The Federal Reserve and Immigration
Audio; Posted on: 2007-06-03 13:00:37 [ Printer friendly / Instant flyer ]
by John Young
Audio Version (new version - corrects error)
Welcome to Western Voices, I'm John Young.
As a scientist and engineer, I do not live in a world of inexplicable coincidences. Rather, I live in a world of cause and effect where profound happenings don't just appear out of thin air, but are the result of prior events and even ideas. In other words, we live in a world that is both explainable and predictable in many respects, particularly in a macroscopic way. This also means that given proper action, desired outcomes are achievable.
The compromise immigration bill being considered by the Senate this week contains a number of shocking provisions that make its introduction a rather profound event. If passed, our children will live in a third-world America that our nation's founders wouldn't recognize. A person doesn't need to be a scientist to predict this outcome - just a little common sense will suffice. But an important thing to understand is that this bill that threatens our very existence didn't come into being by coincidence, or even exclusively as a result of malice on the part of a few. Rather, it is the culmination of a long series of events in various realms whose ultimate results are predictable. The role played by the Boasian school of anthropology, misguided organizations like the Anti-Defamation League and government-funded groups like La Raza is well documented. Today, however, we will be exploring the role played by our economic and banking systems.
No matter what you may think of the Federal Reserve system, (and we will discuss that shortly) former Federal Reserve Chairman Alan Greenspan is an extremely informed man, and in 2003 he testified in front of the Senate Committee on Aging, describing the effect our low birth rates would have on the work force. Specifically, by 2030 the growth in the American work force would decrease from its current 1% annual growth to only 1/2%. In addition, by 2030 fully 20% of the U.S. population will be over age 65. He described the impact of that eventuality this way:
“In particular, it makes our social security and Medicare programs unsustainable in the long run, short of a major increase in immigration rates, a dramatic acceleration in productivity growth well beyond historic experience, a significant increase in the age of eligibility for benefits, or the use of general revenues to fund benefits...”(1)
I want you to think about this for just a moment, because what Alan Greenspan said is true. Our social security and Medicare programs can only be sustained with an indefinitely growing population. Otherwise, the rug gets pulled out from under them. In a world of 2030 where four people are in the work force for every person drawing social security and medical benefits, not to mention other social services which will make the ratio three-to-one, the sheer tax burden would be too great to bear. It would be like every family having to support an additional two or three children - and that doesn't count anything else in the federal budget.
So ... why is it that these old-age benefits require an indefinitely expanding population? Any system like that is ultimately unsustainable. After all, even if America had the required infinite expansion of population, ultimately we'd fill all available space - then what would we do? This is where the Federal Reserve comes in.
Under a constant currency with no inflation, a currency whose value would be the same fifty years from now as it is today, a mandatory retirement funding system like Social Security would work just fine without the need for population growth. BUT we do not have such a system. President Wilson saw to that with the Federal Reserve Act and the 16th Amendment allowing for an income tax. Then Franklin Roosevelt came along and when he layered Social Security and other welfare spending programs onto the heap, the die was cast that led us to the situation we find ourselves in today.
You see, under our current monetary and banking system that has been in place since President Wilson capitulated to a bunch of moneyed interests, our money loses value so rapidly that it is impossible to save it securely for retirement. In fact, since 1913, the purchasing power of a dollar has lost an astonishing 96% of its value.(2) That means that, back in 1913, you could purchase for four cents what requires a dollar to buy today. As a person's working lifespan is usually fifty years or so, you can see that inflation makes it impossible to save money for retirement by simply setting it aside safely in a bank account. If you do that, in terms of purchasing power, you will actually retire with less than half of the spending power that you had set aside. Since our government can't invest your money in a fashion that earns interest, government-based retirement programs must *always* therefore draw upon current taxes.
In an article entitled "Gold and Economic Freedom," Greenspan stated the following: (please bear with me as the quote is rather long)
"Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which -- through a complex series of steps -- the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation." (3)
So, when you combine welfare statism with an inflationary fiat currency, you end up ultimately with a pyramid scheme in which the base of the pyramid in the form of productive taxable workers has to constantly expand or the whole thing collapses. This is what our grandparents and great-grandparents accepted from Wilson and FDR, what our parents and WE are allowing to continue, and the inevitable consequence - replacing our people with another that breeds more prolifically - is bearing bitter fruit today.
Right now, the Federal Reserve is between a rock and a hard spot. As you have no doubt heard, the Federal Reserve controls inflation by raising and lowering the interest rate it charges banks. Let me explain how this mechanism works.
As Greenspan explained above, additional money is injected into our economy through government deficit spending. But new money also enters the system through lending. You see, in a fractional-reserve banking system like what we have, the bank can "lend" out twenty-five or thirty dollars for every dollar on deposit. Where does the bank get the extra money? It borrows it from the Federal Reserve. Where does the Fed get it? It creates it out of thin air. When the Fed rate is low, more borrowing occurs, thus more money enters the economy relative to tangible assets and more inflation occurs. When the Fed rate is high, less borrowing occurs and thus less money is injected and inflation is lower. But always -- always there is inflation. In fairness, not all lending ultimately comes from the Federal Reserve. A lot of it is financed with long and short term bonds. But since practically all money issued into circulation by the Federal Reserve is issued as a debt that must be repaid with interest, and since the Federal Reserve does not simultaneously distribute adequate funds into the economy to pay back the interest, our economy is structured so that shaking off debt is extremely difficult if not impossible for many, and depends on constant expansion in the future in order to pay interest on the debts of the past. This, too, is ultimately unsustainable.
A lot of the inflation created by our banking system is hidden by the process of shipping production to relatively poor countries where labor is cheap. Thus, a television set that cost $200 in 1987 still costs $200 today. But in 1987 that television was made in America. Then it was made in Japan. Then it was made in Taiwan. Then it was made in Mexico. Finally, it is made in China, very often with labor that could best be described as slavery. A certain amount of this inflation is also offset by improvements in processes, such as replacing thru-hole electronics construction with surface mount devices and automated wave soldering. But as Greenspan noted, increases in productivity that would offset inflation simply aren't precedented.
Of course, there are certain things that just can't be outsourced to a foreign factory -- like housing, gasoline, medical care, college tuition, mechanical work on your car and so forth. These sorts of home-grown resources have become much more expensive to the point that they have finally become beyond the reach of many Americans. And this is where the Fed is between the rock and hard spot I described earlier. The real estate market is the source of a huge percentage of the lending in this country. The median price of a home compared to median wages is now 300% higher than it was just twenty years ago. Foreclosures have increased dramatically, and there is a lot of talk by people in-the-know about the housing "bubble" bursting.
Meanwhile, the price of gas has gone sky high and a reasonable observer can conclude that in the long run, it will continue to climb. This has exerted very real upward pressure on the prices of everything affected by petroleum. So our economy is now being affected by inflationary pressure from a source other than the Federal Reserve; which is the law of supply and demand as it applies to a crucial commodity. Already, economic growth has slumped, retail sales have slowed and 40% of Americans report curbing their spending as a result. Even Walmart is feeling the pinch.(4)
So what is the Federal Reserve supposed to do? If they lower interest rates, the inflation that is already being fueled by spiraling oil and gas prices will go through the roof. But if they raise interest rates to curb the inflation caused by tight oil supplies, they will crash the real estate market. So, basically, in terms of monetary policy, the Federal Reserve is in a position where anything it can do will hurt a lot of people. So what is the solution?
According to Greenspan, "[T]he only point I make in my prepared remarks…the point that I’ve been making for
quite a while is, I don’t know where the level [of unemployment] will trigger pressures [toward inflation], but I do know, because the law of supply and demand has got to work eventually, that there is a point at which if that pool of people seeking jobs continues to decline, at some point it must have an impact. If we can open up our immigration rolls significantly, that clearly will make that less and less of a potential problem."(5)
Did you hear what he was saying? Basically, flood the labor market and force wages lower to offset inflation. In fairness to the former Fed chairman, he has pointed out to Congress the fact that immigration policy is the realm of our elected officials and that there are many aspects to immigration other than the purely economic. No doubt.
But that is where this situation stands. Our President, Senators and Congressmen are not about to tell you that because of their decades of buying votes with deficit spending and their addiction to free money courtesy of the Federal Reserve they have painted themselves into a box where the only way they can see to save this country is to destroy it. Of course, even that, like so many of our Congress' proposals would only postpone the inevitable at best. At worst, since 26% of the third-worlders we are importing are on welfare and a huge proportion is illiterate, they actually cost more than they bring to the economy so they hasten the coming collapse.
Our Congress has, as a whole, demonstrated a remarkable lack of both restraint and candor for so long -- since long before most of us were born -- that their dishonesty and desire for a free lunch can almost be considered institutional attributes. Their behavior is very like that of a child who has told a lie, and then has to keep telling more and bigger lies to cover up the first one. Turning over our nation's currency to a cartel of private bankers via the Federal Reserve was a huge deception, and this was followed by removing any relationship between money and tangible assets. This was again followed by the most addictive drug ever invented for politicians: the ability to spend money in order to buy votes today without having to tax people to pay for it, and instead postpone the day of reckoning until they are safely retired from public life. This immigration bill is yet another attempt to postpone a day of reckoning that will surely come, and to postpone it at the price of the destruction of our people, our culture, and even our national sovereignty. It is far easier for our Congress to shove an amnesty bill down our throats on "humanitarian" grounds in order to postpone the inevitable collapse of a sham system than it is for them to own up to decades of deception.
But just because our Congress is so beholden to covering its own backside, slavishly catering to special interests and tugging their forelocks to the demogogues of political correctness doesn't mean that real solutions aren't available. Real solutions are available, they simply require courage. Thankfully, even though this attribute is in short supply among politicos with a pathological need to bask in the glory of unearned adulation purchased at the expense of our future, it is quite abundant among the members of European Americans United, and European-Americans as a whole once the facts of the matter become clear. And because our Congress is elected, it is entirely within the realm of possibility for informed European-Americans to force our Congress to deal with the big-picture structural issues of long standing.
Fortunately, unlimited open borders is NOT the only way. For example, we can reform our monetary system so that it once again becomes a store of value rather than an instrument of debt, and tied to a tangible asset. We can even force this by joining hundreds of thousands of Americans in adopting legal alternative currencies such as EGold and the Liberty Dollar for exchange. We can stop forcing homegrown businesses to compete with cheap foreign or slave labor by actively choosing to spend our money with homegrown American business rather than overseas, which reduces the drive to import workers at low wages. Right in the "Links" section of our website is a link to an organization that helps people locate "Made in America" alternatives to foreign goods. We can concentrate on improving our personal productivity and that of the companies we work for. We can demand drastic reform of social services so that demand for them decreases over time and restructure social security so that everyone who retires - retires as a millionaire. ALL of these things can be done. It is entirely possible for honest leaders to get us out of this mess without destroying our people, and it is possible for US to lead them there! I covered many of these issues in my prior broadcast on economics, and will address them in greater depth in the future. The point is that immigration is not the solution. Rather, there are dozens of common-sense solutions to our economic situation that do NOT require increased immigration, or even any immigration at all. Greenspan and our politicians work from a perspective that includes numerous flawed premises; including the need for globalization, an unsustainable constantly expanding economy, and massive welfare statism. Reining in their policies will eliminate any perceived economic need for immigration. Even better, if we can just hold the line on immigration, our politicians will have no choice but to address these issues, whether they like it or not.
For now, we have to defeat the immediate threat; but in the longer run we have to address the core structural problems created by past generations of politicians. Right now I am going to focus on the practical present.
In the practical present, our Senate is considering a compromise immigration bill that has NO guarantees of increased enforcement, grants practically everyone in our country illegally automatic legal status, provides a path for these people to even become citizens, and takes the first steps toward establishing a common security perimeter around all of North America for the purpose of moving forward a North American Union. In other words, anything that appears good in this legislation is a smoke and mirrors illusion, and everything that is bad in this bill is so bad that it simply cannot be accepted. Anyone who votes for it is voting for our destruction as a people. In other words, a vote for this bill is a vote for our genocide, plain and simple.
Therefore, we must do EVERYTHING WE CAN to stop this Senate bill.
The first approach is obvious: call your Senators and the President. Call them every day. Write them email as well, and send them letters. Do all three. Do it early, do it strongly, do it politely and do it repeatedly. Do not pause, do not relent and do not get discouraged. Continue until the bill is defeated! While there are a handful of Senators who are utterly impervious to reason, even some very unlikely allies - like Barbara Boxer who has seldom been a friend of our folk - offered amendments that would weaken the bill last week. So your calls, your emails and your letter DO have an effect! Go to our news website at www.wvwnews.net and look for the current Action Alerts. These will tell you how to get in touch with your elected officials along with important details and talking points.
Next, this being Presidential Primary season, it is easier than ever before to bring important issues to the national stage through candidates. Look carefully at the so-called "second-tier" presidential candidates, and support those that clearly favor positive action regarding immigration. Also do some research, and discover if any would like to fundamentally reform our banking system and foreign policy. The longer such candidates stay in the race, the more these issues get in the public eye and the more the first-tier candidates have to address them. Supporting these candidates once you have applied your critical thinking to their positions and record means sending them money, writing letters to the editor, contacting their campaign headquarters to volunteer, putting bumper stickers on your car, and so forth. Every time these candidates are included in a debate, interviewed on television or featured in the newspaper - a subset of our issues gets out there in a way that bypasses the Dynamic Silence engineered by our enemies. Given enough support, it is even possible for a very good candidate to win.
Naturally, there is no candidate out there who supports all of our organizational objectives. But the time for all-or-nothing support is past. It just doesn't work. While we must remain true to our vital core objectives and principles, it must be understood that the way political objectives are achieved is incrementally. We lost our money and banking systems a little at a time. We lost control of our borders a little at a time. We are losing our first and second amendment rights a little at a time. Too many of our people, justifiably sick at the corruption that constitutes modern politics have avoided participation in our political system for too long. As a result, we have surrendered the battleground to our enemies, who then get to make the rules. So find a presidential candidate whose positions will move America, even if incrementally, in the right direction, and put your support behind that candidate. Encourage your friends, associates and family to do the same. A review of the articles at Western Voices World News will give you a good idea about which candidates deserve your support. Go to our news website at www.wvwnews.net and read up on the candidates.
Finally, for now, strongly consider joining and/or supporting European Americans United. The work performed by our volunteers is positively vital, and the scope of the work they can do is determined by the personnel we have available and the money in our coffers. Our enemies have very deep pockets, some of them even own their own printing presses for money - and pockets don't get much deeper than that. But they can be defeated by rallying enough of our people to the cause and organizing our efforts wisely. We work hard at that. We have a number of ongoing initiatives running right now, we are growing and on the verge of adding several new state chapters. But all of the materials we send in the mail, our Internet presence and other costs are not free. Nobody derives a salary or paycheck from EAU. Every penny we receive in dues and contributions goes directly to our expenses, initiatives and legal funds. You can support us by becoming a member and contributing your time, effort and expertise. You can support us by sending a check or money order to our contact address. You can support us by ordering books from our bookstore. You can also spread the word to people you know are receptive to our message of hope for future generations.
In future broadcasts I will expand on issues of economics, the banking system, our stock market, debt and other structural problems we face as a nation; including realistic and achievable long and short term solutions. But right now, focus on the three action items you need to take away from today's broadcast.
These are your action items:
-> Call, email and write your elected officials. Be a stereotypical squeeky wheel. Be polite, but be firm and immoveable.
-> Get involved in the presidential primary. Go to our news site at www.wvwnews.net to find out which candidates deserve your support.
-> Support EAU through volunteering, sending contributions and spreading the word.
These are all simple and achievable things that you can do today. Do not delay because future generations are depending on you. Without your action, they may not even exist.
This is John Young with Western Voices. Thank you for joining me again today.
(1) Greenspan, Alan (March 27, 2003) Senate Testimony
(2) U.S. Dept. of Labor, Bureau of Labor Statistics
(3) Greenspan, Alan, Gold and Economic Freedom
(4) Crutsinger, Martin (2007) Gas Prices Hurt Consumer Spending; http://www.recordonline.com/apps/pbcs.dll/article?AID=/20070512/BIZ/705120313
(5) Federal Reserve Chairman Alan Greenspan’s semi-annual economic report to Congress before the
House Banking Committee (July 22, 1999), Question and Answer period.
Music for today's program was provided under the Creative Common's License. Introductory music is "Stand Your Ground" by Sound Radius and outgoing music is Pachelbel's Canon in D performed by Charles Kimball. Our use of the artist's music doesn't imply either the artist's endorsement of EAU or EAU's endorsement of the artist.
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