GREENSPAN'S BIG LIE

"The Global Workforce Helps Federal Reserve Fight Inflation."

This is Greenspan's "Big Lie". The truth is the exact opposite. The Fed creates the money to fund the government's budget-busting expenditures, which then causes unchecked monetary inflation. (Why else do you think they stopped releasing the M3 money supply figure?) The monetary-induced (all inflation is monetary induced, and not price related) inflation is hidden by the gold and silver price manipulation downward, thus preventing a rise in interest rates due to anticipated inflation. The artificially low interest rates make now sub-marginal labor and invested capital appear marginal when they are not due to currency depreciation. The manufacturer's costs are raised without his being able to pass them on as higher prices due to lack of public-anticipated price rises, or to cut his losses by lay-offs and/or plant closings. This forces domestic manufacturers to outsource their production and services, and/or to import foreign, cheap, exploitable labor in the form of H-1B and L-1 visas, or hire illegal aliens at lower wages and benefits. This is the direct result of domestic labor and manufacture being rendered sub-marginal by rising costs without the ability to offset them via price rises resulting from anticipated inflation, and prevents his being able to move his capital into investments with interest rates high enough to offset currency depreciation in his capital.

With increasingly sub-marginal labor force, domestic production and services also become sub-marginal because the capital they tie up has become sub-marginal with respect to currency depreciation, and must cease in-country, or be made marginal by hiring only marginal (cheaper) labor, and/or replacing now sub-marginal employees (U.S. workers, at their higher wages and benefits).

Because of the hiding of inflation by the Fed and central banks, both of the traditional methods of correcting for Fed-induced inflation are prevented. As discussed in Professor Antal Fekete's The Tenth Pillar of Sound Money and Credit, the two methods traditionally involved: raising interest rates to offset currency depreciation, thus shifting investment from sub-marginal production, {raising the metal content of the dollar (i.e., strengthening the dollar in the form of a lower gold price)}, or lowering interest rates on existing and future debts (while also bailing-out the banks' unprofitable bonds) and on recognizing the inflation {lowering the metal content of the dollar (i.e., weakening the dollar in the form of a higher gold price)}, and inflating away current debts by currency depreciation. In the latter case, by lowering the debt burden and acknowledging the higher dollar-price of goods and services, barely marginal labor, production and services are allowed to continue to be marginal, and prevented from becoming sub-marginal due to currency depreciation.

However, in order to save their huge holdings in the dollar and dollar denominated bonds, the world's central banks have collaborated by using both gold-leasing and actual gold-sales from their reserves to drive down gold prices (raising the gold content of their currencies) to hide massive inflation of their own currencies, and to allow setting the lower interest rates necessary to save their bonds' principal from currency depreciation, and from their consequent lower sales prices, due to rising interest rates demanded for anticipated inflation.

However, by inflating the currencies of the Western, industrialized nations, and by hiding their currency depreciation with gold-reserve sales and gold leasing to set artificially low interest rates (as was previously shown) the central banks have created a squeeze on production of all goods and services in the developed countries by increasing their costs while masking the apparent rise in domestic prices and consequently demanded wage increases.

The theory behind the banks' manipulations is called Gibson's Paradox. Gibson's Paradox says that determining the level of prices is a simple matter of determining the gold price. The paradox has held valid for hundreds of years, but in a world economy of closed, domestic-trading nations. Under President Clinton, Treasury Secretary Summers initiated the Strong-Dollar policy, which consisted of suppressing the gold-price to disguise interest rate, price and wage rises, as theory requires, while the government was permitted to create more money to fund their budget deficits and the trade deficit. According to history, the trick should have worked in the closed economies of the West. However, their economies were no longer closed. The WTO, NAFTA, and CAFTA trade agreements and lower transportation costs allowed increased world trade. But it also introduced the possibility of labor arbitrage. The lower world interest rates permitted the slowed rise in the prices of goods and services resulting from the world-wide gold price suppression under Gibson's Paradox to occur, but with the reduced trade restrictions, domestic manufacturing, services and Western-style wages and benefits were all rendered sub-marginal, while appearing to be marginal. Of course, the developing countries gained all that was lost, because only they could actually remain marginal producers under these conditions. But because the world's wealth remained concentrated in the Western countries, their product and service expansions could only be funded by sales there. So trade barriers and national borders had to go. Thus, the deal struck among the central banks, the world's large corporations, and the politicians of the West to save the banks' bonds in return for the banks unlimited funding of governments' profligate spending to buy their re-election, and for big corporations' elimination of small business competition and the high-cost wages and benefits of the middle class, will diminish middle-class income in the West by 75%, while it raises the middle-income of developing countries by 25%. The end result will be a two-tiered world of high income elites, and a low-income peasant class, bound in debt servitude to the wealthy elites. In short, a new 'Middle Ages' of industrial feudalism, or even a new Dark Age. All of this being brought on by the looting of the Western World by their own bankers, big-corporations and big-governments. After all, peasants do not vote out politicians, and have no need of banks.

So the next time you hear Chairman Greenspan bragging about how he has held down inflation by importing cheap foreign goods, and made your stagnant wages (actually declining in real terms) more bearable, you should understand that he is selling you a band-aid to cover up the wound where he has stabbed you in the back.

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