How’s that for a dramatic beginning to a story? Years ago, when I used to give a lot of talks to high school classes, this was one of my favorites. It always got the students’ attention. And I have to admit, I also enjoyed seeing some liberal teachers get so upset with me they almost lost their lunches.

Here’s the story I told those students in those long-ago presentations.

The Pilgrims who arrived at Plymouth Rock in 1620 were incredibly brave and hardy souls. They were motivated by the noblest of virtues. They vowed, each and every one, to be as selfless as possible—to always put the needs of the group first. They agreed to own everything in common and to share everything equally.

And their naïve piety almost killed the entire colony.

We all know how the adventure begins. A group of devout Christians, seeking religious freedom for themselves and eager to "advance the Gospel of the Kingdom of Christ" in the New World, sets sail from Plymouth, England in 1620. An investment consortium known as the Merchant Adventurers of London paid the expenses for the trip, including chartering the Mayflower and its 40-man crew.

The deal was simple: The Pilgrims agreed to establish a colony in northern Virginia where they would plant crops, fish the waters and hunt in the forests. They would return a certain percentage of each year’s bounty to London until their debt had been repaid.

Things went wrong from the start. First, the syndicate changed the deal, drastically reducing the amount they would loan the Pilgrims. The brave adventurers were forced to sell many of their own possessions, and much of their provisions, to pay for the trip. As a result, they landed in the New World badly short of supplies.

Next, the small ship they had purchased in Holland, which was to accompany them to America so they could fish the waters off the coast, had to be abandoned in England.

Shortly after they set sail, the ship, badly misnamed the Speedwell, became "open and leakie as a sieve," as its captain reported. They returned to Dartmouth, where the boat was dry-docked for three weeks as repairs were made.

But to no avail. After leaving Dartmouth, the group sailed less than 300 miles when the captain decided the Speedwell "must bear up or sink at sea." This time the ships put in at Plymouth, England, where it was decided to go on without the Speedwell. On Sept. 16, 1620, the Mayflower set out alone to cross the Atlantic.

A month later, when they had reached the halfway point, fierce storms battered the ship and threatened the lives of passengers and crew. Many wanted to turn back for England. But if they abandoned the journey, they would lose everything they had invested. The Pilgrims decided to trust in God and sail on.

Despite the storms, the hazards, the crowding and the poor food, only one Pilgrim died during the voyage, a young servant. His death was balanced by the birth of a son to Stephen and Elizabeth Hopkins, who named their child Oceanus.

There were 102 passengers on board the Mayflower—50 men, 20 women and 32 children—along with a crew of 40. The captain set a course along the 42nd parallel, a bearing that would carry him to Cape Cod. From there he intended to swing south and follow the coast to northern Virginia.

A little over two months later, on Nov. 19, land was finally sighted and the captain turned the ship south, toward Virginia. However, they soon encountered such "dangerous shoals and roaring breakers" that they turned back to Massachusetts. It was then that the grumblings of dissent turned into a full-fledged roar. Many of the passengers insisted on landing in Massachusetts, where "none had power to command them."

The Pilgrim leaders decided to meet the explosive situation by asking each male on board, except for the crew, to sign a formal document that would lay "the first foundation of their government in this place." Thus the Mayflower Compact was born.

The Pilgrims were a diverse lot. Many of them were illiterate. Yet in creating the Mayflower Compact they showed an extraordinary political maturity. They agreed to establish a government by the consent of the governed, with just and equal laws for all. Each adult male, regardless of his station in life—gentleman, commoner or servant—would have an equal vote in deciding the affairs of the colony. Of the 65 men and boys on board, all but 24 signed the agreement. The only ones who did not were the children of those adults who did sign, or men who were too sick to do so.

The first decision made under the covenant was to abandon efforts to reach Virginia and instead to settle in New England. The first explorers landed at Plymouth on Dec. 21, 1620.

Weather delays kept the majority from seeing their new home for nearly two weeks. On Jan. 2, 1621, work began on the first building they would erect—a storehouse.

Because provisions were so scanty they decided that the land would be worked in common, produce would be owned in common, and goods would be rationed equally. Not unlike the society Karl Marx envisioned of "from each according to his ability, to each according to his need."

Unfortunately, thanks to illness, injury and attitude, the system did not work. Pilferage from the storehouse became common. Suspicions of malingering were muttered. Over the course of that first, harsh winter, nearly half of the colonists perished. Four families were wiped out completely; only five of 18 wives survived. Of the 29 single men, hired hands and servants, only 10 were alive when spring finally came.

The colonists struggled desperately for two more years. When spring arrived in April 1623, virtually all of their provisions were gone. Unless that year’s harvest improved, they feared few would survive the next winter. The Pilgrim leaders decided on a bold course. The colony would abandon its communal approach and permit each person to work for his own benefit, not for the common good.

Here is how the governor of the colony, William Bradford, explained what happened then. This is taken from his marvelously readable memoir (if you can make adjustments for the Old English spellings), History of Plimoth Plantation:

The experience that was had in this commone course and condition, tried sundrie years, and that amongst godly and sober men, may well evince the vanitie of that conceite of Plato & other ancients, applauded by some of later times;—that ye taking away of properties, and bringing it in communitie into a commone wealth, would make them happy and flourishing; as if they were wiser than God.

For this communitie (so farr as it was) was found to breed much confusion & discontent, and retard much employment that would have been to their benefite and comforte. For yet young men that were most able and fitte for labor & services did repine that they should spend their time & strength to worke for other men’s wives and children with out any recompense.

Once they replaced communal efforts with individual responsibility the differences were dramatic—and life-saving. Men went into the fields earlier and stayed later. In many cases, their wives and even their children (some barely past the toddler stage) worked right alongside them. More acres were planted, more trees were felled, more houses were built, and more game was slaughtered because of one simple change: People were allowed to keep the fruits of their own labors.

The Pilgrims arrived deeply in debt to the London merchants who sponsored them. They worked for more than 20 years, as individuals and as a community, to pay off the crushing burden. In 1627, they borrowed money to pay off the Merchants Adventurers. By 1645, they had paid off the entire debt to the company which had advanced them the sums to pay off the Merchants.

When their debt had been paid in full (at the astronomical interest rate of 45 percent per year), the company that had advanced the sums wrote the Pilgrims:

Let it not be grievous to you, that you have been instruments to break the ice for others who come after with less difficulty. The honour shall be yours to the world’s end.

As we celebrate this coming Thanksgiving Day, some 380 years after the Pilgrims celebrated the first of this uniquely American holiday, let us remember the sacrifices they made… the devotion they showed… and the lessons they learned.

Until next time, keep some powder dry.

—Chip Wood

Sometimes, when I get galled and tired from the tasks of the day, I watch the national news. What do the newscasters really say? What news do they really tell us in America?

I am duly impressed by how articulate they are and how they never say anything. They are trained icons at having NO OPINION.

It’s my conclusion that to be politically correct and socially acceptable in America is to be a faceless people. Just have no opinion.

Oh yes, we can master the King’s English as long as we don’t say anything. Does this remind us of the three monkeys who “See no evil, hear no evil and speak no evil?”

This is modern America, faceless and soulless. Scripture suggests that we are neither hot nor cold and that God spews us out. (Rev. 3:15-19) So how do we learn? How do we approach reality?

I have my own rules. My rule—and I have taught this to my children—is to believe just the opposite of government and political pronouncements. This is the most direct route to sobriety and a peek at the real world.

The system can thrive with no opinion. With this syndrome, “they” can milk us and shear us and keep us on the animal farm. We are as docile and obedient as cattle.  We can be intellectual giants and, as far as practical reality, be complete idiots.

But what if our inner soul begins to suspect disharmony of and disgust with the monotony of the system and the sickening conformity of the masses? The people can have literally the firepower of armies and still be under disciplined control, just so long as they believe the lies of the system.

How else can countries field multi-million-man armies that really don’t know who their enemies are, but are willing to fight to the death for some nebulous propaganda? Ignorance is not bliss. It is sorrow and death.

If we do not know reality we cannot know right from wrong. We have no moral ethic or restraints.

There is a system. Outwardly and ideally it is the rule of law and a moral order. Inwardly and secretly it has an unannounced agenda of human and population control, regardless of the name of the system or the form of government. The same secret elite rules. They have the power of life and death through and with thought control.

There can be no secret elite without thought control. Man must not be allowed to think his own thoughts, but must think the thoughts of the system. And he must not know the difference.

Mind control is used to extract wealth and human freedom without consent. The most perfect crime is when the people who carry out the will and purpose of the system do not suspect the complete shroud of thought control. They suspect nothing.

There are those who see and there are the many that are blinded. What gives us perception and vision? Knowledge is the mechanical attribute of the brain.

The world is floating in knowledge. There are thousands of universities and colleges. This is the black and white world, the rote and the mundane.

But wisdom only filters through to a very few. They are the ones who see with their souls and with their spirits. Their vision is as the colors of the rainbow. Spiritual vision cannot be known or communicated to the vain.

Words carry knowledge but words cannot carry wisdom. Wisdom is perception and spiritual discernment. It is to know God and reality.

It is the evolution of consciousness. It is the fullness of life on earth that God intended. Blessed are those who have it!

It is beautifully described in Madame Ghis’ book “Madame Ghis: Escape In Prison.” In it she wrote:

“My soul showed me that the world in which I live is made up of lies and illusions. Reality can only be perceived with the soul’s eyes. With her (my soul) help, I learned that behind the tax system and all other systems, we find slaves without chains, human beings who are ignorant and unconscious of being the property of the State.

They trust their government enough to entrust it with their children, their health, their property and their entire lives. Citizens cannot guess that the State is a mere legislator and tax collector working for the bank of Canada, and a cartel of private bankers.

When I became aware of this situation, I decided to put an end to my life as the subject of a ‘higher’ authority. How could I do this?

By doing the exact opposite of what I had been doing before. How does a slave behave? Like a domestic dog. He submits to the will of his master who uses it as he wishes. In return, the master feeds it and brings it security. The more docile is the dog, the better he gets treated.”

Madame Ghis is a prison name given by inmates to Dr. Marie Eva Sophie Ghislain Lanctot, a medical doctor who spent a few months in prison for refusing to conform to the income tax system in Canada. She has written several revealing books, “The Medical Mafia,” “The Trial of the Medical Mafia,” “What the Hell am I Doing Here Anyway,” and “Madame Ghis: Escape in Prison.” They can be bought at  www.personocratia.com.

How do we become aware of the illusory world in which we live? How do we come to understand that law, finance, politics and religion are all interconnected?

Everything turns on the individual imperative to inquire. Do you know that most people do not inquire? They ask no questions. They seek no information.

We who inquire are few. We speak of the battle for our minds. We seek freedom from lies and deception which saturates our lives. Self change and release from deception is not easy, nor is it comfortable.

It is very difficult for the ego to let go of old habits of thought and lifelong, cherished attachments. The inquiring person reaches reality according to his own level of consciousness.

What then does the fascist state not tell us? What does the state not want us to know?

They do not want us to know that we do not think our own thoughts, but those of the system. They do not want us to know that we do not have human freedom, that democracy is a myth.

They do not want us to know that we have imaginary money that transfers wealth and savings to the state.

They do not want us to know that public schools and universities are government schools. They indoctrinate us with the system so that we cannot evaluate reality.

They do not want us to know that the medical system is a front for pharmaceuticals and a marketing vehicle for their drugs.

They promote a sickness system to sell drugs. The American people are fast discovering that sea salt and water are more medicinal than all the drugs.

Barack Obama must be thrilled with fellow Nobel Prize winner and former Vice President Al Gore and his just-published book, Our Choice, A Plan to Solve the Climate Crisis. In it, Gore sings the liberal refrain that big government can save the world.

Gore, who is making the rounds touting his book this month, argues there are economic as well as political reasons to be green.

"There is a common thread running through the discussion of climate, (national) security, and the economic crisis, and that is our ridiculous dependence on foreign oil and coal," Gore said.

In other words, clean energy will bring us peace, prosperity and respite from that “End of Days” scenario known as global warming.

Gore thinks we can have peace because America will no longer be dependent on Middle East oil. As a result we can pull out of the region lock, stock and no barrel.

That will save hundreds of billions of dollars being spent on Arab oil. Best yet, that money can be invested into clean technologies—a super-grid to capture and transport wind and solar power.

Gore’s vision is for America to become a world leader in clean technology and export it around the world, correcting one last annoyance—our staggering trade deficit.

Gore’s utopia is green. Soon we can sleep easy in our lavish solar homes with our electric cars plugged in.

If it sounds too good to be true there is a reason for that—it is.

Jousting at Windmills
If you have ever been to Palm Springs, Calif., and driven west you can’t help but notice the forest of wind turbines that pockmark the desert landscape.

As we drove along Interstate-10 years ago my wife Angela said, “How come the windmills aren’t turning?”

“No wind,” I said.                       

That sums up the problem with wind power, a system that currently produces about 1 percent of America’s energy needs.

When the wind blows you get electricity but when it doesn’t blow you get nothing. That is because it is impossible with current technology to store alternating current. Direct current wind power can’t be stored in batteries. As a result consumers need redundant power plants.

Then there is a question of cost and space.

Last year in England, former Industry Secretary and current Labour MP John Hutton announced the British government should build a huge array of giant windmills to meet the country’s future energy needs.

The Energy Tribune said Hutton’s plan would literally change the face of Britain. That’s because Hutton wants the government to build 7,000 turbines—or one every half-mile around the entire coast of Britain.

It’s interesting that as much as the greens hate to spoil the environment they embrace wind power. Turbines not only kill tens of thousands of birds but also use up more space per unit of capacity than any other power source. According to the U.S. Department of Energy each wind turbine requires 40 acres.

Physicist Howard Hayden at the University of Connecticut sums up the situation: “Imagine a one-mile swath of wind turbines extending from San Francisco to Los Angeles. That land area would be required to produce as much power around the clock as one large coal, natural gas, or nuclear power station that normally occupies about one square kilometer.”

And wind turbines don‘t come cheap. One commercial 2 megawatt turbine costs about $3 million installed.

According to Senator Lamar Alexander (R-TN), “At a time when America needs large amounts of low-cost reliable power, wind produces puny amounts of high-cost unreliable power. We need lower prices; wind power raises prices.”

The Sun of All Things
My experience with solar power dates back to that time we drove past the motionless windmills. It was the early 1980s and we were buying our first house. The 1970s energy crisis was still lingering and since real estate was cheap in Spokane, Wash., we decided to spend some extra money and buy a brand new solar home.

It was a nice enough berm house if you didn’t mind dirt piled up against the sides and the back of it. As for the solar panels, they collected energy to beat the band in the summer, which was too bad since we didn’t have an air conditioner. As for its use in the winter, we were in the rainy Pacific Northwest so our solar panels were practically useless.

Nearly 30 years later solar power meets about 1 percent of America’s electricity needs. And solar is still an incredibly costly proposition. It costs up to $80,000 to put in solar technology that would meet the electrical demands of a modest home.

Green Econometrics did the math. In a 2007 article they calculated that solar energy is 10 to 20 times more expensive than fossil fuels for power generation (see graph below). You can read the story at: http://greenecon.net/understanding-the-cost-of-solar-energy/energy_economics.html.

Beam Me Up Scotty
To better understand how ridiculous the prospect of solar energy is, consider a press release sent out by Pacific Gas & Electric Corporation (PG&E) (NYSE: PCG) this past spring.

PG&E announced that it had requested approval from the California Public Utilities Commission to enter into a power purchase agreement with Solaren Corp. in Southern California.

Under the plan Solaren would deploy a solar array into space—yes space—to beam an average of 850 gigawatt hours (GWh) for the first year of the term, and 1,700 GWh per year over the remaining term to PG&E customers.

According to Solaren it has even had talks with Lockheed-Martin and Boeing to build the solar plant and the rockets needed to send it into orbit.

All of which prompted Energy & Capital to write: “The press has gushed about the ‘next frontier’ of solar power, which would collect power ‘24 hours a day’ from the far brighter solar radiation available above earth’s atmosphere from a low-orbit. The energy would be transmitted to a receiver based in Fresno, Calif.”

Meanwhile, it was revealed that the Pentagon had done its own study on space-based solar power. Their report said that a $10 billion program could create a measly 10-megawatt pilot satellite.
 
The scale of the PG&E project is out of this world. Their satellite would have to be hundreds of times bigger than the International Space Station, which can barely sustain itself with solar energy.

Just one final detail: nobody—not even a Nobel Prize winner—has yet figured out a technology that will actually transfer the sun’s rays.

The fundamental truth is that we will, for decades longer, continue to rely on fossil fuels.

Next week, in Part Two of this three-part series, I will touch on more earthly problems, including America’s all too real oil crisis and one rock solid industry that will help ease America’s energy pains and earn you gusher-type profits.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold Report

Yet, from early on, most of us are taught “to manage” or “to mask the symptoms of” and then later “to live with” our poor health conditions. This is perverse and goes against our homeostatic (self-balancing) nature. What’s more, despite lackluster results, too many people keep following the practices of a healthcare system that simply has not delivered on its promises.

Are we doing this because we don’t realize it’s not working?

What if I told you there was in place at this very moment a healthcare model to lose weight, be emotionally strong and illness free? Would you be interested in it? One would think so. But if I then explained that this same model allows 16.2 million adults to suffer from chronic asthma; that 16 percent of the followers have high cholesterol; that 25.1 million live with heart disease and 32 percent suffer hypertension; that one in every six followers of this program develop arthritis; and that a whopping 67 percent of the entire population on this program are clinically obese… would you still be interested?

I would think the fast answer is, “No.” Yet even with freedom of choice and an information superhighway available at our fingertips 24/7, we are still participating in this failed model of wellness called Western allopathic medicine. Are we insane?

Not sure that your ill health is not only not getting better with mainstream medicine but is actually getting worse? Then consider the sickening statistics.

Way back in 1996 only 77 million Americans were suffering in chronic pain. Today, that number is more than 150 million. That’s a 100 percent increase in a symptom in just over a dozen years of medical progress. Now that’s what I call Super Sizing!

Here are some of the current medical statistics from the United States, a nation that spends more resources per capita on healthcare than any other in the world.

• Heart disease is the leading cause of death among Americans, killing nearly 27 percent of the population.
• Twenty-three and a half million Americans over age 20 develop Type 2 Diabetes.
• More than 26 million Americans between the ages of 20 and 64 experience frequent back pain.
• More than 25 million Americans suffer from migraine headaches. And nine out of 10 Americans have other kinds of headaches each year.
• Thirty-three percent of adult Americans lose more than 20 hours of sleep each month due to pain.
• Each day 10 percent of adult Americans suffer from acid reflux.
• Financially, pain accounts for 25 percent of all sick days taken by full-time workers, costing the economy $50 billion in lost work days and $3 billion in lost wages.

Each and every one of the above-mentioned “conditions” is rampant among adults, despite medical “progress.” Why? Because the medical system responsible for that progress is based on a flawed model of health.

Simply put, mainstream medicine fails to eradicate people’s everyday pains, illnesses and diseases. It fails because it is passive and reactionary and thus is unable to prevent you from experiencing chronic health conditions like heart disease, diabetes, hypertension, obesity, stress, anxiety, depression, headache, back pain, tendonitis, colitis, metabolic syndrome, irritable bowel syndrome, Raynaud’s syndrome, Alzheimer’s disease and hundreds of others.

And this model will always fall short because it uses “disease” as its basis of finding health. That is, you see your primary care physician when you are ill, the doctor diagnosis your illness, labels the disease, then prescribes a protocol for treating that disease. Your personal health issues are “managed” by prescription medication, various therapy and surgery. Such a model can never hope to cure your daily non-terminal health problems, yet these are the important issues you face and that steadily undermine your quality of life.

So, who am I and why should you believe in what I say?

I am Dr. Mark Wiley and I know how you feel. I suffered from severe chronic headaches and musculoskeletal pain my entire life. Like you, as I went from doctor to doctor, desperately hoping for relief, no one could help me. Every day was a soul-destroying battle with neck and shoulder pain, mid-back pain, hip pain and head pain. Pain, pain, pain.

Unlike some chronic pain sufferers, I was fortunate enough to have support. My parents are both healthcare professionals. Unfortunately, even with their love, direction and referral to experts in various specialty fields, the suffering was constant, unbearable and unrelenting. I was forever putting myself in front of medical doctors, osteopaths, naturopaths, chiropractors, physical therapists, psychologists, allergists, body workers, hypnotists and dieticians. No treatment or surgery had lasting results.

I became proactive in college. In addition to studying medical anthropology, I was in close contact with dozens of mind/body health practitioners around the country. I became a research assistant at Harvard Medical School, looking into how to combine various mind/body methods for pain relief and even using martial art drills as vehicles to create altered states of consciousness. Yet despite all this, the net results were underwhelming. I was finally forced to face the fact that conventional Western medicine and many of the so-called “complementary medicines” were unable to heal me. So I became the Marco Polo of pain.

I began traveling, tracking down rumors of cures for pain and suffering to be found in far away places with strange-sounding names. Reiki and qigong in Japan, tui na in Taiwan, acupuncture and traditional herbs in Singapore, faith healing and bone-setting in the Philippines, spiritualists and medicine men in Malaysia. Been there, done that, designed the tee shirt. Yes, as with Western doctoring there was some short-term relief, but the pain always returned. Always. Then one day, I had had enough and decided to make a final desperate change in my life’s direction.

What did I do?

I became a doctor of Oriental and alternative medicine to cure myself. And over the past 10 years of treating patients and lecturing worldwide, I have developed a proactive self-directed, self-cure model of optimal health and pain-free living. And I will share it with you here every Tuesday.

I know the information will change your life, as it did mine. And please, if you have a specific health concern you would like me to address, let me know and I will do so as soon as possible. Until next week…

Yours in self-directed wellness,

Dr. Mark Wiley

That’s when the first overt attempt at establishing the framework of a One World Government will occur.

The U.N. Climate Change Conference is currently drafting a treaty that, if signed by President Barack Obama and ratified by the U.S. senate, would place the U.S. under an unelected, undemocratic world body that could impose taxes and place limits on industry, transportation, mining and energy production in order to limit carbon emissions.

Global warming zealots from around the world are scheduled to gather in Copenhagen, Denmark to try and suck billions of dollars from the U.S. economy and the economies of other industrialized nations and spread that money around to developing countries, all in the name of saving the planet.

As The Washington Times editorialized on Oct. 27:

“The treaty’s text is not yet finalized but its principles are aimed at regulating all economic activity in the name of climate security, with a side effect that billions of dollars would be transferred from productive countries to the unproductive.
“The control lever is the regulation of carbon emissions, which some purport are causing global warming. The treaty would establish a carbon market Regulatory Agency and “global carbon budget for each country.
“In effect, this would allow the treaty’s governing bodies to limit manufacturing, transportation, travel, agriculture, mining, energy production and anything else that emits carbon—like breathing.”

One of the few people sounding the alarm on this sinister conference is climate expert and foe of global warming alarmist Al Gore, Lord Christopher Monckton, former science advisor to British Prime Minister Margaret Thatcher.

“I read that treaty,” Monckton told the Minnesota Free Market Institute as posted on wattsupwiththat.com, “And what it says is this, that a world government is going to be created. The word ‘government’ actually appears as the first of three purposes of the new entity. The second purpose is the transfer of wealth from the other countries of the West to third world countries, in satisfaction of what is called, coyly, ‘climate debt,’ because we’ve been burning CO2 and they haven’t. We’ve been screwing up the climate and they haven’t. And the third purpose of this new entity, this government, is enforcement.”

The most recently-released copy of the treaty can be found here. Section 38 mentions government and outlines how it will be framed and financed.

The treaty is still a work in progress even though the U.N. Framework Convention on Climate Change had planned to have it finalized before the opening of the conference.

Obama first said he wouldn’t attend the conference unless the treaty is finalized. But he began backtracking on that statement last week, saying if his presence could push the deal through he would attend.

Hoping to spur a deal, California Senator Barbara Boxer in early November decided to pass a climate change bill out of committee without Republican support.

Without a clear indication from legislation of how much the U.S. is willing to contribute, the treaty probably won’t be finalized in time. Some other industrialized nations are also balking at the cost and regulations in the treaty, prompting U.N. climate Chief Yvo de Boer to say he didn’t think a legally binding agreement could be passed during the upcoming conference, but he thought one could be reached within a year.

Notice his use of the term, “legally binding.” That’s what they’re after, because once the treaty is signed by the president and ratified by the senate, any hope of America extricating itself from the agreement is gone.

“You can’t resign from the treaty unless you get agreement from all the other state parties,” Monckton said. “And because you’ll be the biggest paying country, they’re not going to let you out of it.”

And don’t think Obama won’t sign an agreement if it can be finalized. He’s signified he’s all in on the global warming boondoggle. And the Democrats only need to persuade six Republicans to join them to ratify the treaty.

Arizona Senator John McCain, South Carolina Senator Lindsey Graham (who began working Nov. 5 to help draft compromise Cap and Trade legislation) and Maine Senators Olympia Snowe and Susan Collins are likely defectors.

Signing such a treaty and ratifying it into law would be an unconstitutional ceding of U.S. sovereignty to another entity. But what’s one more unconstitutional act in Washington?

Back in 1975 I was a senior officer with the world’s oldest and largest dealer in precious metals and foreign currencies, Deak-Perera. I learned this lesson firsthand and it forever taught me about the importance of the “barbaric relic”… gold!

Deak-Perera was one of the few financial institutions in the United States with a combined expertise in precious metals, foreign currencies and international banking. As a result of this knowledge the company was invited by the State Department in April 1975 to assist the South Vietnamese refugees that were pouring into the U.S. as Saigon fell. The company became the exclusive “moneychanger” for all five of the Vietnamese refugee camps.

You may recall that, as of Jan. 1, 1975, Americans could once again legally own gold bullion. It had been illegal to own gold since 1933, when President Roosevelt took the U.S. off the gold standard and ordered all privately held gold coins and bullion be surrendered to the government.

Unaccustomed as we were to handling displaced persons, it was nonetheless clear that even the most prominent of these refugees would be arriving at the camps with little more than the clothes on their backs and whatever valuables they could carry. And who knew just how valuable some of their belongings would be?

Only one thing was certain: They wouldn’t be drawing checks on their local banks. All banks in Vietnam had been taken over by the communists, along with the rest of the economy. At the time, the cruel joke was Vietnam was a true “cash-and-carry economy.” If you had the cash, you got to carry off anything you wanted.

A Day that Changed My Life

May 1975 found me at Eglin Air Force Base, Fla., one of the five refugee camps. I will never forget my experience with two families in particular. The experience is burned into my mind forever.

A middle-aged man, trim and well-spoken, was wearing what had once been an expensively tailored suit. He obviously cared deeply for his bedraggled family. He had been a businessman in Vietnam. In fact, I was later to learn, he had been a very successful banker. But now all his family’s wealth was in the small dingy canvas bag that he was hanging onto for dear life.

Even through all the adversity he and his family had recently experienced, there was still a glimmer of hope in his eyes. Despite losing his job, his home and his country, he still wore a relieved expression whenever he gazed upon that canvas bag. It was his key to a new life in a new country. It was, quite literally, a golden anchor.

Gently, carefully, he poured the contents of the bag onto the table in front of me. There, gleaming in the sun, was an enormous collection of golden taels. For those of you who are not familiar with taels, they are a form of gold bullion indigenous to Southeast Asia. Each tael was 1.2 ounces (37.5 grams) of .9999 pure gold. They looked like tiny wafers—thin sheets of gold, delicately wrapped in paper.

It was Deak-Perera’s job to buy the gold taels from the refugees, and, with the proceeds, issue traveler’s checks.

A Lifetime of Savings, Now Worthless

Further back in line there was another refugee who was less fortunate than the banker carrying the golden taels. Much like the banker, he was a successful businessman before he and his family were uprooted by war.

He approached my table with two suitcases in hand. Like his countryman with the taels, he had worked very hard, saved extremely well and carried all his worldly wealth in those satchels.

But there was one major difference. His wealth was in the form of piasters, the currency of the Republic of Vietnam. These were paper promises of a government that no longer existed. I had to tell this man his piasters were worthless. They would not buy anything—not even a Coke or a pack of cigarettes—in his new country.

Can you imagine toiling and saving for a lifetime for two suitcases filled with worthless currency?

Sad to say, other formerly valuable pieces of paper were now worthless as well. One was the Military Payment Certificates (MPC), issued by the U.S. military. Each one carried the likeness of a famous Hollywood movie star. Now they would not buy admission to a show.

Other items, even valuable diamonds, jade and loose gems, were hard to exchange on the spot for a fair price. Only gold had an immediate market at a fair price.

Before that day I always knew that precious metals were an important asset. But, after looking into the eyes of these two men and their families, I knew firsthand the value of gold and other precious metals. Gold holds its value when nothing else will.

Does gold in 2010 offer the same peace of mind and protection to Americans that it has through 5,000 years of history? Absolutely!

As an American, there are many threats to your hard-earned wealth. The most insidious is not military in nature. It is the weakening of the U.S. dollar.

In the past year these mounting costs exceeded our government’s revenue by more than $1.4 trillion. Meanwhile, the Federal Reserve loaned or guaranteed another $2 trillion. How will this debt ever be repaid? The only politically acceptable solution is to print more money. But creating more dollars means, inevitably, that each one is worth less. The dollar is being devalued right in front of our eyes.

Get Ready for Fireworks in the Gold Market

My friend Doug Casey likes to say that the price of gold is not only going to the moon, it’s going to several planets beyond.

When this happens… when gold prices double from where they are now and continue rising… when the dollar falls into the abyss… which would you rather own? Which do you think will better protect your life’s work?

Would you rather be holding two suitcases full of worthless U.S. paper? Or a canvas sack full of gold?

I’m going to choose the latter. I hope you will, too.

If you’d like to know about the safest, most secure way I’ve found to own gold, let me tell you about the Perth Mint Certificate program.

It’s one I helped develop 12 years ago, and it comes with the most rock-solid guarantee you’ll find anywhere. In case you’re not familiar with it, the Perth Mint is wholly owned by the Government of Western Australia. It has been storing and dealing in precious metals for more than a century.

The Perth Mint is the only depository operating today that can offer you a comprehensive storage and trading program, with the unconditional written guarantee of one of Australia’s wealthiest states. In addition, all precious metals stored at the Perth Mint, including your metals lodged under this program, are insured (at the Perth Mint’s cost) by Lloyds of London.

When we designed this storage program, we wanted to make sure it was SAFE. That is, that it offered Security, Affordability, Flexibility and Exclusivity. The Perth Mint Certificate Program has our highest endorsement on all counts.

Purchasing gold or other precious metals through the Perth Mint Certificate Program requires an initial investment of $10,000 or more. Sale amounts or additional purchases must be for $5,000 or more. There is no additional cost for unallocated storage; the one-time administrative fee is a very reasonable $50 per certificate.

When you are ready to dispose of some or all of your holdings, the Perth Mint will arrange to purchase them back from you at the then-current market price. Or you can take delivery of your holdings at the Mint or via insured delivery to most any location in the world.

To learn more about how the Perth Mint Certificate Program can help you find a safe haven for some of your assets in an increasingly troubled world, please contact my company, Asset Strategies International. You may email us at info@assetstrategies.com, or call us at 1-800-831-0007 or 301-881-8600.

Please let us know how we can help you achieve your financial goals.

Live Strong,

Michael Checkan
President
Asset Strategies International

After devastating losses that pushed the Dow Jones Industrial Average to 6,440 in early 2009, the Dow broke above 10,000 last month for the first time in 53 weeks. All thanks to President Obama and his bagmen at the Federal Reserve.

You see, President Obama and Federal Reserve Chairman Ben Bernanke have already injected more than $1 trillion in new money.

Part of this has been in the form of bank bailouts. More has been given to Detroit automakers. And finally, Washington has inserted a whopping $850 billion directly into the U.S. banking system. It is this final act that will wreak the greatest havoc on the U.S. stock and bond markets.

When the credit crisis hit last year the Fed began “running the printing presses.” We are talking about the creation of hundreds of billions of dollars, so presses aren’t really running. Instead, the Fed has created all this money with the touch of a key-stroke. Soon this mountain of money will spill over into the economy and the markets.

The graph above shows the Fed’s unprecedented creation of U.S. bank reserves.

In his Nov. 2, column, Robert Murphy of PrisonPlanet.com explained: “The United States has a ‘fractional reserve’ banking system, meaning that if you added up all of the checking account balances for the customers of a given bank, the total amount of deposits would far exceed the amount of cash reserves in the vaults of the bank.”

As a result, said Murphy, all this fresh Fed money will soon be lent out at a multiple. A conservative estimate is five times the amount injected. That means that the $850 billion in new bank reserves will be transformed into more than $4 trillion in new money. That would take M1 money supply from $1.7 trillion to $6 trillion in just the next few years!

To read all of Murphy’s story, click here.

Even before the avalanche of new money, M1 has risen 50 percent since January 2001 (see graph M1 Money Supply).

With all this fresh cash on the bank’s books, M1 could easily double to more than $3 trillion in the next two years. That would make M1 money supply almost 10 times higher than it was when Ronald Reagan took office.

We haven’t seen this kind of excess monetary growth since the stagflationary 1970s. It was bad for stocks and bonds then and it will be just as bad for them today.

A Short History of Stagflation
Between 1970 and 1981, M2 money supply tripled. A record amount of liquidity was being injected into the economy by the Fed. But all this money wasn’t helping an economy that was just limping along.

From the beginning of 1971 to the end of 1979 the gross domestic product (GDP) rose by just one-third—from $3.9 trillion to $5.2 trillion (in constant dollars).

As the amount of money in the economy vastly exceeded the goods and services being produced, inflation was inevitable.

The consumer price index for the 1970s rose by a staggering 6.5 percent each year. By 1980 a 1970-dollar that had been stuffed in the mattress would buy you just 52 cents worth of goods and services. It marked the end of dollar stability and the post-war economic boom that fueled a bull market in stocks.

In January 1950, the Dow Jones Industrial Average was under 200. In January 1966, it breached 1,000 for the first time. Over the next few years, the Dow moved sideways, twice testing, but never again breaking above the magic 1,000 point level.

Stocks fell into a funk. Money supplied by the Fed was not producing real gains and the stock market reflected this.

In April 1980, the Dow was trading at 759. That might not seem too bad compared to its 1966 apex, but factor in inflation and the 1980 Dow, measured in 1966 terms, was really trading at $329. In real terms the Dow had lost two-thirds of its value in 14 years.

Bond investors also did poorly. In the late 1970s prices on 30-year Treasury bonds fell more than 25 percent as the yields-to-maturity on the bellwether 30-year Treasury bond climbed from a rate of 7.75 percent in 1977 to 14.7 percent in 1981.

The end result was a massive renunciation of paper as investors began switching out of dollars and buying real assets.

Yet while many Americans lost their savings in Big Board stocks and bonds, some investors made incredible gains in precious metals.

Pitfalls and Profits
I first began investing in gold when I was just a teenager and it was selling for $35 per ounce. I kept that gold until it topped out at $840 and corrected back to the $650 per ounce range. So even though I didn’t get out at the top, I did get an 18-fold profit.

If that sounds like ancient history and something that can’t be repeated, don’t be so sure. Nine years ago last month I started writing Outstanding Investments. I told subscribers then to buy gold, silver and platinum as well as precious metal equities. At the time gold was selling for less than $280 per ounce.

Today bullion is trading back over $1,050 per ounce and I have been bullish on the precious metals throughout the decade. I still believe that bullion prices could very well double in the next two to three years. Given the excess of Obamabucks, I can see gold trading for more than $2,000 per ounce by the end of 2012.

And don’t be surprised to see silver rising to $80 per ounce (versus $17 today) and platinum to more than $3,000 per ounce.

In fact I am so convinced of this situation that I have just completed a 100-plus page Special Report for Personal Liberty Digest. It is titled: Profit with Precious Metals During the Coming Dollar Meltdown. In it I delve into the history of gold and money, how the Obama administration is killing the dollar and how you can best profit from the growing crisis by owning physical precious metals as well as a select group of gold, silver and platinum stocks.

To learn details about my new Special Report including how to order it click here.

Action to Take
It is imperative that you get out of Big Board stocks and all long-term debt instruments including Treasury notes and bonds. Look for a major correction to come in the Dow, the S&P and the NASDAQ in early 2010. I wouldn’t be surprised to see the markets hit new lows. At the same time, bonds are just as susceptible to huge losses as I expect interest rates to go up. I urge you put your money into cash in the form of three-month T-bills.

A T-bill is simply a short-term debt obligation backed by the full faith and credit of the U.S. government. The key to a bill is that it’s very short-term (and pays an incredibly small interest return). It has a maturity of less than one year and is sold in denominations of $1,000. You can buy maturities of one month, three months or six months. I like the three-months T-bills because you are not locked in very long but you don’t have to constantly roll them over.

Three Ways to Buy T-Bills

1. Go to your local bank and ask to buy Treasury bills. This may be the easiest option because you already make periodic trips to your bank.
2. Call your investment broker. Tell him or her that you want to purchase three-month T-bills and roll them overuntil further instructions.
3. Buy Treasury bills directly from Uncle Sam. The Treasury Direct Website will guide you through this process and give you lots of information as well. You can access that site at: www.treasurydirect.gov.

I also urge you to buy some physical gold. If you are just starting out, I suggest you buy 1-ounce U.S. American Eagle coins as well as 1-ounce Canadian Maple Leaf and South African Krugerrand coins.

—John Myers
Myers’ Energy and Gold Report

PS—Next week I will be writing the first of a two-part series on energy. If you think wind power is the answer to tomorrow’s problems you will want to read Part I. It will include why fanciful presumptions by the Obama administration are, at best, ignorance, and at worst, the purposeful deceit of the American public. In Part II, I will tell you the core truth about America’s dwindling petroleum reserves and I will give you a new energy stock pick that should be in your portfolio.

There are many people today who know little or nothing about the U.S. Constitution. There are many who know little or nothing of U.S. history, let alone world history. There are many who know little or nothing about central banks, and how they are used to steal our wealth.

There are many who buy into the glossed-over news of the day. There are many who take at face value the words of the elected class, the pundits and main stream media talking heads and printed headlines.

There are many who buy into the party line of their preferred political party. There are many who blindly believe the various political parties have a platform on which they base their actions and agendas and are committed to following through on those policies. There are many who believe the president, senator or representative they elected has in their hearts the best interests of the people they supposedly serve.

There are many who are ignorant.

It’s not all their fault—particularly the younger generations. Their education system has been corrupted by 1960s radicalism—the same radicalism that has infected our government.

Public education has become a sad joke. Its downward slide accelerated with the passage of “No Child Left Behind.” None are left behind because none are allowed to get ahead. The intelligent children are left languishing and fending for themselves while extra resources are devoted to those unable to keep up.

In speaking with a seventh grader recently I asked what he had been studying in his U.S. history class. Well, we spent about 20 minutes on World War II, then several class periods on how the U.S. Olympic Hockey Team beat the Russians in the 1980 Olympics, was the reply.

In class they watched Miracle, the 2004 movie about the team and its victory.

How backward is that? Twenty minutes spent learning about a six-year war spawned from the feckless, irresponsible and dastardly policies of the elected and ruling classes that resulted in the deaths of somewhere between 62 million and 79 million people worldwide. Several class periods on a three-hour hockey game that gave Americans a temporarily thrilling victory over a Cold War foe at the tail end of four moribund years of Jimmy Carterism.

Even the seventh grader was perplexed by his teacher’s decision.

Also glossed over in his class was more than 230 years of American history.

Is it any wonder there is so much ignorance?

Lack of understanding of the founding of our great country has led us to where we are now. Lack of understanding of the origins of the Federal Reserve—and other government attempts to establish a central bank—has led us to where we are now. Lack of understanding of the causes of Great Depression and the misguided (deliberately or unintentionally) attempts to head it off, and how government policies affected the country’s financial health for years has led us to where we are now. Lack of understanding of how a president’s policies can affect a country has led us to where we are now.

Where are we now? In an economic pit of our own making—suffering the aftereffects of a Fed-created bubble that spurred individuals and businesses to borrow and spend like there was no tomorrow. Now there may not be one.

Where are we now? Exacerbating the problem by dumping money out of helicopters in an attempt to stop it—at least that’s what the elected class tells us they’re trying to do. It’s a policy enacted by a supposed conservative, George W. Bush, and perpetuated on a grander scale by Barack Obama.

Where are we now? Watching as the elected class finds more ways to spend more money and steal the wealth of the individuals through massive tax hikes under the guise of healthcare reform.

Where are we now? Waiting for the other shoe to drop in the form of Cap and Trade, which amounts to more taxes and more spending.

Where are we now? Enduring the Obama presidency, which equals Jimmy Carter to the second power.

Sadly, many are ready to go full steam ahead with such policies.

Never mind that the elected class isn’t even considering whether such things are Constitutional. Forcing Americans to buy a product—health insurance—is okay with the elected class.

Maryland Rep. Steny Hoyer said it’s permissible under the general welfare clause of the Constitution. Presidential spokesman Robert Gibbs told the press the president wasn’t even considering whether it was constitutional and no one had brought it up.

Don’t think the elected class is ignorant. They’re not. They know exactly what they’re doing—stealing your wealth and your liberty.

Never mind whether it’s Constitutional, says the elected class. We know what’s best for you.

Never mind whether it’s Constitutional, it’s free, say the ignorant.

Our healthcare system is in terrible shape, we need to have competition, says the elected class. Government can do it better than the free market can.

Yeah. With the compassion of the Department of Motor Vehicles and the efficiency of the Post Office.

Where are we now… really? Many are sitting in front of the television watching Simon Cowell or anxiously awaiting the result of who is getting kicked off the island next or watching some stars in a dance contest.

Some are waking up. The Tea Parties demonstrate that.

But too many are ignorant. And apparently they’re ready to accept anything as long as it’s “free.”

After all: ignorance is bliss and free is good.

Thank you for reminding us that it’s not just Barack Obama’s policies that are often wrong; it is the people who surround him that are a large part of the problem.

Thank you for writing the bestselling book, Culture of Corruption, to give us the documented proof, as you put it, of the “tax cheats, crooks and cronies” with whom he has chosen to associate.

And thank you for granting an exclusive interview to Personal Liberty Digest, so we can remind our 500,000 subscribers of just how dangerous many of those people and programs are.

One of the first things Michelle and I discussed when we spoke was the mainstream media’s fawning favoritism toward Barack Obama and his administration and their relentless bias against anyone and anything to the right of Nancy Pelosi.

As just one example, Michelle described how the New York Times sold millions of dollars worth of Obama memorabilia during and after the campaign. I asked her, “Isn’t it a little unusual for a major media to profit so directly from a candidate?”

“You would think so,” was her sardonic reply. “But if you’ll take a look at my blog ( www.michellemalkin.com ), you’ll be able to see some of the actual merchandise, which really, literally deifies Barack Obama. There are glorious, glowing photos of the president with halos behind him. All sorts of political swag promoting his campaign and then the inauguration.”

And then she made this very telling point: “Imagine if a newspaper out there had been doing this during the Bush years—selling merchandise that glorified George W. and his candidacy. Why, the New York Times would have been all over it.”

By the way, one of the things the Times has not been all over is Michelle Malkin’s book. When we spoke, Culture of Corruption had been riding atop the NYT’s own bestseller list for almost two months. But the paper itself has never published a review of it. Imagine that. The newspaper’s own survey ranked her book No. 1 in sales across the country yet refused to even review it!

We talked for a while about the incredible bias and intellectual dishonesty of the left. Then I asked her if she detected a growing tone of desperation in their attacks on conservatives.

“I certainly do,” she said. “The left simply cannot help itself. They degenerate into ad hominem attacks and very ugly language, bigotry and intolerance. Even with their control of the White House and both branches of Congress they can’t contain themselves.

“We’ve seen this in their attacks and their rhetoric against the townhall protestors and the TEA Party movement. Their knee-jerk resort to things like the race card. It belies the promise that under Obama we were heading into a post-racial era in this country. We certainly are not. The first thing they do is accuse us of racism, whether it’s our criticism of healthcare legislation or Joe Wilson’s calling out of the president during his speech to a joint session of Congress. There is more than a smidge of desperation in their tactics.”

There are nine chapters in Culture of Corruption and every one of them is loaded with facts and anecdotes that need to be more widely known. But if there is one chapter that, by itself, is worth the price of the book and then some, it’s the second one, which she calls “First Crony Michelle Obama.”

As author Michelle puts it, “Star-struck liberal journalists swoon over Michelle O.’s bare arms, but it’s her bare-knuckles they should be watching.”

Here’s how the bestselling author put it during our discussion: “The mainstream media pays a lot of attention to Michelle Obama’s toned arms and what shoes she’s wearing. I pay a lot more attention to the political muscle she has flexed over the years. There’s been a lot of white-washing of her own political history. But what she does is marry a lot of the hard-left ideology—the class warfare, the politics of racial resentment—with the Chicago way of hardball tactics, cracking heads and cracking knuckles.”

Her book is loaded with carefully documented exposés of activities by both Obamas that will shock even the most cynical observer. If you doubt that, just turn to page 52 of Culture of Corruption and read the section that begins “Mrs. O. Screws the Poor.” I have to confess, even I didn’t realize what a sordid history the First Lady has.

Bring any of this up publicly, of course, and you can count on Obama’s defenders to smear you mercilessly. As Michelle Malkin put it when we talked, “These are the folks who called their opponents ‘political terrorists.’ That phrase was used not just by Democrat leaders, but of course by all their satellite organizations as well.”

One of the most powerful and dangerous of those satellites is the Service Employees International Union (SEIU)—a group that poured $60 million to $80 million into Democrat coffers to get Barack Obama elected. Their investment is paying off handsomely, as their legislative agenda is on the front burner of the White House. In fact, we just learned that SEIU president Andy Stern has been the most frequent visitor to the White House thus far this year.

“The SEIU not only uses these bully tactics,” Michelle told me, “they specialize in them. It wasn’t until some of their henchmen showed up at various town hall meetings that we saw actual violence.”

She then continued: “The SEIU, which calls itself the purple shirts of the purple army, has a long and proud history of thug tactics. Their president is quoted in my book about his organizing philosophy, where he says they prefer to use the power of persuasion. But if that doesn’t work, they will use the persuasion of power. That’s not just an idle threat, that’s a guarantee.

“It’s not just healthcare they want. Their holy grail is the card-check bill. If they get it, it will radically transform the political landscape. They now have 1.8 million members and they see card check as the way to vastly inflate their membership rolls and subsequently, of course, their campaign coffers.”

Bad as it has been, Michelle expects the use of terror and intimidation to get worse.

“Team Obama is notorious for that,” she explained, “going back to the campaign days of trying to stifle dissent through shear intimidation. Now they are using the power of government to try to silence their opponents as well.”

As we came near the end of our interview, I asked Michelle about the dedication of her book. “The book is dedicated to the whistleblowers,” she explained. “Many of them worked in the trenches for Barack Obama’s satellite organizations. They saw the raft of broken promises that he’s left over the past several months on transparency, ethics and accountability; core issues that transcend partisanship and ideology.”

And then she concluded, “If Barack Obama can’t deliver on these, what does it tell you about the era of hope and change? It tells you that it was a complete farce. That is what my book documents, extensively and comprehensively.”

As I said, there’s lots of scary stuff between the covers of Culture of Corruption. Michelle Malkin has done us all a huge service in compiling the sorry, shoddy record of the Obamas and those they have invited into their inner circle.

Since we spoke, her book has slipped a bit on the bestseller lists. If you don’t already own a copy, do yourself and your country a favor and order one. In fact, order several and loan the extras to some less-alarmed friends. Believe me, if they’ll read it, Culture of Corruption will act like a very loud alarm bell going off alongside their head.

Go wake them up! And until next time, keep some powder dry.

—Chip Wood

So why does a weaker dollar translate to strength in gold and equities? Because, on balance, a weaker dollar is a lubricant for a U.S. economy saddled with debt and low growth. It eats away at debts; it helps boost trade, and generally makes for a more ebullient economic environment.

But I believe that one of the primary reasons behind this relationship has escaped most analysts. Namely, the fact that economic growth will help burst open the dam holding back enormous U.S. bank reserves.

Investors are watching closely for any signs of an economic recovery because such a recovery could unlock the U.S. credit market… and unleash a flood of liquidity that—so far—remains safely dammed.

U.S. bank excess reserves have skyrocketed to truly unprecedented levels. (Essentially, excess bank reserves are reserves on deposit with the Fed over and above what the bank needs to meet its reserve requirements.)

Now, these reserves don’t impact the money supply—as long as they aren’t loaned out by the banks and thereby put into commerce. And these funds by and large have not yet been put into commerce, and therefore have had no effect on the supply of money or the prices of goods and services.

That may not last for long, however, as economic growth in the U.S. would, eventually, lead banks that are now risk-averse to begin lending. This, in turn, could quickly burst the dam holding back the enormous excess reserves of the U.S. banking system.

Some argue that the Fed’s newly gained power to pay interest on banks’ reserves will forestall any unwanted increase in lending. In practice, however, this will have little effect, unless the Fed is willing to pay interest at rates far above the Fed funds target rate.

As Frank Shostak, chief economist of M.F. Global, notes, “We… suggest that paying interest on bank reserves is not going to stop banks from expanding credit… After all, there are always opportunities to lend money at much higher interest rates than the federal-funds rate.

“We can thus conclude that the massive increase in banks’ excess reserves is a potential threat for an explosive credit creation some time in the future. Contrary to popular thinking, we suggest that the new setup, which gives the Fed total freedom to pump money, can only destabilize the financial system and the economy.”

Of course, this isn’t the last word. Only time will tell how we exit the precarious monetary situation that the crisis, and the Fed’s response to it, have created.

But those who argue that the Fed will be able to mop up the massive liquidity they’ve poured onto the economy ignore the fact that this institution, and governments in general, have never been able to escape from a monetary expansion without significant inflationary after-effects.

And because the Fed is now treading new ground in many ways, they cannot rely on past experiences to clearly guide them.

If we pull back from the economic intricacies and simply look at the big picture, does it seem remotely feasible that the U.S. and the world can employ such monetary and debt expansion without considerable inflationary consequences?

While I have many reasons to be doubtful that we’ll see 70s-era price inflation as measured by the consumer price index (CPI), I am absolutely confident that we will see price inflation in commodities and other assets.

And that will be good news for investors in gold and resource stocks.

Fed Admits Hiding Gold Swap Arrangements
Our friends at the Gold Anti-Trust Action Committee (GATA) have scored another huge coup. In response to a freedom-of-information (FOI) request, the Fed has essentially admitted that it has gold swap agreements with foreign banks that it doesn’t want publically acknowledged.

GATA had requested from the Fed any information or correspondence on gold swaps, which are transactions in which monetary gold is temporarily exchanged between central banks or between central banks and bullion banks.

But GATA’s request was denied, and the organization’s appeal was answered by a Sept. 17 letter from Federal Reserve Board member Kevin M. Warsh, who was formerly a member of the President’s Working Group on Financial Markets.

Warsh wrote that, “In connection with your appeal, I have confirmed that the information withheld under Exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of Exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you.”

As GATA secretary and cofounder Chris Powell notes, “The disclosure contradicts denials provided by the Fed to GATA in 2001 and suggests that the Fed is indeed very much involved in the surreptitious international central bank manipulation of the gold price particularly and the currency markets generally.”

GATA has the right to further appeal through the legal system, and plans to do exactly that. A federal lawsuit will be quite expensive, but well worth it for gold investors who need market transparency to unlock gold’s true value in today’s uncertain world.

As you may know, I’ve never been a big believer in day-to-day manipulation of the gold market by the “powers that be.” But I do believe that governments have and are acting over the long term to keep gold in chains. They’ve done it before, both covertly and openly. And they currently manipulate every other investment market. So why wouldn’t they also do it in gold, the very measuring gauge of their performance?

So I urge all serious gold and resource stock investors to help GATA out. It’s not just their cause—it’s a cause for all of us. GATA is recognized by the U.S. Internal Revenue Service (IRS) as a nonprofit educational and civil rights organization and contributions to it are federally tax-exempt in the United States.

Just as important, you can help by bringing this issue to the attention of news organizations and other investors. With the U.S. dollar at a crucial turning point, and with the International Monetary Fund (IMF) and other official organs needing to keep the gold price suppressed, it has never been more important to make the gold market open, transparent and honest again. To learn more about GATA, this issue and how to donate, visit www.gata.org.

—Brien Lundin