Ron Paul and the Silver Longs: The Capitalists Are Coming!

Silverwolf dreamt last night that a Boston silversmith rode through Spelunker’s Crossing, shouting “The Capitalists are coming! The Capitalists are coming!” But then he awoke and found himself living in Stalinist America.

But the spirit of Paul Revere persists in America. And its two greatest modern day advocates, in addition to the economic philosophers at the Mises Institute, are Congressman Ron Paul and the Longs in the Silver pits.

It sure does help to know, when the army pulls into town, and tells all the well-conditioned lemmings to assemble down at the gravel pit, that they have machine guns and bulldozers at the ready, and a large trench freshly dug. Course, this massacre is only financial. They are only going to steal the fruits of the worker’s savings for the last 50 years; they are not actually going to take their lives (and how would they ever get any more tax revenue to sponge off of if they did?). No, the Socialists have America pretty well sown up, and they are offering a smorgasbord of their co-religionists to the electorate on a Red platter, not a Silver salver.

Dr. Gershon Lesser used to teach: “Don’t you be the one to be exploited.” In America, 92% of the people are willing to let themselves be exploited, or are willing to exploit their neighbors for their own unearned gain. About 8% refuse, the 8% that voted for Congressman Ron Paul for President. They know that the massed forces of the Democrats and Republicans are gunning for the U.S. Dollar. They will make huge percentages if they can get another inflationist like Clinton-Bush into the White House, and now that looks like a sure bet. The only flies in the oitment: Ron Paul and the Silver Longs.

Ron Paul and the Silver Longs see the process unfolding; they’ve been watching it evolve for twenty-five years. To give themselves free money, the Democrats and Republicans have been printing paper for years, foisting it on the world in the name of the “Full Faith and Credit” of the U.S. Government and Treasury. Democrats, from Clinton to Taliafero, will tell you that we are a rich nation. But that is no longer true. Keep spending the inheritance at a faster rate than it accrues, and, well, the ending is inevitable.

And that is what is happening now, as the same folks who were screaming about the rich Republicans, and how they should be taxed to death in order than the rest can live off the gravy train (no mention of higher taxes being a huge disincentive for the wealthy to continue to work and pay taxes — hell, just put it all in tax-free munis like a Perot, and then spend your retirement chasing women) — those same Democrats are seeing their social security checks, which they slaved 28% of their working time to obtain (and paid income tax on the amounts too) now buying one-third of what it did a few years ago. The Silver Longs know that inflation is like a sleepy kangaroo that has just drunk three cups of guarana. Once it breaks above 7% (and it’s there right now), it’s unstoppable except by very high interest rates for a very long time. And now that Clinton-Bush and the Schumerite Congress have pushed the national debt from 3 trill to 9 trill, and long-term entitlement obligations to 70 trill, it’s obvious that rates cannot be raised to the necessary level to contain inflation without the national debt, and the interest payments to foreign bond holders, breaking the American economy. So, the Fed solution — the solution of ancient Rome — is to debase the currency, and inflate away it’s purchasing power. And they are succeeding beautifully.

Of course, Ron Paul and the Silver Longs know this all very well. The way Gold and Silver effortlessly cut through  and far exceeded the $1,000 and $20 levels respectively, was the giveaway that the Communists are going to debase the currency. One can already see the beginnings of the massive financial dislocations that will continue to occur as municipal bonds are suddenly forced to pay much higher rates to attract capital, rates which the local taxpayers cannot and will not pay, which will in turn bring a massive halt to non-Federal infrastructure maintenance and development in America.

The Austrian School of Economics has correctly predicted the exact situation we are currently in: sharply rising inflation in conjunction with recession/depression. The professional financial calmers are telling the public now that this depression will lower commodity prices in America, lowering inflation, but of course, as is so obvious, the strong Rupee, Yuan, and the other 15 “strong” currencies will rush in and use their paper to lay seige to physical commodities. So the Fed is blatantly lying to the public, and anyone who objectively ponders the situation will realize the truth of that observation.

It was telling to watch the recent interview, the other day, with Andrew Young of Standard & Poors. He explained very cogently why the rally in commodities would, in his view, continue. Given that a week ago, the mouthpiece of Paribas currency trading, Redeker,was putting out the pablum that the low was in on the dollar and the high was in on commodities, it is interesting to note that since then, the Euro has gained all it lost in those few days, and the metals have flushed out the greedy-come-latelies from the market, and held where they were supposed to hold. Redeker seems to continue to make the lousy calls Silverwolf observed him make 4 or 5 years back, while his colleague at that time at Paribas, Ian Stannard, continued to hit the nail on the head, day after day. (Stannard was the most accurate Euro analyst Silverwolf ever encountered, not that it helped him much!).

The Austrian-School economist, Murray Rothbard, once asked Fed Chief Arthur Burns, back in the 50’s, what would happen if there were to be an inflationary recession, such as was occurring at that time, and as we are now having in America, and which the Austrian school had both predicted and explained. Burns, a Keynesian economist, said that such a situation was impossible, because the recession would lower demand for physical commodites, and thus lower prices and inflation. He assured Rothbard, who was a Columbia Graduate School student at the time, that the inflationary recession they were then experiencing was a temporary phenomenon that would quickly abate, much as Ben Bernanke assured Ron Paul, in his recent testimony before the Banking Committee, that price levels would soon moderate in the coming months as the economy slows . OK, said Rothbard, I can see that, but, he further queried, what if the inflation didn’t abate? In that case, Burns retorted, we will all have to resign.

But, as Rothbard points out, they didn’t resign. And you can be sure that Ben Bernanke will not resign when the massive inflation he and the Fed are engineering give America and the world its worst inflationary recession in history.

Ron Paul and the Silver Longs: The Capitalist Remnant. When this tide of Socialist cozenage turns into a Red tide that stifles all life out of the economy, there will be little left to do but dream of a time when a Boston silversmith rode through town crying “The Capitalists are Coming!”

One day, they will be coming. Silverwolf howls for that time to arrive.

Hoooooooooooooooooooooooooooooooooooooooooooooooooooowwwwww! — Silverwolf

Tags: Arthur F. Burns, Ben Bernanke, inflation, Murray Rothbard, Ron Paul, silver, Silver Longs