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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 William Histed
March 26, 2009
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One of my most memorable moments as a youth was when the U.S. government took silver out of the coinage and substituted base metals. Even at my young age, I knew the system was in trouble or well on the way to trouble. Only a few years later, Nixon slammed the gold window shut to foreign countries holding Federal Reserve notes.

There was at least some pretense, and maybe a hybrid reality to the fact the U.S. central bank notes had some tie to gold and silver just a little over one generation ago. Just one generation ago, the United States was a net creditor nation; today we are a net debtor nation.

My family was in railroading for over 100 years; I grew up around railroad language in my hometown, which once had a large roundhouse to service steam locomotives. I go back to early lessons taught.

One thing I learned early was that a train may go a long distance....even hundreds of miles---before a fatal flaw reveals itself to everyone.

And so, a fatal flaw with the central banking system has caused the derailment of virtually our entire economy.

That fatal flaw that has been with us all along is that a central banking system run on credit/debit created out of thin air must continuously expand or it collapses. It must expand to continue to service debt on which interest compounds and multiplies. The main problem with the debit money system, versus a system of money with true intrinsic value is that one party's credit is another party's debit, or liability. The only course I had trouble in in high school was accounting. I got straight A's in business math, but in accounting, I had trouble diferentiating between a credit and a debit. Really, one is the flip side of the other.

In our all-paper Federal Reserve Bank system, for example, the new "money" and"credit" created out of thin air immediately is someone else's liability, with compounded interest due. It's a balloon that must continue to be expanded; if it deflates, there are problems just the same, but problems of a different nature.

Once you understand this insanity of bigger and bigger and expand and expand which is built into such a system that creates debits that must be serviced, you see some of the reason for so many foolish things in our society over the years.

The federal government could not have fought its almost constant series of wars without the help of its central bankers. Government got new power with the illusion of new wealth creation by the Federal Reserve; it's banks and wealthy families that own its stock got fabulously wealthy. The Federal Reserve Bank is no more owned by the U.S. taxpayers than Federal Express. It's a scam that is soon to be revealed as nothing but a paper lamb that appeared to be a paper lion as long as people saw it as a real lion. Another writer said that the central governments of the world and their central bankers, are like two legs under one individual. One leg has now gone out and the person is stumbling around, frantically trying to remain upright.

Central governments and central bankers are so close, they are about one in the same, until the time I predict will come when the government gives the Federal Reserve Bank the old heave-ho. I have predicted for a few years, in print, that the Federal Reserve Bank will collapse in this generation.

Just as the space shuttle, two of them, in fact, suffered tragic "system malfunctions," this is what has happened to our economy. The flaw was fixed in the system from the beginning. Just as the shuttles continued to spiral out of control for a time, this is what is happening with the Federal Reserve Bank which is frantically hoping for a safe landing.

This had been predicted for years....the only thing that was not known was at what time the space shift Economy would explode before our eyes and the eyes of the world. Others had seen this fatal flaw built in the system---the need to keep inflating or dying....Jim Cook of Investment Rarities being one of them. In fact, he even wrote a book years ago already about a credit catastrophe. I have a copy of the book, and it very closey mirrors what has happened.

I do know this much. The world will never be the same. The Federal Reserve Bank is creating more "funny money" than has ever been created in such a short time in the history of the world. Estimates are $10 trillion to $13 trillion dollars in overnight "money" and "credit' that has been created out of thin air to "save" this economy. Gold and silver, money throughout countless societies long before the time of Christ, acted as disciplines in the United States for some century and a half. You  can't run gold off a printing press, or increase if by computer keyboard strokes. When we abandoned precious metals in our money, we opened the gate wide open to all sorts of abuse, mischief and tom foolery with the public's money. You can see the results standing there naked. You don't need me to categorize what has happened to this great nation of ours.

Actually, central banks had existed a long time before Congress gave up its Constitutional authority to coin our money supply. England had one for years, and the Bank of England allowed England to finance many of its wars until the costs of the wars and occupation helped do England in. This is not too much unlike what has happened to the United States. Many of my "conservative" friends are against big government---except our world-flung wars and military operations all over the globe. It seems to depend on whose ox is being gored.

The fallacy of easy money and easy credit via the mysterious Federal Reserve Bank led to a host of other fallacies and fantasies, both public and private.

Even Bernie Madoff seemed to follow suit from a fantasy of easy money and magical wealth creation from the government and central bankers. He started his own alleged money machine. His only problem was that the government's right to legally printing money was given a long time ago to the Federal Reserve Bank. Unable to print money to get out of trouble, unlike the Federal Reserve Bankand Congress, Mr. Madoff his headed for prison.

The central banking scam is not a whole lot different from Mr. Madoff's concept of economic prosperity. But one thing the two concepts have in common is that both began with fatal flaws in them.

A number of things have happened that most United States citizens do not see. First, much of the world knows we've had, in the parlance of the space program, "A catastrophic failure." It can't be hidden. It can't be printed away. The entire world has been impacted.

Throughout the history of the world, sharp changes suddenly in the economy have often meant trade wars and real wars that have followed as the powers jocky for new positions on the changed field.

Trust that many have had in Wall Street, the Federal Reserve Bank and Washington is gone for years to come...maybe forever.

Many talk about a "comeback" or a "revival" of the economy, but the economy we've had for a few decades was an ever expanding balloon built on false prosperity. We've borrowed from seemingly much poorer nations....we forgot about what made the United States great.

When we made our largest strides forward, we were a land of net savers, of very limited borrowing, of low taxes, of very limited government. That all got changed around. One writer noted that we often think we are the direct opposite of the Russian system, but that is not true. Both are controlled economies, and both economies have  disintigrated within 20 years or so of each other.

In Russia, we claim, the government dictates economic policy.

But here, our government dictates economic policy, only with the help of its paper central banks, the Federal Reserve Bank.

In Russia, Ivan says, "We need 350,000 more coats and 35,000 more cars manufactured.

In the United States, Congress and its central bankers at the Federal Reserve Banksay, "We need to pick up manufacturing....let's arbitrarily lower interest rates so  people will cause more coats and cars to be manufactured."

Ivan in Russia says, "Tell the workers to build more power plants and more highways."

In the United States, Congress and the Federal Reserve Bank say, "We need to expand the money supply so there will be more demand for more power plants and more highways so we can make more jobs for the unemployed."

Don't blame this economic failure on "free enterprise." Nor, do I believe everyone who has been naive about the Federal Reserve Bank is morally lacking. It seems to be almost human nature, especially these days, for many to be out looking for something for nothing, the one lucky lottery ticket, the fountain of youth.

There are no doubt some well intended people who believed for many years that paper and ink, if handled by mysterious "bankers" and governments, could be spun into real wealth. And for some, the system "did" work for them for quite a long time. Until the wheel fell off.

There are some who will blame "free enterprise." We don't know today what free enterprise is.

True free enterprise, without the entanglement of government, would probably be voted out at most Chamber of Commerce meetings in most cities in the United States.

We have adopted many of the socialistic policies of Socialistic European countries. One of the largest problems in the crash of our economy was a fatal flaw in the central banking system from the start. As the rail car wheel that may run hundres of miles, even thousands of miles before it cracks, so was the fatal flaw in the Federal Reserve Bank Printing Company.

We host huge arguments, even on national talk TV channels on on national talk radio, about Democrats versus Republicans. Jim Cook put it a great way. Both major presidential candidates in the past election were huge "statists." Where they differed was on what programs to spend the loot on. One favored tipping the big bird of big government to the left, and to spend more on social engineering. The other wanted the bird titled more to the right to spend on more warfare, military and foreign entanglements.

We have two big government parties. To try to diferentiate them is like arguing which is better, Coca Cola or Pepsi Cola. There may be a difference, but not enough of one I'm going to risk any limb over.

Both major parties were like one when it came to "bailing" out the banking system, the support of so-called "free trade" laws that have decimated U.S. manufacturing and both parties gave us questionable wars that helped to drain our nation's wealth. They are so much alike, they can't stand each other.

Both parties are for the status quo. One party says, "We're for what the other party is for---just a little bit less."

What caused the balloon to finally pop---pumping and pumping and expanding, is now the so-called "solution" to our problem. More of the same.

As a friend, now deceased due to liver failure, once said, he had to have just a couple of more. "I need the hair of the dog that bit me," he told me. And that's all the Federal Reserve Bank is doing now. It believes having the hair of the dog that bit the world economy is the answer.

It might take a bit of the edge off the hangover, another attempt at "pumping," but this disaster from a fatal flaw born in the system may prove fatal.