Our Opinions, Thoughts, & Ideas

It's Our Own Fault!
Blind Faith

While I expressed a tongue-in-cheek editorial on 11-23-04 about China and it's taking over the position of the world's economic leader in the void left by the United States, the fact becomes clearer that China is fast becoming the world's economic powerhouse due to the U.S.'s foolhardy spending and borrowing.

In an article published on ft.com by three reporters I find China actually 'warning' the United States about the economic woes the U.S. is creating for itself.

China tells US to put its house in order

"In a mark of China's growing economic confidence, the country's central bank has offered blunt advice to Washington about its ballooning trade deficit and unemployment.

In an interview with the Financial Times, Li Ruogu, the deputy governor of the People's Bank of China, warned the US not to blame other countries for its economic difficulties." ~http://news.ft.com

A group in Texas, seeking independence for Texas from the United States has been saying this same thing for nine years, but this group has received little public media voice regarding its political and economic views.

Just looking at a short synopsis of U.S. monetary policy history supports this editorial and the economic views of the Texas Independence Movement. Since the end of World War II the U.S. has been on fifty plus years spending spree on borrowed monies. The bureaucracy created by the United States is the largest in the world, and probably all of world history. The United States has the largest alleged 'peace-time' military, not including the numbers of civilians employed in auxiliary jobs supporting the military operations or the industrial military complex. It has been involved in countless 'peace-time' skirmishes and wars since World War II. The U.S. outlay on military and military related expenditures far exceeds the international average for its population.

International Comparison of Population Density, as of 2000

(persons, per square kilometer)


Population Density

















Russian Federation



The United States ranks next to last in population density of all the major economies in the world.

The population of the U.S. cannot support these extraordinarily high expenditures for a nation of its size. This means the U.S. government has 'borrowed' the money to keep paying its own bills. History shows it has been borrowing money since 1861. It has been borrowing money non-stop since 1913 on the passage of the Federal Reserve Act. When the U.S. totally abandoned the U.S. note in 1971-72, along with the forfeiture on its silver notes in 1973 under Nixon, it has no other 'income' except from borrowed funds, primarily borrowed from the Federal Reserve Bank.

Reports are now expressed in how many generations of the future it will take to pay of the debts of the United States. Few people realize that if only 1 percent of the U.S. population demanded the paper dollars for their funds on deposit in the banking system - well the party would be over - there simply could never be enough paper money to cover the deposits. It would (and will) be the monetary collapse of all history, making the depression of the 1930's look like walk in the park.

Many nations have followed this insane path that was exemplified by the United States over these past 50+ years. The International Monetary Fund has been a major proponent for creating debt for nations internationally.

However, several nations and 'groups' of nations are waking up to their mistakes and are 'slowly' making the corrections to move back towards gold backed monetary systems. The Euro and the Dinar are two that are at least partially gold-backed.

To the average person on the street, it matters not that the money is 'gold' backed. Gold backed money primarily concerns international exchange, international trade, and payments between nations. Gold being a rare metal in demand for industry is what makes it an ideal standard for monetary systems. Industry, in capitalist theory, sets the value for gold, rather than governments. This base of standard gives a benchmark for "how many barrels of corn" does it take to equal "how many bushels of peas" on any given day. The base for the benchmark would not have to be gold, but historically most nations accept the industrial value for that metal base.

The only backing of the FRN dollars of the United States is the faith of the people of the United States to accept that 'paper' backed by nothing except debt, as their money. International commerce accepts the U.S. FRN dollar only due to the acceptance of the paper 'as money' and the purchasing power of the American public.

The people in the U.S. have rocked along, slept in prosperity, and let the bankers, the Federal Reserve and the U.S. government retard their purchasing power and soon their acceptance of that paper will disappear. When the bankers got the power to create money from thin air through credit the downward spiral began. Now there simply can never be enough paper printed to cover the dollars allegedly 'on the books'.

In another article posted on this site this month, a little known 'rule' was revealed. No merchant or provider of services is 'required' to accept the FRN dollar as payment for anything. It is only a legal tender for government and for creditors in the banking system. Our use of it as money was only by our 'acceptance' of it as money. There was no law requiring merchants to accept those FRN dollars.

Once a private party purchases an item - he or she is never required to sell it, much less accept a US FRN dollar as payment for it. The bankers and the government have made the FRN dollar and the credit dollar an easy convenience and therein lies the reason for its acceptance for the past 90+ years. China and other nations are watching the US FRN dollar and the U.S. public's purchasing power very closely and moving into positions so that a collapse in the U.S. will only mildly (at least they hope mildly) affect their own nation and peoples.

Silver is another benchmark metal to base money on between people, though it is not very useful in international trading. We have been brainwashed in the United States into 'backwards' thinking about our money. We think about the price of silver vs. the US FRN dollar. In reality we should be thinking about the price of the US FRN dollar vs. the industrial VALUE of silver.

I buy and sell books for an example. If I pay $6.00 for a book and on that day silver cost $6.00 an ounce, then that book is worth one ounce of silver. The following week I sell the book for $7.00 and silver is now $7.50 per ounce, did I make a profit? NO! I actually lost money, because I cannot buy one ounce of silver for the price I sold the book for. I lost 50 cents of silver. Another way of looking at this is that the value of silver remained relatively the same and the only change was the amount of paper it took to acquire the silver ounce. The paper money was devalued because it took more paper to 'get' acceptance of the devalued paper money for one ounce of silver.

We have operated on worthless paper for so long in the U.S. that it is very difficult to even think in correct terms of 'value' and price of paper.

Due to the ongoing liberations and wars of the U.S., the government is devaluing the paper monetary system daily. It is requiring more and more dollars and credit than ever before and the nations of the world are paying close attention.

You have already seen and felt prices on the rise while wages are staying the same in the United States, thus lowering our purchasing power. You will see that same book you bought for $7.00 soon going up to meet the devalued newly printed paper dollars that are flooding the market. In 1972 a dollar was still worth one ounce of silver. Silver closed at $7.58 cents today and that means our purchasing power of the dollar has been reduced by 600% in 30 years. If you had 'stocked' up on those silver dollars in 1972 you would be 600% richer in paper dollars, but your purchasing power would have remained the same as it was in 1972.

If the U.S. does not stop spending and stop borrowing -- and begin corrective measures we will soon be seeing runaway inflation, bank runs, bank failures, and possible total collapse of the monetary system in the United States.

As long as the U.S. was the giant of the world in purchasing power, the other nations of earth had little choice but to accept its paper FRN dollars in trade. For a long time they even welcomed them. The U.S. adversaries are waiting to step in and takeover in international trade in the event of a U.S. dollar collapse. Even some friends of the U.S. are making economic moves in the event of this possibility. Everyone on earth is paying attention to the U.S. economy and dollar, except those living in the U.S!

When the price of silver drops it is a signal that the U.S. is restraining its production of paper and credit dollars. Even if you bought silver at $15.00 an ounce and the price dropped to $5.00 an ounce, THE VALUE REMAINED THE SAME. When silver goes down in price your purchasing power increases on the paper side. These assumptions are to be taken generally from looking at monetary history.

If the U.S. purchasing power declines then the other nations and international businesses may not accept the US FRN dollar as payment, rather demanding gold in value for the products exchanged. This is what China is watching very closely and mildly warning the U.S. of in the article quoted above.

The U.S. has always had something or someone to lay the blame on when runaway inflation occurred. This was to buy time from the American people and allow the bankers, the government, and the Federal Reserve to make corrective measures. The American people have had 'blind' trust in their money and their government. China is telling the U.S. and its people there's no one else to blame this time - the U.S. has gone too far out on a limb with its wild spending and excessive borrowing.

WHAT the U.S. is spending money on since 911 brings no return investment in products and services. There is little demand internationally for anything the U.S. is spending money on, -- i.e. bombs, destruction, soldiers, bullets, guns, tanks, etc. It is not an investment in Iraq or Afghanistan to destroy the country then rebuild it.

While the blind faith of the American people in the U.S. FRN money brought the U.S. to be the economic giant in the past, other nations are starting to doubt the blind trust and see the U.S. overspending, stretched too far and thin, to the point of no return. China sees this possibility and is stepping in and making itself poised to become that economic fortress, leaving the U.S. weeping over its own demise. There will be that wailing and gnashing of teeth in the U.S. when the people wake up one day and realize their weeks earning will no longer pay the rent. The blind faith will have ended. The collapse will be almost immediate coast to coast in the U.S. Nations like England and Australia that continue to support the 'blind' faith theory will fall like dominoes when they realize the party is over.

All the free trade agreements in the world mean nothing if there is no purchasing power with the US FRN and credit dollars. The American people will survive on their own creativeness, but their governments that depend on blind faith dollars will collapse, and international trade will be rare.

Be forewarned: stock all the silver and gold you can afford. The inflation dollars have risen over 40% in the past three years to get silver, but no matter what you pay for silver, the value of silver remains the same at all times - even when the paper dollar price goes down.

Look at it in a worse case scenario.

Your house payment today is $400.00 per month. Silver is $8.00 an ounce. It takes 50 ounces of silver to pay your house payment today.

Say runaway inflation causes silver prices to go to $100.00 per ounce, and you bought silver for $8.00 an ounce. It would take only four ounces to pay a house payment of $400.00 per month - silver you paid $32.00 for.

If your house payment floated with the price of paper dollars your house payment would have risen to $5000.00 per month or 50 ounces of silver. The VALUE of silver remained the same, only the number of paper FRN dollars changed. Because most house payments are locked in to a preset payment - they are locked into the value of silver at the time of purchase. Here is where your personal and family survival lies in an economic crisis.

People in China and many around the world understand the difference between value and price. The citizens of the U.S. better learn it fast. The U.S. is no longer the economic force in the world as it was even 10 years ago. More and more 'hidden' taxes and fees will sneak in to try and pay for the governments' foolhardy spending - and reducing your purchasing power.

When people that work 50+ hours a week cannot make enough money to support their family and pay their obligations due to taxes and inflation, there is no incentive to waste the time going to work. This is what the U.S. may have to face soon.

The U.S. cannot even print money fast enough to ever cover the 'unaccounted for' credit dollars in the system. The map for failure is outlined throughout history and the U.S. government is following that map. Many people speak out against Alan Greenspan, head of the Federal Reserve Board. I am no fan of his either, but he alone has kept the U.S. dollar from crashing through wise decisions in the past, but now that the government is spending and borrowing so much - so fast - and for so long, he cannot use any of his band-aids in the Federal Reserve side to stop the coming battle of money policy and government spending.

The Texas Independence Movement is pushing hard to establish an alternative monetary system for Texas based on silver. This is one that Texans can run towards when the U.S. FRN dollars begins its inflationary spiral or its dive into collapse. Merchants will be more than ready to take silver backed money instead of US FRN dollars as they have in the past. Nothing stops the people from creating their own money system. Start thinking in these terms for your city, your state or your nation.

China and other nations are preparing for the possibility of U.S. dollar collapse if not the inevitability. Below is a list of headlines found in today's news:

China, ASEAN to sign deals paving way for world's largest trade zone
Commonwealth Bank of Australia -lender is eyeing further investments in China
China holds seminar to enhance trade ties with Africa
Wine exporters eye China
Zinc May Rise 15% on China Demand
China is ready to expand cooperation with Cuba ...trade and economy
China to increase imports from Mexico
China Could Cost US Leverage
Iran's new alliance with China could cost US leverage
China also pledges to play a more active part in promoting free trade
China-New Zealand Free Trade Agreement
China trade talks a leap forward
Sino-Jordan relations...stress booming bilateral trade
Australia-China ... talks on a free trade agreement
Thailand and China. ... on free trade
Argentina, Chile and Peru have recognized China's status as a market economy
China and Chile have decided to open talks on a free trade agreement
Peru Hopes to Negotiate China Trade Deal
Northeast Asian powerhouses - Japan, South Korea and China - meet
China... wheeling and dealing in Latin America
China and Cuba sign trade deals
(US) government has "trampled the principle of free trade"
India's shrinking investment gap with China
Shanghai, Antwerp agree to expand cooperation
Summit Brought China and Russia Closer to Latin America
FedEx, New York Life Press Bush on Trade as China's Power Grows
Pakistan and China expanded mutual trade
Chinese president upstaging Bush in South America
Canada risks losing position as largest trading partner with US ...
Macau, China expand free trade agreement
China trade volume to reach $1.1trillion in 2004

I am not a pure supporter of the theory of 'free trade' and this editorial is not meant to discuss the pros and cons of 'free trade'. Viewing the headlines gives you the picture of how China and other nations are shoring up opportunities that do not rely on the United States economy or its dollar. It is not particularly an anti-US movement but more a self-sustaining attitude economically. These nations feel they can no longer trust the U.S. economy or the U.S. dollar and are making in-roads into alternative trading solutions to decrease dependency on U.S. trade.

The United States government's spending and borrowing has the 'market' world watching the U.S. economy with caution. Trust in the U.S. is declining. Too many lies out of Washington, DC! The U.S. is still 'liberating' Iraq many months after Bush declared it liberated -- and the cost is staggering in money, resources and lives.

The U.S. has forfeited its credibility on both the moral and economic front in the world community. The U.S. is not 'losing' any economic war, it simply abandoned it for 'liberation and occupation.' Further, the government in Washington sees threatening other nations as the way to 'get what it wants.' Outside of the U.S. borders the world sees the U.S. policies as hypocritical and as lies. The US supports a nuclear developing nation named Israel while threatening Iran for developing nuclear technologies. The US is manufacturing millions of weapons of mass destruction while arming the Israeli government with WMD and threatening Syria for allegedly having WMD. The U.S. wants to 'disarm' the Middle East, but that disarming does not include Israel -- nor does it include the United States!

Asian countries and Latin American countries can crush the U.S. economically if they band together and work together to build strong money systems and economies for themselves. They won't have to 'intentionally' try to crush the U.S. economy but will rise to economic power as the U.S. fails.

Remember the U.S. 'claimed' the need to liberate Iraq due to its hiding out Al Quaida (Lie) - Then it 'claimed' it had to liberate Iraq due to its stockpiles of WMD (Lie) - Then it 'claimed' it had to liberate Iraq from a dictator that masscred men, women and children. This from the same U.S. that massacred men, women, and children at Waco, Texas! Is it any wonder that the world views the U.S. as a liar and a hypocrite?

Major companies, CEO's, and small business owners are reinvesting their profits with great caution or not at all. They too fear a collapse of the U.S. dollar. As individual citizens we too should be cautious and prepare for alternatives in case the U.S. fails to wake up from its blind quest for blood and fails to take care of the massive spending and borrowing of the government.

Blind faith in the United States whether it be run by obese animals or jack-asses, by conservatives or liberals, is dangerous to your personal survival. Blind faith will not stop the colllapse of the dollar, only sound government spending and thrift policies will. There are not enough U.S. citizens to pay the bills of the United States government. It is spending your money madly in wars based on lies. U.S. stability and credibility is disintegrating from within. China is correct, the U.S. can only blame itself.

Iran and North Korea, two nations in what Bush has branded an "axis of evil," dominated the president's attention along with trade and economic issues at the opening of a 21-nation summit of Asian-Pacific leaders. Bush tried to ease global concerns about the sinking value of the dollar, a drop based in part on investors' fears about the huge U.S. trade and budget deficits. ~ napanews.com

L. Savage