Part Two: A century of fascism…

A Century of Fascism

Editor’s Note: I hope you enjoyed Part One of James Turk’s insightful essay “A Century of Fascism,” which we featured last week. In the second half of James’ commentary, presented below, he explores how gold-market manipulation has been a natural outgrowth of the State’s propensity for seizing ever-greater control.

— Brien

Fascism’s Link to Gold Market Manipulation

By James Turk

George Orwell explained that “All tyrannies rule through fraud and force, but once the fraud is exposed, they must rely exclusively on force.”
 

Consequently, many believe that police and armies are the primary tool of authoritarians, but fascists and others of that ilk know that it is money first and foremost that equates to the absolute political power and the domination over others they seek. After all, police and soldiers remain loyal to the ruler only if they are sufficiently paid to feed themselves and their families.
 

As fascism took hold in the 1930s and these authoritarians aimed to secure their position, their control of money was essential. To achieve this nefarious target, gold — which has served humanity well since pre-history — needed to be displaced in commerce by money-substitutes: paper currency (i.e., banknotes) and bank deposits. The reason is simple.
 

People determine the value of tangible assets, which require labor, time, and capital to produce. Even when suppressed, so-called “black markets” emerge to determine a free-market value of tangible assets by operating outside of government purview. In contrast, authoritarians can manipulate — as the Federal Reserve and other central banks continue to do to this day — the purchasing power of bank liabilities, which are nothing more than bookkeeping entries created with the stroke of a pen or the typing into a keyboard.
 

Consequently, as an initial step to gain the absolute control they sought, gold was confiscated by Mussolini, Lenin, Hitler and Franklin Roosevelt and prohibited from use as currency.
 

In America the misnamed 1934 Gold Reserve Act provided the “legal” context (8) for this theft as well as the framework for the subsequent manipulation of gold and silver markets. Section 10(a) states the absolute power being assumed. My edits are inserted to undo the wordsmithing employed that intended to make this fascist legislation appear not only above board, but beneficial:

“For the purpose of stabilizing [manipulating] the exchange value of the dollar, the Secretary of the Treasury, with the approval of the President [but without approval by Congress], directly or through such agencies as he may designate [the Federal Reserve, selected money-center banks], is authorized, for the account of the [uncontrolled slush] fund established in this section, to deal [intervene in markets without restriction] in gold and foreign exchange and such other instruments of credit [all bank liabilities, non-bank gold and silver certificates, and derivatives] and securities [shares, Exchange Traded Funds] as he may deem necessary [the grant of unlimited power] to carry out the purpose of this section [the usurpation of absolute power by the federal government].”

This extraordinary power grab is the culmination of decades of agitation by the newly named progressives seeking centralized federal power. Their shredding of the Constitution under the guise of stabilizing the value of the dollar is a big lie, as illustrated by the following two charts.
 

They present — indexed to a base of 100 — the price of crude oil, which is a proxy for energy that is the cornerstone of the global economy and essential to today’s standard of living. These two charts reveal the deceit of the Roosevelt administration as the Gold Reserve Act was forced on the American people. The unstated goal of this usurpation disguised as a “law” is political power and control. The claim to stabilize the exchange value of the dollar is a ruse.
 

Chart 2 shows the rising price of crude oil when viewed in terms of national currency, yet it is remarkably stable when measured in gold. Throughout these seven decades, a gram or an ounce of gold could purchase more or less the same quantity of crude oil, which is a feat that no national currency came close to matching after their last formal links to gold were severed in 1971. Gold preserves purchasing power over long periods of time, which is an essential requisite of money.

Chart 3 presents the same data on a log scale to illustrate the volatility in the price of crude oil. Note that the volatility is the same in all four currencies. The rising trend of the national currencies simply reveals the debasement of their purchasing power compared to gold.

Since the last links to gold were ended in 1971, the powers of the Gold Reserve Act have not resulted in any stabilization in the exchange value of the dollar, nor could there be. The crude oil price rises and falls, which is inevitable because it is impacted and determined by four forces, any of which can change over time. These are the demand and supply of crude oil, interacting with the demand and supply of the currency used to measure the oil price. It is how markets work, and volatility is the result. The interplay of these four forces is unpredictable, except to say that nothing has a “stable” price.

Governments and their captive central banks — contrary to their pronouncements and the claims of the Gold Reserve Act — are not needed to manage the exchange value of the dollar or any other national currency. The reality is the opposite. They debase the national currency to increase the power of the State through the theft of purchasing power from the hands of people in the productive economy, what today is called inflation.
 

What these two crude oil charts clearly reveal is the ongoing debasement of these three national currencies, confirming that “the purpose of stabilizing the exchange value of the dollar” are words chosen to deceive, not achieve. It is gold, nature’s money, that best achieves the least volatile exchange value.
 

Because gold is natural money, it does not need to be managed. This principle is not new and was intuitively and widely understood up until the appearance of 20th century fascism and the propaganda from its proponents seeking to change the nature of currency and commerce to favor State power and control. This observation by London banker Henry Thornton in 1802 still rings true today.

“We assume that the currency which is in all our hands is fixed, and that the price of bullion moves; whereas in truth, it is the currency of each nation that moves, and it is bullion which is the more fixed.” (9)

Policymakers use central banks to deliberately pump up the quantity of bank liabilities circulating as currency to give big government the purchasing power it seeks, to the detriment of its citizens. This currency debasement is obscured when people measure prices in terms of a national currency rather than gold because they lose sight of the cause of national currency debasement, which is government control of the currency and its abandonment of natural money.

Transitioning Back to Gold and Away from Fascism

Five consecutive polls going back to October 2021 reveal that over 70% of Americans believe the country is headed in the wrong direction. (10) It is not unreasonable to deduce the sources of this dissatisfaction. There is the growing burden of costs and regulations imposed by the federal government on the productive sector of the economy and most people’s everyday life. Then there is an ever-inflating dollar currency people are forced to use that steals their purchasing power and their time spent laboring to earn it.
 

Britain recently left the European Union to free itself from mindless, costly — and some say autocratic — policies of distant bureaucrats in Brussels. The rallying cry of the Brexiteers to “Take Back Control” states a political aim that is likely to become as important in the decades ahead as “No Taxation Without Representation” was in the 18th century.
 

Taking back control is the goal of all individuals who love liberty and seek to live their life in harmony with the precepts of natural law and unfettered by State interference. After a century of fascism and its harmful consequences, it is time to take back control, and fortunately, in America there is a clear path to achieve that goal peacefully by lawful means.
 

Because liberty rests on its inextricable link to an unfettered gold market, free of government manipulation, taking back control begins by overturning the Gold Reserve Act in either of two ways. Congress and the President can pass a new act to revoke this 1934 law, which at present seems unlikely. Alternatively, the Supreme Court declares the Gold Reserve Act to be unconstitutional, and its recent Dobbs Decision gives one hope.
 

Adherence to the 10th Amendment is clear in the language used in Dobbs. It is language applied to such a politically charged matter that I never expected to see in my lifetime:

Decision: “Held: The Constitution does not confer a right to abortion; Roe and Casey are overruled; and the authority to regulate abortion is returned to the people and their elected representatives.” [Emphasis added]

Society is diverse, and harmony comes from understanding that there are different views of every aspect of life and the control of one’s own body. By the same logic, people take different paths in their pursuit of happiness, which is diversity that should be encouraged provided there is adherence to the precepts of natural law. In response to this heterogeneity, the framers wisely decided that the states should delegate to the federal government only those 17 of their sovereign powers needed to achieve the three areas where they shared interests — commerce, defense and coinage. Everything else was left to the states or the people.
 

It is time to return to the American people an economy and commerce based on gold and silver as required by the Constitution.
 

It is noteworthy that the Court’s analysis in Dobbs relied on the “history and tradition” of the union of American states to determine the components of an “ordered liberty.” When viewing the turmoil in economies around the world using money substitutes, there is no denying that gold and silver coin are indeed essential to achieving an ordered liberty, which the framers of the Constitution clearly understood and achieved with Article I Sec. 8 & 10 declaring that the money of America shall be gold and silver coin.
 

In today’s world where common sense itself is under attack, a logical analysis to today’s problems is needed to understand where we are, how we got here, and what has worked in the past. The fascist underpinnings of the American economy are not going to disappear overnight or by themselves nor will the country’s return to constitutional money. People benefitting from the present situation are unlikely to give up their position of privilege and power willingly. A transition is not going to happen unless people make it happen.

Turning again to the prescient words of Congressman Buffett: “I warn you that politicians of both parties will oppose the restoration of gold, although they may outwardly seemingly favor it. Also, those elements here and abroad who are getting rich from the continued American inflation will oppose a return to sound money. You must be prepared to meet their opposition intelligently and vigorously.”

8. Autocrats operate with the pretense of legality by ignoring natural law and changing administrative law to serve their aims. “We can never forget that everything Hitler did in Germany was ‘legal’...” Martin Luther King, Jr., Letter from Birmingham Jail, 1963.
 

9. An Enquiry into the Paper Credit of Great Britain, Henry Thornton, 1802.

10. https://www.documentcloud.org/documents/22156173-220455-nbc-news-august-poll-82122-release

Note: James Turk is the founder of Goldmoney.  CLICK HERE to order James’ remarkable new book, Money and Liberty: In the Pursuit of Happiness & The Theory of Natural Money.