Editor’s Note: The following article was contributed by Gerald Spencer and may not reflect the views or opinions of EconomyInCrisis.org. Feedback is welcome.

I  really believe that we must preserve the economic miracle that has given our citizens one of the highest living standards in the world. This economic miracle has not been due to the efforts of Wall Street MBA’s, Stock Market Gamblers, Real Estate Speculators, Economists, Insurance Salesmen, Junk Bond Salesmen, etc. This standard of living was created by the Agricultural and Industrial Base that produced the food, goods, services and other items that we consumed, plus an excess of these goods and services that were produced and then sold to other foreign countries in order to accumulate the US gold reserves through a positive balance of trade surplus payments. Our gold reserves are the basis of the value or buying power of our currency. This was (is) true of all of the currencies in the world.

Only a positive balance of trade will restore the value of the dollar, and we must accomplish this by any means possible, or accept third world poverty on a large scale basis. Riots and insurection are predictable, ala the French Revolution, when the people find their situations economically hopeless.

Our political and economic leaders seem to have decided that we can continue our economic miracle by becoming a service oriented society cooking hamburgers for each other using imported beef, imported vegetables, etc., selling insurance and junk bonds to each other, and suing each other, but definitely not manufacturing or creating anything that we consume. The only way that we can reverse this trend is to re-start making the things that we consume.

The only thing that will save the US Economy is the rebuilding of our gold reserves in order to preserve the buying power of the dollar. The only way to do this is to export more that we import. We can export through re-industrialization. In the last few decades we have purposefully destroyed the industrial base that won WWII and gave us today’s bountiful way of life. Paying people to pave roads, build infrastructure, plant trees, dig holes then refill the same holes, rake leaves, write poems, paint pictures, etc. will not be useful or contribute anything to correcting the US economic problem.

As long as the US government continues to just crank up the presses and print more dollars, T-Bills, Government Bonds, etc. to pay for these pork barrel projects, negative balance of trade, government payrolls, bailouts, entitlements, operations, social schemes, wars, new infrastructure, wealth re-distribution, mental health etc, we will see the buying power of our dollars diminish until a loaf of bread costs $200 (or $20,000).

What if the US government prints up a bunch of new paper money and other similar paper securities to pay people to re-build and expand the US infrastructure (Pork Barrel Projects) in order to reduce unemployment, and it is all then spent on illegal aliens, imported earth-moving machinery, imported materials (Steel, equipment, Pipe & Wire), outsourced engineering, outsourced CAD drafting, immigrant labor, etc., and the US workers are still unemployed? This is probably necessary at this time, even if it will cause massive inflation. Any Economic Stimulus Spending also needs to prohibit any imported products from being purchased with these funds, and also prohibit all outsourcing of the labor Required.

The dollar buying power or value is partly about psychology when it is backed by the “full faith and credit of the U.S. government” rather than gold. This is the same as “Junk Bonds.”

Since the U.S. government stopped redeeming U.S. dollars for gold, foreign governments and foreign individuals continue to use these dollars (and other US securities that they earned in exchange for their products that they exported to the USA) to purchase title to real estate, forests, industries, breweries, hotels, factories, casinos, financial institutions and everything else of value that is located in the USA. We paid these foreigners with our dollars to manufacture or supply the things that we imported and consumed (rather than US citizens working to make these products ourselves in this country). Some government sources estimate that 25 percent of our property and businesses are now foreign owned.

There is (probably) a limit to the amount of paper dollars that the foreign country manufacturing people and the foreign country raw material supplying people will continue to accept in payment. This limit will become apparent as soon as foreigners own everything of value in the USA and nothing is left that the foreign dollar holders want to buy with their paper dollars. This is the selling of our children’s legacy to foreign owners, and the US government calls it “Investing in America.”

The USA population will probably become employees (or maybe slaves) to the foreign countries and individuals that will own everything of value in the USA. The foreigners know that these US dollars will buy less and less each day that they do not spend them. They also know that these securities are not redeemable for anything except the “full faith and credit of the USA” (aka junk bonds).

It is not the foreign manufacturer’s fault that this condition exists. We created this condition ourselves. We purposefully destroyed most of our industries and fired all of the employees that were located in the U.S. for various reasons. Why should we work and make the things that we consume as long we can get people in other countries to work to make these things for our consumption? We can pay them with freshly printed-paper currencies and other types of freshly printed-paper securities (Junk Bonds). They can redeem these freshly printed-paper currencies by exchanging them for title to our real estate, hotels, forests, breweries, casinos, factories, and our remaining businesses (instead of Gold). Our legislators, ignorant government employees, self-serving corporate managers, greedy unions, Wall Street financial genius criminals, Enron and Arthur Anderson type Master Criminals, NAFTA, EPA, WTO, and OSHA, just to name a few, have created this situation.

How can we ever re-start our industries (re-industrialize) to generate a positive balance of trade that will restore our economy? Most of the men who knew how to operate the US basic industry and factories are now long dead. There are no books that completely tell how to do most of the things that we knew how to do years ago when we created the industries that won WWII and gave us our bountiful way of life. We need science-oriented citizens to create things and services that we can exchange for foreign currency and foreign gold.

Our computer programming technology and expertise (Microsoft etc.) has helped our balance of payments considerably in the past, but the lack of technical education in this country today will soon destroy this export capability when foreign countries become better than the USA at creating new computer software programs.

We also need more engineers to innovate and produce new products to export and also to export services that will improve our balance of trade.

We need to stop the H-1B import of low paid scientific and engineering talent, in order to create an incentive for our students to major in technical and scientific subjects that are needed to re-industrialize the USA. Only a positive balance of trade will protect the purchasing power of the U.S. dollar, or the USA will never return to the economic powerhouse position that we enjoyed during and after WWII. We must create tariffs on imports that will be sufficiently high to effectively prohibit all foreign imports in order to re-create our industrial base and export products that will improve our balance of trade, increase our gold reserves, and protect the buying power of our dollar.

BY: Gerald Spencer  E-mail - editor@economyincisis.org

This entry was posted on Friday, January 23rd, 2009 at 7:52 pm and is filed under Business & Economy, Taxes & Spending. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.