War and the Paper Standard
by L. Reichard White
mailto: L. Reichard White

It is no coincidence that the 19th Century, a time of Gold coin standards for the most part, was an era of peace. Nor is it a coincidence that the 20th century combines war with paper money. -Ron Paul (R-TX), The Ron Paul Money Book, 1991, pg. 32

Anyone following the news at all will have noticed a very odd about face: After eleven years, suddenly Iraq became number one on the D.C. hit-list again.

And now we know that Herr Bush II massaged the truth about Iraq to con us into war. O.K. He didn't massage the truth about Iraq: He lied thru the teeth -- about Iraq's nukes, connections to alQaeda, and certainly the non-existent Iraq involvement in the 9-11 attacks. [1]

But why?

And what do Venezuela, North Korea, Brazil, Iran, Cuba and Malaysia all have in common with Saddam and Iraq?

Did you know that if Japan, England, France or any other country buys oil -- whether from Saudi Arabia, Venezuela, Russia, or where-ever -- they must pay for it with U.S. dollars? The equivalent situation would be if we Americans always had to pay for oil in, oh, say British pounds.

Did you know that the World Bank and IMF (International Monetary Fund) have written into their charters and included in all their agreements that transactions may not be dominated in gold? Why would that be? And what's this have to do with Bush's war on Iraq? And where does War and the Paper Standard enter the picture?

Well from time immemorial, paper money scammers have discovered that gold and paper money don't mix. In fact, when they do mix, things can get quite nasty. Take this example from the 1790s French Revolution:

To reach the climax of ferocity, the [National] Convention decreed, in May 1794, that the death penalty should be inflicted on any person convicted of 'having asked, before a bargain was concluded, in what money [paper "assignats" or gold and silver] payment was to be made.' The great finance minister, Cambon, soon saw that the worst enemies of his [inflationary] policy were gold and silver. Therefore it was that, under his lead, the Convention closed the Exchange and finally, on November 13, 1793, under terrifying penalties, suppressed all commerce in the precious metals." -Andrew Dickson White, Fiat Money Inflation In France, (Irvington-on-Hudson, New York: The Foundation for Economic Education, INC. 1959), p. 78 & 79

Because the gold standard and "the paper standard" don't mix -- and despite the fact that the U.S. Constitution specifically states for very good reasons: "No State shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts" [2] -- on April 5, 1933 President Franklin Delano Roosevelt issued infamous Executive Order #6102 . With EO #6102, Roosevelt, that outlaw and traitor to his country, not only stole our ancestor's gold, he made it illegal to own. [3] Despite the allegiance he swore to The U.S. Constitution when he took his oath of office, Roosevelt turned gold into a "controlled substance" -- as if it were cocaine or heroin.

Now theoretically paper money could work -- if central bankers in cahoots with the people in governments didn't regularly create a little extra each year "for the gipper." But they always do, and because money, like everything else, obeys the law of supply and demand, this extra "for the gipper" shows up as so-called "inflation." [4]

That's right, prices aren't going up, the value of your money is going down. Like clockwork. Year after year. Because the U.S. FED (Federal Reserve) - - - actually since it's a consortium of private banks, there's really nothing "Federal" about it except its name - - - in cahoots with the people in the U.S. Government take care of the gipper, namely them and their cronies, their brown-nosers, suck-ups and hangers-on. If you look closely for the tip of that suck-up iceberg, you'll discover approximately 22,000 registered and well-paid lobbyists prowling the halls of congress flushing out special favors for their employers -- paid for with your tax money.

What might all this have to do with Iraq, Cuba, Iran, Venezuela, North Korea, Brazil, and Malaysia? And dollars for oil?

Well, things would be a lot worse inflation-wise -- except for one thing: A lot of the money the FED - U.S. Government axis creates has been going overseas. And it stays there. So far. In fact The Federal Reserve estimates that the majority of the cash in circulation today is outside the United States.

Experts estimate that "majority of cash ... outside the United States" is between 60% and 80% of the U.S. dollars in circulation. All that money overseas has a lot to do with the fact that everyone has to pay for oil with dollars. Remember that for later.

As Case Sprenkle of the University of Illinois puts it, "Insofar as the money remains abroad and is not used to purchase goods or services from the country that printed it, it serves as an interest-free loan from poor countries to the rich." But what happens if people overseas stop using it -- and discover the only place they can spend it now is back here in the good ole' u.S. of A.?

What would happen if the Saudia Arabians said they didn't want to be paid [for oil] in dollars anymore, but wanted instead, to be paid, say in yen. There would be inflation that would make the 15 to 20 percent inflation in the early 80's look good. Sen. Pete Domenici, R-NEW MEXICO, C-SPAN II, 18 May 1995 ~12:33:55 PM

Why? Because all those former Saudi oil dollars showing up here would increase the supply, which in accord with Friedman's "Law," would cause the inflation mentioned by Sen. Domenici.

Iraq . . .

Despite U.S. support for Iraq's 1980s war against Iran, including supplying Iraq -- via the early carreer of current U.S. Secretary of Defense Donald Rumsfeld -- with chemical and biological weapons and intelligence on how to use them against Iranian soldiers, the U.S. Government, in cahoots with the British government were, since 1992, engaged in the "secret war" bombing of Iraq, described as " the longest Anglo-American campaign of aerial bombardment since World War Two."

Against international law, [5] they created and were "policing" so-called "no fly zones" over about half of sovereign Iraqi territory and were enforcing an embargo which former U.S. Secretary of State Madeline Albright all but admitted was responsible for the deaths of 500,000 Iraqi children.

Not too surprisingly the oligarcs ruling Iraq -- not to mention the Iraqi people -- weren't ecstatic over this chronic attention. As a result, as reported in Oil & Gas News, Oct. 12, 2000, Iraq made a decision to ditch the dollar in foreign trade transactions. Said Iraqi Finance Minister Hekmat Ibrahim al-Azzawi, "The dollar is the currency of an enemy state, and must be abandoned for other currencies, including the euro."

Iraq suspended "Oil for Food" program sales, under which Iraqi oil is traded -- more than two thirds of it to U.S. concerns -- in exchange for currency. Iraq formally asked the United Nations, which administers "Oil for Food," to change the currency in Iraq's U.N.-managed accounts from dollars to euros. That may well have been Saddam's greatest mistake.

In due course, the U.N. bureaucrats ruled that Iraq could indeed sell it's oil for any currency it chose. Iraqi oil is now paid for mainly in euros. Uh-oh!

Venezuela . . .

Unless you're a news junkie, you probably missed the temporary coup against Venezuela's popular democratically elected president Hugo Chavez. Temporary? Yes, and that's very unusual.

But, since Venezuela is a main oil supplier to the U.S., you probably heard of the Venezuelan strikes disrupting our oil supply. You almost certainly didn't see the dollar connection because the U.S. Corporate media avoids telling you such potentially embarrassing things. If you'd been reading Japan Times online however, you would have gotten this clue back in November of 2000:

...it must be noted that Iraq is attempting to switch to the euro as its currency for settling oil exports, and that Venezuela is reportedly planning to follow suit. Euroland has a lot to gain from this development because it will eliminate currency exchange risks. -TERUHIKO MANO, Euro attracts global audience as option to dollar-based trade, JAPANESE PERSPECTIVES, The Japan Times: November 20, 2000

Now if you're congentially cynical (or an objective observer of U.S. militaryindustrialmedia complex [6] behavior) then you wouldn't be surprised to discover that

... an influential lawmaker [House International Relations Committee Chairman Henry Hyde (R-Ill) [7] ] has called on President George W. Bush to support the ouster of left-wing Venezuelan strongman Hugo Chavez. Hyde Urges Bush to Help Oust Venezuelan President, J. Michael Waller, Insight Magazine, Oct. 29, 2002

Or that CNBC insider mouth-piece Lawrence Kudlow called for another attempt at "regime change in Venezuela" as late as February 28, 2003

So, you shouldn't be too surprised to discover that that first attempt at "regime changing" Chavez had "Made In USA" stamped all over it. In early November 2001 (well before any oil supply disruptions), the formerly super-secret National Security Agency (NSA) held a two-day seminar on U.S. - Venezuela foreign policy, supposedly because President Chavez made a statement to the effect that the U.S. was "fighting terrorism with terrorism." A two day confab involving hi-powered super-secret bureaucrats? Because someone "told it like it is?" Really?

Once you have that background information, you know enough to look for U.S. Government fingerprints on the first "regime change" attempt which occured just five months later --- and here they are:

WASHINGTON: Venezuelan military officers, who unsuccessfully tried to topple President Hugo Chavez last week, were in contact with the US embassy in Caracas less than two months ago, Newsweek magazine reported Monday. ... The United States expressed no sympathy for Chavez after he was ejected from power early Friday and did not explicitly reject the interim government that replaced him. -Venezuelan coup plotters were in contact with US, The News, Jang Group, Tuesday April 16, 2002

Only circumstantial, you say? Well, here's the CSI (Crime Scene Investigation) seal of approval from an interview with crack reporter Gregg Palast - - - "And our ambassador, a political toady named Charles Shapiro, ran down from the U.S. Embassy to put his arm around the guys who are literally holding the president of the country [Venezuela] hostage. You have to imagine what this looks like to the rest of the people in the world. Of course, we didn't see that." In that same interview Palast gives some insight into just how integrated into Ike's "militaryindustrial complex" the U.S. Corporate media is [8] -- and why you should consider dropping your subscription to the NY Times and read sites like Sierra Times and The Libertarian Enterprise regularly instead.

Now despite all this special attention, Venezuela isn't even a member of the official "Axis of Evil." What's with that? (You already know -- and it has everything to do with the paper dollar.)

From here, we can skip most of the gory but usually hidden details and look for the clues that manage to escape TPTB (The Powers That Be) cone of silence. [9] Our tactic is simple: We look for some sign the U.S. Government may take action against a particular country and then see if we can find a non-use-of-the-paper-dollar connection.

Iran . . .

So first, we look for signs of U.S. pressure - - -

Iranian Foreign Minister Kamal Kharrazi has condemned an allegation by US President George W Bush that Iran is developing weapons of mass destruction. "Whatever comments Bush made on Iran's pursuing weapons of mass destruction are totally baseless, superficial and wrong," he told reporters in Tehran. BBC, Wednesday, 29 January, 2003, 17:56 GMT, Iran outraged by Bush speech

Is the response to Bush Jr. justified or just the paranoid imaginings of the Iranian Minister? Apparently the former: U.S. Undersecretary of State John Bolton assured Israel on Monday, Feb. 17, 2003 that America will deal with Syria, Iran and North Korea after attacking Iraq and occupying Baghdad. And on Friday, February 28, 2003, Richard Perle, chairman of the U.S. Defense Advisory Board, confirmed the U.S. position that "Change is needed in all those three countries [Iran, Libya and Syria], and a few others besides."

We know then that the pressure is on Iran -- other countries too, but we're only perusing those officially on the "Axis of Evil" list at this point.

Next then, we look for the dollar connection - - - and there is one. It seems that a senior Iranian oil politician, while serving as OPEC Secretary General, said in a speech delivered April 14, 2002, in Oviedo, Spain, "It is quite possible that as the bilateral trade increases between the Middle East and the European Union, it could be feasible to price oil in euros considering Europe is the main economic partner of that region." Such comments are not made -- nor taken -- lightly.

North Korea . . .

Any American corporate media-watching at all and you know N. Korea is under pressure, largely of their own making. As usual though, things aren't quite as spun by said corporate militaryindustrialmedia. [10] We already know from above that Undersecretary of State John Bolton confirmed the continued presence of N. Korea on the U.S. Government hit list. As usual, Tony Blair's in on it.

Is there a dollar connection too? Well, though not very significant in the over-all scheme of things, effective Dec. 7, 2002, North Korea dropped the dollar. Was the Dec. 7 date just a Pearl Harbor Attack coincidence?

Perhaps to some the connection of Iraq, Iran, and North Korea to dropping the dollar may seem a little ambiguous -- but it's clear there's no obvious reason to attempt a coup against a popularly elected Venezuelan president -- only oil and the threat to dump the practice of using dollars to pay for it. To what extent is this "war" on Iraq's citizens because their oligarchs stopped taking dollars for their oil?

There are some things they simply won't let us know, even though we pay their bills. So the best we can do is view the circumstantial evidence and reach our own conclusions. What do you think?

There are a few other countries that may develop problems with the U.S. militaryindustrialgovernmentmedia complex because of dollar factors, and you may want to keep an eye on them just out of curiosity.

Russia . . .

One of five countries still targeted by the U.S. Government nuclear arsenal -- and as reported recently in the Wall Street Journal, Russia's planning to cut it's dollar foreign reserves to 50% from the previous 70%. Russia has also announced plans with Germany to open a euro denominated oil futures market.

China . . .

Another of the five countries targeted by U.S. nukes. As a result of a chronic trade surplus with the U.S., China now holds the largest supply of foreign exchange dollars next to Japan.

Malaysia . . .

Malaysian Prime Minister Dr.Mahathir Mohamad said the latest warning by the United States on the possibility of terrorist attacks in Malaysia could amount to economic sabotage. ..."They should tell us, who, where and when so that we can take action to prevent such attacks from happening instead of making such baseless allegations," said Dr. Mahathir. -[source: Malaysia Star, 11/22/2002]
Just before the Organisation of Islamic Conference which is due to take place in Kuala Lumpur in October 2003 a number of Muslim countries, led by Malaysia, propose to introduce an electronic unit of value called a gold dinar to settle bilateral trade among themselves. The ... White House should reflect on the fact that there are 1.3 billion Muslims in the world and very few of them share America's view of the dollar. Western World Would Be Unwise To Ignore Proposal For Gold Dinar Currency Among Islamic Countries., Date : August 21, 2002

Brazil and Cuba . . . .

According to Insight Magazine, in the same letter urging Bush Jr. to go after Venezuela, Henry Hyde also warned "that a triumvirate of political extremists leading economic powerhouse Brazil, oil giant Venezuela and the terrorist-sponsoring regime of Cuba constitute an emerging "Axis of Evil" that the United States must stop."

So now you know what Venezuela, North Korea, Brazil, Iran, Cuba and Malaysia all have in common with Saddam and Iraq.

While war and fiat (paper) money have many symbiotic associations, rarely, even in Ron Paul's 20th century, has a connection between war and "the paper standard" seemed so clear!

UPDATE:

Tokyo, April 17 (Bloomberg) -- Pertamina, Indonesia's state oil company, dropped a bombshell recently. It's considering dropping the U.S. dollar for the euro in its oil and gas trades. -William Pesek Jr.

NOTES:

[1] Fifteen of the 19 alleged hijackers carried passports from Saudi Arabia for example. Iraq has never been implicated in the 9-11 attacks, and in fact many of Ossama bin Laden's comments indicate that he was opposed to Saddam Hussein. return

[2] Article I, Section 10, Clause 1 United States Constitution from U.S. House of Representatives, return

[3] As you would expect in such a radical document, the terminology in EO 6102 is predictably political. Remember, our ancestors always transacted with gold or silver. How do you go about making that illegal all of a sudden? 6102 speaks of "hoarding." Most people would call it "saving." Anyway, if they wanted to end hoarding, why is gold no longer available for transactions? Answer: It was truly "hoarded" by the Federal Reserve system & U.S. Government -- in places like the Federal Reserve Bank of New York and Fort Knox, Kentucky. In 1933, the Federal Reserve paper money scam was about to blow up, and like Cambon and the French before them, the bankers knew they had to get the gold out of circulation. 6102 was how they did it. return

[4] "There is perhaps no empirical regularity among economic phenomena that is based on so much evidence for so wide a range of circumstances as the connection between substantial changes in the quantity of money and in the level of prices." ... "It follows ... that inflation is always and everwhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output." -Economics Nobel Prize winner Milton Friedman quoted in Judy Shelton, Money Meltdown (New York: The Free Press 1994), p. 176 & 177 return

[5] "There are no references to no fly zones in any Security Council resolution. To be sure about this, I asked Dr Boutros Boutros-Ghali, who was Secretary General of the United Nations in 1992 when Resolution 688 was passed. 'The issue of no fly zones was not raised and therefore not debated: not a word,' he said. 'They offer no legitimacy to countries sending their aircraft to attack Iraq.' " John Pilger, The "secret" war which has seen a 300 per cent increase in bombing raids on Iraq., 20 Dec 2002 See also The Embarrassment and Illegality of the No-Fly Zones, by Jacob G. Hornberger, November 21, 2002 . return

[6] The phrase "militaryindustrial complex" was made famous by President Dwight David Eisenhower in his farewell address. I sometimes take liberties and expand his original idea to match the modern situation. return

[7] Hyde recently stated that the U.S. Constitution has been "overtaken by events, by time" and is "no longer relevant to modern society." Congressman Ron Paul, P.O. Box 1776, Lake Jackson, TX. 77566, (979) 265-3034 return

[8] Greg PALAST: We're not permitted to find out what's happening in our news media. ... in the case of Venezuela, I was stunned to come back from Caracas to find a picture on the front page of the San Francisco Chronicle of 100,000 people marching against the president of Venezuela. Sounds like he's a terrible guy and people hate him. What they didn't say was that half a million people were marching for him. At least the Soviet Russians knew that the stuff in Pravda was coming out the wrong end of a toilet, whereas, we live under the pretense that The New York Times prints all the news that's fit to print. return

[9] They do regularly cover for themselves and each other. The Bush administration sought secrecy for Bill Clinton's leaving office pardons --- and danged near everything that's happened since. return

[10] As of 2003, the U.S. Government is five-years behind schedule on two nuclear power reactors promised in return for North Korean abandonment of their own reactor -- which, unlike the U.S. plants, could produce weapons-grade materials. -PINR: "North Korea threat part of U.S. regional strategy", Tuesday December 10, 2002 @ 01:56:19 EST return /html>