Gold Swindle: The Story Of Our Dwindling Gold Ch. 2: The MazeSubmitted by The Rascible Ch... on Thu, 03/07/2013 - 20:58
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copyright 1959, revised 1961 - George Racey Jordan, USAF Major (ret)
Gold Swindle: The Story Of Our Dwindling Gold Ch. 2: The Maze
How did this unfortunate situation come about?
For the most part it has been due to wild, unregulated government spending, based on an artificial increase in the supply of currency and bank credit. A huge foreign giveaway program in which the United States Government has been engaged on so lavish a scale since 1940, in addition to our maintenance of armies of troops in 73 faraway bases throughout the world, have constituted an unremitting pressure which in turn has been used to frightened us into more spending.
With the initiation of Lend-Lease the United States Government expanded its spending program from the domestic to the foreign scene. Harry Hopkins, chief architect of government spending, planned the shift in emphasis from domestic to foreign spending. Through the medium of foreign aid and soft loans for his thousand socialistic schemes of experimentation.
All the dollars spent abroad for Lend-Lease, war, war relief, international agencies and foreign aid may change hands many times, but they ultimately return as dollar claims against the American economy, and must be redeemed by the American taxpayer. Claimants from outside our country may exchange their dollars for American goods, American land, residential or business buildings, stock market shares, or gold.
The 'Readers Digest' Feb 1953 issue published a condensed version of chapter 12 of my book 'From Major Jordan's Diaries' under the title 'Astounding Soviet Swindle of American Taxpayers'. This account covers the period where it was discovered that the Allied Occupation currency of West Germany was being printed and circulated by the Russians in great quantity, to the great consternation of our command. Undoubtedly many of these phony military marks put into circulation by the Soviets, then converted into an obligation against our dollars, are now coming back to haunt us in the form of demands for gold. How we came to loan these money printing plates to the Soviet Union on a carte blanche basis is still one of the war's greatest unanswered mysteries.
For twenty years we have been recklessly giving away American dollars to foreigners. We knew that we could not recoup our war spending or gifts to other nations. Dollar spending for foreign materials, construction and services have remained as a claim against our economy for goods or services, for which nothing has been received in exchange.
We are just beginning to realize that the dollars that we gave to foreign nations or their citizens or Americans abroad, can return as demands on our stockpile of gold - a demand the American government cannot refuse. If enough foreign claimants exercise their present rights to demand such redemption, our entire financial system could crack and fall apart as did Germany's after World War I.
Our total supply of paper money and credit is supposed to be backed by at least 25 per cent of reserves in gold. As gold moves out of the country, the metallic support under our money weakens. More billions in currency rest on fewer billions in gold. Our money system is teetering more and more off balance.
There is another curious problem. The United States is a gold-producing country. But we are mining almost no gold. Why don't we replenish our depleted stockpile by mining our own gold? Our Government will not let us do so.
Furthermore the Government says all mined gold must be sold to the Treasury, or a licensed dealer, at its 1934 price of $35.00 per ounce. But the costs of mining have increased several hundred per cent. Obviously, mine owners cannot hire labor, buy machinery, and meet other costs if they must sell at 1934 prices.
During the war, the War Production Board issued an order, No. L-208, closing all gold mines because, it said, the machinery was needed for mining copper for the war effort. That strange order was drafted by Harry Dexter White, Assistant Secretary of the Treasury, who advised our government on so many policies which strengthened the Soviet Union and weakened the United States.
None of the gold mining machinery was of any use to any military operation. Some - if not all - of this specialized equipment was shipped from Seattle to Vladivostok in the Soviet Union to be operated by unskilled, political prisoners. I knew of this because the orders passed through the Lend-Lease Depot at the Great Falls, Montana, Air Base, when I was in charge. I saw proof of vast shipments of gold mining machinery.
When gold mines are closed, they usually fill up with water. Machinery grows rusty, Skilled gold miners move to other jobs. No new men are taught gold mining techniques. It costs a great deal to pump out and reopen a gold mine that has been closed for years.
We need to add to our gold reserves every ounce of the yellow metal we can take out of our mines. Here again we are blocked. Almost all mined gold (except placer gold) must be sold exclusively to our Government at the fixed price of $35.00 per ounce, a price which has not changed although the value of the dollar has fallen more than 50 per cent since the price was set. The fact is, we cannot replace even a small part of these dangerous drains on our metallic base with raw gold from the mines in our own country, unless we rehabilitate this entire segment of our economy.
Why are we so crippled? Because back in 1942 a little group of Government officials headed by a clever, farsighted Soviet agent, instituted an ingenious series of moves which put an end to gold mining, as a necessary prerequisite to a managed money system. Domestic gold production was ended, yet our dollars were allowed to flow abroad like water.
The mines are still closed. The mining machinery the Government seized is now producing uranium in the Jachymov, Dobris and Marianske Lazne mines of Czechoslovakia and gold in the wastes of Siberia. Our American mine owners are unable to mine gold except in a few special cases or when the metal is a by-product of other metal production.
There were about 4,000 producing gold mines that were peremptorily closed as an asserted war necessity in 1942. After years of idleness, the great majority of these could not attempt to reopen as long as gold is priced so low. Inflation and currency depreciation have made a higher gold price mandatory. A few mines attempted reopening, but after heavy losses were again forced to close down. This is the situation facing more than 95 per cent of all gold mines in the country.
All of these apparently distinct and separate pieces of the puzzle fit together with curious exactness during the critical period of global cold war.
Did someone plan it that way? Why? What does it mean in regard to our capacity to wage war - hot or cold?
So far as the ingredients for "Social" revolution are concerned, sometimes they are cooked on a hot stove of violent revolution and sometimes they are more slowly steamed over the slow fire of Fabian socialism. If the latter method proves too slow, additional heat is turned on and the resulting concoction is called national defense, wherein more than half of the annual budget is spent for armaments which prove to be obsolete when delivered. This will eventually fulfill the Marxist schedule of spending our economy into destruction.
(to be continued in chapter 3: Clear and Present Danger)
Copyright 1959, rev 1961 George Racey Jordan, USAF Major (ret)