By Mickey Walker – April 12, 2009
In the aftermath of the burnt earth economic policy George
W. Bush brought America by starting wars and then borrowing and spending
Trillions of dollars to perpetuate them, many questions remain: How bad can things get? Will the dollar survive? Will we have jobs and enough to
eat? Can we keep our homes? Can we earn enough to pay for life’s
basic essentials? Will we be able
to send our children to college? Will Americans ever know prosperity as they have in the past? Will the
government help those in need, or will they have to forage across the
countryside in search of a living?
In great desperation, many Americans are buying gold. Somehow the human race will turn to the
yellow metal once again, it has been said, as the only viable currency in the world. So people buy and stash bullion and
coins in their safe deposit boxes, under their mattresses, and even buried with
the fertilizer in the safety of their own backyard tomato gardens.
But what is afoot here? Just why, philosophically, would Americans prefer to trade
in gold to that of paper money, to wit, Federal Reserve Notes? Why would one not be as valuable as the
other? When the financial and
housing markets undergo a meltdown, i.e., last fall, and giants like Bear
Stearns, Lehman Brothers, and Merrill Lynch bite the dust, you begin to brace
for further aftershocks. In truth,
I thought the dollar would tank and maybe become worth much less than it is
today. After all, the USA has HUGE
IOUs attached to the dollar of over 10 Trillion dollars. That is our National Debt. That amount is what we have borrowed,
pay lender nations like China interest on, and still owe before one dollar in
the US Treasury can be spent on roads or healthcare. So how could the US dollar, with so much debt attached, have
any value at all? But lo and
behold, when the markets responded to the world financial meltdown, the dollar
grew steadily in strength against foreign currencies, many of which had beaten
the dollar down for the past several years. Could you believe it? Swiss francs crashed with the Japanese Yen, the Pound Sterling, and most
all other currencies when held up to the dollar. The US dollar ruled and does even still against other
currencies like the Euro (which is on life support and expected to crash and go
up in smoke).
Apparently the dollar, backed by the full faith and credit
of the US government, is what the world looks to as a currency of solid
strength, one that will survive the present chaos. The world looks to America as the strongest contender in
surviving this onslaught of turmoil in the financial markets. And the dollar is definitely a symbol
of hope.
In determining value, the dollar, however, is but a piece of
paper. And gold is a bit of dense
metal. You can eat neither. Neither of them will propel your
vehicle. But if either are
perceived and accepted as an instrument of value then one can buy gasoline or
food with each. But
psychologically, humans must embrace dollars or gold as something of value
before one can buy anything with such symbols of solvency. Cases of C Rations or an underground
storage tank in your backyard filled with gasoline are instruments of
value. If
society ever devolves to where the dollar unravels, gasoline and food would
become extremely valuable commodities, but harder than paper or metal to
utilize as media of exchange.
Of course, many of the scenarios of such a future world
where nations and governments have weakened so that we become “Road Warriors”
in a land of anarchy, roving the countryside as we try to survive, is fantasy
at best. But some of the symptoms
of people preparing for such a darkened future persist. During the last few months, Americans
have been buying ammunition and guns like crazy. All the ammunition suppliers and sporting goods stores no
longer had bulk ammunition for sale. You had to backorder over 500 round
boxes for your pistols or rifles. Prices skyrocketed. You
could hear ominous talk in the stores about how you better buy as much
ammunition as you could now because it might not be available tomorrow. There was also much talk about how
Obama might take our guns away. And these absurd notions, floating about the countryside, did in fact
cause ammunition shortages. So
what of the authenticity of such statements and thinking? From what part of the human breast or
psyche do these notions (real or illusory) come? How could Americans ever come to such a brink of fear?
I never owned a handgun. Except for the .38 Special Colt revolver I wore on my hip in Da Nang during the Viet Nam War. But recently, someone dear to me talked me into buying a
pistol. Or perhaps my unconscious
dark side decided it was time. Were the images of desperate Americans roaming the countryside in
hordes, looting and stealing from others becoming closer to reality in my
mind? I don’t think so, but then
who has ever seen inside the unconscious mind? I had been opposed to owning a handgun for many decades, but
acquiesced in the end. Did I
rejoin the NRA in my mind, or had my expired membership of 30 years ago and my
renewed Billy Bob testosterone levels suddenly seen a rebirth? Not likely.
Some of my friends talk about how to deal with hard
times. Some of them say they will
grow vegetable gardens, and if people try to take their corn, pinto beans or
tomatoes, they will be forced to shoot. Really? I would remind them
that likely there might be too many humans to shoot for all the bullets they
could manage to buy at Wal-Mart. Besides, most of my gun-totin’ friends are
Christian and religious so I pressed. Would Jesus, who said, ‘Feed my sheep’ really cotton to ‘If somebody steal-ith thy Rutabagas, shoot him down?’ If your brother is hungry would you not want to help him? Could you turn away a starving family, knowing you might save them by
sharing a bit of what you had? But
this is all fantasy. Just overactive minds, painting illusions of ‘What ifs’,
don’t you think?
So why all the concern about buying
ammunition, guns, and gold? It’s puzzling. But the phenomenon
exists. It seems likely, you would
have to shoot more marauders, thieves, and just hungry people than you could
possibly bury in a lifetime with more bullets than you could ever buy. So that’s out of the question. Then if you have gold bars how can you
be sure that the person from which you wish to buy
food or gasoline or medicine will accept gold? He might accept a tank of gas, but gold? Dollars? I just don’t know. A Las Vegas blackjack dealer advised to buy and store vast amounts of
cigarettes and whisky. Might be
something to that. But my crystal
ball gets hazy. One thing is for
certain, if anyone cared enough to force you to tell him where your gold is
hidden, chances are good that you will tell him, eventually. Understand? Yes, you will let him know because he will have means of
getting you to spill the beans.
So why all the fuss about guns, bullets, and gold? Perhaps it is a symptom of our sickened
society, racked by deregulated greed, that has seen prosperity, homes, jobs,
healthcare, and pensions all get flushed down the toilet. President Obama has a big task ahead of
him. It would be good if people in
the world would continue to accept and trade US dollars as hard currency. It surprised me, the dollar’s rise
against world currencies when it all hit the financial fan and turned 401k
plans to ashes, but the dollar tended to hang in there. If we can just look the other way and
continue to work for US dollars, even though they are fiat and have a
10-Trillion dollar debt attached, perhaps we can dig ourselves out of this
mire. The Chinese have over a
Trillion dollars in US Treasuries. Remember the old adage about, “You owe the banker 10,000 bucks and the
bank has you by the gonads? But if
you owe the bank 10 million bucks, then who has who by the gonads?” Perhaps we have the Chinese by the
short hairs because we are into them for such a mountain of debt. Maybe they will have no choice in the
future but to continue to loan us dollars for our huge impending deficits. Perhaps all this ‘funny money’ we call
US dollars is really the best game in town. As long as it is accepted, who cares if it is backed by gold
or not? In this crazy world,
dollars might just prove to be more valuable than gold. I sure hope so because if it ever comes
to the point to where gold is used as the chief medium of exchange; just
imagine the world we would be living in. 