Economic Outlook: Economic Disaster

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ILLUSTRATION: FOTOLIA/HITTOON.COM
In 1980 the decade ahead seemed to promise nothing but economic disaster. 

POGO: “The future ain’t what it used to be.”

JULIAN M. SNYDER, International Money Line: “If there is anything certain about the 80’s, it
is that the outlook is extremely uncertain. The German
Chancellor Helmut Schmidt put this into the most succinct
(and safest) forecast when he said, ‘Nothing will be the
same in the 80’s as it was in the 70’s . . .
nothing.”‘

ALEX HERBAGE, IMAC Economic Newsletter,
on the Russian invasion of Afghanistan: “Now we shall pay
the price for our continued weakness and lack of vigilance
that has resulted from the shameful sale of advanced
Western technology to the Soviet nation and its satellites.
Truly we have been handing over the rope from which the
noose will be fashioned with which Moscow hopes to hang the
West. To boot, and to add a dreadful irony to this tragic
scenario, we have willingly lent the Communist East the
money and the credits with which to purchase our
technology, thus helping to undermine our own financial and
economic stability.”

IDA COX, 30’s blues singer: “When you lose your money,
don’t you lose your mind.”

ALEX HERBAGE, IMAC Economic Newsletter: “Confrontation will be the key word of the 80’s. Nation
against nation, developed world against the emerging
nations. Worker against boss,. politician against
politician. The world is stirring whether we like it or
not. The established order is being challenged by a spirit
of revolution and unrest that is rife in the world today.
On a global scale, we are now experiencing the fears that
must have been felt by the aristocrats and landed gentry
when they heard the swish of Madame Guillotine for the
first time during the French Revolution. We could all learn
more by studying history, and the events of those momentous
years at the end of the 18th Century are in many ways
parallel to those we are experiencing today. Then — as is
happening now — the established order was challenged and a
new epoch entered.”

RICHARD RUSSELL, Dow Theory Letters: “My feeling is that the 1980’s are going to be
the years in which Americans finally have to face
realities. What are these realities? [1] Russia, with the
sacrifice of her economy, is now military leader of the
world. [2] The U.S., over its head in debt, is going to
have to sacrifice a good chunk of its domestic economy if
it wants to remain a free power. [3] The current U.S.
concepts of government spending, transfer payments,
consumerism, [and] deficit spending are going to be revised
drastically. They’re going to HAVE to be revised. [4] For
25 years U.S. Presidents have been blathering about
“sacrifices” the American people will be called upon to
make. So far, the so-called sacrifices (whatever they are)
have been minimal to non-existent. In the 80’s real
sacrifices will have to be made.”TIMES OF LONDON, December 12, 1979 editorial: “The forces
which have knocked the dollar down against gold are far
stronger at the beginning of the 1980’s than they were at
the beginning of the 1970’s. The world shortage of oil, the
competition faced by American industry, the rate of
inflation in the United States, all undermine the dollar
now in a way they did not ten years ago. It would be
difficult to find any plausible argument for supposing that
gold will weaken in dollar terms in the 1980’s.”

RICHARD RUSSELL, Dow Theory Letters , Inc.: “In
1960 the U.S. Federal budget was just under $100 billion.
By 1970 the Federal budget was just over $200 billion. Here
in 1980 the budget will be over $600 billion! But this is
the true horror: I estimate that the interest, THE
INTEREST, on the Federal budget this year will be around
$80 billion … [and that) the U.S. will be paying about
$100 billion next year [just] to carry its debt! That
amounts to $2 billion a week. Ever hear of a nation being
eaten up alive by debt and deficits? You’re looking at
it.

“This whole process is the road to economic disaster. An
accelerating debt and accelerating interest on the debt
allow of only two choices: [1] rocketing inflation in which
the debt is ‘reduced’ by destroying the currency in which
the debt is denominated, or [2] deflation, depression, and
potential bankruptcy.”

R.E. McMASTER, JR., The Reaper: “Interest on
the Federal debt is now $85,000 per minute. Such debts have
never been paid off in the history of world governments . .
. [also] the interest [alone] on the Federal debt is
expected to reach $100 billion between 1982 and 1983. One
hundred billion dollars is the net capital generating
ability of the U.S. economy. In other words, between 1982
and ’83, all capital generated will go to pay just the
interest on the Federal debt.”

RICHARD RUSSELL, Dow Theory Letters, Inc.: “The
U.S. Government is the biggest . . . borrower . . . in
world history . . . [and sells] … $14 billion . .. in
15-year bonds annually. These bonds are sold at auction
against all bidders. Whatever interest .. . it takes to
sell these bonds . . . that’s what they go for!

“Yields on U.S. Government long-term bonds are moving to
the 13% rate now (February 27, 1980). At 13%, money
QUADRUPLES in a little over 11 years! Do you understand
what this means? Suppose institutions put their assets into
bonds yielding 13%. That means they will be guaranteed to
quadruple their assets by 1991. Where would the money come
from to provide this kind of return? You say from
inflation? Great, but inflation demands even higher
interest rates, and higher interest rates produce an even
greater rate of return, and even more money is needed to
service the debts. And so on . . . until
destruction.”

JULIAN M. SNYDER, International Moneyline:
“‘Americans are just beginning to realize that the fight
against inflation is a hopeless cause,’ Hans Bar, Chairman
of Bank Julius Bar, told us. ‘You can’t have thirty-year
bonds anymore. Long-term money is on the way out.’

“As Henry Kaufman of Salomon Brothers points out, the end
of long-term financing will reduce the final liquidity of
the banking system, since a great deal of it depends on
corporations’ being able to borrow long in the bond markets
to pay off bank debt. This could hamper the next period of
expansion in the economy, since one prerequisite for
expansion is an improved liquidity base (improved balance
sheets). Public utilities will be particularly hard hit,
since their long-term borrowing requirements are
astronomical. Insurance companies and pension funds would
also be seriously hit and their long-term capacity to pay
benefits severely impaired.

“Inflation is the kind of reduction gear that systemically
destroys long-term credit and contracts of all
kinds.”

RICHARD L. LESHER, President of the U.S. Chamber of
Commerce: “Even as government’s deficit spending fuels the
inflation that destroys the fixed values of private
pensions, government officials are protecting themselves at
your expense. They are committing your tax dollars to index
their own pensions to the rate of inflation. And since
Federal workers can retire earlier, inflation and time
could compound those benefits beyond belief. Twenty years
from now, retired Federal clerks could be receiving annual
incomes of $100,000.”

JIM McKEEVER, McKeever’s Individual Survival Strategy
Letter
: “People have no concept of the
incredible implications of a 20-25% inflation rate . . .
[but] if the inflation rate averaged 25% per year between
now and the year 2000, for every $1,000 per month in
expenses that you have today, the same amount of
expenditures would cost you $86,735 each month in the year
2000. If a loaf of bread costs 70¢ today, It would
cost $63.00 then. A suit of clothes that costs $200 today
would cost $18,000 …. Similarly, if today you are making
$50,000 per year you would have to be earning $4,500,000
annually in the year 2000 just to break even!”

GARY NORTH, Remnant Review: “Consider the
30 pieces of silver Judas received. Assume that they were
the size of dimes. If he had invested his $3.00 (pre-1965
price of silver, of course) at 3% interest in the first
week of A.D. 30, and his heirs went down to the bank to
pull out the money at the end of 1979 (a total of 1,950
years invested), the account would now total . . . 31
septillion, 400 sextillion dollars.

If everyone on earth (4 billion people) got an equal share,
each person would inherit seven quadrillion, eight hundred
fifty trillion dollars. “Here’s another one. If the present
world population of 4 billion people were to continue to
grow at 1% per annum — far lower than world population is
presently growing — in 1,000 years the total would be 83.8
trillion people.

“What we have to face is simple enough: The present growth
rates that the West’s economies sustain today, or have
sustained over the past two centuries, simply will not
continue over an indefinite period of time …. It is
categorically, mathematically, impossible to maintain
economic growth at 6% or 5% or even 3% for centuries on
end.

“Politically, no government economist can admit this. The
politics of the 20th Century are committed to compound
economic growth, or as Robert Nisbet [says], `liberalism
plus 6%’. Of course, no serious economist would maintain
that such growth can go on indefinitely. But the
overwhelming majority insist that it can go on for another
few decades, or a decade, or at least until they
retire.

“The leaders of the world are committed to the pursuit of a
demon. The corporate executives, if they are to stay in
power inside their firms, are also committed to pursuing
this same . . . demon. They will beg, borrow, and steal
money — taxpayers’ money — to stay in business and keep the
compound growth demon going. In the final analysis, it is
the public at large — the voting public, the stock-buying
public, the pressure group public — that has adopted the
ideology of endless compound growth …. This ideology has
doomed the dollar. It has doomed the international monetary
system. The numbers don’t lie. Economists do.”

SOMERSET MAUGHAM: “If a nation values anything more than
freedom, it will lose its freedom. And the irony of it is
that if it is comfort or money that it values more, it will
lose that too.”

RICHARD RUSSELL, Dow Theory Letters, Inc.: “The
U.S. wasn’t satisfied with just a free lunch. We’ve lived
on a free seven-course dinner which lasted from 1945 to the
present. But the markets know that there are no free
lunches and damn sure no free seven-course perpetual
dinners. So we wrecked the great “good as gold” dollar to
pull off the magic, and now we’re being exposed for the
dollar creditors of the world to see.

“From this point on, it’s going to get harder. We’re losing
out on the economic front, the geo-political front, and the
military front. We’re spent up and pooped out, and suddenly
the crises are beginning to hit. And that’s what the gold
and silver move is all about.”

GARY NORTH, Remnant Review: “My conclusion [about
gold and silver] in 1965 .. . [was] simple: Buy and hold
… I never tried to beat the market. I simply bet against
Western Civilization, year in and year out. I shorted the
20th Century. So far, I’m ahead.”

GARY NORTH, Remnant Review : “The issue is
personal freedom, not the price of gold
. The price of
gold is a very good indicator of the market for freedom — the
higher the price, the less the domain of freedom — but the
really important issues are political, not economic. If you
allow yourself to become hypnotized by rapidly rising or
falling dollar-denominated prices for pieces of metal, then
you will probably make some disastrous decisions, such as
selling off your gold in order to buy back in later at a
really good price. Gold should not be regarded as a means
of increasing your holdings of paper money. Gold should
be
regarded as an admission ticket to the free
market during a future period of bureaucratic
tyranny.”

R.E. McMASTER, JR., The Reaper: “A free man must
reconcile himself to the fact that he will eventually
involuntarily break establishment law. He must resign
himself to the validity of a higher law (God’s law), and
that of the U.S. Constitution. Even now, nearly all of us
are in violation of some law. We could hardly be otherwise.
Fifty thousand pages a year are added to the Federal
Register, the law of the land. Then there are all the
`alphabet agency’ Rules and Regulations. The number of laws
created in the last two and a half years (approximately) is
greater than the number of laws created from the beginning
of the country up until the past few years.”

JULIAN M. SNYDER, International Moneyline: “Big
Brother knocked on the door the other day. Five weeks after
our `Smoking Gun’ issue about David Rockefeller’s role in
influencing the Carter Administration relative to the
Iranian crisis and 23 days after David Rockefeller’s
resignation as Chief Executive Officer of the Chase
Manhattan Bank, two nice gentlemen from the Securities and
Exchange Commission dropped in on a `routine’
investigation.

“Agents Jack Lustig and Don Jennings were quite friendly to
the staff, but when they sat down with the editor behind
closed doors, some of the friendliness evaporated. In the
outer office, an agent from the IRS was auditing our
books.

‘Where did you get the money to start this business?’
Jennings wanted to know among other things. Such a
question, in the opinion of our attorney, indicated that
the investigation was not just `routine’. Lustig handed us
a piece of paper that stated: ‘It is mandatory that
accounts, correspondence, memoranda, papers, books, and
other documents and records of the above required to be
made and/or preserved must be made available for inspection
. . .’and that: “‘The Commission’s principal purpose in
soliciting the information is fact-gathering in order to
determine whether any person has violated, is violating, or
is about to violate any provision of the Federal securities
laws . . .’and that: “

`A willful failure to permit inspection by authorized
Commission personnel of the documents specified above may
result in a conviction and a fine of not more than $10,000
or imprisonment for not more than 5 years, or both, except
that when the person failing to permit inspection is a
national securities exchange, a fine not exceeding $500,000
may be imposed . . . .’

“Maybe someone was sending us a valentine …. However, the
outrageous assault of the SEC on Colonel Edward C. Harwood
of American Counselers Institute (ACI) of Great Barrington,
Mass., the recent action of the New York Attorney General’s
office against James Dines, and the jailing of Canadian
gold bug Vern Myers provide cause for a certain amount of
real concern. Certainly, such attacks are not the hallmarks
of a free and open society.”

GARY NORTH, Remnant Review: “By 1982, at the
latest, the U.S. will enter the most dangerous period in
its history.”

IRVING KRISTOL, in his November 26, 1979 Wall Street
Journal
Editorial Page article entitled “The Worst Is
Yet To Come”: “The 1980’s have already begun. They began
with the takeover of the American embassy in Tehran earlier
this month and with the subsequent confrontation between
the United States and a virulently anti-Western Iranian
regime. This episode is . . . the shocking prologue to an
equally tense drama that stands poised to unfold in the
decade ahead. It promises to be an absolutely ghastly
period.

“The 1980’s will see a disintegrating international order
in which economic growth is going to be extraordinarily
difficult to achieve, and in which even economic stability
will be hard to maintain. It will therefore have to be an
overriding goal of American foreign policy to help shape
this world so that the growth of the world economy can
continue. This will require many sacrifices, but so long as
the goal is visibly there, the sacrifices are tolerable. If
the goal is not there, our situation will gradually
deteriorate until we end up divided among ourselves and
destroying our institutions in a frenzy of
recriminations.

“Where will such a foreign policy come from? Who will
articulate it? Who will be able to sustain it? Those are
the questions that ought to be dominating the 1980
elections. But no one, so far as I can see, is asking
them.”

RICHARD RUSSELL, Dow Theory Letters , Inc.: “Many
people wonder why Europe is not jumping to aid the U.S. in
its belated `born-again’ struggle against Russian
aggression …. If you wonder, then mull over these items:
West Europe received 7% of its natural gas in 1979 from
Russia (Austria received 50%). Russia supplies 35% of all
enriched uranium to Europe. About 40% of European coal
imports come from Russia and Poland. About 5% of European
oil comes from Russia (Italy gets 10% of its oil from
Russia). At least 60% of the hard currency debt owed by
Russia to Western banks is owed to European banks. Are you
beginning to get the idea?”

DAVID WITTS, Dallas lawyer and former member of the Texas
Railroad Commission, in a confidential memo to Yiji Sawano,
president of the Naigai Trading Company in Tokyo and quoted
in the February 1, 1980 issue of To The Point: “The energy
era is what I call the decade ahead. Decisions will pivot
on energy . . . its availability and its cost. The
post-World War Two Period will fall apart, as its policies
become irrelevant. What is relevant will be energy . . .
and the power to seize it, develop it, and use it.

“When the guard is changed in the Kremlin, they will not
have been brought up in an era of Western military
superiority. They will be confident, having authored the
power shift. They will be bold.

“For 1,400 miles Russia borders Iran, openly coveted by
them since the reign of Peter the Great. The Tudeh
Communist Party dominates Iran’s oil workers. Pipelines now
carry Iranian gas and oil to Russia. The Soviets will
require substantial oil imports by 1982. They outflank Iran
on all sides. They can send in the Afghans or Iraqis as
surrogate forces to take over, just as they used the Cubans
in Ethiopia, Angola, and South Yemen. Or they could use
their own troops now in Afghanistan.

“This would give Russia control of the entire Persian Gulf.
They already dominate the Straits of Hormuz. When this
happens, the Russians will reverse the oil flow to the
Soviet bloc. This will occur whenever the Soviets feel the
current charade has gone on long enough. They don’t want to
risk serious damage to the oil installations.”

R.E. McMASTER, JR., The Reaper: “Dr. Raymond H.
Wheeler . . . who created the Drought and Civil Warfare
Clock, stated, ‘The present 500-year cycle is due to end
around 1980.’ Wheeler felt that where we are presently in
the cycle is where governments break down and nations
collapse! Along with this breakdown there occurs a wave of
international wars, nation-felling wars, and these wars
give way to civil strife and revolution.

“Fundamentals are confirming Wheeler’s cyclic research.
Expect the next major economic downturn in the 1980’s to
result in civil unrest and a resulting decline in
government power. The inevitable result will be war.”

R.E. McMASTER, JR., The Reaper: “Between now and
1985, we not only need to be concerned about the
destruction of our monetary system through runaway
inflation and a subsequent depression, but we need to focus
on the more serious threat of devastating earthquakes and
accompanying worldwide wars and revolutions.”

WILLIAM IRWIN THOMPSON, on page 125 of his book,
Darkness and ScatteredLight: “The Maya
with their sacred calendar calculated the positions of the
stars back in time for millions of years …. They had
learned to live with such an extended sense of meaning that
time for them wasn’t simply the next meal, but the next
concert of the stars and the planets …. For the Long
Count of the Maya, human time expresses itself in a
5,124-year cycle; there are 5,124 years of savagery, then
5,124 years of civilization. The period of civilization
began for them in 3113 B.C. and will end at midnight on
December 24. A.D. 2011. From 1987 to 2011 is the hell
period of the calendar, in which earthquakes are prophesied
to tear the civilization to pieces.”

R.E. McMASTER, JR., The Reaper: “What does one
do? Geographic separation from the cities is considerable
help. Absence makes the government’s heart grow fonder for
someone else’s pocketbook, assets, and freedom. Diversity
of assets internationally with holdings in Caribbean tax
havens, Switzerland, and London is recommended. Diversity
of assets domestically into gold, cash, income-producing
real estate, farms, commodities, homes, and important
retail businesses such as hardware stores is helpful. These
should be in different geographic locations, preferably out
of the major cities.

“Gold and silver are survival money. They should be held
for such use. Home self-sufficiency, by way of solar or
wood heating, a garden, greenhouse, and food storage, also
makes sense. One must hedge one’s bets. We live in the age
of uncertainty. There is no other way to survive
intact.”

GARY NORTH, Remnant Review : “Gold and silver got
away from you, right? Even if you had some, it wasn’t
enough. You didn’t have 75% of your investments in gold or
silver a year ago. You suspected something like this would
happen, but not this fast. You intended to get ready. You
really wanted to buy more coins. Next time, you say, next
time. You will be ready next time. NOW IS NEXT TIME.

“You should now rethink your strategy of ‘chasing metal’.
Yes, I think you should buy some [silver] dimes, some small
gold coins, and even some diamonds if your net worth is
high enough. (But) the ground floor (in those investments)
is long gone. Now you have to find other ground floors . .
. Used guns [for instance] are still cheap (in this
country). And when the evening news tells us that in Iran
and Afghanistan a bullet costs a dollar, we had better
understand why. If you are looking for a surefire
investment, buy .22 long rifle … .45, .357, .38, .30.06
(rifle), and .308 (rifle) cartridges and weapons. I am
talking about investing. A .38 caliber pistol and 100
bullets for it will serve as major barter items by the late
1980’s if there isn’t a war, and by 1982 if there is
nuclear war.”

THE STRAIGHT SKINNY ON INVESTMENT DIAMONDS. At one time or
another we’ve all heard of how this or that family escaped
Nazi Germany or Communist Cuba or wherever by converting
its wealth into diamonds, sewing the stones into the
children’s coats, and catching “the last boat out.” It’s
also common knowledge that, recently, diamonds have
skyrocketed in value right along with gold, silver, and
platinum. What most of us don’t know, however — even if we
have the money to invest — is how to guarantee that any
diamonds we buy are indeed investment’ grade gems and that
we’ve purchased them at the “right” price (no more than
wholesale plus a broker’s commission of, say, 5% to
7%).

How are diamonds graded anyway? And what is today’s actual
wholesale price for a quality stone? The man with the
answers to these questions is Mr. Martin Rapaport, Rapaport
Diamond Corporation. Martin (Mike, to his friends) publishes a
concise one-page set of instructions that almost
instantly can teach you how to read a Gemological Institute
of America (GIA) diamond certificate with authority. He
also distributes other useful information, including an
interesting chart which graphs the “average” price of
investment-grade stones against the New York Comex
per-ounce value of gold.

But most important of all , Mr. Rapaport prints
and mails a weekly summary of the current spot wholesale
prices for the top 120 grades of investment diamonds plus conversion factors for marquise,
heart, and other fancy cuts.

Now this is the Genuine Article: a weekly update of actual
wholesale investment-grade diamond prices from around the
country and, most especially, from the New York City
diamond market (quite possibly the most important in the
world).

The weekly Rapaport Diamond Report will cost you $100 a
year. But if you’re a diamond dealer or a serious investor
in diamonds (the only folks eligible for subscriptions to
the service), you’re certain to find that modest cost
returned many, many times over during the coming 12 months
. . . and probably during your very next gem transaction.
This is real “insider’s” information that, at least to this
writer’s knowledge, simply is not available anywhere else
at any price at all.

GARY NORTH, Remnant Review: “Anyone who has read
The Gulag Archipelago knows how seemingly incoherent and
random the operations of tyrannical bureaucracies really
are. Those who escaped getting shoved into the labor camp
system were able to do so by acting fast, by staying out of
the way of the authorities, by offering bribes, and by
disappearing at critical moments …. Ultimately the
bureaucratic hierarchies . . . are not fully coordinated.
Understand this, and you can take effective steps to avoid
the consequences of unbridled bureaucratic expansion.

“Invest in yourself, your family, and your tools. The best
investment will be mobile, liquid, immediately usable in
producing real (not monetary) income, and not worth
confiscating.

“A rototiller (for example) is an immensely useful item for
home gardening. But what good is one for a multinational
agribusiness company? What value would it have on a
large-scale farm? A modern tractor is something else
again.

“If you have 200 light bulbs in storage, what will it cost
the State to search them out and confiscate them? It is
quite easy to imagine a day when the State will simply
confiscate (by purchasing at controlled, below-market
rates) half the output of GE’s light division. That gets
the State more bulbs for the buck. But how much will the
bureaucrats have to spend on locating and collecting your
hoard of bulbs? Too much, I suspect.”

L.T. PATTERSON, The L.T. Patterson Strategy Letter:
“Some will prefer to stock up on . . . goods in advance,
including such items as cigarettes, light bulbs, coffee,
sugar, liquor, and so on. My recommendation is that
[silver] coins will be more important since they are freely
exchangeable . . . and each [one of my readers] should
invest in a total of $1,000 face value pre-1965 coins (one
bag) at this time (as a minimum) … 50% in nickels, 25% in
dimes, 15% in quarters, and 10% in halves …. I recommend
you deal with U.S. Paper Exchange [since I]
have found this firm to be better organized and more
professional in silver coin sales.

“Of course each [reader] should have in his home a year’s
supply of dehydrated food for each member of his family…
Those who have not yet purchased their dehydrated foods
should do so now.”

GARY NORTH, Remnant Review: “The government is
actively inflating. We must be actively evading …. If the [rise in] price of [the goods we need] exceeds the return
on conventional investments, then why don’t people just
sell their conventional investments and buy the
goods?

“A person may have $50,000 investment capital. Why not take
$25,000 of it and buy those durable goods that he or she
expects to consume over the next five or ten years and
store them? Why not buy all the light bulbs, kitchen
utensils, consumable durables, paper products, frozen beef,
frozen food, dehydrated food, new clothes or fabrics,
sewing machine, thread, and so forth? Buy and store ….
Pay a year in advance (ask for a 10% discount, of course)
…. There is the theft problem [of course], but inflation
is a more certain form of theft.

“If a person is going to speculate — that is, deal with the
uncertain future — it’s a safer bet to speculate against
money and for goods.”

ALEX HERBAGE, IMAC Economic Newsletter: “The
general level of public interest in high flying forms of
speculation should be taken as a serious sign of warning on
the wall. Such abandonment by the general public of prudent
saving practices replaced with uninformed speculation has
always been an indicative sign of the last blowoff before a
major economic crash occurs.”

RICHARD RUSSELL, Dow Theory Letters, Inc.: “One
thing I have been wondering about is the general consensus
that ‘there will be no recession, or perhaps a very mild
recession in 1980′. Frankly I wonder if (after being held
off for years) there won’t be a stiff recession starting
this year. If so, we could see `the big fooler’ . . . [a]
contrary opinion shocker [which] might be [1] a tumbling
stock market, [2] a collapse in gold, [3] a big rally in
bonds. And ultimately, a rush to CASH (for liquidity
purposes), since the banks, business, and the public are
all extremely illiquid at this time.

“Remember, `everyone’ is now borrowed up, loaded with
collectibles, very low on savings, and ready for more ‘fun
and inflation’. What a perfect setting for the markets to
put on `the big squeeze’. And the big squeeze could be a
pressing need for CASH, the one thing that nobody has at
this time.

“Up to now, cash and credit (borrowing power) have
practically become synonymous. But they are not synonymous.
Cash and credit may be ‘about the same’ when confidence is
riding high. When things get rough, however, the cash you
have is still cash. But the credit spigot can be turned
off. At that time, many will find that cash and credit are
most definitely NOT the same thing.”

TOM BURKE, Friends of the Earth, quoted by Jeremy Sea-brook
in his book, What Went Wrong? and requoted by Gary North’s
Remnant Review: “The new wealth might count as affluent the
person who possesses the necessary equipment to make the
best use of natural energy flows to heat a home or warm
water . . . the uses which account for the bulk of an
individual’s energy demand.

“The symbols of this kind of wealth would not be new cars,
TV’s or whatever, although they would be just as tangible
and just as visible. They would be solar panels, insulated
walls, or a heat pump. The poor would be those who remained
dependent on centralized energy-distribution services,
vulnerable to interruption by malfunction, sabotage, or
strike … and even more vulnerable to interruption by
inaccessible technocrats, themselves the victims of market
forces beyond their control.

“The new rich would boast, not of how new their television
was, but of how long it was expected to last and how easy
it would be to repair. Wealth might take the form of
ownership, or at least access to, enough land to grow a
proportion of one’s food …. The role of the State would
change as it became less important as a provider of
services. The relationship between a person and his job
would change as the importance of non-financial
transactions grew.”

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