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Jim Cook



Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

Best of Bill Buckler
July 14, 2010
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Please remember, money is NOT wealth, it is a medium for the exchange of wealth. By being the common denominator in almost ALL exchanges that take place in the economy, money brings forth prices. Prices are ratios which fluctuate with EVERY individual economic exchange that takes place. By definition, exchanges are voluntary. Because they are voluntary, there is never an exchange unless BOTH parties to it are offering something they value less for something they value more. Were that not the case, an exchange would not take place. Yes, all these things are basic and obvious when thought through. But they are not thought through. In fact, the concerted effort to prevent them from being thought through has never been so pervasive as it is today. Because of that, these basic truths cannot be repeated too often.

The simple fact that money is the only economic good which is NOT consumed makes the “production” of more money, even the production of more gold coins which then circulate as money, injurious to economic well being. In an economy where Gold in coin form circulates as money, the production of more Gold coins lowers the purchasing power of every existing Gold coin. In an economy where paper which is in use as money by government edict circulates as money, the exact same thing happens. Every new “Dollar” produced debases the utility as a medium of exchange of every existing “Dollar” in circulation. This simple fact is one which also cannot be repeated too often.

The “Stimulus” Solution:

So what have governments and the banks they control done? They started by taking over - by law - complete control of what is used as the medium of exchange. Having gained that control, they used it to gradually switch the medium of exchange from something that cannot be created out of thin air - Gold – to something which can - paper. Having done that, they went on to remove the link between the paper and the gold. They finished that process almost 40 years ago.

Once paper gained full ascendency, the “game” was on in earnest. Savings all but vanished and circulation credit took over almost total control of bank lending and government spending alike. The links between risk and reward, production and consumption and savings and investment were shattered by an ocean of “money” created out of thin air and “backed” by the full faith and credit of those who created it. They turned what was a global economy into a global “stimulus package”. They are still doing it.

“Repent At Leisure”?:

On June 24, The Economist put out a special report on global debt. They called it “Repent at Leisure” and it began with this sentence: “Man is born free but is everywhere in debt”. If you don’t recognizethis, it is borrowed from the first sentence of Rousseau’s Social Contract with the last word changed from“chains” to “debt”. The essence of The Economist’s argument was contained in this sentence: “This special report will argue that, for the developed world, the debt-financed model has reached its limit.”

Nowhere in the article was there any mention of the nature of modern “money”. Nor was there anydiscussion about how this “money” comes into existence through the lending practices of the bankingsystem, including the central banks. There is no possibility of addressing the economic problems we facetoday, let alone “solving” them, unless and until these basic questions are faced.

The “debt-financed” model has indeed reached its limit, but there is a simple question that nobody isasking. How can a monetary system which is underpinned almost ENTIRELY through circulation creditcreated by borrowing continue to function when the ability to borrow has reached its limit? Nobodywants to “solve” this problem because the answer is as simple as the question. IT CAN’T!

Repenting at leisure is reserved to the contemporaries of Mr Keynes who saw their “long run” out and are now no longer with us. But before we can “repent” at all, it is necessary to know what confronts us.

Sound Finances:

“Sound fiscal finances are essential to sustain recovery, provide flexibility to respond to new shocks, ensure the capacity to meet the challenges of aging populations and avoid leaving future generations with a legacy of deficits and debt.”

From the Toronto Heads of State G-20 Summit communiqué

“Fiscal” is again derived from a Latin word, in this case “fiscus” which was a money basket used for the collection of taxes. Even the most corrupt of the Roman Emperors never imagined a basket as big as the one that the G-20 governments have been using in an attempt to restart “growth”.

The G-20s version of “sound fiscal finances” is based on a proposal put forward by Canada’s Prime Minister, Mr Stephen Harper. Mr Harper has suggested that the “advanced” G-20 economies should aim to cut their current budget deficits in half by 2013. Let’s take the case of the US government. Back in February this year, the Obama administration released their budget for 2011. In it, they estimated a budget deficit for 2010 (the fiscal year ending on September 30) of $US 1.6 TRILLION. They projected a budget deficit for the year 2013 of $US 778 Billion.

Ignoring the record of the yawning gulf between US government budget “projections” and the ensuing reality, this is indeed a deficit reduction of (just over) one-half. We would hazard a guess that this was the projection upon which Mr Harper based his “suggestion”. The problem is that these “projections” are totally meaningless. In the “Inside The United States” section of our last issue (Number 656), we reported that on June 4, the US Treasury itself reported to Congress that the government’s funded debt would climb to $US 19.6 TRILLION by 2015. The Treasury is predicting annual deficits averaging about $US 1.25 TRILLION per year over the next five years. The talk of “sound fiscal finances” is ludicrous.

Even more ludicrous is the idea that such “sound fiscal finances” can avoid leaving coming generations lumbered with a “legacy of debt and deficits”. A century ago, US government debt (funded and unfunded) was a bit less than $US 30 per person. Today, the funded portion of the debt alone is nearing $US 43,000 per person. Bad as this “progression” is (add in the unfunded debt and the number explodes to well over $US 325,000 per person), it is the minor problem. The major problem is the destruction of the monetary system. The “legacy of debt and deficits” is ALREADY almost 100 years old. . .

By definition, a free people are those who interact with each other at their sole discretion. The use of force is barred to everyone, including governments, except in self-defence. The role of government is to protect the freedom of its citizens. It’s a reasonably simple proposition.

Is it true that the indirect exchange through the use of the media of exchange which is money has enormously enriched the world? It surely is. Is it true that without the use of money, the standard of living of all but the very poorest and most primitive would be a small fraction of what it is today? Indisputably. Is it therefore true that money is a necessary prerequisite for the flowering of freedom and therefore civilisation? All of history confirms the fact.

Neither prosperity nor freedom nor even life itself can be sustained, let alone enhanced, by pretending that the wealth which is a necessary prerequisite for all these things can be conjured up by passing a law or waving a wand. Wealth cannot be “created” by printing or lending into existence the legal “means” to consume what has NOT been produced. Nor can there be any freedom as long as people are legally bound to use only these “means” in their exchanges. A free people must have a sound money. As Hans Sennholz (amongst others) has said, sound money is not impossible, it is merely illegal. As long as sound money IS illegal, freedom will be prohibited by law.


Ó 2009 – The Privateer

(reproduced with permission)


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