Dear Sirs and Madams:
I had the good fortune to meet all of you during the campaign season. I made the point of telling each of you that my run was not about me. It was about raising people’s awareness of the need to return to Constitutional government, local autonomy and solutions vs. Federal control and mismanagement, and restoring sound money to our Republic. It is the disruptive and potentially dangerous consequences of not having sound money that I need to alert you to today.
The Federal Reserve continues to create money on a historically unprecedented scale via “Quantitative Easing”, which is a 21st century euphemism for printing money. Ben Bernanke would like us to believe that this can be done without consequence. A thinking person will immediately realize this is insane, for if a country could simply buy its own debt with no consequences, every country should have been doing this all along. Clearly, any country that did so would have its currency repudiated on the open market. The US has only been able to do this so far because it has the privilege of controlling the production of the world’s reserve currency. If we do not change course, this privilege will be revoked, and soon.
I mentioned to a few of you what is likely to happen to our country and society if the federal government, state government, and Federal Reserve continue on the present path. At the very least, the USA will experience extremely strong food and energy price inflation in the coming 6-12 months, well beyond that which the USA has endured before. There is also the possibility of an even more severe outcome, which if it is to come to pass, will become more evident in the months ahead.
I am far from alone in this thinking and direct your attention to the following information that supports the case (this is by no means exhaustive).
A good place to begin to begin is here: http://www.chrismartenson.com/crashcourse. The course is free and a great primer if any of this is new to you.
Economically speaking, we are essentially in the “Crack-up Boom” phase of the Austrian business cycle; see http://mises.org/mobile/daily.aspx?Id=4016 and http://mises.org/daily/485 and http://mises.org/humanaction/chap17sec18.asp.
As inflation strengthens, food and energy prices will continue to go steadily up. Combined with the failed policies of the local, state, and federal governments (and the Federal Reserve) resulting in extremely high (and still increasing) unemployment, we will reach a point quite quickly where a large percentage of citizens are going to be unable to feed themselves. It will fall on government and private charity to meet their food needs. Please see: http://www.zerohedge.com/article/bernankes-poverty-effect-foodstamp-recipients-jump-400k-november-hit-new-record-436-million.
This trend is accelerating and shows no sign of letting up until well after the necessary structural reforms are in place to allow a real recovery to take hold. I personally have spoken with two people who volunteer at different local food banks, and they told me they are adding 30-40 new families every week.
The necessary structural reforms to avert this scenario are nowhere on the horizon. The US House is highly unlikely to produce any necessary change in time to avert a crisis as the “muddle through” mentality is firmly in place.
If any of you have any doubts that the Federal government in conjunction with the Federal Reserve can somehow pull off a miracle, then please review the following article: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/11/5_Jim_Rickards_-_Fed_May_Go_Bankrupt.html and realize that we will simply have more of the same until there is a crisis.
Please also watch the Crash Course, and then reflect on the effectiveness of the government’s response, both state and federal, during hurricane Katrina. Now imagine an ‘economic Katrina’ hitting the entire nation at approximately the same time. That is what we are facing.
I strongly encourage you to seek the opinions of your own experts in the areas of monetary systems and economics, as I would not expect you to take my word alone on this. But I would also urge you to first ask them if they saw the financial crisis coming, and acted on it (either defensively to preserve capital, or aggressively to profit from it). This is because if they did not see it coming, or did not act on it, then I would not give their opinion much weight in this matter.
Please consider that those that did see it coming are now ‘bullish’ on only a few things, among them are commodities, arable farmland with water (in politically stable countries with strong property rights), and precious metals. Please think on that fact; it’s very important.
I am sending this letter to as many community leaders as possible and will be publishing it online. I sincerely hope that events do not play out as suggested above, but given my own understanding of the matter it is almost certain they will, and my conscience demands that I must place a stake in the ground here and now. And that begins with all of you.
In my next correspondence I will present to you what I believe is critical to prepare our community and to help get Staten Islanders through this potentially most difficult period without an undue amount of strife.
Until then, please contact me with any concerns or questions.