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Central Banking and War

Actual bankster burial ritual

As long as there have been people, there has been war, but total war is something new, or maybe it’s a barbarous relic that has returned from the past, but either way, WWI marked a change in the way wars are fought, and WWII accelerated that change. What made that change possible?

War has always been expensive, and total war is even more so, since it involves mobilizing an entire population for war. Total war means transferring labor and capital from the production of necessary goods and services, to the production of death and destruction.

By 1913, America and every major European power had instituted a central bank. The largest war in world history, up to that point, started in 1914.

Without a central bank or other means to debase the currency, wars have to be funded through taxation or borrowing, both of which have limits. Through money printing, a central bank can hide some of the cost of war in the form of increases in the general price level. This also has the effect of deferring these costs, it takes time for an increase in the money supply to work its way through into the price level. Milton Friedman described this as the “long and variable lags” of monetary policy.

It’s no coincidence that the century of total war coincided with the century of central banking… If every American taxpayer had to submit an extra five or ten thousand dollars to the IRS this April to pay for the war, I’m quite certain it would end very quickly. The problem is that government finances war by borrowing and printing money, rather than presenting a bill directly in the form of higher taxes. When the costs are obscured, the question of whether any war is worth it becomes distorted. – Ron Paul

Dr. Paul is referring to the concept of war fatigue. Propaganda might be effective in getting people fired up for war at the outset, but as the death toll and costs mount, people begin to question why we are fighting in the first place. The state hides the human toll several ways, including not allowing the filming of caskets and embedding reporters with military units, so that the reporter sees what the powers that be want them to see. Central banking is a tool to hide the true financial costs of war. Everyone notices a tax increase, but less people make the connection from rising prices to increases in the money supply to the wars that money funds, and even fewer care.

Governments can raise revenue in three ways. Taxation is the most visible means of doing so, and it eventually meets with popular resistance. They can borrow the money they need, but this borrowing is likewise visible to the public in the form of higher interest rates – as the federal government competes for a limited amount of available credit, credit becomes scarcer for other borrowers.

Creating money out of thin air, the third option, is preferable for governments, since the process by which the political class siphons resources from society via inflation is far less direct and obvious than in the cases of taxation and borrowing. – Lew Rockwell

To end war, humanity has to change. I believe it’s possible, but it won’t happen until there are a generation of people who accept the non-aggression principle as axiomatic, and that won’t happen in our lifetimes. In the mean time, the best we can do is to try to reduce the violence, the surest way to do that is to reduce the funding sources for those directing and committing that violence. That is why, if you’re against war, you have to be against central banking.

 

Brigitte Gabriel – A Woman of Passion

I wasn’t aware of Brigitte Gabriel, President and Founder of American Congress for Truth, until last March.  I heard her speak at a retreat I attended in Colorado Springs, Colorado for the Leadership Program of the Rockies.  At first, I wasn’t as excited to hear her speak as I was to hear other speakers, such as Dr. Yaron Brooks, President of the Ayn Rand Institute.  The reason being that the war had been going on for years, and although I still care deeply for our soldiers and the cause of freedom and protecting this country, I just wasn’t into the discussion of terrorism.  I just felt I heard it enough throughout the Bush years to last me a lifetime, and quite frankly, I didn’t know what to believe anymore.   Besides, I had been studying free market capitalism as well as the philosophy of Objectivism, and I just wanted to hear more about that!

Once she began to speak I could not take my eyes off of her or stop listening to her story.  A beautiful woman in her early forties, Brigitte was emphatic, full of life and proud to be an American by choice.  She was born in Lebanon in 1965 into a Christian family.  Not many years later, her and her family were in the middle of the Lebanese Civil War, which was not friendly to Christians.  Her story was gripping, terrifying and utterly devastating.  Although I expected her story to be the same old talk I’ve heard in the past, it was not ten minutes into her speech that I was tearing up uncontrollably.  By the middle, I was all out sobbing.  And I wasn’t the only one.  The story Brigitte told was that of her life growing up.  She talked about the constant fear her and her family suffered at the hands of those who hated them simply for being Christians.  She told us why her parents wouldn’t take her to Beruit one year as a child for Christmas; because once the war started there were checkpoints set up throughout the country, and Christians were taken from their cars to be shot on the spot.  She told us stories of how families hiding out in bomb shelters would be tortured and mutilated when found by the enemy.  She told us such horrible stories that I could hardly bare to listen, yet I could not leave the room.  She really opened my eyes, which have been shut for a while, to the reality that we face in this world; that there are people who hate us enough to kill us without knowing who we are.  People from many different religions and walks of life.  And while I won’t say that I now trust the government (which I see as separate from the military) to correctly determine which enemy poses an imminent threat  to our lives and/or our freedom, I will say that I support, and would personally administer, any action necessary to keep myself and my loved ones alive and free.  I would also support anyone who wanted to hear Brigitte speak.  It is very much worth hearing what she has to say, even if it’s only through a youtube video.