-- Posted Friday, 21 January 2011 | | Source: GoldSeek.com
Past economic data is more fun to play with than silly putty. Undisputed historical data allows you to play “what if” scenarios at economic turning points where our bankster-controlled government made horrific policy decisions.
President Nixon’s 1971 decision to close the gold window remains one of the most horrific economic policy decisions ever made by any US president.
Closing the gold window made soaring gold prices so easy to conjure, a blind man could see it. I was a 12 year old in 1971, and even I understood inflation well enough to convert my paper route and golf caddying money into pre-64 silver coins as fast as I could earn it.
But lets play “what if”, shall we? What if Nixon had understood that his bad action brought with it the opportunity to strengthen Social Security and suppress the future size of government?
What if tricky Dick had been bright enough to light a golden “back fire” to prevent fiat money inflation from creating the government overspending inferno that followed ever since?
From its inception, the Social Security trust fund has been an accounting fiction that took real payroll taxes paid and converted them into NOW un-payable government IOU’s.
In '71 President Nixon could have directed that all future Social Security surpluses be protected from inflation by investing them in gold. Initially, putting Social Security reserves into gold would have only prevented 2.336 billion dollars from going into Treasury IOU’s.
Using the Social Security surplus data here http://www.ssa.gov/history/tftable.html as well as average annual prices, you can get a pretty good idea how much gold Social Security would own now (assuming any deficit years were paid by redeeming its pre-1971 IOU’s).
The number is approximately 9 TRILLION dollars of Social Security trust-fund-held GOLD (over 200 tons), assuming Social Security buying could have coaxed enough mining for 200 tons to even be available, when only about 165 tons have ever been mined.
Of course gradual Social Security gold buying would have pushed prices somewhat, buying fewer tons and most likely prevented all bankster suppression of metals prices.
However, there can be no doubt that without the Social Security trust fund surplus to spend via government bonds, federal politicians would be greatly constrained to start wars and expand the size of government.
Steady gold buying by the Social Security trust fund would also have helped arrest asset-fed bankster bubbles from being created in other markets.
Senior citizens would have become the lobby that prevented gold vault break-ins, and not the lobby for bigger government they have become.
Putting gold in the Social Security vaults would have created (and still could create) a VERY important economic stabilizer for the US dollar and the global economy.
Social Security gold could even be minted into legal tender coins or Treasury-issued notes and paid out to seniors to spend into debt-free circulation. Such “good money” would surely, over time, push “bad money” fiat federal reserve notes out of use, like toothpaste gradually empties from a tube.
Nearly all of the world's gold in the Social Security trust fund that belongs to the people would have kept America an economic superpower.
Why is this “what if gold had been put in the Social Security trust fund” question important?
Simply put, the world is in the middle of what my Chicago pal Ted Andros calls a “currency extinction event”. Our fiat dollar is doomed, and there is no intelligent dispute of that.
There are lots of good ideas out there about what kind of monetary system should come after the current dollar dies. A currency backed by, and redeemable in, a basket of metals, energy, food and never-taxed land remains my preference.
Given how stable our economic system would be now if we had just put gold and in the Social Security trust fund, that idea needs to be a part of the thought process for serious economic thinkers going forward.
Fiat government debt has made Social Security part of the problem. Gold, and possibly Silver, could make Social Security and other government trust funds both REAL and part of the solution.
There is surely nobody approaching (or in) retirement who would rather have 2.5 Trillion of now near worthless government IOU’s backing up Social Security instead of 12 trillion in Gold.
Michael "Woody" O'Brien ChFC
mwoodyo@hushmail.com
http://www.facebook.com/#!/profile.php?id=1026276294
-- Posted Friday, 21 January 2011 | Digg This Article
| Source: GoldSeek.com
