by Joseph P. Farrell, Giza Death Star:
After last week’s blog about the South Dakota bullion and unit-of-account bill, I received an email from Catherine Austin Fitts that the movement to state bullion depositories might be the latest gimik and squeeze play from the banksters. We’ll get to why that possibility should never be ignored in a moment, because the Louisiana bill, as written, contains some telltale signs that her misgivings are well-founded. But I also want to use this opportunity to clarify my thinking for the record, and to remind readers here that if you read my individual blogs and do not contextualize them within the wider body of my thinking about financial and physical systems, that you will be bound to misinterpret and forget what I’ve stated on previous occasions. Absent any repudiation by me, those earlier statements still form part of my thinking.
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A case in point: bullion. I have repeatedly warned on numerous occasions, in interviews, at conferences, in writings, that I view any possible return to a bullion-backed currency as a near impossibility, for two basic reasons: (1) there simply isn’t enough gold or any other bullion to “back” all the circulating currency, a scenario that immediately sets up all sorts of possibilities for manipulation of shorting. Since the world gold standard was abandoned as a result of the massive increase of credit by World War One, the two – money supply and bullion supply – have become increasingly disconnected… and then along came World War Two, and the aftermath of Bretton-Woods, a modified gold standard, and its abandonment by Richard Nixon. This is a complex point, and one that one could spend volumes pondering. We must, however, pass on doing so for the moment and pass to consider the second point: (2) since the end of World War Two, the amounts of bullion – and particularly gold bullion – available in the world’s banks’ and national depositories’ stocks, is badly obfuscated, and again, for two reasons (a) as a matter of national security, and (b) because the amounts of gold looted during World War Two particularly into the Axis’ powers’ treasuries is itself badly obfuscated. I have opined on many occasions that the estimated amounts of bullion may be off by as much as an order of magnitude too low. A recent and, to my mind, telltale indicator of this possibility of wild obfuscation of estimated bullion amounts are all those estimates of the bullion in asteroids, in many cases amounts of such estimates range to the quadrillions of dollars. That’s a lot of bullion, the only trouble is going out and getting it. Claiming to do so would be a way to mask the introduction of those badly obfuscated figures into the equations, or conversely, to claim to have done so. In other words, to boil all of this down to its most basic point, the opportunities for continued bankster fraud are maintained in any system claiming to be bullion-backed for the simple reason that the obfuscation admits the possibility of commodities markets manipulation and further fraud. For this reason I’ve insisted on convertibility of any certificates of deposit into state bullion depositories and their use as legal tender: one should be able to go to a bank, and exchange a note for specie, and that convertibility is a matter defined by law. Therewith we have the real point of my blog about the South Dakota bill, the central point of which was not the bullion or the specie, but the definition of the value of a unit of account by law.
Why is that important? The answer is simple, and admittedly quite scary when one thinks through the obvious nature of it: the current international system is entirely lawless: or to put it differently, it has no internationally recognized standard of the value of any currency, because commodities data and the markets pricing dependent on that data are both badly obfuscated.
This is where my attention – and where, I believe Ms. Fitts’ concerns (and mind you, I’m guessing here on the basis of some writings she referred me to, and because she is travelling now and it is difficult to have time to compare notes) – were both grabbed by the South Dakota bill, and I want people to understand that the bill’s effects can be either very good or very bad, depending on the context of the system in which it is enacted. As I mentioned, my attention was not focused on what the bill said about bullion or specie, but about what it said about units of account being defined by law, and mutually agreed upon between countries or, in this case, the State of South Dakota and potentially any of its trading partners, be those partners Italy, Wyoming, or (perish the thought) Delaware. Units of account are definitions of value of assets and liabilities on the ledgers of banks. They first emerged in modern financial history in the northern Italian banks of the late High Middle ages and early Renaissance, and especially so in the Italian city-states like Genoa, Florence, and of course, Venice. For the bankers on the Rialto, trading constantly and on not just a daily basis, but an hourly one, and doing so in a plethora of different national currencies from Florentine (and its own) ducats, florins, to Byzantine bezants and Turkish crescents and the various marks of German principalities, the unit of account allowed the banks of the Rialto to conduct transactions and currency conversions quickly, because the transactions were settled in those units of account, which had agreed-upon definitions of value based on the several currencies behind it, and the commodities traded with it. As such, the value of such units of account tended to be less volatile than that of any individual currency comprising it. Needless to say, the value of such units of account more often than not fluctuated far less wildly than the national currencies themselves, a fact which, as I detailed in The Financial Vipers of Venice, that city state could and did exploit by the manipulation of gold-to-silver exchange ratios…and, please note, by having access to a then-‘secret” supply of bullion from the as-yet not publicly known source of bullion in the New World which its Templar allies were able to exploit.
In other words, the estimated bullion supply of Europe was off by a large amount because of that hidden and unknown supply.
