Friday, May 4, 2012

Buffet's Dad wrote this whole blog 65 years ago.


Zero hedge had a link to a 5-page speech given in the year 1948 by Howard Buffet, father of Warren "Sage of Omaha" Buffet that neatly summarizes most of what I've been going on about, and then some. Not that I expected my views to be new, but wow, this guy knew what was going on.

From the abstract:


"Congressman Buffet stresses relation between money and freedom and contends without a redeemable currency , individual's freedom to sustain himself or move his property is dependent on the goodwill of politicians. Says paper money systems generally collapse and result in economic chaos. Points out gold standard would restrict government spending and give people greater power over public purse. Holds present is propitious time to restore gold standard..."


It was a plea to return to the gold standard for domestic currency, which I don't specifically advocate, mostly because I don't think it matters either way anymore. It would be like advocating narrower roads. He also links the collapse of paper money systems to the rise of both fascism and totalitarian communism, and how printed money hands such despots unlimited power.

Amazingly he predicted this:

"Because of our economic strength the paper money disease here may take many years to run its course. 

But we can be approaching the critical stage. When that day arrives , our political rulers will probably find that foreign war and ruthless regimentation is the cunning alternative to domestic strife. That was the way out for the paper money economy of Hitler and others."

So was he right? Indeed, to a point... within a few years, the Cold War with Russia was in full swing, the U.S. became embroiled in the Korean war, followed by Vietnam and Cambodia, along with the various South American adventures of the 1960's through 80's.

But can you say that he foresaw a totalitarian future resulting from unlimited political spending power, or were there geopolitical factors that just made it have to go that way? With some hindsight, in spite of the absurdity of the propaganda from the era, Russia's unlimited de-facto slave labour force under communism did allow it to develop technology and military strength that threatened the balance of power in the world.

The same could be said for China, with its manipulated currency being used to both undermine international industrial powers and build a military super power. And yet, the same could be said for the U.S. over the last 50 years printing money to fund the "military-industrial complex" that was the economic base of the post-war middle class. However, the rest of the world wasn't on anything resembling sound money either, the strategy resembling something along the lines of, peg your peso to us and we'll print you enough aid to crush your opposition parties.


To a Nebraskan congressman in 1948, our hyperreal present of electronic money, state froteurs in airports and train stations, and ubiquitous surveillance would indeed seem like a dystopian future. Even the bleak landscapes of cyberpunk author William Gibson - with skies the colour of television sets tuned to a dead channel - today seem quaint.  ("But Daddy, what's a dead channel?")  And yet, life for the average North American is pretty good. Everyone is fed, educated, patched up, employed and no one is poor or hungry. To borrow from Douglas Adams, "at least, nobody we know, anyway."

The main difference that Congressman Buffet might see is that nobody is rounding people up and purging them in camps and gulags. At least, on a large scale anyway. The thinking today appears to be, when an innocent boy wearing a hoodie is shot in the street, it is a tragedy, but if a natural disaster  wipes out thousands of people who were members of a poor ethnic minority, it is a statistic.  Not to be too glib about it, but for members of the ruling coalition and party members, (The %75, or I think they call it the hegemon these days) life is pretty easy.

So, as Buffet predicted, the U.S. has had lots of foreign war. It has remained in a state of constant war with either communism, drugs or terror for the last 60 years. The more interesting question is, what will "ruthless regimentation" look like?

The answer is of course another question. That is, "Ruthless regimentation, of whom?"



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