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2nd World War Franklin D. Roosevelt Hellstorm Holocaust Joseph Stalin Morgenthau Plan Red terror Third Reich Thomas Goodrich Winston Churchill

Hellstorm • chapter 4

In almost any war one side can be dishonestly demonized even by a truthful enumeration of its crimes, if the crimes of its adversaries are suppressed. —Irmin Vinson


Excerpted from Thomas Goodrich’s 2010 book

Hellstorm:
The Death of Nazi Germany
(1944-1947)



Crescendo of destruction

Roosevelt slapped a crippling embargo on the Reich’s ally, Japan, in hopes of provoking an attack and slipping into the war via the “back door.” When the Japanese, facing slow strangulation, dutifully responded at Pearl Harbor in December 1941, it was Roosevelt dream come true. Later, when his Secretary of Treasury, Henry Morgenthau, proposed a plan to pastorialize Germany upon victory, thereby assuring the death of millions, Roosevelt was its strongest supporter.

“I would like to see the Germans on the breadline for 50 years,” the president admitted in private.

In early February 1945, leaders of the three most powerful nations on earth assembled a final time at Yalta in the Soviet Crimea. Despite the obvious dissimilarities of the men, intellectual as well as physical, each shared a characteristic with the other that shrank into insignificance all outer contradictions—all three harbored a inveterate hatred of not only Adolf Hitler and Nazism, but Germans and Germany.

At a meeting with Churchill at Casablanca in 1943, Roosevelt declared that nothing short of “unconditional surrender” would be accepted from Germany. Thus, by removing any possible latitude Hitler might have had for negotiation, the American president’s pronouncement insured that not only would Germany fight to the death, but it also guaranteed that hundreds of thousands of Allied airmen and soldiers would perish as well. Additionally, that such a protracted war would enable the Red Army to reach and no doubt enslave much of Europe seemed a foregone conclusion.

When Soviet forces invaded Poland in 1939, one of Stalin’s first moves was to round up and execute upwards of 15,000 army officers and intellectuals, thereby removing in one stroke much potential opposition. Well aware of his past, nervous about the impact his future acts in Europe would have upon a squeamish British public, desperate to hold an unnatural alliance together, Churchill’s government tried mightily to cover for the bloody behavior of their communist ally. Ran a secret memo of the British Department of Intelligence to high-ranking civil servants and opinion-molders in the press:

We cannot reform the Bolsheviks but we can do our best to save them—and ourselves—from the consequences of their acts. The disclosures of the past quarter of a century will render mere denials unconvincing. The only alternative to denial is to distract the public attention from the whole subject. Experience has shown that the best distraction is atrocity propaganda directed at the enemy… Your cooperation is therefore earnestly sought to distract public attention from the doings of the Red Army by your wholehearted support of various charges against the Germans… which have been and will be put into circulation by the Ministry.

Let anyone doubt Stalin’s intentions once his legions gained control of Germany, the reality was made crystal clear at the Teheran Conference in 1943. Lifting his glass of vodka for the “umpteenth toast,” the communist leader suddenly announced, “I propose a salute to the swiftest possible justice for all of Germany’s war criminals—justice before a firing squad. I drink to our unity in dispatching them as fast as we capture them, all of them, and there must be at least 50,000 of them.” When Churchill, well into his cups, angrily protested—“The British people will never stand for such mass murder without a proper trial!”—Stalin smiled, his eyes twinkled and overall he seemed “hugely tickled.”

“Perhaps,” the American president interrupted, “we could say that instead of summarily executing 50,000 we should settle on a smaller number. Shall we say 49,500?”

Despite Stalin’s well-earned reputation as the greatest mass murderer in history, Franklin Roosevelt was a staunch supporter and admirer of the dictator and defended him at every turn. In an effort to put a friendly, folksy face on the Russian premier and convince Americans that he was a “magnificent” and “gallant” ally, Roosevelt began referring to Stalin as “Uncle Joe.”

“He is a man who combines a tremendous, relentless determination with a stalwart good humor,” explained the president of the American public. “I believe he is representative of the heart and soul of Russia; and I believe that we are going to get along very well with him and the Russian people—very well indeed.”

The eyes of the world were now upon Yalta, said the prime minister, and what the “Big Three” accomplished during talks over the next few days would affect mankind for a hundred years.

Another subject Stalin was explicit about at Yalta concerned the return of over two million Soviet citizens who had either fled to Germany to avoid persecution at home or who had joined the enemy to fight against communism. Again, to this demand Roosevelt promised his complete cooperation. But of course, the main topic of discussion at Yalta was the fate of their mutual enemy, or, as Churchill grimly phrased it, “The future of Germany, if she had any.”

Once victory was complete, the three leaders agreed that the former Third Reich would be carved up like the evening’s meal and her people marched off as slaves to the Soviet Union. Although Roosevelt had solemnly announced earlier that “the united Nations do not traffic in human slavery,” when Stalin proposed the plan, the president called it “a healthy idea.”

Another subject broached at Yalta, albeit a seemingly minor one, was Stalin’s request for the massive bombing of eastern Germany to smooth the way for the Red Army’s final sweep across the Reich. Eager to demonstrate to his ally that Britain, and especially the RAF, was yet a force to be reckoned with, Churchill quickly agreed.

When the Yalta talks were finally concluded on February 11, the three Allied leaders signed a joint statement for press release, then bid each other a fond adieu.


____________________________

Educate yourself about the Holocaust perpetrated on the German people by the Allied forces that the mainstream media has covered up for nearly seventy years.

Hellstorm is still available from the publisher.

____________________________


My 2 cents:

As described by Solzhenitsyn:

In Yalta Churchill and Roosevelt had signed the agreement to repatriate all Soviet citizens, and especially the military, without specifying whether the repatriation was to be voluntary or enforced: How could any people on earth not be willing to return to their homes? The nearsightedness of the West was condensed in what was written at Yalta.

The English turned over the Soviet army command a Cossack corps of forty to forty-five thousand men which had fought its way to Austria from Yugoslavia. The extradition was carried out with perfidy which is characteristic of British diplomatic tradition. The Cossacks did not grow suspicious when they were asked to turn in their weapons, on the grounds that this was necessary in order to standardize their equipment. On May 28… [Solzhenitsyn describes in this paragraph of his Gulag Archipelago how the Allied forces extradited these Russian people, against their will, to Stalin.]

They could not even shoot or stab themselves to death, since all their weapons had been taken away. Some jumped off the high viaduct into the river or onto the stones. The hearts of the British were not troubled, nor were their democratic minds. British tanks and soldiers arrived. The British soldiers started beating them with rifle butts and clubs, grabbing them and throwing them into the trucks, including the wounded, as if they were packages. Entire families sought death by throwing themselves into the river. Meanwhile, the British units in the neighborhood pursued and shot at the fugitives. (The cemetery where the people who were shot or trampled to death and buried still exists in Lienz.)

But even that was only the beginning. During all of 1946 and 1947 the Western allies, faithful to Stalin, continued to turn over to him Soviet citizens, former soldiers as well as civilians. It did not really matter who they were as long as the West could get rid of this human confusion as quickly as possible. People were extradited from Austria, Germany, France, Denmark, Norway, and Sweden, from the American occupation zones, and from the territory of the United States as well.

It goes without saying that most of the deportees died in the Soviet Gulag. So who was the real monster, the three Allied leaders or the German chancellor?

Categories
Giorgio de Chirico My pinacoteca

Piazza d’Italia

Painting of the day:

Giorgio de Chirico
Piazza d’Italia
~ 1955
Olga’s Gallerya

Categories
2nd World War Alexandr Solzhenitsyn Hellstorm Holocaust Mongols Thomas Goodrich

Hellstorm • chapter 3

In almost any war one side can be dishonestly demonized even by a truthful enumeration of its crimes, if the crimes of its adversaries are suppressed. —Irmin Vinson


Excerpted from Thomas Goodrich’s 2010 book

Hellstorm:
The Death of Nazi Germany
(1944-1947)



Between Fire and Ice

With the remnants of the German army in headlong flight, hordes of Red soldiers swarmed through the breach and poured into Greater Germany. As word of the Russian breakthrough spread, millions of Germans in their path hastily packed and fled into the freezing weather.

Already bitterly cold, several days after the exodus began the temperature plunged below zero. As a result, little children and infants dropped by the thousands. “It was terribly cold, and the wind was like ice,” said one young mother, “the snow was falling and nothing warm to eat, no milk and nothing. I tried to give Gabi the breast, behind a house, but she didn’t take it because everything was so cold. Many women tried that, and some froze their breasts.” When Gabi died, the distraught woman continued to cradle the tiny corpse until her own arm eventually froze. “I couldn’t carry her more after she was dead. I couldn’t stand it any more,” the mother sobbed. “I wrapped her up well and put her deep in the snow beside the road… Thousands of women put their dead in the ditches by the roadside where they wouldn’t be hurt by automobiles or farm wagons.”

Hideous as conditions were, the treks pressed steadily west, away from the terror looming somewhere behind. Although millions were on the roads in full flight, millions more remained at their farms, villages and towns. They did not really believe that the Russians were as cruel and inhuman as they were reputed to be, but hoped to win over the latter by welcoming them and being hospitable.

“The Mongols are coming… You go quick. Go quick.”

Composed largely of Mongols, Kulaks, Kazakhs, Kalmuks, and other Asians, as well as convicts and communists, these men who formed the second wave of troops [the first were Slavs] were regarded, even by their own comrades, as utterly merciless. Terrified by the news, many Germans did attempt to flee and move in the wake of the first Soviet wave. Most, however, found themselves trapped and could do little more than hide young girls and once again pray that their worst fears were unfounded. After a wait of sometimes days, but normally only hours, the dreaded second wave arrived.

While flames shot up from different corners of the towns and gunfire erupted as citizens were murdered in the streets, the invaders soon began kicking in door homes, shops and churches. A frightened boy recalled, “Right next to me poor defenseless women were being ravished in the presence of their children.” Said another victim, “The women were raped, not once or twice but ten, twenty, thirty and hundred times, and it was all the same to the Russians whether they raped mere children or old women. The youngest victim in the row houses where we lived was ten years of age.” Mothers were raped in the presence of their children; girls were raped in front of their brothers. While many upright Russian officers courageously stepped in and risked their own lives to stop the murders and rapes, their efforts were little more than a drop of water to a forest fire.

“All of us knew very well that if the girls were German they could be raped and then shot,” admitted Alexander Solzhenitsyn. “This was almost a combat distinction.”

When the Russians eventually tired of looting, robbing, murdering, and ill-treating the women and girls, “they set fire to a considerable part of the village and razed it to the ground,” said a survivor of Schoenwald, the small community that had dismissed rumors of Russian ruthlessness and opted to welcome them instead.

While those who remained endured unspeakable fates, Germans who fled with treks also suffered. “What surprised us most was the way they traveled,” recalled a British POW, who, along with thousands of other Allied prisoners, was being marched west away from the advancing Soviets.

It was so cold that even in day-time any drink mixed with cold water froze solid before it was possible to carry it to one’s mouth. At night men and women could keep alive only by huddling together in a wagon… Those who fell asleep in the snow were dead within a few minutes.

Given the chaotic conditions, and with freezing refuges clogging the way, many treks were quickly overhauled by the Russians. Some Soviet tanks refused to leave the roads and crashed straight through the columns, squashing all in their path. After heavy traffic, the victims—men, women, children, and animals—were eventually as flat as cardboard.

As a rule, those who fled by train fared best. Speed did not always guarantee escape, however. Russian aircraft routinely strafed and bombed the cars from above and tanks cut the rails from below. When the Soviets suddenly captured the town of Allenstein, they forced the stationmaster to signal the “all clear” to refugee trains still arriving from the east. As one unsuspecting train after another steamed into Allenstein, the Russians first slaughtered any men found on board, then passed their time raping carload after carload of females.

Meanwhile, the red tide moved closer. In countless German cities and towns the pattern repeated itself, as the diary of a Catholic priest from Klosterbrueck reveals:

January 21st 1945. Strange to say, the population intends to remain here, and is not afraid of the Russians. The reports that in one village they rapped all the women and abducted all the men and took them away to work somewhere must surely have been exaggerated.

January 25th. They told us that whole families had been shot by the Russians. Girls who had refused to allow themselves to be raped, and parents who had sought to protect their children, had been shot on the spot.

January 27th. We priests were allowed out of the chapel for half an hour today in order to bury Margarethe in the yard. Poor girl, it is a good thing you were dead and so did not know what the Russians did to your body!

“In every village and town they entered,” wrote one who spoke with soldiers, “the German troops came upon scenes of horror: slain boys, People’s Army men drenched with gasoline and burned—and sometimes survivors to tell the tale of the outrages.”

Hundreds of thousands massacred, hundreds of thousands raped, millions already enslaved—but this was nothing. Worse was to come.


____________________________

Educate yourself about the Holocaust perpetrated on the German people by the Allied forces that the mainstream media has covered up for nearly seventy years.

Hellstorm is still available from the publisher.

Categories
Art My pinacoteca

Guernica

Painting of the day:

Picasso
Guernica
~ 1937
Museo Reina Sofía

Categories
2nd World War Berlin Hellstorm Holocaust Third Reich Thomas Goodrich

Hellstorm • chapter 2

In almost any war one side can be dishonestly demonized even by a truthful enumeration of its crimes, if the crimes of its adversaries are suppressed. —Irmin Vinson


Excerpted from Thomas Goodrich’s 2010 book

Hellstorm:
The Death of Nazi Germany
(1944-1947)



The Dead and the Dead to Be

As a symbol of the Third Reich, as the most obvious example of Germany’s will to fight on, more bombs had been devoted to Berlin than any other German city and in total tonnage, more explosives were dropped on the capital alone than the Luftwaffe had dumped on all England throughout all the war. The destruction was so complete that one Berliner was heard to quip, “If they want to hit more targets, they’ll have to bring them with them.”

Although nothing could stop the rain of death pouring down on Germany, Adolf Hitler was determined to trade terror for terror. While damage was trifling compared to that of the Reich, it was a boost to German morale when the first “wonder weapons,” or V-rockets, began slamming into England during the summer of 1944.

“When German soldiers were captured by guerrillas, they were often abominably treated,” one Wehrmacht general recounted. “It was not unusual for the Soviets to torture their prisoners and then hang them up, sometimes with their genitals stuffed in their mouths.” Other Landsers were released, then sent staggering down roads toward their comrades, naked, bloody, eyes gouged from sockets, castrated.

One group which could expect no mercy from the Germans was the communist commissars who traveled with Red Army units. Composed “almost exclusively” of Jews, it was these fanatical political officers, many Germans felt, who were responsible for the massacres and mutilations of captured comrades. Explained one witness, Lieutenant Hand Woltersdorf of the elite SS:

One of our antitank gun crews had defended itself down to the last cartridge, really down to the last cartridge… They then had to surrender. While still alive they had their genitals cut off, their eyes poked out, and their bellies slit open. Russian prisoners to whom we showed this declared that such mutilations took place by order of the commissars. This was the first I heard of such commissars.

With the threat of torture and execution facing them, many idealistic Germans soldiers had an added impetus to fight to the death.

(Typical Landsers)

In the minds of most Landsers, the war in the east was not a contest against the Russian or Slavic race in particular, but a crusade against communism. In the years following World War I, Marxist revolutionaries had nearly toppled the German government. Because most of the leaders were Jews, and because Lenin, Trotsky, and many other Russians revolutionaries were Jewish, the threat to Nazi Germany and Europe seemed clear. Hence, from Adolf Hitler down to the lowliest Landser, the fight in the east became a holy war against “Jewish Bolshevism.”

“The poor, unhappy Russian people,” said one shocked German soldier as he moved further into the Soviet Union. “Its distress is unspeakable and its misery heart-rending.”

“When you see what the Jew has brought about here in Russia, only then you can begin to understand why the Fuhrer began this struggle against Judaism,” another stunned Landser wrote, expressing a sentiment shared by many comrades. “What sort of misfortunes would have been visited upon our Fatherland, if this bestial people had gotten the upper hand?”

Following the devastating German defeat in Stalingrad in 1943, the “upper hand” did indeed pass to the enemy. Supplied by the US with a seemingly inexhaustible amount of goods, from tanks and planes to boots and butter, the resurgent Red Army assumed the offensive. As the heretofore invincible Wehrmacht began its long, slow withdrawal west, a drama as vast and savage as the steppe itself unfolded, the likes of which the modern world has never witnessed.

____________________________

Educate yourself about the Holocaust perpetrated on the German people by the Allied forces that the mainstream media has covered up for nearly seventy years.

Hellstorm is still available from the publisher.

Categories
Currency crash Emigration / immigration Eschatology

Our crystal ball

Further to my previous post.

As der Schwerter has just translated to German an article by Edward S. May (“Baron Bodissey”) that explains beautifully why it is almost certain that economic Armageddon is around the corner.

Below “Chump Change,” the complete 2009 article by May that originally appeared at Gates of Vienna. Presently the situation in the US is far more compromised thanks to the ongoing (suicidal) efforts of chairman Ben Bernanke:




When I was seven years old I took up coin collecting as a hobby. Back in those days there were still a lot of interesting coins in circulation: the buffalo nickel, the Mercury dime, the Liberty Walking half dollar, and—if you were patient and went through enough rolls of coins—the occasional Indian head penny or “V” nickel.

The most exciting coin of all, however, was the silver dollar. The 1921 “Peace” dollar would do, but the Morgan dollar was preferable—it had a serious-looking 19th century design, and was the very same dollar that filled those heavy payroll bags heisted by stagecoach robbers in Westerns. It was a nice hefty piece of real American history, and it could fill the palm of a small boy’s hand.

Up until my tenth birthday my allowance was fifty cents a week, which I received in the form of a biweekly dollar bill. During my silver dollar craze I would take that bill down to the bank and ask for a silver dollar in exchange for it. The tellers all knew me, and would oblige me by picking through their selection of silver dollars until they found a date I didn’t have.

I was able to indulge myself in this manner because most of the dollar bills in circulation back then were still silver certificates.

The bank had no choice: under its charter, it was required by law to “pay the bearer on demand” a dollar in official United States silver coinage for every silver certificate presented to it.

No one has the same option today. Today all the paper money in circulation consists of Federal Reserve notes, which are not redeemable for anything in particular. You can go to the bank and exchange your dollar bill for four quarters, but those are no longer the shiny silver discs that rang so delightfully on the marble counter at the teller’s window. Nowadays the dimes, quarters, and half dollars are all “Johnson slugs”, the ugly nickel-copper sandwiches that were introduced in 1964 when silver coinage was abolished and the silver certificates were withdrawn from circulation. 1968 was the last year in which the law required that any paper dollar be redeemable in silver.

The abolition of silver coinage was the culmination of an extended process that took most of a century to complete: the disconnection of American paper currency from any fixed standard of value as represented by precious metals.

By the time the Johnson slugs appeared, the abolition of the silver coinage was an absolute necessity. The price of silver had been allowed to float, and because of inflation the silver in a dollar coin was worth more than $1.25. Entrepreneurs could make a tidy profit buying up silver dollars in bulk, melting them down, and selling them as bullion to silver traders. The old coins had to go, which meant that the silver certificates had to go, too.

From then on the federal government was not required to give you anything for your dollar bill. If you had one, you could go out and buy something that other people were willing to give you in exchange for your piece of paper. But the Treasury was obliged to provide nothing of value in return for that piece of paper except the “full faith and credit of the United States government”, which was worth a lot more in 1964 than it is today.

In the 19th century, the United States adhered first to a “bi-metallic” standard—both silver and gold coinage—and then the gold standard. Under the pressure of the Great Depression, FDR initiated a gradual slide away from gold and into a silver standard for the paper currency, although the Treasury and the Federal Reserve adhered to the gold standard until 1971.

Since then the official currency of the United States has been anchored by nothing more than global confidence in the soundness of the dollar. As long as everybody believed in the same fantasy, then the system could operate. The dollars were printed, credit was extended, the financial markets functioned, and business enterprises were profitable. People went to work and got paid and bought stuff.

They also borrowed money and took out mortgages, which brings us to the mess we’re in today.

Today’s system of commercial and consumer credit is made possible by the practice of fractional reserve banking. Until the late 18th or early 19th century, banks did not lend out their cash reserves of depositors’ money. The advent of fractional reserve banking made it legal for a bank to lend out a portion of its deposits, and required it to keep only a fraction of those deposits—in modern times, typically 20%—as an actual cash reserve.

This means that when Joe Consumer deposits $1000 into his bank account, the bank can lend up to $800 of it and keep $200 of the deposit as a fractional reserve, maintaining the loan on its books as an asset. At this point the initial $1000 in cash has morphed into $1800 in cash assets and credit—in effect, $800 worth of money has been created.

When the borrower deposits the $800 into another bank, that bank in turn can loan out $640. And so the process continues, forming a geometric progression of assets which cannot exceed $5000 (500% of the original deposit), $4000 of that in loans listed as assets on the books of the respective banks.

This practice seems bizarre and imprudent at first glance, but it was absolutely essential during the expansion of our industrial economies. Industrialization created wealth where none existed before, but without a way to extend the money supply to match the added wealth, the capitalization of industry would have lagged, and growth would have been much slower. Fractional reserve lending allowed credit to be extended to industrial entrepreneurs, and as long as loans were made prudently and repaid on time, and banks retained their depositors’ confidence, the system functioned well.

Maintaining a gold or silver standard imposed a natural limit on the inflation of the money supply via fractional reserve banking. As long as banks met their capitalization requirements and observed the rules for fractional reserves, the money supply could never expand past the implied mathematical limit.

During times of economic contraction the system sometimes foundered. Then there would be a run on the banks, and some banks would fail. Although the system always righted itself eventually, businesses were ruined and individuals impoverished in the process, so that the political pressure for a system of government controls was irresistible.

Right: At a distance looks like the White House but it is the “Fed” headquarters (Eccles Building)

Thus was the Federal Reserve born in 1913. The Fed is a consortium of private banks linked closely to the government, and functions more or less as a central bank would in many countries. Its job is to control the money supply by setting interest rates for government lending. By stabilizing swings in the money supply, the Fed’s mission is to prevent bank runs. It’s not always successful: witness the recent run on Washington Mutual and its subsequent collapse—the largest bank failure in history.

The current gargantuan federal government, so far beyond the size and scope of what the Founding Fathers originally envisaged, owes its origins to the Civil War and Abraham Lincoln. Using military means, Lincoln demonstrated that the government in Washington was the absolute master of the several States.

But the bloated bureaucracy didn’t really take off until Woodrow Wilson invoked his presidential authority during World War I to create federal powers and functions which had never existed before, and which just happened to fit into his Progressive framework.

Not all of these powers were scrapped after 1918, and Franklin Delano Roosevelt took everything a step further when he created the New Deal to fight the Great Depression—once again, an excuse for massive Progressive intervention—and then World War II.

By 1945 the federal government was simply “too big to fail”, and all the layers of emergency powers that had accreted over the previous thirty years became permanent bureaucratic institutions. Once initiated, a new federal program was virtually never abandoned. No cabinet office has ever been abolished—new ones can be created, but they cannot be destroyed; they may only persist and grow.

Decade after decade the government has continued to expand, adding agency upon agency and bureau upon bureau. It has sprawled out across the District of Columbia into satellite fiefdoms in Maryland and Northern Virginia and created nests of regional offices across the rest of the nation. Whenever a congressman or senator perceives an important “constituent need”, a new federal function is created and funded, and becomes a permanent fixture in the Washington ecosystem.

Needless to say, all of this is very expensive. For the first thirty years or so of the federal explosion, increased taxes were sufficient to fund the pet projects and Progressive fantasies of the federal mandarins. But then the post-war boom leveled off, even as the Great Society was mandating a thicker layer of lard on top of the government pudding.

Increased taxation was not good enough. Unfortunately for the feds, raising taxes much further had become politically impossible, yet the internal logic of government expansion required that more money be found.

That’s where the Johnson slugs came in.

The uncoupling of the money supply from any reserve of precious metals did not automatically doom the country to inflation, indebtedness, profligacy, and ruin.

If the individual functionaries within the system did their jobs properly—if they acted with probity, prudence, fiduciary integrity, honesty, and in the interests of the people they purportedly served—the fractional reserve system could have continued indefinitely.

But there are too many perverse incentives built into a banking system that is not pegged to any external reserve of actual tangible value. By adding new rules, augmenting existing procedures, and tinkering with the arcana of accounting terminology, new wealth could be created where it didn’t exist before. The Treasury could keep issuing bonds, and as long as the price of milk and shoes didn’t rise too much, why then, everything must be fine, mustn’t it?

But it wasn’t fine. Decade after decade of deficit financing created the infamous national debt, which kept growing and growing. But, once again, as long as productivity increased and the economy kept on expanding, inflation could be kept at bay. The national debt, huge as it was, might theoretically be paid off—someday.

Unfortunately, during the last two decades or so, productivity hasn’t really been as high as it seemed. Our national wealth is now denominated at least partially in assets that are over-valued, with real estate as a notable example. Those California house prices—a million dollars for a tiny bungalow on a postage-stamp lot—might have looked good on the asset side of a balance sheet, but they weren’t real money.

That value was conjured out of thin air by cynical or short-sighted people who gamed the system to their own advantage—quite legally, in most cases. But the wealth thus generated was illusory, and could disappear as easily it was created—which it is even now in the process of doing.

The final stroke which broke the banking system—and caused it to collapse years or decades earlier than it would have otherwise—was meddling by the federal government for political reasons.

Meddling was irresistible. And, without a gold standard to enforce fiscal restraint, it was inevitable. Money could always be created out of nothing, so the federal government created it and ordered its agencies to force the private sector to do certain things with it, things that might otherwise be considered foolish or imprudent.

In the case of the subprime mortgage fiasco—the most visible and notorious example—the federal government created government-protected lending institutions and through them forced banks to loan money to homebuyers who would not otherwise have qualified for the loans, and who could not reasonably be expected to pay them back.

Beginning in the 1970s, and continuing until the whole house of cards collapsed last year, the government used Fannie Mae and Freddie Mac—two quasi-government lending institutions which were not bound by normal market constraints—to pump untold billions of dollars into the housing market. Mortgages were issued to people who were poor, or had vaginas, or spoke English badly, or had sufficient melanin in their skin—because they deserved them. Never mind whether they could afford them: it was unfair for them not to own houses, and so the mortgages were issued, backed by the full faith and credit of the United States government.

The rules kept being eased, the system got more corrupt, more and more money flowed through more and more hands, creating an ever-increasing supply of perverse incentives for bureaucrats and businesses to lie, to manipulate the rules, and to line their own pockets.

In the process the demand for real estate increased, driving the price of housing far beyond what it would otherwise be, thus creating the real estate “boom”—which was actually a bubble, and which has now officially popped.

During this period baroque new rules emerged to facilitate the issuing of additional debt. Exotic new financial derivatives were designed. Accounting rules for valuing assets were loosened. Bond-rating agencies were corrupted by their dependence on the institutions whose debt they rated. The securitization of debt removed the traded derivatives ever farther from anything of tangible value. Debt instruments were used as collateral on new debt, which was in turn used as collateral on yet more debt, until the money supply became so attenuated and rarefied that it had almost no connection with anything real. The entire elaborate financial structure of the country’s banking system was spun out of the purest speculative gossamer.

And at every level of the process somebody took a cut, so everyone worked very hard to increase the size of the pie.

In order to issue all those worthless mortgages, the ultimate guarantor—Uncle Sam—had to create the money by borrowing it himself. T-bills were issued, and buyers snapped them up.

Many of the customers for US Treasury paper were foreign governments, especially in Asia. The Chinese accumulated a large surplus of dollars, and recycled them by buying up more dollar-denominated debt. As long as China kept producing cheap products and exporting them to us, the process could continue. Our manufacturing capacity was diminished, and our money flowed out of the country to buy Chinese goods. But they kept loaning it back to us so that we could continue to fund the federal behemoth and its profligate habits.

The entire system depends on confidence in the dollar—as long as foreign countries continue to believe that real value lies behind the dollar, and that the American economy is strong enough to withstand this level of debt, they will continue to loan money to us, and pump liquidity into the system.

But confidence in the dollar won’t last. It can’t, because all those dollars in circulation, held in reserves in central banks all over the world, are not backed up by enough collateral. The last estimate I read—which was over a month ago, and real estate prices have presumably dropped even further since then—placed the number of dollars in circulation and held in reserves all over the world as thirteen times the amount of tangible assets in the U.S. financial institutions that back them up. That is, if all the holders of dollars across the globe decided to exchange them at the same time, the currency would have to be inflated at least 1,300% to redeem them.

With the addition of the recent stimulus package, American debt now exceeds the entire collective wealth of every man, woman, and child in the United States.

And this debt is almost entirely collateralized by confidence in the dollar. There’s nothing else backing up our currency.

The national debt is even more alarming if our unfunded liabilities are taken into consideration. One of the ways that successive presidential administrations kept deficits to a theoretically manageable level was by putting the Social Security Trust Fund “off-budget”—i.e., outside of its fiscal calculations. The “Trust Fund”, of course, is a joke—there’s nothing in it but IOUs. The FICA money that is withheld from your paycheck and contributed by your employer disappears instantly into the insatiable maw of federal spending, leaving only a promise that your retirement fund will be available for you when you are ready to collect it. Your future Social Security, like all things federal, depends solely on the “full faith and credit of the United States Government”, a commodity whose value is dropping precipitously.

One recent estimate puts the unfunded liability of Social Security and Medicare—the money which the system will be statutorily required to provide for today’s citizens at some point in the future—at more than $100 trillion. And that’s just for the two biggest federal entitlements—add to them federal pensions, veterans’ benefits, and state, local, and private pensions, and the amount of unfunded liability is unimaginably huge.

All those hundreds of trillions of dollars are mandated by law and must someday be paid out. Yet the money is not there now—where will it come from?

And “someday” is drawing rapidly closer. Much of the unfunded liability will begin to come into play in the next few years as my generation, the Boomers, begins to retire and claim all its benefits. That’s why political leaders of both parties are so keen to get Pedro and Ahmed into the country—they’re looking for somebody, anybody, who will go to work and pay the FICA and income tax necessary to support the Beautiful People as they shuffle off into assisted living.

But it’s not going to work. Even if all the immigrants were skilled and ready to work, even if mass immigration were not doomed to destroy the culture and civil society that holds this entire Potemkin village together, even if the multicultural dream could be fully realized—even if everything else were ideal, the system would not be able to handle the load. The conclusion is inescapable: the persistence of our current political arrangements is fiscally and actuarially impossible.

This is the broad context in which the current financial crisis has emerged.

The system is going to fail. Failure is unavoidable. The big questions are:

1. How soon will it fail?

2. What form will that failure take?

3. How much civil unrest, violence, deprivation, and destruction will accompany the changeover to whatever new system emerges?

The broad outlines of what is to come are already visible. The banking systems of the West are heading for insolvency, and no amount of bailout money is going to save all the major banks. Bailing them out will only serve to delay the catastrophe and make it worse when it finally arrives. Real value to match the newly-created bailout money does not exist, and at some point the market will mark everything down to its true worth, destroying roughly 90% of the system’s wealth in the process.

One of the first symptoms of the collapse will be a run on the dollar. When confidence finally erodes past a certain point, speculators will start to unload their dollars en masse, and the U.S. government will have to choose between inflating the currency or defaulting on its obligations.

The United States is at the epicenter of the banking crisis, but the European currencies are feeling the pinch first. With the Austrian banks facing the default of Eastern European debt, the euro may be in trouble, and sterling is also widely rumored to be near collapse. The dollar is maintaining its value relative to these currencies (and the yen), but all of them are in the same boat. It won’t be long before investors start unloading their reserves of currency and taking refuge in gold, silver, platinum, and other non-perishable commodities whose value is expected to outlast whatever unpleasantness lies ahead.

After that the major Western nations will experience an unprecedented fiscal and monetary crisis. Mass insolvency, bank failure, an inability to meet entitlement payments, and the suspension of normal commercial activity will be the result.

The modern global economy depends on mass consumption by the wealthy Western democracies of goods produced by the Third World and purchased by savings borrowed from the Third World. This part of the system is already in retreat—consumption in the West has dropped dramatically, Chinese exports have collapsed, and the Chinese are signaling their unwillingness to loan us more money unless we can guarantee that we won’t inflate our currency to pay off our debts. What sane person would believe such a guarantee, even if the Treasury were so foolish as to offer it? The inflation is coming, and the current system will grind to a halt.

We are, in a word, screwed.

All of this will not just happen. None of the unfortunate consequences will occur in a vacuum, and there will be reactions and counter-reactions on the part of governments and the public, which will make the system chaotic and unpredictable.

Governments will continue to intervene to “fix” the market, and by doing so will generally make the problems worse. Riots, civil wars, insurrection, and revolution will be likely if the maintenance dose of government cash is withdrawn from recipients in the major welfare states. Many other negative consequences are probable, but no one knows when, where, and how much.

Even the wisest and most skilled political leadership would find it difficult to intervene in a way that would mitigate the worst effects. At some point the market will have to realistically revalue the system’s assets, and the results will be painful. The consequences can only be postponed, and thus made more severe; they cannot be avoided.

Unfortunately, wise and skilled political leadership is in short supply all across the West. Our social democracies—with their welfare systems and ideologically uniform media—do not reward risk-takers and visionaries. Cynical time-servers, technocrats, obedient functionaries, and corrupt fixers tend to rise to the top. This is the cohort who will be leading the charge with broom-handle and dustbin lid during the coming debacle.

So far Congress and the Obama administration seem determined to do the worst possible things, economically speaking. Pumping more debt into the system, bailing out inefficient and unprofitable private companies, increasing pork-barrel spending and patronage, nationalizing financial institutions, rewarding corrupt and incompetent administrators, raising taxes, increasing regulation… How much more perverse can they get?

Giving bankruptcy judges the right to “adjust” interest rates on individual mortgages will serve only to distort the credit markets further and make the crash much worse when it finally arrives. Appropriating vast quantities of public funds to force a restructuring of private mortgages is senseless when the market value of the mortgaged real estate is half the face value of those loans, and dropping fast.

Barack Obama has assumed the role of King Canute in the current farce, sitting on the foreshore with his hand raised, ordering the tide to stop. A pathetic and futile gesture, but one that he and all the other leaders must inevitably make. They have no other solutions.

“Tide, I command thee: turn back!”

There are a few possible positive aspects of the current mess. As the crisis matures, supra-national institutions will fail and become irrelevant before nation-states do. Individual nations will reclaim their authority and sovereignty in an attempt to take care of their own.

Here in the United States, in the face of new unfunded mandates, trillions of dollars of federal largesse with strings attached, and volumes of new federal regulations, the several States have suddenly recalled the Tenth Amendment and are invoking their own sovereignty. This is all to the good, because for the last sixty years or so the federal government has extended its effective reach by dangling money before the states and making them dance for it. As the money disappears, the dance will come to an end. Without a bottomless cash drawer, the federal government is a pathetic weakling, and most power will eventually devolve to the states.

Another possible spinoff of the coming financial collapse is that the problem of Islam will solve itself. One of the consequences of the depression is that the demand for oil has dropped dramatically, and the price will be low for years. Not only will the sheikhs lose much of their income, but many of them are heavily leveraged and live on the margin, with their assets tied up in the Western financial markets. Like everyone else, they will see most of their wealth disappear.

And, unlike many other countries, the oil-dependent states of the Middle East have nothing else to fall back on. When the oil money disappears, that’s it. The entire population—millions of people on the Arabian peninsula and in Iran—subsists on state oil revenues, directly or indirectly.

The effects of this are already becoming evident. Hundreds of thousands of guest-workers in Saudi Arabia and the emirates are being sent home to Malaysia, Indonesia, Nepal, Bangladesh, and the Philippines. These latter countries will thus experience the unfortunate secondary effects of the collapse of oil prices. Given that most of the rest of their economy depends on the manufacture of cheap consumer goods for the West, they will be in serious trouble.

If this process is severe and goes on long enough, rioting, civil insurrection, and revolution may well give way to epidemics and actual mass starvation all across the long crescent of Islam’s bloody borders, from Marrakech to Mindanao.

All of the above is pure speculation.

I’m a rank amateur when it comes to economics and finance. Over the past three months I have read and digested a huge volume of information in an attempt to understand the catastrophe that is unfolding in slow motion around us.

I don’t know if my prognostications are correct. Unfortunately, no one else can predict what’s going to happen, either. The current situation is unprecedented. It is inherently unstable, chaotic, and unpredictable. Don’t believe anyone who says he knows what will happen next year. No one does.

Preliminary indications are that the global economy has actually been a planet-wide Ponzi scheme since at least the beginning of the Industrial Revolution. Like any other Ponzi scheme, it depended on a constant infusion of new suckers. As long as the world’s population was expanding, and the efficiency of industrial production was increasing, the fiscal bubble could continue to inflate.

But the dream is over, and the bill is coming due. The bubble has popped. The scheme is collapsing. The entire finance system will soon become like 1997 Albania writ large.

When the fever has run its course, a new system will emerge. Eventually the market will reassert itself, and production and consumption will resume.

But how much trouble and sorrow lies ahead of us is hard to predict.

Given that the economy of the United States will take the biggest hit—and has the farthest to fall—the era of American hegemony will almost certainly come to an end within the next decade. On balance this will be a salutary thing for the rest of the world. Europe will learn to deal with Russia and Iran on its own. Third World dictatorships will have to extort protection money from a different client. The Japanese will rapidly discover the value of missile defense and a strong military. All the fires that have been prevented or contained by American military power will rage unchecked until their human fuel is fully consumed.

And America will persist in some form, perhaps in several pieces, or as a loose confederation that will warm the heart of Jefferson Davis’ ghost.

Or perhaps we will continue as a single nation, much poorer and unable to project power abroad, but ruled by a despotic central government wielding a citizens’ army of multicultural block wardens to keep the citizenry in line—a continent-wide Cuba from sea to shining sea.

Or perhaps some other currently unimaginable form of government and civil society will emerge.

The only thing that’s certain is that the system cannot continue for much longer in its present form. The laws of economics—which are nothing more than a mathematical model describing what must happen—tell us that a collapse of some sort is unavoidable.

You will know changes soon.

Categories
Arcadia My pinacoteca

Landscape with Orpheus and Eurydice

Painting of the day:

Nicolas Poussin
Landscape with Orpheus and Eurydice
~ 1650-51
Musée du Louvre

Categories
Currency crash Eschatology Michael O'Meara Peter Schiff

Why not look through the crystal ball?

Our only strategy appears to be waiting for ZOG to blow itself up based on the inherent unworkability of its founding nostrums.

—Alex Linder

Very few nationalists are taking seriously Austrian economics: that the US will be facing a depression soon—in case that Romney is elected and decides to prick the government bubble—, or even a complete currency crash in case that Obama gets reelected and his Ben Shalom Bernanke allows the bubble continue to expand until it pops by itself.

While I am no promoter of a capitalism that ignores racial interests, I see Austrian economics as a reliable predictor of what’s going to happen during the next administration: either way, Americans will face economic meltdown. The subject is of such paramount importance that I find it bothersome to find the promotion of third-way economics, such as Social Credit, at several Robert Stark radio shows and essays at Counter-Currents, which recently hosted a Stark interview of Anthony Migchels (for an exchange of Austrians with Migchels see here).

Bothersome I said: because nationalists are flatly ignoring the Austrians’ main message, that Keynesian economics is (good news for us!) driving the US economy straight toward the cliff.

Why are they ignoring the most momentum issue of our times?

Most nationalists are just reactionaries. It can be no coincidence that, unlike these reactionaries that like to discuss Social Credit in ivory towers, revolutionaries like Michael O’Meara do mention the literature of collapse. O’Meara for one believes that only a catastrophic collapse of imperial America holds out a possibility that a racially-conscious vanguard of white Americans reclaim their territory.

I don’t see Austrian economics as a way to promote libertarianism (“sound money for brown people”) because, by definition, there will be no browns in the White Republic. I see it as a very hilarious way to expose the Keynesianism that is fulfilling the deconstruction of imperial America for white nationalists to takeover. Austrian economics is a reliable crystal ball to see the future. Even if nationalists fail to take full advantage of it, we all must welcome the big window of opportunity that is about to be opened—exactly what happened in Weimar Germany.

Categories
Degeneracy Feminized western males Turner Diaries (novel)

Andrew Hamilton on the Turner Diaries

The view is expressed that the “millions of White people who died, and who have yet to die before we are finished” are not really “innocents” because they allowed themselves to be subjugated by Jews in the first place.

“In the Creator’s account book,” that is the way things are reckoned.

Source: here

Categories
My pinacoteca

Finding of Moses

Painting of the day:

Nicolas Poussin
Finding of Moses
~ 1638
Musée du Louvre