Money - Inflation - and Morality - RR175A2
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Our subject in this session is money, inflation, and morality. Money today is simply a state issue of paper stamped with the denomination. It is fiat money, it is state created, with a state imposed value. Fiat money always has been and always will be inflationary money. It has an arbitrary and an artificial value, it is counterfeit money. True wealth has behind it the accumulation of work, of thrift, of inventiveness, of character. A well cared for orchard, a vineyard, has a continuing value as a producer of food. The paper value of that farm will vary in terms of taxes, inflation, the market for its produce. But it also varies in terms of what is called money. When money is fiat money we falsely assume that a house or a farm has increased in value when In reality all that has happened is that the money has grown cheaper. And what we are seeing today is the increasing cheapening of money by means of inflation. The real value of good and of services of buildings and farms is not changed, the value of money has. We have seen a steady depreciation of the value of moneys since the beginning of the Federal Reserve System, since world war two, and especially since the Vietnam War. As a result to protect their assets people have moved away from paper money and from bonds and to short term notes, buildings, lands, gold and silver, and tools. But now we’re seeing the decline of the value of stocks and of buildings. We are seeing a growing de-capitalization of our society. I mentioned in the previous session that capital is not only money but it includes work thrift and character. Inventiveness, intelligence. But today capital is being destroyed by our social order, which taxes monetary wealth which depreciates the value of work, and which in one way or another penalizes character, thrift and intelligence. [00:03:09]
We are seeing the rate of inflation exceed the rate...
We are seeing the rate of inflation exceed the rate of savings. We are seeing savings taken by federal loans and bonds and they do not go into the creating of new jobs. To illustrate: in the early 1970s the capitalization required for a new job was roughly 100,000 dollars. In other words, to create a new job required in the form of the land that was used or the building, the tools, the education, everything that went into creating a new job, the materials out of which something must be produced, the average was 100,000 dollars. However since 1917 we have seen two dramatic factors affect the economic scene. One: the tremendous cost of regulations, meeting all kinds of state and federal standards. There have been companies that have spent 3 million, 5 million dollars trying to get a permit to put up a new plant, and then they denied it. All that goes into the cost of the job. Then inflation goes into the cost of the job, so that today we may conservatively save that it costs 250,000 in fresh capital to create a new job, and the money is not there. Not only are old jobs being de-capitalized by bankruptcies and by the debt structure but the new capital is not there to create new jobs. And so we are in an economic crisis. It takes capital to create new jobs. And what do you do when there is no capital? To try to create it by taxation and federal grants, we just had a tremendous sum allocated and the proposed budget for more loans to get the housing industry underway. Where will that money come from? From us as taxpayers. And because the cost of those new houses will rise all the more we will be less and less able to afford them. But more new jobs will be created then ostensively by taxing us all the more. We are being de-capitalized at the same time as inflation, and regulations are raising the price of every new job. [00:06:37]
Jobs are being priced out of the market and there is...
Jobs are being priced out of the market and there is not enough capital to create them. The federal deficit is decreasing new jobs by sopping up so much of the available money and the hope is receding of anything resembling a balanced budget. One commentator recently said and his name Robert D. Ben in writing on the receding mirage of the balanced budget in the most recent of public interest and I quote: “We can no longer have and no longer do have specific allocations for a specific agency in the federal budget. Once we said we need so much for this and we allocated it” but now he says and I quote: “It does not work that way any longer. Rather than getting an agency a specific amount of money for a specific program, congress decides what types of people are eligible for what levels of benefits, under that program. How much money is actually spent depends on how many people apply, and how much the benefits for each one costs. How much is spent on such a program each year also depends upon economic conditions such as unemployment and unemployment inflation. And how much we should budget for these programs next year, depends upon what we think will happen to these economic factors. What we end up paying is not at all constrained by what number was used in that budget” Ben goes on to say and I quote: “Uncontrollable spending is not only uncontrollable, it also increases uncontrollably”. We see thus the debauchery of what pretends to be a federal budget. It is no longer a budget but simply granting licenses in various areas for spending. And we see increasingly the budget dedicated to irrelevant and evil causes. I do not know how many of you get the conservative digest, so how many of you do? Some of you, but not enough. John Lofton a very good friend of Chalcedon is the editor and a recent issue was devoted with help from Howard Phillips one of our very strongest friends, head of the conservative caucus to where federal funds are going. Let me read to you a list of some of the beneficiaries of our funds. The Amalgamated Clothing and Textile workers, the AAFFLCIO Appalachian Council, American Friends Service Committee. [00:10:16]
Why don’t they talk about the separation of church...
Why don’t they talk about the separation of church and state on grants like that. The Association of Community Organizations for Reform now, or Acorn. The council on foreign relations, well the Rockefellers do need our money. (Laughter) The feminist press, the gray panthers, the international union of united auto workers, the league of woman voters of the united states, the national association of farm workers organization, the national council of senior citizens, the national retired teachers association, the Pacifica foundation, the Sierra club and so on. The entire issue this past month of conservative digest simply listed organizations receiving our funds and the amounts they are receiving. In that same month Howard Phillips stated and I quote: “President Reagan’s top economic advisors yesterday abandoned the traditional republican stance that government deficits are the main cause of inflation. Warning that it would be disaster if any basic changes were made in the president’s economic policy going for a new perspective on the budget, the council of economic advisors suggests that instead of a goal of a balanced budget, the nation should be prepared to accept the deficit of 60 billion plus. Having asked for too little in the way of spending cuts, the Reagan administration has now decided to change its economic philosophy rather than its strategy for implementing that philosophy on which candidate Reagan campaigned.” Howard Phillips has documented the fact that the homosexual or gay rights movement in this country and the feminist movement and a great many others were able to get off the ground and function and become powerful with federal grants. [00:12:46]
This is not all...
This is not all. “Planned Parenthood, with its abortion stand and its educational program for “sexual freedom”, its lobbying for tax paid abortions, and for radical social change has very extensive federal financing. For example, in 1980 the Planned Parenthood federation of America took 12.8 million in tax dollars, more than half its budget. Its 189 local affiliates received 58 million total, their combined budget was 122 million.” Thus both the national and the local affiliates are financed by us. Planned Parenthood has not been hurt by the Reagan administration. In fact Planned Parenthood of Washington, if you will pardon me for getting into the ridiculous had the week of February 14-21 of this year 1982 declared national condom week by Mayor Barry. In a mailing they said and I quote: “yes it is the fourth annual rubber disco. Now the previous had not been official but we’ve advanced so much that now it is an official District of Columbia week. Admission is free with a condom and an invitation which can be picked up at the man’s center of Planned Parenthood. This fabulous dance will be held at the beret disco tech. decorated with an array of different colored blown up condoms. The height of festivities will culminate with a condom blowing contest, the winner of which is to receive a prize.” Now the same time that this is being done with our tax money tax dollar are being used a million dollars or more at every trial to persecute Christians. Christian churches, Christian schools and children. Well with such moral insanity we can hardly expect an honest money, an honest economy, or an honest budget from the federal government. The financial movement of our modern age has meant the abandonment of the gold standard, and the monetization of debt. Money now represents debt, not wealth. And the transition from capitalism and the free market to socialism has been made easy by fiat money and debt living. [00:16:13]
Banking is no longer warehousing, it is fractional...
Banking is no longer warehousing, it is fractional reserve banking. Moreover we have seen on a large scale in the last decade not only massive foreign aids as before to Marxist countries, but banks encouraged to make massive loans to these foreign countries. The estimate is that by 1980 in the decade of the 70s the New York bank and other banks, primarily the New York banks, had lent 80 billion dollars to the Marxist countries. Their default would destroy the banking system unless of course with spectacular inflation. Runaway inflation we wiped out that debt. Poland defaulted to honest loan at the beginning of this year, just the interest payment 71 million dollars, Washington decreed that the tax payer would pay the New York banks. And so Washington paid the banks of New York to keep Poland going. And at the same time we recommended to the international monetary fund and to the World Bank increased loans which will come out of our giving to those agencies, to both Poland and Romania as well as other countries. Just a couple weeks ago the president of the Zaire an African country perhaps the most corrupt of all, was in Washington DC in New York with his entourage. They spent 2 million dollars of our loans just celebrating in New York and Washington DC. Meanwhile they were in default of 200,000 dollars on an interest payment due almost a year ago. [00:18:39]
And when the congressman rose to protest that kind...
And when the congressman rose to protest that kind of indulgence and to say” let us strike Zaire from our current foreign aid”, the man was rebuked by an administrations spokesman. This is economics? Celso Ming a Brazilian economist said not too long ago and I quote: “if I owe a million dollars then I am lost. But I owe 50 billion, the bankers are lost.” This is another version of the old proverb make a small loan and you have a debtor. Make a very large loan and you’ve got a partner. Now that tells us something about the international sink. We have been making immense loans as a federal government and as bankers, to the third world and to the Marxist countries, we are now in partnership with them as a result, and this explains a great deal of our foreign policy. We are in partnership with them and at war against the people, us! The federal government is at war against you, not against the Soviet Union, nor against Poland. We frown on what Poland does, but we pay their interest. We supply wheat to the Soviet bloc without which they would have food riots in a very short time, and the regimes would collapse. But then what would happen to our loans? As a federal government and through the banks, so we continue to prop them up, we are in partnership. We’re not only extending and increasing the loans, we are moving factories into the iron curtain countries to help their economies. Next time you buy a pair of Levi Strauss jeans remember they have moved from San Francisco to Hungary. They’re one among many. After all you get what amount to slave labor in those countries and you can produce more cheaply. The morality of these loans by banks and by the federal government must be seen as basic to humanism. Humanism you remember I said believes in fiat money, in fiat morality, in fiat values. The state therefor seeks as God to create value. And to create productivity and prosperity. And this outlook that man can create in every area, is basic to modern banking. The bank loans to the USSR by the New York and other banks are to us insane. [00:22:32]
Civil governments have never in any era been safe borrowers...
Civil governments have never in any era been safe borrowers. You and I cannot declare that we refuse to pay without having economic consequences. There will be a foreclosure, what we have will be taken from us. But this does not happen to civil governments. Do you know that in 1875 the state of Mississippi defaulted on loans the main possessors of those bonds were English investors? Those investors are still trying to collect from the state of Mississippi. They have an organization which keeps working away at it. And what is the state of Mississippi done written into its constitution the provision that those loans will never be repaid by any future government. The idea of any civil government paying off anybody is absurd, they don’t! We’ve never paid off Europe on countless things, I’ve just cited Mississippi. And Europe never paid of the war debts from World War I or World War II. Nobody that runs a government ever thinks of paying off. Paying off is a luxury that works for a while to keep the suckers happy. But in time there’s a cancellation. [00:24:21]
It is interesting that when in the course of WWII Nazi...
It is interesting that when in the course of WWII Nazi Germany was broadcasting to Britain and attacking the western world and its economics it criticized savagely classical economics, and the gold standard. And when Lord Keynes (spelling?) was asked about those broadcasts and what should be done with them, he said nothing. We have to agree that at this point the Nazi’s are right. And so that philosophy through lord Keynes and others was made a part of the economic order of post WWII. We did not oppose the Nazi’s on their national socialism, their economics. We are today a fascist country increasingly, we have the façade of freedom but behind it through regulations and controls we have socialism. Brown, rather than red socialism, indirect socialism. And the false premise of all this kind of thinking is that state created money and loans can create prosperity. Hence there must be state loans to all the world and the banks must loans also, and the banks having the same philosophy believe they can by loans to Poland and to Romania create such a wave of prosperity there and in the far east and in Zaire. That the whole world is going to blossom with economic prosperity. It is blossoming, with uncollectable debts. Money cannot produce, fiat money cannot produce nor create the productive man the man of character, but unearned money can de-capitalize a weak man and a weak economy. And today inflation is de-capitalizing all the world, and basic to that inflations if bad money. [00:26:57]
But the primary de-capitalization begins with bad religion...
But the primary de-capitalization begins with bad religion, and bad morality. When Franklin D. Roosevelt took office, one excellent economist name Tilden wrote a book predicting what was going to come, the title gives the prediction: a World in Debt. And he made this statement: “Inflation only works not just when the state speaks to promote it, but when the people have larceny in their hearts.” Because basic to all inflation is larceny, larceny by debtors, by people who want to pay off good debts with bad money. It begins with bad religion, of which antinomianism is a key factor. Because if we do not believe that Gods law rules the world, we are going to believe that man can make his own laws as he goes along. And then we fly in the face of common sense because we believe that the world is going to be what we make it. I said that the record of history demonstrated that loans to states are the worst loans that can be made, but listen to what David Rockefeller said a while back and I quote: “in terms of straight credit risk the presumption is that there is greater continuity of government in certain socialist states than in non-socialist states.” But does that mean the best risks are your socialist countries because they are not readily overthrown? But if you lend to a republic, its government can be voted out of office, so make your loans to the most socialist nations. But what Rockefeller totally forgot about in his thinking and this is the reason why Chase national Bank is one of our endangered banks thanks be to God. (laughter) is that loans to a nonproductive country are nonproductive loans, and the soviet empire and it satellite states are all nonproductive. And no loan to them has been or can be productive. But as the old saying which we encounter through the ages has it: whom God would destroy he first makes mad. There are a lot of madmen running around now governing economies. If there is a future it must be capitalized, it requires a theological and an educational capitalization first. And this is why we established Chalcedon, we want to capitalize the world theologically and educationally I believe that capitalization is underway. The very fact of the growth of the Christian school movement, so that it would appear that if they do not succeed in destroying it by 1999 or the year 2000 the public schools will have disappeared. [00:31:37]
That is significant...
That is significant. What is significant too is that there is a major move now by the black community into Christian schools. In our next journal of Christian reconstruction we will give you some stories of that. Pastor Melvin Hodges whom I know in Baton Rouge Indiana has a superb Christian School and a foundation for black Christian education which is starting Christian schools in numerous areas. One of our Chalcedon men who is here, Howard Almenson has had a hand in an excellent school in Las Angeles. Las Angeles has a black mayor, but that has not saved Mrs. Jenkins from unbelievable harassment from the city. They do not to see Black education prosper, nor the black community move out of the public schools. But it’s happening and its one of the most important indications of what the future is. [00:33:04]
We are seeing thus a dramatic change and by the way...
We are seeing thus a dramatic change and by the way let me add we are seeing a dramatic revival going on today in the black communities all over the country. In Las Angeles one of the churches there, again I know the pastor Dr. Evie Hill, and you will read about him I believe also in an external which Dr. Kelly is editing, they started a Christian school, they started a training school for adults, and has told every member that they must work to convert every person on their block. On one block they had only an elderly blind black woman, but she worked and she got together a prayer meeting of women in time, and finally they converted a 161 of 162 people on that block. And that young man was so upset by all these amen brothers on the block, he moved away! (laughter) but they found out from the truck driver where he was moving and they called up that block and told them meet him when he arrives and help him unload! (more laughter) and when that man got there he found people waiting at the house to help him unload saying praise the Lord brother, we are here to help you! (more laughter) and he said is the whole world going crazy? Well, Evie Hill says either we are going to convert the people in the ghettos, or the revolutionists are and it is his goal in this decade to reach into every ghetto in the united states, every inner city area, and he has a helper now to do it, Bunker Hunt, a dedicated Christian. They’ve begun work in Denver and in Dallas and they plan to spread out across the country. That is capitalization on the ground level. Making capital out of human beings, who can then recapitalize with their character in this country. There is a tremendous movement out there. And there is a tremendous counter movement, and that is why I am in the courts so often. As the powers of statism seek to destroy this movement, to control it, to put it out of existence so that they can be free to continue their plans for a humanistic world order. [00:36:25]
But we are told by scripture that the earth is the...
But we are told by scripture that the earth is the Lords and the fullness thereof and we know that the enemy is doomed to failure. The only question is, will we take over? That is our responsibility, and God willing, we of Chalcedon intend to do all we can to arm the people of this country to take over this nation and the world for Christ. Thank you. (applause) [00:37:22]