for sale. The Securities and Exchange Commission finally suspends trading.
Nine months have now passed. The crisis has been a blessing for politicians. They have thrived upon it and grown in stature 542
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because of it. It has given them an excuse to swarm through the country on fact-finding trips, to appear in shirt sleeves at town-hall meetings, to give speeches, and to be seen on television—all the time expressing grave concern and appearing to take charge. It has legitimized their role and somehow made them seem more necessary than before. They have been converted in the public eye from oafs and bumpkins to serious-minded statesmen.
The party in power said it inherited the mess. The previous party blamed the current one for dropping the ball. Both parties, however, agreed on the solution: more of exactly the same policies that created the crisis: expanded power to the Federal Reserve, more government control over the economy, more subsidies and benefits, and more international commitments. These were called
'emergency reforms' and became law. The same men who created the problem prescribed the solution. The public was grateful to have leaders of such vision and wisdom.
BANK BAILOUT AND MORE INFLATION
The most important emergency reform was to bail out the
banks with taxpayers' dollars. Defaulted foreign loans were taken over by the IMF/World Bank, and the failing corporate borrowers were given government grants disguised as loans—loans which everyone knew would never be paid back.
Next, the banks were nationalized, at least in part. In return for the bailout money, they gave large blocks of stock to the government which now operates as an official business partner. This was not a drastic change. The banks were already heavily regulated by government, even to the point of determining their profits, dividends, and executive salaries. That is the way the cartel wanted it.
It was the means by which competition was avoided and profits assured. Monetary scientists and political scientists have always worked as a hidden partnership. This merely made the relationship more visible.
Technically, no bank was allowed to fail. The Fed kept its promise on that. When the troubled banks were taken over, all depositors with $100,000 or less were fully protected. If they wanted their money and the bank didn't have it, the Fed simply manufactured it. No one was worried about the value of those dollars. They were just happy to have them.
A PESSIMISTIC SCENARIO
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Ten more months have now passed. Those new dollars are
flooding throughout the system. The money supply has increased by the amount of the bailout plus the amount of new spending for welfare, health care, interest on the national debt, and foreign aid, all of which are in a vertical climb. Inflation has become institutionalized.
The dollar has been dethroned as the world's defacto currency.
Foreign investors and central banks no longer have any use for dollars. They have sent them back to the United States from whence they came. Over a trillion of them have returned to our shores like a huge flock of homing pigeons that fills the sky from horizon to horizon. They are buying our refrigerators, automobiles, computers, airplanes, cargo ships, armored tanks, office buildings, factories, real estate—pushing prices to levels that would have seemed impossible a year ago. A single postage stamp costs as many dollars as once would have purchased a new TV set.
Most stores have stopped accepting checks and credit cards.
Workers are paid daily with bundles of paper money. People rush to the stores to purchase groceries before prices rise even further.
Commerce is paralyzed. Bank loans and mortgages are unobtainable. Savings accounts have been destroyed, including the cash values of insurance policies. Factories are shutting down. Businesses are closing their doors. Barter is commonplace. Old silver coins come out of private hoards and a hundred-dollar bill is exchanged for one silver dime.
Following the crash of 1929, the supply of paper money was limited because it was backed by silver, and the amount of silver itself was limited. Those who had money were able to buy up the assets of those who did not. Since prices were falling, the longer they held on to their dollars, the more they could buy. Now, things are exactly the opposite. There is nothing to back the money supply except politics. There is no limit to the amount of currency that can be created. It is just a question of printing and delivering it. Money is abundant, and prices are rising. Those who have money are spending it as soon as possible to prevent further loss of purchasing power. In the 1930s, everyone wanted dollars. Now, everyone wants to get rid of them.
The Emergency Banking Regulation No. 1, originally issued in 1961, empowered the Secretary of the Treasury —without consent of Congress—to seize anyone's bank account, savings account, or 544
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safe-deposit box. It also gave him the power to fix rents, prices, salaries, and hourly wages, and to impose rationing. This was to be done 'in the event of attack on the United States.' That phrase now has been changed to read: 'in the event of national emergency.'
The Federal Emergency Management Agency (FEMA) has been
expanded to administer the directives of the Treasury. FEMA also has the power to detain and forcibly relocate any citizen 'in the event of a national emergency.'
NEW MONEY
Three more months have passed, and the President has de-
clared a state of national emergency. Today, the Secretary of the Treasury announced that the nations of the world had ratified a multilateral treaty that would solve the inflationary problems of the United States. This will be
