Gold News

Gold, the Dollar, and the Graveyard of Empires

50 years of trouble...
 
YESTERDAY, August 15, marked several important anniversaries and events, writes Bill Bonner in his Diary of a Rogue Economist.
 
Not only was it the date of the Virgin Mary's assumption into Heaven...
 
...it was also the date, in 1971, when America broke the golden lock that protected the nation's money and opened the door for its descent into Hell.
 
Thirty years later, like the obligatory scene in a horror movie, it went down into the basement.
 
Where, exactly? Afghanistan!
 
Just to remind ourselves, after 9/11, the US insisted Afghanistan turn over al-Qaeda leader Osama bin Laden. The Taliban, then Afghanistan's rulers, said they would turn him over if the US produced evidence that he was guilty of masterminding the 9/11 attacks.
 
Otherwise, they said, it would be an insult to Islamic justice.
 
The Taliban even suggested a compromise – they would give bin Laden to a third country, where he might get a fair trial.
 
Even at the time, that seemed reasonable to us.
 
But the Bush team had no real evidence against bin Laden. And the last thing it wanted (at least, as suggested by his murder by US Navy Seals in 2011) was to give the man an honest hearing.
 
So, in October 2001, it invaded Afghanistan and proceeded to rerun the British and Soviet experience for the following two decades.
 
And then on Sunday, like the other great empires before it, it came to the end of the road.
 
The puppet government in Kabul, set up by the US government, fled on helicopters...an eerie reminder of the fall of Saigon in 1975.
 
Afghanistan is known as the "graveyard of empires." And we doubt this episode will be an exception.
 
The British left Afghanistan in 1919, after 80 years of frustrating warfare. Less than 20 years later, the British empire was, essentially, finished. 
 
The Soviet Union gave up trying to pacify Afghanistan in 1988; two years later, the Soviet Union collapsed.
 
And now, it's America's turn.
 
Last week, we wondered how it came to be that Facebook, Google, Twitter, et al. are falling in line as censors for the feds. Here, we trace the steps...
 
In 1971, the US cancelled the integrity of its money by breaking the link between the Dollar and gold. Then, it used a new, fake currency to corrupt its most important institutions – the military, universities, the press, and business.
 
By the debut of the 21st century, all of them were ready to rumble. They went along with the invasion of Afghanistan...the War on Terror...the bailout of Wall Street in 2008...the stimmies...the lockdowns...Heck, even the major churches were on board.
 
Only one brave member of Congress – Barbara Lee of California – dared to vote against the War on Terror in September 2001. And the press tore her to bits.
 
Republican...Democrat...every administration has gone right along with the program.
 
"If I were slightly younger and not employed here," said George W. Bush to the Afghanistan-bound troops, "I think it would be a fantastic experience to be on the front lines of helping this young democracy succeed."
 
"This is not a war of choice. This is a war of necessity," said Barack Obama to the veterans eight years later.
 
A trillion Dollars here. A trillion Dollars there. A war lost here. Another there. The rich get richer; the poor get poorer. And the claptrap keeps coming.
 
"It's the Democrats' fault..." say Republicans. "It's Trump's fault..." say the Democrats. "It's Alexandria Ocasio-Cortez (AOC) and the socialists," says Newsmax. "It's the climate change deniers, white supremacists, and anti-vaxxers," says The New York Times.
 
Over the years, readers have accused us of being all these things – both liberal and conservative, red and blue...Democrat and Republican.
 
We are none of them. We have no politics here at the Diary. We just don't like anyone telling us what to do. And we notice that those who insist that we go along with their ideas are invariably morons.
 
But the partisan battle makes an excellent smokescreen. It conceals what is really going on – a power grab...by the small minority known here simply as the "elite."
 
Some are in the private sector. Others are in the public sector. Some call themselves "conservatives". Some say they are "liberal".
 
Almost all share the same interests. Some take to them readily. Others see the benefits less clearly. Some are bullied or threatened. Almost all eventually wag their tails to get patted on the head.
 
It is a phenomenon that deserves more study. Every society has an "elite". Some people are natural leaders; others are naturally led. With being a leader comes power...and with power comes temptation, and inevitably, corruption.
 
Our hypothesis is that the rot began with the ability to "print" money, post-1971. Thereafter, wealth and power came less from supplying goods and services to others and more from working your way into the elite class...where you were among the chosen few, to whom the rewards of government spending were given.
 
Naturally, ambitious young people wanted to go into government rather than industry...into finance rather than chemistry...and to business school rather than into real business.
 
They wanted to take their places among the elite. Because that's where the money was. And once in, they could move from law firm to bank to think tank to lobbyist.
 
Wall Street, the professoriat, bureaucracies...the "Deep State"...academia...the press – they represent maybe 10% of the public. But they control the money, the ideas, the news flow...and the government.
 
And, while they may argue bitterly about where and how the money is spent...
 
...there is one thing they almost all agree on – that the system must be protected, at all costs.
 
Why? Because people come to think what they must think when they must think it.
 
And when trillions of Dollars are headed your way – you're going to think it's a pretty good idea!

Bill Bonner has co-authored a number of New York Times Bestsellers including Financial Reckoning Day, Empire of Debt and Mobs, Markets and Messiahs. In his own opinion, Bill's most recent title, A Modest Theory of Civilization: Win-Win or Lose, is his best work yet. Bill also founded The Agora, a worldwide community for private researchers and publishers, in 1979. Financial analysts within the group have exposed and predicted some of the world's biggest shifts since that time, starting with the fall of the Soviet Union back in the late 1980s, to the collapse of the Dot Com (2000) and then mortgage finance (2008) bubbles, and more recently the election of President Trump.

See full archive of Bill Bonner articles

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