 SOAPBOX
ORATIONS...
This page is
offered as a public service to guest writers who wish to submit an
article on current events, blow off a little steam (tastefully
vented, of course), or enlighten others on a subject of interest,
religious or secular, with some relevance to the topics on this
web site. Submissions for this page should be sent to me at: miles@webenet.net.
Obviously, all articles are subject to discreet scrutiny and
editing, and those chosen for publication will be posted here
periodically.
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Studying TEOTWAWKI: Why the "Smartest Men in the Room" are Worried, by F.S.
By James Wesley, Rawles on June 4, 2010 10:17 PM http://www.survivalblog.com/2010/06/studying_teotwawki_why_the_sma.html
The purpose of this article is to lay out the intellectual underpinnings of what I will call the neosurvivalist movement. The target
audience is those individuals either beginning, or considering to start, preparations for broad societal emergencies. The intended result is to
demonstrate that far from being a fringe or extremist movement, neosurvivalism is rational and has emerged as a natural result of broader social,
cultural, and technological circumstances grounded in specific historical and contemporary thinking.
This movement goes by many names,
including survivalism, prepping, emergency preparedness, and so-called “offgrid” or “resilient communities.” Businesses and governments are likewise
investing in continuity of operations plans, disaster mitigation, and disaster response. Everyone it seems is concerned about the permanency of
civilization. While the focus of these groups varies – some are more “green” and “sustainability” focused, others are profit motivated, still others
fit the traditional media stereotype of militant and self-defense orientated loners – all are worried about the fragile and interconnected nature of
modern society and understand that the interconnectedness of our civilization is its major weakness.
In recent American memory the fundamental
game changers were the dual warnings of 9/11 and Hurricane Katrina. These two events demonstrated that man-made and natural disasters could seriously
disrupt a modern society, and that governmental plans were insufficient to respond quickly to large scale events. These events have spawned a large
and growing body of work on emergency response and mitigation. The flagship publication is the Journal of Emergency Management, an excellent source
of articles running the full gamut of neosurvivalist concerns, a mission shared since 1993 (in the wake of the governmental failure to properly
respond to Hurricane Andrew) by the Federal Emergency Management Higher Education Program, itself designed to research and educate in areas of
emergency planning concerns.
During the Cold War national attention was focused on fallout bunkers and bomb shelters and there was little
public interest in broader problems associated with societal collapse until the mid-90s. That it has now reached a point of near universal concern at
operational and strategic planning levels is most evident in the last couple of years. While the nuclear Civil Defense Programs of the 1950s and
1960s are well-known, there was little focus by federal planners on other societal threats until the creation of
FEMA in 1979, which slowly expanded from almost purely nuclear civil
defense to the current focus on “full spectrum” and or “integrated all-hazards” disaster response. Prior to this it was assumed local and state
agencies would lead disaster response, and they often did not. Cold War preparations assumed a Federal-Individual partnership, in which the
government assisted individuals by preparing “self-help” programs for citizens’ protection. The classic example was the backyard bomb shelter for
individual families, a mitigation program continued today with state block grants usable for individual family safe rooms or in-ground tornado
shelters. To highlight the American public’s general unwillingness to prepare, at the height of the Cold War fewer than 3% of the population had
taken any personal measure to defend against radioactive fallout. Current assessments (following the U.S. Government’s introduction of the “Ready”
preparedness program in 2003) of those likely to prepare for disasters typically include the following characteristics: 1. Pays attention to the
news 2. Aware of and concerned about socio-environmental threats 3. Has personal experience with disasters 4. Has children in the home 5.
Has strong community relationships (church, civic organizations, etc.) 6. Has disposable income available to make preparations These
characteristics are important because the surge in neosurvivalism is often attributed to religious, suburban professionals with families. These are
the people, to be frank, with the awareness, good sense, and money necessary to make preparations capable of producing a meaningful result.
As
much as government agencies and private industry have embraced a general preparedness philosophy in recent years, it often seems as if academia
largely undermines civil defense strategy. Books such as The Imaginary War, One Nation Underground, and Bracing for Armageddon seek to ridicule and
discredit preparedness concepts in general, arguing the government cannot be trusted to deal truthfully with the public on such measures (a mantra
most obvious in the media frenzy over the “duct tape and plastic” advisement issued by the new Department of Homeland Security in 2003). That this
view often emanates from those corners which often wish for more government and more governmental control – a schizophrenic position perched
perilously on the anti-nationalism ideas of Eric Hobsbawm and Ernest Gellner, and the liberal-democratic faith in deterministic concepts of man’s
inevitable progress. It’s important to consider that media treatments of private individuals engaged in preparedness typically attack along these
lines – suggesting that preparedness is a statement of little faith in the government to handle emergencies, and that individuals that do so are
dangerous or at least hold dangerous ideas. At the same time, the media typically depicts governmental agencies and programs as necessary,
particularly if their budgets are cut. Often journalists interview academics who seem to invariable fall in line with depictions more appropriate for
Cold War interpretations of governmental malfeasance than the day-to-day realities of a post-9/11 and Katrina world. This and raw political
partisanship explains much of the disconnect the average American feels about his place in society. That this can manifest in profoundly important
political ways (such as the “Security Moms” so often depicted in the media in 2004) only adds to the lack of clarity in the general consciousness of
the population. Fundamentally, Americans having been asking themselves questions such as “Is it wise to prepare for disaster? If so, how much is
enough? To what degree should I believe the government or the media?” Journalists and leftist academics generally provide a negative reply.
It’s important to understand that the above actually represents a very small contrarian academic view, and that generally academic specialists
support the conclusions of neosurvivalism. Researchers such as Tainter, Diamond, and Zartman all find the modern state as an incredibly imperiled and
fragile edifice. Joseph Tainter’s The Collapse of Complex Societies follows in the footsteps of earlier historians such as Oswald Spengler’s Decline
of the West and Arnold Toynbee’s A Study of History in that it predicts that societies do not enjoy “progress” endlessly, that eventually societies
reach a point of diminishing returns when solutions to their problems invariably cost so much that they create more serious problems. This is an
assessment shared by Vaclav Smil in his book Global Catastrophes and Trends. Smil foresees a connection between global stability and energy
consumption; military and economic engines are powered by the energy source of the nation, a reduction in which can create substantial geopolitical
problems. Peak Oil researchers will find much to agree with in Smil’s
work.
Jared Diamond is a Pulitzer Prize winning academic whose work Guns Germs and Steel was followed by his equally impressive Collapse: How
Human Societies Fail or Succeed. Diamond comes down on the side of environmentalist fears as a major threat to human civilization, though to his
credit he’s more than willing to entertain a joint effort at sustainability with corporations. That Diamond’s Collapse has received positive reviews
buttresses the idea that societies can indeed fail, and that human action or inaction can cause that collapse. Posner’s book, Catastrophe: Risk and
Response, comes to similar conclusions as Diamond, and his exploration of events which can wipe out humanity and how we should rationally respond to
them is a remarkable read.
William Zartman’s book Collapsed States uses post-colonial African Nations as the subject for his study of how
nations cannot easily be put back together. Once a polity collapses, he ominously predicts, only a powerful outside force can reestablish its
authority, and even the success of such operations is spotty at best (as U.S. adventures in Iraq and Afghanistan can attest). The typical result is
ongoing instability, tribalism, and intranational violence. Zartman is supported by R.J. Rummel’s work on what he calls “democide” in his book Death
by Government, which demonstrates that failed states are generally highly active in either perpetrating or supporting genocide. Mary Kaldor comes to
similar conclusions in her work, including her excellent book Old Wars, New War. Fearing one’s government as an agent of violence against its own
citizens is not paranoia – it’s an academically supported position, and a cause célèbre of the Amnesty International and its supporters.
Finally, consider the concept of societal collapse, something that Mr. Rawles and many others write about. This too is a well-studied and supported
concept in academia. George Mason University economist Robin Hanson has this to say about it: “While there are many kinds of catastrophes that might
befall humanity, most of the damage that follows large disruptions may come from the ensuing social collapse, rather from the direct effects of the
disruption.” He also goes on to say that “if individuals vary a lot in their resistance [to disaster], however, then it may pay to increase the
variance in such resistance, such as by creating special sanctuaries from which the few remaining humans could rebuild society.” Archaeologists
Harvey Weiss and Raymond S. Bradley have said that “The archeological and historical record is replete with evidence for prehistoric, ancient and
pre-modern societal collapse. These collapses occurred quite suddenly and frequently involved regional abandonment, replacement of one subsistence
base by another (such as agriculture by pastoralism) or conversion to a lower energy sociopolitical organization (such as local state from
interregional empire).” Thomas Homer-Dixon’s work, such as Environment, Scarcity, and Violence maintains (as an extreme simplification) that
environmental scarcity results, ultimately, in violence (something Smil and many other scholars have concluded). That these scarcity issues cannot
always be solved is something Homer-Dixon explores in his book The Ingenuity Gap. The result is fragmentation and destruction, if not extinction.
What I have attempted to do here is layout the academic and intellectual work that has been done in support of neosurvivalism. This is
necessarily only a short introduction to the topic, and it focuses only on the academic research angle, the books published largely through academic
presses such as Oxford University Press, MIT Press, and Princeton University Press. These books are read mostly by policy makers and planners,
generally not by journalists or non-specialists. The reason I have focused on these is to inform the general neosurvivalist community of the immense
support that government and academia provide for them as they make individual contingency plans. When faced with family members and others who are
dubious about the practice of emergency preparedness, a library stocked with the texts I listed above may be the very best tools available because
they may help convince loved ones of the importance of emergency preparedness.
In closing, the U.S. government has been urging American
citizens to prepare for nuclear war since 1947, for all-hazards emergencies since the late 1970s, for terror attacks since 1999, and for national
health disasters, such as pandemics, since 2006. Every U.S. state has a disaster management agency, which often has funds available for disaster
mitigation in individual homes. The Red Cross urges emergency preparedness as well, including the requirement for two weeks of food at home and one
gallon of water per person per day, as well as the packing of an evacuation bag, with three days food and water in it. The reason people do not
prepare is because they do not match the criterion I listed above – they either do not have the disposable income (meaning they choose to spend
family funds on other priorities) or they are unaware of the dangers to which they are exposed. In addition, academic researchers from the best
universities have produced copious evidence to support any number of rational preparation schemes, to include preparation for total societal
collapse. Following the recommendation of the government disaster planning agencies and the scholars who specialize in studying disasters is the
result of neither paranoia nor foolhardiness. It is prudent, logical, and rational. Pretending none of this is an actual threat, and refusing to make
even the most basic preparations, is lunacy.
The following academic texts may prove interesting to the general survival community. These are
not “how-to” survival texts, but nevertheless are books very worth the reading because they help the reader to understand the potential survival
situation which may result from a disaster or societal collapse. (And this alone is an invaluable service for emergency planners, institutional or
individual.) Those marked with an asterisk are, in the author’s opinion, especially useful:
David W. Orr, Down to the Wire: Confronting Climate
Collapse Johan M. Havenaar, Toxic Turmoil: Psychological and Societal Consequences of Ecological Disasters* Robert A. Stallings, Methods of
Disaster Research Havidan Rodriguez, Handbook of Disaster Research Piers Blaikie, At Risk: Natural Hazards, People's Vulnerability and
Disasters* Maxx Dilley, Natural Disaster Hotspots: A Global Risk Analysis Robert D. Putnam, Bowling Alone: The Collapse and Revival of American
Community* Greg Bankoff, Mapping Vulnerability: Disasters, Development and People David R. Montgomery, Dirt: The Erosion of Civilizations
World Health Organization, The Management of Nutrition in Major Emergencies* Richard A. Posner, Catastrophe: Risk and Response* Michel Agier,
On the Margins of the World Karen Jacobsen, The Economic Life of Refugees Mohamed Gad-el-Hak, Large-Scale Disasters: Prediction, Control, and
Mitigation United Nations Human Settlements Programme, Enhancing Urban Safety and Security Vaclav Smil, Energy: A Beginner's Guide* Nayef
Al-Rodhan, Neo-Statecraft and Meta-Geopolitics Nick Bostrom, Global Catastrophic Risks Dmitry Shlapentokh, Societal Breakdown* Michael
Bollig, Risk Management in a Hazardous Environment Carl Sagan, The Cold and the Dark: The World After Nuclear War* Jerome H. Barkow, The
Adapted Mind: Evolutionary Psychology and the Generation of Culture Azar Gat, War and Human Civilization* Henrik Hogh-Olesen/Azar Gat, Human
Morality and Sociality Glenn M. Schwartz, After Collapse: The Regeneration of Complex Societies* Herbert Gintis, The Bounds of Reason: Game
Theory Daron Acemoglu, Economic Origins of Dictatorship and Democracy Douglass North, Violence and Social Orders* Mark Juergensmeyer,
Terror in the Mind of God Marc Gopin, Between Eden and Armageddon Kenneth D. Rose, One Nation Underground Colin S. Gray, Another Bloody
Century Robert D. Kaplan, The Coming Anarchy* John Robb, Brave New War* Fathali M. Moghaddam, The New Global Insecurity* Kaldor, Old
War, New War* Tainter, Collapse of Complex Societies* Jared Diamond, Collapse: How Human Societies Fail or Succeed Walter Dodds, Humanity's
Footprint: Momentum, Impact, and Our Global Environment Goudsblom, The Course of Human History: Economic Growth, Social Process, and Civilization*
Bill McGuire, A Guide to the End of the World Vaclav Smil, “Limits to Growth Revisited: A Review Essay” Vaclav Smil, “Energy at the Crossroads”
Vaclav Smil, Global Catastrophes and Trends: The Next Fifty Years*
----------------- 7.1.09------------
Surviving
Hyperinflation: An Update
by
Eric Englund
http://lewrockwell.com/englund/englund54.1.html
by Eric Englund
Recently by Eric Englund:
Ford Motor
Company, Goldman Sachs, the SEC, and the ‘New’ Wall Street
 
In the early
1980s, Harry E. Figgie, Jr. (the founder of Figgie International,
Inc.) became concerned that the United States’ government was
following the same destructive path that lead countries such as
Argentina, Bolivia, and Brazil into hyperinflationary economic
collapse. In the 1980s, each of these South American countries
were running massive annual deficits, were accumulating
unmanageable national debts, and each respectively had a central
bank creating money, out of thin air, at a reckless pace. In
looking at the frighteningly similar profligate behavior, on the
part of the U.S. Government, Mr. Figgie became concerned that
hyperinflation could emerge in the United States as well.
PARDON THE
INTERRUPTION
I wrote the
opening paragraph, and the balance of this essay, in January of
2004. Since then, the
national debt has grown from $6.9 trillion up to $11.4
trillion – an increase of about 65%. Uncle Sam’s
unfunded
liabilities now exceed $100 trillion. Per the Federal
Reserve’s own data, the United States’
monetary base has skyrocketed from $735 billion, in January of
2004, to over $1.7 trillion today. To believe that the paper
tickets in my wallet, Federal Reserve Notes, will somehow gain
value over time has always struck me as absurd. In my opinion, the
stage has been set for an explosion in the prices of everyday
goods and services. Economists Robert Murphy and Thorsten Polleit
have recently written essays (linked
here and
here) affirming my
trepidation. To be sure, I firmly believe tough economic times,
marred by harsh inflation, lie ahead of us.
AND NOW,
BACK TO THE ESSAY
As a
businessman and an entrepreneur, Harry Figgie was concerned that
his business enterprises may not survive if his management teams
were not prepared to operate under the unstable conditions wrought
by heavy inflation. Since little had been written about managing a
business under hyperinflationary conditions, Mr. Figgie initiated
a research project to find out what a business must do to survive
the ravages of inflation. So, in his own words, here is what he
decided to do:
As a result,
we initiated research of our own, and chose our target South
America – specifically Bolivia, Brazil and Argentina – as the
best available examples of economies suffering high inflation
rates.
We put
together a three-person team headed by Dr. Gerald Swanson, a
University of Arizona economist and director of the Academy for
Economic Education.
The team
went to South America four times over a two-year period to study
the development of inflation and its impact on businesses,
individuals and governments. They interviewed 80 leading bankers
and industrialists and a considerable number of ordinary
citizens throughout Argentina, Brazil and Bolivia.
As a result of
this research, Dr. Swanson wrote
The Hyperinflation Survival Guide: Strategies for American
Businesses; which was first printed in 1989. The superb
content of this book can be attributed to Mr. Figgie’s foresight
and to the outstanding research and writing of Dr. Swanson. What
follows are a brief "Austrian" perspective about this book and
then specific details regarding the book’s content.
AN AUSTRIAN
PERSPECTIVE
The
Hyperinflation Survival Guide: Strategies for American Businesses
is a book that provides sound business strategies for business
managers and entrepreneurs to implement when operating a business
under economic circumstances in which monetary calculation becomes
increasingly difficult due to a rapid decline in money’s
purchasing power. Although the term "monetary calculation" is not
found anywhere in this book, it is crucial to understand monetary
calculation is a method of thinking for a businessman. As the
extraordinary economist Ludwig von Mises explains in his magnum
opus
Human Action:
Monetary
calculation is the guiding star of action under the social
system of division of labor. It is the compass of the man
embarking upon production. He calculates in order to distinguish
the remunerative lines of production from the unprofitable ones,
those of which the sovereign consumers are likely to approve
from those which they are likely to disapprove. Every single
step of entrepreneurial activities is subject to scrutiny by
monetary calculation. The premeditation of planned action
becomes commercial precalculation of expected costs and expected
proceeds. The retrospective establishment of the outcome of past
action becomes accounting of profit and loss.
A tool
businessmen use to determine the success or failure of past
actions is a financial statement – which includes a balance sheet
and an income statement. It is important to understand that all
entries in the balance sheet and income statement are expressed in
terms of money. Under conditions in which money’s purchasing power
is stable, a businessman can directly correlate whether his
company’s capital base (i.e. the company’s net worth as reflected
in the balance sheet) is expanding or contracting depending upon
if the company turned a profit or made a loss. Such monetary
calculation assists a businessman in deciding to maintain or
change a business plan based upon satisfying the ever-sovereign
consumer.
But what
happens to monetary calculation under conditions of inflation? As
Murray N. Rothbard explains in his fabulous book
Man, Economy, and State, businessmen may be "tricked" into
making poor decisions thus causing consumption of capital:
…the
inflationary process inherently yields a purchasing-power profit
to the businessman, since he purchases factors and sells them at
a later time when all prices are higher. The businessman may
thus keep abreast of the price increases (we are exempting from
variations in price increases the terms-of-trade component),
neither losing nor gaining from the inflation. But business
accounting is traditionally geared to a world where the value of
the monetary unit is stable. Capital goods purchased are entered
in the asset column "at cost," i.e., at the price paid for them.
When the firm later sells the product, the extra inflationary
gain is not really a gain at all; for it must be absorbed in
purchasing the replaced capital good at a higher price.
Inflation leads him to believe that he has gained extra profits
when he is just able to replace capital. Hence, he will
undoubtedly be tempted to consume out of these profits and
thereby unwittingly consume capital as well. Thus, inflation
tends at once to repress saving-investment and to cause
consumption of capital.
Indeed,
inflation can lead to entrepreneurial error and, thus, to business
failure.
SPECIFICS
FROM THE BOOK
The
Hyperinflation Survival Guide provides excellent strategies
for businessmen to adopt and act upon should hyperinflation
emerge. Although this book is geared more toward owners/managers
of manufacturing companies, operating under inflationary
conditions, any businessman (and any individual) can garner sound
advice from this insightful book. The four chapters in this book
cover financial management, marketing strategies, manufacturing
decisions, and industrial relations.
Chapter one of
this book – titled "Financial Management" – can be summed up as
follows: "Cash management is the difference between profits and
bankruptcy. The single fact that influences every decision is:
Time eats money." The following list highlights a few of the
important financial-management issues covered in this chapter:
-
Make
absolutely certain your managers understand the time value of
money.
-
Never allow
your cash to remain idle.
-
Good cash
management can provide a major source of profit, while poor cash
management can destroy a company in a matter of months.
-
Be prepared
to convert dollars into a stable foreign currency.
-
Be aware
that the stock market may become an uncertain source of capital.
-
Be prepared
to maintain more than one set of books.
-
Inventory
valuation should be based on NIFO (next in first out) rather
than LIFO.
-
Develop an
appropriate inflationary adjustment for capital replacement or
the value of your capital will disappear.
Chapter two is
titled "Marketing Strategies." Pertaining to the "4Ps" of
marketing (price, promotion, place, and product), this book
concentrates on pricing and product.
Since
government intervention and regulation inevitably become more
oppressive during bouts of high inflation, it is important for
businesses to sell products with the largest profit margins. As
Dr. Swanson points out:
A fact of
life in a hyperinflationary economy is the disappearance of
products whose controlled price does not cover the cost of
production. In Brazil, for example, dairy products such as milk,
eggs and cheese became unavailable when the regulated price was
set below their production cost.
Likewise, in
the United States, high volume products with extensive
competition – characteristic of many consumer products – may be
the first to disappear should inflation begin to rise, because
they tend to have low profit margins.
With respect
to pricing, the book conveys that pricing "…policies undergo a
dramatic transformation during hyperinflation. Fluid pricing
becomes an absolute necessity, and prices must change frequently
and sharply to accurately reflect the impact of inflation. True
costs become increasingly difficult to track, even as the need to
do so grows more important."
For Americans,
it is hard to imagine products disappearing from the marketplace
let alone having to cope with hyperinflation. Just imagine the
nightmare Bolivian businessmen went through, in 1985, when
inflation hit 50,000% annualized. Upward price adjustments would
have to be made by the hour. These upward adjustments accumulate
to the point of seeming absurd. For example, under 50,000%
inflation, a $25 necktie would cost $12,525 one year later.
In chapter 3
(titled "Manufacturing Decisions"), Dr. Swanson emphasizes that
management must be flexible and innovative. Corporate survival,
furthermore, may require radical decisions. For example, during
"…periods of high inflation, manufacturing operations are
particularly hard hit. In fact, in some extreme cases in South
America, corporate attempts to survive have led some companies to
shut down their manufacturing operations in favor of speculation,
which can be a more profitable use of capital." The cold reality
here is that the rates of return on speculating in commodities and
currencies, under conditions of severe inflation, may exceed the
rates of return on capital projects. Correspondingly, this means
laborers will lose their jobs.
Other
important points, covered in this chapter, include the following:
-
Anticipate
that your purchasing department will assume a more important
role in the long-run survival of your firm.
-
Be aware
that hyperinflation creates increased opportunities for
corruption.
-
Effective
cost control requires that you develop methods for estimating
your internal rate of inflation.
-
Anticipate
difficulty in maintaining capital expenditure programs.
Chapter 4 of
this book is titled "Industrial Relations." It could just as
easily be titled "Employee Relations." As Dr. Swanson and his team
discovered in South America, the impact of hyperinflation on wages
and benefits was stunning. For instance, "…Brazilian employees who
were not given raises in the first three months of 1988 watched
their buying power plummet 64 percent. Even worse was the spring
of 1985, when Bolivians saw their real income drop 90 percent in
only three months." Such bouts of inflation become especially
difficult for businessmen to cope with as inflation is inflicted
upon society by a government’s reckless monetary creation (out of
thin air) while, in turn, government regulations – for the alleged
purpose of controlling inflation – prevent employers from granting
raises to employees. Employers, unfortunately, take the brunt of
the blame for the declining living standards (that employees
experience during bouts of severe inflation) when government is
the real culprit.
As standards
of living decline, Dr. Swanson found that "…individuals tend to
seek the support of a group to represent them in order to survive
constantly rising prices." He further articulated:
This is
certainly true in Bolivia, Brazil and Argentina, where the union
movement is very strong in both the public and private sectors.
Some South American business leaders go so far as to complain
that union leaders actually use hyperinflation to their own
advantage, recognizing it as a major source of their power.
Because wages continually lag behind rising prices during
hyperinflation, there is a near-constant need for negotiations,
as union members press their leaders to push for higher wages.
Other notable
labor-relations issues covered in this book are summarized below:
-
Labor
relations staffs should be prepared to face stronger unions and
virtually continuous negotiations.
-
There is a
high likelihood that wages will at some point be frozen, and
labor will apply pressure on management to circumvent controls.
-
Prepare to
shorten pay periods.
-
Anticipate
morale problems among middle management, which often bears the
greatest burden during hyperinflation.
-
Consider the
type of index you will use for cost-of-living adjustments, and
be prepared to make adjustments often.
-
Fringe
benefits must be adjusted to reflect inflation or they can
disappear.
This book’s
appendix provides a nice bonus as it covers the disastrous results
of the wage and price controls President Nixon implemented to
"combat" the United States’ 4.7% inflation rate and its 5.8%
unemployment rate. Two of the most notable actions President Nixon
undertook on August 15, 1971 included an immediate 90-day freeze
on wages, prices, salaries and rents and of course, the
reprehensible floating of the dollar; by severing the last vestige
of the dollar’s linkage to gold. For a president to assert that
severing the dollar’s link to gold will help reduce inflation
completely defies logic. In reality, what President Nixon
"accomplished" was to enable the federal government to create
money without limit. How such an irresponsible action can be
construed to be anti-inflationary is a sad testimony to the
economic illiteracy of the American populace.
To buttress
the point, about economic illiteracy, here is an excerpt from this
book’s appendix:
Domestic
reaction to Nixon’s proposal was overwhelmingly positive.
Leaders of the nation’s corporate giants, believing that some
sort of action was overdue, responded with general enthusiasm,
and opinion polls showed broad support among the populace.
Financial
markets reacted with unprecedented gains, as trading on the New
York Stock Exchange hit a record 31.72 million shares, and the
Dow Jones Industrial Average set a one-day record by climbing 33
points. Bond prices also rose sharply in heavy trading…
In all,
President Nixon implemented four phases of wage and price
controls, with the final phase ending in April of 1974; and the
results were predictably terrible. There were, for example,
shortages of beef and textiles. Prices rose, moreover, at an
average annual rate of 6 percent while the controls were in place,
yet in the eight months following the end of Phase IV, prices
climbed at an annualized rate of over 12 percent.
CONCLUSION
Of the books
published regarding hyperinflation, this may be the only one that
provides effective strategies for operating a business under
conditions of a rapidly depreciating currency. To reiterate,
The Hyperinflation Survival Guide: Strategies for American
Businesses was written by Dr. Gerald Swanson – an
associate professor of economics at the University of Arizona.
Harry E. Figgie, Jr. sponsored the research and the original
production of this book. As it was originally printed in 1989, it
was way ahead of its time. This, however, does not change the fact
that Dr. Swanson’s book will prove to be an excellent resource for
businessmen and individuals once the Federal Reserve's destruction
of the U.S. dollar enters its terminal stage.
Let me close
with a little bit of sobering humor:
There are
10^11 stars in the galaxy. That used to be a huge number. But
it's only a hundred billion. It's less than the national
deficit! We used to call them astronomical numbers. Now we
should call them economical numbers.
~ Richard Feynman (1918–1988)
June 29, 2009
Eric Englund [send
him mail],
who has an
MBA from Boise State University, lives in the state of Oregon. He
is the publisher of
The Hyperinflation Survival Guide by Dr. Gerald Swanson.
You are invited to visit his
website.
Copyright ©
2009 Eric Englund
-----------------
http://www.321gold.com/editorials/mathid/mathid101508.html
It is Time
Sam Mathid
Oct 15, 2008
What is beyond the
collapse?
The construction of
the collapse was loosely as thus:
-
Governments
inflated their currencies.
-
Malinvestment
resulted
-
To cope with the
problems of malinvestment, governments inflated
their currencies more.
-
Huge
malinvestments resulted.
-
To cope with the
problems of huge malinvestments governments
inflated their currencies hugely.
-
Currencies
utterly collapsed (still playing out).
The feeble
construction known as the world economy has been
held together with the glue of lies and pathetic
conceits such as:
-
Pieces of paper
printed by governments, and not backed by
anything of value, could successfully be used
instead of real money.
-
Wealth creation
could be separated from production.
-
The more control
government took of the economy, the stronger the
economy would be.
-
The
disintegration of the moral, spiritual and
intellectual fabric of the western world had
nothing to do with governments control of the
economies.
I have had
readers make the point that if the whole edifice
was built only on an illusion of wealth creation,
then how come there was so much prosperity for the
last few decades? The answer to that is horribly
simple. We expropriated and wasted not only such
real wealth (production) as there has been in the
present times, but we wasted the accumulated
wealth of all the preceding generations, and
finally (and most disgusting of all) we then went
into vast debt and consumed the wealth of future
generations.
The whole lot,
every last nickel, has either been doled out in
the gutter of political corruption, or flushed
down Wall Street's slimy drain; all abetted by a
malign, mumbo-jumbo nonsense called Keynesian
economics. Nowhere is there reference to prior
criminality and stupidity on such a grand scale.
There is no historical precedent.
For three
generations the public have been lied to and
lulled into a false sense of security by the
media, by the education system and by governments.
Now, more than
ever, there is a desperate need for the truth. The
restoration of hope for the future can only begin
with the truth. A foundation of truth is the
bedrock of any decent society, which is why the
enemies of freedom seek so desperately to suppress
it, and why sane people value the virtue of truth
so highly.
The truth is that
the current system has become corrupted beyond
possibility of repair, and needs to be allowed to
collapse. It will do so anyway, whether we 'allow'
it or not. It must collapse, so that something
more attuned to the genuine needs of people can be
created. Destruction must often precede
creation... slums have to be razed before fine
living quarters can be constructed.
When a system is
corrupt it will attract only corrupt people and
only the corrupt will flourish. We have provided
history with a wonderful example of that. Look at
the legislators who sit in not only the American
Congress, but in the UK and Australian
parliaments, and in governments all across the
western world. Only an utterly corrupt system
could elevate and reward such second-rate people.
As of this morning
I see that the DOW rose almost 1000 points
overnight in the US. This on the promise of
politicians taking firm action. Looking to
politicians to effect a solution for this
situation is as futile as poking around in a
parrot's entrails in an attempt to divine
Saturday's winner at Randwick. Bush claims that it
is an effort to preserve the free market. The free
market needs no help, it needs less hindrance. It
is government 'help' that has killed the economy.
As Reagan once said: "the nine most scary words in
the English language are 'I'm from the government
and I'm here to help.' It's actually eleven words,
but what's a 20% error with any government figure.
Look at the
criminals who infest Wall Street, the Federal
Reserve and the Treasury. How foolish and shifty
they look as they sit blinking in front of the
television cameras struggling to provide coherent
answers to simple questions; and yes, on one level
it is laughable, but that is our money and wealth
that has been destroyed. That is the material
present and future of our families that has been
stolen.
Our education
system is run by people whose job is to ensure
that children attain adulthood without gaining any
dangerous ideas about personal integrity or
individual responsibility. Our media no longer
even pretends to publish the news, they are merely
organs of propaganda for the government, and for
those vast corporations allied to government. It
is time to be done with all our institutions. No
part of what we have is worth saving. The
corruption has penetrated and permeated from the
very top to the very bottom. Society has been
rotted down to the last point of resistance... the
core level of the family and individual. The
institutions have become a part of the problem,
not the solution. The solutions can now only be at
the level of the family and the individual.
We need a new
system which allows people (who, despite all
inducements to be otherwise, are mostly honest,
hard working and decent) to produce and prosper. A
system that allows everyone the rewards of their
efforts. A system that keeps government locked
away, not only by Constitutionally binding laws
(we tried that), but by harsh and prescribed
penalties for the flouting of those laws.
We need a system
that keeps government completely out of the
economy. The first great breakthrough in the
establishment of boundaries between government and
people was the separation of the State from
Religion, the second will be the separation of the
State from Money and the Economy.
There is no place
for government in monetary or financial dealings
between free people. No matter the occasional
foibles and failings of individuals, people will
always be as saints compared to the systemized
criminality that infests our corridors of power.
When government pokes its dirty and self-serving
legislation into the economic pie, there is an
immediate corruption of that pie. The pie then
gradually deteriorates until eventually and
inevitably the economic pie becomes so rotten that
it collapses. That is the point where we now find
ourselves.
Eventually people
are going to find out how it is that they have
been ripped off so grossly. At that point the
expression of the voice of the people will move
from the sedateness of the ballot box to the get
down and dirty level of the streets. What is
important is that people's wrath is directed
toward the right target. There are many easy yet
wrong targets such as neighbours, other races,
immigrants, religions etc.
The right target is
governments. The criminality and breathtaking
greed of Bankers and Wall Street, that has brought
the whole western world to its knees, could never
have happened without the legislative complicity
of government. Our western system of governments,
not just the American system, are rotten to the
core. Definitely the American system is more
corrupt than any other, but that is only a matter
of degree, not of standard.
It is time for a
revolution, but not just more of the same old
mindless and horrendous violence of the 20th
Century, with its pointless wars. Another century
spent fighting wars to determine which is the best
form of total government control of monetary and
fiscal affairs would likely see the end of the
human race. A pox on all of those governments. The
original Constitution of the United States of
America would be a good starting point, but with
changes sufficient to ensure that the errors of
the past could not again happen.
It is time for the
second American revolution. America is the only
place with the tradition of freedom and the
intellectual underpinning (not to mention the
arms) to make it happen. There would be many
willing and happy to come and help. There must
again be a beacon for freedom in the world. The
fight is not just for the future of America, but
for the future of the world.
Many in the
American intelligence and military, from the top
to the bottom, would renege on their allegiance to
the government in an instant in the event of a
revolution. They are deeply troubled by the nature
of the system that they serve. Indeed, it is
possible that there are very few who would fight
to keep the current elitist system intact.
Bush has already
deployed the First Brigade of the Third Infantry
Division within mainland America. More troops are
to follow. Will these troops remain reliable and
true for the elites against their own countrymen?
Hard to say... especially for the elites. Bush's
striking down of Posse Comitatus, which disallowed
the use of the US military on home soil, is a
double edged sword. It is a decision and a
precedent that could come back to haunt him.
It would be easy to
argue the merits of a military coup in America.
The arrest of George Bush, Dick Cheney, Hank
Paulson, Robert Rubin et al with the dissolution
of Congress, followed by an announcement of
immediate criminal investigations into the whole
upper hierarchy of the political and financial
establishment would, after the initial shock had
subsided, have massive public support.
Colin Powell
sitting in the White House and presiding over a
new Constitutional Convention would do a lot to
reassure Americans and the rest of the world that
America was serious about addressing its problems.
Maybe the military are the one institution that
could redeem themselves.
The fortresses of
our ruling elites around the world were almost
impregnable during the complacency of the past few
decades. That complacency, born of the illusion of
prosperity, is about to be replaced by a public
rage, born of the reality of an imposed poverty.
The time for truth is now, and the truth is that
it is time to bring down the fascist and socialist
elites and their Keynesian economic cronies who
have destroyed so much and so many.
Is my message 'doomy'?
Absolutely not, it is a message of hope and
salvation. Could poverty, violence, war, hatred,
sickness, moral rot and spiritual oblivion become
worse in this century than it was in the last?
Only if we allow a continuation of the same
corrupt monetary system. We are in a vast debtor's
prison and the guards are the very people who
created the monetary system that ensured the
financial ruin. Not only is the message hopeful,
but throwing these criminal and pompous bums into
jail, or out into the street, would be a lot of
fun.
Sam Mathid
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~~~~~~~~~~~~~~
"In the first place, we should insist that if the
immigrant who comes here in good faith becomes an American and assimilates
himself to us, he shall be treated on an exact equality with everyone else, for
it is an outrage to discriminate against any such man because of creed, or
birthplace, or origin. But this is predicated upon the person's becoming in
every facet an American, and nothing but an American... There can be no divided
allegiance here. Any man who says he is an American, but something else also,
isn't an American at all. We have room for but one flag, the American flag... We
have room for but one language here, and that is the English language... and we
have room for but one sole loyalty and that is a loyalty to the American
people."
Theodore Roosevelt 1907
~~~~~~~~~~~~~~~~~
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
"Insanity in individuals is something rare - but in groups,
parties, nations and epochs, it is the rule."
--Friedrich Nietzsche
DON'T BEAT YOURSELF UP WORRYING --
JUST PREPARE!
"All you can do is all you can do, and all you can do is enough;
the rest is God's grace."
- Christos
"Once a government resorts to terror against its own population
to get what it wants, it must keep using terror against its own
population to get what it wants. A government that terrorizes its
own people can never stop. If such a government ever lets the fear
subside and rational thought return to the populace,
that government is finished."
- Michael Rivero
"Mankind must put an end to war,
or war will put an end to mankind"
- John F. Kennedy
"In a time of universal deceit, telling the
truth becomes a revolutionary act."
- George Orwell
"If man will only realize that it is unmanly to obey laws that are
unjust,
no man's tyranny will enslave him."
- Mahatma Gandhi
"Rebellion
against tyrants
is obedience to God."
- Thomas Jefferson

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