Greece’s Golden Age, but he points out that the system of democracy Pericles installed and great Greek achievements do overlap. Thus we may acknowledge that for a brief but powerful period of time Greece experienced major economic, scientific, artistic and social progress — miraculous really, according to Rothbard and many other observers. 735-50 B.C. — Rome (Mediterranean-based): The Roman Republic would seem to be a diffused government, one initially made up of two assemblies, the assembly of centuries (comitia centuriata) and the assembly of tribes (comitia tributa). This latter included all citizens of Rome. Citizens could vote; however, the citizenry did not include women, children and slaves. Around 500 B.C. a new form of Roman government was introduced whereby power was divided up among a senate, consuls and assemblies. Around 290 B.C., the Romans set up a governmental entity that included executive, judicial and legislative divisions. The Roman republic finally ended with the death of Julius Caesar and the assumption of the throne by Augustus. This period was marked by a number of Roman conquests extending over several centuries and culminating (during the period of Julius Caesar) in an extension of the Roman world to the Atlantic Ocean, in the launching of the first invasion of Britain, and in the introduction of Roman influence into what has become modern France. While the highly efficient Roman military forces conquered fresh territories, they left behind a trail of socioeconomic impacts: Conquests brought an endless supply of fresh slave labor, making the poorer Roman citizens jobless, creating unrest and unemployment among the citizenry. To keep them fed and engaged was a daunting task for the administration. A number of measures — including land reforms — were attempted on the one hand; on the other, certain events were institutionalized such as inducing the criminals, outlaws and debtors to enter arenas for gladiatorial combats resulting in death and mutilation. It is said that “the Roman republic won an empire, and destroyed itself in doing so.” 1000-1400 A.D. — Italy (Mediterranean-based): Rome before its emperors, Greece, Italy during the Renaissance, Britain during its industrial revolution and, of course, America before 1900 can all lay claim to some form of functional republican government. By the beginning of the Italian Renaissance, there were five major players in city-state politics: the papal states (or Romagna) ruled by the Pope, the republics of

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Firenze (Florence) and Venezia (Venice), the kingdom of Napoli (Naples), and the duchy of Milano (Milan). The Renaissance had elements of diffusion as well. Italy was made up of numerous small states and from about 500 to 1000 A.D., urban centers within these small states began to grow slowly. One of the most prominent was Venice, a marshy outpost whose geography made it a logical candidate to serve as a center of trade and commerce. Venice, and to a degree the rest of the Italian city-states, acted as clearinghouses for banking and trade between Byzantine, Muslim and central European countries.

So Much Commerce The influences of three different cultures that were brought to bear on the Italian city-states generated a number of innovations, especially in the mercantile fields such as banking. The Venetians, particularly, embarked on an extraordinary venture via international banking that, for a while, made Venice, citizen for citizen, the most influential and powerful city in the world. An academic Web site, WorldCivilizations.com run by Richard Hooker, relates the following: “The aftermath of Justinian’s reconquest of Italy in 533 left the cities in Italy largely depopulated; from 500 to 1000 A.D., Italy was largely a rural region with few and sparsely populated urban centers. In the twelfth century, Italy saw a resurgence of urban living which grew into a flood in the thirteenth century. The Italian cities, especially Venezia (Venice), had long served as intermediaries in the trade between central Europe and the Muslim and Byzantine states to the east. As they grew wealthy, many of these cities became centers of banking long before the rest of Europe had discovered this lucrative area of commerce.” According to Hooker, “The constant uncertainty, both economic and political, and extreme volatility of the historical situation provided the material for new intellectual, cultural and social experiments. These would at their conclusion provide the means of constructing a new European monocultural identity, one focused on humanistic studies, science and the arts. … Some of the most radical and far-reaching cultural work in the Renaissance was done in the periods of greatest insecurity.” Of course, there are other interpretations of this phenomenon and other reasons that the Renaissance states may have been successful. Lyndon LaRouche is an extremely controversial sociopolitical and economic analyst who has been accused of fomenting cults and “brainwashing” followers. However, his historical analyses are often drawn along classical lines, as described above, and follow points of inquiry beyond what is ordinarily available on the ‘Net and even in academic literature. LaRouche’s analyses emphasize the importance of the Renaissance as a point in

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the history of Europe when there was a major resurgence of what he terms “Platonic” thinking. European culture gradually embraced the idea of progress, a radical shift from feudalism, which was characterized by the “Aristotelian view” of the universe as fixed and unchanging. LaRouche also believes that the American Revolution and the adoption of the U.S. Constitution mark a watershed in history, as the most successful attempt to put the republican theory of politics into practice. In this chapter’s conspirati presentations, we introduce comments from LaRouche’s Executive Intelligence Review. These trace the history of the Venetian republic as the “LaRouchites” see it. LaRouche in fact might disagree that Venice was a republic in the normal sense of the word, but much of Venice’s influence was due to a kind of political tribalism at least partially resembling a republican structure. And certainly, the outsize influence exerted by Venice (whether one believes in LaRouche’s details or not) was perhaps bolstered by its residence among the republican oriented nation-states of Italy. Its achievements, especially in banking — the good, the bad and the ugly — may be considered indicative of the power of this kind of social organization.

Geography as Destiny Perhaps the most interesting and broad-ranging explanation for why certain epochs of civilization yield extraordinary creativity and scientific advances comes from Michael O'Dowd, chairman of the Free-Market Foundation and former chairman of the De Beers Group Chairman's Fund. O’Dowd’s perspective actually builds on that of Everdell, taking the paradigm of competing power centers and analyzing them from a geographical point of view. In a post at FreeMarketFoundation.com, O’Dowd writes that “periods of outstanding creativity are quite few” in human history — then cites some of the above historical episodes plus others that he believes are worthy of note. For O’Dowd, these creative epochs began to make sense once he read a book about the Tang Dynasty, circa 1000 A.D. “The people of the educated class at this time looked back to the time of Confucius as a golden age, forgetting that it was in fact a time of anarchy known as The Period of the Warring States, when China proper was divided into five separate kingdoms, often at war with each other. … ” The same sort of situation was present in fifth century BC Greece, O’Dowd realized, where numerous warlike states existed in an uneasy balance. Italy, during the Renaissance, was divided into at least six major states. “The Eastern Mediterranean after Alexander the Great was the same again. There were three

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Conspirati It was one of the most well-known “secrets” of the British oligarchy, that the model for the British Empire was Venice. Benjamin Disraeli, the late-nineteenth-century prime minister of England, let the cat out of the bag in his novel Coningsby when he wrote, “The great object of Whig leaders in England from the first movement under Hampden to the last most successful one in 1688, was to establish in England a high aristocratic republic on the model of the Venetian. ... William the Third told ... Whig leaders, ‘I will not be a doge.’ ... They brought in a new family on their own terms. George I was a doge; George II was a doge. ... George III tried not to be a doge. ... He might try to get rid of the Whig Magnificoes, but he could not rid himself of the Venetian constitution.” The well- known secret of all the Whig insiders was that the Venetian takeover of England was a 200-year project beginning with the break of Henry VIII with Rome and concluding in 1714, with the accession to the throne of George I. —The Venetian Takeover of England, The Executive Intelligence Review, April 15, 1994. major, and several minor, kingdoms all ruled by Macedonians, often at war with each other. The great period of the Arab world saw almost the very same kingdoms, now ruled by Arabs, independent and sometimes at war.” And O’Dowd adds,

There is the classical period of China, the time of Confucius and Mencius, and the other Chinese Sages. At about the same time, there is classical Greece, the age of Aeschylus and Euripides, Plato, Socrates, Aristotle, Herodotus and Thucydides, Phidias and Praxiteles. The next period is less well known since most of its art and literature had perished and the only well known names associated with it are Archimedes and Euclid. It is the period of the kingdoms ruled by the successors of Alexander the Great, especially Egypt, centered on Alexandra, and Syria, centered on Antioch and forming part of the same world, the independent Greek cities of Sicily and Southern Italy, especially Syracuse. To appreciate the importance of this period we have to compare the level of general sophistication, both philosophical and technical, reflected in classical Latin literature with that of “golden age” Greek literature from four hundred years earlier. We have to wait a long time for the next period which happened in the Middle East around 1000 A.D. in the Arab kingdoms, especially those centered in Baghdad and Cairo. Out of these came remarkable advances in science and mathematics and in architecture. The well- known Moorish architecture of Spain is an offshoot of this. After this,

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and in some ways directly derived from it, comes the flowering of Renaissance Italy, Michelangelo and Leonardo Da Vinci, Petrarch and Boccaccio, Machiavelli and Galileo. … How are we to account for all this? From the sixteenth century onwards it is not difficult to detect the correlation between creativity and (relative) freedom. Though very far from free in the modern sense, the England of Shakespeare’s time, and the Republic of the Netherlands of the same period were not merely the freest countries in the world at the time, they were among the freest that there had ever been.

For O’Dowd, it’s not the wars themselves that are important for “it is not clear that there was more war than at other times.”What O’Dowd thinks is key is that educated individuals and entrepreneurs could move from one familiar environment to another, without having to drastically rearrange their lives and those of their families, learn new languages, etc. “When Socrates was sentenced to death in Athens, he could, if he so wished — and was probably expected to — go into exile, which meant moving all of 30 miles to another city where they spoke the same language, had the same culture, and where he was known. When Dante was driven out of Florence, he went to live in Pisa and carried on with his writing. When Michelangelo quarreled with the Pope in Rome, he went home to Florence and continued with his work. There are references in Chinese classics to sages moving from one kingdom to another because they disliked the policies of a particular king.” And O’Dowd concludes, “Freedom is not a luxury that comes at a cost. It is the precondition of all human progress.”

Emergence of Classical Liberalism In a 1994 essay entitled, The Rise, Decline, and Reemergence of Classical Liberalism, Amy H. Sturgis of Belmont University’s LockeSmith Institute makes several points that are close to O’Dowd’s, while analyzing how free societies function for humankind’s betterment. She defines classical liberalism as exhibiting the following characteristics: • An ethical emphasis on the individual as a rights-bearer prior to the existence of any state, community or society. • The support of the right of property carried to its economic conclusion, a free-market system. • The desire for a limited constitutional government to protect individuals’ rights from others and from its own expansion. • The universal (global and historical) applicability of these above convictions.

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Sturgis identifies the trends that came together in Europe in the 1700s that would eventually develop into a cohesive classical liberal philosophy. “In this story three distinct flavors coexist and often blend: the realistic English tradition of law, the rationalistic French tradition of humanism, and the organic German tradition of individualism. [These three are] competing yet complementary definitions of liberty, with Britain representing independence, France self-rule, and Germany self- realization. … The individuals and movements manifested themselves in two major ways. They asserted ideas, as with [John] Locke’s defense of property and [Alexander] de Tocqueville’s analysis of democracy. Also, they reacted to policies, as with the Scottish Enlightenment and French Physiocratic responses to mercantilism.” It is now that Sturgis comes closest to O’Dowd’s view. She asks why classical liberalism evolved as it did in the late 1700s, then answers her own question: It was partly the result of increased European mobility and intellectual commerce.

First, the overriding European culture provided those with assertions the opportunity to travel, test their theses against observations, and communicate effectively. Second, the increasingly interdependent nations of Europe could no longer contain their people either economically (protectionism) or politically (absolutism), as the citizens could travel and exchange information concerning conditions elsewhere. For example, England’s lead in constitutionalism influenced the classical liberals of the other nations, as did the United States’ egalitarianism. Third, some policies such as mercantilism were not successful and thus there was an audience for any alternative, particularly one that worked. A number of combined conditions put Europe in need of economic, political, and philosophical answers, and classical liberalism responded.

Sturgis tells us that in the late 1800s, classical liberalism began to wane as frustration with the Industrial Revolution generated a new mindset. “The people turned to the government, often more democratic in nature than before, to regulate and legislate these transitional hardships away, thus substituting the long-term problem of unprecedented governmental growth for the temporary problems faced until the market adjusted to the new industrial economies.” What Sturgis is not so clear on is the intellectual construct that took the place of classical liberalism — rationalism. Rationalism (the Age of Reason) is often seen as following the Age of Enlightenment, which itself emerged or co- existed with the Reformation — though some trace it back to the Italian Renaissance. There are perhaps distinct differences between the Age of Reason

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and the broader Age of Enlightenment, however, and they are critical ones for Western history and the development of Western sociopolitical thought. Rationalism is actually the philosophical tradition that has dominated the last two centuries of Western thought. Rationalism is often referred to by other names and its continued power in the 20th and now the 21st century is often disguised or misdiagnosed. It remains a most controversial doctrine.

Curse of Rationalism In practice, Rationalism has been an unmitigated disaster. Its application spawned first the bloody French Revolution, then the scientific pseudo- philosophy of Marxism, the romanticism of socialism, the brutal mercantilism of Nazism, and on and on. Every “ism” in the modern world can be seen, fairly or not, in the first and fiercest, modern “ism,” Rationalism. The Age of Reason was a perfect philosophy for big government throughout the 17th and early 18th centuries. Big government grew apace, with all its attendant miseries and brutal, often bloody, failures. The expansion of the English Empire, the rape of Middle Eastern and Asian cultures, the perversion of the republican experiment in the United States were all outgrowths of big government empowered by Age of Reason justifications appropriated by a committed power elite. By the end of World War I it was over. European governments were massive, militarized affairs and the United States was heading in the same direction. World War II provided the coup de gras for the kind of civilization that the Enlightenment promised. It finished off the gold standard, private trade across boarders, a freer, easier exchange of literary and scientific information. In its place were increasingly ponderous, state-negotiated treaties and accords.

Modern European Afflictions The classical-liberal world of individual rights, private property and civil liberty died in World War I. Every one of the cherished and hard-won freedoms of the 19th century were sacrificed on the altar of winning victory in that war. And when the war was over, liberty, as it turned out, was the ultimate victim. Behind the wartime slogans of “making the world safe for democracy,” “the right to national self- determination,” and “a league of nations for the securing of world peace,” nation-states swelled with power. Wartime controls had replaced free enterprise; exchange controls and import-export regulations had replaced free trade; confiscatory taxation and inflation had undermined the sanctity of property and eaten up the accumulated wealth of millions. The individual and his freedom had shrunk, and the state and its

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Conspirati: The role of Venetian Paolo Sarpi

The second phase of the Venetian operations ... was launched by the notorious Paolo Sarpi. It was in this phase that England's mind and soul were taken, and England was set up to become the bastion of the New Age. ... This phase was highlighted by what was understood in Venetian history as the 1583 fight between the Giovani (young houses) and the Vecchi (old houses). In this phase, a very radical faction took over. The Giovani realized that time had run out for the Islands of Venice. They were increasingly less viable as a military force. For the Giovani, the only defense Venice had was a desperate attempt to destroy both the papacy and the Habsburgs, by securing Germany for the Protestants with the help of France. ... For this phase, the takover of England was left to Paolo Sarpi. Paolo Sarpi was nominally a Servite monk who was exceptionally talented. Yet he was much more. He was the leading organizer of the Giovani. Out of the Giovani salons and secret society, Venice planned the destruction of Christianity in what was later to be called Freemasonry.

In a book about Sarpi, a modern historian by the name of Wooton proves that Sarpi was the creator of empiricism and taught Francis Bacon his so-called scientific method. The thesis of this book, which the author proves conclusively, is that Sarpi, while nominally a Catholic monk, revealed himself in his philosophical work to be a radical atheist. Sarpi was to argue that the idea of the need for a providential religion, as the basis for the majority of men acting morally, was unnecessary. He insisted that belief in God was irrational, since it is not necessary to explain the existence of the physical universe by an act of creation. This is the empiricism of Bacon. It was later revealed by sources that Sarpi was a homosexual and a blasphemer, who believed that the Bible was just some fantastic stories. He especially attacked the idea that Moses was given the Ten Commandments by God. ...

Some of you may be aware of the phrase, “The pope is the Anti-Christ.'' It was Paolo Sarpi that created that myth. He is the real founder of modernism and the Enlightenment. With these ideas, he created a pagan cult later called Freemasonry, which dominates England to this day. Out of this salon came Giordano Bruno, Galileo (a complicated case), the Rosicrucian cult, and the Thirty Years' War.

—The Venetian Takeover of England, The Executive Intelligence Review, April 15, 1994.

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power were now gigantic. World War II was a disaster for many of the nation-states involved. It was also the catalyst for a cure that would be worse, if possible, than the disease — a “united Europe”that began to take shape almost before the last bullet was fired. Ironically, it was apparently the German dictator Adolf Hitler himself who actually grasped the power inherent in a European union. As a young man stationed in Berlin, diplomat and Trilateralist George F. Kennan writes in his “Memoirs” that he was “struck with the fact Conspirati: Venetian Giovani: England’s Takeover

The Giovani very consciously had to build up their own faction among the English nobility. England had to be totally controlled. The drawback that the Giovani had to correct, was the fact that England was not really reliable, because the kings tended to act independently of Venetian strategic considerations. The way the Giovani functioned was by the creation of a Protestant-controlled merchant class. This was most explicit with the creation of the Venice Company by the Earl of Leicester, the funder of the Puritan movement in England. It was he who was granted by Venice certain trading routes. In 1581, another trading company was created with Venetian agreement, called the Turkey Company. These two companies later merged and became the Levant Company, which later became the infamous British East India Company. The first governor of the East India Company was Thomas Smythe, who studied law in Padua. Through this process of creating a rich merchant class, predominantly Puritan, Venice also created a battering ram against the king. These radical Protestant cults took over England during the so-called Commonwealth period.

While it takes some 80 more years to complete the Venetian takeover of England ... the empire of the mind became ensconced in England. Sarpi and Venice create the Rosicrucian cult of syncretic religion that becomes Freemasonry. Once that process of takeover is complete, England becomes the bastion of paganism: usury and slavery. In short, real Aristotelians. This hatred of imago Dei is the basis of England's promotion of the New Age. This was Sarpi's program and intention, and it completed the essential destruction of the English soul. Venice and Venetian methods had transplanted themselves in England.

—The Venetian Takeover of England, The Executive Intelligence Review, April 15, 1994.

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that Hitler … had actually accomplished much of the technical task of the unification of Europe. He had created central authorities in a whole series of areas … Why, I asked myself, could this situation not be usefully exploited after an Allied victory?” Kennan became involved at a top level with the United States’ gigantic post- war, European welfare program, the Marshall Plan. That program’s massive funding was in part configured to begin the job of the “unification of Europe” — and thus the first steps toward unification were taken. The project took a false turn with “the Council of Europe and the European Parliament,”according to R.W. Keyserlingk in “Fathers of Europe.”What was eventually put into place was an economic rather than political union. And thus it came to pass that unification began with such issues as workers’rights and freedom of movement. Only after years, even decades, had passed, did the discussion drift toward areas of increasing criticality such as trade and the establishment of a single currency. Of course eventually, inevitably, the shadowy elite at the top of the EU returned to the idea of political union. Brussel’s mandates became broader, the goals clearer and finally a European constitution was produced, filled with turgid prose and arrogating powers of every sort to the state. The preamble provides the flavor: “Reflecting the will of the citizens and States of Europe to build a common future, this Constitution establishes the European Union, on which the Member States confer competences to attain objectives they have in common. The Union shall coordinate the policies by which the Member States aim to achieve these objectives, and shall exercise on a Community basis the competences they confer on it.” It may have been intended for “Member States [to] confer competences to attain objectives,” but no sooner had it been launched than it was rejected by several countries including EU-founder and main proponent, France. FMNN commentator and free-market thinker Dr. Helen Szamuely has written articles that expose the real power agenda of the European Union on an almost daily basis. Her analyses, among others, helped clarify the real issues underlying the EU constitutional debate and ultimately helped lay the groundwork for the rejection of the flawed document. “We must get back to the Conservative concept that the State exists to serve the people and that the people are genuinely sovereign.” Szamuely points out in a May 2005 FMNN post, Who Governs Britain.

It should therefore be a central tenet of a Conservative government that it cannot delegate its law-making powers ... This applies to external bodies such as the European Union and internally, where currently so much effective law is made by officials without political input or control. Law-making must remain in the hands of

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politicians directly elected by the British people ... affording the people an opportunity to remove legislators. ... It is ludicrous that over 60% of the laws imposed upon the fourth largest economy in the world are created by people who have not been elected and cannot be removed in elections.

We can see, as Szamuely has pointed out, that the EU member-states grant or remove citizens’ freedoms which are, in fact, “competences conferred by Alternative Reality Byte: Socialism — One Definition

The power of the Internet is manifest in this excerpt below, from a site, mega.nu, maintained by journalist Daniel Pouzzner.

Socialism is a social movement that began in eighteenth century Europe, and is now the organizing principle of many of the world’s political establishments, and the faith of much of the world’s population. It is a loosely bound cultish religion, centered cryptically on the biblically revealed premise that humanity once enjoyed a paradise, long since lost. To varying degrees, the modern proponents and adherents of socialism have internalized the ancient mythology specifically, mostly subconsciously. They believe they can, through ritual propriety, restore earthly paradise as a new Eden, tended by a benign paternal authority tantamount to that tending the mythical Eden. This monotheistic messianism has been largely transmuted into faith in an eventual world government acting as an omnipotent, omniscient, infallible savior, empowered by ideologically regimented voters. Clearly, socialism is also abstractly millenarian and apocalyptic. Socialists empower their deified governments to pass judgement on the people and purge (by extermination or radical dis- franchisement) those deemed unworthy of life, in order to realize the promised idyllic society. One can plausibly describe socialism as a form of ultrareactionary biblical fundamentalism, albeit aiming to reinstitute conditions under which humanity and its forebears never really existed.

Deified government is simply a modernization of the “divine right” claimed by kings and emperors throughout world history. As for the idea of Edenic paradise reconstituted on earth, this is actually found in the Hebrew Bible itself, in Isaiah and the Psalms. The overt

messianism of the Abrahamic religions and Zoroastrianism is tantamount to Edenic

reconstitution, and (at least in the Abrahamic ones) in most cases clearly relates to the Eden

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member states.” This actually flies in the face of the historical lessons that have been learned over and over. The truths of these lessons may be found in powerful historical analysis that the cause of freedom is best served when power is diffused. To this end, the American republic functioned well to begin with because the powers of state were radically distributed among three separate arms of government plus a number of states and state assemblies. This diffusion of power was more responsible for the success of the initial venture than various constitutional agreements. motif specifically. Their messianism is just as utopian as socialism's, and through syncretion with their occult derivatives and with Buddhism, it serves to elaborately theologize socialism under the “New Age” banner. In the New Testament, Matthew, Mark, and Luke, all tell the same story, exhorting the faithful to radical egalitarian charity, and promising the eternal torment of damnation for those who refuse. Thus, on a deep level, Jews, Christians, and socialists, are coreligionists, and their squabbles are sectarian.

The eighteenth century was the setting for the inception of organized socialism. At the time, the apparent juggernaut of rationalism (revived in the Renaissance and culminating in the scientific method of the Enlightenment) was widely and reasonably perceived to threaten with imminent collapse the traditional religious faiths of Europe. Because religious faith is, at heart, open belief in the plainly preposterous, this was only natural. Moreover, because traditional religion is transmitted chiefly by authoritative speech, and fails without it, it was particularly vulnerable to Enlightenment rejection of authority. The perception of a threat was particularly pronounced among the intelligentsia, who most thoroughly embraced the tenets of the Enlightenment. People with a psychological appetite satisfied by traditional faith were thus receptive to an equipotent replacement, one that was not immediately vulnerable to demolition by Enlightenment rationalism, naturalism, and libertarianism.

Enter socialism, appealing to this appetite, conceived and promoted by men who shared this appetite, and who moreover were intensely conscious of the rationalist threat by dint of residence in the social heart of the Enlightenment. Consistent with this account, the embryo of socialism came out of Renaissance Italy, borne by the Sozzinis. Socialism is a sort of ark amidst the flood of rationalism, harmonizing with the Enlightenment’s theme of progressive improvement of mankind, and keeping alive certain fundamental themes and promises of the Abrahamic tradition, including the premise that deaths have spiritually redemptive power for the dead and living alike. Ironically, the parents of socialism — the

“idealists” — are to this day considered key figures of the Enlightenment, and the Sozzinis

and their Brethren are credited with spurring its birth.

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Elite Retreat …

“Britain’s Prime Minister, Tony Blair, faces a bruising six-month stint as president of the European Union as Jacques Chirac plots revenge for the weekend’s summit showdown in Brussels. … Blair accused Chirac of arrogantly refusing to learn the lessons of France’s no vote on the E.U. constitution. The German Chancellor, Gerhard Schröder, said of the deadlock: We are in one of the worst political crises Europe has ever seen. Visibly shaking with anger, Luxembourg’s Prime Minister, Jean-Claude Juncker, who holds the E.U.’s presidency, in effect accused London of intentionally scuttling his attempts to strike a compromise on the budget by calling for a broad rethink of the bloc’s finances in a late stage of negotiations.” —Compilation from Daily Telegraph and the Agence France-Presse, FreeInternetPress.com, June 2005

Storm Warning The regionalization of nation-states and centralization of power — as in the EU — eventually yields oppression, not efficiency. The apparent thrust of the power elite strategy is to merge and centralize so as to do away with multiple power nexuses. Ironically, this “urge to merge” can have initial beneficial effects on freedom in the short term. The merger or “fusion”(as opposed to diffusion) of European currency into the euro made it easier for individuals to do business in various geographical areas. This is probably a reason why the EU has seemingly maintained the support of many Europeans despite the blizzard of regulations out of Brussels. The support does not, however, run especially deep as we can see from the rejection of the European constitution. More importantly, once the concept of diffusion is understood, the underpinning of much of the international sociopolitical and economic conversation becomes fairly ludicrous. If nation-states are a source of instability, after all, what makes the power elite so sure that an even larger state construct will work out better? If the problem in Europe resided in border bureaucracy and tariffs, what makes the wise men of Europe so inordinately sure that a super-bureaucracy in Brussels grinding out thousands of regulations a year is the antidote? The idea that more and bigger government is the cure for smaller, ineffective government makes little sense. If something is actively making one sick in fairly large

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doses why is it reasonable to expect that it will somehow be less sickening in even bigger doses?

Economic Action Alert Consider EU investments, but not if the political union threatens to overwhelm the positive benefits of currency fusion. Diffusion can be found within successful political systems that have competing power centers. In fact, it is a cause of this success. Yet the fusion of European currency into the euro made it easier for individuals to do business in various geographical areas. This is probably a reason why the EU has seemingly so much support. The support is very shallow, however, as we can see from the rejection of the European constitution. What citizens of the EU are saying implicitly is that they recognize the empowering effects of one currency but they seek to avoid the freedom-stifling impact of a single political system. From an economic standpoint, European equity opportunities remain a potentially healthy source of profits so long as the benefits of the common currency outweigh the negatives of the impending political union. If and when the political union’s regulatory mechanism overpowers the benefits of the economic union, the EU will cease to be a relevant source of positive investment returns.

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Power elite interference in the U.S. Republic — and economy. U.S. TSUNAMI

“The President does not have unlimited executive authority, not even as Commander-in-Chief of the military. Our government was purposely created with power split between three branches, not concentrated in one. Separation of powers, then, is not simply a talisman: It is the foundation of our system.” —January 2006, FindLaw.com, The Unitary Executive

High Alert The United States was once a republic and a powerful engine of industry. Even today, the culture of the United States is determinedly entrepreneurial. The “Puritan work ethic” is still very much a part of many people’s lives. Strong-willed men and women, desperate for economic opportunity, sailed across the sea to start over in a country they perceived as a “bulwark of freedom.” And millions of Americans, many in the “red states” — descendants of bold immigrants — still believe in a constitutional republic. These citizens are not enamored of European socialism and the assumption of government infallibility — and they will continue to resist it, even as their political system moves in that direction. While the mainstream media portrays the American legislative choice as one between liberals and conservatives — soft socialism versus soft fascism — a predominant American sociopolitical strain actually continues to be civil libertarianism. This same political viewpoint can be found in Canada’s western regions. It goes little remarked upon, unfortunately, but it just may be that Canadian-American civil libertarian sympathies are more prevalent than either liberal or conservative views in either country. Many citizens in either country do not want the government in their

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bedrooms. Just as many do not want the government in their wallets either. Canada is a special case because the French in Quebec have made it all but impossible for the Anglosphere’s Ottawa-based government to effectively federalize the country as has been done all-too-successfully in the United States. The politics of diffusion are still noticeable in Canada where, despite its best efforts, the government often cannot muster votes to pass the kinds of laws that attack citizens’ fundamental rights. When it does, as with overarching gun laws, those laws are often defied or ignored. In America, unfortunately, the decline of individual rights is marked and accelerating. The “war on terror” has dramatically increased the trend. Americans are no longer secure in their houses from government seizure, their phones and e-mail are apparently subject to scrutiny without warrants and increasingly the political power has shifted away from a so-called imperial congress to what is now being referred to as the “unitary executive.” Since America is a most important key to the world’s economic health, it is important for free-market thinkers to arrive at adequate conclusions about the country’s current condition and prospects. In the first couple of chapters in this book, we discussed the state of the union from an economic standpoint and concluded that an economic hurricane was striking with increasing force. What we left out in those chapters was the reasons for the jeopardy. Unlike a physical hurricane, there are steps that can be taken, ahead of time, to head off an economic storm. That the United States could not do so is an unfortunate testament to the relative inefficiency and ineptness of its legislative and financial bureaucracy — and the lack of any domestic challenges to their incompetent reign. For at least 200 years, (excepting the Civil War) America was generally governed with a fairly light hand. It is only in the 20th century that the full force of the regulatory state has crashed against her shores — and begun to hollow out a once-powerful economy. The more fusion that occurs, the more unitary power that President Bush is able to command, the more difficulty the American experiment will undergo. If the trend does not shift, and centralization continues, the alert free-market thinker may do well to consider alternatives that place his or her family in a safer and more respectful environment elsewhere in the world. As the end of the chapter shows, the United States’ traditional freedoms are not only eroding, but the actual country itself is under attack. Its borders are in jeopardy and its cohesiveness as a sovereign nation in some doubt. As shocking as this sounds, what is even more so is that the attack is not by “foreign terrorists,” but seemingly by those within the nation’s political structure — elected representatives at the highest levels — alongside, predictably, the visible power elite. Let us examine how this process came to pass, in order to understand better

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where it is headed and what it portends from financial, economic and even sociopolitical perspectives.

Initial Victory? The great founding father Thomas Jefferson initially won the day on a number of fronts. He fought a successful fight to restrain the federal government and to ensure the Constitution enumerates only the powers that the federal government has received from the states. It should be fairly clear to anyone who studies the document that it was the states, not the federal government, that held the balance of power in the initial relationship between state and federal authority. Senators were to be elected from state legislative bodies — and this was done until a constitutional amendment changed the procedure to direct elections at the turn of the 20th century. The writings of various founding fathers refer to “these united States” — a phrase that reflects a voluntary association of states, not an individual super-state bound together by a federal authority — “the United States” — a nomenclature in vogue only after the Civil War. While it is tempting to present the fall of the U.S. republic as a direct result of malevolent and ancient global elites and their machinations — and certainly on the Internet you can find such history — it is also worth noting that the ascension of the Internet has empowered individuals, even individual voters. It has likely given them the ability to act as “citizen journalists” who can find out in some detail about the politicos who wish to represent them, and their strengths and failings. While this provides hope for the future, modern-day, free-market historians such as Thomas J. DiLorenzo, show fairly conclusively that the breaking point for the republic was the Civil War. And the operative executive force, for all the many good qualities he may have had, was President Abraham Lincoln — a successful lawyer seemingly under New York industrial and banking control — someone whom today we might categorize as one of the power elite himself. Once Lincoln was in power, the republic’s incipient decline was, unfortunately, not in doubt. In a 2002 interview carried at WorldNetDaily.com, DiLorenzo discussed Lincoln and his agenda following the publication of his ground-breaking book, “The Real Lincoln.”

[Lincoln] was a Whig, and … for decades the Whigs and Lincoln advocated doling out tax money to corporations for building railroads and canals. Presidents from James Madison on vetoed this, because Madison said he could find no place in the Constitution where you could justify giving any private business taxpayer money. This was a big, ongoing political debate during the last half of the 19th century that was

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ended at gunpoint when Lincoln was elected president. … The Whig Party was the party of empire. I think the Whigs, as well as the Republican Party, wanted to change government’s role as a defender of individual liberty. I don’t think the Republican Party was especially interested in the welfare of the black slaves in the South. They wanted the empire to be financed with high tariffs to protect Northern manufacturers, mostly, and Lincoln was a career-long protectionist. … The Declaration of Independence was a declaration of secession. I write in the book about how after Thomas Jefferson was elected, the Federalist Party was so upset that for more than 10 years they plotted to secede. The party actually held a secession convention in Hartford, Conn., in 1814. They decided not to secede, but all during that whole saga, no one really questioned the fundamental right of secession. In fact, the leader of the whole movement was Massachusetts Senator Timothy Pickering. He said that secession was the principle of the revolution. … I quote John Quincy Adams in my book. All of the founding fathers wanted the Union to thrive. But Jefferson and John Quincy Adams, who were certainly the staunchest Unionists, also said in an 1839 speech about secession that in “dissolving that which can no longer bind, we would have to leave the separated parts to be reunited by the law of political gravitation to the center.” In other words, let them secede if they want, and we’ll hope that they’ll come to their senses and reunite some day. Even the staunchest Unionists, like John Quincy Adams, said things like that, as did Alexander Hamilton. Alexander Hamilton said “to coerce the states is one of the maddest projects that was ever devised.”

Conspirati The Rothschild-Vatican cabal unsuccessfully attempted to gain control over the power of the purse in the United States through the First and Second Bank of the United States. They were established under emergency powers granted to the President by the Constitution, as temporary institutions to tide the country through the periods of financial stress occasioned by the Revolutionary and 1812 Wars. But the aims of the conspirators to establish a banking monopoly were thwarted by the Constitution. Until the Fed. —IlluminatiNews.com

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In writing about the Civil War, it is always necessary to point out that to the degree the war helped free African-American people in slavery, it was good. But the Civil War changed the balance between the states and federal government by taking away states’ right to secede, as DiLorenzo notes. Once this was done, there was nothing to stop the growth of the federal government and grow it has — to 20% of the nation’s entire gross national product. Post-Civil War, the entire sociopolitical history of the United States has been one of gradually increasing centralization of power. Meanwhile, in England and elsewhere, slaves received freedom without such a bloody war. Also, it is very doubtful that the institution of slavery — itself a government-supported initiative — would have survived into 20th century America. The Industrial Revolution would have killed the slavery, and the South would have withered with it — and without such a horrible conflict and the effective end of one of the world’s great experiments in freedom. What the United States received from the Civil War was mostly the worst of all worlds. The republic itself was fractured and the human bulwark of Jefferson’s “agrarian republic” — mostly in the South — millions of courageous young men, watered the tree of liberty with their blood to no avail. The New York industrialists and bankers who bankrolled the Lincoln administration likely in league with European bankers, were evermore fully empowered. As America fell back under the European influence, the monetary and fiscal policies of ancient regimes began to be implemented. Taxes climbed and power was increasingly centralized in Washington. Using the 14th Amendment as a pretext, the federal government began to claim expanded powers separate from the states, which, once upon a time, were supposed to supervise it.

Unconstitutional Creations As the Northern industrialists and bankers achieved a preponderance of power, speculation and financial trading were enculturated while the trades, crafts and family farming became less important. By the late 18th century, the stock market had begun to take on some of the trappings of the 20th-century securities industry. Stocks surged, then fell, manipulated by financiers, railroad builders and various flavors of European money power. By the 1890s, major American financiers such as the mighty J.P. Morgan felt bold enough to speak openly about a bank of “last resort” — and then possibly to help engineer an artificial stock panic from which Morgan himself, not surprisingly, emerged as a much-storied savior.

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Morgan, ever humble in his own way, was not, however, willing to bask in glory but promptly called yet again for the establishment of what amounted to a central bank. It was a call that was repeated for years to come, Finally, in 1913, Morgan and the money power behind him were successful in installing, first, a central bank (the Federal Reserve) and, second, a graduated income tax. The two financial regimes, together, gave the federal government even more control over individual citizens. Just as importantly, both unconstitutional creations also violated the laissez-faire principles that had made America a great industrial power. Gradually the income tax would hollow out America’s infrastructure as big business chose to move elsewhere where it could operate with fewer taxes and less intrusive oversight. Meanwhile, the Fed was the mechanism through which the powerful European-based money interests would drain the prosperity from the most productive free-market economy the world has ever known. European and American banking interests were busy in other areas of the globe than Europe and the United States in the late 19th and early 20th centuries. One of their main triumphs, astonishingly enough — as Griffin has shown in “The Creature From Jekyll Island” — was the grafting of an extreme form of socialism onto the ailing tree of Greco-Oriental governance. Griffin has documented this amply in his chapter “Masquerade in Moscow,” which begins as follows: “One of the greatest myths of contemporary history is that the Bolshevik Revolution in Russia was a popular uprising. … the planning, the leadership, and especially the financing came from outside … mostly from financiers in Germany, Britain and the United States.” Throughout the chapter, Griffin traces the financial support that would become the Soviet Union life. Leon Trotsky, Edward Mandell House and others, including President Woodrow Wilson, aided and abetted the “glorious revolution.” Griffin quotes historian Antony Sutton as calling Wilson the “fairy godmother” of the Russian revolution. At House’s request, Wilson “provided Trotsky with a passport to return to Russia to ‘carry forward’ the revolution.” Griffin concludes that the American Red Cross was used to conceal the activities of American financiers in Russia. After the ascendancy of Bolshevism, both the English and American power elites used the connections they had formed by funding various factions of the Russian Revolution to “obtain profitable business concessions … which returned their initial investment many times over.”

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Colonel House The visible power elite aiding communism in Russia had also achieved victories for centralization — fusion — with the installation of central banking and the graduated income tax in the United States. But the rest of the 20th century would see consolidation of power in the United States that could hardly have been visualized in the 1800s. Lincoln had been fusion’s most important operational executive in his century. In the early 20th century, Colonel Edward Mandell House (“Colonel” was an honorific) emerged in a similar role. House, in fact, can be seen as a kind of human clearinghouse for the money power of his day. He apparently helped in the formation of many of his century’s centralizing instruments — the Council on Foreign Relations, the Federal Reserve and the League of Nations. On his deathbed, House was said to have told those near to him that he had been “closer to the center of things” than almost anyone knew. Today, his role in many of the most important events of his age is increasingly clear. Here is just one example. Apparently an original and valid document, the Col. E.M. House Report lays out in detail House’s plans for the League of Nations. The language, according to some, indicates that the League was actually a transparent and ultimately failed attempt at creating a one-world government. The 10-page “progress report” dated June 10, 1919, may or may not have been written by House, according to those who have posted it online — one copy of which may be read at BibleBelievers.org. The letter is written from the British Consulate in New York City and addressed to then- British Prime Minister the Right Honorable David Lloyd George. • Peaceful return of colonies to Crown: “From the moment of my arrival here, it was evident to me that such an Anglo-American alliance as would ultimately result in the peaceful return of the American Colonies to the dominion of the Crown, could be brought about only with the consent of the dominant group of the controlling clans. … The Rhodes scholarships are inadequate in number. I would suggest that the Carnegie trustees be approached to extend to American students the benefits of the scheme by which Scottish students are subsidized at Scottish universities. If necessary, a grant from the treasury should be obtained for this excellent work, which however, should remain for the present — at least outwardly — private enterprise … ”

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• U.S. newspapers isolated: “The censorship, together with our monopoly of cables and our passport control of passengers, enables us to hold all American newspapers as isolated from the non-American world as if they had been on another planet instead of in another hemisphere. The realization of this by the Associated Press and the other universal news gatherers … was most helpful in bringing only our point of view to the papers they served. British-born editors and reporters now create imperial sentiment in most American newspapers. As their identity and origins are not usually known, they can talk and write for us as Americans to Americans. … ” • Pierpont Morgan & Co. financiers of Anglosphere: “In the financial world the Anglo-American alliance is a well-established fact. And as the consortium for China, and the security company for Mexico show, our brokers and their aids have become the unchallenged financiers of the world. We have been particularly fortunate in our fiscal agents here, Messrs Pierpont Morgan & Company. They advantageously placed our many bond issues and every American holder of these bonds having now a stake in the Empire as a defender of its integrity and a potential supporter of its extension over here. … ”

Roaring ’20s Despite House’s high hopes for the League of Nations, it did not succeed. It was dependent on the Great Powers to enforce its edicts. Perhaps, most importantly, the man on whom Colonel House and others had depended to drive the League forward, Woodrow Wilson, was incapacitated toward the end of his term by a stroke. The vote by the U.S. Congress in 1919 not to join the League was a blow. But even this may have been overcome in time had Wilson retained his health. His stroke felled him and probably felled the League of Nations as well — even though it actually took World War II to help formally dissolve it. With Wilson and the League of Nations out of the picture, central banking took up globalism’s aims in the 1920s and beyond. This chapter in American history has been well-narrated by such economists as Murray Rothbard and economic historians such as Carroll Quigley and, of course, Ed Griffin. Griffin, especially, has identified the driver of the Roaring ’20s as Britain’s odd central banker Montagu Norman, a man who fancied walking sticks and black, swirling capes and enjoyed traveling around the world on ocean liners incognito.

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Norman wanted the pound to return to its position of prominence and found willing partners in officials running the newly minted U.S. Federal Reserve. Quigley has provided us with a pointed description of Norman: “[He] was a strange man whose mental outlook was one of successfully suppressed hysteria. … When he rebuilt the Bank of England, he constructed it as a fortress prepared to defend itself against popular revolt, with the sacred gold reserves hidden in deep vaults below the level of underground waters which could be released to cover them by pressing a button on the governor’s desk.” The idea, according to this odd, dramatic man, was to bring the pound back to its pre-war status by devaluing other currencies, especially the U.S. dollar. The devaluation was to be provided by printing so many dollars that the British pound would gain in value relative to the dollar. Norman and his counterparties at the Federal Reserve also agreed on the need for a universal gold standard with what Quigley calls “an artificial value set for the benefit of England.” As the Fed printed more dollars, the U.S. economy itself caught fire — a conflagration that reached its peak in 1929 when the overstimulated American stock market finally crashed, taking markets around the world with it. A monetary contraction and a full-shelf’s worth of sociopolitical and economic regulations soon followed. These, plus tariffs and other assorted government initiatives, slowed and then stalled any momentum toward recovery either in America or overseas. By the later 20th century, the American republic would have been largely unrecognizable to its founders.

Modern-Day Colonel House From Lincoln, to House — to David Rockefeller. Much as Wilson’s “second brain” served as kind of clearinghouse for globalism in the early 20th century efforts, the later 20th century belonged to David Rockefeller. Hard-money commentator and long-time Rockefeller watcher Hans Schicht has this to say about him.

There is however one single man, who hates publicity and loathes the masses, a man who more than anybody else has left his imprint: born 1915, his name is David Rockefeller. … He made New York the capital of the world. Under him the Council on Foreign Relations and the Tri-Lateral Commission drew up the blue print for the post-war era centered around a United Nations. The land upon which the United Nations building rests was his grant. It was David who in 1944 had the Bretton Woods conference convoked, to draw the rules for the post-war international monetary relationships. It was David who stood behind

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the foundation of the IMF, the World Bank, the Bilderbergs, the many G-x Meetings and the World Economic Council. Whatever important events occurred in the last 70 years, be it the Land-Lease to Russia, the Marshall Plan, the decolonization movement, the Alianza para el Progresso, the Point Four program, the Peace Corps, the opening up of China and Russia, they all carry the stamp of David Rockefeller, his Council on Foreign Relations and his Tri-Lats.

As chairman and chief executive of Chase Manhattan from 1969 to 1980 — and chairman until 1981 — Rockefeller commanded the wealth and power of America’s preeminent commercial bank alongside his own wealth and the family trusts he controlled — about $7 to $10 billion. If one adds in the assets of Chase itself, Rockefeller’s monetary control verged on the hundreds of billions. The leader of Chase occupied a chamber directly in the heart of America beating with economic and military might. Rockefeller, in fact, probably functioned throughout the later 20th century as the unappointed head of the Federal Reserve. Paul Volcker, Alan Greenspan, Ben Bernanke and other Fed chairmen all worked in his employ in some capacity at one time or another. It has also been claimed with some authority that many of the most powerful federal appointments as well as various candidates for president of the United States were subject to his approval. In a July 2003 post on Gold-Eagle.com, From a Different Perspective, Schicht writes: “I have observed many top people in my life, but never have I met anybody of the caliber of David Rockefeller and never have I experienced a man radiating greater power. … When Nestor Kirchner visited the United States, the electronic pages of the first Argentine newspaper, la Nacion, did not even mention Kirchner meeting Bush, but a full account plus photos was carried of Kirchner sitting for luncheon between Rockefeller and the president of Citigroup, William Rhodes.”

U.S. Financial Century Schicht also provides us with a fairly clear evolution of the “U.S. financial century” — which will probably be seen by monetary history books as corresponding roughly to David Rockefeller’s mature life span. The actual evolution of the American financial century is rendered as follows:

Europe after the second world war was kaput. Not only were they conquered but so were the victors like England, inclusive its bankers. After WWII, the Bank of England was flat-out broke. In England and on the continent reigned financial austerity. No Maynard Keynes policies

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were applied in post war Europe! Penny pinching was the recipe. After the post war mega power shift, any stories about the Rothschilds or the Bank of England still holding much sway in the U.S. FED, must be discounted. After the second World War New, York’s bankers were quite capable to take care of their own FED and take on the world! It was New York, that rolled out the red carpet for Maynard Keynes in Bretton Woods. The same New York, that thrives on paper and credit creation and does not care the hell about financial discipline. Bretton Woods was the authentication of the great post war power shift. It heralded the beginning of global American financial expansionism. Bretton Woods brought the IMF and the World Bank, both controlled by New York, to serve as launch pad for the post war American dollar and financial expansion. Once the second World War was over, New York launched its worldwide dollar offensive. It is New York’s financial aggressiveness which brought the wrath of the world on to America. New York’s dollar imperialism wrongly has become associated with America as a whole. The outside world does not realize that the American people themselves are likewise burdened with a heavy debt yoke imposed by the same bankers, and that the American people have no idea about the harm caused overseas by the extravaganzas of American Banks. American preaching of freedom for all, forced Europe to decolonize its overseas territories. And once decolonized, the U.S.A. stepped in, the dollar following. Only the French franc-zone did offer some resistance to the dollar tide. Where British trade and enterprise had dominated South America with the Pound Sterling up to World War II, in the shortest time of around 15 years, South America changed from sterling to dollar territory. And before we knew it the whole world was on a dollar standard. That leaves the New York bankers in control of the world’s finances, its markets, economies and its people, through a system, tighter, more efficient and binding than any dictator could ever have dreamt of, and all that in anonymity! Who was it, that Herbert Hoover called the Master of Deceit? Today we can say, that it is not the clothes of the emperor which are invisible, but it is the Emperor himself, who is invisible. … The great question is: how long can such a suppressive paper empire last? The answer is: only as long as alternative stores of value can be withheld from the people. And that is the very reason why the outcome of the gold and silver battle is of the utmost importance.

Schicht seems to believe that Rockefeller has worked alone, aligning Rockefeller-

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controlled money interests to those of Old Europe but seeking to dominate the advancement of centralization and internationalism through Rockefeller-founded institutions such as the United Nations. Schicht also believes that the fiat-money push of the late 20th century was a Rockefeller-influenced approach to global finance and wonders how the world’s monetary system will survive Rockefeller’s passing. Interestingly, Schicht instructs readers to look at the “solid base building of gold and silver and at the growing warning signs of looming panic on the bond markets. It is bonds which are the antithesis to gold, not stocks.” For Schicht, as for some other observers of the internationalist scene, Rockefeller’s age has meant a slippage of control as regards modern foreign policy. However, another observer of the global power elite, Will Bayan, does not seem to believe that Rockefeller’s waning will diminish the firmament.

There are plenty of new rich who share the same objectives and who are determined to use their wealth to the same ends. The notorious currency speculator George Soros, for example, has long portrayed himself as a supporter of a ‘global open society.’ … Ted Turner, the founder of CNN, is another in this league, who demonstrated his intentions through his US$1 billion donation to the United Nations in 1997. … Though Turner's fortunes have waned, other plutocrats — among them Bill Gates and Warren Buffett, both intent on dispersing most of their fortunes — are waiting in the wings. … The agenda of the Rockefellers and their successors is hidden in plain sight. If we look past the veil of media-led denial and ridicule, one does not have to look far to find it. Whether we just watch it unfold is another matter.

Creating a ‘European Union’ in North America Bayan would seem to have the last word as to the relative impact of Rockefeller’s removal from the world scene. As mentioned at the beginning of this chapter, massive sociopolitical changes are under way in North America — exceeding in scope and immediacy perhaps even the expectations of a David Rockefeller. The most startling is the undeniable effort under way to create a “region” out of America, Canada and Mexico. Not only is this an astonishing idea being pursued seriously and actively, its proponents are apparently some of the most senior people in the current U.S. administration, as well as many experienced former politicians and senior bureaucrats. One observer of the ongoing effort to combine the three countries into one (by 2010, no less) is Phylis Schlafly, who wrote an initial article about the effort that found its way into numerous alternative ‘Net Web sites in late 2005. Schlafly is a civil

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conservative and her Web site, EagleForum.org, reflects this point of view. It was here that she published her article, Plan to Integrate the U.S., Mexico and Canada, in July 2005. She commented on the constitutionality of the plan as follows:

“Sovereignty means the ability of a government to act without being subject to the legal control of another country or international organization, restrained only by moral principles. The United States Constitution is based on the premise that we are a sovereign nation and we don’t obey any power unless authorized in the Constitution. The enemies of sovereignty are working toward world government. … Bill Clinton … told the United Nations that he wanted to put America into a “web” of treaties to set the ground rules for “the emerging international system.”

Using Schlafly’s research and articles by others who followed up on her initial reporting, it is possible to come up with an informal timeline of how the idea of merging America, Canada and Mexico into one super-region moved from an idea to an agreement and then to active implementation. It is interesting to trace the unfolding of this astonishingly bold concept for two reasons. First, only the alternative ‘Net media, including FMNN, has reported adequately on the North American “super-region” plan. Second, it illustrates clearly what those in and around the mainstream media are loath to admit — that the visible elite not only exists, it works in tandem with political leaders around the world to facilitate and implement plans that are inevitably of a globalist nature. While the case can easily be made for the activism of today’s money power, the connections between power-elite groups and actual, on-the-ground, structural changes are more difficult to make, day-to-day. It is only when taking the long view that the focus snaps into place and obviousness of the mechanism behind, say, the European Union’s ascent from trade agreement to super state becomes clear. So it is with the United States, which began as a republic and is currently an increasingly federalized “democracy.”If the North American union becomes a reality, the United States will not even be that — it will basically cease to exist. Now there is nothing wrong with a country, any country, disappearing. What’s wrong is for a former republic to do so without its citizens having any chance to be heard on the subject while meaningful options still exist. Such an international merger as is apparently being planned is not merely wrong because it is somehow unfair. It is profoundly wrong because such a secretive evolution tears at the heart of civil society. Starting with the Magna Carta in Britain, the West has engaged in a long, slow journey away from the concentrated decision-making of tiny elites. Yet, ‘lo, the process seems to be repeating itself a thousand years later. And people notice. Protests grow; civil society

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is disrupted. The drive to merge three separate countries, several languages and massively disparate cultures and economies moves briskly along, as if conception and reality are one. How is this possible? Examine the definition of conspiracy, according to Answers.com: “An agreement to perform together an illegal, wrongful, or subversive act.” It is also, “A joining or acting together, as if by sinister design.” The Constitution is clearly “based on the premise,” as Schlafly puts it, “that we are a sovereign nation and we don’t obey any power unless authorized in the Constitution.” A premeditated and secretive attempt to merge America with Canada and Mexico constitutes an attempt to redefine the world’s most powerful nation-state and a 250-year-old republic. As such it is an unlawful act in the broadest sense, no matter whether the current status of the country (state of war, state of emergency, etc.) putatively allows the executive office to proceed “legally”or not. It is a conspiracy within the definition of the word.

Timeline: North American Super-Region The informal timeline, below, should make it fairly obvious to anyone without bias that the construction of the North American Union is a concerted, premeditated effort inside and outside of government. 1980: Ronald Reagan voices idea for North American Free Trade Agreement (NAFTA) — the concept of a “free-trade” agreement is mentioned by Ronald Reagan during his presidential campaign. Wikipedia.com December 1993: President Bill Clinton signs NAFTA into law — “NAFTA is a free trade agreement among Canada, the United States, and Mexico. NAFTA went into effect on January 1, 1994. NAFTA is also used to refer to the tripartite trading bloc of North American countries.” Wikipedia.com 2001: Robert Pastor’s 2001 book, “Toward a North American Community,” calls for the creation of a North American Union — “Much of Pastor’s thinking appears aimed at limiting the power and sovereignty of the United States as we enter this new super-regional entity. Pastor has also called for the creation of a new currency which he has coined the ‘Amero,’ a currency that is proposed to replace the U.S. dollar, the Canadian dollar, and the Mexican peso.” The Plan to Replace the Dollar With the 'Amero' by Jerome R. Corsi, May 2006, HumanEventsOnline.com April 2001: President George W. Bush signs Declaration of Quebec City — “This is a ‘commitment to hemispheric integration’ larded with favorite United Nations doubletalk such as ‘interdependent,’ ‘greater economic integration,’ and ‘sustainable development.’” Plan to Integrate the U.S., Mexico and Canada, July 2005, EagleForum.org

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January 2005: NAFTA railroad proceeds — “KCS takes control of The Texas Mexican Railway Company and the U.S. portion of the International Bridge in Laredo, Texas. Kansas City Southern, or KCS, has just completed putting together what is being called ‘The NAFTA Railroad.’”Coming soon to U.S.: Mexican customs office, Jerome R. Corsi, June 2006, WorldNetDaily.com March 2005: Kansas City signs cooperative pact with Michoacan, Mexico – “According to SmartPort.com in March 2005, Kansas City signed a cooperative pact with representatives from the Mexican state of Michoacan, where Lazaro Cardenas is located, to increase the cargo volume between Lazaro Cardenas and Kansas City. The whole point is to move cargo fast, using cheap, below union-wage scale Mexican workers to move the containers from Asia into the heart of the USA.” Coming soon to U.S.: Mexican customs office, Jerome R. Corsi, June 2006, WorldNetDaily.com March 2005: Agreement to build the Texas NAFTA Superhighway — “A ‘Comprehensive Development Agreement’ [is] signed by the Texas Department of Transportation (TxDOT) to build the ‘TTC-35 High Priority Corridor’ parallel to Interstate 35. The contracting party involved a limited partnership formed between Cintra Concesiones de Infraestructuras de Transporte, S.A., a publically listed company headquartered in Spain, owned by the Madrid-based Groupo Ferrovial, and a San Antonio-based construction company, Zachry Construction Corp.” Texas Segment of NAFTA Super Highway Nears Construction, Jerome R. Corsi, June 2006, HumanEventsOnline.com March 2005: Security and Prosperity Partnership of North America established (SSPNA) —A joint statement by President Bush, President Fox, and Prime Minister Martin. Security and Prosperity Partnership of North America (SPPNA) reads in part: “Over the past decade, our three nations have taken important steps to expand economic opportunity for our people and to create the most vibrant and dynamic trade relationship in the world. … Our Partnership will accomplish these objectives through a trilateral effort to increase the security, prosperity, and quality of life of our citizens. … The Partnership is trilateral in concept; while allowing any two countries to move forward on an issue, it will create a path for the third to join later.” North American Leaders Unveil Security and Prosperity Partnership, USInfo.state.gov March 2005: Dept of Commerce creates SSP to implement North American Union — the SSP was never ratified. “Instead, the U.S. Department of Commerce merely created a new division under the same title to implement working groups to advance a North American Union working agenda in a wide range of areas, including: manufactured goods, movement of goods, energy, environment, e-commerce, financial services, business facilitation, food and agriculture, transportation, and health. SPP is headed by three top cabinet level officers of each country. North American Union to

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Replace USA? Jerome R. Corsi, May 2006, Humaneventsonline.com April 2005: KCS purchases controlling interests in Transportacion Ferroviaria Mexicana — “KCS promptly renamed [it] Kansas City Southern de Mexico, or KCSM. … No stop is planned for customs inspection for KCSM trains until the Mexican customs facility located at Kansas City. The only security check planned at the U.S. border with Mexico is electronic, with the KCSM railroad moving along pre- approved KCS rail lines.” Coming Soon to U.S.: Mexican Customs Office, Jerome R. Corsi, June 2006, WorldNetDaily.com April 2005: Senate Bill 853 introduced by Senator Richard G. Lugar (IN) and six cosponsors. “The North American Security Cooperative Act (NASCA) is touted as a bill to protect the American public from terrorists by creating the North American Union. The North American Union consists of three countries, U.S., Canada, and Mexico, with open borders, something that is proposed to be in effect by 2010. Thus, it would ensure the fulfillment of the Security and Prosperity Partnership of North America.” NASCA Rips America, FMNN May 2005: CFR Issues its Building a North American Community Report — “The Task Force’s central recommendation is establishment by 2010 of a North American economic and security community, the boundaries of which would be defined by a common external tariff and an outer security perimeter. Unlike previous Council-sponsored Task Forces, this project was international, or trinational to be precise. The membership was comprised of policy practitioners, scholars, and business leaders from each of the three countries. The Task Force held meetings in Toronto, New York, and Monterrey. In this effort, the Council partnered with two outstanding institutions, the Canadian Council of Chief Executives and the Consejo Mexicano de Asuntos Internacionales.” From the Introduction by Richard N. Haass, President, Council on Foreign Relations, www.CFR.org June 2005: Follow-up SPP meeting was held in Ottawa, Canada — “U.S. representative, Homeland Security Secretary Michael Chertoff, told a news conference that ‘we want to facilitate the flow of traffic across our borders.’ The White House issued a statement that the Ottawa report ‘represents an important first step in achieving the goals of the Security and Prosperity Partnership.’” CFR’s Plan to Integrate the U.S., Mexico and Canada, July 2005, EagleForum.org June 2005: Senate Republican Policy Committee policy paper released — “The CFR did not mention the Central America Free Trade Agreement (CAFTA), but it is obvious that it is part of the scheme. This was made clear by the Senate Republican Policy Committee policy paper released in June 2005. It argued that Congress should pass CAFTA … The Senate Republican policy paper argued that CAFTA ‘will promote democratic governance.’ But there is nothing democratic about CAFTA’s many pages of

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Artist’s rendition of the Texas Department of Transportation (TxDOT) proposed

NAFTA superhighway network. The 12-lane superhighway will run from Canada

to Central America. grants of vague authority to foreign tribunals on which foreign judges can force us to change our domestic laws to be ‘no more burdensome than necessary’on foreign trade.” CFR's Plan to Integrate the U.S., Mexico and Canada, July 2005, EagleForum.org July 2005: CAFTA [passes] the House of Representatives by a 217-215 vote — “This vote, especially on the Republican side of the isle, does not reflect the views of the American people or the U.S. Constitution. Even many Rush Limbaugh listeners have called in to voice their strong opposition to this so-called ‘free trade agreement.’ In fact, one poll suggests that half of the country’s Republican voters opposed CAFTA!”CAFTA Passes: Dirty Tricks and Devastating Consequences, Scott Ritsema, Prisonplanet.com, August 2005 July 2005: Phylis Schafly writes about “The CFR Plan to Integrate the U.S., Mexico and Canada” — “The Council on Foreign Relations (CFR) has just let the cat out of the bag about what’s really behind our trade agreements and security partnerships with the other North American countries. A 59-page CFR document spells out a five-year plan for the ‘establishment by 2010 of a North American economic and security community’ with a common ‘outer security perimeter.’” CFR's Plan to Integrate the U.S., Mexico and Canada, July 2005, EagleForum.org June 2006: Mexican customs office to open with Kansas City SmartPort —

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“This will be the first foreign customs facility allowed to operate on U.S. soil. … [The customs office is part of a larger plan for a] NAFTA Super Corridor [that] calls for the construction of a 12-lane highway (six lanes in each direction) along Interstate 35.” Coming soon to U.S.: Mexican customs office, June 2006, WorldNetDaily.com June 21, 2006: Texas Segment of NAFTA Super Highway Nears Construction — “The Trans-Texas Corridor (TTC) is ready to begin construction in 2007, building the first segment of what is planned to be a NAFTA Super Highway stretching from Mexico to Canada.” Texas Segment of NAFTA Super Highway Nears Construction, Jerome R. Corsi, June 2006, HumanEventsOnline.com June 2006: Tom Tancredo, R-Colorado. Demands Superstate Accounting from Administration — “Responding to a WorldNetDaily.com report, Tom Tancredo is demanding the Bush administration fully disclose the activities of an office implementing a trilateral agreement with Mexico and Canada that apparently could lead to a North American union, despite having no authorization from Congress.” Tancredo Confronts 'Super-State' Effort, June 2006, WorldNetDaily.com June 2007: Trans-Texas Corridor (TTC) Ready to Begin Construction— “TTC will build the first segment of what is planned to be a NAFTA Super Highway.” Texas Segment of NAFTA Super Highway Nears Construction.” Jerome R. Corsi, HumanEventsOnline.com. June 2008: Corridor to Use Existing Facilities — After much controversy, TxDOT, in charge of the Texas corridor, announced their recommendation that TTC- 69 focus on using existing facilities rather than building a new highway. ... The Trans- Texas corridor has been slowed but not stopped. CorridorNews.blogspot.com

China, Next America? America has experienced more than a century of fiscal and monetary mismanagement and fusion. The graduated income tax and federal reserve system have hollowed out the country’s industrial base. Massive promotions and monetary stimulation have drained dollars from its stock and bond markets. The country is trillions in debt, at war and is now seemingly better known for its military exports than its industrial ones. Ironically, a country in much better shape than the United States is that country’s main debt-holder, China. I have visited China several times. The country that China reminds me of, peculiarly enough, is the United States — not necessarily now, but more than 150 years ago, during America’s great industrial revolution. It is that kind of near-unrivaled growth that springs to mind when one travels throughout China today. The trends that have conspired to throttle much of America’s manufacturing economy — over-taxation, over-regulation and a socialist mentality — are surprisingly absent in

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China. That sounds almost oxymoronic in a country convulsed by Mao’s bloody, collectivized great leap forward only a generation ago. But perhaps the Chinese have learned from their mistakes, if not at the top among its aged leadership, then in China’s teeming streets and bustling malls where the most modern and exciting activity is seen in the spending, getting and growing of one’s wealth. Taxes? The Chinese leadership does not even try to collect the country’s income tax, leaving it up to individual business owners to raise it from their workers — which some do and some don’t. Regulation? It may be coming, but in China nearly anything goes, with pollution fogging the air of its busiest cities and its urban waterways offering a patchwork of industrial debris. Travel through China and you’ll actually find very few people who seem to enjoy talking about the past, for understandable reasons, I suppose. They’d much rather focus on the future and on the prospects of getting rich as China pursues and expands its very own industrial revolution, one that may be destined to drive all of Asia past Europe and perhaps even past America as a discreet, regional powerhouse. Literature on China’s growth states that it was decentralization rather than privatization that gave the current boom its start. Thus it was not the result of a party decision but happened as a result of decentralization — human action, in other words. Once local governments gained control over their vast industrial centers, the decentralization policy gave officials the power to reconfigure industries in their regions and even create new companies with different industrial mandates. Importantly, legislation gave local authorities the right to grant “residual shares” in the enterprises to management. As competition became more intense, the local authorities began granting more and more shares to the individuals involved in the enterprises until the state lost control and the entity was effectively privatized. There are powerful global financial trends at work that support increasing Chinese economic vigor for years to come. One only has to look at the companies flocking to China to see that our perception of the China Trend is shared by those in positions of power within corporate America, and in Europe as well. China, India and other developing nations are popular destinations for industry, just as America once was — and it can be quite profitable to follow the money trail.

Storm Warning Further consolidation of U.S. federal power will finish off the remnants of the American republic. The U.S. economic miracle was one that began pre-Civil War. In fact, free-market proponents would argue that the current situation of “these United States” have obscured the engine of prosperity that drove one country with less than 5% of the world’s population to generate up to 50% of the world’s wealth,

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revenue, and medical and engineering inventions. Private individuals had access to the markets and their “human action” added to the well-being of the populace and the wealth of the community. The foundation for the entrepreneurial culture and ongoing prosperity of the United States was generated (mostly) pre-Civil War days, so this argument goes, and the ability of its citizens to participate freely in the marketplace has been eroding ever since. One may well ask if the many silk and cotton mills that adorned the rivers of New England would have been built today given the concern of groups lobbying for the environment — and the radical solutions they often propose. The great explosion of industrial might, developed in the 18th and 19th centuries probably wouldn’t have occurred given today’s concerns with pollution and other industry-negative issues. The more fusion that occurs, the more unitary power that the current administration is able to command, the more difficulty the American experiment will undergo. This is not to say that “protecting the environment” is of lesser value than industrial growth. In fact, those who put it this way are using the thesis/antithesis paradigm to confuse the issue. Free-market thinkers understand that market competition is the best remedy for industrial pollution. Over time, consumers will gravitate toward responsible corporate citizens versus those who receive a constant drumbeat of negative publicity because of ongoing problems with pollution. Government itself, by issuing rules and regulations and then attempting to enforce them, cannot easily protect the environment. One of the most easily-grasped examples of this economic fact would be in the area of “poaching,” and making it a crime to kill certain animals for ivory or for their furs. In fact, anti-poaching laws only fuel the illegal killing of animals. When other solutions have been tried, such as attempting to breed more animals to provide the in-demand product, often the pressure on the species is reduced because the profit incentive is regularized. Speaking of the environment, it is ironic that the fuss raised when a large corporation is involved in pollution is almost wholly absent as regards the vast superhighway being built from Canada to Central America. Not only is this gigantic transporation network what “green types” might call an “environmental disaster in the making,” it is also a project that is rushing along at a fairly fast clip — avoiding the kind of scrutiny that one might ordinarily consider appropriate for a project of this size. A project of this sort surely demands close examination, given the potential for economic harm to America’s midwest from such a massive undertaking. It is well known among civil engineers that throughout the 20th century, large transportation projects bisected American cities and often turned thriving communities into dilapidated backwaters. Perhaps the most egregious example of this kind of harm was perpetrated by New York’s “master builder”of the 20th century, Robert Moses, who split the Bronx in two

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Elite Retreat …

“For nearly 20 years, the United States has been the foremost cheerleader for a trading regime that has shamelessly been promoted as ‘free.’ … [But] ‘free trade,’ as currently practiced, is a fraud. The regulatory agency that advances this transfer of power from sovereign democracies to capital interests is the WTO, the World Trade Organization, which should more appropriately be termed the ‘Wealth Transfer Organization.’ … Revolts against these practices among the citizens of Latin America are on the rise. Ecuadorians rioted against the practices imposed by the IMF, some 10-million Brazilians condemned the IMF in a national referendum, and more recently, Bolivians overthrew their government rather than knuckle under to the IMF-induced privatization of their nation's natural gas resources.” —Leo W. Gerard, International President, United Steelworkers (USW), representing 1.2 million members, USWA.org, May 2005 with a massive highway development. The Bronx never recovered from Moses’ violation. Neighborhoods with boulevards as grand as any in Manhattan were transformed into slums. The fabric of the borough and the logic of its development was ripped apart. Those who plan enormous civil engineering projects were said to have learned from Moses’ many disasters — yet the superhighway project seems ready to repeat them on a titanic scale. Such a “superhighway,” if fully realized, would no doubt do to the midwest what Moses did to the Bronx — turn a number of “red states” into economic backwaters. The industrial action would be at either end of the highway, and the damage to the American economy — and national psyche — would be immense, eventually, perhaps, transforming the United States into two separate economic and industrial regions.

Economic Action Alert Look for signs that the onrushing wave of U.S. federal power has crested and is waning. The federal government redistributes more than $2 trillion in wealth from taxes, and this does not take into account the redistributive impact of the Federal Reserve. Inevitably, because of the economic law of marginal utility, government spending is inefficient and tends to inject even more distortions into the economy. Additionally, government “takings” fund regulatory endeavors and private lobbying groups that would not otherwise exist. The effects are to be seen throughout the industrially devastated communities of the American Midwest, and elsewhere too.

< 154 > H IGH A LERT 8 How the Federal Reserve has wrecked America. ONSLAUGHT OF THE FED

“[Free-market economist] Murray Rothbard published ‘America's Great Depression,’ in which he presented a detailed interpretation of how Federal Reserve monetary policy in the 1920s created the economic imbalances that resulted in the economic downturn that started in 1929 [and became] the worst economic contraction of the 20th century.” — September 1999, FFF.org, Money, Central Planning and the State

High Alert This indescribably bad institution deserves a chapter unto itself. Certainly, the Unites States was founded without a central bank for a reason. Jefferson and the agrarian republicans despised them and were suspicious of bankers in general — and for good reason. Banking, as we have already noted, is an industry that exists merely for the protection of those who wish to place real money — gold and silver — in a reputable institution. The proactive measures bankers have taken with the generation of fiat money and concurrent fractional banking — especially through central banking — have brought wrack and ruin to society and plunged nation- states into continuous war, much as Jefferson warned. In simplest terms, as we have seen, central banks — including the Federal Reserve — inflate by printing money and offering credit that is then expanded by other banks. The more money it “prints,” the cheaper money gets, and the less a government’s debt becomes. By cheapening money, the government deprives individual citizens of part of the value of that money. As the value is eroded, citizens

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become poorer, even if they don’t notice it right away. Inflation makes those closest to the money printing facility the richest — and the power elite is closest of all. Being first in line to receive the benefits of fiat money, including credit power, is just as rewarding as printing the money itself. Central banking also makes society more malleable, more controllable via ongoing, massive booms and busts. The boom-bust cycle created by overprinting of money is also known as the business cycle. Alert free-market thinkers will be cognizant of where the economy resides as regards the business cycle. Accurately identifying the right place gives the individual investor insight into what kind of instruments might work best in the near future as the cycle grinds along. No more than central banks can the business cycle be ignored. And it is just as critical to understand the business cycle — a product of central banking inflation — as it is to understand the mechanism of central banking itself.

Mysterious Conclave The Fed is actually the third American central bank. The first two failed, in large part, thanks to agrarian populists and republicans such as Thomas Jefferson and Andrew Jackson. All this changed early in the 20th century when, after numerous tries, bankers and industrialists were able to create a central banking act and have it passed by the U.S. Congress. Also, early in the 20th century, Congress levied a graduated income tax, resulting in the formation of the IRS and the tax code in all its complexity today. All large banks in the nation are members of the Federal Reserve System. Nationally chartered banks are forced to join; state chartered banks can choose. The system consists of 12 reserve banks, located throughout the country.

Conspirati The Federal Reserve Board, a private corporation owned mainly by foreign interests dominated by Germany, is dubiously blocking the crediting of $4.5 trillion of repatriated offshore funds that were transferred into the United States in May and June 2006, in fulfillment of an agreement reached last year between the U.S. authorities and the U.S. financial engineering genius, Leo Wanta, which would transform the financial and economic outlook for the U.S. Treasury, the U.S. economy, the American people, and the whole world. —July 2006, Rense.com

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These 12 reserve banks are supervised by the Board of Governors of the Federal Reserve System, who are appointed by the president of the United States. There was reason of course for all the secrecy that surrounded the birth of the Fed. The government’s control — and the control therefore of those who control the government — of the banking system is most important within the structure of the modern nation-state. In modern economics, the banks provide the most effective engine of inflation. Some people claim that the Federal Reserve System is a fully private enterprise despite its quasi-public posture, and that the secretive power elite makes loads of money from the Fed and other central banks. This cannot be easily established and in any event is probably beside the point. To repeat: Inflation makes those closest to the money printing/credit-offering facility wealthy — and the power elite is closest of all. Being first in line to receive the benefits of fiat money, including credit power, is nearly as rewarding as printing the money itself.

Money Everywhere As more and more money and credit are issued into the economy, the money and credit already circulating is devalued. Those farthest away from the money creation are the ones who suffer most — those with the least access to modern financial transactions — the poor and middle class, in other words. Did this suit the designs of the state money makers? Of course it did. A state with a central bank is ultimately a kind of criminal enterprise and has placed itself in opposition to its citizens. In any event, even before the advent of central banks, royalty existed in uneasy accord with the mass of people whose wealth and labor were often expropriated by force or at least for less compensation than they were worth. If the state had developed an inscrutable money mechanism that drained wealth and power from the citizens, then that was all too good, for these citizens would be too busy scraping out a living to make trouble. Additionally, the inflation that afflicted society, once central banks began to issue major amounts of “money for nothing,”was a great opportunity to turn central banks into centers of economic command and control. Of course central banks are nothing of the sort. They are merely coercive mechanisms of brute force extracting money far more efficiently than taxes ever could. But because the central bank introduced a steady stream of inflation into the economy, the central bank could be made to appear as an arbitrator of the nation’s monetary health. This is so even today, when monetary functions have been extraordinarily centralized and royal banks issue torrents of credit and money into an environment where money loses value with disheartening regularity. Each pulse of monetary devaluation is

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monitored by the media and putatively by the central bank. Every upward tick of prices is cause for concern. Print too much of anything and you get a glut. But only in the world of central banking and money do the criminals come with white-collar degrees and the ability to participate in the crime while posing as the law-and-order sheriffs determined to crack down on the very fraud in which they are involved. FMNN commentator and “monetary architect” of the silver Liberty Dollar Bernard von NotHaus put central banking and inflation into context for Americans with the following post: “From 1913 [inception of the Federal Reserve] to 2001 the national debt grew to $6 trillion in 88 years. In the next three years it climbed to $7 trillion dollars in 2004. In just one year it climbed sharply to over $8 trillion dollars. The acceleration of the national debt is alarming. The corresponding loss of your purchasing power may also accelerate in the near future.” As the economy sputters along, various commentators and politicians tell us that the way out of this mess is to lower interest rates, increase spending, and, consequently, take on more debt. In a post on FMNN entitled The Credit Delusion, banking executive Christopher Mayer makes this point about how central banking encourages the creation of retail debt, as follows: “The purpose [of the central banking mechanism] … is to encourage debt, and indeed it has achieved the result. Debt as a percentage of disposable income, for example, is as high as it has ever been, over 100%. As recently as 1990, debt represented 80+% of disposable income. In 1982, it was in the 60% range. … At the heart of such a scheme — its sole logic — is that debt need not be repaid but postponed by increasing the debt of the debtor.”

First American Central Bank With so much on the negative side of the ledger, it is not surprising that the idea of implementing a central bank in early America was a controversial topic. Despite Jefferson’s well-documented distrust of “bankers”and banking, the concept of the central bank is intertwined with the history of the United States from inception — and not just the concept but the implementation as well. Nowhere is this more visible than in Philadelphia, the nation’s capital for some time before the move to Washington, D.C. Visitors to Philadelphia can see at close quarters the various buildings that once housed the federal apparatus of the “American experiment” including, nearly side-by-side, the buildings housing the nation’s first two central banks. The first is actually a house, by all measures modest, white-painted and of wood construction. The second, far grander in scope and ambition, is built of stone and looks like a bank with an imposing façade and institutional landscaping. In “A Brief History of Central Banking in the United States,” mainstream financial economist Edward Flaherty summarizes the history of the nation’s first

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central banks as follows: “The Bank was profitable, earning most of its income through substantial loans to both government and private business. … The chief argument in favor of the Bank's renewal in 1811 was that its circulation of about $5 million in paper currency accounted for about 20% of the nation’s money supply. It was the closest thing to a national currency that the U.S. had. Ironically, this may have contributed to its downfall because the Bank’s issuance of notes came at the expense of state banks. … Foreign ownership, constitutional questions (the Supreme Court had yet to address the issue), and a general suspicion of banking led to the failure of the Bank’s charter to be renewed by Congress. The Bank, along with its charter, died in 1811.”

America’s Second Central Bank The Second Bank of the United States was chartered in 1816 but its inception and operation met with the fervent opposition of President Andrew Jackson, elected in 1828, on something of an anti-bank platform. AmericanPresidency.org, sponsored by the University of Virginia’s Miller Center of Public Affairs, offers the following brief narrative concerning the Second Bank of the United States: “A corporation chartered by Congress to provide a national paper currency and manage the government’s finances. … In United States history, the National Bank was a major political issue during the presidency of Andrew Jackson [who] fought against the bank as a symbol of greed and profit-mongering, antithetical to the democratic ideals of the United States.” Elected as what we today might call a “populist,” Jackson felt antipathy to America’s second central bank that actually deepened over the four-year time period leading up to a congressional vote to recharter the bank. In his veto, Jackson wrote, “A bank of the United States is in many respects convenient for the Government and for the people … I sincerely regret that in the act before me I can perceive none of those modifications of the bank charter which are necessary, in my opinion, to make it compatible with justice, with sound policy, or with the Constitution of our country.” Flaherty sums up the results as follows: “The Second Bank of the United States expired in 1836. The U.S. would be without an official central bank until 1913 when the Federal Reserve System was formed. Jackson believed that the nation’s money supply should consist only of gold or silver coin minted by the Treasury and any foreign coin the Congress chose to accept.” Of course, free-market thinkers would disagree with Jackson on this issue of the government’s involvement in minting gold and silver coins. Private mints are more than capable of handling the necessary tasks.

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Modern Federal Reserve For Flaherty and other mainstream observers of central banking, the inevitability of an American central bank is nearly self-evident. Such narratives tend to reveal mild surprise that the event did not occur much sooner in U.S. history rather than that the final empowerment of such a bank occurred at all. Flaherty sums up the impending creation of the American national bank as follows: “The movement for banking reform picked up steam among Wall Street bankers, Republicans, and a few eastern Democrats [after the panic of 1907]. … In 1910, Senator Nelson Aldrich, Frank Vanderlip of National City (Citibank), Henry Davison of Morgan Bank, and Paul Warburg of the Kuhn, Loeb Investment House met secretly at Jekyll Island, a resort island off the coast of Georgia, to discuss and formulate banking reform, including plans for a form of central banking. … Because it was secret and because it involved Wall Street, the Jekyll Island affair has always been a source of conspiracy theories. . ... Everyone knew Wall Street wanted reform, and the Aldrich Plan which the meeting produced was, in fact, rejected by the House.” Eventually a compromise was reached: “What eventually emerged was the Federal Reserve Act, also known at the time as the Currency Bill, or the Owen-Glass Act. The bill called for a system of eight to twelve mostly autonomous regional Reserve Banks that would be owned by commercial banks and whose actions would be coordinated by a committee appointed by the President. The Federal Reserve System would then become a privately owned banking system that was operated in the public interest. Bankers would run the twelve Banks, but those Banks would be supervised and by the Federal Reserve Board whose members included the Secretary of the Treasury, the Comptroller of the Currency, and other officials appointed by the President to represent public interests.”

Flaherty Versus Griffin In the above narrative of the inception of the Federal Reserve, Flaherty alludes to the “conspiracy theories” to which the Wall Street meeting on Jekyll Island gave rise. “The conspiracy theorists overestimate the significance of the meeting,” he writes. Opposed to Flaherty is FMNN commentator and Federal Reserve biographer Edward Griffin. Griffin and Flaherty represent radically different perspectives on central banking. Griffin avoided addressing Flaherty’s criticism of his “Creature from Jekyll Island” for a fairly long period of time. But in 2004, he wrote a rebuttal, beginning as follows: “Edward Flaherty is a Ph.D. of Economics who has been critical

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Reality Byte: ‘one of the most corrupt institutions ... ’

“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” —John Maynard Keynes

“Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.” —Ben S. Bernanke, 2002-Nov-8, at a celebration of Milton Friedman’s 90th birthday

“The Federal Reserve Banks are one of the most corrupt institutions the world has ever seen. There is not a man within the sound of my voice who does not know that this Nation is run by the International Bankers.” —Congressman Louis T. McFadden

“From now on depressions will be scientifically created.” —Congressman Charles A. Lindbergh, Sr., 1913, on the Federal Reserve Act

“We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not we starve. We are absolutely without a permanent money system. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.” —Robert H. Hamphill, Atlanta Federal Reserve Bank

Source: Quotes collected at www.Mega.nu/ampp of my book, ‘The Creature from Jekyll Island: A Second look at the Federal Reserve.’ … The essence of Flaherty’s critique is that anyone who opposes the Federal Reserve must be some kind of a kook, totally lacking in scholarship. He lumps all Fed critics together, those who bring scholarship to the topic as well as those who do not, and the mixture tends to discredit everyone. … ” Griffin then answers Flaherty’s points at length. Rather than a summary, a

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portion, below, has been reproduced with Griffin’s permission. Flaherty: All the conspiracy authors whose work I study here profess a belief in the alleged “New World Order” conspiracy, or some variant thereof. Griffin’s reply: An informed reader would not waste time beyond this point. It is absurd to claim that a blueprint for a New World Order based on the model of collectivism is merely “alleged.” The evidence that this is a demonstrable fact of modern history abounds. Some of that evidence is presented in my work, “The Future Is Calling,” found in the Issues Section of the Freedom-Force.org web site. Flaherty: Hypothesis: Each of the 12 Federal Reserve banks is a privately owned corporation. Like any firm, their main objective is to maximize profits. They do so by lending the government money and charging interest. They manipulate monetary policy for their own gain, not for the public good. Facts: Yes, the Federal Reserve banks are privately owned, but they are controlled by the publicly- appointed Board of Governors. The Federal Reserve banks merely execute the monetary policy choices made by the Board. Griffin’s reply: Basically, Flaherty is correct as far as he goes. But, as we shall see in so many of his statements, he stops short of the entire truth. A half-truth is just as much of a deception as an outright lie. Flaherty says that the Board of Governors is politically appointed. This is true and it is supposed to make us feel safe in the thought that the President responds to the will of the people and that he selects only those who have the public interest at heart. The part of the story omitted by Flaherty is that the President does not select these people from his own personal address book, nor does he ask the public to submit nominations. With few exceptions, he makes appointments from lists given to him by the staffs of banking committees of Congress and from private sources that have been influential in his election campaign. The most powerful of all these groups are the financial institutions (including prominent members of the Fed itself) and the media corporations over which they have effective control. One does not have to be a so- called conspiracy theorist to recognize the tremendous influence that these institutions have over the outcome of presidential campaigns, and anyone with knowledge of how our current political system works will understand why the president makes exactly the appointments that the banks want him to make. All one has to do to see the accuracy of this appraisal is to examine the backgrounds and attitudes of the men who receive the appointments. While there is an occasional token individual who appears to come from the consumer sector of society, the majority are bankers deeply committed to the perpetuation of the system that sustains them. Anyone who would seriously challenge the power of the banking

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cartel would never be appointed. So, while Flaherty is correct in what he says, the implication of what he says (that the Fed is subject to control of the people through the political process) is entirely false. Flaherty: Nearly all the interest the Federal Reserve collects on government bonds is rebated to the Treasury each year, so the government does not pay any net interest to the Fed. Griffin’s reply: Here is another half-truth that is a whopper deception. It is true that most of the money paid by the government for interest on the national debt is returned to the government. That is because the Fed’s charter requires any interest payments in excess of the Fed’s actual operating expenses to be refunded. However, before we jump to the conclusion that this is a wonderful benefit, we must remember that the banking cartel is able to use tax dollars to pay 100% of its operating expenses with few questions asked about the nature of those expenses. After all of those expenses are paid, what is left over is rebated to the Treasury, as Flaherty says. There is no secret about this, and you will find an explanation of it in my book. Technically, there is no “profit” on this money. However, remember that creating money for the government is only one of the functions of the Fed. The real bonanza comes, not from money created out of nothing for the government, but from money created out of nothing by the commercial banks for loans to the private sector. That’s where the real action is. This is the famous slight-of-hand trick. Distract attention with one hand while the coin is retrieved by the other. By focusing on the supposed generosity of the Fed by returning unused interest to the Treasury, we are supposed to overlook the much larger river of gold flowing into the member banks in the form of interest on nothing as a result of consumer and commercial loans. Flaherty: Hypothesis: Bankers and senators met in secret on Jekyll Island, Georgia, in 1910 to design a central bank that would give New York City banks control over the nation’s money supply. Facts: The meeting did take place, but plans for a return to central banking were already widely known. Regardless, the proposal that came out of the Jekyll Island meeting never passed Congress. The one that did, the Federal Reserve Act, placed control over monetary policy with a public body, the Federal Reserve Board, not with commercial banks. Griffin’s reply: Here again we have a half-truth that functions as a deception. Plans for a return to central banking, indeed, were already known, but they were unpopular with the voters and large blocks of Congress. That was the very problem that led to the great secrecy. Frank Vanderlip, one of the participants at the Jekyll Island meeting, later confirmed that, if the public had known that the bankers were the ones creating legislation to supposedly “break the grip of the money trust,” the bill would never have been passed into law. The facts presented in my book, and

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Elite Retreat …

Selected public-record exchanges (abridged) between Dr. RON PAUL (R-Texas) and ALAN GREENSPAN, Federal Reserve chairman, 2000-2005 • 2/17/2000 — DIALOGUE ONE The Fed has no way of knowing how much money the economy needs. Dr. PAUL. My concern is what is going to happen when this bubble bursts? I think it will, unless you can reassure me. But the one specific question I have is will M3 shrink? Is that a goal of yours, to shrink M3, or is it only to withdraw some of that credit that you injected through the noncrisis of Y2K? Mr. GREENSPAN. Our problem is, we used M1 at one point as the proxy for money, and it turned out to be very difficult as an indicator of any financial state. We then went to M2 and had a similar problem. … The difficulty is in defining what part of our liquidity structure is truly money. … Our measures of money have been inadequate and as a consequence of that we … have downgraded the use of the monetary aggregates for monetary policy purposes.” Dr. PAUL. It is hard to manage something you can’t define. Mr. GREENSPAN. It is not possible to manage something you cannot define. • 2/11/2004 — DIALOGUE TWO The Fed has ‘inordinate power.’ Dr. PAUL. Maybe there is too much power in the hands of those who control monetary policy, the power to create the financial bubbles, the power to maybe bring the bubble about, the power to change the value of the stock market within minutes? That to me fully documented by references from original sources, show that my version is historical fact. Flaherty attempts to minimize these facts by implying that the original, secret meeting was not important because the first draft of the legislation was rejected. What he does not say is that the second draft that was passed into law was essentially the same as the first. The primary difference was that Senator Aldrich’s name was removed from the title of the bill and replaced by the names of Carter Glass and Robert Owen. This was to remove the stigma of Aldrich as an icon for “big-business Republicans” and replace it with the more popular image of

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is just an ominous power and challenges the whole concept of freedom and liberty and sound money. Dr. GREENSPAN. Congressman, as I have said to you before, the problem you are alluding to is the conversion of a commodity standard to fiat money. We have statutorily gone onto a fiat money standard, and as a consequence of that it is inevitable that the authority, which is the producer of the money supply, will have inordinate power. • 7/21/2004 — DIALOGUE THREE Successful central banks must replicate gold standard. Dr. PAUL. Yesterday's testimony was received in the press as you painting a pretty rosy picture of the economy. … So my question to you is, how unique do you think this period of time is that we live in and the job that you have? … Since there is no evidence that fiat money works in the long run, is there any possibility that you would entertain that, quote, we may have to address the subject of overall monetary policy not only domestically but internationally in order to restore real growth. Mr. GREENSPAN. Well, Congressman, you are raising the more fundamental question as to being on a commodity standard or another standard. And this issue has been debated, as you know as well as I, extensively for a significant period of time. Once you decide that a commodity standard such as the gold standard is, for whatever reasons, not acceptable in a society and you go to a fiat currency, then the question is automatically, unless you have Government endeavoring to determine the supply of the currency, it is very difficult to create what effectively the gold standard did. I think you will find, as I have indicated to you before, that most effective central banks in this fiat money period tend to be successful largely because we tend to replicate that which would probably have occurred under a commodity standard in general.

Democrats, “defenders of the working man.” It was a strategy advocated by Paul Warburg, one of the participants at the Jekyll Island meeting. The fact that Flaherty makes no mention of this suggests that he has not made an objective analysis but, instead, has presented a biased critique in the guise of scholarship. His statement that “the Federal Reserve Act, placed control over monetary policy with a public body, the Federal Reserve Board, not with commercial banks” cannot be taken seriously. The Federal Reserve is not a public body in any meaningful sense of the phrase.

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Storm Warning The demise of the dollar will give the Fed much about which to be unhappy — and its captains will do almost anything to avoid such a fate. Yet if the Fed’s history is any indication, the dollar’s demise is an eventual certainty. American investors will then choose among various other options to park dollars and in the 2000s, money metals should be chief among them — along, perhaps, with overseas investments. The only thing that can possibly delay the arrival of a full-force hurricane is if China and America continue to play the “money game.” Take a walk through any American airport and look objectively at the figures walking by. Then hop on a plane and head to Beijing. From lots of personal experience in airports in both countries, I can certainly tell you that the Chinese are hungry and they’ve just started to get a taste of what modern banking can yield. It’s a difficult battle to be fought, one that appears to be smoldering as I write. I have very knowledgeable friends in Beijing and, after many late night discussions, I believe it is safe to say that right about now, China, a nation that has suffered through many paper money downfalls, is probably wondering how it can slowly back out of this game. China has tried to be a good corporate citizen. Needing to secure reliable commodities access, Chinese corporations tried to acquire several different, world- class commodity corporations, but permission was never granted, not in Canada and not in the United States. So what’s the message? Something like this: “It’s OK to take U.S. dollars in return for goods but real assets are off limits.” The Chinese certainly understand this by now, and that is why they have begun to concentrate on building relationships with the “South” — those countries that are impoverished now but that have the natural resources that China can help develop or even purchase. The West and the United States especially, has looked to the developing world to help support its consumerism. But in the process, the industrial might of the United States has been hollowed out. Today, the West, especially America, trades increasingly worthless paper for the goods and services it imports. The low savings rate and high credit volume of the United States function as a kind of call on the future prosperity of America.

Economic Action Alert Money metals and overseas equity investments are appropriate considerations during a time of the U.S. dollar’s decay and possible destruction. Seek investment opportunties that offer what might be called a teeter-totter

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approach — publicly-traded mining companies with both base and precious metals exposure. Such mining companies have the management experience to generate successful projects domestically or abroad. And companies that possess a broad portfolio of metals projects will do well if gold and silver continue to see price advances. If economies worldwide confront ongoing shortages in raw materials and commodities, then base metals may prove a lucrative play. With the right mining companies, either eventuality is covered. However, it may prove more practical to acquire a portfolio of base and precious metals companies that are specifically focused on a chosen commodity.

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The Web versus money power. EXPANDING ‘NET

“It is no one’s fault that pernicious tales such as Peak Oil haunt public discourse — they would be far worse, and more immediately catastrophic were it not for the debunking power of this wonderful mechanism of individual mass communication, [the Internet].” — November 2005, FMNN

High Alert This and the next chapter focus on the Internet and on those free-market thinkers who are able to take advantage of the ‘Net’s promise most efficiently and use it best. Just as the ‘Net and free-market thinking provide tools for people to defend themselves and their portfolios against the financial hurricane of the 2000s, so these chapters explain how society itself may become inured to at least some of the more serious manipulations performed by the visible power elite. In addition to examining the workings of the Internet itself in more detail, this chapter attempts to focus on why it has become such a challenge for the global power elite. It also offers some ideas about the future of the ‘Net as both a technology and an informational tool. Without the control of communication and the ability to build a virtually seamless wall of “messaging,”a good deal of the power elite’s promotional ability is in jeopardy along with the time, energy and wealth invested in creating the initial mechanism. In the long run the power elite may have difficulty maintaining the integrity of its ambitious promotional structure. This supposition is based on historic precedent: During the era of the Gutenberg press, the Catholic Church with all of its physical assets

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“on the ground” and an army of committed servants, lost control of its message and ultimately of many of the faithful. This is not to imply that the power elite will necessarily succumb to a similar degree. But the ‘Net’s impressive debut would seem to indicate modern money power faces increased difficulty on several fronts. The mathematics alone must be worrisome. There are perhaps a few hundred or a few thousand of the power elite, and billions who are not. As the Internet becomes an evermore effective communications medium, the kinds of anti-promotional explanations that this book espouses — along with FMNN itself — will become more widely known and accepted among a certain small, but influential segment of the non- power elite population. There is a name for this group, “free-market thinkers,” and they will be discussed further in the next chapter.

‘Net as Change Maker The Internet is a truly revolutionary technology, a change maker — a device, in aggregate, that people relate to with intimacy over a long period of time in much the way they relate to television. The difference is that TV is a cool or passive medium while the ‘Net often demands at least some level of interaction. Additionally, depending on how it is used, the Internet can be exceptionally informative, giving users a great deal of detail along with a broad, factual overview. Over time, ‘Net users may become knowledgeable enough to counteract the programming they received as children through the media and public schools. Of course each revelation takes place personally, over weeks, months or even years. But the 'Net’s power is such that it can set a hundred million or even a billion such conversations going at the same time. Certainly the ‘Net has enemies, powerful ones. But if it is able to continue to provide education and an increasingly truthful version of history, the power elite’s promotional messaging will come under additional pressure. Once enough people have reached conclusions that are fundamentally at odds with their initial “programming,” society can undergo profound changes. It is easy to fear for the Internet, but it is also quite possible to be optimistic. It is so large at this point that any attempt by one or several groups to take it over with an eye to controlling it or imposing Draconian censorship is bound to be resisted by numerous other interest groups. These groups, primarily from the United States but also from overseas, may well not agree with each other but will unite to stave off ‘Net challenges as best they can. One reason for optimism is that there are already laws on the books that allow the United States government, for instance, to regulate the ‘Net at will — and yet it has not happened. The problem is that ‘Net denizens are vocal creatures and have

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regularly bombarded Congress with e-mails and even shown up at hearings aimed at muzzling or otherwise retarding communication on the ‘Net. The amount of passion the ‘Net elicits is unheard of in this age of compact, hyper-useful technologies and marks the ‘Net as something different, more powerful, more complex than a mere “communications technology.” “High Alert” has compared the ‘Net to TV, but in truth the ‘Net is far bigger than TV when it comes to its ultimate impact. It is bigger than radio, bigger than telephones and faxes and even cell phones. The only comparable quasi-modern invention might be the Gutenberg press. These are serious technologies invented to present serious information. Movies, radio and television are commonly thought of as entertainment technologies, but no one is expecting an on-line version of Hollywood to spring up anytime soon. Nor will most people, in describing the Internet, mention its entertainment value before other attributes.

Science Fiction? From the late 1930s to the late 1960s, the economically printed paperback in the United States — where the genre was most popular — offered tens of thousands of alternative futures via science fiction. Almost all featured space travel of some sort or, if not that, showcased various kinds of extrasensory powers that humans might acquire and utilize. A reader of historical science fiction might be struck by the absence of any imaginary worlds that feature an Internet-like system. It is merely further proof of the saying that “truth is stranger than fiction” and also, more importantly, proof of the Misesian concept of human action. Someday, probably in the near future, if it has not already been written, an FMNN or LewRockwell.com commentator will submit a post noting how the inscrutable and mysterious human spirit has created a magnificent worldwide information system of which no one, least of all the global bureaucracy, had any inkling. The United Nations may debate the Internet now, but those who make up that august body were certainly not discussing the pros and cons of the Worldwide ‘Net with any urgency 25 years ago, or even 15 years ago when Bill Gates finally noticed it. The U.S. Congress was just as late. Perhaps the ‘Net is destined to “flame out.” But it has many backers, and a number of software-adept private users who will keenly monitor actions aimed at narrowing the flow of information on the ‘Net.

History of the ‘Net “High Alert” argues that government intervention at any level likely makes

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worse whatever problem is being attacked. But it has been pointed out that while users of the ‘Net often celebrate free markets, it took a government, the U.S. government, to develop the Internet to begin with. In fact, government in league with the private sector via Rand Corporation, did provide the funding and organizational efforts that gave birth to the electronic network that billions around the planet use today. In a June 2006 post at Mises.org, Government Did Invent the Internet, But the Market Made It Glorious, economics professor Peter G. Klein explains the history of the Internet from a free-market perspective. Klein does not come out and say so, but one of the reasons that big- government types have probably not made more of the bureaucratic connection between the ‘Net and Uncle Sam than they have is because the Internet was actually created in a fit of paranoia after the USSR’s launch of Sputnik. The Rand Corporation and the U.S. military both saw virtue in a decentralized, computer-supported communications network that could send redundant packets of information electronically — thus rendering the system fairly impervious to military catastrophe. The Internet was originally funded by the U.S. military’s Advanced Research Projects Agency (ARPA), according to Klein. Four universities initially participated by hosting “nodes.” By the early 1970s, that number had grown to nearly 50 and the ‘Net was already proving an efficient transmitter of what we would today call “e-mails,” as well as scientific news and research reports. Klein compares the ‘Net at this point to a “high-speed, federally subsidized, electronic post office.” He explains its evolution this way:

As parts of the ARPANET were declassified, commercial networks began to be connected to it. Any type of computer using a particular communications standard, or “protocol,” was capable of sending and receiving information across the network. The design of these protocols was contracted out to private universities such as Stanford and the University of London, and was financed by a variety of federal agencies. The major thoroughfares or “trunk lines” continued to be financed by the Department of Defense. By the early 1980s, private use of the ARPA’s communications protocol — what is now called “TCP/IP” — far exceeded military use. In 1984 the National Science Foundation assumed the responsibility of building and maintaining the trunk lines or “backbones.” (ARPANET formally expired in 1989; by that time hardly anybody noticed). The NSF’s Office of Advanced Computing financed the internet’s infrastructure from 1984 until 1994, when the backbones were privatized. In short, both the design and implementation of the internet have relied almost exclusively on government dollars. The fact that its

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Reality Byte: Ripe Time for Gutenberg’s Press

The development of printing in fifteenth century Germany succeeded because of a number of complex and inter-related factors. Increased trade and prosperity, the decline of feudal society, the Byzantine influence, the revival of learning in the Renaissance and its resulting spread of literacy each played a part. The conditions were right. The facilities and materials needed to convert the idea into physical form existed. Paper, ink and press were available, as was the technology to create type. A large, broadly based market insured that this new enterprise filled a social need. Thus we see the effects of the spread of literacy on the development of printing were as profound as the reverse and were, in fact, responsible for printing's success. —Terry Donovan, History of the Book at the School of Library and Information

Studies, University of Alberta in Edmonton, Alberta,

December 2002, revised March 2003

designers envisioned a packet-switching network has serious implications for how the internet actually works. For example, packet switching is a great technology for file transfers, email, and web browsing but not so good for real-time applications like video and audio feeds, and, to a lesser extent, server-based applications like webmail, Google Earth, SAP, PeopleSoft, and Google Spreadsheet. Furthermore, without any mechanism for pricing individual packets, the network is overused, like any public good. Every packet is assigned an equal priority. A packet containing a surgeon's diagnosis of an emergency medical procedure has exactly the same chance of getting through as a packet containing part of Coldplay’s latest single or an online gamer's instruction to smite his foe. Because the sender’s marginal cost of each transmission is effectively zero, the network is overused, and often congested. … We must be very careful not to describe the internet as a “private” technology, a spontaneous order, or a shining example of capitalistic ingenuity. It is none of these. Of course, almost all of the internet's current applications — unforeseen by its original designers — have been developed in the private sector.

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Klein lists Xerox and Apple as contributors to the ‘Net’s current usability via a graphical user interface (GUI), and the invention of the “mouse” and Ethernet protocol. He also points out that we do not know what an electronic messaging system might look like had the government not become involved initially. “What kind of global computer network would the market have selected? We can only guess. Maybe it would be more like the commercial online networks such as Comcast or MSN, or the private bulletin boards of the 1980s. Most likely, it would use some kind of pricing schedule, where different charges would be assessed for different types of transmissions.” Klein’s conclusion? “It is only thanks to market participants that the Internet became something other than a typical government program: inefficient, overcapital- ized, and not directed toward socially useful purposes.”

An Unexpected Boon? It is obvious from the above, brief historical synopsis, which differs from others only in its focus on the free market, that the current state of the Internet was not something its original participants expected. Military programs, after all, are developed for the military. Government can lose control if commercial entities intrude too aggressively. In fact, this is exactly what did happen. The Internet has succeeded brilliantly at performing its communications function. Yet it is probably also safe to say that the better it performs, the more upsetting it is to the established order. From the military and power elite’s points of view, one might perhaps compare the Internet to Frankenstein’s monster, birthed with a particular purpose but soon running out of control. The Internet is such an effective purveyor of knowledge because it is a solitary communications medium that invites leisurely research; viewers can choose what they like and examine the information for so long as they wish. The idea that the Internet is only around because the government made it is debunked, above, in Klein’s article. Certainly, once the technology was available, the private sector would have figured out a way to build something along the lines of the ‘Net. Quite likely it would have been a lot more efficient since it would have had price- points built in to give market feedback as to what were popular features and whether they were cost effective. In any event, a quick glance at Google shows that radio, TV, even computers, were either invented or given great boosts by 20th century Western governments, usually the American government and the military. Given the size and breadth of government, it is probably impossible to conceive today that any significant communications medium past a certain point would not come to the attention of those in the military who would then want a hand in bringing the latest cutting edge technology to fruition. As Klein points out, the test of the usefulness of a technology is

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not where it gets its start but whether the private market eventually finds it useful and commercially viable. In the case of the Internet, the market’s answer was a resounding “yes, yes, yes.” The ‘Net’s functionality grew quickly in the 1970s and 1980s and virtually exploded in the 1990s. Today, the functionality and usership continue to grow rapidly — apparently at an accelerating rate. Its penetration among major Western companies, which depend on the ‘Net for some level of business success or branding, must be near 100% at this point. It is possible, over time, that Western governments, especially the United States, can grant franchises to certain companies that effectively provide “price- fixing” via political patronage, etc. This would certainly introduce greater inefficiencies and wait-times for certain services. But inefficiencies or not, one of the main qualities of the ‘Net, perhaps its most subversive aspect, is the truthful information it provides (to those who seek it). This will not change, at least in the West, unless the Internet is radically reconfigured and controlled to the point that it would probably stop being of great use commercially. And that itself would be a difficult administrative “sell.” For reporters, the Internet has already proven a great boon. It confirms intuition about specific subjects by yielding up various nomenclatures that are trackable. Certain controlling elements of modern money power may be easily followed via foundations, donations, endowments, fellowships and other kinds of money trails. It is in the area of such linkages that the Internet has given rise to some of the most original reporting at sites such as FMNN. In fact, a convergence of machine, resoluteness and vanity has created a kind of perfect stew of reportorial nutrition based on what can be absorbed with patient research. The power elite has created its own problems with supreme confidence, arrogance, actually. Over and over the same names are revealed behind the most obvious regulatory initiatives. One example: Big Oil funds environmental groups that lobby against drilling in the domestic United States thus making more profitable overseas extraction and importing a necessity. Once it sinks in — and eventually it will — that the “environmental” movement has, in large part, been set up and promoted by those in traditional power industry venues to raise prices and barriers to entry of competitors, public anger will drain the movement of its more poisonous and extreme elements, leaving behind perhaps a rational discussion of costs and benefits. Paranoia is likely rising in high places, as the realization that decades of vanity — names appearing on this trust or that charity — have left an obvious web of connected interests. Recently, U.S. Vice President Richard Cheney announced that the

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names of his staff were classified and would not be released to the general public. It was an announcement that caused much amazement as such a decision had never been taken before. Perhaps it was concerns over terrorism and the ability of terrorists to target the nation’s best and brightest serving in Washington, D.C. But just as likely it was, at least in part, the beginning of a calculated campaign to reduce the availability of data to those who wish to research the interlocking backgrounds of the political elite. This effort is likely doomed to failure. History does show clearly that new technologies need to be contained on their own terms. Simply withholding information from a force so powerful as the Internet is a stopgap measure at best. The Internet and its alternative press will probably not be contained this way. One such example of the ‘Net’s ability to out-report mainstream media is, of Reality Byte: Internet Snapshot As of Summer 2006 (numbers continue to grow)

United States • 152 million U.S. Internet users • 80 million blogs (not one blog per person, though) • 77% of Americans are now online, up from 57% back in 2000 • 52% of U.S. women are Web users • 79% of urban U.S. residents were online in a single day • 55% of suburban U.S. Internet users are online several times a day • 30% of U.S. Internet users go online without any specific reasons • 52% of U.S. Internet users (76 million) surf for fun vs. November 2004 @25 million • 38% of U.S. Internet users use a search engine daily

World • 110 million Internet users in China (China is 2nd-largest Internet market after U.S.) • 60 million Chinese blogs est. by year-end 2006 • 14% of world’s population, 694 million Internet users worldwide, age 15+ • 31.3 monthly online hours — worldwide average • 57.5 hours online spent by Israeli ‘Net users most in world per month • 26 hours online by Americans per month • 17 billion devices to connect to the Internet in 2012 • 400 million broadband subscriptions worldwide by 2010

Sources: comScore, Nielsen/NetRatings,Harris Interactive, Baidu.com(China), Pew Internet & American Life

Project

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course, the Dan Rather story. At FMNN, we were “on top of the story,”reporting how alert Internet bloggers skewered Rather when he claimed to have documents exposing President George W. Bush as a malingerer during his career in the National Guard. Rather maintained the documents were real, long after myriad ‘Net bloggers had proven them fairly obvious forgeries. The more Rather “stonewalled” the worse it got — until the obviousness of the fraud became evident to all. Eventually, Rather issued an on-air apology and not much later announced his “retirement,” from his evening news show. The Internet, with its built-in cast of millions of citizen reporters has no built-in censor; thus, fewer and fewer Rathers will be able to get away with wholesale falsifications. If a story is important within the cultural context of the time, it will be “covered” via Internet radio, TV and, of course in various posts, blogs and e-mail alerts. The pressure builds and builds as this process takes place, until the mainstream press, too, must provide an interpretation, or look as if it is actively hiding something. So it was with the Rather story, as one of the world’s most important and polarizing media stars was gradually pushed off stage, scoffing at first and even bellicose, then pathetic and finally, momentarily, resigned to the unfairness of it all.

9/11 Questions … Another example of the result of media pressure, and the sudden result it can yield, was provided by a March ’06 New York Magazine article. As might have been expected, the coverage came of the 9/11 attacks from the point of view of “conspiracy theory.” However, it mentioned the major role the Internet played and appeared, interestingly enough, several months after a 9/11 article in the Village Voice dealing, even more reluctantly, with the same content. The New York Magazine article was afforded major play; it was, in fact, a lengthy feature teased on the cover.

Google “9/11 conspiracy” and the bytes bury you. The first great conspiracy theory of the Internet Age—imagine JFK assassinationology with the Web!—9/11 Truth is a fast-moving meme. The thicket of “truth” sites is myriad. … It can be argued that a whole new kind of politics is being waged in the 9/11 Truth assault. … This is not a movement that takes its Nagra tape recorders to document Dealey Plaza acoustics to ascertain which bullet came from what angle. When 9/11 Truth “researchers”cite “the physical evidence,”they usually mean the referred reality of photographs or videos posted on the ‘Net. Paul Thompson, whose 9/11 timeline has become the undisputed gold standard of Truth research, does all his work on the ‘Net. ‘I don’t have to be any particular place to do this,’ says Thompson, who for a while moved to New Zealand so it would be easier for him to concentrate.

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Taken in its totality, the article is not one that might have been printed were it not for the pressures of the Internet. We are not speaking here of a quarter-century re- examination, or even a decade’s retrospective. The grief of the victims’ families is still raw. It is as if Life Magazine devoted much of an issue, only a few years after Kennedy’s death, to detailing the ways that many bright, verbal, studious individuals had come to conclusions vastly different than those of the Warren Commission.

Reformation Repeated? Combine the information on the 'Net with a way of gaining access to it, such as the one provided by Google or Yahoo, and you have a communication technology of incredible power. It is one that makes the pre-Internet information and article databases of a decade or two ago (to which it costs easily $10,000-$100,000 to subscribe per annum) look laughingly primitive. Right now history’s “great conversation” can be read and heard and seen on the Internet — taking place in your own home. Visit LeMetropoleCafe.com or any of the other great sites out there that are helping people to see just what has been happening, and you’ll find many of the same perspectives as those represented in this book. The battles mentioned above are really variations on a theme. In one of his Uncle Eric books entitled, “Ancient Rome, How It Affects You Today,” FMNN commentator Richard Maybury explains how so-called Roman law is really the use of state power to enforce whatever regulations the ruling elite decides is necessary. At its height, the Roman Empire’s judicial systems had thousands of laws regulating all parts of citizens’ life and work. Yet before the Roman civilization was an empire, it was a republic observing common law that evolved over the millennia from social and cultural interactions. Rome was ruined by the governance that had once made it great. Its coin was debauched, its taxes were onerous and commerce was rendered impossible by legalized fraud. Eventually, Roman citizens were not willing to support their empire. The armies that protected Roman borders gradually ceased to be paid and the various tribes looking to exploit Roman weakness poured across the borders and began a 200-year-long spree of looting, raping and destruction of anything Roman. So total was the devastation that even today little is left of the empire’s enormous, mechanized civilization or the many magnificent buildings spread across its densely populated urban areas. There are obvious parallels between what is going on in the West today and what took place in Rome. But these parallels have been made for a number of years. What has changed — brought them so overwhelmingly to the public’s attention — is

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Reality Byte: Some of the Alternative ‘Net Press

American Conservative Kitco Ananova Le Metropole Cafe Anti-State.com Lew Rockwell Antiwar.com Liberty For All Asia Times Mises Institute Bruges Group Newsmax Build Freedom Plug Nickel Times Capitol Hill Blue Prison Planet CounterPunch Propaganda Matrix Democratic Underground Rational Review Drudge Report Reason Magazine eLibertarian Rense Financial Sense Online Straits Times Free Market News Network (FMNN) Strike The Root Freedom News Daily The Independent Institute Free Republic The Last Ditch Freedom's Phoenix The Memory Hole Future of Freedom Foundation Truthout Gold-Eagle Truth About War Huffington Post VDARE

Information Clearing House What Really Happened

Jewish World Review World Net Daily increasingly functional and convenient technology. Not only is the Internet adding to viewers’ knowledge and regularly changing opinions, it is making inroads against mainstream media that are increasingly being acknowledged by the media itself. In a wide-ranging special report in April 2006, the Economist magazine caught up to the rest of us by comparing the Internet to the Gutenberg press in terms of its impact. The survey included a number of other powerful descriptions of the Internet’s impact. “The obvious benefit of this media revolution will be … a ‘Cambrian explosion’ of creativity: a flowering of expressive diversity on the scale of the eponymous proliferation of biological species 53 million years ago. We are entering an age of cultural richness and abundant choice that we’ve never seen before in history.”

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The magazine all-but-declared the newspaper dead (by 2040) and somewhat surprisingly found room to quote a media mogul its topmost authorities usually pretend to despise — Rupert Murdoch, chairman of News Corporation. Murdoch, as the Economist pointed out, told the American Society of Newspaper Editors last year that “as an [newspaper] industry, many of us have been remarkably, unaccountably, complacent. … [The young] don’t want to rely on a god-like figure from above to tell them what’s important. And to carry the religion analogy a bit further, they certainly don’t want news presented as gospel.” Not much later, Murdoch went on a $3 billion buying spree, purchasing MySpace.com among other Internet sites.

Scarcity Versus Plethora — What the Economist Missed FMNN commentators, including myself, have been writing on the similarities between the Gutenberg press and the Internet for years now. Thus, it was somewhat surprising that so much of the Economist survey dealt with blogs and participative media. Most media moguls are after news delivery systems — radio, TV, newsprint. It’s news that delivers credibility and power. Many come to FMNN for what they consider to be a “truthful” or honest take on what’s going on — one that is not filtered through the mainstream media. Actually, Murdoch is wrong. They don’t want to participate. They want information they can trust — and in turn they trust sources such as FMNN more than mainstream news or information channels. Only a decade ago, The New York Times set the standard for interpreting and reporting news, and the nation’s TV stations, radio networks and even other newspapers and weekly magazines fell in line. Today, hardly a trace of this sort of homogeneity exists in the United States, for many of the industry’s younger reporters have gone “on-line” and the Internet is increasingly filled with those who were formerly part of the mainstream news media but now have little or no contact with it. It is probably safe to say that these writers acknowledge no allegiance to the Times (why should they?) and have no intention of letting it or any other media company dictate what is and isn’t allowable coverage.

Information Plenty The 20th-century mainstream media was created on a model of information scarcity. While it seems odd today, given the amount and variety of news dissemination channels in the 20th century, the actual news content available to the average consumer was fairly limited, even 10 years ago. That’s not the case anymore, and it is the reason that mainstream media is having trouble keeping up. Mainstream players simply aren’t equipped to cover news the way the Internet covers it.

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The idea of “media plethora”is not just a theoretical point. With little in the way of regulation or self-censorship to consider, Internet reporters and bloggers have contributed to the increasing difficulties that those Western institutions, controlled by the power elite, seem to be having with “business as usual.” • United Nations: an ongoing oil-for-food scandal. • European Union: a long-awaited constitution fails to pass. • FEMA: exposed as incompetent in confronting the New Orleans hurricane tragedy. • IRS: loses closely-watched tax-cases, may have declined to prosecute others. • Central American Free-Trade Agreement: passes in Congress by the narrowest of margins. • DOHA international trade talks: foundering as of this writing.

The model of information scarcity is dead, but it still permeates almost every part of the mainstream media and colors every decision including the way news and information is presented. In order to create this scarcity, the biggest media giants have had to make their peace with a variety of regulatory authorities setting limits on coverage. Murdoch’s empire cost billions of dollars to build. FMNN, which now reaches millions of viewers a year, was up and running for an outlay that Murdoch would consider petty cash. Yet Murdoch has no serious news presence on the Web — or not one that builds on his mainstream information business. He has transplanted what he has, with difficulty, but he has not been able to build anything new. The space that is growing fastest on the ‘Net, the space that Murdoch would fill if he could — but he cannot — is the one that FMNN (and others similar to FMNN) has entered and begun to dominate — the “free-market” space. This offers a profound alternative to mainstream media. As the Internet’s unique characteristics are continually expanded and deepened, the differences between the ‘Net’s capabilities and that of mainstream media will become more pronounced.

Storm Warning Competition for control of the Internet intensifies. From a competition standpoint, the Internet is winning the battle for the eyes, ears and minds of viewers. Newspapers recently reported an aggregate 3% drop in circulation for the trailing six months. With no way of reversing the lagging readership, newspapers are bound to lose a good portion of their regular advertising and an even larger portion of their classified advertising to Internet sites. Once that happens, the collapse of the once- great newspaper industry is all but assured and the collapse is sure to affect the

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broader stock market as well. Modern money power has already experienced one unexpected information revolution which seemingly destroyed its grip on Europe. Imagine the discomfort of the power elite as its members eye the Internet. What will be tried? What hasn’t been, already — with mostly limited success. The Internet is damned as a hotbed of child pornography, of financial terrorism, of frauds and scams that can hardly be believed. But just as with the Gutenberg press, people recognize a good thing and are not about to be easily swayed. The Internet — their Internet — is not a thing of terrorism or evil. This is at the heart of the power elite’s dysfunction. It is a dysfunction just as powerful as the one that short-circuited the Roman Catholic Church when it confronted Gutenberg’s press and briefly demanded to license every book printed on the new technology. The technology has outstripped the resources of the power elite’s control, and it may take a good number of years to develop a countervailing technology and strategy. The ‘Net marks a profound boundary between what may well become known as the “Age of Promotion”and what comes next. Once the mechanism is “illuminated,” it will be as difficult to continue it as coin-shaving or “sneakily”mixing base metals with precious ones prior to releasing a coin. Many a battle will occur between now and then. There are those among the global power elite who are no doubt convinced of their ability to rule and believe their own justifications. They will crank up their printing presses, flood the world with paper money and drown out dissent on the airwaves with paid media hacks. But they will not be able to snuff out the Internet any more than the Catholic Church could snuff out the widening river of printed Bibles undermining the foundations of the Roman Catholic Church’s credibility — page by page and word by word until Luther nailed his thesis to the door and the Reformation began.

Economic Action Alert Watch out for a media-induced collapse of the stock market— and for an increased level of Internet-oriented investment opportunities. ‘Net-based news networks possessing a strategy designed to leverage large and growing niche markets may offer exceptional investment potential. Ironically, any radical transformations of the ‘Net’s ability to freely transmit truthful information among users will be noted on the Internet itself, probably long before reports appear elsewhere. Realize, if you are reading this book and taking advantage of the opportunities offered by the ‘Net, that you must take personal responsibility for what it has to offer. Thomas Jefferson spoke of the price of liberty being “eternal vigilance.” This is no less true when it comes to monitoring the freedom

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Elite Retreat …

Rupert Murdoch has forecast a gloomy future for newspapers with the growth of the Internet, saying he doesn’t know “anybody under the age of 30 who has ever looked at a classified ad.” The owner of the Sun, Times, Sunday Times and the News of the World, who once described newspaper classified advertising revenue as providing “rivers of gold,” now says: “Sometimes rivers dry up. … Certainly I don’t know anybody under 30 who has ever looked at a classified advertisement in a newspaper. With broadband they do more and more transactions online.” But Mr Murdoch denies he has been forced into “panic buying” internet companies because of falling ad revenues. At a conference last month, the WPP group chief executive, Sir Martin Sorrell, accused Mr Murdoch of buying web operations “willy nilly.” —Media.Guardian.co.uk, November, 2005

of electronic communication. It is not enough to hypothesize about the ‘Net. If you are speaking to these topics, or reading or writing about them, then you are certainly able to move beyond the merely speculative. Build alliances with others who think as you do. Take advantage of the great resources the ‘Net offers. Agitate when necessary, but do not confuse sincere privatization efforts with government-initiated legal protections. The former — privatization of the Internet — is to be devoutly wished for. Legitimate privatization (of the parts of the ‘Net that are currently run with public money and administered by third-party “stakeholders”) will rationalize the ‘Net’s pricing mechanism and provide markets via price points for innovative minds. It cannot be denied that much is wrong with the ‘Net despite all of its successes. Those who look toward government to protect the ‘Net as it is, and to enforce the status quo, are ultimately doing themselves and the alternative electronic ‘Net community a disservice. The ‘Net is a dynamic communications super-system that is constantly changing, and every effort should be made to enhance electronic property rights on and around it. Help to ensure the ‘Net’s immunity from power-elite initiated political agendas and the ruination that can result from biased legislation. Remember that if government has or gains the power to pass substantive laws aimed at “protecting” the ‘Net, then government and those behind government are in the position to pass other, less favorable laws.

< 182 > H IGH A LERT 10 How the Internet is adding to the world’s free-market thinkers. COUNTERCURRENTS & TWO PERCENTERS

“In reporting on President Bush’s announcement that he would suspend fuel deposits into the Strategic Petroleum Reserve in an effort to reduce rising gasoline prices, numerous news outlets failed to note that Bush had previously criticized both the Clinton administration and Senator John Kerry (D-MA) for proposing to use the reserve to lower prices.” — April 2006, MediaMatters.org, News Outlets Ignored Bush Flip-Flop

High Alert Two percenters, according to psychologist Abraham Maslow, are capable of fully entering the adult world through “self actualization” — thus giving themselves a chance to live up to their potential. The Internet is aiding in the creation of additional two percenters every day — some of whom are what “High Alert” refers to as “free-market thinkers.” These individuals, while as aware of the way the world really works as other two percenters, may have little acceptance of the transformative power of government initiatives and a surprising sophistication when it comes to how market forces operate. This chapter also brings together actual details about free-market thinking with a brief presentation of the history of free-market economics including the most important laws, marginal utility and Say’s law. You will also find a presentation of the business cycle and what are the best investments within a given part of the cycle. I suggest that the best combination of investment strategies consists of business- cycle asset allocation, combined with a sense of how modern money power readies its assets for investing. Also, the places or regions that have been identified as targets

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for potentially massive financial promotions. Two percenters — free-market thinkers — will use portions of these strategies to determine for themselves how to best protect and expand their portfolios. While “High Alert suggests that only “two percent” of the population is inherently capable of absorbing the full spectrum of power elite activities — and then acting on that information, this number is offered not with a presumption of superiority but with concern, even dismay. It is to be hoped that books like “High Alert” — and many to come as the Internet stimulates a flood of additional information — will help raise 2% to three, four, five or even more. Not only will additional people be putting themselves into a better position financially, but as the percentage rises, the ease with which global economic manipulations are effected will gradually diminish. Real change takes place as numbers grow.

Changing Definitions What makes a two percenter? Maslow — the American psychologist who built a career on the insight that people had certain needs to satisfy, usually in a certain order — believed that such individuals were not common. His “hierarchy of needs” was simple but not many could reach the top. Maslow spent his entire career refining his ideas and creating further rhetorical flourishes. But the basic insight remains: If you are chasing sexual experiences or popularity past a certain age, you are probably not going to be able to take your mature intelligence and life experience and apply it as effectively as someone who has resolved these life issues earlier. Maslow never believed it was easy to achieve one’s full potential (hence the term “two percenters”), because certain needs must be satisfied in a particular order or the individual will remain “stuck,” unable to proceed. While he came up with several different models, his most popular “Hierarchy of Needs” was published in Motivation and Personality in 1954.

1) Physiological: Need of life-sustaining items — food, water, shelter, etc. 2) Safety: Need of stability and consistency. 3) Love and belongingness: Need of family, friends, stable workplace. 4) Self-esteem: Need of personal and professional recognition. 5) Self-actualization: Need to realize one’s full potential.

For Maslow, people such as Albert Einstein were two percenters, because they had the ability to tap internal resources that led to remarkable accomplishments. But Einstein was also mean to women (especially his wives), selfish, disorganized and cruel. As with many two percenters of the mid-20th century,

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Conspirati Socialism is the political system the Black Order uses to enslave the people on Earth. The red banner is the private symbol of their biggest sponsors — the Rothschild’s — and is actually their family-banner. You can see the red banner swaying from the top of their big mansion. This family has since the 1700s worked on bringing about socialism. … Few people know that many of the European Banks were founded by the Rothschild's and owned by them. Central banks is a basic thesis for … socialism. —IlluminatiNews.com

Einstein had little to say about the sociopolitical and economic structure of the West and the United States in particular, though he did abhor Germany under Hitler — and helped America, according to his lights, with the creation of the atomic bomb. What becomes obvious in studying the life of someone such as Einstein is that being a two percenter as Maslow envisioned it does not necessarily give individuals deep knowledge in areas beyond their specific disciplines. Einstein’s gaze was turned outward toward the physical universe on a microcosmic scale. But he does not seem to understand the motivating factors behind the great and sorrowful events that were taking place right under his nose. Others did, however. The great poet and “war criminal” Ezra Pound understood what was going on — a good deal, some would say, as did the young man he mentored, Eustace Mullins (whose monetary histories are explosive, to say the least).

Today’s two percenters, Today’s two percenters, I would like to think, are far more aware of the world around them and how it is changing. I have also referred to this class of the two percenter as the “free-market thinker” — those who are viewing a good deal of original information on the ‘Net and coming to the conclusion that there is no panacea for social issues save letting the private sector work as it ought to. These people see that free-market economic laws of supply and demand will impose themselves anyway, and that attempts to circumvent natural law only end up distorting the marketplace and causing misery, scarcity and other unforeseen consequences. Over the next five or 10 years we may well see and hear from numerous free-market thinkers — educated by information on the ‘Net — who will fulfill Maslow’s “two percenter” criteria as delineated previously, but who will be passionate about sociopolitical and economic change. These charismatic and savvy

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individuals will have insights into society and what is going to happen next that is unlike generations that went before. So much information, so freely available, will produce remarkable individuals who may make real change. This may not, of course, please the power elite. Powerful truths are prone to restatement. We have already re-stated Maslow’s hierarchy from a free-market point of view. But to refine it further, let us consider Ludwig von Mises’s great insight regarding “human action,” as follows, from “Human Action,” Part 1, Chapter IV, A First Analysis of the Category of Action:

The result sought by an action is called its end, goal, or aim. One uses these terms in ordinary speech also to signify intermediate ends, goals, or aims; these are points which acting man wants to attain only because he believes that he will reach his ultimate end, goal, or aim in passing beyond them. Strictly speaking the end, goal, or aim of any action is always the relief from a felt uneasiness. A means is what serves to the attainment of any end, goal, or aim. Means are not in the given universe; in this universe there exist only things. A thing becomes a means when human reason plans to employ it for the attainment of some end and human action really employs it for this purpose. Thinking man sees the serviceableness of things, i.e., their ability to minister to his ends, and acting man makes them means. It is of primary importance to realize that parts of the external world become means only through the operation of the human mind

Two percenters: Those few Free-market thinkers: An whom, according to self emerging subset of two psychologist Abraham H. Actualization percenters informed by the Maslow, are “self-actualized” Internet. They understand and able to make the most Self-esteem the world as it is and take of their unique talents — realistic “human action” thus fulfilling their to ensure their futures abilities to the and their families’ fullest. Love and belongingness futures.

Safety

Physiological needs

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and its offshoot, human action. External objects are as such only phenomena of the physical universe and the subject matter of the natural sciences. It is human meaning and action which transform them into means.

A close acquaintance of Mises, author Ayn Rand, examined similar concepts with a good deal more poetry. For her, certain individuals are the world’s “movers and shakers.” They are courageous “men of action” who may well be brighter and sharper, and more thoroughly committed to their goals. Such individuals do not confuse a “good” life with mere subordination to a political regime or its regulatory demands. They are at ease with their own uniqueness and seek to cultivate it. They have little desire to participate in “the collective.” They see — or try to see — life’s problems as awaiting solutions rather than as insurmountable difficulties. They appreciate simplicity, and do not seek out complexity merely because it is impressive to others. They lead meaningful lives rather than senseless existences. They are driven by truth — or at least their own truths. This is not to say, by the way, that such people are in any way saints. We have already pointed out that Albert Einstein and many others who are likely considered two percenters by anybody’s definition were by all accounts not very nice people. They achieved what they could — a great deal by any yardstick — but they certainly could not be considered free-market thinkers.

Seeing Clearly Free-market thinkers, as mentioned earlier, are a relatively new phenomenon, one that Western public schooling, and the “group think” it fosters had nearly snuffed out late in the 20th century. Education is obviously part of what constitutes the power elite’s “information lever” — and is still an effective way of dumbing down children who go into school eager to learn but are soon discouraged by the factory-like atmosphere, the lack of creativity and a rising tide of peer pressure. Into this environment has come the Internet, and with it the first stirrings of change. On the ‘Net, most anything can be located and children are far more apt to find it — truthful substantiations of history, especially — than most adults. The true impact of the ‘Net has yet to be felt, but it is certainly possible that many of the individuals going forward — characterized herein as two percenters —will be free- market thinkers over time. The “greatest generation” is yet to come.

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Reality Byte: School Scandal — The Functioning, Financial Illiterate

Throughout Europe, Britain and the United States, public schools provide the cultural conditioning that is a prelude to a lifelong acceptance of the monetary and fiscal status quo. These schools produce children with little faculty for critical thinking and few of the tools needed for independent thought. They are no threat to the power elite and, in fact, make good, if uncritical, consumers of whatever promotions are aimed in their direction.

What has become today’s worldwide “public school system” was founded in Germany early in the 1800s. The German “gymnasium” system, in which children are educated in compulsory fashion by grade, was put in place, at least in part, by the German military establishment. It was intended to ensure that village boys would bond with each other, grade by grade. The young men also trained together in the military and fought together as one unit. This generated fiercely loyal fighters.

Contrast this with the American system before the Civil War, especially when children were educated at home or in groups that were not grade-oriented but contained a mix of older and younger children as well as a teacher.

Today, American teachers are unionized, a form of militarization comparable to that of the public schools themselves. They have no real say over the curriculum they teach, which tends to reflect whatever the political establishment wishes to emphasize at the time. Politicians, preoccupied with re-election, have no great desire to throw up an educated population of discerning citizens.

John Dewey was perhaps America’s most influential 20th century educator. He was also to provide a final blow to American education, welding to it socialist practices reflecting a belief that children should be educated to serve the state. Dewey once wrote: “The mere absorbing of facts and truths is so exclusively individual an affair that it tends very naturally to pass into selfishness. There is no obvious social motive for the acquirement of mere learning, there is no clear social gain in success thereat.” (The School and Society, 1899)

Analyze Dewey’s objective — the centralization and diminishment of learning to make the individual more group-oriented and malleable — and you have the mechanism of diffusion writ small. Centralized education is no more or less effective than a centralized sociopoltical and economic system, and its goals are similar as well. And just as centralization fails the state, so it inevitably fails the students.

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Examples of prominent two percenters within an investment context might be Warren Buffet, Bill Gates and George Soros. These three are certainly not free-market thinkers by any stretch. But each of them understands the economy in his own way. Separately, several years ago, they seem to have come to similar conclusions about where economic trends were headed and began to buy silver at a very low cost at the beginning of the decade. Obviously, financially-oriented two percenters such as these three have the capacity to absorb the bottom-line realities of the way the world really works — even if they are making plans to rearrange it, as is George Soros (who seems to believe, despite his free market-oriented education, in a kind of command-and- control economic approach). The Internet is at its best when it promotes ideas that allow individuals to break free of programmatic thinking and gain the confidence and energy necessary to influence events in a dynamic way. Using the Internet, it is not difficult to find material that contradicts what might be characterized as “accepted knowledge.” Schooling and mainstream media reinforce those concepts, but education is not destiny. With the advent of the Internet, an informed world view — one that may or may not confirm previously held perspectives — is easy enough to acquire, though perhaps difficult to internalize. Modern economic history is in large part defined by the clash between free- market proponents and those who deal in state economic mandates. German and Prussian economists favored state involvement in the government and believed in “econometrics” and various kinds of modeling and forecasting. Austrian-oriented free-market economics has no use for forecasting because trends, as they apply to humans, are not predictable. As soon as a trend forms, “human action” will change it. Austrians and free-market economists in general are anti-central banking and anti-fiat money because a central bank necessitates projections of economic activity — and such projections are impossible to make. Former Federal Reserve Chairman Alan Greenspan himself admitted that central bankers have no way of determining how much money to produce or when to offer it. Almost inevitably, central banks print too much money and offer too much credit, leading to the business cycles that cause so much havoc in Western economies and throughout the world. The issue of predictability goes to larger issues of command-and- control and is one of the reasons that this book spends so much time on the visible elite and suggests free-market thinking as a viable alternative. These individuals and groups seek to run the economy as if it were a mechanical device rather than an agglomeration of millions — billions — competing and

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contributing their labor, intelligence, experience and creativity to create the critical mass called “the economy.” There is no way the initiatives, creativity or interaction of inventiveness can be predicted in the long term. The power elite, for instance, was obviously surprised by the rise of the Internet, which even Bill Gates of Microsoft, famously did not realize was a competitive threat until 1996. By imposing a massive burden of regulations, taxes and civilian and military force on “the economy,” modern money power suffocates progress. Who knows how long people would live or how satisfying their lives would be had the current sociopolitical and economic system allowed a free and easy expression of talent and inventiveness in the last few centuries. Instead, the power elite, as delineated in this book, has sought to rule the economy through various visible and invisible mechanisms that most do not entirely understand. Others, who do understand, still do not see, or choose to view, the amount of destruction that is perpetrated by the regulatory, fiscal and monetary policies in place in the West. The balance of power swings back and forth between those who would control societies and those who would let the true genius of the species express itself as broadly and openly as possible. The tragedy is that those who step in the way gain some power and money, and even prestige, but do much damage to lifestyles, life expectancies and quality-of-life in general.

Brief History of Free-Market Economics Economics got its start back in the 1600s with the followers of St. Thomas Aquinas — “The Scholastics” — who built on the ground-breaking observations of Thomas to explain how inflation really works and how economic value accretes. “Free-market” economic theory was codified by Adam Smith who came up with the term “invisible hand” to describe the workings of the “marketplace.” In the opinion of Murray Rothbard, Smith got it wrong however when he referred to the “wealth of nations” in his famous economic treatise of the same title. For Rothbard, it is the wealth of individuals, and nations have nothing to do with it. What are certainly two of the most important laws of economics were developed by Jean Baptiste Say and Carl Menger — along with several other economists not identified with the Austrian school. Say proposed what is now known as “Say’s Law.” This simply states that supply and demand will reach equilibrium if allowed to adjust within a free market, and without interference. But the cleverness of Say’s law lies in the perception that supply can stimulate demand as well as vice-versa.

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The BUSINESS CYCLE simplified free-market economic analysis

Phase One of a business cycle is usually marked by political infighting, increased regulatory burdens, higher taxes and lower interest rates. The central bank “prints money” and stimulates bank lending via easy credit.

CONSIDER FIXED INCOME CONSIDER CERTAIN EQUITY

Phase Four of the Phase Two of the business cycle is the business cycle is “bust phase” marked BUSINESS marked by economic by inflation, slow expansion. Rates are growth or no growth CYCLE comparatively low. and rapid collapse of Those closest to the asset classes that have credit spigot gain risen too rapidly. the most; politicians “Animal spirits” are CYCLES CAN LAST FROM and bankers claim said to be deflated. ONLY A FEW YEARS TO credit for the revival. 20 YEARS OR LONGER

CONSIDER TANGIBLE ASSETS CONSIDER CERTAIN EQUITY

Phase Three is the “boom” of the business cycle — marked by enthusiastic expansion. There may be talk of a “new economy” and investment trends are seemingly enshrined as certainties. Inflation

rises, whether or not the government admits it.

M. Fadiman, MarketShock, 1995

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Carl Menger is at least partially responsible for the concept that has become the dividing line between the static analysis of classical economics and the active analysis of neo-classical economics. The concept, known as marginal utility, states that the individual value of a unit decreases as the amount or volume of units increases. When we have more, what we have more of is worth less. Additionally, the market itself must make the calculation as to the exact worth of our units “at the margin.” Ludwig von Mises, and later his students F.A. Hayek and Murray Rothbard, developed or expanded upon the concepts of human action and the business cycle. The business cycle, as defined in the modern day, is a primarily central bank-driven phenomenon. The central bank prints more money and injects more credit into the economy than is necessary. The volume of money leads to inflation which, in turn, stimulates a “boom.” As the economy overheats, products and services that are an unnecessary outcome of the artificial boom become commonplace, leading to glut and, inevitably, to a collapse. During the boom, the central bank may artificially increase interest rates while also raising the amount of money available via credit and its printing plants. This gradually eases the economy (best case) into a “soft landing” — after which the cycle begins again. In a free market, the business cycle would be radically reduced because gold and silver, dug out of the ground, would respond to market forces. Too much gold or silver in the economy and prices would go down, closing mines. Too little gold and silver and the prices would go up, stimulating mining production. If the government and the power elite would agree to allow gold and silver coins to circulate next to fiat money of all kinds, the world would soon be back on the only kind of money standard that truthfully can be called “honest” — the free-market standard of gold and silver.

Storm Warning The West is entering a time of increased stress and change. Be willing to rearrange your basic programming, or at least entertain different perspectives than the ones with which you have been brought up. If you live in America, you will be facing some extremely tough circumstances in my opinion. You will need every mental, emotional and intellectual discipline you possess to make it through. Your loved ones will depend on your ability to see the world as it really is and to act accordingly. They may not be able to do it themselves and may even put impediments in your way. But ultimately, it is up to each individual to show the requisite courage and common sense. This is an absolutely critical juncture.

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Elite Retreat …

“Actually, the score is Ludwig von Mises 357,000 and John Maynard Keynes 326,000 — according to a recent Google search of mentions of both names. This ratio may seem a simplistic measure of influence or import (Michael Jackson garners over 20 million Google mentions currently) but perhaps a decade ago only a handful of Europeans or Americans would even have recognized Mises name, let alone the free-market economic concepts he championed. Now nearly half a million Misesian sites are rocketing around cyberspace. Whatever yet remains of the Western world’s shaky ruling elite — which has generally seemed to prefer a regulatory model to a free-market one — must find the above numbers worrisome. They seem to indicate a fundamental social and intellectual shift of the kind that occurs when technology suddenly offers vastly expanded access to important information. The last time this happened was when Gutenberg invented the moveable type that allowed people to read the Bible for themselves — and to find out that the content varied considerably from the prevailing dogma. Though it took about 100 years, the ramifications of this knowledge effectively ended the high Middle Ages and ushered in the Modern Era. As the Catholic Church crumbled, the Reformation gathered strength, and the royal families of Europe lost first credibility, then divinity. There is no reason to doubt that the Internet may well do to the world’s socio-political structure in 10 or 15 years what it took the Gutenberg Press much longer to accomplish. Technology compresses time.” —FMNN, June 2005

Hopefully, after you read this book, you will take further steps to widen your horizons — intellectually anyway — by reading more about free-market economics and how it interacts with modern sociopolitical issues, and how it and the Internet are causing great challenges for the global power elite. If you understand it, then you will be ready for almost any reconfiguration of society and the economy. You will be neither surprised nor shaken. Together with others who have the same approach, you will begin to muster the forces that will provide the changes necessary to move away from the “century of promotion” into a brighter, more challenging and ultimately more satisfying world.

Economic Action Alert A commitment to honest economic education is part of the process of becoming a free-market thinker. It is difficult to believe that the entire system has been set up not for our benefit but for others’; that we are being lied

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to in order to be controlled. Our life views have been configured by propaganda that we believed was reality. Make a commitment to find out the truth. Two percenters are perhaps focused on becoming the best they can be, but are not necessarily interested in fully understanding the world around them or their place in it. Free-market thinkers want to find out all they can about their environment. They think for themselves and want all necessary and available input to do so. Once they are well on their way to accomplishing this task, they may feel more comfortable about making the lifestyle and investment decisions that are necessary to the health and welfare of themselves and their loved ones. Free-market thinkers use the Internet as a primary source of information — but they do not accept what is on the ‘Net without question. They approach ‘Net research from a skeptical point of view. Free-market thinkers question all that is new or different — and attempt to validate information with other sources. After a while, what is true should become clear. And, eventually, patterns will emerge. To facilitate this familiarity, visit the bibliography at the back of this book. Consider subscribing to free market publications that offer insightful discourse on sociopolitical events and the likely resulting financial trends. Eventually, the analyses and perspectives being absorbed should help generate better financial and even life decisions.

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11How the power elite gets rich by scaring you. POWER ELITE PROMOTIONS

“We have lost control of our economy.” —Former Federal Reserve Chairman Alan Greenspan, Sept. 2004,

High Alert So long as the Internet continues to evolve, the plans of the power elite are in jeopardy. Sooner or later, people may well begin to understand the full scale of the manipulation to which they have been subjected. It took 100 years from the invention of the Gutenberg press to the start of the Reformation. The Internet, as a truly viable, publicly available and useful source of information, has been around for perhaps a decade. The human condition has not changed much in 500 years, but elements have. The great 20th century mechanisms of control are, for the most part, owned or at least supervised by the global power elite rather than by a formal religious entity. Within this context the similarities are striking, however, and mostly concentrated around the United Nations. The various powerful governmental appendages include the so-called Anglosphere and European Union, central and commercial banking, internationalist corporations, managed trade agreements and a variety of secretive organizations that purport to be only talking shops but are likely top decision-making apparatuses. How will people express their loss of faith in this complex structure of sociopolitical and economic control? The same way they did before: They will withdraw their support; they will walk out the door; they will go elsewhere. It will not be so simple, perhaps. There will be a struggle, though whether it will take place on a physical level is not predictable. The proximate cause of the wars in

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Europe after the Reformation were in part stirred up by Venetian manipulations, apparently, as the great Italian city-states of the day sought to pit European powers against each other, the better to control them. Certainly there are ways that the United States can be pitted against other countries in an attempt to force a more globalist outlook despite the informational undermining of the ‘Net. This may even come to pass. But direct or indirect attacks on the ‘Net will no doubt continue as well. There is of course the ongoing effort to link the Internet in the minds of the average citizen with pornography, tax evasion and other activities that the average American might find unsavory. And the Internet is already subject to certain political speech rules, though due to massive blogger protests, these rules have not yet been applied. Other initiatives that may pose a danger to the ‘Net’s current innovation and freedom of speech — as some see it, anyway — include “Internet 2,” which is virtually a worldwide effort to make the Internet even more efficient and serviceable but which in its current incarnation is also intended to identify each user’s PC. However, what looks inevitable now will be reconfigured by “human action.” Thousands, if not millions, of clever minds with access to the ‘Net, or at least parts of it, will continue to seek to reshape it to their liking even as the power elite attempts a different course.

The Administration and Free Speech The Bush administration is becoming more active regarding free-speech issues and the ‘Net. An early 2006, post, Rumsfeld Zeros in on the Internet, identified the beginning of just such a campaign. “Defense Secretary Donald Rumsfeld was warmly greeted at the recent meeting of the Council on Foreign Relations. … Rumsfeld’s speech alerted his audience to the threats facing America in the new century. … The growing number of media outlets in many parts of the world … too often serve to inflame and distort, rather than explain and inform. And while Al Qaida and extremist movements have utilized this forum for many years, and have successfully poisoned the Muslim public’s view of the West, we have barely even begun to compete in reaching their audiences. … Proactive news? In other words, propaganda.” In February 2006, Britain’s Sunday Herald reported on a document Rumsfeld had commissioned and approved entitled, The Information Operations Road Map. The Herald summarized the report as containing three major points. First, the Pentagon would fight to dominate the ‘Net and prevent cyber attacks. Second, the Pentagon would embark on operations that would flood electronic and print media with information favorable to the objectives the Pentagon wished to achieve. Finally, and most compre- hensively, the Pentagon intended to try to “take control” of the earth’s electromagnetic spectrum, thus giving the Pentagon the ability to decide what countries and users could gain access to various communications devices.

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Conspirati The warning signs for the crackdown on the web have been with us for over a decade. … Censorship is accomplished by geolocation filtering: the restriction or modifying of web content based on the geographical region of the user. In addition to countries, such filtering can now be implemented for states, cities, and even individual IP addresses. … — GlobalResearch.ca

This statement of “total war for total communications dominance” is not actually a new objective. The post mentioned above also tells us that, “This revolution in information warfare is merely an extension of the politics of the ‘neoconservative’ Bush White House. Even before getting into power, key players in Team Bush were planning total military and political domination of the globe. In September 2000, the now notorious document, Rebuilding America’s Defences — written by the Project for the New American Century (PNAC) … said that America needed a ‘blueprint for maintaining U.S. global pre-eminence, precluding the rise of a great power-rival, and shaping the international security order in line with American principles and interests.’ … Rebuilding America’s Defences also spoke of taking control of the Internet. A heavily censored version of the document was released under Freedom of Information legislation to the National Security Archive at George Washington University in the U.S.” A 2004 post at Kentroversy.com presented no less than four separate points of peril — or as the writer ( Kent Daniel Bentkowski) puts it, “self sanitization.” (1) United Nations or U.S. Control of Domain Name Servers. He notes that with the impending release of Internet 2, the “sanitization” of the medium is upon us, and cites an article from the London Guardian Web site reporting that the Bush administration was taking control of the 13 root servers, which control the domain- name servers, thereby regulating Internet traffic. (2) The Internet will be used as part of a terror attack against the United States. Bentkowski points to recent (and not so recent) TV show plots (Fox’s “24” among others), as blueprints for “conditioning the public to expect both terrorist attacks and anti-constitutional infringements of liberty.” (3) Passage of hate-crime and hate-speech laws. It is important to note that the real reason why hate-crime laws are passed is not to protect anyone’s religious beliefs, ethnic heritage or racial identity. “Most people cannot see these laws for what they really are — which is to stifle debate or silence a large group of people on a particular subject that has been deemed ‘off limits’ by the globalists.”

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(4) Taxation of Bandwidth and E-Mail. Bentkowski predicts the imposition of so many taxes on Internet usage that it will become financially difficult for anyone to reach a large audience. “The taxation of either or both bandwidth and e- mail will affect the underlying operation of the Internet.” Interestingly, Bentkowski did not foresee other justifications for attacks on the Internet that are beginning to come from the U.S. Congress — bills calling for the abolition of ‘Net gambling in the United States and also for outright banning or “blocking” of numerous sites from libraries or schools. The Church’s response in the Middle Ages to the mass production of books was first to burn them and then to attempt to license them. Neither ploy worked and books Alternative Reality Byte: ‘the New Reformation’

Jaques Barzun, author of the marvelous history of modernity From Dawn to Decadence (1500 - present), makes the point that the Catholic Church as a pan- European political force was done in by the Protestant Reformation, itself fueled by the printing press. Once the Church lost the ability to control the direct perception of scripture, thanks to the printing of (relatively) cheap bibles in languages other than Latin, their loss of political hegemony followed.

This is what we are seeing now relative to the military’s control of information. A year or so ago, someone in the Department of Defense told me that the thing that would most affect the prosecution of the war in Iraq would be images of DAB’s — Dead American Bodies. The unplanned spread of photos of coffins, and now of torture victims, means that control of this part of the war is outside the military’s hands.

The spread of images from Iraq, both relatively plain ones like most of what’s on the YAFRO blogs to the horrifying images of torture and abuse from the Abu Ghraib prison are all part of the removal of bottlenecks that will change the political structure in ways we can’t predict.

And it isn’t just military affairs, its politics and business and everything else, from attempts to coordinate evidence of Apple’s manufacturing errors

(previously handled case-by-case, but now becoming a kind of grass-roots class

action protest, to Apple’s horror) to the distributed amicus brief on the SCO case

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continued to be printed. The Internet will likely continue to produce information inimical to money power.

Promotions We have discussed some of the ways ‘Net freedom of speech can be threatened. Now let us examine underlying reasons why Rumsfeld and others would all but declare war on a network of interlocking computers, cables and satellite dishes. The reasons, of course, are always the same and have to do with money. The Internet threatens the ability of modern money power to control the very specific messages it wishes to broadcast and, thus, the integrity of the dominant social themes.

conducted by the Linux community to the recent right of Americans to get their medical records on request and within 30 days to the publication of spoilers for popular TV shows.

I remember hearing about the security efforts being put into place around delivery of Ken Starr’s Whitewater (Lewinsky) report as it was delivered, and thought “Why are they bothering? It will be on the web in 48 hours…” I was wrong, of course — it was on the web the next day. Now I hear that military officials are debating whether to release other photos with evidence of American torture of Iraqis, and I wonder again why they are bothering. If the images exist, they will be released. It’s a fantasy to assume that they can re- assert control of the spread of images by fiat.

A parallel and a counter-parallel jump to mind. The parallel is Barzun’s point that during the initial furor of the Protestant Reformation, neither the Church nor Luther and his peers wanted a schism — on the contrary, all of them constantly maintained that what they wanted was to preserve the Church. It’s just that the Lutherans wanted to preserve the Church while reforming the relationship between the institution and the laity, while the Church itself was willing to talk about all sorts of reforms except institutional privilege.

—Posted by Clay Shirky

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We have reviewed, for instance, the structure of the global power elite and also the history of banking and how the fraud that is central banking works. We have seen the ways that the global power elite has manipulated internationalist institutions to serve a mightier master plan. But what has not been presented thus far is a full discussion of the profit motive and how the above mentioned mechanisms can be tied together with corporate solutions that allow the wealthiest among us to “cash out,” again and again, depending on the success of what is being promoted. Central banks print money and create credit, but only so much profit can be taken even from the most active central bank. The problem then becomes (if you are interested in really big money) how to remove money from the economy once it has been generated and circulated. The easiest way is to remove it through publicly traded companies profiting from investments generated via well-placed promotions. Promotions exist at every level of the securities industry. When London or, more likely, Wall Street launches even the biggest-name IPO, it is engaging in a promotion. And promotions have certain signatures that are fairly ubiquitous. But a promotion is only as good as the “megaphone” on which it is broadcast. If no one hears the story, then no one is going to be effectively promoted. Now imagine controlling a megaphone as big as the world. Imagine if you had created much of the global infrastructure, including an increasingly seamless stock exchange on which vast amounts of company stock could trade. Consider that, if there was a particular message you wanted to send to promote a particular company or cause, you could count on hundreds, thousands, of the world’s most important and esteemed statesmen and bureaucrats to voice it for you. Is this happening? The United Nations, the World Bank, the World Trade Organization, the World Health Organization, even at the top levels of the EU bureaucracy — all of these entities were essentially implemented by a few wealthy individuals. It can easily be argued by anyone with professional experience in the marketplace that they were built, first and foremost as a kind of worldwide, promotional megaphone. A megaphone that has been operated with increased efficiency and power for the past 50 years. Once the pattern is perceived, it may become more obvious to those willing to view it with open minds. After all, the institutions in question hardly ever function properly, or do what they were supposed to do. Corruption is endemic; charters are rarely if ever fulfilled. Also, there is risk in setting up such a giant effort. Free-market thinkers know that risk is commensurate with reward. Thus, such a vast undertaking must have had the potential of yielding fabulous wealth — unless it was truly a humanitarian effort. (If that were the case, why is it being run so badly?) I am not old enough to remember the crises and panics that swept the world in

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the 1950s, though I suppose they had to do with the U.S./U.S.S.R. cold war. But I am certainly cognizant of the scientifically controversial messages being promoted today, many of which I have already mentioned — bird flu, peak oil and global warming, just to name a few. How many of today’s oil companies are profitably able to produce oil at $40 to $45 a barrel? The answer is, all of them. So why at the time of this writing is oil at $70 to $75 a barrel? The answer is that a well-orchestrated promotion has created a perceived reality among the 98 percenters that we are “running dry.” The profits resulting from this fear-inspired campaign are immense. And guess who receives the profits — a handful of stockholders in those oil companies. And who is paying at the pump? You are. This is a promotional “wealth-transfer” at its most efficient, from the middle class and the poor to the super-rich. Unfortunately, people will spend more time planning a trip than they will educating themselves about their core beliefs. They internalize these promotions and actively participate in the resultant wealth transfers. They hear it on the “news”and they think they are informed. We’re virtually drowning in oil, natural gas and coal, but still people are spending thousands of extra dollars to buy small cars with big batteries because they believe in the myth of “peak oil” and energy scarcity. And then there is “bird flu.” People are scared stiff of bird flu even though it’s killed maybe 100 people in two years. How about Islamofascism? Perhaps the supposed Muslim hatred of the West’s purported democratic freedoms is not the case at all. Maybe those responsible for hollowing out America’s productive capacity and basically stealing the wealth of its citizens decided it would be better to create a historical illusion that could effectively distract them from the crimes that had been committed. (They’ve already moved onto the next country “ripe for stripping” - China - in any case.)

Incomprehensible Level The dominant social themes we are discussing function at a level that is incomprehensible to most people. The breadth, power and intensity of these promotions are enormous and can last for years, for decades — regionally, nationally, throughout the Americas, Europe, throughout the West, throughout the world. They take on the color of what Carl Jung called archetypes. They become so ingrained in the public consciousness that their viability is not questioned. Their existence is attested to by bibliographies of books and articles, by doctoral dissertations, by endless media coverage, by movies and documentaries. These dominant social themes are introduced much as a symphony introduces musical variations during performance. For a while one theme will be emphasized, and then another and another. The market seems to dictate the themes

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Alternative Reality byte: Dominant Themes?

A 2006 article posted at FMNN featured Mr. “Paranoid American.” Mr. PA is a man who is well educated, or at least well read, thanks to the Internet and other sources. However, he sees current events through a prism of rising paranoia. The following points have been adjusted to further emphasize what Mr. PA might consider to be promotional elements.

9/11 and extant or incipient wars: The takedown of the World Trade Towers was the work of American and Israeli military and secret service elements. It was designed to generate a shooting war in the Middle East to consolidate Israeli power and to generate globalist solutions to Middle Eastern violence. It was also designed to allow the generation of laws and regulations further depriving U.S. citizens of civil rights. A military conflict could help in intimidating the U.S. media — as large U.S.-based media entities could be accused of a lack of patriotism if they questioned either the events of 9/11 or the rationale behind it. Also the “war against terrorism” would soon become a self-fulfilling prophecy, spawning the kind of third-world hate that might soon evolve into a real war complete with real terrorists. Promotion: Of the myth of 9/11 terrorists to justify a war that will generate profits for the military-industrial complex, distract U.S. citizens from the increasing failures of their economy, remove or diminish U.S. civil rights and intimidate American media. Facts for Paranoids: At least some of the 9/11 terrorists identified by U.S. intelligence personnel were later shown to be alive in Europe and elsewhere outside America — and remain alive today. The official explanation: misidentification. CooperativeResearch.org

Bird flu: So-called bird flu has apparently caused the death of less than 100 people worldwide, but it has many convinced the next major health pandemic could strike at any time. Bird flu has a predecessor, “swine flu” in the 1970s that was supposed to be just as deadly as bird flu will be someday — perhaps. If bird flu mutates into a deadly flu, it may fulfill doomsday prophecies, but for now it’s a bird-killer, not a human-killer. Promotion: Of the myth of bird flu to further militarize health care, encourage questionable vaccinations, draw up plans for a “state of emergency” in Western countries, make quarantining entire populations acceptable and enrich Big Pharma and those who hold shares thereof. Facts for Paranoids: U.S. Defense Secretary Donald Rumsfeld is the former chairman (and still a major stockholder) of Gilead Corp., a previous manufacturer of Tamiflu, which is the

prescription remedy that was once touted as most likely to stop or mitigate the effects of

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the avian flu virus, should it mutate into a human-susceptible form. The U.S. administration purchased up to 20 million or more doses at a price of $100 per dose for $2 billion, though there is no evidence that Tamiflu aids in recovery from bird flu — though bird flu itself is not, anyway, hurtful to humans except in rare cases. Tamiflu Gilead Chair Was ... Rummy, October 2005, FMNN

Peak oil: An artificial scarcity justify rising oil prices benefitting the oilmen in the current administration and others involved with the energy industry in manifold forms (biodiesel, solar or wind power, etc.) at a top level. Promotion: Of the energy scarcity myth to generate new kinds of power companies that Wall Street, Big Oil and Detroit find controllable and profitable. Facts for Paranoids: “One of Bush's closest relationships is with Houston-based oil-banker Matthew Simmons who may also have an office in the White House. Simmons & Company International (SCI) works in numerous areas of oil and gas, but its initial success was in investment banking in the 1970s and 1980s, and Simmons, a well-respected member of the internationalist Council on Foreign Relations has been a tireless promoter of the "peak oil" theory - that the world is running out of energy.” Iraq War to Destabilize Oil? FMNN

Internationalist do-gooding: America’s participation in the United Nations and its funding of other internationalist organizations, as well as its negotiated “free trade” treaties, are basically illegal — unconstitutional. This system has been designed to weaken the West through further redistributionist policies in anticipation of a continued push toward global governance. Promotion: Of the myth of viable international communitarianism in order to create a massive promotional vehicle speaking with the voice of international authority. Additional goal: Creation of a one-world government in waiting. Facts for Paranoids: High on the U.N.’s agenda is “sustainable development” — “requiring government to regulate virtually all human activity in order to achieve "equitable" and "sustainable" use of the planet's resources.” Globalist Assault, GoFigure.com

European Union: Yet another attempt at constructing a building block for a “one-world order” that actually diminishes the authority of nation states and the control the citizenry have over them. Promotion: Of the myth that a massive, regional bureaucracy can vanquish war from Europe, that a hyper-regulatory, pseudo-democracy can expand wealth while providing citizens with endless social benefits. Facts for Paranoids: “The so-called [EU] Parliament just rubber-stamps legislation made by the unelected EU Council and Commission. This is simply not acceptable and that is why we work with other groups across the whole of Europe who are also concerned about their own democracy.” NeilHerron.co.uk

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themselves, with the power elite identifying the strongest and then attempting to exploit them as powerfully as possible for as long as possible. Usually motivated by fear (global warming, etc.) these themes are eventually addressed by “solutions”controlled by the same elite that tended to the initial theme. The manipulation of these dominant social themes is likely the reason the stock market has grown exponentially over time — from auction-style stock and bond trading in France to the current electronic 24-hour-a-day equity trading around the world. It is the reason so much ink is spilled on how to invest in equities and why every newspaper and investment radio and TV program freely gives out equity information almost round-the-clock. It is why the regulatory structure, captured as a matter of fact by the power elite, is so anxious to set up a single seamless global stock-trading market. A market, in fact, is essential to making dominant social themes pay off. Without a stock market — one as large and powerful as the promotions themselves — and a good deal of central-bank-supplied liquidity, companies servicing the dominant social themes of the day cannot be created, expanded and eventually brought public. The United Nations, World Bank, Bank for International Settlements and a host of trade organizations and international judicial entities form a good part of the echo chambers that provide the triumphal resonance necessary for a successful promotion on an international scale. Through them, the appropriate concerns are aired: Kofi Annan makes the right noises, the ambassadors voice concerns, the diplomats and the leaders of Conspirati Our countries have been officially bankrupt since the 1930s and you are paying taxes, going to court, and applying for licenses on behalf of a fictitious entity that does not exist, except in theory. Oh yes, and the government is not a government, it is a private corporation. I don’t remember hearing any of this on the television “news.” Some explanation: In the 1930s the United States, Britain, France, Germany, Italy, Spain, Portugal, and many others, officially declared bankruptcy to the international banks, but didn't tell the people. According to researchers into these matters, this was agreed during the years of the Geneva Conventions in Switzerland between 1928 and 1932. It would appear, however, that the documents containing the details of the bankruptcy declarations have never been made public. —May 2006 David Icke e-newsletter,

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Conspirati I gained much of my information from my late father G. A. Frost. [He was an elite commando] during the Second World war. Given time I will write more on his fascinating life. The central issue of his wartime career was that he was Churchill’s assassin — namely he was employed in the covert removal of perceived troublesome characters — such being certain government ministers of the Irish Free State and a somewhat nasty Swede. According to my father he was ordered by the late King and Churchill to remove Prince George (who my father was told was the figure head of an establishment plot to murder Churchill, the King, the Queen, and the two Princesses and replace same with Prince George and a number of infamous characters out of the Red Book). The plan was then for the British Empire to join up with Hitler against the Russians; in turn Germany would make peace with the U.S. and declare war on Japan. Such a plan was well known to the Russians viz Prince George’s homosexual relations in particular with Anthony Blunt — a factor which explains why it was not until the actual defeat of Hitler in 1945 that Russia declared war on Japan. —MartinFrost.ws

various countries gather together to provide the necessary gravitas. Often what comes out of such grand convocations is the appointment of one industrial concern or another to help the international community “address the issue” — whether it be war, weather or disease. Naturally, industry groups are well compensated for their services. We can see this in Iraq, where certain companies get the bulk of the reconstruction business. But it works in plenty of other ways. Let modern money power promote vaccines, and global governance will generate a tremendous level of concern about something called bird flu — or swine flu for that matter. Let peak oil suddenly arise as an issue and, lo, car companies are providing battery powered cars and setting up bio-diesel fuel stations throughout the Western world. Power-elite promotions seldom stop. They are always building and subsiding. Sometimes they make enormous amounts of money and sometimes they make slightly less enormous sums. The tech bubble of the late 1990s was a truly spectacular example of wealth redistribution. While the power elite may not have foreseen the power of the Internet, it is fact that once ‘Net mania began to roll across the marketplace, major corporations piled on with international marketing programs, national investment magazines and newspapers reinforced the theme and broker/dealers grew rich recommending “high tech” stocks.

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Not so Artificial The beauty of the above scenario is that most, if not all, of it is “legal.” The regulatory authorities who are supposed to “police” the market do not have the frame of reference — nor the brief — to focus on world-spanning promotions. The annual Bilderberg meeting is probably the largest, formal “insider-trading” conference of its kind, yet it is never identified as such (in fact, in the past, it was rarely identified at all). Discussions of wars, commercial trends and political candidates by the wealthiest and most important men and women in the world are elevated high above trivial regulatory considerations. And what is an observer to think? That, as with the mushrooming global scene of transnational bureaucracies and NGOs, the activity is motivated by charitable enthusiasm? It is not. There is a profit to be made, so long as the voices raised against these activities are few and their message of opposition not clearly stated. And that message should be that it is not good for such powerful conclaves to take place in secret. It is not good because it is obvious that no distinction is made between the private and the public by these individuals. Important heads of state and billionaires mingle to discuss a sensitive agenda in a cocoon of security and privacy. Whatever consensus is achieved — and apparently consensus is sought — the result is that a handful of people have generally decided on various courses of political, economic and even military action without the public’s knowledge. The elaborate financial regulatory structure surrounding the West’s securities and commodities markets are barriers to entry rather than guarantors of fair play. In the United States, anyway, they could hardly be anything else. Both the Securities and Exchange Commission and the now split-in-two NASD are monstrous morphs of unconstitutional creations. In the United States, anyone aspiring to own a broker-dealer is obliged to “join” the NASD — a government imposition that travels well beyond the borders of restraint-of-trade. And that’s just the beginning. FBI background checks, NASD tests, inspections, expenses, taxes, fees and sundry considerations — all must be confronted before the harassed businessperson brokers or “deals” a single stock. Both the Securities and Exchange Commission and the NASD regulatory commission have so many rules and regulations on their books that either group can fine or suspend a business into oblivion should they choose to do so. This is an enormous power, but it is aimed at the “little guy”— the supplicant attempting to do business in the world’s most populous and boisterous securities arena. It is increasingly difficult. Worse still, as the U.S. regulatory structure is exported around the world, other markets become more difficult to do business in. Only the world’s largest firms will have the resources and power to “capture” the regulators, hire the lawyers and generally provide a level of legal responsiveness that the 21st century’s financial environment will demand.

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2000 tech bubble

Inflation-adjusted “Real Dow” chart from January 1924 to end of 2005

Peak of 1929 bull market

Reality Byte: Real Dow Chart Insane

An October 2005, column at FMNN charted the Dow throughout the 20th century — without inflation — and explained it as follows: “[Our] anonymous chart creator said he became obsessed with the Dow's real return once he saw a similar chart published in the Wall Street Journal in the late 1990s. He called the Journal trying to get them to reprint the article without success. He doesn't know why the chart showed up in the Journal or why it never appeared again. ... What's it look like? A roller coaster scrawled by an asylum inmate, one that puts paid to the notion that "buy-and-hold" is an adequate strategy when confronting the merciless forces at work in securities speculation. One could buy and hold, according to this chart, from peak-to-peak an average of 35 years, far too long for most folks. Our anonymous chemist sent us an e-mail explaining the above chart, as follows: • The purchasing power of the U.S. dollar has shrunk over time. In August 2005, $100 bought what $78, $55, $28, and $16 bought 10, 20, 30, and 40 years earlier, respectively. • So, meaningful examination of the Dow over time must be done on a purchasing power basis. The Dow over time, shown as purchasing power -- what it could buy - is called the "Real DJIA" • The long-term Real DJIA is a "severe roller-coaster" on a 3.5 decade time scale. (The Real S&P is similar.) This dominant historical reality is overwhelmingly relevant to long-term stocks-holders and to the Social Security personal accounts issue. •The dominant historical reality [he wrote us] “is ignored by the financial services industry and by the financial news media — this is the big CON. For their own gains, these two entities treat the people like mushrooms, because they can. Leaders should choose

LEADERship, not treat the people like mushrooms because they (think they) can.”

You may see the original chart at http://HomePage.Mac.com/ttsmyf.

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There will be consequences. America’s capital markets have been efficient and fair, to a point, despite the increasingly horrendous regulatory burden. They have provided financing for a variety of innovative products and services. But tomorrow, as legal trends continue to bite, the securities markets of America, and quite possibly the world, will be the playground of only the biggest intermediaries who will demand a sizeable gatekeeping fee. For those who are not enamored of the system as is, the fallout can be severe. The regulatory authorities will pursue them and virtually blacklist them. And these wretched “accused” are guilty of crimes of a kind that were not even imagined 100 years ago. And for good reasons. The shelf load of legal tomes under which Wall Street bookcases groan is a recipe only for litigators. Just as everyone agreed the emperor wore clothes when he did not, so all involved, or most anyway, assure each other that this outlandish charade is Reality Byte: DELIBERATE UNION … Timeline: European Union (1948-2007) — 59 years to build

1948: European Community planned to secure peace and economic cooperation 1957: Belgium, France, Germany, Italy, Luxembourg and The Netherlands create the European Economic Community (EEC) 1973: Denmark, Ireland and U.K. join the EEC 1979: The first European Parliament elections take place 1979: Single European Currency Unit was introduced (later to become the Euro) 1981: Greece joins EEC 1986: Portugal and Spain join the EEC 1991: The EEC is renamed the European Union (EU) 1995: Austria, Finland and Sweden join the EU 2002: The Euro is introduced in 12 of the EU member states 2004: On May 1st, 10 new member states join the EU. 2004: European Parliament elections take place in the U.K. 2005: U.K. takes its turn as President of the European Council of Ministers 2005: EU constitution defeated 2007: Bulgaria and Romania set to join the EU

2008: Lisbon Treaty status remains undecided

Source: www..HeadsUp.org.uk (text verbatim)

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necessary and appropriate. Each year, the Western public is assaulted with reports of more white collar criminal danger. Each year, more and more protective regulations are manufactured. And the next year it is worse. There is no reference to the free market anymore. Neoclassical economics, variable pricing, marginal utility, every part of the great edifice of sensible economic thought created at great human cost in the 19th and 20th centuries is disregarded — or even worse does not even rise to the level of disregard. It seems to exist in another universe. It is a lamentable situation and growing worse — especially for those entrepreneurs who have to suffer through it and come away tarred as “white collar criminals” simply because they wished to stand up for themselves. It seems, increasingly, a regulatory prerogative in America and no doubt elsewhere in the world, that litigators need not explain the criminal or civil pursuit of a “target”anymore. And often those so targeted will settle. Certainly that is the case when it comes to the SEC, as such cases are civil and the individual involved does not have to Reality Byte: WHAT’S THE HURRY? … Timeline: North American Super-Region (1993-2010) — 17 years to build

December 1993: President Bill Clinton signs NAFTA into law 2001: Robert Pastor’s 2001 book calls for the creation of a North American Union April 2001: President George W. Bush signs Declaration of Quebec City January 2005: NAFTA railroad proceeds March 2005: Kansas City signs cooperative pact with Michocan, Mexico March 2005: Agreement to build the Texas NAFTA Superhighway March 2005: Security and Prosperity Partnership of North America established March 2005: Dept. of Commerce creates SSP to implement North American Union April 2005: KCS purchases control in Transportacion Ferroviaria Mexicana April 2005: NASCA introduced in Senate May 2005: CFR Issues its Building a North American Community Report June 2005: Follow-up SPP meeting was held in Ottawa, Canada June 2005: Senate Republican Policy Committee policy paper released July 2005: CAFTA [passes] the House of Representatives by a 217-215 vote June 2006: Mexican customs office to open with Kansas City SmartPort

2007: The Trans-Texas Corridor (TTC) is ready to begin construction

2010: Suggested implementation of North American Union

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Reality byte: UFOs — Promotion from Grave

An August 2005 FMNN post focused on a classic promotion by (recently deceased) Laurence Rockefeller, as follows: “From his apparent funding of Ho Chi Minh in the 1950s, to reported attempts to co-opt the 1960s anti-war movement (funding its more violent inclinations in order to put pressure on the nation’s policing and regulatory structure to react), to his support for the environmental movement, Laurence Rockefeller’s philanthropy has seemingly always contained a deeper purpose – one of provoking a reaction that would move society in the desired direction from the Rockefeller’s point of view, toward more control and regulatory authoritarianism. Laurence ... wished to utilize a belief in UFOs and alien civilizations to help in the further implementation of governmental and quasi-private controls over behavior.” Further excerpts, below:

“Laurence Rockefeller’s ... enormous wealth was turned toward supporting UFO research later in life. ... [He] is said by some to be one of the authors of the current UFO [craze]. One does not ordinarily associate the Rockefellers with UFO research, yet Laurence’s influence on the movement is remarkable and has given rise to increasing speculation on the ‘Net about his motives while doing nothing to diminish general paranoia about the Rockefellers in general. ...

“Rockefeller was active during the last decade of his life in supporting [UFO] investigations. He funded Dr. John Mack's Center for Psychology and Social Change in Cambridge, Mass., to the tune of $250,000 a year. (Dr. Mack investigates alleged UFO abductions) and also bankrolled at least two meeting sessions of the Starlight Coalition, a group said to be made up of former intelligence officers and military men interested in UFOs. Interestingly, Laurence also funded his own plan to establish contact with aliens — not by the scientific radio-telescope method of SETI, but by signaling with banks of powerful halogen lamps. Beginning in 1999, he funded several studies on ‘crop circles,’ convinced he was onto something important (despite hard evidence that at least some of this ‘UFO evidence’ was a longstanding practical joke, perpetrated by Doug Bower and Dave Chorley, a pair of puckish Brits). He also once held a UFO conference at his Wyoming ranch.

“Laurence’s interest in the field of UFOs ... has inspired much speculation as to deeper motives. According to Dick Farley, who worked for the organization for about three years, Rockefeller's interest seemed to be the promotion of ‘alternative religious and psychiatric/psychological paradigms, including so-called UFOs and abductions, having

Global Mind Change potentials.’ ” [Common Cause Magazine-Rockefeller/UFOs].

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plead, but can maintain innocence even as his “E&O” insurer pays the fine. (The target must pay only if the case goes to trial and a guilty verdict is returned.) SEC attorneys, not surprisingly, have filed increasingly frivolous lawsuits over the years. There is every reason to agree to pay up and almost none to go to trial. Securities law, notional to begin with, has been reduced to a kind of bureaucratic blackmail — a formalized legal dance in which lives are disrupted, but not outlandishly, and after the money is exchanged no one breathes a word. This is the system of securities and commodities governance that has been exported to Japan, to Europe and England and no doubt eventually to the thinly traded markets of Third World countries as well. Is it a malicious system? It certainly is a hurtful one — damaging to the pro- fessionalism of the litigators, and of course to the unwary and unwilling entrepreneurial victims themselves. The control sought by the visible power elite is intended to keep its promotions intact and to winnow out the promotions of others who wish to take advantage of the powerful mechanism that has been built and put in place. This it does most effectively at this point. Whether it will continue to do so is perhaps more questionable. As the regulatory excesses become more obvious and the system becomes increasingly dysfunctional, it is possible that the Internet will do to it what it has begun to do to many of the power elite’s other promotional exercises in command- and-control. What is legal one day is subject quite literally to millions of dollars-worth of fines the next. The idea is to capture the funds of the working poor, the middle class and even the wealthy, but to keep the system itself out of reach of all but a chosen few. The hurdles at this point are quite high. And the institutions involved are so large that, once a tone has been set, a problem identified, a promotion initiated, the conversation itself needs no great encouragement to continue. The academic, diplomatic and journalistic communities will carry forth on their own. These groups do not make a distinction between what is a conversation that is naturally generated and sustained and one that involves the artificial elements of a promotion. This is not an easy argument to make or accept — even for readers of “High Alert.” In general, we don’t like to believe we are being manipulated. Also, we are not apt to easily acknowledge that our closely held belief systems involving fuel substitutes, health concerns or even global warming and the like are part of a global promotional scheme. The argument will be, perhaps, that these are valid concerns — even if someone, or some group, is taking advantage of them. But that is just the point. Some group (or groups) is indeed taking advantage of these concerns, amplifying them, certainly distorting the science, in some cases anyway, to support certain conclusions, getting laws passed and regulations levied to indicate the seriousness of the problems at hand and — as a bonus — to create additional market opportunities.

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Health Care, Too The distortion of science that increasingly accompanies global money power promotions are not limited to simply revenue raising. Often, they can reduce consumer choice, thus reducing lifestyle and health options. A good example would be “Codex Alimentarius.” This strange sounding name stands for a disturbing trend — the crimi- nalization of nutrition supported by the Commission of the UN World Health Organization. In July of 2005, FMNN reported the story as follows:

[The UN] has [adopted] new guidelines for vitamins and food supplements. The guidelines will set limits on potencies that are allowed in these products and apparently may even be regulated — insofar as US citizens are concerned — via the Central American Free Trade Agreement (CAFTA). ... Congressman Ron Paul (R-TX), one of the US’s only true free-market legislators, has reportedly said that the “Codex Alimentarius Commission, an offshoot of the United Nations, is working to ‘harmonize’ food and supplement rules between all nations of the world. Under Codex rules, even basic vitamins and minerals will require a doctor's prescription.” Although the legal potencies of vitamins haven’t been announced yet, critics believe that the limitations will eventually follow the path of the risk-based World Health Organization's Nutrient Risk Assessment Project. Vitamins and other homeopathic medical solutions may be restricted based on potential health risks without any analysis to their benefits. In order to justify restrictions on vitamins, those responsible for the final Codex may argue that because super-high doses may be dangerous, smaller doses may be as well. The lower-end dosages may be modeled along the lines of the restrictive German formula. In Germany, currently, a doctor’s scrip is often needed, reportedly, even for the purchase of aspirin. For about 30 years the FDA has prevented any further research into the use of vitamin B-17, which reportedly has had beneficial effects regarding cancer prevention. Now other potentially promising vitamins will surely come under regulatory scrutiny — and the road to proving their efficacy will surely become more difficult as well.

Imagine, if society were comprised mostly of free-market thinkers, how much more difficult would it be for those large pharmaceutical and bio-tech companies to continue their regulatory manipulations? The bottom line is that it requires a dumbed down public to accept the kinds of massive health-care restrictions that a Codex-like promotion contains. Will they stop with the West? China, for instance, is famous for

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Reality Byte: humanitarian efforts or rogue’s gallery?

Had the U.N. deliberately set out to design a program opened to manipulation by Saddam Hussein’s regime, it is hard to think how the U.N. could have improved upon the arrangement that was put in place. —Journalist Claudia Rosett, 2004 testimony to National Security House Subcommittee

The U.N. from the onset envisioned the Oil for Food program as a get-rich-quick program. Anan’s Secretariat office alone collected more than $1.4 billion over the life of the program ... yet due to a U.N. policy of extreme secrecy there are no public records of the program. —The UN: Corruption Junction, FrontPageMagazine.com, June 2004

The World Bank has lost about 100 billion dollars slated for development in the world's poorest nations to corruption since 1946, nearly 20% of its total lending portfolio, according to a U.S.. Senate committee. … Experts estimate that between five and 25% of the 525 billion dollars the Bank has lent since 1946 has been misused. This amounts to 26-130 billion dollars. — Poorest Pay for World Bank Corruption, Inter Press Service, May 2004

The World Health Organization (WHO) was mired in what the British Medical Journal called "a morass of petty corruption and ineffective bureaucracy." Under Director General Hiroshi Nakajima, a Japanese pharmacologist, WHO was so widely understood to be mired in cronyism and financial irregularities that such longtime boosters as Denmark and Sweden slashed their contributions; even the group’s official auditor resigned in disgust. … WHO is an organization by and for bureaucrats and health ministers — for whom it provides jobs, fellowships, and chances to go to conferences in exotic vacation spots — not the world’s sick. —WHO Cares? Reason.com, July 2004

By the 1990s, say observers, UNICEF had become a bloated U.N. bureaucracy: Administrative costs for "regional offices" and headquarters [was] more than a third of the approximately $1 billion budget. … An independent audit … found bloated overhead costs, lack of financial control and a proclivity for luxury travel accommodations and overstaffing.”

—UNICEF Another United Nations Boondoggle ,

National Center for Policy Analysis

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alternative healing methodologies. Meanwhile, pharmaceutical remedies are often far less effective than touted — and almost inevitably generate more side-effects than the FDA can ever admit. Wealth without health is not important and this book is designed to focus on your mental health and provide alternative investment strategies. However, do not Reality Byte: The Reformation: Violence Begets ...

The French Protestants were called Huguenots (pronounced, hoo-guh-no), and members of both the Bourbon and Montmorency-Chatillon families were major leaders in the Huguenot movement. The Huguenots represented only a very small part of the French population; in 1560, only seven or eight percent of the French people were Huguenots. They were, however, concentrated in politically important geographical regions; as a result, they were disproportionately powerful in the affairs of France. It is important to understand that the rivalry between the Guises and the other two families was primarily a political rivalry; this political rivalry, however, would be swept up in the spiritual conflict between the Catholic church and the new reformed churches.

Francis II died in 1560 after only one year as king. At his death, his younger brother, Charles IX (ruled 1560-1574) assumed the throne. Because he was too young to serve as king, his mother, Catherine de Medicis became regent (a regent is the ruler of a kingdom when the king is incapable of exercising that rule). Catherine was a brilliant and powerful political thinker; she understood right off that the Guises were a threat to her and to her son. In order to tilt the political balance away from the powerful Guise family, she cultivated the Bourbons and the Montmorency-Chatillons. In the process, however, she also had to cultivate the support of the Huguenots who were closely allied to those two families. Until this time, it was illegal for Huguenots to worship publicly (although there were over 2000 Huguenot churches in 1561). In 1562, Catherine took a great leap forward in religious toleration by allowing Huguenots to hold public worship outside the boundaries of towns. They were also allowed to hold church assemblies. Catherine was a Catholic and wanted France to remain Catholic; she did not, however, want the Guises to be calling all the shots. The only way to chip away at the political power of the Guises was to increase the political power of the other major families and their Protestant allies.

The Guises, for their part, understood what this religious tolerance was all about and

quickly clamped down on it. In March, 1562, an army led by the Duke of Guise attacked

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discount the importance of staying on top of truthful and accurate coverage of all kinds of medical solutions that may not be found in the corner drug store. And understand the deviousness of a system that would purposefully discredit such products — through various regulatory means. It is surely a system that appears to be under some stress as the Internet continues to report on non-pharmaceutical cures featuring vitamins, herbs

a Protestant church service at Vassy in the province of Champagne and slaughtered everybody they could get their hands on: men, women, and children—all of whom were unarmed. Thus began the French Wars of Religion which were to last for almost forty years and destroy thousands of innocent lives.

For all her brilliance, Catherine was placed in an impossible position. She did not want any noble family to exercise control over France; she simply wanted power to be more balanced. She also did not want a Protestant France. So the only strategy open to her was to play both sides, which she did with enormous shrewdness.

This balancing game came to an end, however, when Catherine helped the Guise family plot the assassination of Gaspard de Coligny, a Montmorency-Chatillon family member who was one of the major leaders of the French Huguenots. The assassination failed; Coligny was shot but not killed. The balancing game was over: the Huguenots and Coligny were furious at both Catherine and the Guises. Fearing a Huguenot uprising, Catherine convinced Charles IX that the Huguenots were plotting his overthrow under the leadership of Coligny. On August 24, 1572, the day before St. Bartholomew's Day, royal forces hunted down and executed over three thousand Huguenots, including Coligny, in Paris. Within three days, royal and Guise armies had hunted down and executed over twenty thousand Huguenots in the single most bloody and systematic extermination of non-combatants in European history until World War II.

The St. Bartholomew Massacre was a turning point in both French history and the history of the European Christian church. Protestants no longer viewed Catholicism as a misguided church, but as the force of the devil itself. No longer were Protestants fighting for a reformed church, but they suddenly saw themselves fighting for survival against a Catholic church whose cruelty and violence seemed to know no bounds. Throughout Europe, Protestant movements slowly transformed into

militant movements.

—Richard Hooker

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and other non-traditional treatments. Watch bird flu and its impact on the markets. Will the 98 percenters show up in a buying frenzy to swallow truck loads of "miracle" stocks when the fear campaign is fully revved up? Or will the power elite retreat from its redistributive intentions and be content with the billions of dollars it was able to suck out of taxpayers pockets as their governments rushed to supply the much needed cash to secure vaccines for a pandemic that doesn't yet exist? Because of the power of such promotions, people are stampeded into corporate solutions based on inaccurate information and faulty conclusions. Resources are thus misallocated, funds are misapplied. Great wealth accrues to a few — but illegitimately. And the quality of life goes down as a result.

The Power of Two Percent: Protect With VESTS Those who accept the above hypothesis, will now comprehend how government really works, how it is has been put to use by those involved in global promotion as part of a larger money-making effort. (Just follow the money and it will become clear.) Why does government, any government, so often act as an enemy of the people? Why has the U.S. government attempted to strip more and more freedoms from the all-too-passive citizens of the earth’s oldest existing republic? Why is the Internet under attack? The simplest explanation is that a controlled and controllable population is more apt to accept whatever is promoted to it. Properly “dumbed down,” an audience marinated in the nationalism, jingoism and contextual vacuum of a public school curriculum is likely to buy, without very much discernment, whatever the higher-ups wish it to do. Still, the game of promotion as described above is not without risks. The banking community is behind many promotions, and that is a powerful culture that demands rash, bold, even violent acts in pursuit of business goals. Let the mechanism become too obvious, let the Internet’s information spread too far, let the economic environment prove too perilous and a noxious mix of information and misinformation will boil to the surface and make a good deal of trouble — more, perhaps, than even the power elite can comfortably deal with. What might occur? After great struggle and furious debate, the markets could become more privatized and less distorted. Companies could rise and fall based on their merits rather than on gigantic, government-linked promotional efforts. The unseen but stifling hand of “money power” might lift a bit — or maybe even a lot. If the power elite’s promotional mechanism is subject to exposure by the Internet, then what will happen as the credibility of these promotions erodes? “High Alert’s” Visible Elite Super Tendencies Strategy (VESTS) system brings together the business cycle, observation of the power elite’s regional and generational money flows and free-market economic analysis. The goal: to predict investment opportunities in

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Elite Retreat …

“Just before the 2006 Bilderberg meeting in Ottawa, Canada, alternative ‘Net reporter and leading conspirati Alex Jones was detained at the Canadian border. The secretive Bilderberg Group is composed of some of the most powerful and wealthiest people in the world. According to Jones, anyway, the Bilderbergs did not want him in Canada. A decade ago, would the Bilderbergs have focused any time or energy on Alex Jones? Yet today, if this incident took place as he suggested — and there is no reason at this writing to doubt that it did — something has changed. Alex Jones has nailed no thesis to church property. He has not needed to. The Internet is his door and his informationhas been transmitted not via cold type but on a thousand — a million — points of light.” —Anthony Wile, FMNN

regions, securities and commodities. The style: asset allocation based on overlays of three separate models and their interactions. In formalizing this sort of approach, “High Alert” hopes to provide a strategy and vocabulary that, if utilized, may act as a starting point. Unbundled, the VESTS investment system looks like this: 1) Business cycle analysis: This is the first and fundamental overlay of the VESTS system. The free-market thinker using this approach will ascertain where the economy is in the business cycle before committing funds. Early in the cycle, equities are promising because of the monetary stimulation being generated by the central bank. Later in the cycle, with rates beginning to rise and equity markets stabilizing, bonds will be “cheap” and so will commodities. Finally, as boom turns to bust, it will be time to lighten up on fixed income and real-estate investments such as REITS. Gold and silver stocks may have moved up quickly, but eventually it will be time to reallocate some assets away from precious metals, or at least to begin an active hedging program via options, etc. 2) Global elite, money-power promotions: This is the investment-oriented response to various global-elite promotions. Identify key figures in worldwide governance, ascertain their overlapping interests and then attempt to generate a financial “play” that takes advantage of appropriate observations. The main hurdles in such an approach have to do with the identification of the individuals, the methodology of the investment itself and, even more fundamentally, the idea that such an approach can provide a serious portfolio configuration. Recall, however, that it is the central bank that generates the shape of the business cycle, not the general economy. Additionally, the “themes” of the 1990s and now the 2000s have been remarkably similar — having to do with various alarming trends such as global

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warming, bird flu and peak oil. Accept the information and seek out first the region, then the trend opportunity. China is an obvious regional trend, with specific investments to be made depending on the business cycle. An equity play might be appropriate in China, given its still-booming economy, yet the rest of the world is involved in a much different scenario. It is these complexities, and many others, that make interactions between global elite promotions and the business cycle dynamic — thus making investing challenging in both timing and application. 3) Free Market Response: This is the final and most difficult cyclical overlay. The global power elite seeks to control information, dominate the legislative process and create cross-platform (country-to-country or theme-to-theme) promotions — yet ultimately the free market, not the global elite, will decide what is profitable and what is not. The global systems the power elite has built will gradually become less trustworthy and may cease to do their jobs at all. Moreover, as the Internet exposes these increasingly transparent promotional configurations, the likelihood of its success will diminish. It is not so much the individual exposure as the cumulative effect of millions comprehending the truth, day by day and blog by blog. The current arrangement is bankrupt logically and financially. The strategy of war and annihilation for peace and profit is increasingly ineffective. Promotion is subject to the check of the Internet. The longer the promotional vehicles (world bodies, etc.) are sustained, the more obvious their ruinous ineffectiveness becomes. For all these reasons, the promotional power and hyped-up money flows are bound to collide with, and perhaps yield to, free-market principles. In fact, much as an encounter with inflation may kick off an inflationary cycle, knowledge of what is occurring via money-power promotions makes economic laws visible. Instead of wondering why the United Nations does not work out, or why the economic position of the United States is deteriorating rapidly, a widening pool of free-market thinkers will begin to anticipate the latest power elite-engineered disaster and react accordingly. Money flows that used to follow the power elite promotions — arriving at exactly the right time to “take out” those who wanted to get out— now will arrive on a different and more inconvenient schedule. People will anticipate power elite promotions, or perhaps they will simply not participate at all. This is indeed the final overlay — the final cyclical analysis — put into place by the free-market thinker using the VESTS system. The erosion of money-power promotional effectiveness will lead to a variety of dislocations including, eventually, the deterioration or demise of the 20th century’s central banking system. As the system fails, the VESTS system should prove itself — not so much as a technical tool but as a broadly comprehensive way of interpreting an increasingly complex and economically unstable speculative climate.

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Storm Warning As the elements that created the age of promotion come increasingly under attack, the global elite will surely grow more confrontational. Free-market thinkers will accept the inevitability of change, look for appropriate personal and professional opportunities and protect themselves and their loved ones by making prudent lifestyle choices. As FMNN commentator Rick Maybury wrote in a recent newsletter, “a family who wishes to prepare for whatever the future holds will stock the necessities. Water, dried food, an alternative energy source and weapons of self-defense are all part of preparations.” Governments do change, but human action remains the provenance of the individual. One day perhaps, historians will look back on the 20th century and label it the Age of Promotion — as “High Alert” has done. By then, perhaps, the system will be finished for it has not been up and running for so very long, and has been served to the public secretively, and without explanation. Thus, the likelihood that there is a great reservoir of positive sentiment for modern money power and its activities is fairly minimal. Exposure, via the Internet, of what has been taking place will assuredly have a negative impact on the extension of the Age of Promotion into the 21st century. We need not fear, but we must continue our discussion and utilize all available tools, including the Internet, to do so. It is possible to build a fairer world with less government and more private initiative. Human action — as opposed to communal governance — can become an accepted option as people educate themselves one by one and then speak to others. A truly private marketplace — as opposed to a managed marketplace — can be cultivated one action at a time.

Economic Action Alert Follow the money — and monitor the system’s unwinding. One of the reasons I have been so successful in my own life as an investor is that I pay attention to the power elite’s capital flows. I ascertain the business cycle and then look to see where it is that the power elite is headed. I invest where the money is, with the serious money or ahead of it. (I can tell you from experience that China is one destination from a regional perspective; commodities, especially silver, are another; and environmental companies, so-called natural fuels such as bio-diesel is a third area of concentration.) However, if the system I have described above comes under concerted attack from information available on the Internet, then those who have created and broadcast dominant social themes for their own profit will need to revise their methods of operation. This must surely result in a high-level reconfiguration of globalism and even a rethinking of the wisdom of internationalism itself. Change is frightening but also offers opportunities. Since risk is inevitable, we should strive to manage it rather than ignore it. The Internet is anomalous — a mechanism that we have not seen before and one

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that is obviously complicating the business of investing. “High Alert” suggests a series of non-technical overlays that may help in generating certain monetary conclusions. The first overlay, as described in this chapter, is an analysis of the business cycle. The second focuses on power elite promotions themselves and where cash is moving. The third considers the collision of these manipulations with the Internet and free-market thinking. It is this last overlay that is most interesting, given that there is evidence this leg of the business cycle may last far longer than it did last time, perhaps another 10 or 15 years. Why make this prediction? Two reasons. First of all, the distortions in the economy are tremendous, far more severe than in the 1970s, the last time the market experienced a commodity bull of this sort. The market is currently trying to work off these distortions but given what has come before, those who expected a rapid diminution of this part of the business cycle are probably in for a disappointment. The other reason is that there is considerable evidence that the power elite is not simply going to let a commodity bull market rage unimpeded. If nothing else, the reader who has stuck with “High Alert”this far must be fairly aware that much of the global elite power base depends on the generation and manipulation of fiat money. Without the ability to print dollars and exchange them for goods, the ability of the power elite to purchase the cooperation and armaments they need to sustain their current globalist strategy becomes limited. The more the world values commodities, the less leverage fiat possesses. Thus the power elite almost certainly must attempt to forestall, or at least diminish, a commodity bull market, just as it did in the 1970s with some success. There is evidence, some of it mentioned in this book, that it is doing just that via the manipulation of the price of gold and by attacking economic growth by printing money and raising interest rates simultaneously. However, this is unlikely to continue without causing major repercussions in the housing market — a situation which could result in major pressure on the U.S. dollar as foreign investors lose their willingness to support it. The two factors mentioned above may result in the lengthening of what is already a powerful and long-running bull market in non-paper assets. As the market extends its run, the individual investor will want to take a position of high alert more than ever. This may be, in fact, the most profitable bull market ever for commodities and also eventually for commodity-oriented stocks and money metals. Every day it seems there are more analysts calling for gold to climb well past US$1,000 before this commodity bull market runs its course. The estimates even move into the range of US$2,000 or even US$3,000 an ounce. Whether mining stocks catch fire as well is still questionable at this point. Certainly mining stocks will come in for more scrutiny as the bull runs on. It may be this time around, because of demand from India and China, that mining companies involved in extracting copper, nickel and other industrial metals may prove the more profitable choice. Yet mining firms concentrating on gold and

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silver have historically proved profitable toward the end of a commodity surge. One way of hedging, to ensure that a portfolio takes advantage of whatever commodities are in demand, is too look for well run firms that participate in mineral extraction across the board. One does not have to look abroad to find these firms, for there are many with great track records and managerial competence in both the United States and Canada — especially Canada. Find one of these firms with a broad portfolio of metals prospects, and you will be in the fortunate position of participating in what I have previously called the “teeter- totter” approach to mining sector selection. In a soft or hard hyperinflationary environment, mining companies with gold and silver prospects will prove most lucrative to the average shareholder. But if for some reason, the promotional plans of the power elite are maintained — and the economic juggling act continued — then the same company can generate considerable profits in industrial metals such as copper and nickel. Either way, the investor is covered and gains are made. How do we analyze what is occurring? Via VESTS, as has been suggested in this chapter. Consider subscribing to free-market oriented news services and newsletters focused on sociopolitical and economic discourses (see page 257 for a list of websites that may offer such publications, including my personal favorite, FMNN). These analyses should help the free-market thinker and investor ascertain whether or not a “tipping point”is occurring, and its direction as well. If enough free-market thinkers, informed by the ‘Net, seek an honest-money economic system, then the current financial environment will inevitably crumble. If the impact of the ‘Net is muffled or if censorship is effective in stilling the ‘Net’s more informative voices, then it is possible the dollar’s ruinous inflation will be worked out in other ways. Perhaps the investment with the most promise may be silver — a malleable, portable metal with vast industrial uses and yet popular appeal as the “people’s money” throughout the ages. Silver usually rises and falls in a ratio with gold, but the ratio as of this writing is clearly unbalanced in silver’s favor. Were both gold and silver to start to rise quickly in price, silver would eventually rise more quickly, were the ratio to return. Wayne Gretzky was not a big man for a hockey player, yet is considered by many to be the greatest ever. When asked about his unlikely success, he used to say succinctly that he “skated to the open ice.” Average investors with modest portfolios can leverage their success similarly. In the 2000s, silver is the “open ice” of commodities investing — and those who are not yet skating in that direction should rearrange their portfolio to do so. Chapter 12 will focus more closely on investment opportunities — including the value of “promotion” itself in creating and expanding investment opportunities.

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Sociopolitical and economic solutions to money power problems. PROFIT FROM THE FINANCIAL HURRICANE

“Gold and silver are not just precious metals, they are ‘money metals,’ valuable — utilized — as currency throughout history. Despite efforts to reduce the allure of gold and silver by banning the use of precious metals as currency, the two historical money metals continue to be in great demand as investments through mutual funds, stocks and as bullion and non-circulating minted coins.” —April 2004, FMNN brochure

High Alert This chapter presents a summary of its Storm Warning segments, along with a summary of its Economic Action Alerts. It also offers a separate summary focused on why ownership of precious metals in some form is so necessary in an age of high alert. It does not summarize the VESTS system, the conclusion of which can be found in the final chapter.

The Problem, Again This is a good time to make clear that the problems afflicting Western economies — especially the United States — have little to do with people being lazy or slothful or “saving too little,” spending too much, etc. The problems facing us are apparently engineered — constructed by those who have knowingly created a bad system because of the benefits it offers to a very few at the top. Government-sponsored fiat-money systems, especially when combined with fractional-reserve banking, present excellent opportunities for a handful of people running affairs to become staggeringly wealthy. But for many of the rest who must suffer under these monetary regimes, the consequences are dismal.

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Despite the talk of rosy numbers, of deficits coming down and jobs being created, citizens of the West, especially in America, face an uncertain outlook and a challenging future. Many Americans live from paycheck to paycheck — highly leveraged and bereft of any honest money. They are overwhelmingly exposed to whatever it is that those who are the most powerful believe appropriate or profitable to themselves in the sociopolitical or economic arena. The current system is not salvageable. It is entropic, prone to decay. Central banks have to print more and more money to keep up with the spending of the politicians who, in turn, spend more and more to buy the favor of increasingly disaffected voters. Fiat money devalues more and more quickly, and the printing presses run day and night. Prosperity is just around the corner but never arrives and, in fact, recedes despite official pronouncements to the contrary. The productivity isn’t there any longer, yet in America, certainly more than Europe as of this writing, the average household is loaded to the eyeballs in debt and is still urged to take on more. Why? Because foreign buyers continue to purchase American debt, allowing U.S. citizens, even if they don’t know it, to fund their lifestyles at least in part with overseas loans. Who could blame the Chinese for trying to unload some of its dollar reserves by buying resource companies that help to ensure they have enough control over their own productive destiny? As the currency devalues, the American middle class will be squeezed even harder. The public sector will continue to swell, just as it has overseas. The money and credit in the system continue to expand until the volume simply can’t be contained by economic activity. It becomes overwhelming — triggering hyperinflation and sweeping revaluations. Today, this very scenario is taking place — and tomorrow, as the financial hurricane bears down, it will be even worse. Again, these results are predictable. Anyone who studies money knows how government fiat-money systems end up. History tells us they always collapse. And we are facing a collapse now. Global money power has high-jacked the productivity of America as surely as it did in Asia during the “Asian Contagion” and then, afterward, in South American countries. It is unfortunate that government-backed fiat-money systems can function effectively for fairly long intervals while hiding the ongoing internal rot. When fiat melts down, and it can do so rapidly, the results are very sad for those caught up in the crisis. The hypothetical suddenly becomes real, and causes material suffering to whole countries. Just as one must weather the storm before sailing into calm seas, the West in general and the United States in particular must likely suffer variations of a not-too-distant fate as the consequences of the inflation, even hyperinflation, gradually settle into place.

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Conspirati These are shapeshifters that can take either human or reptilian form. It’s all holographic trickery because everything, including the body, is a hologram and not ‘solid’ as it appears to be... . Only the [shapeshifter] bloodline gets into the Skull and Bones Society. ... Readers of my books will understand the significance of this.. —Interview with leading Illuminati researcher AboveTopSecret.com

Further Destabilization Via the ‘Net As mentioned above, the collapse of the post-World War II economic system is probably something the power elite anticipated — but perhaps the rise of the Internet is not. The Internet is an extremely complex issue for those who seek to move the society toward a more globalist path. What is surprising is that much of the informational power struggle is not being covered in any significant way. It is as if the Reformation were proceeding without anyone commenting. This alone is indicative of the amount of discipline and control that still exists within the mainstream media and its “news” organs — many of which can be counted on to report what’s on the surface without ever peering beneath. How is the game played? GATA’s Bill Murphy complains the mainstream media picks up on his points about the power elite’s conspiracy to dampen the price of gold but never goes any further. No calls are made to large Wall Street firms, to the Fed or to other central banks. GATA’s charges are reported flatly, factually, and the subject is dropped. Thus the open conspiracy maintains the illusion of a free press — by reporting on charges without investigating them. It is perhaps more effective these days than merely attempting to “kill the messenger” with the “conspiracy” label. Ultimately, neither the power elite nor the mainstream media are going to be able to hold back the onrushing tide of information. The ‘Net is generating a critical mass of questions — some from the left or right and many from a free-market point of view. More and more is being pieced together about the way the world really works.

Storm Warnings — a Summary • The Fed withdraws the M3 inflation number from public viewing — a historical first, which potentially destabilizes an already unstable economic situation in the United States and abroad. • The velocity of money increases — and the threat of a real, hard hyperinflation looms.

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• The sociopolitical confrontation intensifies — while the globalist agenda pushes forward at a dangerous pace. • Middle East violence intensifies, perhaps producing another full-scale war — as part of a larger, political and economic confrontation. • Competition for control of the Internet intensifies — the ‘Net continues to win the battle for the eyes, ears and minds of users. • The West enters a time of increased stress and change — both sociopolitically and economically, especially in the United States. • Market volatility increases — the result of the exposure of a massive gold- rigging plot. • The regionalization of nation-states and centralization of power moves forward — yielding oppression not efficiency. • U.S. federal power consolidates further — gradually reducing what’s left of the American republic. • The petro-dollar continues its demise —with countries such as China, which holds $1 trillion worth of U.S. Treasuries, continuing to sell off. • The promotion falls apart — as the alternative Internet press continues to expose the global power elite’s secretive money-mechanism.

Challenges and Solutions The Anglosphere is in turmoil. The Western world, generally, is faced with the kinds of economic adjustments that only come once in several generations. Centralization of state power, increased profligacy of government spending, currency devaluation, war and violence in various global “hot spots,” especially the Middle East, efforts at increased information control — this is indeed the Fabian way, from chaos to control. Each element of mass disturbance moves humankind in the preferred globalist direction. History, as we have seen, is clear that these are the mechanisms and levers of social change. Carroll Quigley has explained it to us, Colonel House has apparently confirmed it in his secret memo to the British prime minister, and the current U.S. administration is run, at least in part, by so-called neocons whose think tank’s mission and white papers give voice to the same sorts of strategies. For you and me, the above difficulties present a serious but not impossible challenge. Most people do not want trouble, and most people do not revel in violence, seek it out, or use it as a tool. Most people, seeing what the future holds, merely want to anticipate difficulties in time and find the right coping strategies. Unfortunately, if we believe Maslow, only about 2% of the population is fully aware of what the problems are and even fewer (the subset of free-market thinkers) will

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actually apply “human action” to implement appropriate coping strategies, even if they come across them. It is, nonetheless, one of the main purposes of this book to explain not only the sociopolitical and economic problems faced early in the 21st century, but the solutions too. There are certainly steps that can be taken to ameliorate the worst of the challenges that lie ahead. Below is a list of such steps condensed from the “Economic Action Alerts” presented at the end of each chapter. Just as the Storm Warning list may have provided a better sense of the difficulties ahead, so this list of action alerts is intended to provide the beginnings of a practical strategy of protection. Practiced together, they may provide an inoculation against troubles to come.

Economic Action Alerts — A Summary • Knowledge is the key to wealth — as individual issues begin to become clear, courses of action may be appropriately considered. • Purchase precious metals to counteract the lack of transparency regarding inflation — as hyperinflation moves toward reality, the leverage afforded by silver- and gold-based investments will also become more valuable. Mining stocks will become quite extraordinary investments toward the end of a commodity bull run. • Monitor the global power elite — for power is in the hands of many who are not evident on any world stage. You may well find that the power elite makes a habit of buying silver and gold even though the public face of the power elite is negative about such money metals. You will almost certainly find that the global power elite owns property in several countries, not just one. • Take possession of at least some assets via physical delivery — creating a new currency is hard work. Given a change of this magnitude, if the global power elite is truly serious about delivering it, as Joan Veon believes it is, one wants to be holding money metals, especially silver. Physical delivery is a plus. • Watch out for a media-induced collapse of the stock market — and for an increased level of Internet-oriented investment opportunities. From a competition standpoint, the Internet is winning the battle for the eyes, ears and minds of viewers, certainly in the West and especially in the United States, where most of the 100 million or more blogs and bloggers are supposedly located — even if their readers “span the globe.” Take advantage of what savvy billionaire investors such as Rupert Murdoch see: opportunity to participate on the ground floor with the “new breed” media players. • A commitment to honest economic education is part of becoming a free- market thinker — unlike two percenters in general, who are focused on becoming the best they can be but are not necessarily interested in fully understanding the world

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around them. Free-market thinkers intend to find out all they can about their environment. They take human action to live as independently and forthrightly as possible. They understand that depending on “programs,” economic or otherwise, supposedly set up for their benefit, places them in a position of childish dependence. • Put enough time and effort into sociopolitical and economic analysis to reach a determination as to where you stand on these issues — times are changing. If it ever gets to the point where there is public debate on the issues discussed in this book about the sociopolitical and economic manipulations practiced by the power elite, the power elite will lose. Any honest explanation will ensure the system’s downfall. • Consider EU investments, but not if the political union threatens to overwhelm the positive benefits of currency fusion —given that the EU’s support is very shallow. We can see from the rejection of the European constitution that while the citizens of the EU recognize the empowering effects of one currency, it does not follow that they aspire to the freedom-stifling impact of a single political system. If and when the political union’s regulatory mechanism overpowers the benefits of the economic union, the EU will cease to be an investment target or a relevant source of positive returns. • Look for signs that the onrushing wave of U.S. federal power has crested — and that redistributionist policies are waning. Inevitably, because of the economic law of marginal utility, government spending is inefficient and tends to inject even more Conspirati Lord William Rees-Mogg, a life peer in the House of Lords and a former editor-in- chief of the London Times, has written that the world is moving into a post- industrial ‘Third Wave' paradigm. [This] will see the erosion of nation-states, and their replacement by a form of one-world ‘electronic feudalism.’ In Rees-Mogg's Brave New World, only 5% of the population, the ‘cognitive elite’ or what he calls the ‘Brain Lords,’ will prosper and enjoy the fruits of modern technology. The vast majority of peoples of the world are doomed to a life of misery. To prevent social unrest under these brutal conditions, the British financier oligarchy has gone to great lengths, since the Kennedy assassination, to foster a drug-rock-sex counterculture, that creates, in the words of Aldous Huxley, ‘a concentration camp of the mind.’ From the ranks of that counterculture, Prince Philip, his World Wildlife Fund have recruited a radical environmentalist movement, a neo-pagan gang like the Hitler Youth of the 1920s. —1997 post at The American Almanac, The Largest Empire In the History of the World

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distortions into the economy. The more fusion that occurs, the more unitary power the current administration is able to command, the more difficulty the American experiment will experience. • Precious metals and overseas equity investments are appropriate — consider them during a time of the U.S. dollar’s decay and possible destruction. If the Fed’s history is any indication, the dollar’s demise is an eventual certainty. American investors will then choose between various other options to park dollars and in the 2000s, precious metals should be chief among them — along, perhaps, with overseas investments of various sorts. • Monitor the unwinding of the Age of Promotion — as those who have controlled dominant social themes for their own profit revise their methods of operation. This must surely result in a high-level reconfiguration of globalism and even a rethinking of the wisdom of internationalism itself. Change is frightening but also offers opportunities. We should strive to manage it rather than ignore it.

21st Century Investment Solutions In the above Economic Action Alerts, what comes through clearly is that there must be a commitment to self-education and watchfulness as to the reactions of the power elite. But several of the action alerts refer to honest money and the need to understand what money is and to configure your portfolio so you own both gold and silver. The rest of this chapter will concentrate on specific economic and financial issues with an emphasis on hard-money solutions. The larger discussion of the power elite and the ramifications of the Internet are most important in terms of building a valid 21st century frame of reference. But the acquisition of honest money in varying forms is an important insurance element in the event of a soft or hard hyperinflation or in the case of social breakdowns or government economic interference. Few grew wealthy in the 1970s buying blue chips and the same may be said of the 2000s. This is the decade of the commodities bull. Money that is not necessary for other purposes might well be aimed in the direction of metals, raw and precious, and almost any other tangible thing, with the exception of some real estate that might be seen to sop up the excess inflation that the Fed is pouring into the economy. In perhaps 80 years, the greenback has lost substantially all of its purchasing power and whatever remains is rapidly being dissipated in pursuit of overseas wars and domestic welfare giveaways. Let gold and silver coins circulate side by side with fiat dollars for a single year — as they did for 100 years after the founding of the republic — to see what demand there is and how such coins will be valued against fiat. The conclusion is not open to question: People will seek to hold “money metals of choice” rather than the Fed’s ever-eroding fiat dollars. No one knows for certain what

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the future holds, but when it comes to money and monetary issues, certain educated guesses can be made. Fiat money will continue to erode in the United States and around the world until some “trigger,” be it lack of confidence or merely the entropy of the system itself, will cause a crisis. Of course the time frame for these monetary disasters can be compressed or expanded and therefore such disasters can occur quickly or can be drawn out. In either case, the result is the same. As fiat money erodes, so do living standards. People find it increasingly difficult to provide the basic essentials. Eventually civil society itself begins to break down as people grow increasingly desperate. While it is very clear what the ultimate fate of fiat- money regimes must be — especially as the Internet continues to undermine the Age of Promotion — the timing is never easy to predict. Whether fiat currency collapses entirely in our lifetime or not, understanding the mechanics of honest money is of paramount importance to any free-market thinker. Physical gold and silver are a necessary part of a person’s or family’s portfolio; gold and silver will continue to rise in value as government-backed paper money lurches from one crisis to another, constantly eroding in value.

Rates Continue to Rise? As of this writing, many so-called experts expect the rate increases by the Federal Reserve to slow during the summer and fall of 2006. This is probably wishful thinking. Just the sheer amount of media coverage of Fed Chairman Ben Bernanke’s bias toward money creation might lead one to assume that the Fed will move as it has traditionally moved — in the opposite direction. While Bernanke may favor endless floods of money, the same mechanism will be responsible for a continued hike in short-term interest rates as well, and eventually these probably will move, as they have in the past, well past the point of pain. The last serious round of rate hikes occurred during the time of former Fed Chairman Paul Volcker in the 1970s. One increase at a time, rates crept up. Eventually 20% came into view and the result was an inevitable recession. Actually, “depression”might not have been out of context in terms of what ultimately occurred, though it was certainly compressed, wedged between 1980 and 1981, extremely difficult years, providing challenges for both North and South, the developed and developing. Financial challenges always spill over national boundaries. Job creation was at a low, foreclosures at a high, and the U.S. economy and equity markets sputtered. Even commercial center banks came close to default as a result of Central and South American loans. Over the last two years, as rates started upward, low-interest variable

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rate mortgages suddenly hove into view. These were pounced on inevitably — receiving unfortunate, abundant, enthusiastic patronage. And the result was predictable, too. Today, both delinquency and foreclosure are moving up. Estimates are that nearly $1 trillion in these adjustable rate mortgages (ARMs) will be ready for a reset over the next 12-plus months. If the specter of broad-base consumer mortgage defaults is not bad enough, how about the problem of credit card debt? Just as the early ARMs predict the early sufferers, so high credit card debt predicts additional weakness. The profile is simple and includes a leveraged home, ARM cash flow difficulties and excessive credit card debt. Add higher credit card rates to higher house payments and a still inflating dollar, and the recipe for an engulfing wave of U.S. bankruptcies is feasible in the longer or shorter term, one that may well rival or exceed those of the 1970s.

Popular Precious Metals Rate rises, fiat erosion, understated inflation reports — no wonder more are becoming aware of gold and silver and seeking to buy it on the dips. These precious metals have already proved themselves the best investment bets of the first decade of the 2000s, with gold being gobbled up rapidly, despite price swings. And professional investors seem to be finding it increasingly difficult to refute the arguments of GATA that gold should eventually go over US$2,000, and perhaps much higher before the latest commodity bull runs its course. And then there’s silver. If you think the world’s insatiable industrial demand for silver is a big deal, watch what happens when the crowd shows up in a desperate panic trying to salvage something “real” from their artificially inflated lifestyle. Having studied both markets exhaustively, I feel that the times are bright for both money metals, but I actually give the edge to silver — there just isn’t much of it around and there’s always more annual industrial demand than new annual production. There are those who believe the time is now for both gold and silver to re-emerge as actual “honest money,” primarily because of the public’s growing awareness of the fraud that’s been perpetrated against them as regards their paper money substitutes. This is certainly a possibility. FMNN commentator and free-market thinker Richard M. Ebeling — who runs the prestigious Foundation for Economic Education (FEE) — is most aware of how much power precious metals gain as paper currencies decline. This is excerpted from Dollars on Sale, 30% Off, posted to FMNN in May 2006.

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If you own paper-assets denominated in dollars (cash, stocks or bonds) sell them and wait for the dollar to crash before going back to owning dollar assets. The dollar could fall 20 to 30% before there is a material improvement in the trade deficit. You should, instead, consider owning real assets: Gold, silver, other precious metals and commodities, come to mind. For investors who prefer being in cash, it’s not easy but it is possible to open up a foreign currency account. Everbank even offers foreign currency CDs insured by the FDIC, and there is a new, short-dollar currency fund offered by RYDEX Funds that offers a 2% increase in value for every 1% the dollar goes down.

Precious Metals Points to Ponder •Precious metals are anonymous: Physical gold is as anonymous as a banknote, but without the depreciation — as is silver. Most paper currencies that ever existed have been inflated out of existence. Even the very few that have survived 100 or more years have seen most value eroded by the printing of paper money, or the inflation of the money supply. Rising prices, known as inflation, are a symptom of the inflation of the money supply. In times when inflation is high, or is expected to be high, because it is rising, people seek protection through holding real assets rather than fiat money, which can be printed ad infinitum. History is littered with examples of currencies that have collapsed in hyperinflation. Gold and silver are real assets that can never be printed by any government. The demand for precious metals rises in inflationary times, pushing up their prices. • National crises makes metals more attractive: In times of national crises — wars, civil or financial emergencies, etc. — people fear that their assets may be confiscated, looted or seized. Paper becomes suspect and silver or gold, especially coins, become increasingly valuable; even when fiat fails, a gold or silver coin will always buy bread or transportation. Are people nervous currently? According to the World Gold Council, gold demand rose 29% in the first half of 2005. The increase came mainly from ETFs (Gold Funds), but also from jewelry. Gold demand was at an all-time record. Demand from the electronics industry is rising by 11% a year, jewelry by 19%, and industrial and dental by 21%. • Increasing high-tech demand for precious metals: Both gold and silver are still used today in jewelry and ever-more intensively in high-tech industries with silver emerging as the increasingly more popular of the two — primarily because China and India’s gigantic manufacturing industries have

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Elite Retreat …

“FMNN recently covered the surprising New York Times feature bashing gold miners. Its thesis is that open-pit mining’s use of cyanide to separate out gold from tons of crushed rock and earth constitutes a form of ‘dirty gold,’ poisoning indigenous communities against their will. Resource Investor’s “Pitpundit Blog” reported on a PBS/Frontline program accompanying the New York Times story, one that blasts giant Newmont Mines, among others, for its industrial practices. … The magazine also mentions the radical environmental group Earthworks whose site prominently features a link to ‘No Dirty Gold.’… The President and CEO of Earthworks is himself from Greenpeace. … A prominent member of the board of directors of Earthworks is Michael E. Conroy who turns out to be the ‘program officer’ for the Rockefeller Brothers Fund. A quick crosscheck shows that fully ONE THIRD of the names of No Dirty Gold “Campaign Allies” would seem to have received Rockefeller Brothers’ bequests in the 2000s. These include Greenpeace and various ‘Friends of the Earth’ — No Dirty Gold Campaign allies. Free-market observers who believe in gold are not at all downcast by this concerted attack on the gold-mining industry, citing it as a buying signal. ... The rhetorical question posed by free-market thinkers: ‘Do you think any of this would be happening if the price of gold was headed down?’ ... Even more plainly: ‘It could be the mother of all buy signals.’” —FMNN, October 2005 been gobbling up the world’s supply of silver. Applications involve millions of units of production of high priced goods in which the per-unit value of silver might be on average 20 to 30 cents. The price of silver could easily triple or more without even affecting the wholesale and retail prices of these electronic goods that rely on silver for their unique conductivity characteristics. • Silver wins? Gold and silver are very popular with a lot of people because of their place as “real money.” And this book, to some extent, has concentrated on gold to explain the evolution of the monetary system, fiat money and the decline of honest money. But silver may be an even more attractive precious metal than gold during an era of high alert. Silver is still in relatively short supply, and if and when a financial hurricane hits the West, especially America, it will be silver that the 98 percenters turn to because that will be all their meager savings will allow them to buy. Silver has been seen as desirable by many of the world’s savviest investors including Warren Buffet, Bill Gates and George Soros — all of whom have bought a good deal of it in the last decade. A case for considerably higher silver prices has been made persuasively

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by such noted silver experts as David Morgan. • Copper too: Copper was about 70 cents a pound three years ago and it is over US$3 as of this writing. Commodities follow precious metals. When gold and silver are up, often copper, palladium, zinc and others are up as well.

Junior Mining Equity • Promise of junior mining stocks: For those who want the most “leverage” during a commodities boom such as the one now taking place, an investment in mining stocks may be appropriate. • Not all juniors equal: When it comes to selecting mining stocks, a prudent assessment must be made of the company’s management, prospects and strategic positioning. Consult a broker with experience in precious metals and mining stocks before making a choice. Hard-money sites such as FMNN, where information may be gleaned about mining stocks through articles, TV programs and advertisements, may prove useful as well. Savvy investors who hold strategically chosen positions in junior mining stocks may reap enormous profits over the next several years, and do so while the majority of those around them are being financially decimated. • Is there an ideal junior? What attributes would it possess? Such a company should have a focused, disciplined strategy and a proven track record. Ideally, it should have a portfolio of properties with identified ore bodies in regions where there have been significant discoveries and preferably large operating mines still in production. This is most important. Any positive geological success has the possibility of generating tremendous widespread investor interest — because the region is already known to many. After that, the ideal junior would offer proven reserves — and a strategy for efficiently exploiting those reserves below market prices. The company’s skilled, experienced management will have acquired properties in a country with a stable sociopolitical climate. The region will not have seen the application of widespread, modern mining methods, but will have a proven history of mining — and will only recently have been opened to direct foreign investment. Free-market thinkers will pay close attention to the struggle between the private sector and populist governments for control over assets. South America and Asia are becoming more difficult places in which to do business. Bolivia, Mongolia and Venezuela — to name a few — have all sought to repatriate natural resources, and other countries threaten to follow. The more risk that is associated with a region or property, the more alert and competent management must be as regards to the increased challenge of doing business in developing regions.

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In the latter 2000s, and beyond, management of lesser capitalized mining companies will need to focus the assets of the firm on a very few promising properties, preferably in a single locale. The company’s management can then attempt to ensure that it has laid a proper political and economic base — one that will result in a successful conclusion rather than, say, an unexpected confiscation. The available pool of countries where one can safely mine has been shrinking dramatically in the 2000s. Thus, location plays an evermore important role in the ability of a company to succeed and reward its shareholders. While many regions around the world are all but “tapped out,”a slew of new opportunities for gold and silver mining may be waiting “in the wings” in such places (despite the current epidemic of confiscations) as Argentina, Peru, Brazil, Chile and Colombia in South America — Finland, Norway and Sweden in Northern Europe. It could also be that countries such as Russia and China will lead the way in the 2000s from a commodities standpoint, with China providing the consumption and Russia providing the raw materials. Visionary mining management able to capture such a trend — and then promote business and mining savvy to the public-at-large— will be the ones rewarded by shareholders. A teeter-totter approach to capitalizing on mining stocks as they heat up later in the bull market cycle was mentioned at the end of chapter 10. This teeter-totter approach should be put into practice in conjunction with companies that are led by experienced management teams with significant international exposure. When identifying such companies, or taking advantage of the investment focus identified in this book, the reader may want to check in regularly with the FMNN Internet news site — and also subscribe to appropriate free-market oriented newsletters.

The Value of Promotion This chapter has reviewed tangible, realistic steps to take when faced with the kind of sociopolitical and economic problems that“High Alert” has profiled. But a free- market investor will be willing to overlay fundamental and free-market considerations with yet one more — promotional skill. We do indeed live in an age of promotion and the equity markets around the world, growing in strength even as they are homogenized and merged, thrive on such activities. A mining exploration company may be well managed and have a terrific business niche, but management must have a way of telling its “story.”If it does not, then from an equity standpoint that company may not do as well as one that is less viable as a business but better “promoted." If a company does not emphasize public relations, if its materials and website are second rate, if management does not seem to understand the necessity for promotion in the Age of Promotion, then even good performance will not add to the company’s value. This is especially true in mining stocks where only one

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company in a thousand graduates from “hope and promise” to actual mining. The odds are staggering and the amount of money necessary is enormous. The better the company’s management is at letting the world know about the firm’s progress, the more liquidity the company is likely to gain from banks and investors.

Personal Responsibility — Take It No one but the individual himself or herself can make decisions on how to confront the upcoming conflict between money power and the Internet. But free- market thinkers will certainly be prepared. And those accustomed to “looking in the mirror” and taking responsibility will do more than acquire money metals. A domicile abroad — a place to go in a time of mounting distress — is an appropriate resource at such a time. Honest money outside of the country, as well as at home — this too can be seen as desirable during a time of high alert. Free-market thinking is a perspective that goes beyond a specific investment choice. It is grounded in responsibility and independence. Understand sociopolitical and economic realities and then take “human action.” Make contingency plans. Have a strategy to confront emergencies — and think ahead. If the Internet continues to hamper promotional activities worldwide, then money power will utilize other means to sustain extant sociopolitical and economic systems. Gold will no doubt come under increased attack as the favored method of exchange for “terrorists and criminals.” Even extraction techniques will be criticized. The idea, inevitably, will be to find ways to silence honest money advocates — either via threats of incarceration or simply by painting them as sympathizers of enemies of the West. In 1933, during the Depression, the U.S. government made it illegal for Americans to own gold. This was a direct reaction to the public’s loss of confidence in paper money. What might happen this time round? Don’t wait to find out. Consider storing some gold and silver at home, where it can be easily reached. Buy a bag of “junk silver” — coins with a good deal of wear and tear that have little value to collectors but can be used in an emergency to pay for life’s essentials. Such silver pieces may provide the essential elements of survival in a true economic crisis when people cease to trust government notes. Also consider Swiss-based bullion banks in Zurich that specialize in purchasing and storing bullion. Many still operate as bullion banks did 200 years ago. Store some dried food, potable water and even oil and gas. Learn about self-defense, and how to load and shoot a firearm. One may hope for the best, but it is prudent to plan for the worst — in investing as in life. Taking personal responsibility is the essence of free-market thinking.

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CONCLUSION

“We have to decide whether we want a nation of self-reliant individuals who improve their own lives by offering needed services to others, or a nation in which everyone is responsible for everyone else — and so the government must control every aspect of our lives.” — Harry Browne

The great financial hurricane has arrived. Hyperinflation, recession, joblessness and increased wealth disparities are in the offing. America’s middle class reels under a barrage of Fed moves and resultant stock-market drops. Simultaneously raising rates while surreptitiously printing money, the Fed seeks to fund the country’s endless oceans of deficit spending on its elder-care welfare state, a two-front (as of this writing) war in the Middle East and the endless predatory spending of internationalist institutions. It succeeds only in aggravating income disparities and further distorting the economy. Taxes are higher, inflation verges on soft hyperinflation. The privileges accorded to a few regarding money and credit are little understood by the majority of those who live and work under the current system. The 98 percenters are the “last to get it,” but when they do, they will be angry. What many of them may eventually come to see is that as with the hit movie The Matrix, every part of their existence is not what it seems — but is instead, as we have discussed, a kind of promotion in which their fundamental or “core” belief structure is manipulated to provide financial gain for a handful of the super-wealthy. Facilitating these promotions is the elaborate globalist structure of governance that has been erected in the last century, a tremendous bureaucratic megaphone, trumpeting problem after problem as

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widely as possible to the billions who need to hear about the latest crisis in order to direct their capital flows to the correct gilded, gaping pocket. It’s time to pay attention, time to be on high alert. The old order is changing. The new order may belong to free-market thinkers who understand what is taking place and are able to position themselves properly to take advantage of it.

What Free-Market Thinkers Know Free-market thinkers know that many of the most highly touted investments of the last century will not do today. In fact, being economically literate, they understand that marginal utility and Say’s Law preclude much of what was put into place in the 20th century from working at all in the 21st. It has lasted this long only through a series of international emergency patches and stopgap measures. The system, or large portions of it, must fail, especially those having to do with the monetary system. Free-market thinkers are not averse to taking possession of some of their assets via physical delivery and dispersing assets in places where they cannot easily be found. They expect further price rises for precious metals in 2006 and beyond, despite the volatility. Free-market thinkers will pay close attention to the messages the Internet is sending as well as the information they can find on it. The Internet is useful as more than a kind of glorified encyclopedia or newspaper. It is also a community, airing gripes and deliberating endlessly on all sorts of sociopolitical and economic issues. In this sense, it may function as a kind of early warning device, revealing by a change in tone — among bloggers or the conspirati — just how serious the economic environment is becoming. Free-market thinkers understand how the business cycle is influenced and heightened by central banking policies, and how important it is to understand the ramifications of those policies. Follow the incessant stimulations of central banks, the resultant inflations, hyperinflations, disinflations and depressions, in order to determine the best allocation of assets at a given time. Free-market thinkers will “follow the money”— the power elite’s money — to track capital flows and the kind of global promotions that emerged in the 20th century and are still prevalent today. Remember, American Express was one of the first American companies to do business in China after Nixon, with the help of Henry Kissinger, “opened the door.” Today, China is possessed of what may be the most vibrant economy in the world. Sure there may be troubles with China, and with choices that have been made by its officialdom, but an early China investor would have reaped substantial rewards, just as America Express has. This sort of information should be overlaid with a knowledge of the business cycle, how it operates — and where it is. Of course, this is not a standard perspective — but what was normal for citizens of the West, especially

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Americans, in the 20th century is not what will be normal in the 21st. The Age of Promotion is not yet over, and the era of High Alert (and the Age of Connectivity) is just beginning. In Chinese, the written word for crisis and opportunity is the same. Ready yourself and your loved ones for change, but do not give in to hopelessness or fear. Wars subside, governments change and opportunities are most prevalent when the larger scene seems bleak. Take the time to stand back and internalize the bigger picture rather than the smaller one. Even on the ‘Net there are plenty of extraordinarily intelligent sociopolitical and economic critics chasing what might be called “conspiratorial ephemera.” (Were Jews really gassed in ovens? How much culpability does the U.S. administration have for 9/11? Did Tony Blair conspire with George W. Bush to present fake evidence to justify the war in Iraq?) Yes, these issues are both grave and shocking. But it is vitally important that the chaos-making mechanism itself is not obscured — and that nothing stand in the way of understanding the free- market solutions within our reach.

Manipulation by a Few Just as the Gutenberg press helped present and thus expose the age-old manipulations and corruption of the Roman Catholic Church, so the global power elite is bound to see its secrets and manipulations increasingly exposed on the ‘Net. To a degree this is already happening. It is imperative that those with the means, and understanding to do so, utilize the transparency that the Internet offers. The system of global promotions, the control of the economy via central banks, its business-cycle distortion via government-backed fiat money, the lust for power, obsessive need for secrecy, endless, ruinous conflations of the public purse and private enterprise — all these have increasingly degraded civil society and made it evermore difficult for the average Westerner to live even a modest existence with some level of certainty. What the West should do is elevate those who are impoverished. Instead the elites argue that Western living standards must degrade further. This is ancient, Malthusian thinking — there is not enough to go around — versus free-market, neo- classical thinking (human action and the marketplace will provide a better standard of living for all). The most obscene hoax of the 20th century was the cover-up of the immutable laws of the free market and the lack of application of marginal utility to the modern, legislative process. Grant the efficacy of marginal utility and the entire regulatory superstructure comes into doubt — as well it should. The “Decline of the West” is not the fault of the free market. The number one reason for the catastrophe now making its

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visitation is that the definition of the problem has been obscured, manipulated, purposefully so. The global corporations behind the current internationalism are no more involved in a “free market” than politicians in their pay. What is emerging in the United States, and around the world, unfortunately, is a kind of corporatism akin to that which was — admittedly with far more brutality — imposed on Germany between world wars. Such a system would not have worked then and will not work now. Bigger is not better. Complexity does not guarantee utility. Private/public partnerships are empowering only for those with direct access to the funding stream. The emergent system of governance removes responsibility but not the beneficiaries. As ubiquitous as global promotions might be, these do not ameliorate other aspects of money-power facilitated globalization. Contrast this with the Internet itself, which holds the promise of communicating enough information so that people will start to realize some of what is going on — and demand a say in it. The 21st century, with its freer flow of information, will no doubt see further abuses of power and bloody interludes. But it also offers hope that as free-market thinkers become more prevalent and vocal, society will become more transparent — and the power elite more responsive.

More VESTS Too much evidence exists, unfortunately, to turn away from what is obviously true — as was stated in the thesis at the beginning of this book. A “visible power elite,” challenged by the Internet, is causing increasing problems for the global economy as it struggles to implement its agenda. To counteract the fallout from this struggle, “High Alert” has suggested certain defensive strategies including an original strategy called VESTS. We discussed VESTS at some length in chapter 11. Below we attempt to sum up the process — along with reasons to use it and why the system should give the interested free-market thinker the wherewithal to confront the elite-sponsored financial hurricane that is now upon us. The VESTS system is ultimately a frame of reference as is “High Alert” generally. “High Alert” has done its best to provide free-market thinkers with an orderly presentation of the ideas and vocabulary necessary for life success — what may be called the Age of Interconnectivity. VESTS gives the free-market thinker a way to respond to the various problems that “High Alert” has predicted. More than that, VESTS provides a framework for response, albeit a generalized one, to these issues as they arise. Use the various components — overlays — of VESTS such as a compass, to provide a direction when faced with the difficult passage of the later 2000s, and beyond. Business Cycle Analysis — This is the first and fundamental overlay of the

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Reality Byte: elite retreat summary

Inflation moving up: “Greenspan says we don't have inflation — yet every chart tells a different story.” —Dinl.net, March 2004

Hyperinflationary forecast: “We are now embarked on a hyperinflationary depression.” —FinancialSense.com, September 2005

Free-trade pact opposition: “The closeness and fierceness of the CAFTA battle points to the growing opposition to these “free trade” pacts. Momentum is swinging our way.” —JBS.org, June 2005

Iraq war unpopularity: “70% of Americans think ... gains have come at an "unacceptable" cost in military casualties.” —WashingtonPost.com, December 2006

Gold prices up: “The more this suppression of the gold price is made known, the more countries and big financial interests will want to own gold.” —Bill Murphy GATA Presentation, GATA.org, June 2006

EU disarray: “Blair accused Chirac of arrogantly refusing to learn the lessons of France's no vote on the E.U. constitution.” —Compilation, FreeInternetPress.com, June 2005

Latin America dissatisfaction with managed trade: “Revolts against ‘free-trade pacts’ among the citizens of Latin America are on the rise.” —Leo W. Gerard, International President, United Steelworkers, USWA.org, May 2005

Fed without monetary indicators: The Fed has no way of knowing how much money the economy needs. —Exchanges between Dr. Ron Paul and Alan Greenspan, February 2000

Media mogul predicts Internet triumph: “Murdoch has forecast a gloomy future for newspapers with the growth of the internet.” —Media.Guardian.co.uk, November, 2005

Internet supports free-market: “Nearly half a million Misesian [cites] are rocketing around cyberspace.” —FMNN, June 2005

Bilderbergs upset by scrutiny: “Just before the 2006 Bilderberg meeting in Ottawa, Canada, alternative ‘Net reporter Alex Jones was detained at the border.” — FMNN, 2006

Gold bashing good for price prospects: FMNN recently covered the surprising New York Times feature bashing gold miners. … “The parties involved know the yellow metal is headed up; they want to force it higher quickly via a crisis that demands immediate and ongoing regulatory intervention.” —FMNN, Anthony Wile, October 2005

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End-of-Book Chapter Summary

Emphasis below on the anti-free-market moves of the power elite that, in the Age of Interconnectivity, may provide an investment opportunity via application of VESTS investment analysis. • Mismanagement: Chapters 1 and 2 dealt with the power elite mismanagement of the economy resulting in the impending financial hurricane. • Global ambitions: Chapter 3 summarized the workings of the “visible” power elite with an emphasis on the Anglosphere. • Use of war: Chapter 4 focused on the manipulation of violence. • Control of money: Chapter 5 dealt with the banking industry and its historical manipulation by the power elite. • Diminishment of freedom: Chapter 6 showed the sociopolitical and economic conditions under which freedom expanded and also focused on the growing domination of money power in Europe through the EU. • U.S. takeover: Chapter 7 presented the power elite’s growing influence in America, while Chapter 8 focused on its banking influence. • Challenges to control: Chapters 9 and 10 proposed that the Internet and a growing cadre of free-market thinking two percenters were challenging control of the flow of information and globalization. • Promotional strategies worldwide: Chapter 11 proposed the world’s global infrastructure was designed to support the promotional messaging of modern money power. • Strategies to counteract: Chapter 12 provided an action summary of solutions to the economic and sociopolitical crises caused by the collision of the Internet and the power elite.

• Conclusion: Restatement of the problem, free-market thinking and the VESTS system.

VESTS system. By analyzing various publicly available data and news items, a fairly good, if generalized, sense of an economy’s position can be ascertained. Again, the analysis should account for the differing cycles in various nations and regions of the world — as well as the relative monetary stimulation to which the economy in question has been subject. The next overlay seeks to analyze money power promotions and money flows. This demands not only an appropriate perspective but also identification of a vehicle. An individual might have been aware of the funds pouring into China during the 1990s, but

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the ability to place his or her own funds in that part of the world would have been proscribed by lack of appropriate alternatives. Today, that is not the case. The Chinese stock market and various international funds, including private funds, offer opportunities, albeit high risk. The final overlay in the three-part VESTS strategy has to do with analyzing how the Internet and the free-market are colliding with global elite promotions — and thus assessing the viability of such promotions. Adam Smith’s invisible hand is no less powerful for not being opaque. The free market inevitably throws up hurdles to the kind of vast command-and-control enterprises that the visible power elite contemplates or has put into effect with the formation of the EU, for instance. Over time, human action may erode control and invalidates command-and-control procedures, and this process could well be abetted by the Internet. Intelligent, aggressive people with no outlet for their creativity will turn to undermining the system. Those involved in its enforcement will eventually internalize its bankruptcy and cease support. This is what the utilizer of VESTS needs to internalize — that the free market is intrinsically hostile to large, bureaucratic shops because price points tend to diminish, then vanish. Once this occurs, the market itself must inevitably fail. Work is disrupted. Food ceases to be shipped where it is needed. Basic resources go untended. Price calculations, or the difficulty of them, form a major part of the VESTS analysis. Free-market thinking based on the inevitability of price calculations can prove enlightening when it comes to analyzing the potential for success inherent in certain power elite plans. As the Internet provides more such free-market thinking, the number of what “High Alert” has called two percenters may swell as well. Percentages may rise to three, four, five — even 10 or 20. In truth, even five or seven or 10% might be enough to initiate a real change in the way the power elite does — or does not — do business. Again, the idea of using Maslow’s “two percenter” theory was to illustrate how difficult it is to grasp and act on the concepts within “High Alert.” The more who can join what Maslow believed was “two percent,”the better — especially if they evolve into free-market thinkers.

Retreat of Money Power? This book has taken, as its thesis, a conflict between the visible power elite and the ‘Net — which is seemingly revealing strategies of control that served better in the 20th century. It would be nice to think that the power elite, having realized the nature of this unexpected communication device, would decide to be open about its plans and allow the average citizen a formal say in its strategies. Alas, this is not the way the elite operates. Yet it would seem there are certain changes in power elite behavior. As mentioned earlier in this book, it took some 50 years to design a European Union — and even then its constitution was defeated. Recently, the CFR issued a white paper

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trumpeting an American union with Canada and Mexico — a startlingly presumptuous and rash call-to-action given the caution with which the European Union was approached. Americans are not happy about Mexican immigration and Canadians seem to appreciate neither nationality. The simplest explanation is panic — causing various miscalculations. What before was fairly hidden and crafty, looks obvious, even ill-conceived, and certainly badly implemented in the Age of Connectivity. Is the visible global power elite in some disarray because of the Internet? Throughout “High Alert,”media observations tracked what seems to be an “elite retreat” on certain issues. The elite even presented a glimpse of what must be a growing frustration by temporarily detaining alternative media ‘Net reporter Alex Jones at the Canadian border, en route to cover a secretive Bilderberger conference in Ottawa. Other areas where the elite seems to be on the defensive: The U.N.’s oil-for-food scandal, global warming — where an increasingly vocal anti-global-warming minority is making its presence heard, and in the area of generally controlling free-market information. No winner will ever fully emerge from the age-old struggle between “money power” and the citizenry. Yet communication devices developed in the last half millennium — the Gutenberg press and the Internet in particular — seem to be having a qualitatively different impact on the social order than that which came before. No one can foretell the future in any detail — human action sees to that — but it is possible to extrapolate general trends. The betting here, as stated previously, is that the quality and quantity of information on the ‘Net will have a lasting effect on the generations now gaining access to it. And this impact will translate into a freer society with more opportunity, less bureaucracy and perhaps even a devolution of sociopolitical and economic control. It has apparently happened at least once before. How we get from here to there — or even if we do — is not yet clear. But it should be obvious to readers that a start has been made and a trend likely established. The power elite’s vision of the world is surely dysfunctional, based on ever- larger and more corrupt bureaucracies generating evermore ruinous regulatory codes aimed at an increasingly restive, if not rebellious, population. This book has in large part, dealt with modern money power from an investment standpoint, but the reality is that much of what is necessary for modern money power to survive involves the potential increased militarization , social and economic chaos, even bloodshed. Ways of building happier, more prosperous societies do exist — via a focus on social constructs that trigger people’s intimate rather than impersonal (confrontational) communal preferences. “Human action,” the ability to create a universe of one’s own choosing within the larger context is the easiest, fastest way to freedom and prosperity. Adjudication of individual-versus-communal-rights should take place privately —

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without government interference wherever possible. If one accepts the reality of the power elite and its anti-free market manipulations, then much that has occurred in the last century was unnecessary — up to and including a good deal of 20th century warfare. If this is the case, it only makes sense that every modern instrumentality should be employed to see that the 21st century does not repeat the 20th. The Internet is certainly a viable tool in this regard. But even more powerful than the Internet is an understanding of free-market thinking and the individual’s power to change the course of human events, large and small. Over and over, great art and great insights have come from those raised in the humblest environments. Physical beauty, great wealth, an impressive pedigree, these are wonderful attributes, yet may count for little when totalling up the value of a lifetime. Understand, please, that High Alert is an attitude — but its benefits can be manifold. Visible Elite Super Tendencies Strategy (VESTS) power elite promotions & money-power manipulation

Power elite promotions Monetary stimulus and via dominant social themes — business inflation via Federal Reserve, from elite-controlled governments, World Bank, International foundations, religious entities, Monetary Fund, other central mainstream media groups, etc. cycle banks, etc.

— INVESTMENT ZONE — CONFLICT BETWEEN MONEY POWER PROMOTIONS AND FREE-MARKET THINKING Analyze the collision between elite promotions and free- market thinking to ascertain investment opportunities CONFLICT OPPORTUNITY

Power elite Honest Money (gold & silver) promotions analyzed — retained as prudent investors ongoing success questionable prepare for financial storm

Internet exposes money Growing audience of power and monetary free market thinkers manipulation; increases employs human action percentage who understand to prepare for and profit the power elite dynamic free-market thinking from monetary crises

free-market analysis & the business cycle

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Some FMNN Free-Market Thinkers

Jim Babka, Downsize DC, funnels timely e-mails to congressmen to help defeat federal boondoggles and anti-freedom legislation — including attacks on the Internet. Babka is popularizing laissez-faire-oriented ideas through the “new thinking” of the Downsize DC Foundation and DownsizeDC.org — of which he is president. He was the press secretary for Harry Browne's 2000 campaign for president — when Browne was the Libertarian Party [LP] nominee. Previously, Babka was the state chair of the Libertarian Party of Ohio. The Foundation itself was Perry Willis's brain-child; Harry Browne devoted his talent and resources to co-found the organization; in January 2003, Steve Dasbach joined to bolster the Foundation's management arm as “special advisor to the president.” William Bonner, Agora Publishing, runs one of the world's most successful consumer newsletter publishing companies, focused on hard-money and free markets. Bonner, founder and president of Agora also publishes a free daily e-mail, The Daily Reckoning, which reaches millions. In 1979, he began publishing International Living and Hulbert's Financial Digest. Since then, Agora has grown to include dozens of newsletters focusing on finance, health and travel. Bonner is the author, with Addison Wiggin, of the New York Times Business best-seller “Financial Reckoning Day: Surviving The Soft Depression of The 21st Century” (John Wiley & Sons, New York, London). Harry Browne, (deceased) who wrote best-selling books and launched popular, free-market campaigns for the U.S. presidency, reached millions with practical advice on how to be “free in an unfree world.” In his lifetime, Harry Browne wrote 12 books, selling more than two million copies. In 1996 and 2000 he was the nominee of the Libertarian Party for president of the United States. Browne was little known in the investment world when his first book, “How You Can Profit from the Coming Devaluation,” was published in 1970. This was only the first of a number of Harry Browne bestsellers. In late 1994, Browne announced his Libertarian candidacy for president and received 485,759 votes on Election Day, the second highest total in Libertarian Party history. In 2000, he was again nominated to represent the Libertarian Party and garnered more than 382,000 votes, despite a tight

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race between the two major parties. Dr. Richard M. Ebeling, who discovered the “lost papers” of the famous Austrian economist, Ludwig von Mises, in a formerly secret archive in Moscow, Russia — and is now supervising their translation, runs the prestigious Foundation for Economic Education (FEE). Ebeling was the Ludwig von Mises Professor of Economics at Hillsdale College in Hillsdale, Michigan (1988-2003), and also served as the vice president of the Future of Freedom Foundation (1989-2003). In 1996, Ebeling and his wife, Anna, discovered the “lost papers” of the famous Austrian economist, Ludwig von Mises. Looted by the Nazis from Mises's Vienna apartment in 1938, the papers had been confiscated by the Soviet Army at the end of the second World War. Edward G. Griffin, documentary film maker, founder of the successful free- market sites RealityZone.com and Freedom-Force.org, is the author of the definitive book on the Federal Reserve, “The Creature from Jekyll Island” named after the island where the Federal Reserve system was planned. Griffin is a recipient of the coveted Telly Award for excellence in television production, a contributing editor to The New American magazine and president of American Media, a publishing and video production company in Southern California. Marshall Fritz, founder of the Alliance for the Separation of School and State, has reached millions with the increasingly influential message that education must be removed from government control and reprivatized. Fritz founded his Alliance for the Separation of School & State in Fresno, Calif., in 1994 to promote “Honest Education” — a concept similar to “honest money.” He is the publisher of The Education Liberator, The School Liberator, and the lead author of the “Proclamation for the Separation of School and State.” Pat Gorman, a hard-money strategist who has helped individuals solve the problem of “fiat” money and inflation throughout his career, believes that precious metals are the ultimate store of value, and that paper money inevitably loses value since more of it is always printed than needed. Gorman writes a regular newsletter and has written numerous articles about hard money and has appeared on TV as well. For the last 13 years, he has also run his own radio talk show in Phoenix, Ariz., called Hard Money Watch. His talk show has been rated in the top five radio talk shows in Phoenix for the last 10 1/2 years. Richard J. Maybury, newsletter editor and author — whose sociopolitical and economic analyses emphasize free markets and show how death and destruction flow from the state — spends a good deal of time studying the behavior of governments, military activities and how they affect investments. Inventor of the Chaostan model, Maybury's U.S. & World Early Warning Report (EWR) is the first and only publication to specialize in reporting about it. The economic model employed is the free-market “Austrian” school of Nobel laureate Frederick Hayek, who influenced Ronald Reagan and former British Prime Minister Margaret Thatcher. The political and legal model is the “Natural Law” of Thomas Jefferson, James Madison and the other founding fathers. He has written a series of 11 internationally best-selling “Uncle Eric” books for eighth grade and up

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on economics from a hard-money, free-market point of view. David. Morgan, honest-money publisher, whose analyses, over time, have made millions aware of the opportunity to protect investments via precious metals purchases, especially silver. Late in the 1990s, Morgan founded a Web site, Silver-Investor.com, and began publishing his popular newsletter, The Morgan Report with a strong emphasis on the benefits silver can bring to those looking to prepare for and profit from the financial hurricane of the 2000s. The newsletter also covers free market-oriented investing generally. Many regard Morgan as the leading independent, silver analyst in North America. He has been a keynote speaker at the Silver Institute and appeared at investment conferences throughout the world. He is the author of “Riding the Silver Bull” and “The Skinny on Silver.” William (Bill) Murphy, grass-roots, educational campaigner via GATA, exposed the powerful Wall Street and Federal Reserve forces manipulating gold and silver and laid the groundwork for the current boom. The Gold Anti-Trust Action Committee (GATA) was founded in January 1999 to advocate and undertake litigation against illegal collusion to control the price and supply of certain financial securities, particularly securities involving gold. GATA's focus on gold manipulation may have weakened the international banking cartel and thrown its money metals manipulation into disarray. In that case, GATA and Murphy can be said to have aided in the return to prominence of money metals and the eventual downfall of the government-backed paper money system. Bernard von NotHaus, founder of the Liberty Dollar, distributes his successful money to users throughout the United States. Von NotHaus — one of the world's foremost experts on private currencies and alternative economics — retired after 25 years as the mintmaster at the Royal Hawaiian Mint and began a new life’s work introducing the Liberty Dollar into circulation in America and throughout the world. The Liberty Dollar is a currency that competes in the marketplace with Federal Reserve Notes. Dr. Ron Paul (R-Texas), congressman, defends the historical meaning of the Constitution in his position as a principled member of the U.S. Congress. Author, statesman and Libertarian candidate for president, Paul is a leading defender of free markets, sound money and strong families. He is the founder of two educational organizations: the Foundation for Rational Economics and Education (FREE) and the National Endowment for Liberty. He is also a distinguished counselor to the Ludwig von Mises Institute and a trustee of the Foundation For Economic Education. Dr. Lawrence Parks, founder of FAME, conducts a national campaign about the benefits of returning the United States, and ultimately the rest of the world, to an honest monetary standard. Only 100 years ago, the world thrived on a so-called “gold standard” in which gold pieces (coins) were exchanged worldwide for goods and services. Today, the world operates on a “fiat money” or “paper” standard. Parks, the executive director of the Foundation for the Advancement of Monetary Education (FAME), is a leading proponent of honest-money economics. Lew Rockwell, founder and president of the Mises Institute, and vice president of the Center for Libertarian Studies, is an opponent of the central state, its wars and its

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socialism. He is also editor of six books on free-market economics and arguably the most influential free-market scholar and activist of his day. Rockwell’s most recent books are “The Irrepressible Rothbard” and “Speaking of Liberty.” His Web site, LewRockwell.com, highlights the news and commentary that he finds important, or simply interesting. Dr. Helen Szamuely, founder of a popular anti- EU referendum blog, exposes the real power-agenda of the EU and helped lay the groundwork for the rejection of its flawed constitution. Unlike many Western intellectuals who seemingly always find parts of socialist or communist systems commendable, Szamuely has no such illusions. Born in the Soviet Union, she attended school in Hungary, Ghana and Britain. Her childhood and geographically-varied education provided her with the frame of reference that many of her peers lack and helped her reject the “soft socialism” of the U.K.’s upper classes. The EU referendum Web site she started with colleague Richard North has helped set the standard for anti-EU scholarship and aided immeasurably in exposing the European Union as the corrupt centralized, bureaucratized, unified pan-European state that it really is.

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AFTERWORD

We exist in a “real” world, and test our understanding against that reality every day. The more our “model” corresponds to reality, the better off we are when making monetary prognostications or even organizing our private and family lives so that we are enriched instead of impoverished, and our loved ones are properly looked after. So … how have we done? This afterword is intended as an evaluation. Let me begin by restating High Alert’s core concept: That a visible power elite challenged by the Internet causes increased problems for the global economy as it struggles to implement its agenda of increased global control over a range of human endeavor. Of course, if you have read this far you already realize it does not matter who “it” is (the power elite), only that we can make an accurate analysis of what is occurring and how, at the very least, the “two percenters” among us can protect themselves against the increasing depredations. Let’s briefly summarize what was going on when this book was written and initially published in the summer of 2006. At the time, the stock market was up, inflation was “tame,” the American war in Iraq was deteriorating - but was not yet as obviously hopeless as it is today - and the price of money metals was relatively high, but not yet as high as “High Alert” predicted they might go. What’s happening as I write this nearly two years later? All across the world, currencies are collapsing in a proverbial “race to the bottom” as inflation has continued its rise – whether or not you believe the official

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figures, you simply need to look at prices – so gold and silver have risen too. Meanwhile, aggravating the situation, the West’s fixation on the war in Iraq has given way to bellicose U.S. warnings against Iran, the next target in what is shaping up to be a three-front American war. The Federal Reserve has embarked on an unprecedented course to bail out failing Wall Street concerns such as Bear Stearns. Powerful officials are speaking out on behalf of giving the Fed increased powers to regulate the financial industry including and the real-estate industry. Stock markets around the world gyrate up and down as the Fed and other Western central banks attempt to pump enough fiat money into the system to keep it afloat. Of course, every printed dollar merely increases the rate of inflation, just as High Alert predicted.

History of a Collapse It all began quite suddenly in the summer of ‘07 with the “subprime” housing crisis - not the result of unforeseen circumstances but the predictable result of central banking policy. As “High Alert” points out, Western central banks printed too much money and offered too much credit throughout the 90s – indeed throughout the late 20th century and early 21st - and economies around the world first roared to life and then found the boom quite unsustainable. Resources went awry, sectors expanded needlessly and eventually, just as free-market economics predicted – the crunch came, the boom went bust and the results will be with us for a terribly long time, no matter what the pundits say. As a result of the collapsing sub-prime sector, the American dollar, which has been the reserve currency of the world, has begun to lose its primacy. Foreigners are rapidly losing interest in holding the U.S. dollar as of this writing, as the lowest common denominator – sub-prime domestic creditors - are failing. Without them… it’s hopeless. In America, where the weakness first appeared, the Federal Reserve snapped the whip across the backs of all the sub-prime domestic dollar borrowers as they ratcheted up rates – that was until September 18th 2007. A date that shall forever be marked as an official turning point in America’s reign as the reserve currency of the world. When the Fed bankers subsequently lowered interest rates by 50 basis points to 4 3/4s percent, they clearly sent a message that they were willing to sacrifice the dollar and let it devalue – knowing full well that foreign creditors would bail out. The result? As “High Alert” predicted would happen

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eventually, gold began to run. Over the next couple of days, the yellow metal hit a 28 year high breaking through the $750 barrier on the December futures contract and then running all the way to $1,000 and beyond before declining. A few days later the “loonie,” the Canadian dollar shot up and soon reached parity with the American dollar for the first time in 31 years, capping a 62% rise from its low in 2002. The Euro, a currency that really is nothing to write home about either – being comprised of a bunch of high-cost, low- producing nations with major socialist problems – benefited as well from the structural failings of the U.S. dollar, rising to record heights. Meanwhile, there was yet another attack on the dollar coming as Asian nations, China in particular, decided that “enough was enough.” A recent trip to Zurich, yielded information from one trader with a leading Swiss bank that he was “personally” handling some “transfer” business on behalf of the Chinese as they moved out of dollars and into gold as well as other foreign currency. The Chinese have also apparently created a $200 billion super fund with the intention of quietly unloading some of the trillion-plus of devaluing dollars that they hold. The targets? Natural resources and companies involved with finding, developing and processing them. Can you blame the Chinese? Maybe not today, but give the power elite a couple of more years to spin the story around and the mainstream media an opportunity to work their magic and you will observe the “98 percenters” numbly agreeing that the Chinese, just like the Muslims, are the reason for America’s terrible economic chaos. The power elite needs chaos, wars and destruction. Without them, the machinations become too obvious. Yet, for any serious observer, the coincidences are simply too numerous. Iraq, for instance, began to reprice oil in other currencies such as the euro and gold just before it was attacked by George W. Bush’s administration. As of this writing, Iran is doing the same thing with its bourse, and the war drums in the West are beating once more. How many Americans actually know what they or their children have been sent over to the Middle East to fight for? The determination to ensure that the world continues to buy oil in dollars? I wonder how they will feel when they finally realize it – a day that will eventually come as the Internet continues to inform users about the truth. But in the meantime, the game will play out. The power elite have already moved on to greener pastures – China and India in particular. They

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are already eyeing Africa as well – no surprise. As “High Alert” has pointed out, throughout, the power elite deals in promotions – Bird Flu, Green Energy, Islamofascism. The idea is to whip up the population, make it fearful, and then pose a solution which can be promoted on the stock market as a massively profitable anodyne. Of course, eventually, part of the process, eventually, involves the bankrupting of the countries involved. Without invasive taxes and central banking, the population cannot be made malleable enough for the promotions that will provide the coup de gras. So many countries have ended up in critical condition as a result of power elite machinations and promotions: Korea, Burma, Thailand, Indonesia, Argentina, Brazil, Chile, even Mexico. Now it is the turn of the West, America in particular. Of course it happened to Austria and Germany, but that was long ago. America, with its republican traditions and allegiance (still) to free markets is still the big prize. Crush the American culture and economy once and for all and global governance awaits! It is important to cover one’s tracks as well, by the way. The damage must appear effortless and easy, the economic implosion as unstoppable as any natural occurrence. Perhaps that is why the West’s most prominent 20th century central banker Alan Greenspan has chosen to release a book that seemingly absolves him of any wrongdoing – if he says so himself. He may have played a part in the current injuries, the book tells us, but he had the best of intentions and, besides, was unaware of the serious problems that were building in the credit markets. It is all too much for one man, of course, even an indispensable one, but none seem to discover that until after they have vacated office. Who is Greenspan kidding in this day and age – the age of the Internet when every fact is just a “mouse-click” away? Yes, he used to preach “honest money,” but that was before he served as a corporate director for J.P. Morgan & Co. and numerous other corporations such as Capital Cities/ABC, Inc., Mobil Corporation and General Foods, Inc. while being groomed for his ultimate role as Fed Chairman. As chairman, he directly oversaw the largest creation of paper money the world has witnessed since the hyperinflationary downfall of the Weimar republic – a scenario that could very easily happen again… this time in America. It would be laughable to think of Mr. Greenspan as an “innocent” were it not so serious an issue. And what about the so-called North American Union? Wait a minute, didn’t George W. Bush announce recently that it did not exist - so why does it

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continue to be built? In fact, since “High Alert” was published, knowledge of the NAU’s transcontinental “superhighway” and what it portends has exploded exponentially across the Internet. “High Alert’s” NAU timeline was even used as an inspiration for Canada’s leading anti-North American Union website. (They still cite the book as a source.) Confronted with “pushback” as regards one of its plans or promotions, the power elite famously denies and dissembles – while continuing to forge ahead nonetheless. In the case of the NAU, one outcome of the American dollar devaluation is that American and Canadian financial services firms can merge without impediment. While U.S. companies were always limited in terms of how much penetration they could make in Canada, it apparently works better the other way around. In this case, laden with loonies, Canada’s largest banks are quickly heading south to gobble up their American counterparts. Yes, a new day is dawning, featuring North American super-money conglomerates – thanks to the demise of the dollar and the rise of the loonie. It’s all a coincidence of course! What about bird flu. As I mentioned in “High Alert,” perhaps the ‘Net had already sidelined that fear campaign, but I still wouldn’t discount the over eager supporters of neat eugenic “solutions” (we’re talking of the Nazi variety, folks) such as those wonderful members of the “Club of Rome” and various vocal environmental groups whose idea of population control seems to include “a touch” of genocide.

The Unraveling Will Continue You’ve read “High Alert” and you’ve read this afterword. Truth is a slippery concept, but the point of “High Alert” and this, too, is to emphasize that there are large, subtle and enormously powerful forces out there that could not care less about you or your family. Get out of debt. Transfer out of U.S. dollars… get gold and silver. Get a (fully declared) overseas bank account with a large Swiss bank and hold your funds in other currencies that are benefiting from the dollar’s demise. Do it now. The bottom line is that currency controls have already started. How much money can you walk into a bank and get on a moment’s notice? Not much – perhaps a couple of thousand or none as Britain’s Northern Rock (Britain’s fifth biggest mortgage provider) customers found out. How much money can you take out on your ATM card each day - $500 … a 1,000 if you are lucky. Why should you be handcuffed when it comes to your own money? The answer: They can’t afford to let you have it.

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Become an information junkie. “High Alert” has given you a thorough grounding in a realistic paradigm. Now subscribe to ‘Net based news services such as FMNN and free-market oriented newsletters. They can help you add to your store of knowledge while recognizing warning signs along the way.

Buy a Book … Or Several When the last edition of “High Alert” was released nearly a year ago, its price accurately reflected the currency balance of the time. The book was priced at EU$24.95 and US$29.95. Now look on the back cover. Less than a year has passed and the U.S. price is US$35.95. If you live in America today, you might want to buy several copies, as you may not be able to afford them in the future. If you do, pass them around. There are not many financial books that make sense from cover to cover – as plenty of readers have commented that this one does - and still fewer that have proven as accurate. That’s something to be proud of, sure, but it’s not the really important point. Here’s the real point: “High Alert” was written partially to expand the number of people who “get it” from two percent, to three or four. If you share “High Alert’ with others - and encourage the purchase of more copies as well, if you choose - then perhaps that goal can be achieved. The more who understand, the less effective power elite promotions will be, and the more power the real “free market” will have. One day perhaps we will all live without the shadow of these terrible promotions and our children will be healthier, happier and more hopeful as a result. It is my hope that “High Alert” will help to make it so.

Anthony Wile, Vancouver, Summer, 2008

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SELECTED NOTES & WEB REFERENCES

Author’s note

Carl Menger, “Principles of Economics,” Mises.org

Ludwig von Mises, “Human Action,” Mises.org

Murray N. Rothbard, “Man, Economy and the State,” Mises.org

Chapter 1

Resource Investor, What a Difference a Week Makes,ResourceInvestor.com

Murray Rothbard, “Great American Depression,” Infography.com

Jim Jubak, Fed Kills a Key Inflation Gauge, MoneyCentral.msn.com

Mike Whitney, Doomsday Approaches, Info.Interactivist.net

Peter Schiff, With Real-Estate, This Time It Really Is Different, FMNN.com

Greg Silberman, Will Derivatives Cause This Market To Fail? Gold-Eagle.com

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Krassimir Petrov, Ph.D., An Austrian Analysis of U. S. Inflation, FinancialSense.com

Dave Morgan, How to Buy Gold for $252 Per Ounce, 321Gold.com

Ted Butler, A Permanent Shortage Of Silver, Gold-Eagle.com

Harry Browne, Why I am Obsessed with War, HarryBrowne.org

Chapter 2

Richard Daughty, Economic Newsletter, FMNN.com

Lyndon H. LaRouche Jr., Monetary Collapse by September 2006, LaRouchePub.com

Chapter 3

Eric Jon Phelps, “Vatican Assassins,” VaticanAssassins.org

Interview with Benny Morris, Israeli historian, CounterPunch.org

Carroll Quigley, “The Anglo-American Establishment,” Amazon.com

Carroll Quigley, “Tragedy and Hope,” Amazon.com

Frank Aydelotte, “American Rhodes Scholarships,”RhodesIndia.com

John Ruskin, “Fors Clavigera,” VictorianWeb.org

C. Wright Mills, “The Power Elite,” Amazon.com

Michael H. Hunt, “Ideology and U.S. Foreign Policy,” Amazon.com

Edward Mandell House, “Philip Dru,”Amazon.com

Phyllis Schlafly, “The Plan to Integrate the U.S., Mexico and Canada,” EagleForum.org

Richard N. Haass, “Building a North American Community,” CFR.org

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Steven Yates, “United States of North American,” theNewAmerican.com

Patrick M. Wood, “Trilaterals Over Washington Volumes I and II,” augustreview.com

Terry Hayfield, A Piece of Fabian History Unveiled, ProLiberty.com

Antonio Gramsci, Italian Marxist,, Marxists.org

“Universal Declaration of Human Rights,” UN.org

Noah Webster, “The Occult Theocracy,” BibleBelievers.org

Conrad Goeringer, Atheist Society, The Enlightenment, Freemasonry, and The Illuminati, Atheists.org

Richard M. Ebeling, Dancing with the Devil, Fee.org

Chapter 4

George Orwell, “1984,” Online-Literature.com

Ryan McGreal, Iran in the Crosshairs, InformationClearingHouse.info

Randolph Bourne, War Is The Health Of The State, BigEye.com

Michael Meacher, The War on Terrorism Is Bogus, Guardian.co.uk

Khalid Mish’al, We Will Not Sell Our People Or Principles For Foreign Aid, Guardian.co.uk

Lawrence Scheinman, New U.S.-India Agreement Undercuts U.S. Allegiance to Nonproliferation of Nuclear Weapons, CFR.org

Harvard Law’s International Financial Systems symposium, 21st Century Agenda for China and the United States, Beijing, Law.Harvard.edu

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Henry Kissinger, Conflict With China Is Not an Option, ChinaDaily.com

Joan Veon, The Bank for International Settlements Calls for Global Currency, NewsWithViews.com

William White, The Bank For International Settlements, Mega.nu

Ron Paul (R-Texas), Iran, The Next Neocon Target, FMNN.com

Rixon Stewart, Who Was Albert Pike, TheTruthSeeker.co.uk

Chapter 5

Peak Oil Rouses Prophet, FMNN.com

Richard Maybury, Ancient Rome, How It Affects You Today BlueStockingPress.com

Economist Magazine, Special Report, Economist.com

Chapter 6

TheAmericanAlmanac. The Largest Empire in the History of the World, Members.Tripod.com

The Executive Intelligence Review, The Venetian Takeover of England, American_Almanac.Tripod.com

MediaMatters.org, News Outlets Ignored Bush Flip-flop on Oil Reserves, MediaMatters.org

Edward Griffin, “The Creature from Jekyll Island,” Amazon.com

Abraham H. Maslow, “Maslow On Management,” Amazon.com

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Chapter 7

Gary North, Money Gold Standards: The Good, the Bad, and the Ugly, LewRockwell.com

IMF pamphlet, “A Global Institution: The IMF’s Role at a Glance,” IMF.org

James C. Baker, “The Bank for International Settlements: Evolution and Evaluation,” John Wiley & Sons; 1 Edition, June 27, 1996.

Bernard von NotHaus, Competition Comes to the Fed, FMNN.com

Chapter 8

Robert LeFevre, The Nature of Man and His Government, Mises.org

William Everdell, “The End of Kings,” Amazon.com

R. F. Hassing, The Federalist Post-1989, Ashbrook.org

Murray Rothbard, It All Began, as Usual, With the Greeks, LewRockwell.com

Richard Hooker, “World Civilizations,” My.WSU.edu

Michael O’Dowd, Freedom Is The Precondition Of Progress, FreemarketFoundation.com

Amy H. Sturgis, The Rise, Decline, and Reemergence of Classical Liberalism, Belmont.edu

George F. Kennan, “Memoirs.” Amazon.com

Helen Szamuely, Who Governs Britain, Eureferendum.blogspot.com

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Chapter 9

The Unitary Executive: Is The Doctrine Behind the Bush Presidency Consistent with a Democratic State? Findlaw.com

Col. E. M. House Report 1919, Etherzone.com

Hans Schicht on David Rockefeller, From A Different Prospective, Gold-eagle.com

Will Banyan, The Proud Internationalist, NexusMagazine.com

David Rockefeller, “Memoirs,” Amazon.com

David Icke, The Law Is An Ass And You Are Made Of Straw, Davidicke.com,

Chapter 10

Richard Ebeling, Money, Central Planning and the State,” FFF.org

Christopher Mayer, The Credit Delusion, Gold-Eagle.com

Edward Flaherty, “A Brief History of Central Banking in the United States,” FreedomDomain.com

Edward Griffin, Meet Edward Flaherty, Conspiracy Poo-Pooist, Realityzone.com

Chapter 11

Kent Daniel Bentkowski, Kentroversy.com

Web Restriction, Globalresearch.ca.

Bankruptcy, David Icke e-newsletter

Chapter 12

FMNN, “Value of Money Metals,” Midasresources.com

Richard M. Ebeling, Dollars on Sale, 30% Off,FMNN.com

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Web References

Abebooks.com Guardian.co.uk AboveTopSecret.com HiddenAgendas.com Amazon.com Iht.com/articles AmericanPresidency.org Illuminati-news.com Answers.com Investopedia.com Anti-state.com Jbs.org Antiwar.com Kentroversy.com Baidu.com KFNN.com. BibleBelievers.org LeMetropoleCafe.com Cfr.org LewRockwell.com ChathamHouse.org.uk Media.guardian.co.uk Clubofrome.org MediaMatters.org Commondreams.org Mega.nu/amp Conclusion & Bios Mises.org Counterpunch.org Mises.org Dinl.net Myspace.com DownsizeDC.org Newswithviews.com Fabian.org.uk PerfectEconomy.com FFF.org PlausibleFutures.com Financialsense.com RealityZone.com FindLaw.com Reason.com Freemarketnews.com se.ac.uk/collections FMNN.com Silver-Investor.com Foreignaffairs.org Thenewamerican.com Freedomdomain.com TheTruthSeeker.com FreedomForce.org Trilateral.com Freeinternetpress.com Uncensored.co.nz FreeMarketFoundation.com USWA.org Freemarketnews.com Venusproject.com Freerepublic.com Vonmises.org FrontPageMagazine.com Washingtonpost.com GATA.org Whale.to Globalresearch.ca, WorldCivilizations.com Gold-eagle.com Yahoo.com Google.com

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BIBLIOGRAPHY

Bailey, Ronald. Eco-Scam. The False Prophets of Ecological Apocalypse, New York: St. Martin's Press, 1993. Bandow, Doug and Vásquez, Ian, eds. Perpetuating Poverty. The World Bank, the IMF, and the Developing World, Washington, D.C.: Cato Institute, 1994. Bouvard, James. The Rise of the State and the Demise of the Citizen. Freedom in Chains, New York: St. Martin's Press, 1999. Browne, Harry. How I Found Freedom in an Unfree World. A Handbook for Personal Freedom, 1973. Liberty, Great Falls, Mont.: LiamWorks, 1998. Buchholz, Todd G. New Ideas from Dead Economists. An Introduction to Modern Economic Thought, New York: Plume/Penguin Group, 1990. Burke, Edmund. Reflections on the Revolution in France, Garden City and New York: Anchor Press/Doubleday, 1973. Casey, Douglas, Lies, Damn Lies & Dirty Lies. How to Get Rick by Understanding Big Government & the Media, Baltimore: Agora Financial, 1995. Casey, Douglas, Crisis Investing for the Rest of the ’90s, New York: Birch Lane Press, 1993. Cubeddu, Raimondo. Philosophy of the Austrian School, London: Routledge, 1993.

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de Jouvenel, Bertrand. On Power. The Natural History of Its Growth, Indianapolis: Liberty Press, 1993. de Jouvenel, Bertrand. The Ethics of Redistribution, Indianapolis: Liberty Press, 1990. Epperson, A. Ralph. The Unseen Hand. An Introduction to the Conspiratorial View of History, Tuscon: Publius Press, 1985. Fadiman, Mark. MarketShock. More Than Fifty Insiders Tell How to Survive and Profit from Today's Global Financial Revolution, New York: John Wiley & Sons, Inc., 1994. Ferguson, Adam. An Essay on the History of Civil Society, New Brunswick, N.J.: Transaction Publishers, 1991. Griffin, G. Edward. The Creature from Jekyll Island. A Second Look at the Federal Reserve, 4th ed., Westlake Village, Calif.: American Media, 2002. Hollander, Samuel. Literature of Liberty. A Review of Contemporary Liberal Thought. David Ricardo: Economics and Idealogy, vol. II, no. 3, July-September, 1979, San Francisco: Cato Institute. Hutt, W. H. The Keynesian Episode. A Reassessment, Indianapolis: Liberty Fund, 1979. Kindleberger, Charles P. Manias, Panics, and Crashes. A History of Financial Crises, 3rd ed., New York: Chichester, Brisbane, Toronto, Singapore: John Wiley & Sons, Inc., 1996. Lane, Rose Wilder. The Discovery of Freedom. Man's Struggle Against Authority, San Francisco: Fox & Wilkes, 1993. Lavine, T. Z. From Socrates to Sarte: the Philosophic Quest, New York: Bantam Books, 1984. Martin, James J. Men Against the State, Colorado Springs: Ralph Myles Publisher, Inc., 1953. Maybury, Richard J. Uncle Eric Talks About Personal, Career, and Financial Security, 2nd ed., Placerville, Calif.: Bluestocking Press, 2004. Maybury, Richard J. The Money Mystery. The Hidden Force Affecting Your Career, Businessand Investments, 3rd. ed., Placerville, Calif.: Bluestocking Press, 2004. Maybury, Richard J. The Clipper Ship Strategy for Success in Your Career, Business and Investments, rev. ed., Placerville, Calif.: Bluestocking Press, 2003. Moore, R. I. The Formation of a Persecuting Society, Oxford, England: Blackwell Publishers, 1994.

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Orwell, George. Animal Farm, New York: Plume/Penguin Group, 1977. Paine, Thomas. The Rights of Man, Garden City and New York: Anchor Press/Doubleday, 1973. Raimondo, Justin. Reclaiming the American Right. The Lost Legacy of the Conservative Movement, Burlingame, Calif.: Center for Libertarian Studies, 1993. Richman, Sheldon. Separating School & State. How to Liberate America's Families, Fairfax, Va.: The Future of Freedom Foundation, 1994. Robison, John, A. M. Proofs of a Conspiracy, Boston and Los Angeles: Western Islands, 1967. Rockwell, Llewellyn H. Jr., ed. The Gold Standard. Perspectives in the Austrian School, Auburn, Ala.: Ludwig von Mises Institute, 1992. Rogers, Jim. Hot Commodities. How Anyone Can Invest Profitable in the World's Best Market, New York: Random House, 2004. Rogers, Jim. Investment Biker. Around the World with Jim Rogers, Holbrook, Mass: Adams Publishing, 1994. Rohrbough, Malcolm J. Days of Gold. The California Gold Rush and the American Nation, Berkeley and Los Angeles, London: University of California Press, 1997. Rothbard, Murray N. America's Great Depression, Auburn, Ala.: Ludwig von Mises Inst., 2000. Rothbard, Murray N. Economic Thought Before Adam Smith. An Austrian Perspective on the History of Economic Thought, vol. I, Hants, England: Edward Elgar Publishing, 1995. Rothbard, Murray N. Classical Economics. An Austrian Perspective on the History of Economic Thought, vol. II, Hants, England: Edward Elgar Publishing Limited, 1995. Rothbard, Murray N. A Case Against the Fed, Auburn, Ala.: Ludwig von Mises Institute, 1994. Rothbard, Murray N. For a New Liberty. The Libertarian Manifesto, 3rd rev. ed., San Francisco: Fox & Wilkes, 1994. Rothbard, Murray N. What Has Government Done to Our Money?, Auburn, Ala.: Ludwig von Mises Institute, 1990. Shelton, Judy. Money Meltdown. Restoring Order to the Global Currency System, New

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York: The Free Press, 1994. Shlaes, Amity. The Greedy Hand. How Taxes Drive Americans Crazy and What to do About it, New York: Random House, 1999. Soloman, Steven. The Confidence Game. How Unelected Central Bankers Are Governing the Changed World Economy, New York: Simon & Schuster, 1995. Spencer, Herbert. The Man Versus the State, LibertyClassics edition, Caldwell, Idaho: Caxton Printers, Ltd., 1982. von Mises, Ludwig. The Historical Setting of the Austrian School of Economics, Auburn, Ala.: Ludwig von Mises Institute, 1984. von Mises, Ludwig. The Theory of Money and Credit, Indianapolis: Liberty Fund, 1981. von Mises, Ludwig. Human Action. A Treaties on Economics, 3rd rev. ed., Chicago: Contemporary Books, Inc., 1966. White, Eugene N. Crashes and Panics. The Lessons from History, New York: New York University, 1990. White, Lawrence H. Competition and Currency. Essays on Free Banking and Money, New York: New York University Press, 1989. Wiggin, Addison. The Demise of the Dollar — and Why it's Great for Your Investments, Hoboken: John Wiley & Sons, Inc., 2005.

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INDEX

Achenson, Dean, 62 Asian economic crisis, 46–47 Adams, John Quincy, 137 Athens (Greece), 115–16, 118–19 adjustable rate mortgages (ARMS), 230 Austrian economics, 13, 189 Adorno, Theodor, 67 Aydelotte, Frank, 59 Advanced Research Projects Agency (ARPA), 171 Afghanistan, 91–92 Babka, Jim, 245 Age of Connectivity, 10, 20 Bacon, Francis, 127 Age of Enlightenment, 126, 131 Baker, James C., 108 Age of Promotion, 10, 20, 22, 181, 219, 228, 238 Bank for International Settlements (BIS), 107–9, Age of Reason, 126 111 Agnadello, Battle of, 124 banking agriculture, 100 bullion used for, 103–4 Ahmedinejad, Mahmoud, 88, 91 central banks, 11 Aldrich, Nelson, 160, 164 First and Second Banks of U.S., 137 Alexander ("the Great"; king, Macedon), 119 government and, 98–99 alternative 'net media, 10–11, 178 international structures for, 107–9 American Revolution, 56, 140 Jefferson on, 155 Amero (proposed North American currency), monetary innovation and, 105 147 promotions in, 96, 216 Ansari, Masoud, 93 See also central banks; Federal Reserve Apple Computers (firm), 172 System Aquinas, Thomas (saint), 190 Bank of England, 105, 106, 140, 142–44 Argentina, 42–43, 223–24 Bank of Palmstruch, 106 ARPANET, 171 Bank of Sweden, 106

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bankruptcy, of countries, 204 Bush, Jeb, 84 Barbour, Haley, 76 business cycle, 11, 156, 191, 192 barter, 99–100 analysis of, 217, 239–42 Barzun, Jaques, 198, 199 Bayan, Will, 145 Cagan, Philip, 13 Bazargan, Mehdi, 89 Canada Behreandt, Dennis, 78–79 civil libertarianism in, 134–35 Beit, Alfred, 59 merged with Mexico and United States, Ben Gurion, David, 57 145–51 Bentkowski, Kent Daniel, 197, 198–99 mineral extraction firms in, 221 Bernanke, Ben S., 143, 161, 229 in North American Community, 63 Bilderberger Group, 73, 77, 206, 217, 240 Carter, Jimmy, 64, 89 bin Laden, Osama, 84 Catherine de Medicis (regent, France), 214–15 bird flu, 201, 202, 205, 215–16 Catholic Church, 53 Blair, Tony, 65, 67, 132, 240 Central American Free-Trade Agreement Bolivia, 44 (CAFTA), 21, 50, 76, 78, 240 Bonaparte, Napoleon, 60–61 passes House vote, 149–50 Bonner, William, 245 central banking, 104 Bourne, Randolph, 83–84 central banks, 11, 51 Bower, Doug, 210 conspirati on, 140 Bretton Woods conference (1944), 142, 144 creation of money by, 97 Breyer, Stephen, 62 Federal Reserve System as, 155–56 Britain, See United Kingdom history of, in United States, 158–59 British East India Company, 128 hyperinflation and, 28 British Empire, 117, 123 inflation and, 157–58 Browne, Harry, 7, 33–34, 49, 236, 245–46 as lynchpin of economy, 98 Bruno, Giordano, 127 monetary innovation and, 105 Brzezinski, Zbigniew, 64 Chaney, Dick, 84, 174–75 Buffet, Warren, 33, 145, 189 Chapman, David, 32 buillion banks, 235 Charles IX (king, France), 214, 215 Bush, George W., 83 Chatham House, 73 Blair and, 67 Chertoff, Michael, 149 commitment to North American Cheuvreux (French bank), 111 Community by, 63 China, 7, 21, 27, 115, 166 Council on Foreign Relations and, 65 Bush administration and, 88–90 Declaration of Quebec City signed by, 147 doing business in, 237 falling popularity of, 28 Falung-Gong in, 54 Iraq war under, 84–85, 94 Internet controlled in, 57 Rather controversy involving, 176 investing in, 219 on Strategic Petroleum Reserve, 183 present economy of, 151–52

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under Tang Dynasty, 122 income tax amendment to, 156 Chirac, Jacques, 68, 76, 132, 240 sovereignty under, 146, 147 Chorley, Dave, 210 Convention on Persistent Organic Pollutants Christianity, in early U.S. colonies, 71 (POP), 77–78 cities, origins of, 100–101 copper, 233 civil libertarianism, 134 Corsi, Jerome R., 147–49, 151 Civil War (U.S.), 136–38 Council of Florence, 124 classical liberalism, 125–26 Council on Foreign Relations, U.S. (CFR), 59, 72, Clinton, Bill, 58, 66, 146, 147, 183 140 Club of Rome, 73, 77–79 Fabian Society and, 65 codes of honor, 116–17 House and, 140 Codex Alimentarius, 212 on North American Union, 150 coins, 102–3 power of, 62–63 gold and silver, 229 Rockefeller and, 142 Coligny, Gaspard de, 215 Trilateral Commission and, 64 commercial banks, 11 credit Commission on Global Governance, 75 in creation of inflation, 40 common law, 11–12 devaluation of money and, 157 Conroy, Michael E., 232 credit card debts, 230 conspiracies, definition of, 146–47 currency conspiracism, 12 Amero, 147 conspiracy theory based on precious metals, 101–2 on Jekyll Island meeting, 160–61 coins, 102–3 C. Wright Mills on, 59–60 euro, 132, 133 on September eleventh terrorist attacks, 176 Liberty Dollar, 109–10, 158 conspirati, 23, 30 precious metals as, 222 on bankruptcy of countries, 204 precious metals versus, 231 on censorship of Internet, 197 Currency Bill (U.S., 1913), See Federal Reserve Act on central banks, 56, 140 on drug-rock-sex counterculture, 227 D'Albernon, Lord, 38 on First and Second Banks of U.S., 137 Dante, 124 on global conspiracy, 64 Daughty, Richard, 37 on Illuminati, 53 Davison, Henry, 160 on Israel, 57 debts, 223 LaRouche and, 60 credit card, 230 on M3 money measurement, 44 Declaration of Quebec City (2005), 147 on Rothschild family and socialism, 185 deflation, 42, 46 on Sarpi and Giovani, 127–28 Delaware, 71, 72 on wars, 82–83 democracy, 118–19 Constitution, U.S. Deng Xiao Ping, 88

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derivatives, financial, 32–33 religion in, 54 de Tocqueville, Alexander, 125 unification of, 129–32 devolution of electoral control, 12 European Economic Community (EEC), 208 Dewey, John, 188 European Union (EU), 115, 129, 132–33 diLorenzo, Thomas J., 136–38 Constitution of, rejected, 50–51, 130 disinflation, 46 failure of, 240 Disraeli, Benjamin, 123 history of, 208 dollar on human rights, 70 as dominant currency, 26, 144 investments in, 227–28 gold and silver coins versus, 229 paranoid view of, 203 held by foreign governments, 27 as super state, 146 not backed by gold, 34 Everdell, William, 117–18 petrodollars, 83, 166, 225 purchasing power of, 207 Fabian Society, 65, 67–68, 72 strength of, 42 Falung-Gong (China), 54 dominant social themes, 12 Fannie Mae, 32–33 manipulated by power elite, 19 Farley, Dick, 210 Donovan, Terry, 172 federal government Dow Jones stock average, 207 development of Internet by, 171–73 Jefferson on, 136 Ebeling, Richard M., 230–31, 246 monetary policies of, 40 economics overspending by, 31, 35 business cycle in, 191 Federalist Party (U.S.), 137 free-market, 13, 187, 189, 190–92 Federal Reserve Act (U.S., 1913; Currency Bill; modern theory of, 189 Owen-Glass Act), 51, 156, 157, 160, 163, 165 economy Federal Reserve Board, 160 anticipated crisis in, 26–28 Federal Reserve System internationalism in, 29 under Bernanke, 229 education, 188 as central bank, 11, 155–56 Einstein, Albert, 184–85, 187 creation of, 51, 62, 138, 156–57, 159 elections, devolution of electoral control, 12 current policies of, 26–27 eminent domain, 76 dollars printed by, 142 empiricism, 127 Flaherty on, 160 Engels, Friedrich, 14 House and, 140 England, See United Kingdom M3 measurement dropped by, 29–30, environment, 153 35–36, 224 environmental movement, 174, 227 money measurements used by, 29 Epicitus, 34 rate increases by, 32 euro (currency), 42, 132, 133 Rockefeller and, 143 Europe von NotHaus on, 110

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First Bank of United States, 137, 158–59 global power elite, 49–50 Flaherty, Edward, 158–60 global tax, 76 Griffin versus, 160–65 global warming, 201 Ford, Gerald, 45 Goeringer, Conrad, 70–72 Fox, Vicente, 63 gold, 96, 230–33 fractional banking, 104 bullion banking, 103–4 fractional reserve banking, 104 as currency, 222 France, Huguenots in, 214–15 dollar not tied to, 34 Francis II (king, France), 214 hyperinflation and, 44, 48 Franklin, Benjamin, 56, 71, 105, 140 illegal to own, 235 Freddie Mac, 32–33 as investment, 20, 33 freedom, 114–16 monetary oversupply and, 27 free market, 12 Morgan on, 45 free-market economics, 13, 189 price of, 42, 110–12, 220, 240 history of, 190–92 used for money, 101–2 Free Market News Network, Corp. (FMNN), 7 Gold Anti-Trust Action Committee (GATA), free-market thinkers, 12, 183, 194, 237–38 110–12, 230 Freemasonry, 127, 128 gold mining, 232, 240 Free trade, 154 gold standard, 96, 98 Free Trade Area of the Americas (FTAA), 78 Greenspan on, 109, 164 French Revolution, 60 Goldwater, Barry, 66 French Wars of Religion, 215 Google, 193 Fritz, Marshall, 246 Gorman, Pat, 246 government Galileo, 127 of ancient Rome, 120 Gates, Bill, 33, 145, 170 banking and, 98–99 on Internet, 190 as pillar of power, 51 as two percenter, 189 republican form of, 115–16 geography, 122–24 wars fought by, 83–84 Gerard, Leo W., 154 See also federal government Germany Gramsci, Antonio, 67 public school system founded in, 188 Great Britain, See United Kingdom Weimar Republic economy, 38–39, 43, 44, Greece, ancient, `115–16, 118–23 188 Greenspan, Alan, 34, 109, 111, 195 Gibbon, Edward, 61 M3 money measurement dropped by, 44 Ginsberg, Ruth Bader, 62 Paul and, 164–65 Giovani (Venetian faction), 127, 128 on production of money, 189 global elite promotions (GEPS), 217–18 Rockefeller and, 143 globalism, 74 Gretslu, Wayne, 221 globalization, LaRouche on, 60–61 Griffin, G. Edward, 7, 51, 66, 67, 246

< 270 > H IGH A LERT

Flaherty versus, 160–65 impersonal communal preferences, 15 on Russian Revolution, 139 income tax, 138–39, 142, 156 Group of Eight, 76 India, 85–87 Guise family (France), 214–15 inflation, 31, 240 Guttenberg press, 181, 195 central banks and, 157–58 Internet as, 21, 170, 178, 180–81 debased currency and, 103 defenses of, 37 Haass, Richard N., 149 disinflation and, 46 Hamas, 85 free-market definition of, 40 Hammell, John C., 79 hard and soft hyperinflation, 13–14 Hamphill, Robert H., 161 precious metals to counteract, 226 hard hyperinflation, 13–14 printing money and, 106, 155–56 Harper, Stephen, 63 in Weimar Republic economy, 38–39 hate crimes, 197 See also hyperinflation Hayek, Friedrich A., 40, 192 information, as pillar of power, 51, 56–58 Hayfield, Terry, 65–68 Internal Revenue Service (IRS), 110 health care, 212–16 International, 223–24 hedge funds, 47, 60 International Bank for Reconstruction and Hegel, Georg Wilhelm Friedrich, 14, 60 Development (IBRD), 107 Hersh, Seymour, 88 International Criminal Court, 75 Hitler, Adolf, 56, 129 International Democratic Union, 68 Hooker, Richard, 121, 215 International Development Association (IDA), Hoover, Herbert, 144 107 House, Edward Mandell, 62, 139–42, 225 internationalism, 29 housing bubble, 31–32 International Monetary Fund (IMF), 75, 107, 108, Huguenots (French Protestants), 214–15 154 human rights, 68–70 Internet, 7, 28, 112, 190, 224 Human Rights Law Resources, 68–70 alternative 'net media, 10–11 Hunt, Michael H., 61 change generated by, 169–70 Hussein, Saddam, 82, 84, 85, 91 competition for control over, 180–81, 225 Huxley, Aldous, 227 controlled in China, 57 hyperinflation, 18, 41–43, 240 conventional knowledge challenged by, 189 hard and soft, 13–14 current state of, 173–76 in history, 27–28 free market supported by, 240 soft, 28 as Guttenberg press, 21 velocity of money and, 44–48 history of, 171–73 See also inflation as information source, 195 investments oriented to, 181–82 Icke, David, 204 overlays for, 220 Illuminati, 53, 70–71, 77, 85 perceptions of money from, 98

< 271 > A NTHONY W ILE

power elite challenged by, 16–18, 21–22 Juncker, Jean-Claude, 132 on September eleventh terrorist attacks, junior mining stocks, 233 176–77 taxation of, 198–99 Kansas City, 148, 150 threats to, 196 Kant, Immanuel, 14 used by free-market thinkers, 194 Kennan, George F., 62, 129 Internet 2, 196, 197 Kennedy, John F., 67 intimate communal preferences, 15 Kerry, John F., 183 investments, 20 Keynes, John Maynard, 40, 144, 161, 193 commodities as, 221 Keyserlingk, R.W., 129 Internet-oriented, 181–82 Khomeini, Ruhollah, 87, 91–93 power elite's capital flows and, 219 King, Alexander, 79 precious metals as, 226, 228, 230–33 Kirchner, Nestor, 143 invisible power elite, 23 Kissinger, Henry, 90, 237 Iran, 27, 82 Klein, Peter G., 171–73 next war with, 91–92 Kohl, Helmut, 68 Pahlavi dynasty in, 86–87 Korea, 223 public opinion on, 94 Krock, Walter, 62 U.S. hostages held by, 89 Iraq, 205, 213 LaRouche, Lyndon, 60–61, 121–22 Iraq war, 27, 198 League of Cambrai, 124 opposition to, 240 League of Nations, 140, 141 plans for, 84–85 Leicester, Earl of (Robert Dudley), 128 Israel, 54–55, 57 Levant Company (Britain), 128 September eleventh terrorist attacks and, Libby, Lewis, 84 202 liberalism, 125–26 Supreme Court building in, 80 libertarianism, 116 Italy, 120–23 Liberty Dollar, 109–10, 158 Lincoln, Abraham, 136–37, 139 Jackson, Andrew, 156, 159 Lindbergh, Charles A., Sr., 161 Jackson, Michael, 193 Lippmann, Walter, 62 Jagger, Mick, 67 Lloyd George, David, 140 Jasper, William F., 59, 77–78 LoBaido, Anthony C., 67 Jefferson, Thomas, 51, 68, 71, 136, 137, 156, 182 Locke, John, 125 on bankers, 155, 158 London School of Economics and Political John Birch Society, 73, 77 Science, 65, 67 Johnson, Samuel, 118 Lugar, Richard G., 149 Jones, Alex, 217, 243 Luther, Martin, 199 Jubak, Jim, 29–30 Judiasm, 54–55

< 272 > H IGH A LERT

M1 money measurement, 29 Morgan, J.P., 138, 141, 156 M2 money measurement, 29 Morris, Benny, 57 M3 money measurement, 29–30 mortgage rates, 31, 230 dropped by Federal Reserve System, 35–36, Moses, Robert, 153–54 44, 224 Mullins, Eustace, 185 Mack, John, 210 Murdoch, Rupert, 179, 182, 226, 240 Madison, James, 118, 136 Murphy, William (Bill), 224, 247 Maistre, Count Joseph de, 60 marginal utility, 192 Nakajima, Hiroshi, 213 Marlow, Christopher, 119 Nasdaq, 47, 97, 205 Martin, Paul, 63 New Jersey, 72 Marx, Karl, 14, 40 newspaper industry, 180–81 Maryland, 75 New World Order, 30 Maslow, Abraham H., 13, 183–86, 225 New York, City of, 144, 153–54 Maybury, Richard J., 177, 219, 246–47 Nicholaus of Cusa, 124 Mayer, Christopher, 158 Nitze, Paul, 62 McFadden, Louis T., 161 Nixon, Richard M., 75, 237 McGreal, Ryan, 83 Norman, Montagu, 141–42 McNamara, Robert Strange, 107 North America Meacher, Michael, 82, 84–85 merging of states in, 145–51 Menger, Carl, 190, 192 as super-region, 209 Mexico, 63, 145–51 North American Community, 63 Michelangelo, 124 North American Free Community, 75 militarism, origins of, 100–101 North American Free Trade Agreement Miller, Clifton Ray, 79 (NAFTA; 1993), 50, 75, 76, 147 Millin, Sarah Gertrude, 59 superhighway for, 148, 150, 150–51, 153–54 Mills, C. Wright, 59–62 North American Security Cooperative Act mineral extraction stocks, 221 (NASCA), 149 mining stocks, 220–21, 221, 233 North American Union, 147–51, 209 Mish'al, Khalid, 85 monetary control, 104 O'Connor, Sandra Day, 62 money O'Dowd, Michael, 122–25 creation of, 97 oil prices, 203 devaluation of, 157–58 Orwell, George, 82 gold and silver used for, 101–2 Ottoman Empire, 43 Greenspan on, 109 Owen-Glass Act (U.S., 1913), See Federal Reserve Act inflation and printing of, 155–56 origins of, 99–101 Pahlavi dynasty (Iran), 86–87 paper, 103–4 Palmstruch, Johan, 106 Morgan, David, 33, 45, 47, 232, 247 paper money, 103–4

< 273 > A NTHONY W ILE

in creation of inflation, 40 as investments, 20, 33, 166–67, 226, 228 hyperinflation and, 27–28, 43 monetary oversupply and, 27 Parks, Lawrence, 7, 247–48 prices of, 42 Parvus, Alexander Helphand, 60 pricing of, 98 Pastor, Robert, 147 See also gold; silver Paul, Ron, 30, 91–92, 164–65, 212, 247 President of U.S. Pennsylvania, 72 Federal Reserve System Board of Governors Pericles, 120 appointed by, 161 Perkins, John, 74, 96 powers of, 134 personal responsibility, 234–35 Prince of Wales International Leaders' Forum, 75 Peters, Alan, 89 printing, history of, 172 petrodollars, 83, 166, 225 Project for the New American Century Petrov, Krassimir, 33 (PNAC), 197 Philadelphia (Pennsylvania), 158 promotions, 96, 199–201, 203, 216 Philip (prince, England), 227 global elite promotions, 217–18 Pickering, Timothy, 137 paranoid view of, 202, 203 Pike, Albert, 85 value of, 234 pollution, 153 Protestant Reformation, 198, 199 Pound, Ezra, 185 public education, 188 Pouzzner, Daniel, 130–31 public-private partnerships (PPPs), 75, 76 power elite, 14, 16–17, 30, 50–51 Puplava, James, 31, 48 challenged by Internet, 21–22, 169, 174–76, 181 Quigley, Carroll, 58–59, 65–66, 72–73, 141 Council on Foreign Relations in, 62–63 on Bank for International Settlements, exposure of promotional mechanism of, 107–8 216 on history, 225 global, 49–50 on Montague Norman, 142 inflation and, 156 information used by, 56–58 Rand, Ayn, 109, 187 internationalism of, 146 Rand Corporation, 171 Internet and, 190 Rather, Dan, 176 Mills on, 59–62 rationalism, 126–28 promotions by, 205 Reagan, Ronald, 89, 147 religion used by, 53–55 Rees-Mogg, Lord William, 227 Rockefeller and, 142–43 religion in United States, 66–67 in early U.S. colonies, 71 precious metals, 7, 230–33 as pillar of power, 51, 53–55 as currency, 222 rejected during Age of Enlightenment, 131 currency based on, 101–2 Renaissance, 121 hyperinflation and, 48 republican form of government, 115–18

< 274 > H IGH A LERT

Reserve Bank of Australia, 111 Schlafly, Phylis, 62–63, 145–47, 150 Rhodes, Cecil, 59, 72 Schmitt, Carl, 60, 61 Rhodes, William, 143 Scholastics (school of thought), 190 Rhodes Scholarships, 59, 140–41 Schröder, Gerhard, 132 Rio de Janeiro Earth Summit (1992), 75 science fiction, 170 Ritsema, Scott, 150 Second Bank of United States, 137, 159 Rockefeller, David, 64, 66, 142–45 Securities and Exchange Commission (SEC), Rockefeller, Laurence, 210 206 Rockwell, Lew, 248 Security and Prosperity Partnership of North Roman Catholic Church, 70–71, 168–69 America (SPPNA), 148, 209 printing press and, 181 self-actualization, 13 Protestant Reformation and, 198, 199 September eleventh terrorist attacks, 21–22, 54, Rome, ancient, 116, 117, 120, 177 93 Rosett, Claudia, 213 Internet and, 176–77 Rosicrucianism, 128 paranoid view of, 202 Rothbard, Murray, 96, 141 Shakespeare, William, 90, 91, 119 on ancient Greece, 119–20 Shaw, George Bernard, 65 on Federal Reserve System, 155 Shirky, Clay, 199 on human action, 192 Silberman, Greg, 32–33 on hyperinflation, 28 silver, 96, 98, 230–33 on natural rights, 68 bullion banking, 103–4 on Adam Smith, 190 as currency, 222 Rothschild, Lord, 59 hyperinflation and, 48 Rothschild family, 80, 105, 140, 185 as investment, 20, 33, 219, 221 Round Table Groups, 58–59 monetary oversupply and, 27 Rubin, Robert, 47 price of, 42, 112 Rumsfield, Donald H., 84, 94, 196, 202 purchased by prominent investors, 189 Ruskin, John, 59 used for money, 101–2 Russia, 27 Simmons, Matthew, 203 Russian Revolution, 139 Skousen, Joel, 54 Russo, Aaron, 79 Skull Bones Order, 30 slavery, 138 St. Bartholomew Massacre (France), 215 Smith, Adam, 190, 242 Sarpi, Paoli, 127, 128 Smythe, Thomas, 128 Say, Jean Baptiste, 190 socialism, 130–31 Say's Law, 190–92 of Fabian Society, 65 Scheinman, Lawarence, 85–86 Rothschild family and, 185 Schicht, Hans, 142–45 von Mises on, 117 Schiff, Peter, 32 Socrates, 124 Schiller, Friedrich, 119 soft hyperinflation, 13–14, 28, 31

< 275 > A NTHONY W ILE

Soros, George, 33, 45, 112, 145 Turner, Ted, 145 as two percenter, 189 two percenters, 184, 185, 189, 194 Sorrell, Sir Martin, 182 South Carolina, 71 UNICEF, 213 Sozzinis, 131 unidentified flying objects (UFOs), 210 Special Drawing Rights (SDR), 108–9 United Kingdom stagflation, 46 banking in, 106 stock market British Empire and, 117 after Civil War, 138 history of banking in, 105 collapse of, 226 Venetian Giovani in, 128 crash of 1987 in, 45 United Nations, 75–76, 114, 195 Dow Jones stock average of, 207 Convention on Persistent Organic global, 204 Pollutants of, 77–78 Strategic Petroleum Reserve, 183 development of central banking and, 107 Strauss, Leo, 60 Internet and, 170 Stresemann, Gustav, 39 land for donated by Rockefeller, 142 Strong, Maurice, 78 nutrition guidelines of, 212 Sturgis, Amy H., 125–26 United States Sutton, Anthony, 64, 139 anticipated economic crisis in, 26–28 Sveriges Riksbank (Bank of Sweden), 106 bankruptcy of, 204 Sweden, 106 Civil War in, 137–38 Szamuely, Helen, 129–30, 132, 248 economic power of, 94 history of central banks in, 158–59 Taliban, 91–92 history of hyperinflation in, 43 Tancredo, Tom, 151 merged with Canada and Mexico, 145–51 taxation in North American Community, 63 of bandwidth and e-mail, 198–99 power elite in, 66–67 in China, 152 religion in early colonies, 71 global tax, 76 separation of powers in, 116, 134 income tax, 138–39, 142, 156 as voluntary association of states, 136 terrorism, war on, 135, 202 Universal Declaration of Human Rights, 68–70 terrorists, 197 urbanization, 100 thesis and antithesis, 14–15 Thompson, Paul, 176 Vanderlip, Frank, 160 trade agreements, 50 velocity of money, 44–47, 224–25 trading communities, 100 Venice Company (Britain), 128 Trans-Texas Corridor (TTC), 148, 150, 151, 209 Venice (Italy), 119, 121, 123, 124, 127, 128, 196 Trilateral Commission, 64–65, 72, 142 Veon, Joan, 226 Trotsky, Leon, 60, 65, 139 VESTS, see Visible Elite Super Tendencies Turkey Company (Britain), 128 Strategy

< 276 > H IGH A LERT

Virginia, 71 World Summit for Sustainable Development Visible Elite Super Tendencies Strategy (2002), 76 (VESTS), 13, 19, 216–18, 221, 239–42, World Trade Organization (WTO), 75, 154 244 China in, 88 as investment strategy, 20 World War I, 129 visible power elite, see, power elite World War II, 129 Volcker, Paul, 45, 91, 143, 229 von Mises, Ludwig, 13, 96 Xerox (firm), 172 Google hits for, 193 on government monetary policy, 40 Y2K crisis, 47, 97, 164, 205 on human action, 185–86, 192 Yates, Steven, 58, 63 lost papers of, 246 on socialism, 117 von NotHaus, Bernard, 109–10, 158, 247

Warburg, Paul, 160, 165 war on terrorism, 135, 202 wars Bourne on, 83–84 with Iran, 91–92 reasons for, 82–83 as ultimate weapon, 95 Washington, George, 71 Webb, Beatrice, 65 Webb, Sidney, 65 Webster, Noah, 70 Weimar Republic (Germany), 38–39, 43, 44 Weishaupt, Adam, 70–72 Whig Party (U.S.), 136–37 White, William, 91, 111 Whitney, Mike, 31–32 Wile, Anthony, 19 William III (king, England), 106 Williams, Walter, 79 Wilson, Woodrow, 62, 139, 141 Wolfowitz, Paul, 84 Wood, Patrick M., 64, 66–67, 108, 109 Wooton, 127 World Bank, 75, 107, 213 World Health Organization (WHO), 212, 213

< 277 > AUTHOR BIO

Anthony Wile is the founder of Free Market News Network Corp. (FMNN), already one of the most successful libertarian/hard money informational sites on the worldwide web. In founding FMNN, Anthony brought more than 12-years' experience consulting to growth-oriented companies in a variety of sectors but primarily mining companies. Before consulting and then founding FMNN, he worked in the Canadian investment industry with Scotia McLeod (Bank of Nova Scotia), and Nesbitt Burns (Bank of Montreal). He continues to advise and consult to large international banks and money managers as well as to senior executives at both senior and junior mining firms. A Certified Investment Manager, he was made a Fellow of the Canadian Securities Institute in 1994.