A transcript of the January 1996 Ron Paul Survival Report. A scan of this excerpt of the newsletter is on scribd: “Ron Paul Survival Report January 1996”.
January 15, 1996, Volume XII, Number 1
Clinton’s War for Reelection
No sooner had the troops hit the ground in Bosnia than many former critics of the operation retracted their views: We must back the president. Politics stops at the borders. Clinton may have gotten us into this mess, but it’s our mess now. We must work together to clean it up.
Baloney. The time for bipartisan foreign policy is over. The Cold War is history. There is not one good reason for sending our troops into this hotbed of religious and ethnic feuding. Most of the troops themselves oppose it. The public opposes it. If we support our troops, we should bring them home.
This Bosnian mission will be expensive in tax dollars and perhaps in American lives. And, to start, there are 40,000 American lives at stake, not the 20,000 usually cited.
But should “we” maintain “our” leadership role in the world? What a bunch of poppycock. There are no American interests in this region. No American territorial security is threatened. The ethnic troubles in our country are bad enough. There is no reason to take on the troubles of the world. After all, the real threat to our security and our sovereignty is in Washington, D.C.
If we practiced the rules of a free society, and set a standard with the free market, sound money, and civil liberties, that examples could provide true leadership to a world now swiftly moving toward world government.
To make matters worse, Clinton’s “peace” agreement was made at the expense of the Bosnian Serbs, who have been emigrating as fast as possible, and with the bones of their family members in tow. Why are they taking the bones? To keep the graves from being desecrated by the muslims who are now ruling over Sarajevo and its suburbs.
That’s right. The U.S. government is imposing a plan to create a Muslim government in the heart of Europe that will be ruling over a Christian population, or what’s left of it after this peace agreement. How or why this happened is the subject of a great deal of revisionism right now.
My Ten Predictions for the New Year
(Although the principles of Austrian economics preclude an overemphasis on short-term projections.)
1. The Federal Reserve will lose control of the international value of the dollar.
2. The myth of the mutual fund (that it’s as secure as secured savings) will explode.
3. Congressional spending, taxes, and the deficit will be higher next year than this.
4. Interest rates will also be higher.
5. The elections will reveal unrivaled hatred of the federal government.
6. The Fed will bail out at least one large pension fund as the Pension Benefit Guaranty Corporation is stretched to the limit.
7. A recession will be confirmed by year’s end.
8. Price inflation, even by government measures, will accelerate.
9. The war in Bosnia, as well as the war in our streets, will get worse.
10. Gold will break through $400.
The 1991 Russian recall of the 50 and 100 ruble notes destroyed the life savings of many innocent citizens. In that recall, they had only three days to turn in their cash, and for tax purposes, were required to explain, in detail, its source.
Our Treasury Department continues to argue that the U.S. has never had a recall nor declared any paper currency not to be legal tender. But our government has really done worse. It failed to keep its promise to redeem our currency in gold and silver, and refused to pay gold for federal bonds issued as promises – acts equally immoral to declaring a currency to be no longer usable.
The Russian situation cannot be ignored. Robert Friedman, an investigative reporter for New York Magazine, claims that U.S. banks, with the full knowledge of our Federal Reserve, have sent $40 billion in new $100 bills to Russia since January of 1994 [this is actually a fascinating story, and is available on the New York magazine archive at Google Books: “The Money Plane” by Robert Friedman]. This amount is greater than all the rubles in circulation in Russia. Currently, $100 to $200 million in cash is flown to Moscow Monday through Friday to satisfy demands for U.S. currency.
Since the Russian Mafia controls the majority of Russian banks, and it is deeply involved in the drug trade, it makes one wonder as to the full motivation behind our government’s willingness to participate in this massive currency flow.
My analysis is that it’s a short-run benefit to our Treasury to export our cash since it helps to keep price inflation in check here at home. If all this cash circulated in the United States, it would put tremendous price pressure on our goods and services here at home.
Yet I would not put it past some of our officials to be in bed with the drug dealers and the Russian Mafia. Is there really that much difference between the Russian Mafia-controlled system and our highly secretive, illegal, and all-powerful Federal Reserve system?
The problem they are running into is that with the issuance of the new currency, the masses of Russian underground participants are getting skittish. This is the reason for the Treasury Department’s unbelievable effort to reassure the Russians, pleading that they not dump our dollars out of panic (which could lead to a world-wide repudiation of the dollar, or at least its devaluation vis a vis harder currencies like the mark).
The Fed and the Russian Mafia are powerful and rich, but they cannot control public confidence. It is controlled by the market place, and public confidence is cracking and threatens the establishment’s whole financial empire including the dollar system. If it comes undone, which it could rather rapidly, there would be an explosion in gold prices and massive inflation in dollar terms.
Issuing new currency has been an on-again off-again plan for more than 15 years. The concerns expressed by many Americans modified and slowed down the government’s plans, and this newsletter ironically played the crucial role in bringing about the delay.
Even now, our officials are quite worried and hesitant about the way the new money will be received, otherwise there wouldn’t be this lavish PR effort worldwide directed toward maintaining confidence in the U.S. currency. It’s conceivable, if not likely, that this concern could force even another delay.
Many ask me about the possibility of a 10 to 1 or 100 to 1 exchange on the new money. Under current conditions, that’s not to be expected. But if, by accident or design, the Russian-U.S. dollar controversy precipitates a run on the dollar and instant inflation occurs, all bets are off.
The U.S. government is anxious to break people’s attachment to the present design of the currency as a foreshadowing of more ominous plans later. If the U.S. does default on its bonds, or has to inflate to the skies to pay them, the power elite want the flexibility to undertake any measures, even extreme ones. Government officials want that too, and changing the currency now helps minimize the chances of a panic.
U.S. officials also want to do what they can to uproot the vast underground economy in legal goods and services. If currency switches are in the offing, it discourages people making long-term contracts in paper money and from keeping underground savings in this form.
Ultimately, the goal of central bankers and government is power and wealth at our expense. Honest money and economic growth benefiting the middle class is of little concern to them. That’s why reform in money, and the promotion of individual liberty, will only come from intellectual leaders who care more about the middle class than the privileged elite.
Ceour [sic] d’Alene Mines
Although we are big believers in silver’s long-term role as a monetary metal and its significant appreciation potential, Greg Orrell and I have rarely mentioned silver-mining stocks.
It is not that we have purposely neglected silver stocks; it has more to do with the fact that there is no longer a silver mining industry in North America as there once was.
While the 80s marked the rebirth of the gold-mining industry in North America as gold prices stabilized around $400 an ounce, the silver mining industry was wrecked by depressed prices and higher costs.
The Spokane Stock Exchange, which listed mostly silver-related issues, closed down in the late 80s for lack of interest. Venerable silver producer Sunshine Mining went basically bankrupt; it is only now recovering.