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Paper Mountain

There’s a wonderful thing about history and that is the fact that it often repeats itself. In school I never enjoyed English or history, although I did well in them, I was more of a natural math and science guy. I remember thinking: “what’s the point with learning all this history, all these guys are dead and what’s in the past is gone?” Life has taught me that history is as crucial as math and science, if not more so, and now I wish I had learned as much history as possible. But ever since I realized how important history is, years ago, I started paying more attention, and the way I tried to memorize important math formulas and scientific facts, I also tried to remember important historic events for the simple reason that people never change and when people stay the same then events tend to often reoccur just like they did in the past. And one great benefit we have today, which our ancestors didn’t have is the internet, which allows you to find out any information, any history which has been recorded and is verified.

A very important piece of American history which the majority of Americans have no idea about. On April 5th, 1933, the US government, under President Franklin D. Roosevelt, passed Executive Order 6102, “forbidding the hoarding of gold coin, gold bullion, and gold certificates”. This order actually criminalized the possession of gold by any person or business. This law required everyone to turn in all of their gold to the Federal Reserve (a private organization created in 1913) by May 1st at a preset price of $20.67 per ounce. People were given in return paper money with the promise that the paper money would buy them the same value in goods and services as the gold they had just lost. By May 10th of the same year, the US government had taken in roughly $300 million of gold coin and $470 million of gold certificates. Not long after this unbelievable act by a free and democratic government, Franklin Roosevelt signed another law (2nd act), and not more than two months later congress abolished the gold clauses in many public and private obligations which required the debtor to repay in gold dollars. A 3rd act came soon after that, in 1934, when the US government increased the price of gold to $35 per ounce which literally increased the gold reserve the government was holding on its own balance sheets by nearly 70%. With a swift act of the pen the US government got 69% richer at the cost of each and every citizen, as all wealth has to come from somewhere, so every citizen at that moment lost nearly half of their real buying power or real wealth. This immediate and superficial increase in “real” government assets allowed the government essentially to then inflate the money supply which in effect caused the paper dollars people received to drop by an equal amount. All of this happened step by step and in a matter of less than two years. And I’m certain the government didn’t announce any of their plans to the citizens of the United States and I’m equally certain, today’s government, be it ran by republicans or democrats, will act in its own self-interest with the interest of the citizens as a far second. Anything else would make our politicians altruistic, kind and compassionate and let’s face it, those are not the qualities most politicians exhibit. Finally, in 1971, the final act, President Nixon took the US completely off the gold standard, and ever since then the dollar has lost value every single year and it is now worth only 3 cents of the original dollar Franklin D. Roosevelt gave every American, in exchange for their gold, back in 1933. As a concelation prize I suppose, in 1974, president Ford signed a law permitting Americans to once again own gold coins and bullion. Now how many Americans today know it was illegal to own gold coins just 40 years ago? Illegal. In these United States of Free America. That is a shocking fact I’m betting 80% of American citizens have no clue about, and if you don’t remember anything about the past you’re bound to get hit with the same old tricks because what is better than a gimmick which has already been proven to work once before without a hitch.

So why is this important? I remember about 2 or 3 years ago, President Obama signed a law requiring all Americans to register any gold they were buying. I don’t remember the exact details but at the time I remember wondering why such a law would be needed now when it wasn’t necessary all of these past decades. What has changed that Americans have to now register the gold they buy? Has gold all of a sudden become dangerous? Has Au moved a few rows down the periodic table into radioactive territory? I can’t say I know the true intentions of the current administration and perhaps they have a legitimate reason, but I simply cannot think of any good reason which would make such a law necessary now while we did just fine without one all of these past years. Knowing that the government doesn’t pass laws for any reason I have to presume that there is a good reason for it and since we still live in a free country I’m also free to speculate.

Now, I’m no conspiracy nut, but you’d have to be naïve to think the US government or any other government for that matter tells their citizens any and all their plans and intentions well ahead of time or at the time of their conception. This is simply not possible for many reasons, and at least one of them is a good one, which is in the name of national security – the US can’t have other governments, friend or foe, knowing every single plan we have. So we as citizens then are left having to guess and speculate in order to be somewhat prepared when some unexpected law or event occurs. Another thing to keep in mind is that when the first act occurred, it was in 1933, this was the bottom of the great depression which started in October of 1929 so the government essentially went around taking everybody’s gold when they were at their lowest point, financially speaking, in the history of the United States.

Now I want to try and explain the flip-side of that coin. The problem with most conspiracy theorist sites is that when you read them they’re too extreme and they come across as uneducated for the most part, but that is just my perspective, as I’m sure many people blogging on those sites have degrees. To add some color and better explain my perspective, I’m an immigrant who came here at 10 years old so I was old enough to understand the particular society and government I lived in so I have an advantage compared to someone who has only lived and experienced a single government and society. In addition, I have an economics degree from a decent college where my Economics GPA was 3.9 while my cumulative GPA was 3.8. I saw early on that I wasn’t learning enough nor getting the entire perspective in Economics so I used up my “fluff” elective credits to take business classes and then worked on a Finance degree which greatly helped in my opinion to better understand Economics and the world in general. That said, one should never put too much value on academic credentials as it’s mere knowledge and not some type of Godsend wisdom – people with triple PhD’s make horrible decisions all the time and some prove to be quite worthless in the real world or in understanding things that matter, things about life and relationships. Furthermore, one or two BS degrees are not a lot of education once you get through it, I always felt disappointed because I expected college to really leave me full of knowledge and understanding and it just didn’t do that and I’m not sure a masters or even a PhD accomplishes that goal. But there is a place for education and it has its good characteristics in that it helps you understand matters which you might not otherwise understand.

That said, this paper is about trying to tie in together the past and the present in order to accurately predict, with some degree of accuracy, the future. This is a very difficult task which requires knowing or inferring many unknowns and one quality which greatly helps in accomplishing this goal is having good observation skills and most of all, to try and understand yourself first and then your neighbor. And to do this one has to gain some sort of understanding in how people think and why and the reasons, the real underlying reasons for their behavior, because rarely is the true reason the obvious one, that’s usually the act or one side effect of the real cause for that person’s lack of reason or understanding. The need to understand this is that it is people, like yourself and your neighbors, who choose the rulers of this land which in turn may make the bad decisions which then may take this country from bad to worse or cause us to lose more and more of our rights, a path that eventually leads to a complete loss of freedom. If a person can understand at least himself or herself and why we think the way we do then it may be possible to completely change one’s entire thought process and therefore, in the future, make very different decisions. Also, understanding yourself makes it much more possible to understand others, even people you’ve never met, like the politicians we put into office. Therefore, I want to explain my view and perception on why so many people appear to not see the simple truth in front of them and why so many people so often keep making the wrong decisions, even though the answer may be obvious. It’s as if people have been brainwashed so much so that they no longer even know themselves or why they make the decisions they make. But how can you brainwash the masses without anyone noticing or maybe even calling it a good thing? Well here’s a plausible explanation which has to do with what most people consider a good thing – and that is a proper and formal higher education.

As I pointed out earlier an education has its many benefits but from what I’ve seen and experienced with myself and people around me is that an education can also be equally dangerous. I noticed very early on that the more I went to school the less I thought on my own, I was gradually losing my free and creative thought, and this realization actually scared me but I kept it to myself because I didn’t understand if it was something normal or permanent, and I remember that no matter how hard I tried to keep my real self, it was just too difficult to hold something imaginary (my natural mind) over something as real as a book so the only thing I could do and still get an education was to at least stop reading books. In 6 years of college I read, at most, 3 total books combined and those were books I had no choice but to read as there were assignments due where I could not use lecture information. In essence I was losing myself, the innocence of my mind which has much more potential than an education alone, but an education coupled with one’s imagination intact, now that’s the most powerful tool, but unfortunately the large majority of people lose this imagination and creative honesty once their mind has been subjected to too many books and too many years of study. This is just my personal theory and I know it sounds crazy as I’ve never heard another person ever say this about education, but I think the reason is that a formal education teaches your mind to respond to any given situation or stimuli in a very structured and formal manner, and while structure has its benefits one of the problems with any structure is that it is rigid and always limited and so your mind and the way you think then become limited in the same way, limited to what you learned and the new beliefs your education instilled in you. With an education and little to no imagination one’s answers feel almost rehearsed – the obvious result of too many years of formal learning without numerous long breaks and your mind simply forgets how to think on its own so when you’re presented with a given situation later on in life your mind follows the protocol it is trained to know and thinks in a pattern resembling one of the many books you read or one of the classes you took. Add to this the fact that our human nature automatically puts faith in things we can see and touch (because they are real in absolute terms to us) and then our biased and reactive response feels right and true as it reminds us of something we learned, something legitimate and certifiable – for it is much more difficult to feel equally strong about something in our imagination or creative opinion since that does not present the same reality to our senses so when the subconscious mind is shown two possible answers it will not even consider that which no longer appears real to it no more than one would consider the answer “Santa Clause” to any real world question.

Unless you can see what I’m talking about this is a difficult theory to grasp because we associate an education with knowledge and knowledge is good. So let me use an example to help prove my point. When we are very young and we lack an education we all have a very powerful imagination and creativity, and I don’t think this is a coincidence. If you ask any child if they think they can fly most would answer yes, because in their minds, even though some may not imagine themselves actually flying, they do imagine some kind of contraption or super hero power and so on. But when you ask an adult: “do you think you can you fly?” The automated and reactively trained response is “No”, and you may even get a smirk, as if to say, “Do you think I’m stupid, I’m educated?” “So what?” most would say, “ the truth is we cannot fly so what’s the point, it’s silly to think like a kid, I’m all grown up now so I think like an adult, an educated adult” But that’s exactly where the problem lies, the fact that once we’re educated not only do we stop thinking like we once did but we also feel justified, certified, truthful and full of conviction. These are very real and powerful thoughts and feelings which easily overwhelm the more fragile, impractical and not nearly as real creative imagination, and once we think that way about the world around us then we will never build a plane because I’m certain the Wright brothers really believed and thought they could fly before they set out to build a plane, otherwise they would have just been crazy people. The difference between crazy and genius is that the latter has an imagination attached to logic and usually that logic is critically enhanced by an education. Every great idea, invention or business was started by a person who, in many ways, still thought like a child and somewhere in their hearts managed to hold on to that precious imagination and while others around them were robotically repeating – “that’s not possible” these individuals were first saying “I can fly” and then using their education for what it was meant to be, a mere tool to help you achieve your dreams but without our creative minds and imaginations we literally no longer dream, as dreams are most often outside the realm of formality and structure, and that is the potential crime of books and a formal education. The right way to approach an education is to constantly be aware which thoughts come from your education so you then stop them and think freely long enough to be able to see a different perspective a different universe and once your imagination is unleashed and all of a sudden, much like a child, all things and all answers are possible then you superimpose the education over your imagination, never letting go of either and then begin to use it [the education] as a hammer and chisel to chip away at the dream, separating the possible from the impossible and the probable from the improbable, using logic and reason, enhanced by an education, to filter out impurities and once you are done the result should be a dream made real, fully functional and perhaps even practical, something truly unique and beautiful. And the opposite is equally useless, an uneducated person may still have the imagination of a child but what good is it if he doesn’t know nor understand the math and science necessary to build a plane. The near impossible task then, is to somehow gain a good education without losing that which makes an education truly successful, your free thinking and creativity. It’s my firm belief that any man or woman with a strong and creative imagination, whom at the same time grasping firmly onto logic and reason, can accomplish truly unbelievable things. The real danger is in losing one’s imagination because unlike an education which can be easily gained, once an imagination is gone it is nearly impossible to get back, it is not something you learn but rather something you are, and I fear America has lost way too many people to various things which take away one’s real self and real free thought.

One last observation I made years ago before I had children which I think is so ironic that if it were not so painfully true I would literally laugh out-loud. Since we were small children our parents put us in a square room with square doors and a square windows in a square crib (with rigid bars), and bathe us in a square tub in a square bathroom with a square sink and a square mirror, then later transfer us to a square bed where at night they read to us the same predictable stories from square books, and put us at a square table to eat off a square placemat inside a square kitchen next to a square TV, Fridge, Microwave, Stove and another square sink, and quite often for what seems at the time as our entire and long 5 year old lives we hear predictable and unpleasant yelling, hundreds if not thousands of times, mainly words such as NO, NO, NO and You CAN’T! – DON’T! - and as we get older the same parents take us to a building called a school, another square building where they give us a square schedule with now predictable classes then they put us in more square rooms, and at predictable hours of each day they herd us like non-thinking sheep, thru long square empty hallways, via an automated and ultra-predictable horn, forcing us to sit at square, hard, rigid desks and force us to read square books after looking at a square chalkboard all day, listening to nothing more than the stuff you’re reading in your now very predictable square book, and once you’re home from school you’re then forced to follow a very square (and rigid) schedule where there is almost never any variation or deviation because you’re told consistency is good, your free time is spent watching a square TV, Computer or Game screen and you go to bed at a very square hour just to wake up yet again to the same exact and predictable morning, where you ride to school in a square bus and start your square day all over again, but one day you think things have changed because after 16 years there’s finally something different in your life so your parents drop you off at another square building, where a greasy, mean, short tempered man sticks you in another square kitchen, behind a square steely fryer dipping square baskets filled with square fries which you just took out of a square box, and you CAN’T move from that station and you CAN’T talk to anyone because that’s not communication, it’s insubordination, so all day long you wear a predictable and very uniform, uniform and to help further hide or delete any original identity you may have they make you unfold a long square paper hat and put it on your head which shockingly is not square, then at very predictable times and dates you’re given a square piece of paper with a very square and predictable number on it but your parents then tell you that you CAN’T spend it so you go put it inside a big square building where people are lined up like cattle at a feeding station so these poor people take your square check and put it inside a square vault and you’re told you CAN’T go see your money and you have to just trust them but no matter how many times you visit these same bankers they always pretend they never saw you and ask you to show a square card with your picture inside a square frame on it, and instead of your long square money you’re given a small square card, and they promise you it’s just as good as your square bills and to trust them again, and you’re told you can use the card at the square machine outside the square building but they lied to you, cause you CAN’T use that card because your mother said so, so you just toss it inside one of your square drawers in your not-surprisingly still square room, and FINALLY, after 18 years of this square world, you’re presented with a square piece of paper called a high school diploma at which point your parents firmly command you: now think out of the box!

But I digress, so now here is the part that comes from education, trying to understand actions of the government when from the outside there seems to be no plausible good reason. This is now just an educated guess, but in 1933 the US government was probably at the end of its wits, as the country sank deeper into the depression and the unemployment rate sky rocketed to over 25%. My guess is they had to do something and Keynesian Economics says to spend your way out of it. This is not an altogether bad or evil idea.

To understand why governments spend money like crazy one must first get a quick picture of what happens in any society with business cycles. A business cycle is like an animal, it grows for a while and then it stops and sometimes it can also contract. Although business cycles can be predicted with some accuracy, as they do sometimes follow a pattern, it is impossible to always predict how long or how strong the boom part of the cycle is and how long or how bad the bust part of the cycle will be. In the real world most [smaller] countries live a good life during the boom cycles and the presidents who happen to be in power during those times are seen as geniuses and heros, and then suffer and pass painful austerity programs like we’re seeing in Europe now while at the same time raising taxes, since a government cannot function with no money and since a bust cycle means lower employment and sales, then the government is forced to raise taxes to survive at the worst time for their citizens and of course, the president who happens to be in power at the time is seen by everyone as bad, evil and incompetent, even though a president has very little to do with any business cycle.

But there are a few countries that do not have to go through that suffering and the US is one of them. The main reason for spending policies however, is not altruistic, government officials are already rich and they’re not as much concerned about your lifestyle as they are with their political careers and they know the people will not understand if you simply try to explain to them that this is just a 5 year bust cycle, it’s perfectly normal, it’s gonna be painful for a while and we’ll have to raise taxes while many lose their jobs, but in 5 years we’ll be back to partying like it’s 1999. This doesn’t work so then, with the goal of appearing to be a great government official, you pass legislation that allows you to step in for the consumer who is now out of work and can’t spend. This is what government spending is all about (during bust cycles anyway) and the intentions are to spend heavily for a few years until the next business boom cycle kicks in and then you can raise taxes when things are good and pay back everything you just spent. In reality, as painful as it may be, countries that let the bust cycle take place, are usually better in the long run. But let’s face it, would you like to be out of work for the next 5 years or to lose your house because in the long run it’s better for you kids? No way, never, not in this country and this is a legitimate reason why government spending happens and to that degree, it’s not always the fault of the politician. Let me quickly say that governments overspend for ridiculous reasons like unnecessary entitlement programs or to increase the size of an already large government – the spending I’m referring now is only that done in reaction to a business bust cycle.

Because America is such a rich and powerful nation they can afford to spend their way out of any recession or any depression for that matter. But in 1933 they weren’t able to do that because they were not able to spend more than the gold they had on the books and you can’t print gold like you do paper dollars so the government was very limited in scope and power. This is a point you will never see on any conspiracy sites and I don’t think it’s dishonesty, it’s simply something one wouldn’t know unless you learned it somewhere and most people don’t read 20, 30 books on economics as a hobby. So in 1933, out of sheer desperation and need to do something to get the economy back on track, the government needed more money and unlike today where the entire planet owes us favors, out of fear or greed, back then the US was not able to borrow very much money and certainly not at the rates the US gets today, roughly 3%, which is basically interest free money when you factor in inflation. So I’m guessing they had to devise a plan to gain access to more cash. But this was impossible since mining more gold would have taken many years and printing more money was not possible at the time since everything was dependent on the current gold value on the US balance sheets. When one considers the options the US government did NOT have at the time, automatically the only possible options comes to mind: get more gold. But for where? Well, you can’t attack Russia and take their gold, that would be more costly than the gold you’re trying to steal so then try to think of a way to steal it from where you are – home. Now all of a sudden the 3 acts detailed above which are now historic facts make a lot of sense and if one would have been aware of the situation in 1933 and the options the US government had it would have been relatively easy to predict with great accuracy what would need to happen for the US government to achieve its goals. They first passed a law making gold illegal and this didn’t cause any serious revolts because they immediately gave you something of “equal” value in return. That was the catch, the gimmick, the Kool-Aid to help swallow an enormous pill. And Americans, being uneducated and uninformed at the time, relatively speaking, took the bait thinking they weren’t really losing anything. The second step only took 2 months more months which nullified all previous contract clauses which had the right to demand an equal gold amount in return for a debt. This was an important step before step 3. And of course, the final step, step 3, which was what the entire sham was about, to nearly double the value of gold with the sole purpose of the government to now have nearly twice as much money to spend. But this also helped the government in other ways as I’m sure it was able to secure bigger low interest loans given it now held so much gold.

So what is the problem here then if they did this to help out the unemployed and the country in a desperate time of need? The problem is that it was theft. The government, in less than 2 years literally stole, transferred nearly 70% of the entire wealth of individuals into its own hands. It’s like me seeing you on the side of the road with a flat tire and you need help so I get you to sign over the car title and in return I give you a spare tire and a ride home, but I get to keep the car. Sure you got help, but in the long run you got robbed. And this is the long term effect of governments overspending during bust cycles and I seriously doubt that if the President of the United States got on TV and explained this that many Americans would care, they would still vote him out if he didn’t get the economy back on track in a hurry. So Americans and politicians are both to blame for the mess America is in right now.

To be fair let me quickly mention another benefit for going off the gold standard. Now, I haven’t researched this but this was taught in Economics and it makes sense which is why I haven’t done additional research on it. Before 1971 when we completely went off the gold standard and especially before 1933, due to the government having its hands tied and not being able to print money in times of need to smooth out the business cycles, recessions were deeper and more prolonged and they also came more often. Once the government was free to print money it was easy to simply spend more money if the economy was having one off year, where on the gold standard that would not be possible and that one bad year could have turned into three. And of course, by spending billions or now we’re into trillions, the US government has gotten the US out of many recessions and probably one or two really big depressions.

But as I showed with the gold example above, this is not free. The US government cannot create new wealth any more than scientists can create new matter so all the US government is doing when they spend like crazy is they transfer wealth from the masses to wherever the government decides it’s important to spend. This year it may be a war, next year additional or bigger entitlement programs and the list goes on. And this is how the dollar has lost nearly all its value since 1933, 97% of the original dollar’s value has evaporated and this is the pain that eventually has to be felt – we now have to pay $400,000 for an average house and although wages have gone up, they have not kept up nearly as much as the rise in asset prices due to constant inflation caused by printing too much money. If you look back even 25 years, let alone 80 years, a single income family was able to afford a house and a car where today a dual income is hardly enough. This is not what I call helping out – just like the guy who got a “free” spare tire and a “free” ride home, for that 15 minutes he felt great, like he just found a new best friend, but when he woke up the next morning and found his car missing he had to deal with reality, the bailout he thought was a miracle was really a nightmare and that’s what we’re facing in America today, a nightmare that is about to go live.

Clearly nothing is free but the biggest problem is a lack of awareness and too many people voting for politicians who would do anything to get re-elected. Then again, is there any other type of politician? Unfortunately no, but in the end the politicians are all rich and set for life and the ones who passed most of these laws are long dead and gone having lived a rich successful life, but there is one more act to be played out and that act is tomorrow. If one looks at history it’s easy to see the government is always planning something to “help” us out and regardless if their intentions are good or selfish we as citizens have to be prepared for their next actions so that we can at least preserve some of our wealth (if you’re one of the lucky few who has it) and if at all possible, profit from it. If you knew in June 1933 that after the government made gold illegal they would then make collecting gold illegal and then soon after that they would nearly double the value of gold it would take a lot of thought to figure out a way to keep the real value of your money or perhaps make some money. When gold almost double overnight that created inflation, but the only currency that lost most of its value at the same time was the paper dollar. If you had any real assets like a house or a car then those assets also went up with inflation. If you didn’t’ know this and you were a rich person sitting on a lot of cash then you truly lost a massive amount of wealth on that day.

Thinking about all of these events one can only wonder: what’s next? It’s impossible to know for sure but one can make some educated guesses. The way I see it is the US government built an enormous mountain and boy does it look impressive from afar – they show it off to all their citizens and to the nations of the world who peer at us with jealousy, but if you take a closer look, this huge mountain is nothing more than a paper mountain, a fragile, easily destructible piece of history waiting to become another major event. And putting away the education and trying to think openly, what do you do when your currency has devalued 97%, when your currency has been turned nearly worthless? The automatic and uneducated answer that comes to my mind is: “if it’s a done deal then let’s take the rest of the 3 cents out (without telling anyone) and start a new currency”.

In my mind, this is the only plausible possibility given the current economic and political environment. There is no way out. This paper mountain has gotten too big and there’s a big tornado coming this way so let’s add as much on top of it as possible before it topples over or gets blown away and everybody sees what we’ve really done. There’s an old saying, “spending money like it’s going out of style”. I have to laugh at that one because this may be exactly what we’re witnessing right now. This is where I have to agree with the conspiracy theorists because it makes too much sense from every angle I approach it from - with and without the education glasses on and when something really looks like what you see, well, it probably is. The next question then would be, if our government is trying to help us out of this stubborn recession that can’t seem to go away regardless of how many trillions they throw at it or if our government is in trouble because the dollar has been destroyed beyond any possibility of repair and furthermore, the government has been caught off guard with things like Medicare and Social Security and an insufficient workforce to support 78 million retiring baby boomers, then what would they do next, what makes sense as their next act?

To gain a better understanding of the future we have to look at the past. In 1933 the government first set the foundation for the following 2 acts. This was the simple law making something once legal now illegal. At the time I’m sure it made no sense, just like if the government now passes certain laws that make no sense, in a few years it will make sense. Like the new law forcing people to register their gold, I still cannot think of a single good reason such a law is needed all of a sudden. Nothing has changed except the price of gold, which has skyrocketed, and the dollar, which has been diluted beyond anyone’s imagination just 5 short years ago. To add some color to the enormity of the dilution over the past 5 years, the current administration has borrowed, on top of the roughly $3 trillion budget we spend already every year, nearly $7 Trillion. I remember a lot of constant news, for years, where President Bush W. Bush was being berated, for years for runaway spending, which toward the end of his presidency it was around half a trillion per year. To put this in some kind of frame, over the last 5 years, President Barak Obama and his administration, as permitted by the house of representatives, who write all the checks (most people forget this latter part) they have borrowed more money than all of the Presidents’ before the current administration. What’s more scary, this is the dollar figure we know about, this is what’s disclosed. Why do I say this? Given it’s not possible to audit the Fed, a private organization, it would be foolish of me as a free thinking individual to think that the humans running the fed are that much better than me or all those around me. And if we look at history, the government, any government, has the habit of not telling its citizens everything. I remember reading an article a few years back on a reputable website, Bloomberg I believe, which stated that the bank bail-out wasn’t just the $1 trillion we were told, but that the total bailout, which included other things like loan/loss guarantees, was actually roughly $7 trillion. If that’s the case, then we have reached a point where talking about the dollar has reached near comical levels, much like playing a monopoly game and when you’re bored you just start throwing money around like it means nothing, because you know it actually doesn’t mean anything.

If a new currency is coming we then have to try and predict what currency will it be and the other details, such as what and who will back that currency. Firstly, no matter what currency it is or what it’s called or who backs it, nobody in the world will take it seriously, after the biggest default in the history of the world, unless you have massive gold stockpiled to the sky to back it up. I’m not saying the US will need enough gold to back on the gold standard, that’s not gonna happen ever again, but they will definitely need a massive amount of gold. This explains why all of a sudden a few years ago a new law was passed for everyone to register gold they purchased. After-all, it’s easier to find and confiscate gold when you’re given an address of the person buying and holding it for you. Secondly, this decade long run for gold all the way to $1950, it has baffled me the entire time. For a long time I thought it was the hedge funds and mutual funds trying to insure first against the Iraq war and then against the near depression we had and other uncertainties such as the ongoing wars and so on. But a recent article I read a few months back actually took a look at many mutual and hedge funds and their gold holdings were startingly low. So then, who has been buying all the gold, it would take a massive amount of money to push gold from $250 to nearly $2,000. And no, it wasn’t the individual investor, individual investors buy gold but not in that amount and most individuals didn’t start talking about buying gold until it was too late and gold was way over $1200. And how much gold can the average consumer buy at $1200 per ounce and higher? Not very much.

Here is one possibility. Ten years ago all of the gold in the world could fit in several Olympic sized swimming pools. That might sound like a lot but if the United States wanted a lot more gold, no other country would sell theirs (just like in 1933) and for the amount of gold they would need to support a new currency after the biggest default in history confiscating all the gold Americans have would not be nearly enough. No, the US needs the kind of gold that is sitting inside mountains and underground but would costs much too much to take out. At $250 per ounce there was very little mining being done. But at $1200 and over, now you’ve got every driller smashing up every mountain in the world looking for gold and, using modern techniques and equipment which is very costly, they have been finding gold by the tons. This would have not been possible if gold didn’t go much higher than the $250 price it was at in 2000. I’m saying that for the past decade or so, the US government directly or indirectly helped drive up prices of gold for the sole purpose to induce gold mining companies to drill and mine for as much gold as possible. What made me realize this is a new tidbit I heard on TV a few days ago where the anchor was saying that if gold keeps going down they won’t be able to search for new gold as it currently costs $1200 per ounce to find and get the gold out of the ground. I wanna know why drillers and miners were doing just fine for the past 3 decades, before this absurd and unexplainable run to $1950. Were they all unemployed for nearly 30 years? That makes no sense unless what they’re talking about is the fact that all the gold that was easily accessible in the world has been mined and although they may have located lots of new gold reserves, the price of gold would have had to go to $1200 just for them to break even. Well, I think it’s such a wonderful convenience that gold just so happened to go up for an entire decade without any real explanation that makes sense. It wasn’t the QE money because the QE money was buying bonds and now as of late they’re also buying stocks, although the latter is just speculation on my part as the stock market seems to wanna correct for the entire past year but seems not to be able to as if someone is holding it back. So the government could have killed 2 birds with one stone – drive up the price of gold and keep it there and give miners a good decade to extract as many tons of gold as possible. What I wanna know, besides all of the existing gold, the thousands of new tons that they have pulled out over the past decade; shouldn’t that much gold have driven the price of gold down? Now, I can see how the government could have easily spent enough money to build momentum in the gold and then let the traders and individual investors buzz with mass hysteria and let them drive it higher and keep it there for a number of years, but given inflation is tame and most funds have not been buying gold who then has been buying up all this gold? Well, if it was the government, then it would make sense that if the digging for new gold part is complete then why pay $1800 per ounce when you can pay say $500? And if the government helped take the price of gold up then it should be even easier to take it down and it looks to me like it’s already happening. This is another unexplainable phenomenon. If gold went up cause of fear of inflation should it keep going higher now since the government has been printing more money than ever thought before? But instead it’s crashing down? And if I’m correct then the price will unexplainably keep going down for the next 12-24 months down to a much more affordable level and that’s when I would theorize the government would jump in and buy up the remaining gold on the market and since they’ve already printed trillions of dollars, perhaps there’s just enough money sitting on the sidelines waiting for act 2.

Let’s pretend for a moment this theory is correct. If the government now has all or most of the gold reserves it needs to back a new currency what currency will it be and how will they get the entire planet to play along? Another interesting coincidence is that the only other valid and powerful world currency is the Euro and anyone who has followed the news over the past 3 or 4 years knows that Europe and the Euro are in in big risk of losing member nations and the euro itself. There are very powerful countries in Europe, like Germany, who would do anything (well, hopefully besides start another world war) to keep the EU intact along with the euro. But if that’s not possible then perhaps a new currency could help them as well, one with some backing since right now there’s nothing backing the Euro, it’s worse off than the dollar. Then I’d have to presume the US government is in bed with the entire EU, or really just Germany and France as all the other member countries will just go along with anything that continues their entitlement programs. In theory, if the US would be able to partner with the EU, and if the US would have a truly massive gold reserve all of a sudden, then the rest of the world would have no choice but to play along. Military wise, the US and the EU together are absolutely unbeatable, but what really counts are not the armies, but rather the economies. If the US and Europe got together and stopped importing goods and services from countries like Russia or China those countries would simply collapse and would be in widespread revolutions resulting from massive unemployment within 1 year. The countries which may have a problem with a US default and a new union would be China and Russia – the rest of the countries like Iran are simply insignificant players and would be forced to play ball or perish. China has already been diversifying out of the dollar for at least a couple years now and what they have left on the books pales in comparison to the money the Fed has been printing for the last 5 years. And as for Russia, if China plays ball then they’re left all alone but I’m sure they’ll threaten some stalemate situation at which point all the players in the game will pitch in some free tokens and Russia will be onboard. And the rest of the world’s countries will fall like dominoes because that’s one of the problems with globalization – they enjoyed free trade and higher living of standards all these decades, now they’re dependent on exporting to the US and Europe and stopping such trades would be political suicide for any politician. The US and Europe can basically do anything they choose if they get together and it seems to me, just like in 1933, they’re both in the same currency and debt boat, so they don’t have much of a choice.

The only remaining act then is what currency will they choose? Before the last 60 days I always presumed it would be a dollar/euro combination which would be made into one global currency. Many other countries would join this union by the way – I’m only saying the US and Europe will form it first to get the leverage they need. What I am seeing lately with Bitcoin and alternative crypto currencies is simply amazing. Offer free money to the world and, if nothing else, sheer greed will take over and they’ll fall in love with the idea in a matter of a year or two. Since Bitcoin blew up a couple months ago and made millionaires out of many people I’ve dying to see and hear from the founders. I know they’re anonymous and we only know their names but it’s safe to come out, I mean, they’re probably billionaires and if not then close enough. So am I missing something because I have looked and searched and I can still only find their names and nothing else. Wouldn’t be odd if there was a new Google or Facebook but we never got to see pictures of videos of the new billionaire founders? Yeah, that would be very weird especially since it’s never ever happened since the beginning of the world. Gravity is constant and so is the fact that billionaires are never shy or anonymous. Call me a conspiracy nut but until I see these guys there’s going to be a question swirling through the back of my mind: who really started and pumped bitcoin? Because it sure fits in nicely with the next piece of the puzzle which would greatly benefit not just our government and governmet abroads, but also entire industries such as banks, retailers, the IRS, the DEA and to some extent society. I mean, besides losing more individual freedom and privacy a digital currency would be very convenient, no more wallets, lost money, stolen money, roberries, etc. A digital currency, although costing more personal rights, would solve a lot of business ineficienes, and be a dream come true for governments and to some extent societies as well.

This theory isn’t completely unfounded. NFC payments have been around a few years now and there’s an entire global network that has been built by partnerships between major banks, cellphone carriers, companies like Google and Apple and many other participants. Biometric security is here and is now good enough that people would trust their entire life savings on an NFC phone or their home laptop. And on top of biometrics there are other very good security options like retina scans, heartbeat scans, and voice recognition so security would not be an issue. The only real issue is in getting the masses to accept a virtual, unreal currency for something physical and real like the paper money and credit cards we’re used to carry around. And until now this was just not a clear step in my mind but now it is. Be it an accident, a coincidence or all part of the plan like the multi-step plan to get America to accept paper for real gold, it’s working and if I’m correct we are now in the final one or two stages. There is one final final state after this, the microchip – which is ready, built and tested, but I won’t get into that as that’s a different topic than the digital money I was aiming at all along.

Just like in 1933, if you could predict what was coming you would then be able to at least protect your assets or maybe even make money. If any of this proves to be correct then the right thing to do is to stay away from gold for a while, invisible forces are taking it down hard all of a sudden and for no obvious reason even to top hedge fund managers so let gold drop until it stabilizes and if I’m right it should drop to at least $500, a price nobody in their right mind is predicting right now. But once it drops that low I would then expect massive buying to resume which would then most likely be the US and perhaps the EU.

The other and much more profitable way to play this crazy theory is with digital currencies. If this is what the government and entire industries want, whether they purposely started this or not, they will then want it to succeed so either way, digital currencies, any of them should do incredibly well over the coming year or two until the gig is up and then one will survive which will be “the one” and the rest will die or be made illegal tender just like gold was made illegal tender in 1933. But we currently have at least a one year window of opportunity and perhaps 2 years, I fully don’t expect this to take longer than maximum 2 more years. Digital currencies are made of electrons and coincidentally they sure move and surge at the speed of light. One can make a killing playing any of the currencies but I would stick to the more reputable ones, Bitcoin (which is already over $100+), Litecoin, Namecoin, IXcoin and Devcoin. Devcoin is interesting because it is specially developed to help and support developers so as a result it has a large base of holder already and because it has been diluted much more than the other currencies it is currently trading at roughly $.0004, which is an insane price. Many think it will never go up but I give it better chances than the rest because it is more stable. And if any of these theories are correct, the media will see to it that there is a mass hysteria over all digital currencies and there’s simply not enough coins to go around for even America let alone the rest of the world so when/if that occurs I would expect a massive and sustained boom that should last until the beginning to middle of 2015. My advice now is try to mine these coins as it is free and if you have the money and you can stomach some speculative risk it’s not a bad idea to buy a few different coins as they’re mostly very cheap right now, costing under $1 and a few using are here to stay, government plans or not.

I fully realize that the latter part of this paper which is mostly conjecture, opinion and theory is difficult to accept or grasp but try to think with your imagination and ask yourself if something like this is at least possible. If you think this is not in the least possible then I recommend you read the first few paragraphs at the beginning of this paper where I listed historic FACTS. And then ask yourself if the current government is that much better and holy than the government of 1933 or if the current financial and economic situation of the US today is that much better where the government would not be forced to take extreme actions to help us all out. Because the way I see it, there’s a lot of similarities – the government has done all it can and can’t seem to straighten this ship and in the process has printed so much money that there may be no way out except to do something extreme just like they did in 1933. The foundation, the network, the hardware is all set for what I am predicting to occur. Now the masses have to fall in love with digital currencies enough to embrace them and during this time gold should keep going lower so the US government can buy all it can and then, we’ll wake up one morning and the dollar will be no more. I don’t know how they’re gonna act out that particular act cause they sure can’t make it look like they’ve been planning this for a decade, but I’m sure it’s gonna be interesting and it’s gonna be fun, if this does play out this way, to see how many millions upon millions of Americans will swallow whatever pill the government gives them because they have long stopped being free thinkers. Anyway you look at it, conspiracy or just bad decisions after bad decisions for decade after decade, one way or another there’s gonna huge, enormous changes in America and I feel it’s coming very soon and ironically, to me, is that I remember President Obama running under the banner of Hope and Change. It would be so amazing to have such drastic and unexpected change that nobody will recognize America anymore and I would actually laugh if everybody will be left with nothing but the change in their pockets because all paper money will be revoked and in an instant everything you are and everything you own will be made electronic and put on your shiny new NFC enabled iPhone.

I for one will hope and pray for the best while fully expecting the worst, and who knows, maybe I’ll get a nice surprise and things will just turn for the better and we will be able to pay off this debt over the coming couple decades. That would be the best that could happen for this country and its citizens but it doesn’t hurt to keep our eyes open and our minds and hearts free to think and imagine, imagine the future.

- Maximilian Wilhelm


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