The fiscal and monetary crisis confronting America today is more than an economic problem, it is a threat to our liberties and the nation's sovereignty, constitutional lawyer Edwin Vieira said at a Constitution Day celebration in Portsmouth, N.H. on Sunday. Unless a sound currency is established, the coming economic collapse will result in America "falling victim to a domestic totalitarian police state with the loss of American sovereignty and independence and lead to some sort of regional or global system, i.e. a new world order," he said.
Citing Italy and Germany in the 1920s and 1930s as examples, Vieira warned of the hyperinflation that occurs when a government dramatically increases its printing of dollars to cover its mounting debts. No form of government has ever survived a national debt that equal to more than 41 percent of its annual budget, he said, adding that in the United States today, it is 44 percent. "Our country is set up to fail," he said, as jobs and technology are shipped overseas, artificial "bubbles" are created in the domestic economy and banks and large-scale investors turn to the federal government for relief.
If the European Union begins to disintegrate, what signs would portend its spiral into disunion? One would be a member nation utterly ignoring the financial rules intended to support the EU by providing false and misleading information about its economy — actions already undertaken by both Greece and Portugal. Another indication of impending EU disintegration would be a member state simply printing its own euros — after only technically meeting the requirement of notification — as did Ireland a few months ago.
Or the European Union might dissolve as European society itself is breaking down with the rise of both radical Islam and secular humanism. Many Muslim settlements in the continent have become “no go” zones for police and fire services, and the disdain by the elites in Europe for historic Christian values is now deeply entrenched in the culture.
Furthermore, representative government is no longer working in some of the EU nations.
Even as the dollar is crashing and inflation in the United States is rampant, Federal Reserve officials have announced plans to flow dollars into banks in the European Union. The European Central Bank, which is to receive the largest amount, will in turn will extend the money to other major banks in EU member states, which are finding it increasingly difficult to raise funds from investors deeply concerned by the massive regional government's unstable economic climate.
Meanwhile, the planned participation of central banks across the globe in the scheme is now prompting some to ponder how these efforts will impact the drive for gold, as well as the future of the European economy. The Washington Post reports:
The initiative, which entails temporarily swapping dollars for foreign currencies, also involves the central banks of Britain, Switzerland and Japan, underlining the extent of international concern about Europe’s deteriorating financial system. By tapping the Fed for dollars, the other central banks are taking advantage of long-standing arrangements, first put in place four years ago at the outset of the global financial crisis to prevent bank lending from freezing up.
To the list of mega-corporations bailed out by the United States government, we now must add — Europe. In an announcement that rocked financial markets worldwide, the European Central Bank announced today a concerted effort in combination with four other major central banks — the Bank of England, the Bank of Japan, the Bank of Switzerland, and yes, the United States Federal Reserve — to use dollars rather than euros in an attempt to paper over the European Union’s economic woes.
Starting in October, the Federal Reserve and other major central banks will begin auctioning allotments of dollars to the European Central Bank, which will then use the new money to shore up shaky European megabanks. The allotments, which will have three-month maturities and will be structured like typical repurchase operations (“repos”), will be issued against euro-denominated collateral and repaid, with interest, in dollars. That, at least, is the theory.
Currency swaps involving the Federal Reserve and other central banks are nothing new, and have been a focal concern of Fed opponents like Congressman Ron Paul, who has long suggested that much of the Fed’s financial chicanery has been carried out in the form of such currency deals with foreign central banks, in total secrecy.
On September 13, 2011, Ron Paul chaired a hearing entitled "Road Map to Sound Money."
One of the expert witnesses testifying before Ron Paul’s Domestic Monetary Policy and Technology Subcommittee on Tuesday was Dr. Lawrence H. White, professor of Economics at George Mason University. His testimony reinforced the case for Paul’s bill, HR 1098, the “Free Competition in Currency Act of 2011” by outlining its benefits in introducing freedom of choice into the realm of currencies.
White compared competition in currencies to competition in package delivery services among Federal Express, United Parcel Service, and the U.S. Postal Service. That competition has lowered costs, accelerated delivery, increased reliability, and in general allowed better overall services to be provided for their customers. It also weeds out weak competition and rewards the most successful. He went further to explain that financial consumers today rely on banks to provide other services such as checking accounts, credit cards, and travelers checks — why not choices in currency? He noted, “Although Federal Reserve Notes … should of course be protected from counterfeiting, there is no good case for them to enjoy monopoly privileges in the market for currency.”
On March 15, Rep. Ron Paul (R-Texas) introduced H.R. 1098, better known as the “Free Competition in Currency Act of 2011,” which would repeal the legal tender laws in the United States Code (Section 5103 of Title 31). In its elegant simplicity (the bill is only three pages), it would be the first step to restoring a sound currency by allowing American citizens to choose which currency among competing currencies works best for them.
In his "Texas Straight Talk" for July 11, Paul presented the case for competing currencies and promised that his committee, the House Domestic Monetary Policy and Technology Subcommittee, would shortly hold hearings on his bill. On September 13, the first of those hearing was held with testimonies from Dr. Lawrence Parks, the executive director for the Advancement of Monetary Education, and Dr. Laurence White, professor of economics at George Mason University. In short, Paul told his constituents exactly what he was going to do, and then he did it. It isn’t necessary to iterate how rare such an occurrence is in Washington’s hallowed halls.
The CNN/Tea Party Express presidential debate September 12 featured a staple question of the Ron Paul candidacy — the Federal Reserve Bank — but didn't give Representative Paul a chance to weigh in on the nation's central bank.
When a Tea Party member asked a question about whether the Federal Reserve should be audited, Paul was not asked to comment on the question. Paul is the author and primary sponsor of the main Federal Reserve Audit bill, the Federal Reserve Transparency Act (H.R. 459) in the House. His son, Senator Rand Paul (R-Kentucky) is the sponsor of the Senate version of the bill (S. 202). Paul's bill won every House Republican and many Democrats as co-sponsors during the last Congress, and he has 176 co-sponsors for his bill thus far in the current Congress, including fellow presidential candidate Michele Bachmann of Minnesota.
Prime Minister George Papandreou’s speech on Saturday evening in Thessaloniki was designed to reassure not only his Greek citizens that all would be well but also that those holding Greek sovereign debt would be getting their money back. The government’s top priority, he said, is “to save the country from bankruptcy.”
Said Papandreou: "We have taken the decision to fight to avoid a catastrophe for our country and its citizens: bankruptcy. We will remain in the Euro. And this meant and means difficult decisions.... If this year the recession [already in its third year] is markedly greater than the estimates of international organisations on which the medium-term fiscal plan [to obtain additional bailouts from the European Central Bank] was based, despite that, Greece will make its fiscal targets, doing all that’s needed in this direction."
Collectivist statists from America to southern Europe are singing a familiar tune: The private sector is to blame for the economic nightmare that they have created. The Obama administration began complaining that businesses with cash were not instantly using that cash to hire employees, whether market conditions made that a prudent decision or not. Now the Greek government is issuing more bonds and, according to the condition of their second proposed bailout by the European Union, is being required to convince private investors to acquire the vast majority of the new debt of the Greek government.
The feedback that the Greek government is getting over its sovereign debt crisis is more than just from the private sector. German Chancellor Angela Merkel, whose own job hangs by a thread and who has just been limited by Germany’s Constitutional Court in using German assets to solve the Greek sovereign debt crisis, is now acknowledging that it was a mistake to admit Greece to the European Union. Merkel remained committed, however, to keeping Greece in the union, provided that no more help is needed from nations with stable and sound fiscal policies, and the Chancellor also warned the rest of the "PIIGS" nations to expect no more bailouts. European Central Bank President Jean-Claude Trichet echoed Merkel’s sentiments, and warned that the purpose of the ECB was to maintain the stability of the euro and not to protect nations that incurred debt far beyond the nations’ ability to repay those debts.