Monday, July 19, 2010

Book review: Confessions of an Economic Hit Man

As if we needed more evidence that the World Bank, International Monetary Fund, World Trade Organization, and United Nations are all instruments of subjugation, now an insider tells all. Throughout the 70's and 80's, this author schemed to bring third world nations into debt-slavery by convincing their leaders to take huge loans from the World Bank and IMF to fund massive, ill-conceived infrastructure programs. The credit always came with conditions designed to force open each nation's vulnerable fledgling markets to international competition before viable domestic producers could emerge. The international competition destroyed domestic employment, driving down internal revenues, and increasing social welfare expenses. Eventually the infrastructure projects could not be completed and resulted in no significant economic development. More importantly (to the World Bank and IMF), the victim nations defaulted on their loans, and had to come hat-in-hand to their creditors, who would only refinance after significant natural resources concessions. Essentially this is a story of how first-world banks rape third world nations. Before you go thinking first-world banks are somehow on "your side", consider how their mechanations endanger us all by impoverishing regions, causing destabilization, war, and terrorism. It is an utterly disgusting, immoral tale, and kudos to Perkins for telling it.

Book review: Tomorrow's Money- A Financial Program for America

Lies, disinformation, and the blueprint for a totalitarian Monetary Authority, all in one handy little volume!

Five stars, not because I agree with the content, but because everybody needs to read this book and understand the threat it represents. Writing in 1932, Frank A. Vanderlip describes changes to our monetary system which have gradually come to pass (the United States abandoned the gold standard in 1971), and some which are still in the process of evolving (centralizing of the commericial banking industry). It should be clear that the endpoint of Vanderlip's proposals would leave the American public with a system of monetary totalitarianism.

Background Information
The author, Frank A. Vanderlip, was a minion of banking elites J.P. Morgan, J.D. Rockefeller, and the Rothschild family. In 1910, he helped them draft the Federal Reserve Act at Jekyll Island. This legislation, passed in 1913, took the power to print money away from the U.S. Treasury and put it into the hands of the privately-owned “Federal” Reserve (in truth no more federal than Federal Express). Under the terms of the new law, the Fed does not print the nation’s money at cost, as the Treasury did, but charges the public interest on their money , as a “fee” for the printing. To assure the bankers that the nation would always be able to pay the interest, federal income tax was created (also in 1913) to create collateral, with the passage of the Sixteenth Amendment to the Constitution. That is where much of your income tax goes: paying interest to private bankers for use of their money, when we could print our own at cost just as easily, and it would be less subject to manipulation. This outrageous and unjustified power over the money supply allows the Money Masters who also control the credit markets) to engineer boom/bust cycles manipulable to their personal interests. Through timely deployments or shorts on the market, they whipsaw the public out of their investments. Vanderlip dedicated his life to constructing and promoting this system, which remains in place today. Privately-owned debt-based currencies continue to centralize wealth into the hands of a very few who are intent on a planetary oligarchy. That is the “New World Order” (NOVUS ORDO SECLORUM) which appears on our $1 bill, and which Vanderlip refers to on page 5. Our ongoing $23 trillion banking “bailout” is part of it. Tomorrow’s Money is a public relations piece promoting this work.

The book is divided into two sections:

The Past
The first seventy pages or so outline Vanderlip’s skewed and self-serving interpretation of the dollar’s history. At the heart of this is an attack on the gold-backed dollar (i.e. the gold standard). A gold-backed currency requires a certain amount of physical gold in reserve before paper dollars representing the reserve may be printed. This restricts banking Elites’ ability to manipulate the money supply, and is the reason the gold standard has been an object of their animosity. Friedrich Hayek elaborates on bankers’ hatred of gold in [book:The Road to Serfdom|299215], and more recently Ron Paul comments on the same in [book:Case for Gold: A Minority Report of the United State Gold Commission|747182] Vanderlip begins his attack by showing how a gold-backed money supply can be inflated by manipulating the gold exchange rate (how much gold each dollar represents). True enough; any paper currency is subject to manipulation… but fiat money is much more prone to inflation than physical coin. Even with changes in the redeemability rate (in 1834 and 1837), the gold-backed dollar was remarkably stable compared to any fiat currency in history. Our fiat ( since 1971) money supply is supposedly managed and regulated with bankers’ tools like the Consumer Price Index, the CRB Commodities Index, and currency exchange rates, which have proven to be so manipulated that they are really just charades. Proceeding, Vanderlip describes bank runs, liquidity freezes, and other engineered banking horrors, and then blames these on the gold standard. In truth, these are all artifacts of fractional reserve banking , not the gold standard… and there is no plausible way Vanderlip did not know this; he was a Vice President of National City Bank, and later an Assistant Secretary of the Treasury.

The Future
This part consists of a lot of grousing about citizens “hoarding” gold. Of course what Vanderlip calls “hoarding” the rest of us call saving, and up until recently, it was considered the responsible thing to do. Shame on ordinary citizens for selecting a stable medium as a store for their hard-earned wealth! Shame on them for protecting value from the inflationary ravages of Federal Reserve printing presses!

Bankers don’t like having large amounts of gold out of their direct control, and give all sorts of pretexts for why it is undesirable, including: “It creates instability and unpredictability in the circulating gold supply“; “the nation‘s gold reserve can be transported offshore, leaving insufficient reserves to support the circulating paper money“ etc. Vanderlip kicks around several solutions to address bankers‘ concerns, all of which restrict citizens’ ability to freely use the metal as a store of wealth:
1) Maintaining a bullion, rather than coin standard. This is designed to deter saving by limiting the coin supply and making it less convenient to ascertain the value of a quantity of gold.
2) Limiting redeemability of gold certificates. This serves central banks’ interests by protecting their reserves, but limits certificates' utility as a store of wealth by restricting liquidity. It is never explained what the basis would be for confidence in a currency which was backed in gold, but was never redeemable for gold.

Eventually Vanderlip gets around to telling us what he really wants: creation of a totalitarian, private banker-controlled “Monetary Authority”, which would impound and control all physical gold. On p.79, he tells us “[the Monetary Authority:] would always be in control of the situation, being aware at all times of the purposes for which any gold secured in exchange for currency was intended.” Oh, how nice for the nation! Big Brother will keep the economy stable by overseeing every private transaction! He goes on: “free coinage of gold should be a thing of the past. At the moment, of course, it would presumably be in possession of all the free gold in the country with the exception of gold employed in the arts or for jewelry, etc..”

It is a testament to the author’s audacity that he would feel comfortable coming out and admitting this. Fleshing out the details, he tells us: (p.127) “the Federal Monetary Authority will have to take over from the Federal Reserve, not only the currency-issuing function but this system of valves [rediscounting commercial paper, dealing in short-term Treasury notes, and buying and selling bank acceptances:] as well.”

There would be no point in denying these plans represent the architecture for a monetary tyranny, so Vanderlip admits (p. 156) “I believe that a Monetary Authority which concentrates all the levers within the grasp of one group of hands is the wisest course." I can't imagine any rational person (banking insiders excepted) agreeing with him.

A few comments about Style and Substance
The people working to construct a world totalitarian collectivist oligarchy are good at what they do, but they aren’t very imaginative writers. Whether you’re reading Vanderlip, Col. House or Henry Kissinger, you tend to keep coming across the same soundbites, phrases, and stylistic hallmarks. For example, no good Robberbarron book on finance would be complete without a passage characterizing gold as a primitive, outdated, maybe irrational or superstitious icon of wealth. Frankie Vanderlip delivers those goods on p.13-15.

Another old saw is the overused "terrorist" label. The Elites love to call anybody who does anything they don't like a terrorist. I kid you not: on p.32, Vanderlip cautions that future banking systems need to be constructed to protect their gold reserves from “the domestic attack of hoarders“! I’ll bet you didn’t know that buying gold to protect your wealth from inflation was a terrorist act!

Finally, most of the New World Order crowd seems incapable of containing their contempt for the public. There are so many instances of arrogance in this text; I need to list just a few to show you what I’m talking about. On pp. 201-202 he goes on at length about how the nation is filled with “economic illiterates”, and how certain select politicians are especially good examples of this. On page 10, he tells us that paper money used to require a 40% backing of gold reserves, but declines to explain or defend the statement, since it can’t be explained “without going into confusing details”. (go ahead, Frank: confuse us, we want to know where that number came from!) On p.153, we learn that when “the reform of banking practices is debated, the subject is too technical for untrained minds to grasp.”
Isn’t there anybody Frank Vanderlip respects besides himself? Oh, don’t‘ worry, there is: he gushes embarrassingly over the “expert management of English bankers” on p.30. He also shares with us that “Bankers have become almost unduly modest in advancing their opinions.” Yeah, right.

Everybody needs to read this filthy piece of Robberbaron totalitarian propaganda, and understand the threat it represents to our Life, Liberty, Prosperity and Democracy.

Book review: Fantastic Voyage: Live Long Enough to Live Forever. by Ray Kurzweil

High-tech problems
Has your computer ever gotten a glitch or a virus, causing it to freeze up, run extremely slow, or get the "blue screen of death"? Most people have experienced something like this at one time or another, but apparently Ray Kurzweil never has. His faith in technology is so complete, so blinded by love, that he actually dreams of a day when we can remove all our natural red blood cells from circulation, and replace them with "more efficient" nanotechnology robots, which will not only deliver oxygen, but perform other helpful functions as well.
nanobot graphic
I don't doubt that medical science will continue to amaze us all with new developments, including in vivo nano-bots one day, but Kurzweil's vision looks more reckless than appealing. Maybe Kurzweil should consider the following scenerio:
TS:Welcome to Bio-nano-dyne Tech Support... (in a thick Indian accent) my name is Kevin, how can I help you?

Kurzweil: name is Ray Kurzweil... I just replaced all my natural red blood cells with your OxygenMaster 3000 (TM) cells, and I don't feel so good. I'm sweating in buckets, my piss is green, and I have double.. make that triple.. vision.

TS: Oh, I think I can help you, Sir... Let me ask you: do you have a Jarvik 6 heart?

Kurzweil: Yeah, but it's never been a problem before.

TS: Oh yes... we've discovered a slight glitch in the OxygenMaster 3000 (TM) series when used with the Jarvik 6 heart, but don't worry, we've corrected it! You'll just have to install a patch. Have you been to our website?

Kurzweil: Oh God, can you please call me an ambulance?!?

TS: After you install the patch, you'll have to reboot the system. Do you have a friend with you, and a set of defibrillator paddles?...
There's nothing wrong with dreaming big- in fact, that seems to be what Kurzweil is paid for, but his dreams appear to be untempered by caution or skepticism. Should I really be excited about replacing all my organs with proprietary technology? And how much is all this going to cost? And who's going to pay for it?

This isn't for you
The prospect of living forever is exciting, but don't rush out and get a 3500 year mortgage on your house just yet. It should be obvious that not everybody will be able to afford Kurzweil's life-extension program. So where are these developments heading? A two-tiered society composed of wealthy semi-immortals, and short-lived poor? Even if life-extending technologies were distributed justly, what would happen to society if people suddenly started to live for 2500 years? (Kurzweil throws that number out there, but later says that life may be able to be extended indefinitely) And it wouldn't be just any people living 2500 years, it would specifically be the super-rich. Imagine how much more difficult it would have been to abolish slavery in the U.S. if a large fraction of the wealthiest Americans were 2500-year-olds who had owned slaves back in the days of ancient Greece and the Roman Empire.
world population growth
This isn't for you
One doesn't need to contemplate the implications of this book for long to realize it would be truly terrifying if Kurzweil's vision comes to pass. Time is the biggest commodity you need to get rich. Extended life would make the super-rich richer (and the poor poorer). What's worse: simple arithmetic demonstrates what a population problem we'd have if a lot of people started living 2500 years or more. The result would force a lot of hard questions on the public about limits on childbearing, euthenasia, maybe mandatory life limits, etc. The debate would be driven by super-wealthy in a position to influence both the media and public policy makers. It seems likely that they would conclude that the super-rich immortal are entitled to their demigodhood, and the rest of us should somehow suck it up, either by having fewer kids, and/or by accepting lower and lower lifespans. The magazine "H+" (which stands for "Humanity +", a reference to the enhanced humans Kurzweil wishes to create) hints at two possible approaches to this problem: 1) replace real sex with cybersex; or 2) bioengineering ways to make the sex act neurologically displeasurable to the general population. Gee, where have I heard that before? So, to enable our political and financial Elite to obtain immortality, we all have to become celibate? I guess progress has its price.
world life expectancy

This isn't for you
Kurzweil is smart to steer clear of the social questions in this book, and to stick to the scientific aspects of his "fantastic voyage". If you look to outside sources, you can learn that he is well aware of the social issues, and has no problem with the two-tiered society I've described. You can check out an interview in which he imagines the "unenhanced" will be as bacteria to the "MOSH" (Mostly Original Substrate Humans) superhumans, as he likes to call them.

This isn't for you
I am certainly onboard with reducing human sufferring, and giving people longer, more productive lives. Fantastic Voyage, however, is not about that at all. It is the basis for an envisioned social system which would be inequitable by intention. From a biologic standpoint, Kurzweil's ambitions possess a hubris on the level of Icarus, and unless we plan on colonizing space agressively in the next few decades, I do not see how his vision can end in anything but extreme injustice.

Monday, July 12, 2010

Book review: The Underground History of American Education by John Taylor Gatto

I just want to say...

I am a product of the American public school system, and I owe a whole hell of a lot to all the teachers who taught me, and whose patience and thoughtfulness guided me or set an example I could follow. My experience with public school teachers has overwhelmingly been that they care about their students far beyond what their paychecks warrant. I hope it is clear that the criticisms I offer are with the higher school leadership, with flaws inherent to the architecture of the system, and with historic decisions which I have led the institution away from the altruistic intentions of teachers. (And for what it's worth, my grandmother was a public high school librarian!)

The same old song and dance?
You probably think you know what's coming:
1) America ranks embarrassingly low among nations on standardized math tests.

2) "High school science class in Europe is like college science class in America."
(It is. I was an exchange student for a year in Germany, and my physics class there was harder than in America. In fact, it was about like the Physics 101 course I took in college.)

3) American history textbooks propagate worldviews ranging from mildly Eurocentric to downright racist.

4) American schools don't teach foreign languages very well, don't teach classical Greek or Roman literature enough, and with rare exceptions, don't teach Latin or Greek at all.

5) "New Math" (am I dating myself? Is this still out there?)

6) And of course:
Pink Floyd The Wall
There's some legitimacy to these observations, and there's also room for some nuance. (American schools are not all the same- math scores at the better schools are quite competitive with other nations') But these are all part of the same old conversation we aaalllllways have about public school. I wouldn't be recommending this book if it didn't contribute something new.

History lesson
The earliest public education was in India, and was devised as a mechanism to condition students to accept and propagate the caste system. Later, Prussia adopted the system- partly to gain a military quality advantage over its neighbors, but also as a forum for military and other types of indoctrination. Limited community-based education has existed in America since the colonial days, but in the late 1800's, Robber barons- with plenty of money to spend, dreamed of ways that public education could be harnessed to their benefit. Like the Prussians, they saw ways that an educated (with other peoples' money) American workforce might impart a potential competitive benefit. More ominously, they imagined ways that a captive American youth could be indoctrinated with social and political ideas beneficial to big business. As explored and documented quite thoroughly by the 1954 Congressional investigation (a.k.a. the Reece Committee), the Fords, Rockefellers, Morgans, and other blueblood families expended money and influence for over sixty years to gain power over public school curricula. In the late 1800's, they pushed to expand the mandatory hours and years kids must spend in public school. (perhaps not a bad thing, but motivated in this case by malicious intent) In the early 1900's, they acquired possession of the major textbook publishing houses. From this point onward, the quality of content became subservient to the advancement of Rockefeller-driven social and political programs (e.g. the recurrent promotion of banker-dominated supranational bodies such as the League of Nations, and the United Nations) Math and science performance has gone down over the decades- as banks recognized that it was more profitable to keep Americans ignorant of some concepts- particularly basic financial skills. Sure, some schools have classes that teach kids to balance checkbooks, etc... but rarely do they address very real subjects like how derrivatives or escrow work, and never do social studies classes instruct how the Third World is kept in perpetual servitude through crushing debt at the hands of international private banks. Over time, budgets for the teaching of traditional subjects has declined, while training programs to indoctrinate teachers and students alike with social conditioning has expanded. (e.g. history taught in a manner most favorable to international banking interests: championing highly centralized and interdependent social and economic systems over less centralized, more self-sufficient systems; promoting "international" agencies such as the United Nations and World Bank while demonizing ideas of protectionism or self-sufficiency)

Enrichment programs of all sorts (music in particular) struggle to remain funded, yet Gatto shows how millions of dollars are wasted on new math books which are substandard teaching on math concepts, but which promote various Rockefeller social views. In one stunning example, a word problem to calculate how far Columbus sailed on his journey of discovery to America is accompanied by an entire paragraph of racially divisive commentary about the Indians and Europeans. As always, there is an element of truth to some of what is said, but a favorite game of Elites such are the Rockefellers is keeping the public at each other by stoking any divisive issues, and downplaying our common interest in removing the corrupt elements from our leadership. The new books keep students uninformed consumers by removing math lessons which show how compound debt is calculated. (a valuable lesson that would potentially prevent students from becoming future debt-slaves to the Rockefeller-dominated Chase Manhattan Bank)

Moving from specifics of the curriculum to more general observations about the entire school experience, Gatto shows how school has become very much focused in recent decades on conditioning students to learn and accept the place in society which the school predicts for its students. Schools in impoverished communities rarely promote entrepreneurship in their students. Guidance councilors in the inner city generally don't tell kids to start their own businesses, they tell kids to get a paying job at the local factory. This isn't to say that excellence isn't rewarded, or that kids are not encouraged to reach their fullest potential, but intentionally or not, these schools construct a limiting mindset. "Fullest potential" is lowered from striving to become upper class to striving to be comfortable middle management/ middle class. While independence is downplayed, the ability to follow orders and take direction have been more and more overtly advanced. Sure, everybody needs to learn how to follow instructions, etc, but the difference between rich and poor schools in this regard is striking. Some impoverished schools have no student government. (and yes, student government is a charade in real terms, but it does foster leadership skills in the kids who participate) Likewise for projects like Model U.N. which is really only seen in schools over a certain socio-economic threshold. Model U.N., parenthetically, conditions upper class kids to accept the idea of global government at the hands of the Rockefeller-dominated United Nations as desirable, and in fact inevitable! Private schools for upper-crust kids are far richer in leadership development and love of the treasonous United Nations.

On one hand, none of this may be surprising: "Of course poor schools don't have the resources for student government, they're probably struggling just to keep kids from killing each other in class.!" What's appalling is how Gatto shows these mechanisms have been put in place by intention- and without the consent of the public who actully fund the schools.

No more teachers' dirty looks
Millions of kids have attended public school over the past hundred years since the Robber barons' infiltration, so it to be expected that Rockefeller and Ford have left their mark on school discipline. Gatto demonstrates convincingly how the approach to discipline over time has evolved towards conditioning students of different socioeconomic groups to take their appointed places in life. Poor and middle classes have obedience and respect for hierarchical power structures instilled to a much greater degree than the wealthy. The comparisons to Alphas and Deltas of [book:Brave New World|5129] are apt, but Alpha and Delta are determined not by ability, but by socioeconomic provinence.

Born into it

Present Day
By the time Gatto finally turns his eye to present-day public schools, it comes as no surprise what the true nature of the system is. There are probably a lot of ways to say it, but the unvarnished idea is that schools are factories designed to produce subservient drones, trained just enough to become low-level functionaries in corporate and government circles. Faux rebellion may be tolerated, but true questioning of the order is not. Imagination and creativity are permitted only in forms that can be channeled to the purposes of the reigning regime. The very most promising students may be groomed for higher positions up the pyramid. (of course never the VERY top; these old robber baron families believe in bloodline succession for the highest positions of leadership) For the rest, school is meant to dumb us down, keep us from asking questions, keep us paying our taxes, and slowly sink us into a sort of debt-slavery.

Before you write this off...
as an anti-education screed, please note that Gatto shares with us a very compelling alternate view of what education COULD be. He is quite fair-minded in his criticisms (and praises) of teachers, principals, and others at the bottom who run the system without really understanding its nature. It seems extremely unlikely this was written to grind an axe. For one thing, the information is independently verifiable, and well-reasoned. For another: he was not scorned by the system; he enjoyed New York State's highest honor, State Teacher of the Year, in 1991. This is a "must-read", and I hardly ever say that.

Suppose you read this book and decide for yourself that Gatto’s criticisms are legit. Now what are you supposed to do?
A few bold or zealous souls out there might actually decide to home school their children. Real die-hards teach their kids a full curriculum in-house... but Man! who has the time or confidence to do that?? Did you know that you can pick and choose certain subjects for home schooling? Teach some subjects at home, and then send the child to school for others. As long as you meet the state requirements, you're good. Actively learn the content of your kids' instruction. Maybe you'll find some subjects are taught in a manner you find perfectly acceptable, while others are objectionable. Just teach the bad ones at home, and then send the kids to school for the rest. OR, send your kids to school, but augment their instruction with additional lessons at home. A simple search will show the internet is loaded with home school materials. (buyer beware, as always!) Some communities have private schools or other institutions you can send your kids to for instruction in individual subjects. My friends send their kids to a local Hindu community center to learn Gujarati... I'm not saying that specific example fits your childrens' needs; I'm telling you to look at who else in your community besides the local public school offers instruction that might enrich your children.

Finally, the obvious yet difficult advice (you knew this was coming): get involved. Join the PTA, but more than that, attend your local school board meetings. Public schools are taxpayer funded, and should be open to the public. If they aren't where you live, make a fuss! Challenge officials about the quality and content of instruction. Going further, make education a campaign issue in local and state elections. Don't sit around and hope somebody good gets elected; participate actively in the process. Volunteer for the campaigns of candidates whose view of education fits your own. Better still, run for office yourself. Yes, yes... this all sounds like a lot of work, and it would be easier to say "I'll just let the school handle it...", but judging from Gatto’s book, that's exactly what you're supposed to say.
Dumb and Dumber

Saturday, July 10, 2010

Book review: Report from Iron Mountain on the Possibility & Desirability of Peace

Hoax!?... who cares?
Too much time is wasted discussing whether Report From Iron Mountain (RFIM) was a hoax or not. This latest edition comes with 20 pages of Foreword by Leonard Lewin and Victor Navasky (of [book:Naming Names Victor Navasky] fame), laboriously drumming out why RFIM should be dismissed as a hoax. In my opinion, they doth protest too much, but regardless what you choose to believe, RFIM provides sufficient references in the endnotes to substantiate its contents, however they may have been intended.

The value of war
The premise of this document is that a special Cold War-era think tank (the “Special Study Group”, or SSG) was tasked with evaluating what challenges the USA would face if a prolonged peace occurred. To assess the impact, the SSG outlines the role of war in society. As you might guess, war is a foreign policy device: a tool-of-last resort to enforce policies, advance national goals, protect/defend territories, etc. Somewhat less intuitive, however, are the “secondary benefits” of war (Section 5, beginning p.51):
1. Economic- the defense (war) sector of the economy is completely under the control of the government, and is relatively protected from the boom/bust cycles of the private sector. Thus, defense spending (via civilian contracting) is a powerful tool with which the government can stimulate or moderate the domestic economy.
2. Political- the threat of external enemies tends to unite the public, quell dissent and bolster support for the sitting regime. The widespread domestic support for George W. Bush in the days immediately following 9/11 seems to illustrate this point sufficiently.
3. Sociologic- service in a standing army provides a socially and legally sanctioned mechanism for people with violent tendencies (and even criminal records!) to channel their energies. Peacetime police forces also help serve this function.
4. Ecologic- cynically, RFIM designates war as the primary mechanism our species has of preventing global overpopulation.
5. Scientific War is a major impetus driving new research and development, in ALL areas of scientific inquiry.
6. Cultural War-related propaganda (Tom Clancy novels and military-themed video games, I suppose) influences popular culture, helps set the moral tone, and promotes/sanctions certain values, which helps leaders of the war establishment steer development of society. Some of these also support the sociologic function(#3, above) by providing avenues for release of primal violent urges.

The tail wags the dog
The SSG goes on to say that war is so critical to society that warmaking is not just a feature of all modern societies, but is actually the bedrock foundation upon which they are built. In fact, it contends that the needs of society do not dictate the circumstances of wars, rather the needs of the warmaking machine do… and the function of government (through the media) is merely to produce a believable and palatable pretext. Maybe this is the hoax part of the Report (yuk yuk) but it’s not really outrageous by the standards of what think tanks conclude all the time.
Don’t believe me? Consider the now-famous 1997 “Project for a New American Century (PNAC)" think tank. Composed of such “visionary thinkers” as Dick Cheney and Donald Rumsfeld, PNAC concluded (among other things) that what America really needed was a Pearl Harbor-type attack on the homeland (fulfilling the Political benefits of war, above). By an amazing, incredible, unbelievable cosmic coincidence PNAC got their wish in the form of 9/11, only four years later, when many of its principals were in high office, and actively coordinating the nation's response to the attacks... but I digress. You can read more about it, if you like, in [book:Crossing the Rubicon|83500]

The problem with peace
Moving along, SSG turns to exploring the question of how to maintain society in the face of prolonged peace. Noting the above, SSG concludes that in the absence of war, our national leaders would need to devise some alternative to achieve war's functions. Their various suggestions include: a massive space exploration program, staging a fake invasion by space aliens (p.81) poisoning the world’s water supply or (re)introducing slavery. (If this is satire, Mr Lewin, don’t quit your day job.)

Embrace the dark side
These suggestions are not exhaustive, and they don’t need to be. Moderate exposure to this cynical mindset is sufficient to make the book's point. Hoax or not, RFIM encourages us to experiment interpreting current events from a much more Machiavellian perspective than most of us would otherwise be comfortable with. Sadly, this mindset does frequently lead to more plausible and satisfying interpretations of historic and current events. Is ultra-cynical pessimism always the correct context? Of course not. Informed citizens always need to do their own due diligence. Every citizen must use his own common sense to decide for himself how best to interpret information. RFIM's utility is in showing us just how sick think tanks can be -and that is really the value of this book. Consider a few examples:

1) The practice of “false flag” terrorism (e.g. Gulf of Tonkin Incident, or USS Maine) is a direct illustration of the political function of war.
2) As Naomi Klein documents so beautifully in her book [book:Shock Doctrine|1237300], natural disaster mimics the political benefits of war, by inducing exploitable public submission to unpopular government initiatives during times of emergency.
3) Unproven ideas such as manmade global warming, or (Hubbart’s idea of) “peak oil” may have a basis in reality, but are suspect because of the agendas they have been linked to, particularly when the offical responses to these directly link to desired ecologic and political functions. The idea of manmade global warming has been evoked to justify a global carbon tax payable to private banks. "Peak oil” is likewise linkable to austerity measures, including (but not limited to) government-controlled petroleum rationing. Both of these subjects (real or not) have been evoked to justify aggressive population control programs (the ecologic function of war).
3) Over the past 100 years, the increasingly violent, even gladiatorial, nature of popular sports (from innocuous baseball to football to WWF wrestling to ”extreme” cage fighting..) seems to be geared to serve the social and cultural secondary functions of war.

So what is this all about?
What is the significance of an alleged think tank document investigating contingencies for a sustained world peace? Is there a larger context to all this? I think there is. RFIM was published in 1967. About this same time (1966), Carroll Quigley first published Tragedy and Hope [book:9780945001102], in which he outlined how a cabal of international banks grasped they might manage to merge Western democracies and Communist block nations under a monolithic, bank-controlled totalitarian oligarchy. By folding all the players of the Cold War together into a single unit, one of the challenges this “New World Order” would face is how to manage the world population under conditions of sustained peace. In 1971, Gary Allen published [book:None Dare Call It Conspiracy|811022], in which he provided additional information on how this might be achieved. That same year, Zbigniew Brzezinski released Between Two Worlds, detailing how emerging computer technologies might be employed to manage an authoritarian global government. Two years later, Brzezinski and his buddy David Rockefeller (then CEO of Chase Bank) would co-found the Trilateral Commission , to unite the ruling classes of America, Europe, and Japan in common purpose to integrate their political and economic systems under a single monolithic government.
… So it seems that RFIM was written during a time when academics and think tanks were contemplating the construction of a unipolar world government. Regardless whether RFIM is a hoax, there is little doubt that contingency planning for a sustained planetary peace was seriously investigated by at least some of these groups. Knowing what we do about think tanks and the way they tend to approach questions, there is also little doubt that RFIM can’t be too far from what these groups would conclude. It may be satire, but like a court jester whose humor comes from speaking the truth too plainly, there is sufficient reason to pay it heed. It is yet another voice in a growing chorus of evidence that globalist banking elites are constructing a planetary totalitarian oligarchy.

Book review: Management Strategies for the Cloud Revolution: How Cloud Computing Is Transforming Business and Why You Can't Afford to Be Left

A cloud, by any other name…
The first question, before even opening this book, is "what is cloud computing?" Now is as good a time as any to come out and admit that "cloud computing" is probably a poor name for what we are talking about. Is this technology is like a cloud ? Is it amorphous or misty or something? Does it make funny animal shapes in the sky? Where did that name come from? Charles Babcock doesn’t know, or he isn’t saying. He too has a difficult time explaining what is meant by the term. He fumbles around, and sometimes tries to compare cloud computing to other things. On page 15 he says cloud computing is really more like mountain streams joining up in a valley to form a glacier... an image which clarifies nothing, and probably makes matters worse. Part of the problem is that cloud computing is such a new and rapidly changing field. It isn’t easy to differentiate what defines cloud computing, and what characteristics are incidental. For now, “cloud computing” is what it’s called. It's stupid, but get over it.

Well what is it?
Cloud computing doesn’t refer to a single concept or design. It conflates several ideas that should be examined separately. Together, these represent a vision of how computing will be conducted in the future. The prominent features of Cloud Computing include:

1) You don’t own that computer
For one thing, it refers to a shift that will take personal computing away from home computers and put it in accounts at gigantic industrial-sized computing centers. In the Cloud Future, you won’t own a computer with its own processor, memory, and software. You will own a “dumb terminal” that can’t do anything except access the superior hardware and software “in the cloud”. If you create a word document, you won’t store it on a disc in your computer; you’ll store it in memory space allocated on your cloud account.

What will the cloud supercomputer look like? To give you an idea of the size we’re talking about, the clouds Babcock et al envision will dwarf the giants of today. Google is a large-scale service by current standards. It operates an estimated (page 10) 600,000 servers worldwide. Microsoft and Amazon both run embryonic clouds now, whose capacities are closely guarded secrets, but which at least rival Google's capacity, and which grow by leaps and bounds. Amazon regularly fills whole shipping containers with server racks, and plugs the entire container into their cloud as a functioning module. Massive computing centers like that profit from economies of scale. Hardware is purchased in large volumes, reducing cost; and labor (i.e. maintenance and tech support) are likewise centralized, cutting down on redundancy.

2) Scalability
Creating gargantuan computing centers with multiple users and practically unlimited capacities is attractive to businesses, because it enables “scalability”. That’s basically like elasticity of capacity. It allows businesses with cloud accounts to continually redefine how much of the cloud's capacity, processing power, and memory they wish to use. Babcock cites a good example: SONY records operates a website to sell Michael Jackson records. When Jackson died, traffic on the website surged, crashing the site. Customers turned to other sites to buy the records, and SONY lost millions in revenue. What could poor SONY do? It wouldn't have been cost effective to buy and maintain the equipment needed to accomodate a surge like that. Spikes of that magnitude don't occur very often, so most of the time that extra capacity would go unused. Enter the cloud. If SONY had been operating their website on a cloud, they could have accommodated the surge by immmediately tapping into the cloud’s enormous resources (for a fee, naturally), and then "scaled back" when the surge receeded.

and 3) The need for speed
The above example shows how capacities can be scaled to meet (and not exceed) customer demand. Since the cloud is composed of billions of processors, processing power can also be scalable. If you have a big number-crunching job (as NASA does, in Babcock's example), you can contract the cloud for more processing power. The flip side this is that you don't get the processing power unless you're willing to pay for it. Is that fair? ... it's actually kind of a sticky debate. The internet has generated a discussion about "net neutrality”, where individual information packets are treated the same no matter who they come from or where they are going. Some people want to create prefered pathways on the internet to get faster, more reliable service (for a fee, naturally). So far, regulations have remained in place to prevent a two-tiered system from developing. Unlike the internet, clouds are (so far) privately owned, so they can operate the way they like. They are not subject to those sort of regulations, and frankly there is no incentive to maintain neutrality if some customers are willing to pay a premium for preferred service. It's the same as the airlines; most carriers offer Business and First Class tickets, because multi-tiered service is a business model that works. In the cloud, information may be handled according to who is paying a premium for processing speed and power. If you don't mind that your TurboTax will take an extra few seconds to calculate, you can pay less. If you’re playing a graphics-intensive video game online, you may have to pay extra. Where it gets to be a survival issue is when you're operating a processing-intensive business on the cloud. If you aren’t willing to pay the premium for top service, you will be at a disadvantage competing with businesses who are. That's just normal market forces at work. Or is it? Businesses with deep enough pockets (or other types of leverage) may be able to contract with the cloud to operate at capacities that, by contract, nobody else can compete with. Big customers can also potentially contract to get rebates that small customers can't. This would increase the cost of market entry and operations for smaller customers... which would be a real game-changer in the software development market. Over the past three decades, software development has grown explosively, in part because very low start-up costs have allowed talent to enter the field easily. The cloud could potentially do away with that. The market forces of the cloud favor large customers over small, and could put young start-ups at a competitive disadvantage. One hundred years ago, Standard Oil did the same thing with railroad shipping, driving costs up for smaller volume refiners, effectively driving them out of business. Now the oil industry is dominated by the “supermajors” oligarchy, who can dump millions of gallons of oil into the Gulf of Mexico and still realize massive profits, because customers have so few options to choose from. Market forces don't always favor the customer.

This part is smoke-and-mirrors. Babcock tries to say provisioning is a new benefit of cloud technology. End users will somehow be able to interact more with websites and with each other, through "provisioning", which is basically customizing software to fit your needs. From what I can tell, this is not unique to the cloud, and the examples he cites (filling out forms on the web) are not impressive. If there's something special about the cloud that will revolutionize interacting with websites, Babcock hasn't explained it very well.

Who said anything about passing on the savings to you?
While Charles Babcock gushes unabashedly that economies of scale will trim computing costs down to nothing, consumers should not assume the “cloud revolution” will save them a penny. End users on their “dumb terminals” at home will use cloud resources online for tasking. This means logging on to, say the Elastic Compute Cloud (EC2), run by Amazon, using its processors (for a fee) to run Amazon’s software (for a fee) to create a document, and then storing it in memory (for a fee) allocated to the user's account. When he wants to print his docment, he will access it and it will send the job to his home printer. Using this system, the user will always have the latest software, operating on a computer that experts will keep virus-free and running at top performance. Corrupted discs, software incompatabilities, and other failures will be a thing of the past.
Sounds good, right? The thing is, once you no longer own your own software and hardware, there's a strong financial incentive for the cloud service provider to change the fee structure from one-time costing to per-use costing. This means that instead of buying MS Word to install on your computer and then use as much as you like, you will be charged a few cents every time you want to edit, save, or print a document. Bill Gates has been pushing for something like this since the early 90’s, because his accountants have shown that over years, nibbling a few pennies at a time at customers’ pocketbooks is more profitable than hitting them up once for relatively larger purchases. How nice for him.

“We have your documents. If you ever want to see them again, leave $10,000 in unmarked bills…”
An added disadvantage of having all of your documents on a super computer that you don't actually own is that you have to go through the cloud provider every time you want to access your own files. That means that if you somehow run afowl of the cloud provider, you are cut off from your own documents. It also means that if somebody hacks your cloud account and erases or alters your files, you have no backup. Cloud providers could engineer some solution where you can save documents on a home storage system, but don't hold your breath waiting for that. It seems evident that “dumb terminal” architecture's purpose is to maximize user dependence on the cloud. Home storage devices would threaten cloud provider storage fees, but they can't complain about that publically. What they will say (and there is a legitimate side to this) is that allowing a way for home devices to upload documents onto the cloud creates an unacceptable risk of viral infection. If they really wanted to get mafia about it, they could put some viruses on the cloud themselves, and then make a lot of publicity about all the disruption it caused. Before long, they'd have customers and paid "experts" on television clamoring to abolish home storage devices.

One Stop Shopping
In an even more sinister vein, forcing users to save their documents in the cloud creates a “one stop shopping” opportunity for hackers looking to commit industrial espionage, political espionage, or for “Big Brother” organizations like the NSA to sift through citizens’ personal documents. Cloud providers will no doubt promise customers the moon and more regarding security and privacy protection, but I think big telecom providers have already shown us where your privacy stands on their list of priorities. When government agencies came knocking, PATRIOT ACT in hand, to conduct warrantless wiretapping in 2002, big telecoms put up no fight whatsoever on behalf of their customers' privacy.

Vulnerabilities of scale
Cloud architecture represents a giant leap towards greater centralization of computing resources. The cloud future looks like it will be controlled by a smaller number of more powerful (and better funded) players. Just as centralization can create economies of scale to reduce cost, it also introduces vulnerabilities to large-scale failures that aren’t a risk in more disperse systems. By its very name, cloud computing sounds far-off and nebulous, but obviously the “cloud” (i.e. that massive computing center) is actually physically located somewhere. No matter where you put it, it will be vulnerable to some physical threats. Earthquake, hurricane, tornado, tsunami, floods, sinkholes, mudslide, volcano, whatever. Then there are threats which are not geographically predictable: large-scale power outages like affected the East Coast in 2003; terrorist attacks, etc. The point is that with our current system, dangers like this may affect users in a limited region, but do not cause major economic cataclysm. The internet was actually a DARPA project designed to create a communications network that would withstand a nuclear attack. Cloud computing is too centralized for that. If the nation depended on just five or six clouds, imagine the disruption if one of them went down. As is documented here, even in their short history clouds have experienced major failures.

I am reviewing this book, actually
I have to admit that I came to this book with a lot of preconceptions. What I know of cloud computing raises a lot of privacy and civil rights concerns, and I didn't trust Babcock to address them. He’s a writer for a tech journal, so I assumed he embraces all change unreservedly. Well.. he does get a little embarrassing sometimes (p23: "The cloud is going to seize the hopes, the dreams, and the ambitions of people around the world- and supply the processing cycles to help make them a reality." ...God, somebody get me a bucket, I think I'm going to be sick.) but overall I was pleasantly surprised to see him touch on some of my pet issues. Not as deeply or as critically as I would have liked, but it was something. Perhaps the greatest credit goes to Babcock for showing how powerful the economic advantages of cloud computing are. The promises of increased efficiency and reduced cost are so compelling, I think it is safe to say the business world will not be able to resist them. Like fighting a rising tide, the strategy is not “how do we stop this?”, it should be “what is our strategy to deal with this?” It’s good to know that up front. Cloud computing poses a lot of threats to privacy and civil liberties, so efforts to address these concerns should not be wasted on fighting overwhelming market forces. They should be directed at getting ahead of these problems early on, hopefully at the formative stages, when the business model is evolving. This means exercising your sovereign power as a consumer. The average person doesn't know how powerful he is, and I'm not necessarily talking about "end user revolts", as Babcock alludes to, but consciously exercising your power as a consumer each day. When vendors start to woo you with initial offers, you need to tell them that attracting your business depends on ironclad guarantees on your privacy and security. When you start to get surveys asking how you feel about X,Y, and Z related to cloud computing, you need to rank privacy as your top issue. It is also important to identify and support open-source (i.e. nonproprietary) projects, such as the Eucalyptus project, which codes Application Program Interfaces (API's). Open-sources help keep any individual company from dominating cloud computing. Finally, it is important to remember that when your friends are on the cloud, and its fun and cool, but you start to see your privacy eroding, you need to get up the courage and discipline to leave.

Technology will never be the root cause of our problems, just as it will never be their full solution. All the things that really matter depend on human behavior. And your behavior is one thing you can control.

Book review: Genetic Roulette: The Documented Health Risks of Genetically Engineered Foods

Yes, I will eventually cover the contents of this book in my review. Skip down to the "This book" section, if you want to get to that part right away.

What is GMO food?
GMO stands for Genetically Modified Organisms, and usually refers to genetically-altered food sold for human consumption. Research has been going on since the 1970's to figure out how to manipulate plants' genetic makeup to induce susceptability or resistance to various pesticides, to create produce with longer shelf life , or to impart enhanced nutritional properties. Sounds great, no? So why is there growing worldwide consumer concern about the safety GMO foods? That's complicated...

Fine, but what is GMO, really?
Part of the controversey is that the state of current GMO technology is not the idealized, precise molecular engineering advocates wish it was. GMO foods are not created by neatly placing an isolated gene into a specific, known location in a plant's DNA. It is far cruder: metal pellets covered with (plant) genetic material are shot with a gene gun into an agar plate containing the target plant's germ cells. This unrefined method is called "bioballistics", which is a good name for it, since the word does not conjure the image of an elegant and controlled technology. It is unsophisticated and haphazard. It operates on the principle that physical trauma (on a molecular scale) resulting from the pellet's collision disrupts chromosomes in the target plant, thus facilitating crossover of genetic material. When the test seeds are grown out, and a certain strain expresses the desired gene, you know crossover has occured. Unfortunately, there is no telling what else has crossed over with the desired gene (e.g. other genes, promoters, inhibitors, etc). Furthermore, there is no telling where in the recipient's DNA the material has been placed. Location within the gene is important, because that largely determines how gene expression is controlled (what promoters/ inhibitors it is subject to). By inserting promoters or supressors into the original plant's DNA, the process can interfere with expression of the plant's native genes. So when genetically modified foods are produced, nobody really knows the extent to which the original organism has been modified, let alone all the consequences from the modification.

"Presumed Safe"
If you think that foods created in this manner should probably be thoroughly studied before being approved for general human consumption, you'd be in good company. A lot of people feel that way. Unfortunately, one person who didn't feel that way was then-President George H.W. Bush. Through precedent-setting executive policy papers, he directed the Food and Drug Administration (FDA) and Dept of Agriculture (DOA) to treat GMO products the same as a conventionally-created food product. These policies don't quite have the force of law, but they have a tremendous amount of inertia, especially now that they have been in effect for 18 years, because they essentially create an "industry standard". In this case the industry standard is "no standard": no additional oversight, regulation, or testing is required for producers to bring their bioballistic fruits and vegetables to market. The policy states that GMO foods are presumed to be as safe as non-GMO until proven otherwise. So, when big agribusiness declares GMO foods "safe", they are probably saying either (1) emperically, no GMO-related public health disasters have yet been identified; and/or (2) in-house studies have satisfied company management that the public health risks are "within acceptable limits". They are definitely NOT saying that their goods have been identified as a new sort of product, with uninvestigated properties, which have now been rigorously tested in this context for both short and long-term effects of consumption.
Why would Bush-I do such a thing? The answer lies in ongoing political and industrial shennanigans originating at least forty years ago, and you could write a book on that alone. In fact, somebody has. It's called [book:Seeds of Destruction|2511478], and I highly recommend it.

Ignorance is Bliss?
So where does that leave us right now? Big agribusiness (e.g. ConAgra and Monsanto), with multibillion dollar profits at stake, has no special requirements to investigate or demonstrate the safety of GMO foods. Such research would cost money to perform, and might yield unfavorable results. Concerned consumers, on the other hand, generally would like to conduct more study. Through the miracle of biased media, the vested interests in GMO have done a masterful job of painting themselves as level-headed and scientific, while depicting concerned skeptics as superstitious ,when in fact this supposed "hysterical fringe" are the ones clamoring for rational, scientific investigation. When a company spokesman for Monsanto tells you that in over 25 years of experience with GMO foods, his company has seen no adverse effects from consuming these products... he's telling you the truth! Not because there are no adverse effects, but rather because his company has not looked for any.

Shut up and eat your food
Well, that's the free market system we live in. If consumers are weary of GMO products, they just shouldn't buy them, right? Sorry. As happens too often, big business only likes the free market when it suits them. Purveyors of GMO foodstuffs have so far fought successfully against any requirements that GMO products be so identified on packaging. They wish to leave the safety of GMO foods unstudied/understudied AND to avert market forces from interfering with GMO profits by keeping consumers ignorant of what products even contain GMO. It's an outrageous situation. Without government requirements or big-business desire to study this, information about the effects of GMO is developing at an impeded pace, but developing nonetheless. Epidemiologic studies as well as research and reports on the effects of GMO on nonhuman populations are beginning to raise suspicion about the long-term safety of GMO... which leads us to...

This book (this part is the actual book review)
Genetic Roulette is an excellent companion to [book:The Gmo Trilogy|587099], for readers who wish to go into greater depth. The book explores possible medical risks associated with eating genetically modified foods, and comprises 1-2 page abstracts and essays by researchers. Some of these papers represent areas of inquiry that were (for reasons we are free to speculate) not pursued. Others are write-ups of anecdotal experiences, not intended for statistical analysis. There are a lot more hypotheses than actual conclusions here, so none of these works have reached the stage of becoming peer-reviewed articles in scientific journals. Skeptics may attach whatever significance they wish to that fact, but the references to each article are published, verifiable, and legitimate. In fact, if the dangers of GMO foods is a topic of interest to you, this book is a worthwhile purchase for the references alone. The articles are all of a scientific nature, and do not address social, political, or economic issues.

One recurring theme which comes up in these pages is the idea of drug resistance transmitted from ingested foods to intestinal flora. A common trait of many genetically modified plants is selective pesticide resistance. The desired crop can then be sprayed with these pesticides. It was previously believed that stomach acid would break down the plasmids which confer pesticide resistance, but that has been shown to be incorrect. Intact plasmids have been recovered from intestinal washings. There is prescedent to hypothesize that these plasmids could be transferred to gut flora, and under the right conditions, could cause a multidrug-resistant intestinal infection.

If you are looking for clear, definitive answers about the nature and extent of risk that GMO foods pose, you will be disappointed. Declarative data simply does not exist at this time, and powerful economic and political interests distort what little information is available. The value of Genetic Roulette lies in the questions it raises, and in the interest it fosters towards developing a movement that will force these issues to be studied properly.

Power to the People
So that's it? Am I just going to raise your concerns about GMO, and then tell you there's nothing you can do about it? Not at all. If you would be more comfortable avoiding genetically modified foods until more substantial information is available about their long-term effects, there are things you can do to avoid them. Most important it to avoid buying from big agribusiness. Don't shop at WalMart or Safeway. Learn about Community Supported Agriculture (CSA). Buy from producers in your community, at your local farmers' market. Not only will you be keeping productive jobs in your local community, but if you get to know the people who grow your food, you will have opportunities to talk with them. Unlike with ConAgra, you can ask the person who actually grew your food about the things that concern you: were pesticides used?, was the seed stock genetically modified?, etc. If you don't like the answers you get, you can tell them "I'd like to buy from you, when you stop using GMO seed". CSA farmers as a whole are very responsive to their customers' preferences, and (at least in my area) consumer sentiment is decidedly pro-organic, and GMO-avoidant. With a minimal degree of effort, I have found local (i.e. within 50 miles of my home) producers to supply me with organic, non-GMO products, representing about 3/4 of my total groceries each week. That's not bragging- I'll bet you can do better. An unintended benefit of my farmers' market shopping is that I genuinely feel more connected to my community. I don't want to overstate this and end up sounding saccherine, but I pass a farm each day on my way to work, and it's not a faceless roadside feature; it's Mr.Sutter's farm. I know him. He grew the spinach I ate in my salad last night. I think there's a value to having ties like that with the people in my town.

Book review: Case for Gold: A Minority Report of the United State Gold Commission ; by Ron Paul

purchasing power

Pee Wee Herman used to have a word of the day, and whenever it came up in conversation, everybody had to SCREAM REAL LOUD! My word for today is "fiat", which means "by royal decree"... something is so, merely because the King says it is so. Printed paper money is called "fiat currency" because its value comes from the say-so of the government (as opposed to something being inherently valuable, like food, or a tool). A dollar is fiat currency. It is legal tender because the government says it is.
Q: Why would the government want to bless pieces of paper with such power?
A: Because carrying around dollars is easier than carrying around bags of gold, or items to barter with. Fiat currency is convenient.
Good system, right?

Going off the rails
Well, maybe not. Fiat currency has a spotty track record. Germany got into trouble in the 1930's by printing too many Reichsmarks, so they didn't seem valuable any more- regardless what the government said. The same thing happened to Argentina in the 1990's. And in Zimbabwe in 2007. And in Yugoslavia in 1994. And in Greece in 1944. And in Taiwan in 1949.

fate of currencies

...So there are a bunch of examples where countries printed too much money. And when that happens, the currency looses its ability to buy goods and services, which devistates the economy. What happened to all those countries? Were they just stupid? Why would it be so common that countries just suddenly print too much money?

Q:Who even decides how much money to print?
A:The Treasury Department used to, but now the Federal Reserve does. That in itself is a very long and important story, but not the focus of this book, so I'll leave it alone for now.

To print or not to print
How does the Fed decide how much money to print? Since it is a private corporation, they don't have to tell us how they make those kinds of decisions. To keep the economy perfectly stable, they would have to balance the circulating dollars with the goods and services for sale. As the economy and population grow, more money would be required. The trick is that neither the economy or the population grow evenly, so its hard to get the balance right. And that's if you want to keep everything perfectly stable. A much bigger trick is avoiding the temptations to print money:

1) Per the agreement the Federal Reserve Bank has with our government, taxpayers pay interest on the money the Fed prints, as a sort of fee for using it. Incidentally, when the Treasury Dept printed it, there was no such fee- money belonged to the people. The interest we pay the Federal Reserve corporation (for virually no real work) creates a very handsome profit for its owners. In fact, the Federal Reserve Bank is one of the most profitable private corporations of all time. All this results in a lot of temptation to print more money.

2) The other temptation has to do with timing. When the Federal Reserve prints a bunch of dollars, it releases them into circulation through banks that participate in the Federal Reserve system (basically all the banks you've every heard of operating in America). Like I said, if too many dollars are printed, their value goes down... eventually. But if you're lucky enough to be the very first person holding all those new dollars, the system hasn't had time to feel the effect of the new money. It has the same buying power as earlier. Taking advantage of that effect, the government (the Fed's only customer) likes to contract with the Fed to print more money, and then use it to pay off debts. Debtholders don't complain, because they are the second people to hold that new money, and the system still hasn't adjusted. It's only when the dollars have changed hands a bunch of times, and it gets down to poor schmucks like you and I that vendors start to realize "Hey, I can raise my prices, and customers are still willing to pay." That's called inflation, and it's why a candy bar that cost 35 cents in 1970 now costs $1.25. If you could pay your debts with money that is worth less than what you borrowed it for, wouldn't you be tempted to do so? That's a lot of temptation for the government. And since the Fed makes interest off every dollar they are asked to print, they are more than willing to indulge.

What choice do we have?
Okay.. so there may be problems with our currency system... but what other options do we have? Even if we throw the parasitic Federal Reserve off our backs, won't we still face the temptation to inflate our money to pay off debts? (...and in a wicked cycle, won't the perception that we are paying our debts off with "easy money" encourage us to accrue additional debt?) What can we do?

It so happens that the temptations to overprint fiat currency have been well known for at nearly three hundred years. Britain and the United States both used to have a mechanism built into their currencies to avoid overprinting: the gold standard. Under this system, a dollar could only be printed if the government held a corresponding amount of gold in reserve. To show that the system was being properly accounted, dollars could be exchanged for the appointed amount of gold on request. Most people did not request the equivalent amount in gold, since the paper money was more convenient. If the government wanted to print more money, it would have to obtain more gold. This inhibited reckless printing.

Britain abandoned the gold standard in the 1931, as they were unable or unwilling to pay back their debts from World War I without inflating the currency (i.e. reducing its value). The U.S., under pressure from ballooning defense spending, followed suit in 1971.

The result has been a steady decline in the purchasing power of the dollar. The cost of goods and services increases rapidly, and wages follow much more slowly. The effects of this are hardest on the working poor, and retirees living on their savings. Retirees, in effect, worked hard to earn dollars, saved them away, and spent them when they were worth less... bad deal. These are the ravages of inflation, which discourages saving. Why save your money in a savings account that yields 2% annually, when the dollar loses more than that in purchasing power? Without a stable currency that retains its value over long periods, it becomes impossible to make long-term plans, such as retirement. Ron Paul puts forth a reasoned arguement that gold (or a gold-standard paper) is the best currency for retaining long-term value.

gold bars

Why Gold?
I'll say right up front that an asset-linked currency doesn't have to be linked to gold. You could have an "oil standard", where dollars are linked to an amount of oil in reserve. You could have an "oatmeal standard", for that matter. Gold happens to be a good asset for this purpose because it seems to exist at a good balance between obtainability and value:

Obtainability There are more rare, and more valuable hard assets than gold. If something is too rare and too valuable, however, it becomes an impractical medium for exchange. Suppose the currency were linked to original Leonardo DaVinci paintings... if the government needed to print more money, but it couldn't get its hands on one of the very limited number of paintings (the market for these being relatively illiquid), the economy would stagnate. A currency needs to be based on something that is obtainable enough to allow for expansion of the money supply, if it is truly needed.

Store of value Gold has been used for art and jewelry for thousands of years, so it is fair to say that it is widely admired for its beauty. There seems to be an inherant value to it which is accepted across cultures. In addition, it is difficult to extract from the Earth. With a few historical exceptions (e.g. surface deposits along the Klondike River), hundreds of tons of rock must be displaced to yield a few ounces of gold. Thus, each ounce represents many man-hours of labor, as well as equipment and energy spent. In this sense, it is a store of value; you can't get it without expending these resources, or an equivalent amount in currency. A further nice benefit: since it is a natural element, it can't be counterfeited.

Keeping on this path
Without the disciplene imposed by the gold standard, deficit spending has allowed our national leaders to spend us into massive debt.
National Debt
As it gets more and more difficult to pay our debts (i.e. debt repayment becomes a larger fraction of our budget)
national debt as a percentage of GDP becomes more and more tempting to further inflate the currency. Obviously, there are limits to that strategy. To avert a hyperinflationary collapse, a nation must either:
(1) Put its financial house in order...this includes paying off debts, and reducing spending. That's politically unpopular, because it means cutting vote-winning entitlements and spending programs, so don't hold your breath waiting for that.
(2) Effectively "hit reset" by collapsing the currency and introducing a new currency. This might sound painless, and would no doubt be presented to the voting public as painless, but in the long term might be the worst thing you could do. Replacing a currency doesn't work if the new currency does't have legitimacy. That means you couldn't just have the same old gang who ran the old currency into the ground (i.e. the Federal Reserve) standing behind the new currency saying "Trust us, it's good this time." To make a new currency work, it would have to have the assurances of a "higher authority". With other currencies that have failed in the past, this has meant the International Monetary Fund (IMF). Once a nation is in the clutches of the IMF, they have essentially lost their freedom- the IMF controls their money supply, and collateralizes it with the country's real estate and natural resources. John Perkins describes in his book [book:Confessions of an Economic Hitman] how nations who go down this path frequently lose all their prized real estate, oil and mining rights, forestry rights, and water supply to offshore foreign banks when the IMF moves in. How are they supposed to climb out of endless debt servitude when that happens? They aren't. An IMF "occupation" only benefits the IMF, who directs victim nation trade polices (destroying protections for domestic industries) to benefit IMF-affiliated (i.e. crony-owned) institutions. Like the Federal Reserve, which appears public (i.e. affiliated with the United Nations and the World Bank), the IMF is controlled by the private Bank of International Settlements After we gave private bankers a $12 trillion bailout of taxpayer money in 2008-2009, there has been a lot of discussion about the weakening dollar, and a push by our financial leadership to collapse the dollar and replace it with something the IMF calls Special Drawing Rights (SDR's).

Obviously, I do not support this plan, and I hope you don't either.

You got the Power!
Of course you can call or write your elected representatives to discourage them from printing more money, or to plead with them not to replace the dollar with SDR's ...I hope you do that.

What you might not know is how independently you can function without the dollar. We are so conditioned against taking initiative and acting independently these days, but who says you have to use dollars when you do your shopping? Throughout the nation, many smaller communities have seen the advantages of printing their own locally-issued money. Some of these currencies enjoy wide acceptance from community-based vendors. Farmers' markets in particular seem to be places where local currencies enjoy acceptance. This local money tends to support small producers and sellers. Wal-Mart and their ilk hate local-issue currency, because they like taking dollars out of your community and sending it to their headquarters out of state. Community-issued money tends to keep circulating in small towns, supporting its businesses, and providing a fair medium of trade, free of the averice of Fed bankers and out-of-control Congressional spenders.
sample local currency
Isn't it true that local currencies could be inflated, or otherwise tampered with? Absolutely, but that has not been the general experience with local-issue money. It is created by a town's businesses, who have an interest in its success. If a local-issue currency were to go off track, you actually know and have access to the responsible parties. You could even take them to court, depending on the agreement of its issuance... try doing that with the Federal Reserve!

If local-print dollars aren't available where you live, maybe you'd like to consider joining the digital gold economy. By holding tradable ounces of gold in an account, you can spend digital gold with a small but growing number of vendors. Does that sound like a lot of hassle? It's less involved than getting a credit card. This is still a developing area in currencies, so due diligence is advised. I mention digital gold because its mere existance shows that the public has caught on to what a scam fiat currencies are. It seems clear there is a desire of the public to return to an honest money system represented by gold.

Good luck!