Professor Fekete's Calls for the Return of Sound Money.

To say that the dollar is strong is not the same as saying that is also healthy.
In fact the irredeemable dollar is terminally ill. The reason for this is its departure
from constitutional money. The Constitution mandates a metallic monetary system
for the United States. Nothing shows the bad conscience of our monetary
leadership more clearly than the fact that they could never muster up enough moral
courage to propose a Constitutional amendment giving the federal government the
power to establish a monetary unit based on negative values such as debt.
Cheerleaders for fiat money in academic circles, in the media, and in financial
journalism will not be able to live down the shame that will be their lot when the
world economy collapses. The excruciating economic pain that people will suffer
as a consequence will be their responsibility. The break-down in law and order will
be their fault. As history and logic conclusively prove, fiat money is not a viable monetary system. It is prone to succumb to the sudden death syndrome. Whether
caused by inflation or whether caused by deflation, sudden death is assured.

It should not be beyond the wit of human intelligence to see this coming and
fend off the disaster by making a timely return to sound money, based on a
monetary unit of a positive value as mandated by the American Constitution.

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The Strategy of "L'Infamie" continues to fail against Ron Paul and Gold.

It has been almost five years since we wrote the article below entitled "Ron Paul, Gold and L'Infamie".

The old article:

William Guy Carr, in his book entitled Pawns in the Game, describes how the Powers That Be have throughout history tried to discredit people or institutions that have threatened their power. The strategy described by Mr. Carr is called l'infamie which is French for infamy. In Pawns in the Game Carr describes how campaigns of l'infamie were started against Louis XVI and Marie-Antoinette during the French revolution and also against Tsar Nicholas II during the Soviet revolution of 1917. Human nature does not alter with the passage of time and with that in mind we have detected the following campaigns of l'infamie.

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The Gold Standard - An Austrian Perspective by Roger W. Garrison

Roger Garrison gives the Austrian School perspective of the gold standard at the first conference of the Mises Institute in 1983. Mr Garrison points out that there are two major fundamentals as far as a gold standard is concerned. First, he notes that gold is money in some meaningful sense instead of being a control mechanism for paper or fiat money. Second, he points put that the gold standard should be a decentralised system without Central bank or Treasury control.

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The Gold Bullet

Could 2012 be the year in which Federal Reserve Chairman Ben Bernanke will use the ultimate tool a government has, under a paper-money system, to combat deflation and weak economic growth by printing money to reduce the value of the dollar? It is certainly possible as all the other tools which he mentioned in his November 21, 2002 speech to the National Economic Club of Washington D.C. have been utilized. If one combs through that speech one sees that the tool of driving rates to zero has already been used up, the tool of buying government and MBSs securities, in order to cap longer term yields, has been used as well and so the only tool left could be to "print money and distribute it willy-nilly" as Mr Bernanke points out in his famous speech.

Devaluing the dollar might be difficult to do against other paper currencies so Mr. Bernanke and the U.S. Treasury could be forced to use the F.D.R. remedy of 1934. Back then President Roosevelt devalued the dollar against gold overnight from $20.67 to $35 through the Gold Reserve Act . One reason the U.S. might have to resort to the F.D.R. strategy is that if the U.S. tries to devalue against all other paper currencies it will very probably lead to a paper currency war as other countries try to keep up with the United States and the debasement of the paper dollar.

Being that the U.S. dollar is the global reserve currency, the U.S. government is only left with the alternative of devaluing against the currency that cannot be debased like paper currencies and that is gold.

Mario Innecco