Not Paranoid Just Prepared

Bank Closures, the Concentration of Wealth, and Your Money


Our economy is stable and those running it are benevolent and care deeply about all of us. If you believe that, there might be some investment land waiting for you in the swamps of Florida. The graph below is from the FRED website, the Federal Reserve Economic Data database of the Federal Reserve Bank of  St. Louis. In the graph, the decline began in the early 1980’s, during and after the  Savings & Loan scandal, largely perpetuated by Neil Bush, of the Bush monarchy.

You might ask the question, “with all the bank closures, why does it seem like there are still so many banks?”  The answer comes in the now-common phrase “too big to fail.”  For more on that, see Neil Young. Small, failed banks, and even larger ones (see JP Morgan-Chase– the largest bank in the U.S.), have been consumed and taken over by the massive multinational banks whose names are now all-too familiar to everyone.

Some economists argue that this is how free enterprise and the economic system works, that inefficiency is replaced by efficiency and that the market corrects itself. This is true when there is no government intervention. As soon as there is intervention, the notion falls on its face- read about the The Austrian School of economics for more on that. Bailing out the too big to fail banks not only caused the self- correcting market to fall on its face, it bashed its head in from behind with a 2 by 4 first!

Bank Closures over time

Bank Closures over time- 1984-2016.

So, what can we do about it? That should be the question on everyone’s mind.  Whether you believe it or not, your money counts. And when I say “your money”, I do not refer just to the money you have in your savings account. The data says that very few of is have any of that anyway! What I am referring to is what you use as money- your home mortgage, your car loan, your credit cards, and of course your checking and savings accounts. When you have these accounts at Chase or Wells Fargo or Bank of America, you are helping perpetuate the unjust system that will destroy our Republic and eventually all democracy. Sound harsh? Do the research yourself- prove me wrong. Good luck with that.

In the meantime, close your account at Wells Fargo, and open one with you local credit union. Close your Chase credit card and… just don’t use credit cards any more. Truly, this is the smartest move, but it is unrealistic in today’s world. Do some research about which credit cards are more socially responsible and go from there. And my final recommendation, instead of putting money away in a savings account that makes you nothing and the bank 5 or 6% interest, keep the money close at hand and safe. If your savings account is your “emergency fund”, how will it serve you in an emergency if the bank has closed its doors when you need it? Put the money under your mattress, preferably in the form of precious metals. But no matter what, do something! Don’t just sit there thinking someone else is going to save the world. If you do, you’ll end up with our economy- face down in the dirt.

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The Gold Standard, Confiscation, and The Gold Window


There was a time when currency came in the form of silver and gold coins. Later, in the 1800’s, once paper currencies became the norm, the value of the paper was still backed by precious metal in the form of gold in countries agreeing to this standard- the gold standard. The gold standard included the agreement between the countries adhering to it that currency in circulation within countries accepting the standard could be exchanged for their face value in gold. England adopted the gold standard in 1817, and the US officially did so in 1900 with the passage of the Gold Standard Act.

Currency prices in the United States were fixed to the price of gold at $20.67 from 1834 (even before the passage of the above mentioned act) to 1933.  The gold standard was abandoned in 1933 when President Roosevelt “nationalised” privately held gold. Debts around the world were henceforth largely paid in American dollars. But there continued to be a sort of “gold standard” in place for nations wishing to redeem gold for their US dollars. The post-war world needed assurance that US currency was safe and stable, and between 1946 and 1971 this “gold window” allowed countries to redeem one ounce of gold for the fixed rate of $35 USD. This ended in 1971, with President Nixon’s closing of the “gold window.”

Having the price of gold fixed to currencies insured relative economic stability in countries adhering to the standard. Economic disturbances- production increases, inflation, increase in demand- in one country were in a sense buffered in other countries, keeping prices and economies stable throughout the world. Interestingly, during World War I when countries abandoned the gold standard, inflation became rampant. This was by design- without the international gold standard governments are able to manipulate their countries’ economies- for better or for worse. Again in 1971, when the US officially abandoned gold standard, we saw rampant inflation. Of course there are seemingly infinite other factors influencing the world economy today that would take lifetimes of study and writing to explain, especially in our ultra-complex, globalised, digital world. But suffice it to say that currencies backed by gold or silver created more stable, self-regulating, and prosperous economies around the world.

Today, January 1st, 2017, the current price for an ounce of gold is about $1,150 USD, an increase of over $1,100 from its 1971 fixed price. The price of gold has been higher, and of course much lower, but generally rising over most of that time to its present cost. Ups and downs occur, but gold remains a tangible, valuable asset that should not be overlooked.

For current prices, making purchases of metals, and a great radio program, visit the Patriot Trading Group. They are an honest, hard-working company who will answer your questions and help you make the right purchase.

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