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Gold Commentary - September 2, 2005


How Are The Mighty Fallen?

By this time, you will know as much as can be known about the atrocity which is the plight of the city of New Orleans. You will have read of the plight of those trapped there by both storm damage and government incompetence verging on criminality. You will have seen the reports of the absolute and complete breakdown in any semblance of a relief effort when it was needed most - before, during, and in the immediate aftermath of the storm and the devastation of the storm swell.

The thing to be stressed is the nature of this calamity. All of the vast horde of those in "authority" knew, in detail and well in advance, what the certain consequences of a storm of the magnitude of Katrina would be. If you doubt that, consider this list of headlines stretching back as far as May 2001 collected from media outlets all over the US.

These headlines deal with the same people who, after having successfully invaded Baghdad on pretexts which they knew to be entirely false, penned up the citizens where they stood, sat or lay and then watched as the city was gutted by looters. Sound familiar? The exact same thing happened in New Orleans. Iraq was and is an entirely man-made catastrophe based on lies and prolonged by criminal incompetence and venality. Katrina was a force of nature, a hurricane. Hurricanes in this part of the world are not isolated occurrences. They are annual occurrences, always seen well in advance, and their power can be calculated with precision well before they strike.

The inundation of New Orleans was a man-made (or more precisely "man unmade") disaster. The storm swell breached levees which everyone in a position to rectify the situation knew (or should have known) were inadequate to the task of containing it. This is bad enough, but it is hardly surprising. Government incompetence in such instances is so well-documented that the negligence and parsimony which are the story of the New Orleans levee system is par for the course.

Worse, much worse, has been the reaction of those "in charge" to the inundation. From "the top" on down, it has been one long and drawn out instance of indecent exposure in the true sense of that term. If you ever wondered what the old line about "giants with feet of clay" was referring to, wonder no longer.

These are the "authority figures", the civic "leaders", the "elected representatives", the "economy runners", the "planners" and the "regulators". Many of them have the gall to refer to themselves as "civil servants". They are the bureaucrats, the councillors, the mayors, the assemblymen, the governors, the Congressmen, the Senators and, at the top of the smoking pile, the President. Most of them, with honourable exceptions whose numbers are sadly dwindling, are puppets dangling on strings. The strings are pulled by the political and financial establishment.

This is true of any developed nation and even more true of any "developing" or third world nation. All nations have such establishments, and all such establishments have one thing in common. Their goal is POWER - the gaining of it, the exercise of it, and the push to gain ever more of it.

The US, like most other developed nations, has elections. The US, like most other nations, has two (some such nations have as many as three) "viable" political parties which contend the elections. Americans can choose to vote for one or another of the canditates or can choose to not vote at all. Australians don't have such a choice, voting is compulsory here. Election results can be and are rigged, the last two US elections being particularly blatant but by no means unique examples of this.

What the individual American (or Aussie or anyone else) does NOT have a say in is who will be the candidates presented on the ballot and what will be the platform of the party presenting the candidates. Yes, in the lead up to US elections, the parties involved make a great show of their "platform" during the nominating convention for their Presidential candidates. What nobody seems to notice is that both the Democrats and the Republicans are right up front in stating that the party will in NO WAY be bound by whatever the party platform might happen to be.

Under the modern "democratic system", the citizen is presented with the choice of voting for establishment candidate A or establishment candidate B - with other candidates being tolerated to enhance the illusion of "choice". They have no say in who these candidates are. They have no say in what the winning candidate will actually do once elected to office. Those who have a say here are exclusively members of the establishment, and they guard their prerogatives very carefully indeed.

That's the political system as set up by the establishment. The financial system set up by the establishment is best described by this phrase: "... because the money you use is totally controlled by your government, dear reader, so are you."

The most powerful political and financial establishment in the world today is the US establishment. As have all their predecessors reaching back to the dawn of history, they have gutted a great nation in their voracious and unswerving pursuit of power. Reporting on the New Orleans disaster outside the US has a unifying refrain. How could such a calamity befall citizens of the RICHEST and MOST POWERFUL nation on earth?

The answer is simple. This calamity, or another just like it, is the lot of the citizens of a nation whose establishment decides on the all out pursuit of power - power on a global scale and power for its own ends. Such a nation exhibits all the external parephenalia of power - as displayed by the might of its military and the opulence of its "leaders". But what this display conceals, often for decades, is the hollowing out of the wealth of the nation necessary to portray and use that power.

All that most of those observing can see is the POWER projected by the US establishment. What they have not seen in the past is the glaring fact that the US is not a "rich" nation. It is a nation living on borrowed everything, including time. They are starting to see it now. The perception of the US as the "richest nation on earth" has been fraying at the edges ever since the US invaded and then occupied Iraq. It has been torn to shreds by the establishment's reaction to Hurricane Katrina.

The appropriate reaction to the spectacle begun in Iraq and now brought to such crystal clarity by the inundation in New Orleans was well described by Ayn Rand in Atlas Shrugged:

"Reardon stood motionless ...There was no triumph in his face, no elation, only the still intensity of contemplating a vision with a bitter wonder that was almost fear. He was seeing the enormity of the smallness of the enemy who was destroying the world. He felt as if, after a journey through a landscape of devastation, past the ruins of great factories, the wrecks of powerful engines, the bodies of invincible men, he had come upon the despoiler, expecting to find a giant, and had found a rat eager to scurry for cover at the first sound of a human step."

The US government can unanimously approve $US 10.5 Billion in "disaster aid", but they cannot foresee, take steps to prevent, or give any REAL aid to those caught up in a REAL disaster. The US government can create "money", but they cannot create wealth. A check for $US 10 Billion (or $US 10 TRILLION) would not have held back the flood waters of Hurricane Katrina. A proper levee would have. The two are not the same thing. The US establishment (and all establishments) know that. Their most craven and real fear is that their "subjects" discover it. It's about time they did, especially after the lesson which is the flooding of New Orleans. Many of them are, if the outrage of the American people is any indication.

It is the sad and inevitable lot of the citizens of a nation with a powerful and power hungry establishment to have their real wealth, the irreplaceable product of the irreplaceable time that went to create it, stripped away in return for a promise of future fulfilment. That fulfilment never comes, because the wealth has been dissipated in the pursuit of power. This is how all empires stagger, splutter, and expire in the pages of history.

The abomination which is the fate of those in New Orleans is the latest and most searing indictment of the US establishment and their rapacity. Lacking both transportation and any means with which to acquire it, these people had the temerity to fail to grow wings and waft themselves away from the flood waters.

Mr Bush may or may not survive this latest political blow. Regardless of his fate, the only way to prevent future 9/11s and Iraqs and New Orleans floods is to reach behind the curtain of the puppet show to those who wield the strings. As The Privateer has pointed out many times before, the choice is between freedom and empire. The consequences of the second choice have been illustrated, even more starkly than they were in New York four years ago, in New Orleans.

Gold? A nation in which Gold circulates as money and where individuals "accept no substitute" which is not FULLY redeemable on demand in Gold is a nation in which an establishment which survives and prospers on promises to pay cannot operate. The only way to curb such an establishment is to make them earn a living instead of printing one. The only way towards emancipation from the control of government is the abolition of government control of money. Gold circulating as money and freedom are inseparable and mutually dependent. Gold circulating as money and the accumulation of political power are mutually exclusive. No one ever gained or kept political POWER by genuinely paying his or her way by his or her own efforts.

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©2005 The Privateer Market Letter

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