Betty Freauf -- The Subtle Side of Gradualism

Lynn Stuter asks in her article ARE WE REALLY SO GULLIBLE?

I have been watching all the finger pointing going on in Oregon due to our fiscal crisis - a problem most states are also experiencing. But no one seems to know who is responsible and we certainly cannot count on the mainline media to expose the culprits.

While several communist sympathizers in our community get lots of ink from the media in the form of lengthy guest opinions, I was just given another rejection from our local paper for a guest opinion I tried to submit on this very subject of blame. A 200 word Letter to the Editor which they suggest I submit instead hardly would be sufficient to amply cover the subject.

Why are people so gullible? While Lynn was talking about the impending war with Iraq and making fun of the recommendation by Homeland Security for us to buy duct tape, plastic sheeting and gas masks, I have to ask could it be because the passage of time can be used effectively to make people lose sight of what has taken place? There are those who have had dreams of controlling us since we escaped the British. Creeping totalitarianism is effective because each generation views conditions at any given time as "normal." One must objectively analyze where we began and where we are today in order to have a realistic understanding of what has transpired during the last 226 years.

If I could show my children or grandchildren the silver certificates I had when our money had silver backing, they would not recognize the significance of them. They would find it hard to believe that we purchased our first small two-bedroom home with one bath for $9,000 -- less than what a new automobile costs today. Our first new car - a '57 Chevy cost $2,000. Had we been smart enough to keep it, it would be a classic today worth lots more than $2,000. I found it hard to believe what a small amount my dad paid for his first new car. My grandkids find it even more amusing to know that "grandma" never had indoor plumbing until she was 14 years old.

So as materialism continues to abound and prices continue to escalate due to inflation which is not, as many have been led to believe, the fault of higher wages and prices, but rather caused solely by the increase in the money supply without the backing of gold or silver.

The first step toward the ultimate goal of the monopoly of our money was Article I, Section VIII, Clause V of the Constitution in 1789, which gave Congress the power "to coin money, regulate the value thereof..." So, just 13 years after the British had been overthrown and the dream of near total freedom had been born, new power seekers already had their eye on the goal: Control.

In his book, RESTORING THE AMERICAN DREAM by Libertarian Robert J. Ringer (c) 1979, he says it took government nearly 75 years to take the next significant step, the enactment of the National Bank Act of 1863 which allowed it to compete with the private sector: the minters and gold warehouses which were always a problem for government. Those alive in 1789 were probably pushing up daisies by 1863.

In the early years of our nation, writes Ringer, people bartered. And then along came the gold. Private sector minters would give receipts for the gold and make coins. Gold warehouses followed. If one might have become a swindler, he'd probably find himself faced with vigilante justice and other warehousers would make sure his "investors" would get their money otherwise these private sector warehousers would get a bad reputation. I'm sure today's shades of Enron, Global Crossing, etc. come to mind when it comes to swindlers which further proves government controls and regulations do not work.

In less than 150 years government entered the money business, in competition with other minters and warehousers. Then government outlawed all competitors and claimed a monopoly on the money system.

Government established the so-called Federal Reserve system (which isn't federal at all) on December 23, 1913 when a group of powerful elected officials in Washington, D.C. stayed behind to vote while the others had left for home for the Christmas break. This maneuver allowed the Federal Reserve to hold everyone's gold in its vaults and issue receipts but what most people did not know, the receipts were issued far in excess of the gold it had on deposit and finally, Ringer writes, government made it illegal for people to get their own gold back and declared paper money (as opposed to receipts for gold) to be the legal, recognized money of our country. That $1 silver certificate today would only be worth one fraudulent federal reserve note.

Ringer says it was the most protracted theft in history. But it certainly did prove that the slow, sure, approach -- the subtle side of gradualism - will work because people forget.

Adrian Kreig in his article "Why We Need This War!" said America is bankrupt and blames it on the imbalance of "Free Trade" the last 25 years; and while Kreig has a valid point, it should be noted almost immediately after going off the gold standard, said Ringer, the government "devalued the currency by about 40% - a sure admission of bankruptcy. What the government was telling foreign countries (who, unlike American citizens, still had the right to redeem dollars for gold) was that each receipt they held was now worth only 60% of the amount of gold it originally had promised them.

Nations, however, are a little bit more powerful than individuals and they did not take kindly to the news that the pieces of paper they were holding were counterfeit. As a result, countries holding large quantities of U.S. dollars began increasingly to cash them in -- a sort of an international "run" on the central bank of the U.S. and what stockholders in early 2000 would have done had they known their stocks were in trouble.

Out of desperation, Republican President Richard Nixon on August 15, 1971, threw in the towel and, in effect, admitted to nearly two hundred years of fraud: He shut the gold window to foreign governments. The game was over wrote Ringer. From that point on, no one, not even foreign governments, could redeem U.S. currency for gold. We were then a 100% paper-money country. Full speed ahead. Turn on the printing presses bringing on inflation and let the good times roll.

Ringer says the inflation swindle was the world's best kept secret for good reason. Had every American in history simply taken the trouble to open a dictionary and read the definition of inflation, the government would have been caught red-handed. Webster's New World Dictionary (1975 edition) defined inflation as "an increase in the currency in circulation or a marked expansion of credit, resulting in a fall in currency value and a sharp rise in prices." (As you can see, even Webster blames high prices.)

My 1996 Newly Revised and updated Random House Webster's dictionary says: A steady rise in the level of prices related to an increased volume of money and credit resulting in a loss of value of currency (opposed to deflation).

But now let's see what Noah Webster's 1828 dictionary said: The act of inflating. The state of being distended with air injected or inhaled. The state of being puffed up, as with vanity, conceited.

Even Noah Webster had no idea of impending dangers of our monetary system. But his definition may have been more prophetic than he ever imagined. For to translate his meaning into today's language, it would mean our current monetary system is full of hot air!! And we know what happens when we put too much air into a balloon, don't we? Eventually it pops and that is about where we are in the world today. It is said, "What goes up must come down" and it only took about 30 years for the governmental financial crisis we are experiencing today to come to fruition.

And now President George Bush is going to ask that the printing presses work overtime to pay for this war in Iraq and the rebuilding of the nation afterwards.

I pondered Lynn's question about gullibility. I often wondered how the German people could have been so deceived by Adolf Hitler. Ringer said if inflation is not eventually curtailed, a final collapse of the economy begins when people start to guess what future prices will be. This sets off a chain reaction by which sellers increase prices even faster than the increase in the supply of money; i.e. panic eventually pushes prices up faster than government's inflation of the currency. At that point, government faces its last chance to avoid a total collapse of the economy or it must "self-destruct." And this self-destruction is exactly what has happened to nation after nation throughout history.

The one we are most familiar with, writes Ringer in 1979, due to its close proximity in time, is the German runaway inflation of 1923. The German government increased the money supply, prices, in turn, rose. Interest rates rose higher. And as you would guess, writes Ringer, people eventually refused to accept paper money in exchange for goods and services. The economy collapsed; chaos and crime ensued; and waiting in the wings, preparing hysterical answers for hysterical people was a man -- Adolf Hitler -- who understood all too well that only an authoritarian police-state regime could restore order.

Can inflation be stopped? Ringer says it can be done by simply shutting off the printing presses. The question is whether those in power will stop it or whether enough people will ever sufficiently understand it to get mad enough to force those in power to stop. I hope this article has in some small way helped Americans to understand how severe the problem may yet become. Unlike the states, our federal government is not required to have a balanced budget so pork barrel spending continues unabated. It is political expedient for politicians to continue to send the pork back to their states so they can be re-elected and all the little piggies at the trough can get their share, but at what price? The cost may be the loss of the rest of our already paper thin freedoms.

For more information on the history of banking and our national debt, you might want to buy the book; THE COMING BATTLE available online through NewsWithViews.com

Betty is a former Oregon Republican Party activist having served as state party secretary, county chairman, 5th congressional vice chairman and then elected chairman, a precinct worker for many years and twice ran unsuccessfully for the Oregon State Legislature. The Republican tradition is to stay neutral in Primary races but in Betty's case. they supported her opponent. E-Mail: bettyfreauf@webtv.com

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