August 2007

FINANCIAL MELTDOWN
Part II

Dear Friend of Radio Liberty,

"Treasury Secretary Henry Paulson, in his first public comments since the sharp down- turn in financial markets, said the turmoil 'will extract a penalty on the growth rate' of the U.S. economy. But he expressed confidence that 'the economy and the markets are strong enough to absorb the losses' without provoking a U.S. recession."
The Wall Street Journal, August 16, 2007 [1]

"Something profound has happened in recent weeks. The credit system is losing its . . . credibility. People no longer trust the triple-A ratings that many complex debt securities carry. The risk models used by rating agencies, hedge funds and banks have also come under suspicion. The effects of subprime losses are being felt in unexpected places, including supposedly impregnable money market funds. Hedge funds and other highly leveraged investment vehicles are being forced to unwind. After years of excess, credit is beginning to contract."
The Washington Post, August 19, 2007 [2]

"Since fiat money has never survived for long periods of time in all of history, is it possible that the funnel of tasks that you face today is a historic event, possibly the beginning of the end of the fiat system that replaced Brenton Woods 33 years ago?
Congressman Ron Paul, July 21, 2004 [3]

"I think you will find . . . that most effective central banks in this fiat money period tend to be successful largely because we tend to replicate which would probably have occurred under a commodity standard in general."
Alan Greenspan, July 21, 2004 [4]

Please reread my July 2007 letter, and note the questions that were asked because they address the financial crisis and the prelude to war that is unfolding today. If you don't have a copy of the letter, it is available at www.radioliberty.com. For information on the Occult Hierarchy, I suggest you read my three-pamphlet set, "Occult Hierarchy," or the January 2004, May 2005, and June 2005 Radio Liberty letters. [5]

The questions that were raised last month are printed in bold type, my answers are in italics:

Have you ever wondered why the U.S. military didn't pursue Osama bin Laden after he and his henchmen fled from their stronghold in Afghanistan in December 2001?

If the U.S. had captured or killed Osama bin Laden at that time, the "war on terror" would have ended and the Bush administration wouldn't have been able to justify a preemptive attack on Iraq. [6]

Have you ever wondered why the U.S. military disbanded the Iraqi army, the Iraqi police force, and the Iraqi civil service?

The Occult Hierarchy wanted to induce chaos in Iraq so they could justify keeping U.S. forces there, and prepare for the coming war with the Moslem world. [7]

Have you ever wondered why our leaders urged U.S. manufacturers to move their factories overseas and outsource American jobs?

They are following the dictates of the Earth Charter which advocates "equitable distribution of wealth within nations and among nations." The Occult Hierarchy wants to equalize wealth, lower the standard of living in First World nations, and impoverish the American people. [8]

Have you ever wondered why the Bush administration hasn't tried to seal our border with Mexico to prevent terrorists from entering the U.S.?

The Occult Hierarchy knows Islamic terrorism isn't a serious threat because they created the movement and closely monitor its activities. [9]

Have you ever wondered why the U.S. dollar has lost over 1/3 its value in comparison with the EURO during the past three years?

The Occult Hierarchy (the FED) wants to destroy the current monetary system and establish a privately issued global, gold-backed currency which they will control. [10]

Have you ever wondered why Alan Greenspan dropped the FED discount rate to 1%, and kept it there for several years?

The prolonged 1% interest rate promoted inflation and laid the groundwork for the destruction of the U.S. dollar, and the inflationary spiral that is destroying the value of currencies throughout the world. [11]

Have you ever wondered why Alan Greenspan encouraged home owners to switch their home loans from fixed rate loans to adjustable rate mortgages (ARMs), encouraged unqualified buyers to purchase homes, and encouraged mortgage brokers to fund unsound loans?

The resultant economic chaos will destabilize the world economy and establish a world government. [12]

Have you ever wondered why Alan Greenspan opposed efforts to regulate the hedge fund and derivative markets?

If the FED had regulated the hedge funds and the derivative market, the world would not be facing an economic meltdown today. [13]

Have you ever wondered why the Bush administration is considering a preemptive attack on Iran that will raise the price of oil, and precipitate a financial crisis?

The coming war with the Moslem world will facilitate formation of a world government.

The final segment of my July 2007 letter concluded with this statement: "The 'financial crises' that Paul Volker predicted are under way. David Ranson and Penny Russell's recent (Wall Street Journal) article, 'Money Meltdown,' discusses the history of money and the tragic events that are taking place (today). . . ."

"In reality, up to and including the 19th century, significant inflation had been the exception rather than the rule. And when it did occur it was usually local rather than global. In the U.S., for example, cumulative consumer-price inflation was zero from 1820 to 1913, just prior to World War I. In the United Kingdom, consumer prices were lower at the beginning of World War II than they had been in 1800. In England the prices of consumables rose at an average annual rate of less than 0.4% over the centuries- long run between 1210 and 1940." [14]

Why is that important? Because the U.S. dollar has lost 96% of its purchasing power since the Occult Hierarchy established the FED in 1913, and the current inflationary spiral is destroying the financial stability of our nation. What happened? J.P. Morgan (and the Occult Hierarchy he represented) established a privately owned Central Bank in 1913, enriched themselves, and seized control of the destiny of our nation. FED officials claim the current core inflation rate is 2.4%, but that isn't true. The price of oil and petroleum products has doubled during the past 3 years, and between June 2006 and June 2007 the price of oranges increased 19.8%, the price of eggs increased 19.5%, the price of frozen juices increased 17.7%, the price of fresh whole milk increased 13.3%, the price of apples, dried beans, peas and lentils increased 11.5 - 11.7%, and the price of meat and chicken increased 9.8 - 10%. [15]

David Ranson's Wall Street Journal article continued:

"In 1975, Yale economist Richard Cooper described the process that now appears to be driving world inflation as a 'general loss of confidence in money, a psychological mood that can be transmitted across national boundaries . . . [that will] lead individuals to try to convert their assets into physical form: goods or housing or real estate.'"

Several independent financial analysts have determined the true U.S. inflation rate is 11%, and other nations are trying to dispose of their dollar holdings ($2,218 trillion in foreign reserves in June 2007, and $7.3 trillion in U.S. stocks and bonds). When that happens, the resultant inflationary spiral will destroy the financial stability of our nation, and the economy of the world, because U.S. currency has no intrinsic value. [16]

A recent article in The Wall Street Journal quoted Henry Paulson (CFR), the Secretary of the Treasury, who is either an agent of the Occult Hierarchy or under their control:

"Treasury Secretary Henry Paulson, in his first public comments since the sharp down- turn in financial markets, said the turmoil 'will extract a penalty on the growth rate' of the U.S. economy. But he expressed confidence that 'the economy and the markets are strong enough to absorb the losses' without provoking a U.S. recession." [17]

Other people disagree with that statement. Edward Chancellor notes:

"Something profound has happened in recent weeks. The credit system is losing its . . . credibility. People no longer trust the triple-A ratings that many complex debt securities carry. The risk models used by rating agencies, hedge funds and banks have also come under suspicion. The effects of subprime losses are being felt in unexpected places, including supposedly impregnable money market funds. Hedge funds and other highly leveraged investment vehicles are being forced to unwind. After years of excess, credit is beginning to contract." [18]

How can we anticipate what lies ahead? Alan Greenspan's July 2004 testimony before the House Banking Committee will help you understand the events that lie ahead because Alan Greenspan is either a member of the Occult Hierarchy, or under their control. Another excellent source of information is Benn Steil's May/June 2007 Foreign Affairs magazine article, "The End of National Currency," Congressman Ron Paul's questions and Alan Greenspan's answers are printed in bold type. My remarks are recorded in italics. [19]

Date of Testimony: 7/21/2004:
Congressman Ron Paul questioned Alan Greenspan:

"Good morning, Chairman Greenspan. Yesterday's testimony was received in the press as you painting a pretty rosy picture of the economy. You have already remarked a second time on one statement you made that I would like to comment on again, because I think my colleagues should pay close attention to it: And that is your statement that corporate investment in fixed capital and inventory has apparently continued to fall short. The protracted nature of this shortfall is unprecedented over the past 3 decades. The proportion of temporary hires relative to total employment continues to rise.
I think that is very, very significant and probably should be taken in the context of the rosy picture of the economy." [20]

Alan Greenspan told the House Banking Committee that corporate investment in fixed capital inventory (machinery and other production facilities) has slowed, and that many corporations are hiring part-time employees, but he didn't tell the Committee that is happening because many U.S. corporations are transferring their production facilities overseas to utilize the cheap labor that is available there. Instead, he painted a rosy picture of the U.S. economy in an effort to deceive the American people and convince them they have no cause for concern.

Congressman Paul continued: Also, at the end of your statement, you make a comment about inflation in the long run, which I entirely agree with. And that is, it is important to remind ourselves, you say, that inflation in the long run is a monetary phenomenon. However, you sort of duck the issue on the short run, that various factors affect inflation in the short run, and yet I think monetary policy is pretty important in the short run. And our temptation here and too often with central banks is to measure inflation only by Government measurement of CPI, where the free-market economists, from Ricardo to Mises to the current free-market economists, argue the case that, once a central bank interferes with interest rates and lowers them below the real rate, that investors and others do make mistakes, such as overinvestment and now investment over-capacity, excessive debt, and speculation. And, therefore, I think that we should concentrate more on the short run effects of monetary policy. [21]

Alan Greenspan lowered the FED funds rate to a little over 1% in 2002, and kept it there until 2004. The FED funds rate was 1.3% on July 15, 2004. Greenspan increased M3 (the monetary base of our currency) over $500 billion in 2004, and let mortgage brokers issue loans to unqualified home buyers. The FED intentionally created the housing bubble that flooded the U.S. and other nations with fiat money, and created the monetary crisis that threatens the economic survival of our nation today. [22]

Congressman Paul: Over the last several months, you had been hit by two groups. One half is saying that you are raising rates too fast, and the other half says you are way too slow. And of course it begs the question of whether or not you are really right on target. But from a free-market perspective, one would have to argue that you can't know and you don't know, and only the market can decide the proper money supply and only the market can decide the right interest rates. Otherwise, we invite these many problems that we face. . . . So my question to you is, how unique do you think this period of time is that we live in and the job that you have? To me, it is not surprising that half the people think you are too early and the other half think you are too late on raising rates. But since fiat money has never survived for long periods of time in all of history, is it possible that the funnel of tasks that you face today is a historic event, possibly the beginning of the end of the fiat system that replaced Brenton Woods 33 years ago? And since there is no evidence that fiat money works on the long run, is there any possibility that you would entertain that, quote, "We may have to address the subject of overall monetary policy not only domestically but internationally in order to restore real growth?" [23]

Congressman Ron Paul noted the fact that "fiat money has never survived for a long period of time" and asked Alan Greenspan if the U.S. is facing "the beginning of the end of the fiat money system that replaced Brenton Woods 33 years ago." Instead of answering Congressman Ron Paul's question, Alan Greenspan used a clever ploy to avoid answering the question:

Mr. Greenspan: Well, Congressman, you are raising the more fundamental question as to being on a commodity standard or another standard. And this issue has been debated, as you know as well as I, extensively for a significant period of time. [24]

The statement isn't true because neither Congress nor the American people have been allowed to debate that issue.

President Andrew Jackson ran for reelection in 1832 based on his opposition to the Second Bank of the United States, survived several attempts on his life, and was reelected because the American people didn't want a Central Bank that was controlled by foreign interests, and a partial fiat money system that enriched wealthy people. [25]

Congressman Louis McFadden tried to warn the American people about the danger of the Central Bank's fiat money system when he was Chairman of the House Banking Committee. He survived several attempts on his life, but died of poisoning in 1936. [26]

Congressman Wright Patman tried to warn the public about the danger of the Central Bank's (the FED) fiat money system when he was Chairman of the House Banking Committee during the 1960s and 1970s. He was viciously demonized by the media, and died a year after he was forcibly removed from his position on the House Banking Committee in 1975. [27]

Congressman Henry Gonzalez accused the FED of being "a secret government more elaborate than anything Oliver North could dream up" when he was Chairman of the House Banking Committee in the 1980s. He became seriously ill while in office, and was forced to relinquish his congressional seat. [28]

Alan Greenspan's statement is incorrect. Neither the American people nor their representatives have been allowed to debate a return to the gold standard.

Alan Greenspan continued: "Once you decide that a commodity standard such as the gold standard is, for whatever reasons, not acceptable in a society and you go to a fiat currency, then the question is automatically, unless you have Government endeavoring to determine the supply of the currency, it is very difficult to create what effectively the gold standard did.

I think you will find, as I have indicated to you before, that most effective central banks in this fiat money period tend to be successful largely because we tend to replicate which would probably have occurred under a commodity standard in general." [29]

The Central Bankers (the Occult Hierarchy) wanted a fiat money system so they could expand the money supply, enrich themselves, and establish a "system of financial control in private hands able to dominate the political system of each country, and the economy of the world as a whole." Professor Carroll Quigley's book, Tragedy and Hope: A History of the World In Our Time, discussed their goal, and mentioned the fact that some of the plotters believed "the Kingdom of God could be established on earth." [30]

Alan Greenspan continued: I have stated in the past that I have always thought that fiat currencies by their nature are inflationary. I was taken back by observing the fact that, from the early 1990s forward, Japan demonstrated that fact not to be a broad universal principle. [31]

Alan Greenspan switched the discussion from what is happening in the U.S. to a discussion of the events that are taking place in Japan because he wanted to divert attention from the inflationary bubble that he was creating in the United States. The Central Bank of Japan (which is part of the Central Banking cabal that rules the world) expanded the Japanese monetary base in the 1970s and 1980s, ran the Nikkei Stock Market up to 40,000, and created a housing bubble that increased the cost of Japanese property to staggering levels. The Economist reported, "Japanese real estate represented one third of all wealth in the world and the capitalized value of the stock market stood at 42% of world stock market value. In theory, Japan could have bought Canada or Australia simply by selling the land underneath the Imperial Palace or the whole of the U.S. by selling off downtown Tokyo." When the inflationary bubble in Japan ended in 1990, the stock market collapsed, property values fell 90%, and most of the major banks became insolvent because they held over 100 trillion Yen in delinquent loans. Many U.S. banks face a similar fate today. [32]

Alan Greenspan concluded his testimony: And what I have begun to realize is that, because we (the Central Bankers - ed) tend to replicate a good deal of what a commodity standard would do, we are not getting the long-term inflationary consequences of fiat money. I will tell you, I am surprised by that fact. But it is, as best I can judge, a fact." [33]

Alan Greenspan knew the FED was creating an explosive housing bubble, and he knew that many Americans would lose their life-savings and their property in the coming economic turmoil, but he concealed that fact from the public and members of Congress.

I will cover Alan Greenspan's July 20, 2005, testimony before the House Banking Committee next month.

My recent interviews with Jeffrey Smith on genetically modified foods are very important, and will be archived at www.radioliberty.com until September 30, 2007. I hope you will encourage your family and friends to listen to the programs because their health is under attack today. For additional information, I suggest you order the 4 tape or 4 CD set, "Genetically Modified Foods," and Greg Ciola's short book, GMOs - Beware Of The Coming Food Apocalypse.

Everything I see and hear leads me to believe the U.S. is going to attack Iran, but I hope and pray that I am wrong. Only time will tell. Please begin making plans for the difficult times that lie ahead so you will be able to provide for yourself and your neighbors - and remember the promise that sustains us:

To God be the glory, - great things He hath done,
So loved He the world that He gave us His Son,
Who yielded His life an atonement for sin,
And opened the Life-gate that all may go in.

O perfect redemption, the purchase of blood,
To every believer the promise of God;
The vilest offender who truly believes,
That moment from Jesus a pardon receives.

Great things He hath taught us, great things He hath done,
And great our rejoicing thro' Jesus the Son;
But purer, and higher, and greater will be
Our wonder, our transport, when Jesus we see. [34]

Barbara and I appreciate your faithful support and your prayers.

Yours in Christ,

Stanley Monteith




REFERENCES

1. David Wessel, "Paulson Expects Growth to Defy Market Turmoil," The Wall Street Journal, August 16, 2007, p. A1.
2. Edward Chancellor, "Look Out. This Crunch is Serious," The Washington Post, August 19, 2007, p. B01
3. www.usagold.com/gildedopinion/greenspan-gold.html, p. 25.
4. Ibid.
5. Occult Hierarchy, three-pamphlet set available at 800-544-8927.
6. http://seattlepi.nwsource.com/national/156352_bushsummit13.html
7. http://en.wikipedia.org/wiki/Clash_of_Civilizations, p. 4.
8. The Earth Charter: Section 10 a. A copy can be obtained from Radio Liberty
9. http://kurtnimmo.com/?p=952
10. www.foreignaffairs.org/20070501faessay86308/benn-steil/the-end-of-national-curre...
11. Ibid.
12. Ibid.
13. www.federalreserve.gov/Boarddocs/speeches/1997/19970221.htm
14. David Ranson et al, "Money Meltdown," The Wall Street Journal, July 5, 2007
15. Ibid.
16. Robert Samuelson, "Masters of the Economy," The Washington Post National Weekly Edition, August 13-19, 2007, p. 31. See Also: www.ustreas.gov/tic/mfh.txt
17. David Wessel, op. cit.
18. Edward Chancellor, op. cit.
19. www.usagold.com, op. cit.
20. Ibid.
21. Ibid.
22. www.federalreserve.gov/releases/h15/20040719/ See Also: www.federalreserve.gov/releases/h6/20041230/
23. www.usagold.com, op. cit.
24. Ibid.
25. www.andrewjacksonsociety.org/
26. www.apfn.net/Doc-100_bankruptcy28.htm
27. http://en.wikipedia.org/wiki/Wright_Patman
28. http://findarticles.com/p/articles/mi_m1316/is_n12_v25/ai_14737957
29. www.usagold.com, op. cit.
30. Carroll Quigley, Tragedy and Hope: A History of the World In Our Time, The Macmillan Company, 1966, pp. 324, 146.
31. www.usagold.com, op. cit.
32. www.tcd.ie/Economics/SER/sql/download.php?key=196
33. www.usagold.com, op. cit.
34. Charles Johnson, One Hundred & One Famous Hymns, Hallberg Publishing Corporation, 1983, p. 179.


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