The Imperative for Change
The purpose of this essay is not to
convince the reader of the necessity for change. It is to present some common
sense policy changes to prevent or perhaps mitigate the economic harm that has
been done to Western economies, especially to the US and the UK, since the end
of World War II. Please watch Godfrey Bloom and Alasdair Macleod interviewed recently by Sonia Poulton. The twenty-two minute
video describes the current financial and reputational weakness of the West.
The interview is the first one under the heading of “Videos” on Godfrey Bloom’s
website. For a more in-depth analysis of the financial threat to the West,
please go to Goldmoney.com/research and read any of Alasdair Macleod’s weekly essays from
the past few months.
In the Poulton interview Alasdair
Macleod ably describes the financial implications of currency debasement and
the West’s deindustrialization policies. Godfrey Bloom describes the
reputational damage stemming from the West’s “sanctions” against Russia plus the
consequences of deindustrialization due to the foolish pursuit of a Green New
Deal. In this essay I do not wish to convince the reader of the seriousness of
the current situation, which these gentlemen do so well, but rather to present
policies that must be changed to stop destruction of the West’s economies and
reverse the harm to their reputations. Reputation means more than others
thinking highly of us. A good reputation for honesty, fair dealing, and
adherence to the rule of law is absolutely essential in order to participate
fully in the entire international community both for trade and comity.
There is no need to point out that none
of the policy changes listed below will be enacted by either of the two main
political parties in America or the UK, as currently led. Either one of the
two leading parties in each country must change leadership or a third party
must emerge. There is precedence in both America and Britain for the emergence
of a new party. In the mid 1850’s the American Whig Party was thrown on the
scrap heap of history when it was supplanted by the anti-slavery Republican
Party. In the first half of the twentieth century Britain’s Labour Party
supplanted the Liberals. It has happened before and it can happen again.
The following “policy imperatives”
assume that such internal change has occurred and now the new ruling party must
mitigate and eventually reverse the damage done by its predecessors over so
many years. The task will not be easy, nor will it be painless, but it must be
done.
Policy Imperatives
1. Drastically
cut government spending. The dollar and the pound’s purchasing power are
steadily weakened by the need of the Treasury to borrow more money than internal
taxes and the bond markets will absorb. Currently the central banks “buy” the excess
debt with money created out of thin air. This leads inevitably to more money
chasing fewer goods, which results in higher prices and the boom/bust credit
cycle, among other economic damages.
2.
Abolish the so-called “Green New Deal”, which is
based upon the schlock science surrounding “climate change”. The Western
economies not only must end the destruction of their industrial economies, but
they must revive the entrepreneurial spirit in individuals by eliminating
regulations on business activity that does not directly cause real harm to
people. For example, the West must end such practices as elevating the sanctity
of other living organisms through mandating costly and time consuming
environmental impact studies. The US should abolish the Occupational Safety and
Health Administration (OSHA), and the UK should abolish its Health and Safety Executive
(HSE). Both countries have well established common law precedents to protect
and compensate workers from on–the-job injuries.
3.
Reinstitute the gold standard. The currency must
be seen as a proxy for real money; i.e., gold. This means that the currency
cannot be expanded unless the central bank has more gold with which to back it.
There is a long list of economic benefits to be derived from a stable currency,
but perhaps the most important benefit is spending discipline. The government’s
myriad spending orgies will face the real-time discipline from the taxpayers
and the markets.
4.
House the nation’s gold, which is used to back
its currency, in a neutral and internationally supervised place—for example,
Switzerland—that will redeem the nations’ currency for gold upon demand. The
governments must not be allowed a means by which to suspend currency-for-gold
redemption. Remember, gold is money and all else is credit. If a nation’s
credit is questioned—i.e., the market fears that there is insufficient gold to
redeem its currency or that the government may suspend redemption--then demand
to hold it for settlement purposes will drop or even evaporate completely.
5.
Return stolen property to its rightful owners.
Theft is a violation of law at every level. The Western powers confiscated
Russian property as part of the so-called “sanctions” following Russia’s
invasion of Ukraine. This insult to justice must end. Neither country has
declared war on Russia, yet the sanctions are well-known tools of war. Ending
sanctions is both a moral and an economic issue. If the world believes that its
property can be seized for some act for which a country’s government disapproves,
international trade of all varieties will fall drastically for such country and
become difficult to recover. Who in the world can trust such a country again?
6. Adopt
a non-interventionist foreign policy. The world is full of controversies that
often lead nations to war. Unless their interests are directly threatened, the
US/UK must not intervene in foreign disputes but remain neutral, even if these
disputes lead friendly foreign nations to war with one another. There is no way
that the Western powers can honestly adjudicate these never-ending disputes.
The best way to support warring parties is to provide honest peace brokers,
such as the Church, a safe place to parley. Otherwise, keep out.
Conclusion
The Western
world has violated international norms of fair dealing so that their
reputations are close to long-term destruction. Their currencies are poised to
fall in value due to unprecedented money printing over several decades. They
foolishly believe that there is nothing that the rest of the world can do. They
believe that the rest of the world must kowtow to whatever international norms
the US/UK dictates. But they are horribly wrong. The rest of the world is
moving beyond dollar hegemony and beyond the reach of US/UK sanctions. It is
building a new reserve currency for settlement of international trade. This
non-Western world is much larger than the West in terms of population and
commodities. More importantly, it is willing to exploit its commodities for the
benefit of its citizens, whereas the West has placed its commodities off limits
due to its belief and commitment to schlock environmental science of impending
environmental doom. The process can be reversed, but such a reversal requires
new leadership. Nothing else can be done unless new leaders can change policy.
The West does not need to “rule the world” in order to be peaceful and
prosperous.
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