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A: The subject is the implications of the difference between the British gold standard, and the gold reserve standard used effectively during approximately 1945-1965. I am committed to the reintroduction of the latter, as an integral part of a new, emergency world monetary-financial system modelled in large degree on the successful features of the 1945-1965 period of post-war reconstruction in the Americas, western Europe,
and Japan.
In the immediate period ahead, there is a strong tendency for a rise in the price of gold on ordinary markets, despite the more or less concerted efforts of central bankers to resist this.
I would agree that the two distinct processes have a certain tendency to converge, especially so, since gold used as a feature of a gold-reserve standard has far greater leverage, under a well-ordered monetary-financial system, than gold as such. Gold as such generates no growth in the economy. Gold as a reserve standard of a credit system engages those productive powers of labor which do generate real net physical growth in assets. The successful reconstruction of western Europe, through the impetus of leaders such as Monnet, typifies the connection.
You interweave the return to emphasis on gold in monetary processes with another issue, the understandable, but usually misconstrued issues of U.S. hegemony over Europe. The use of gold as a weapon against U.S. overreach, misses a certain set of crucial points.
Since the British encouragement to the Emperor of Japan to launch the 1894-1905 series of wars against China, Korea, and Russia, and the overlapping, 1901 assassination of U.S. President McKinley, the U.S. currents associated with the faction of Presidents Theodore Roosevelt, Woodrow Wilson, and Calvin Coolidge, and Coolidge's accomplice Andrew Mellon, transformed the U.S.A. into a virtual adjunct of the British monarchy, through a set of interlinking arrangements among, initially, the U.K., Canada, and the U.S.A., the so-called "BAC" arrangement.
Franklin Roosevelt's 1932 election reversed the 1901-1932 trend in U.S. strategic outlook and policy, but, after his untimely death in 1945, Roosevelt's strategic and other policies began to be reversed, some immediately, with ultimately disastrous effects. With the 1989-1991 dissolution of the Soviet Union, the Anglo-American faction which had continued the tradition Teddy Roosevelt, Wilson, Coolidge, and Mellon, used the governments of Margaret Thatcher and Francois Mitterrand, to set into motion a plan for undermining the economies of continental Europe, with the medium-term perspective of creating a kind of post-nation-state system, an Anglo-American world empire parodying the ancient Roman Empire, Napoleon Bonaparte's fantasies concerning a European continental system, and, to speak with frankness, the Nazi Waffen-SS.
Since the Nixon's first term, there has been a growing conflict between the U.S.A. and continental Europe. The Carter administration was the worst on this account, until the present administration of George W. Bush. This conflict has been pivotted on radical changes in U.S. military policy, away from the tradition typified by MacArthur and Eisenhower, toward a model of policy and practice associated with Samuel P. Huntington's parody of the Waffen-SS, in his "The Soldier and the State." The unleashing of the Brzezinski-Huntington-Bernard Lewis "Clash of Civilizations" policy, in the wake of the events of recent Sept. 11th, has driven the tension between Europe and the present U.S. administration to an extreme. On that account, a deep and growing
resentment against the encroachments of an imperial U.S.A. were inevitable.
However, I propose that sound medicine treats the illness, rather than the pain as such. We ameliorate the pain, but must cure the illness. Look carefully at the current U.S. administration. What you should recognize there is a giant, but one with a feet made of economic clay, and a head to match. It is an administration which is potentially as dangerous as the Emperor Nero was, but also as foolish and imminently doomed as his reign was. The present world monetary-financial system is now in its terminal phase of collapse, nearing the point of, not a mere depression, but a breakdown-crisis. There is no influential government visible in any part of the world today, which does not exhibit a tragic lack of competence, or even willingness, to correct those errors which threaten to bring about its collapse.
The present monetary-financial system is imminently doomed. We must deal with it in that closing phase of its existence, but we need not fight battles with an imminently defeated adversary. The challenge is that of defining and establishing both the needed new world monetary-financial system, and of adopting a general program of international cooperation in measures of reconstruction to be accomplished during a coming span of approximately a quarter-century of what President de Gaulle adopted under the rubric of "indicative planning." We need a workable, durable system of long-range cooperation among respectively sovereign nation-states. This must emphasize cooperation in Eurasian development, but complemented by development in Africa and the Americas.
To maintain the supply of basic long-term credit at between 1-to-2% simple-interest-rates, which is required, we must have a stable system of relatively fixed exchange-rates, as buttressed by restoration of 1945-1965-style protectionist measures generally, in order to maintain high rates of non-inflationary growth in the world system generally. Thus, the gold-reserve-standard for fixed-exchange-rates, becomes the model
of reference for today's urgent needs.
- - Lyndon.
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