The repeated monetary crises that have plagued the United States since the early 1960s have not been solved. Washington and New York have merely applied temporary propaganda palliatives. No effort has been applied to the fundamental dilemma. To a decade of mismanagement we can now add Trilateralist ambitions to rule a world economy in their own image. Consequently, the day of reckoning will be all the more costly.

The coming financial panic will be a logical consequence of these repeated financial crises, themselves symptoms of a deep malaise, the politization of economic activities.

The late Jacques Rueff, that penetrating French financial expert, once commented that the American financial problem “was the outcome of an unbelievable collective mistake which, when people become aware of it, will be viewed by history as an object of astonishment and scandal.” 1

The “unbelievable collective mistake” made by the New York-Washington elite, now continued by Trilateral ideology, is the replacement of a free market system by a fiat money managed system. We suggest that as ordinary American citizens react and become aware of what Rueff called “an object of astonishment and scandal,” a financial panic is likely to be fomented. The realizers will hasten to protect their threatened assets, and the rush to the exits will be awe inspiring.

The realizers, a term coined back in the first decades of the Woodrow Wilson administration when elastic currency was being debated, are those investors who understand the hollow character of a politicized monetary system.


Their key attribute is an ability to think beyond and never move with the herd: the herd instinct is suicidal. When gold markets are quiet, the realizes is quietly transferring assets from paper to gold; in fact, many have been doing just that for a decade. When gold markets are hectic the realizer may lighten up, knowing that all markets react. But when the day of panic arrives, the realizer’s only problem will be to protect his store of wealth.

The responsibility for the “collective mistake,” seen only by the relatively few realizers lies heavily with members of the Trilateralist elite.


Chapter eight concluded with three observations:

. Fixed exchange rates tied to gold will be reintroduced, contrary to the Trilateral goal to “learn to live with” floating exchange rates by international monetary management.
. Reintroduction of gold into the world money arena will pull the rug from under Trilateral goldless IMF proposals and Bancor, and the European Currency Unit (ECU) is a first step in this direction.
. Unless the U.S. gets its financial house in order, we shall witness social upheavals and monetary panic exceeding anything in American history.

We can now (November 1978) see the outline of these observations reflected in world events:

. The U.S. has embarked on its fiat money, anti-gold crusade, stifling its Western friends and subsidizing its Marxist enemies.

. U.S. Establishment-oriented economists predict that the shocks of 1973 to 1975 can never reoccur and that this time their forecasts will be right. These predictions were broadcast even while a minor flight from the dollar demonstrated their inaccuracy.
. By contrast, major European governments, led by West Germany and France, are moving with extraordinary and unparalleled rapidity to protect Europe from the coming financial holocaust.

While American representatives are jetting around the globe muttering clichés about “management of interdependence,” “intensive interactions,” “New World Order,” and similar nonentities, the real monetary economic world is disintegrating around our ears.


And now Europe has said to the United States, “We have watched you play the fool long enough; our patience is exhausted.”




The new European Currency Unit (ECU) introduced in mid-1978 by Chancellor Helmut Schmidt and President Valery Giscard d’Estaing as a European Community unit of account is a clear warning to the U.S. that there is financial chaos ahead.


If the U.S. will not act responsibly with the dollar, then Europe is prepared to go it alone. Neither Giscard nor Schmidt, the joint architects of ECU are Trilaterals, and it is worthy of note that both Schmidt and Giscard are former finance ministers of their respective countries. Furthermore, there is a report that European bankers had muffled, but still audible, reservations about the Giscard-Schmidt plan.


European Trilaterals include powerful European bankers:

  • Baron Leon Lambert

  • Alwin Munchmeyer (German Banking Federation)

  • Baron Edmond de Rothschild

  • Anthony Tuke (Barclays International)

  • Luc Wauters (Kredietbank, Brussels)

Also, prominent European Trilaterals Raymond Barre (prime minister of France) and Count Otto Lambsdorff (minister of economics, Germany) are not prominent in the ECU plan: the ECU plan appears to be a non-Trilateralist, Schmidt- Giscard creation.

The ECU system, scheduled for operation by January 1979, will link major European currencies to the German D-Mark. ECU is more than a broader “snake” and currency defense scheme: its members are required to place 20 percent of their dollars and their gold into a pool along with an equal amount of national currencies. The ECU system is gold based. It reinforces the use of gold as money. It reintroduces the monetary role of gold.

The object? To defend European currencies against speculation.

What kind of speculation? Obviously a future flight from fiat dollars. ECU places the United States and the European Community in opposite camps, and two competitive world reserve assets will ultimately emerge: a European gold-based currency (the forthcoming ECU is only for interbank transfers) and the U.S. dollar based on the printing press and Washington elitist hot air.


In fact, a European currency, tentatively called EUROPA, has been under study for some time at European Economic Community Headquarters in Brussels, and the gold-backed Europa could well be the world’s replacement for the declining fiat dollar and the almost worthless fiat ruble.





The nature and scope of the forthcoming financial panic can be delineated from historical precedent but not – as yet - the precise timing of the panic.

Timing of monetary panics usually depends on random events which trigger underlying distortions, and these events are not always in themselves major events. The 1907 financial panic, by way of example, was triggered by failure of the third largest trust company, Knickerbocker Trust. The August 1978 run up in the gold price from $180 to $215 in U.S. currency was a minor flight from the dollar triggered by the U.S. refusal to face its balance of payments deficits and domestic price inflation. It was not the full-scale flight from the dollar which has yet to come.

The United States has major structural defects which guarantee an ultimate monetary panic. These defects are either not recognized by the elitists running the U.S. or they do not want to recognize them. Let’s examine these defects.




One ingredient making for ultimate financial panic is the manner in which Washington finances federal budget deficits. Three basic deficit financing methods are available to the federal government:

(a) raising taxes

(b) borrowing the deficit and thus channeling funds from productive private investment to largely unproductive public boondoggles

(c) creating more dollars, thus reducing the value of all existing dollars (Le.. price inflation).

Although the preferred financing method is (c) when stealing from the value of the dollar becomes a visible process, dollar holders will dump dollars for more stable wealth-holding vehicles.


The cumulative U.S. budget deficit from 1962 to 1977, excluding off-budget accounts is $ almost 300 billion dollars, generated under both political parties, Democrats and Republicans the only two political parties subsidized by law from public funds.

There is not a whit of practical difference between Republicans and Democrats in the basic question of fiscal probity.


Rhetoric doesn’t reduce deficits. Periodically, Congress acts out a charade extending the “temporary debt ceiling.” As of 31 March 1978, the federal debt was $798 billion, with a “permanent” ceiling of $398 billion. The totally dishonest practice of “temporary ceilings” allows Congress to avoid facing the issue of the federal deficit. The academic world, for its part, explains the almost $800 billion debt with the cliché that “we owe it to ourselves,” although precisely how this vacuous expression bears on the topic of fiscal prudence is unknown.

The crux of the federal deficit is that sooner or later, voluntarily or involuntarily, this debt monument has to be repaid or the dollar depreciated to zero value; that is a fraud must be perpetrated on the debt holders.


The former process is politically impossible.





Another guarantee of ultimate financial panic is a mountain of state, city, and unfunded private debt - a paper mountain almost staggering comprehension. The current surplus position of non-federal institutions is a deception. (As a whole, state and local governments had a $29 billion surplus in 1977, for the tenth year running.) Remember that although $68 billion a year flows from Washington to local governments, Proposition 13-type legislation will reduce the surplus to zero by 1980.

Within this mountain, the really dangerous trigger for panic is New York City debts held by New York banks. The 954 banks holding New York obligations have over 20 percent of their equity capital in New York obligations. About 70 banks hold more than 50 percent of their capital in New York securities. While default may not result in total loss of investment, it is doubtful if the psychological tidal wave unleashed by a New York default could avoid national panic. You are probably safe until 1982. The big New York banks unloaded New York securities onto small holders.


This poses a very real question of fraudulent misrepresentation on their part, now under investigation by New York State officials. The state investigation has questioned numerous “small” holders of New York City securities and found they were misled by major New York banks.


The following is an extract from the official assembly report:

The individual investor responses indicate that the majority had never invested in municipal securities before, and 90 percent responded that a factor in their investment was their belief that an investment in City securities was “safe and secure.” The survey also found that, at the time they made their investments:

• 78 percent of the investors believed the City’s bookkeeping and accounting practices to be excellent or good; and
• 79 percent of the investors believed that the City was in good or excellent financial condition.

Additional comments volunteered by a number of these individual investors concerning their experiences with these investments were overwhelmingly negative, and indicated quite clearly that, in their purchase of City securities, they had been “misled.” 2 The year 1982 is a key date to hold in mind because the statute of limitations on such misrepresentations runs out then. You can be sure Congress will oblige New York City with interim financing until this critical date.

And it will be a miracle if the New York State investigation progresses to the point of indictments.




Another debt mountain consists of dollar and foreign currency denominated obligations and stateless currencies held overseas in a variety of forms. private and public:

. The giant multinational banks generate an uncontrolled $400 billion plus market in Eurocurrencies, a global transnational money market outside the control of governments and central banks. These funds could be used to collapse the dollar either deliberately, by sheer weight of transfers or by simple miscalculation.
. The U.S. Treasury owes more than $86 billion in dollar denominated Treasury securities to foreign central banks and the Organization of Petroleum Exporting Countries (OPEC).
. More importantly, the U.S. Treasury owes substantial amounts in Swiss franc denominated bonds (more below).




The European Currency Unit will be based on European gold reserves. At this time Europe has about twice the gold reserves of the United States.

Moreover, the U.S. does not have $11 billion of good delivery gold as suggested in the establishment financial media.


The U.S. gold stock, as we noted in chapter eight, is as follows:

. Forty-eight million ounces of good delivery valued at $2 billion officially and $9.6 billion in the market place
. The balance in coin melt

Whether this gold belongs in fact to the U.S. Treasury or even exists, has been disputed.

U.S. gold reserves have not been inventoried since 1933. The treasury persists in conducting audits (i.e., checks of the vault seals) when only inventories (counting, assaying, and weighing) will answer the critics.

The skimpy checks are reportedly due to the cost of inventories. Yet, Washington will, for example, spend $46 million on a lavish memorial to FDR who seized citizens’ gold in 1933 - and $122 million on a third Senate office building - a fraction of which expenditures would provide the amount needed for an inventory of the U.S. gold stock. If reluctance to inventory reserves continues, we may have reason to assume that even the 48 million ounces of good delivery is not there. Furthermore, the U.S. has sufficient other hard money debts that we can state the U.S. is technically “bust.”

The fact that 80 percent of U.S. gold reserves is coin melt, not salable on the world market, is not realized even at highest elitist levels. For example, the July 1978 issue of Foreign Affairs (published by the Council on Foreign Relations) has an article by Jahangir Amuzegar, executive director of the IMF and ambassador-at-large for Iran. Amuzegar’s article, “OPEC and the Dollar Dilemma,” records U.S. gold stocks at 277 million ounces valued at “near $50 billion.” This over-valuation assumes the stock is good delivery. It is not.


If OPEC is unaware of the true quality of U.S. gold stocks, the impact of the awakening has yet to be felt.




With this massive debt mountain, a fiat (paper) currency and a miniscule stock of good delivery gold, the U.S. is in a precarious position -far more precarious than generally realized. While ECU is a unit of account and does not circulate, ECU is a forerunner of a gold-based European currency which will be a circulating medium; and a European gold-based circulating currency will come within five years.

In brief: By 1984 the United States will have to face squarely a global contest between a fiat dollar and gold-backed European money. Fiat money has never won this battle. Fiat money cannot win.

The United States will then be faced with two choices:

a. Either allow the present fiat dollar to depreciate to zerovalue
b. Replace the fiat dollar with a gold-backed dollar at a ratio of 10 for 1, or 10,000 for 1.

Quietly, while proclaiming the health of the mighty fiat mini-dollar, Washington has prepared for these eventualities: duplicate dollar currency is already printed and stored away at the Culpepper, Virginia, facility of the Federal Reserve and at Mount Weather in Virginia.

According to Carl Mintz, on the staff of the House Banking Committee, “I believe it’s in the billions of dollars, and it’s buried in lots of places.” This duplicate currency will remain buried, unissued, and virtually unknown until confidence in the present fiat dollar is completely shattered.

Another available option is discussed in the July 1978 newsletter of the Johannesburg Chamber of Mines:

It has become increasingly obvious now that at this time of widespread currency instability, political and economic uncertainty, spiraling inflationary expectations and increasing protectionism, the struggle to eliminate one of the major monetary reserve assets from the international monetary system, has been a futile exercise. It would make more sense to recognize the advantages of gold and to acknowledge its role as a stabilizer in the system and to concentrate instead on underpinning the dollar to avoid its further depreciation against other major currencies.

In brief, the Chamber of Mines proposes the U.S. return to gold and abandon its anti-gold crusade.

As holders of fiat dollars grasp the gold versus paper picture, a common picture in monetary history, the flight from the dollar will begin -at first slowly as in early August 1978, then picking up speed, to culminate in panic. Because of media brainwashing, it is unlikely that most American investors will become realizers (i.e., learn the true nature of the con game) until after the dust of monetary panic has finally settled.

In the period immediately ahead, fiat dollars are going to be exchanged by the realizers in increasing quantities, initially for gold and silver, then for gold-based currencies (such as the coming European currency) and in the final phase, anything which represents scarce resources.

Will the United States ban imports of gold in the coming struggle in an attempt to force its edict of fiat dollars? One school of thought suggests the treasury will allow gold imports as long as possible, as long as anyone wants to exchange gold for paper dollars. Another school suggests that on the contrary, the treasury will clamp down on gold imports.

The policy of gold imports which is finally adopted may well depend on the time frame in question. Remember, the treasury bureaucrats do not recognize gold; they do not understand gold.


Truly, these people believe that gold is a “barbarous” relic. Absurd as it may seem to you and me, the academics involved in the so-called demonetization of gold have a mindset that gold will have no meaning in the New World Order. While the experts in charge retain this mindset, it is improbable that gold imports will continue freely in the years ahead. The treasury is likely to clamp down on imports, and-this will send the price of gold soaring.


However, at some time, pressure of circumstances or politics or new ideas will emerge and then the ban will again be lifted.




A prime contemporary example of the cost of the treasury mindset to the American taxpayer was revealed earlier this year. On 19 April 1978 Anthony M. Solomon, Trilateral commissioner and under secretary of the treasury for monetary affairs went cap-in-hand before the House Subcommittee on International Trade Investment and Monetary Policy, to confess to what Solomon called “some fairly important developments;” that is, the treasury had lost its shirt gambling in Swiss francs since 1961.


In brief, the Treasury Exchange Stabilization Fund has been selling Swiss franc denominated U.S. Treasury notes while the franc moved from 22 cents to over 50 cents.

The story goes like this…

Back in the 1960s and early 1970s, the treasury, under the guidance of three Trilateralists, Robert Roosa, (deputy under secretary for monetary affairs, Bruce MacLaury, (now president of the Trilateral think-tank Brookings Institution), and Paul A. Volcker, (Federal Reserve Bank of New York), held to a superstitious notion that the price of gold should be precisely $35.00 (later $40.00) per troy ounce, a magic figure which originated over President Roosevelt’s breakfast table in the 1930s. To preserve an artificial gold price of $35.00, the treasury under Roosa lost most of the U.S. gold stockpile. The stock went from $25 billion in 1949 to $11 billion in 1974.


In 1960 gold was moving out’ of the U.S. too rapidly even for the treasury, and Roosa hit on the idea of issuing non-marketable certificates and treasury notes to foreign, creditors and denominated in foreign currencies.


In the past decade the U.S. Treasury with its anti gold mind set has lost the U.S. taxpayer billions of dollars betting these foreign denominated securities against gold and the Swiss franc. As of June 1978, $901,000,000 is outstanding in securities denominated in Swiss francs and issued by the U.S. Treasury to the Swiss National Bank (the Roosa bonds).


In fact, new Swiss-franc denominated securities are still being issued as well as redeemed by the U.S. Treasury: the latest known at time of writing being $75 million issued 9 June 1978, due 29 October 1979 with an interest rate of 7.9 percent, payable in Swiss francs. The position for 1977 is contained in table 101.

In brief, the treasury has gotten itself in debt up to its neck in Swiss francs. Even worse, the total losses to the U.S. taxpayer from treasury speculation in Swiss francs may well total $1 billion, when the chips are counted. 3 The treasury covers its shame by arguing that this gambling in Swiss francs meant the U.S. was able to retain 36 million ounces of gold.


On the other hand, the treasury also tells us that gold is a valueless, barbarous commodity!


Many are responsible for monetary chaos, but Trilaterals in key treasury slots stand out. And one man stands out above all others:

Trilateral Commissioner and former under secretary of the treasury, Robert Roosa. In August 1967 the business journal Fortune described Roosa’s handling of that particular year’s monetary crises as follows:
No man has done more than Roosa did in this year at Treasury to try to make the existing monetary system continue to work. The famous “twist” in interest rates, the “Roosa” bonds, the many “swap” and other emergency credit arrangements all stand as monuments to his ingenuity. 4

Roosa’s stopgap measures also stand as monuments to the utter lack of principle and ability among the self-perpetuated elite. Their ingenuity has been to dig a bigger monetary grave for the United States. Ingenuity has been used to stave off the ultimate day of reckoning for another decade and thus make it ultimately worse for the American people.




The coming financial panic will, of course, be a traumatic experience. It will be far deeper than the panic of 1907, when no credit at all was available at any price, and more pervasive than the depression of 1930.

Yet, such a panic is not to be feared by those who are prepared by those we call the realizers. A panic is symptomatic. A panic is the economic system purging itself of excesses. The panic will be deep and more pervasive than any previous monetary crisis because the excesses committed in the name of a “welfare state,” “interdependence” and “globalism” have been deeper and more pervasive than in the past.

Panic need be feared only by those dependent on the hand of the state to feed them or keep them in luxury or by those who use the power of the state for personal vested interests. These groups will be losers. The storm can be weathered by those who have taken precautions to protect themselves, by those who are self-sufficient, and certainly by those who do not depend on the politicians’ whims and on bureaucratic regulation.

Timing? The leading indicators are flashing the seventh post-war recession. The political manipulators may try to postpone this recession, to convert it into what is called a growth recession; or incoming overseas funds induced by the recent “benign neglect” of the dollar may well give an aura of false prosperity come election time. If left alone, the seventh post-war recession will go deeper than other recessions.


Recovery from the sixth recession has been incomplete because the Keynesian demand stimulation locomotive is running down and the economy is strangled by statist intervention. Subsequent recovery will be weaker, the eighth post-war recession, deeper; and the roller coaster is now in a secular down trend.

The final flight from the fiat dollar is not, however, necessarily related to any phase of the economic cycle. Panic can be triggered by a random event which catches public fancy and snowballs as successive waves of investors dump paper dollar-denominated assets. Financial panics always need a trigger event. Some event, usually unforeseen, trips off the cumulative spiral and the subsequent panic to protect wealth before all is lost.

Although a likely trigger for financial panic in 1979-80 is price inflation and a liquidity crisis. the probabilities are against major panic in the next twelve to twenty-four months. While prices are stable or increase smoothly, holders of fiat dollars have no doubt of liquidity, that is, that dollars can be used to purchase goods and services. In brief, under these conditions dollars are still a store of value.

During periods of price inflation, some holders will seek alternative means of wealth storage. In prolonged periods of price increases or-during sudden upward price spurts, contagion sets in; and the relatively few seekers of safe storage vehicles become many. The search for gold, silver, and diamonds becomes contagious.


In brief, there is a flight from paper -a flight from fiat money which is now illiquid because it will not command goods and services. Illiquidity is a sure sign that panic is approaching.

The monetary die was cast back in the early 1960s by men who (strangely) now occupy a key segment of the Trilateral Commission:

Roosa, MacLaury, Volcker, Parsky, Ball, McCracken, Peterson, Solomon and Rockefeller.

A flight from paper cannot ultimately be controlled by this Trilateral establishment. Their recourse will be to adopt Hitlerian or Stalinist measures: a Schachtian economy or a Soviet economy - if they can.



1. Jacques Rueff, The Monetary Sin of the West (New York: Macmillan, 1972), p.24.
2. "The Bank and the Municipal Crisis: Public Responsibility and Private Profit," State
Assembly of New York Special Report (New York, 15 November 1976).
3. Interested readers are referred to Annual Report for 1977 of Exchange Stabilization
Fund (Department of the Treasury).
4. "How Paper Gold Could Work," Fortune (August 1967)

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