Greenspan Misapplied Free Market Theory

(My Comments on "Frontline; The Warning")

Silver Stock Report

by Jason Hommel, October 23rd, 2009



Thanks to my wife, God bless her, I watched "Frontline: The Warning" night before last.  It aired on Oct 20th, 2009.  You can view it online, here:

http://www.pbs.org/wgbh/pages/frontline/warning/view/

There are 679 comments on it already.

The show is about "the warning" given by Brooksley Born, who, while acting as Chair for the CFTC (the commodities Futures Trading Commission), warned of the dangers of "black box," "over the counter" derivatives.  After she was shut up by Congress and Alan Greenspan, 6 weeks later, LTCM (Long Term Capital Management) blew up in early 2000.  http://en.wikipedia.org/wiki/Long-Term_Capital_Management

Frontline shows that Greenspan was one of Ayn Rand's top students, who believed in a philosophy that government is the problem, and that markets are the solution, and thus, self-regulating.

Frontline shows the absurd conclusion of Greenspan's philosophy when it showed that Greenspan invited Born to a meeting, where Greenspan said something like, "I suppose you think fraud should be regulated.  I don't."  He thought the market would figure it out.

Shockingly, the film shows Greenspan painfully admitting that his philosophical views that he held for 40 years were wrong.  He does not elaborate.  Perhaps he's still not exactly sure where he went wrong. 

Perhaps I can help.

Being familiar with Ayn Rand's free market views, here's where I believe Greenspan went wrong.

Greenspan tried to apply the views of an atheist, Ayn Rand.

IN MY OPINION, Greenspan tried to let markets be free, but Greenspan did not understand the basic definition of markets, or freedom.

In my opinion, markets are where things are traded, not where people are traded by entering into contracts.

Markets are where multiple sellers compete with multiple buyers, in the open, and trade, and walk away, free to choose another trading firm tomorrow.

Black box, over the counter, derivatives, are not markets, even if they ever do trade in the open.

The spot market is like freedom.  Futures contracts, and OTC derivatives, are like slavery.

In my opinion, futures contracts, like debt contracts, lead to compulsory performance, and thus slavery.  And slavery is the exact opposite of freedom!  That's Greenspan's big error, the failure to see that slavery is the opposite of freedom!

Again, as an example, allowing people the freedom to trade slaves does not promote freedom, it promotes slavery! 

Allowing banks to enslave people with too much unpayable home loan debt is a fruit of that error. 
Allowing banks to enslave one another so that if one topples, they all topple, is another fruit of that error. 
Allowing people to enslave banks to perform what they cannot, so that they "need" bailouts, is another fruit of that error.

The Bible teaches us that "the borrower is the servant to the lender".  Proverbs 22:7

The Bible teaches us that usury leads to slavery.  See the Bible book of Nehmiah Chapter 5.

The Bible teaches us that usury is extortion, force, oppression, evil.

Before emailing me to ask where the bible says that, please see my two essays on usury, earlier this year:
http://silverstockreport.com/2009/deception.html
http://silverstockreport.com/2009/road.html

And see my essays here, too:

  1. 666: Mark of the Beast 1998
  2. Gold and Silver in Bible Prophecy December, 2001
  3. The Great Harlot of Rev 17-18 is Jerusalem, & what that means.  October, 2002
  4. Usury Enslaves Jan 19, 2004
  5. Freedom from Usury Jan 23, 2004
  6. Bible Verses on how to Manage Money November, 2005
  7. The Use of Paper Money Violates All of the Ten Commandments July 2, 2006
  8. The Stumbling Block of their Iniquity April 9, 2008
  9. Biblical Political Positions February 7, 2009
  10. The Pre-Rapture Gold Gathering August 17th, 2009


God gives strict limits on the practice of usury, as an Israelite cannot lend to his fellow Israelites, and all loans are supposed to be forgiven every 7 years, and all slaves set free. 

The failure to observe those limits results in God punishing mankind.  Jesus set us free from the curse of the law, but that curse will come to a final fruition during a future time called the 7 year tribulation.

Even an Excel spreadsheet, basic modern math, shows the absurdity of unchecked compounding over time.

The solution to the problem of how government should be regulating contracts that are entered into in the marketplace, or in "black box" non transparent "over the counter" party to party transactions, is God given.

No debt terms longer than 7 years, and the 7th year should be well known to all the land.

Beyond 7 years long, God has declared that all contracts are invalid.  Government should merely do the same.

Politically, contracts exceeding 7 years should be clearly unenforceable by any government, and it should be government's responsibility to well publicize that they will not be aiding the enforcement of any fraudulent and invalid contracts that exceed 7 years in length.

Implications:  You should not lend to your bank for longer than 7 years!  All of society should withdraw all funds from all banks on the 7th year!  What year is the 7th?  Good question.  I don't know. 

Shocker to me:  While I knew that Alan Greenspan was Ayn Rand's disciple, I did not realize the extent to which those in power thought they were "free market" devotees.  I tended to think Greenspan had repudiated his former beliefs, or become corrupted, or was in a conspiracy.  No, he was just misinformed, mistaught, uninformed, and misapplied the application of free market theory.

Further implications:  The world is further away from understanding usury than I thought.  If even the man who set interest rates did not seem to know what usury was, or how it worked, or why it was evil, then how much more does the rest of society need to learn. 

After ten years of teaching online, I feel that the world may never learn about the dangers of usury.  However, I know that prophetically, I'm wrong.  The world will wake up when the ten kings of the earth turn on the Great Harlot who practices usury, to destroy her.  Unfortunately, they then give their power over to the Antichrist, the 8th beast, who brings his own world government monetary solution, the "mark of the beast" of Revelation 13.

Revelation 17:
16 And the ten horns which thou sawest upon the beast, these shall hate the whore, and shall make her desolate and naked, and shall eat her flesh, and burn her with fire.
17 For God hath put in their hearts to fulfil his will, and to agree, and give their kingdom unto the beast, until the words of God shall be fulfilled.
18 And the woman which thou sawest is that great city, which reigneth over the kings of the earth.

Interestingly, the Antichrist confirms a covenant with many, for 7 years.  (Daniel 9:25-27)

Daniel 9: 25 "Know and understand this: From the issuing of the decree to restore and rebuild Jerusalem until the Anointed One, the ruler, comes, there will be seven 'sevens,' and sixty-two 'sevens.' It will be rebuilt with streets and a trench, but in times of trouble. 26 After the sixty-two 'sevens,' the Anointed One will be cut off and will have nothing. The people of the ruler who will come will destroy the city and the sanctuary. The end will come like a flood: War will continue until the end, and desolations have been decreed. 27 He will confirm a covenant with many for one 'seven.' In the middle of the 'seven' he will put an end to sacrifice and offering. And on a wing  of the temple  he will set up an abomination that causes desolation, until the end that is decreed is poured out on him.

Speaking of the Antichrist. 

One of my readers who is following the "natural born citizen" Obama birth saga was entirely unfamiliar with Orly Taitz, but he knew of another source:  http://www.obamacrimes.com/

I replied, "Well, with the media blackout and continued misinformation on this subject, it's hard to find the information."  So, I re-publish his link here.  http://www.obamacrimes.com/

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Bible critics continually tell me that the Bible is used as a tool of oppression.  Of course it is!  The Bible itself warns about that, they are called wolves in sheep's clothing, false prophets, deceivers, the blind leading the blind, and worse! 

Once again, I had a blind spot, and must correct, otherwise I become a blind guide.

CORRECTION - REPORTING REQUIREMENTS WHEN SELLING BULLION TO A DEALER:
 
Yesterday, I reported, in error, reporting requirements in selling bullion. 

Here are the reporting requirements & amount limits:  (IF TRIGGERED, THE DEALER MUST REPORT A 1099 TO THE IRS)

Gold bars (any size bars totaling 1 kilo -- 32.15 troy ounces -- or more)
Gold Maple Leaf's (25 ounces or more)
Gold Krugerrands (25 ounces or more)
Gold Mexican Onzas (25 ounces or more)
Silver bars (1,000 ounces or more)
U.S. 90 percent silver coins, pre-1965 ($1,000 face value or more)
Platinum bars (25 ounces or more)
Palladium bars (100 ounces or more)

Thank you to Andrew Schectman, bullion dealer at www.milesfranklin.com for alerting me to the error.

And thank you to www.usagold.com for providing a web page containing this information.
http://www.usagold.com/cpm/privacy.html

And thank you to Sean Wright (1-800-686-2237 Ext 320), bullion dealer at www.midasresources.com for explaining why certain gold coins are exempt, because they were introduced after the reporting law was made.  "There are NO reporting requirements no the sale of Gold Eagles and Philharmonics, as they started being minted after the reporting law was made in 1984."

Note, there are no reporting requirements on Gold Eagles, or Gold Philharmonics, or Gold numismatic coins.

There are also no reporting requirements on Silver Eagles or Silver Rounds.

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IRA FREEDOM?

I was alerted by more than one reader about:
http://www.checkbookira.com/

Apparently, you can spend your IRA money, and be the custodian yourself, of gold bullion, which you can keep in your own vault!

That's info your current IRA custodian probably does not want you to know!

There might still be risks associated with this plan, if the US government forces IRA holdings to invest in sinking T-Bills, as they have talked about.

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Two new UK bullion sources for privately minted 1 oz. rounds:

http://www.wyargent.com/

http://www.preciousmoney.co.uk/

There is a 15% VAT for sales in the UK.

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The Bible says that where the Spirit of the Lord is, there is Liberty!  And I believe it! 

A better way, better than limiting contracts to a maximum of 7 years, is to voluntarily avoid all such contracts altogether!  That's my liberty to try to remain free!

In our business we always strive to limit all of our contracts to no more than a few days.  We strive to work with sellers who deliver as fast as possible, and we also try to deliver immediately!  And we do pride ourselves in our ability to deliver fast as possible.

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I strongly advise you to get real gold and silver, at anywhere near today's prices, while you still can.