Neglected Lectures From the Sixties and Seventies

Money & Work – Q&A

Professor: Dr. R.J. Rushdoony

Subject: Conversations, Panels, & Sermons

Lesson: Money & Work – Q & A

Genre: Q&A

Track: 23

Dictation Name: RR258C5

Location/Venue:

Year: June 18, 1969

I feel a little inhibited speaking this morning because D.F. Sumner is not here, and I was going to ask her permission to tell a little story on her. Sunday night, she and her husband, and one or two others, and I were standing and talking about the present situation, and to make a point, I borrowed a point from my talk this morning, and I said that a certain amount of productive work is necessary to maintain any society, and if some do not work, it means that others are working harder to support them. At that point, she {?} and said, “That’s so true. My husband sometimes has to work eighteen hours a day to keep a whole streetful of colored women having illegitimate babies, and then she turned red and said, “That didn’t come out the way I meant it,” and her husband said, “I should hope not.” I hope she’ll forgive me for recording this, but I thought it was so thoroughly delightful that I couldn’t pass up the opportunity.

Of course, the point I referred to is true. A certain amount of productive, negotiable work is necessary to maintain any and every society. It is necessary to maintain it at its existing level. If the work decreases, then society begins to go downhill. If there is to be progress, the amount of work must be increased.

To understand that, let’s illustrate by {?}. A certain amount of work is necessary for you in order to maintain your home at its present level. Now that work may be done by one person or it may be parceled out to two or three, to the children or to a maid, but to maintain the house at the present level of maintenance, a certain amount of work is necessary, a certain number of hours, a certain level of work every week. If the amount of work decreases, the standard of the home decreases, does it not? Now, if you want to improve the level of the appearance of the home, you increase the number of hours of work. It’s that simple. Now apply that in society. The same thing is true of society. A certain amount of work is necessary to maintain the level of any society, and if there is to be progress, the amount of work has to be increased.

Technological progress does not lessen work. Now one of the myths that is propagated today is that automation will mean fewer jobs. Actually automation means more jobs. If you were to turn back the pages, two, three, four hundred years, what would you find? You would find, first of all, a lower population, because the world at that time could not support {?} people. They would starve. You would have found more people were living then on a very marginal basis, and that many lords and ladies had umpteen servants and they were simply maintaining. Now society at that time had a much lower standards of living. Technological progress does not lessen work. It increases it and makes it progressively more skilled. Again, let’s illustrate from the house. Now supposedly, according to some labor economists, work has been lessened by inventions like the washing machine, and you’re told, “You see how much work has been decreased by technology? After all, your grandmothers, and in some cases your mothers, in some cases some of you, if you lived on a farm up into the twenties, before rural electrical {?} reached every rural community, you were doing your wash over a washtub, with a washboard, and this took several hours. First of all, you had to heat the water on top of the stove, or if it was summertime, you had a fireplace outside and you had big washtubs of water heating water. That was {?} Then after you heated that water, you had to work over a washboard to do that wash. Supposedly now, with the washing machine, there is less labor involved, is that true? There’s more labor involved now. Why? Because then, the washboard and the washtub, you had from year in and year out, they lasted you twenty, thirty years, when the amount of labor that went into manufacturing those two items was very small. Today, the washing machine represents a tremendous amount of man-hours of labor; the manufacture, the parts, the machines, the shipping, the sales personnel, the maintenance personnel, plus the electricity or the gas to operate it, which requires constant maintenance. So that the washing machine today, every washing machine in every home, represents more hours of labor to manufacture and to maintain, and the supply the power for it, and to service it than your mother or grandmother ever put into the wash in a single week. Every washing machine today that you operate represents not only the hour, or half hour, or the two hours a week you may put in doing the wash, but all those invisible workmen behind it, and it adds up to a tremendous amount of hours per week, does it not? And it’s a continuous operation.

As a result, whenever you have progress, you have an increase in the amount of work, so that the progress of civilization does not lessen work. It increases it. If you want less work, get back to the jungle level of the Africans. How do they live? With very little farming which the women do. The men do some hunting and they wait for the coconuts or bananas, or whatever the case may be to drop out of the trees, and if they can’t get the bananas or the coconuts, or if they can’t hunt and fish successfully, they starve. They die of hunger and so a certain number of the population {?}, and they continue on this marginal existence with a minimum amount of labor. But, as civilization increases, work has increased to make that possible.

As a result, it takes a tremendous amount of work to maintain a civilization.

{?} was right. Her husband does have to work extra hours to maintain a civilization, and so do your husbands. They either work an extra number of hours, or they pay, which amounts to the same thing, an extra amount of tax for themselves and somebody else whom they’re supporting. It’s the same thing because every dollar in tax they pay represents so much labor on their tax.

We’re told that today, we have to work almost to the end of May and the beginning of June, each year, before we can begin to support ourselves. In other words, of that much of our annual income, about forty-five, forty-six, forty-seven percent goes in taxes, which means the rest of the year, your earnings alone support you so you’re working harder all the time to get your support up of a limited period of time, so that the pace of labor is stepped up. It takes a certain amount of work simply to maintain any society.

As a society increases in its technology and in its social progress, and its standard of living, the necessary work increases proportionately. Now this goes contrary, doesn’t it, everything I’m telling you to everything you’re told today, and this is one reason, of course, for the riots on the campuses, because the students have been brought up from early grade on to believe that we are on the verge of a world where work is no longer necessary, where a machine will do it all, when the reality is that more work is required to maintain society. Now do you begin to see the nature of our plight? More work is required but since fewer are working, more and more work is required from those who are working, more work and more taxes, and so an increasingly smaller percentage work harder and pay more to support the rest.

New York City now has one million people approximately on welfare, which means that the other seven or eight million are working overtime, together with the rest of us, all over the country, to support those people, and how does the government take that support from us? It takes it by taxation and by inflation, two ways. It has to use both, and when both fail, it results in {?} confrontation. {?}

Now, this is the reason for funny money, for paper money, for abandonment of the gold standard, because in order to take that money from you, the government has to inflate that money, to take away your wealth because you’re going to hang onto it. You’re going to say, “Oh, I’m not going to give up. What I had accumulated and I put aside in the bank, I’m not going to allow the government to take away from me, but if the government inflates the money, it can take it away from you even though you never draw a penny out of the bank or the government never takes it out of the bank.

For example, the standard sum for the rate of inflation for 1969 accepted by business firms is 12%. Alright. If you have $100,000 in the bank, and you’re getting 5% interest on it, and you’re paying taxes on that 5%, and then you’ve lost 15% value as far as your capital is concerned, you have a lot less money in the bank at the end of the year, although you supposedly had $100,000 in the bank.

Not too many years ago, you could buy a very good home for a very small amount of money. One of the lovelier homes within a half a block from here, which was built in the thirties, was built on, I think it was a two acre plot, and the whole cost was $7,500, with the lots handcrafted, the tile for the roof handmade by Mexican laborers. Now what’s the difference between its price today, many, many, many times that and its price then? Inflation and taxes. The house hasn’t changed its value. It was a very lovely home then and it is a very lovely home today. The difference is that money has gotten cheaper and this, of course, is robbery, because if you had $100,000 in the bank then, you could buy about fifteen such homes, and today you can buy maybe one and a half, if you can buy that many. Is that robbing whoever has $100,000 in the bank over those years?

Now of course, as this robbery increases, the governments are faced with a problem. The money begins to inflate too rapidly, and of course, this has happened. Five percent inflation last year, twelve this year, it’s beginning to double, is it not? Well, if it’s twelve percent this year, maybe it’ll hit (now this is the way the government economists are thinking) twenty-four or five percent next year, and fifty percent next year, and a hundred percent the year after. Now they’re good at figures, these government economists, and they’re fighting. So, what happens all over the world? All the countries everywhere are worried, all the civil governments, the treasurers, the president, the prime ministers. So what do you have? A massive credit crunch.

Well, this is done in a number of ways by the central banks, whether it’s the Federal Reserve, or the Central Bank, or the Bank of England issuing credit restrictions, which means that it’s harder for you to get credit but easier for the government to get it. A credit crunch is always on the people, not on the government. Then the government, because the government is now in business to such a great extent, that it is the controlling factor in the economy. The government begins to slow down on its payments. Well, just about everybody in business today or in any profession, is going business first-hand, or second-hand, or fourth, or fifth hand with the government, is it not? So what happens? Well, if you’re a doctor and you had Medicare patients, the government is finagling, it’s cheating you. How? Earlier, it may have been delinquent a few months, five hundred dollars. Then, the rate of delinquency is stepped up and after awhile, you’re never paid up. It keeps paying you but you find that you’re a hundred dollars, a thousand dollars in the red, and then suddenly, it jumps to two thousand, and then it jumps to three thousand and you’re not getting paid that. You may be paid regularly, but the payments are not quite as much so you’re getting further and further in the hole. That’s three thousand dollars that you, as the doctor have, and it’s not in circulation. You have that much less to spend, and the government has that much more to spend because it’s not paying you.

Or you’re in business and you fulfilled a contract, and you’re a private agency and you are making something for a private company. Maybe you’re making it for aerospace, or you’re making it for Pacific Telephone, or some other agency, and they owe you $50,000 or $200,000 or a million dollars, and they’re working under a subsidy from the federal government, and the federal government doesn’t pay them, and then they can’t pay you. What does this do you? You’ve met the contract. You put out maybe a million dollars. We know someone who did that, and you face suddenly bankruptcy because you have to meet your bills, and your payroll, and here, you’re not getting paid on something that you’re to be paid for cash, within thirty days. So you had a credit crunch. What’s the purpose? Well, the government is slowing down its payments, and therefore, putting a roadblock up and down the economy and the ability of people to spend money.

I’ve talked to several people lately who’ve had houses in escrow, and the money isn’t coming, and they’re told, “Well, wait another thirty days, or another ninety days, give them time, because they have some money coming from something which hasn’t come through because the person who is going to pay them off hasn’t got his money,” and so it goes, like a row of dominoes, a credit crunch, because the government steps in and block credit, withholds money from the various channels, because all the economy, as it gets progressively more socialistic, is dependent on them, and if you borrow money, it’s harder to borrow. One of you told me the other day, the fact that a banker of a very prominent bank in Southern California stated that they could not open their doors because they don’t have the liquidity. They have the assets, but no liquidity. What’s the difference by the way?

Assets, well your assets are the sum total of all the things you own, as far as their value is concerned, less any debts you may have. That will be your net assets. So, you may be worth in assets, when you add up your home and your furnishings, and everything, a hundred thousand, a couple hundred thousand. You assets may be considerable, but what is your liquidity? Well, the liquidity is the amount of cash you have that you can put out at the moment. Well, your liquidity may be very small.

This is the problem the banks have now, and business generally. A lot of these banks could not open their doors for lack of liquidity to meet their daily business if they didn’t borrow money. Well, this report stated that this prominent bank was borrowing Euro dollars. These are dollars that Americans have deposited in Europe, or are spending in Europe. These were borrowed at 12%. Now that means the bank is losing money on that basis, because it isn’t getting more than 8 ½%, 9% for its loans, and this is a short-term course but it’s a very painful one. They can’t keep that up much longer, and big business today, well your biggest corporations in the country, according to one economist, have about three days’ equity, enough cash in the till to keep going three days, and if it didn’t come in dribbles, to keep them alive, they couldn’t meet their payrolls.

Now, this is inflation, and inflation rests on paper money, because you cannot issue gold coins and silver coins without buying gold and silver. In other words, the government just inflate with a printing press. There’s nothing behind the paper money except debts, usually, and sometimes not even that, but behind gold and silver coins is real value, and intrinsic worth. Thus, when a people loses its knowledge of sound money, gold and silver, they can easily be robbed.

Inflation can easily take place because of the paper currency, and today we are so far from our moral foundations that this can be done. In bygone days, even the immoral people in a society knew real values because they were close to a rigorous training in Christian values. They had been brought up in it. It was in their schooling. To give you an example, recently I ran across a collection of old English documents from the period just before the American War of Independence, and this, from England, was a list of sporting leagues{?}, and this list was one which was circulated at one of the most prominent English racetracks when all the gentlemen were there for the races, and this was what interested me, because England, at that time, was beginning to get into some funny money practices, and these girls had their ads. The first one has a nickname; “Miss Rattletrap from Pel Mel, London is calculated for first {?}. The rider must be very careful of her as she starts at full speed. Price fifteen shillings. Objects to paper currency in general. May be heard of at the {?}. Miss P.D. is a pleasing girl, has a good face, is handsome made, and gives great delight in all her paces. Will only attend this race to take engagements from billiard table gentlemen (that is, club members), the gentlemen of the tone{?} and young {?} Price, a seven shilling piece. Cautions her customers as she is acquainted with a bad ones in circulation, and of course, will reject them. May be seen at the hotel near the water balloon.”

Now you see, in a society which had so strict a Christian background, even these prostitutes had a knowledge of hard money, and they didn’t want any slugs for silver shillings, and certainly not paper money. They drew the line at that.

But of course, our generation has been so far away from any sound moral principles that it doesn’t know any better and, as a result, we’ve accepted paper money and people think it’s absurd when you try to tell most people that paper money spells disaster.

Well, what is the future? We have, as I said, right now, a massive credit crunch. As a matter of fact, one of the immediate effects of inflation, when it hits the danger point, is with us today. What is that? Bonds, begin to lose their value. After all, what good is a bond that pays five or six percent interest when inflation is 12%. You’re losing half your money, half your value. So, California now has a billion and a half in bonds that it cannot sell. Governor Reagan admitted last week that they had dipped into the general expenditures fund for $12 million to build some University of California buildings, which should have been built with bonds, but the bonds hadn’t sold. This, of course, is not legal, but they’ve done it. He took a trip to New York to try to peddle the bonds, but everybody in the country, municipalities and states are trying to peddle their bonds with very few takers. So what happened? The state of California approached the University of California and said, “Look, why don’t you buy the bonds for your own construction? You’ve got all these endowed funds in scholarships, and professorships, and so on, so why don’t you buy your own bonds and take the yield that will come from it from taxes, and they refused. They didn’t want to be stuck with them, but of course, they’re all for voting school bonds through so that we can be stuck with them, but they won’t buy them themselves. They refuse them.

At the same time, there is a measure before the state legislature to raise the interest rate, which is now set by law, at 10% to 22%. Twenty-two percent. Now whoever introduced that was a realistic man, because already in one way or another, most of your charge accounts are actually eighteen percent interest. The legal rate is ten percent, and if there’s twelve percent inflation this year, that means twenty-two percent, does it not? That means more inflation. Well, after the credit crunch is ended because they don’t want to plunge us into an all-out depression, by the end of the summer, the inflation will be underway again.

Now, what will this spell? Well, this rising interest rate means people are not going to lend their money out unless they do get a high rate of interest, or unless it is with somebody who is highly responsible and it’s a personal relationship or some such thing, but after a year or two, maybe it’ll be three or four, the timetable is not certain. It depends on how fast it goes and what they do. Savings accounts will come to an end. Think what this will do for the country financially. There will be no money to borrow. Why will they come to an end? Why, because you will be losing your money to leave it in a bank. Inflation will eat it up. If it’s going to eat up twenty-two percent within a year or so, then in two or three years it’ll eat up a hundred percent of it, and of course, in the Soviet Union not too long ago, there was a devaluation of about eighty percent. So, what has been happening in Czechoslovakia lately? The Czechs have been expecting the same thing there any day and rightfully so. So what have they done? They’ve lined up at the banks to draw out all their savings, and to take them and spend them for anything. Might as well get some value out of their money, and of course, the bankers, who are now government officials, have been surprised and shaken by this. This isn’t supposed to happen under socialism, but it’s happening faster there than here.

Now let’s get a look at the picture by summary. We’ve seen that it takes more work to maintain civilization as civilization progresses, but we’re having more and more people on welfare so that fewer and fewer are working harder and harder, and paying more and more, and their money is being confiscated by inflation and by taxation, and we’re seeing that the end of savings and of loans is in sight with inflation, and this means, does it not, the progressive breakdown of everything, because how can society function without capital? It cannot.

One of the artificial distinctions made by socialists is the distinction between capital and labor, as though the worker was the man who is a union member and capital doesn’t represent labor. Well, I think all of us know, as D.F. Sumner said, her husband has to work as much as eighteen hours a day to support all those women. Now, he does have to work harder because he represents the capital. Capital is always the biggest worker, so anyone who says workers are on one side and the capitalists on the other has it all wrong. Oh, you have some who are just living off the work of somebody in their family, relatives who are being supported by someone who really did the work, or does the work. That’s private welfare. That’s legitimate, but basically, the person who has the capital on the whole puts in the hardest work.

So, the number of real workers and real capitalists are progressively destroyed by socialism, and they have to work harder and harder, and finally it reaches the point of breakdown and collapse, and this is what faces us. We cannot say how soon. Some people ask me whenever I speak on money, and who heard me four and five, and six years ago, and say, “Well, it’s happening a lot fast than you thought, isn’t it?” and I say, “Oh no, much slower,” because you must recognize that these people are not stupid, these men who are in charge of the various countries and their financial policies are working every angle to delay the day of reckoning, hoping they’ll come up with some answer, which, of course, is a pipe dream, but they have been superb in delaying it, but they cannot escape it. It is inevitable. It will destroy them, and hence the need for Christian reconstruction, for our work, because no society can exist without work, and the greater the progress, the greater the amount of work required of society. This is why, to get into an area, to put in a plug for my new book, The Myth of Overpopulation, the more you have progress, the greater the amount of population you can maintain. You need an increase in population when you have technological progress. Without it, the population increase is a burden.

As they break down our technological progress by their socialist program, they will have overpopulation, because there will be too few workers, too few capitalists, in other words, to maintain society, and it will crumble, but we must create a new breed of workers, a new breed of capitalists, and a new society. We have our work cut out. It’s got to be done. By the grace of God, we are going to do it. Is there time for questions?

[Introducer] Yes, indeed there is time for questions. I know that there must be many.

[Audience] This isn’t a question. I don’t know why{?} I drew a picture of a dike, because I think {?} national economist going around sticking their finger in this hole, and this hole, and this hole, trying to sort things out and keep it going, but I’m {?}

[Rushdoony] Because their perspective is not sound. The only good one I’ve seen was one that {?} passed on to me in the National Observer, I believe, and it showed this man on the upper story of a burning building, and the flames of inflation were licking at his coattails, and he was standing on the ledge to jump, and below were the firemen with their net spelling disaster and collapse, and here he was with inflation behind him and disaster before him, and what was the word of advice? Jump slowly.

[Introducer] Now for questions. Grace, didn’t you have a question?

[Audience] Yes, I was thinking about those that might escape this, and wouldn’t that be the small farmer? And we just don’t have any small farmers in the country anymore, and we won’t have, and yet the small farmer still exists in Europe, and if there were to be reconstruction from that group?

[Rushdoony] We have more small farmers than the government like to admit. It wants to eliminate them, but they are still the most productive element in American economy, in American agriculture. The small famer has, from Lincoln’s day when we had adequate figures, to the present, been the most productive element in American agriculture. Yes?

[Audience] There is a great deal of rumblings over the fact that there may be a depression in this great effort to stop inflation, but I’ve observed that the government, and Mr. Nixon, is calling for a continuance of foreign aid and a continuance of welfare, and big air{?} programs, but the crunch is, as you said, on the enterpriser and the taxes and not going to hold inflation down. They’re feeding inflation.

[Rushdoony] Yes, higher taxes feed inflation. The whole idea is to inhibit you and to uninhibit the government.

[Audience] So it’s going to hurt, it’s going to hurt us all.

[Rushdoony] Right. I believe you are next, Bea.

[Audience] We saw a report from, I think it was the International Bankers, in the paper the other day saying that the gold reserves of South Africa had increased by a certain amount, and also that the gold from communist countries and so on, and in it said that they had bought gold. Communist China, particularly, had bought around $500 million in gold over the last three months. What do they buy with? I thought we didn’t accept their cash, or are they using dollars? How do they get those?

[Rushdoony] First of all, you’ll hear regularly all kinds of propaganda that supposedly South Africa is accumulating gold, and this is going to sink the price of gold when this reserve of there is put on the market. This is propaganda against gold. South Africa has been selling it right along. The world production each year for several, two or three years now, has virtually all gone into private hands so that the governments haven’t even gotten their share. Production could be greatly stepped up without meeting the demand. Then, Red China has been accumulating gold. It isn’t a significant amount, but it is important in this respect. Red China has been selling in order to get gold. In other words, they can export and sell in the Far East and elsewhere at a fearful cost. It doesn’t matter to them if their people go without, or if their people have to go hungry and even starve to death. If they want to get foreign currencies that are exchangeable for gold, they will pay that price without batting an eyelash.

Now, they have increased their gold holdings and thereby, strengthened their currency. So you have the ironic situation today that the Chinese currency, the paper money, is stronger than the Soviet Ruble. Now, this has tremendous repercussions within the Iron Curtain countries. Let us say it’s Yugoslavia, or some other Iron Curtain country, they will now prefer to do business with Red China than the Soviet Union for the simple reason that the Ruble doesn’t have much behind it. The Soviet Union has had to put a little gold backing behind the Ruble because the eastern European captive countries simply were not responding to their production quotas when the people were being paid off with worthless paper. So, there had to be some gold backing, some convertibility, a very limited amount.

So, in the economic war, Red China now has the edge within the Iron Curtain countries, on the Soviet Union, and it’s ironic it has gotten this through gold, and yet, according to present day Marxist theory, gold is worthless, and Lenin said that when they had their world revolution, they would drop gold entirely and use it to line the public toilets to show how contemptible a thing it is. Yes?

[Audience] Do you think our government will raise the price of gold?

[Rushdoony] I think our government has very definitely decided against it, but they will be forced ultimately to do it. It is already up twenty-percent because on the free market, it is selling at a twenty percent higher price. So, this means a twenty percent devaluation, and every time the paper dollar is discounted, for example, in Switzerland at the banks there, it means a practical devaluation. So, there is an actual devaluation without a legal act devaluing our dollar, but devaluation will come. Yes?

[Audience] I thought maybe they’d like to hear what it would be like if they went {?} to open a bank account.

[Rushdoony] Yes.

[Audience] Well, I did this and {?} and I hope that I transferred my own personal feelings {?} the same way. I went to the bank and first, I went to one bank and we had very little time, and the threat of German Marks changing their value {?} at that time, so I rushed to the bank, {?} the car and I bought, transferred some money into Marks, some money into Swiss, and then bought some odds and ends, and then the first thing you said to me, “Now, I want you to know, I want you Americans to know that you cannot take gold into the United States,” and I smiled and I said, “Oh, I know that, I’m going to put it into such-and-such a bank,” the name of which I had, and that particular bank was around on the other side {?} so after I {?} nest egg I went to the next bank and I wanted, told them I wanted to open a bank account, so they ushered me upstairs several flights, and first they asked me what language, and I said English, and we went up several flights of stairs, {?} elevator one, and went down and came back on foot. Then they took me into a private office, and I mean private. There wasn’t one living soul in this place. There was a large desk and I sat on one side, and {?} and sat me down, and the feeling was rather, well with the whole the feeling, because I felt I had somebody watching me all around. However, [?] and it was probably because I was carrying quite a bit of money with me at the time, because I’d {?} it all, all American dollars, I’d crammed {?} dollar. {?} and finally this gentleman came into the room, all by himself, and he sat down on the other side of the desk. He knew my name because I had given it, and we paused a minute and I said, “Well, I would like to open a bank account in gold, because I realize that the {?} silver and other dollars changed too much {?} and he said, “Well,” he said, “I’d like to do that for you Mrs. {?} but we cannot, really cannot do it legitimately because your government does not permit any American citizen to {?} gold anywhere no matter what. Anywhere. {?} so, I said, “Well, {?} out of the room to get some paper and I meant to bring them to you to read what kind of bank account, and what kind of responsibilities you have, {?} bank account, and what forms, pounds, dollars, Swiss francs, {?} you can open in silver and gold, {?} not supposed to.

Now, I said, {?} but not gold, and I sat back and I smiled at him, and I said, “Now, there must be some way around this.” He said, “Well, we would do it for you because in Switzerland it’s still kept a secret {?} but they’re still kept a secret.” And he said, “There still might be some way you could do this.” Then he said, “If you have gold and you put it in our bank, we don’t go around telling people what you’ve got in there.” Now, there was the answer. I could do it, but I had to take the gold myself and put it in there, not go buy the gold after and say, “I’m opening an account in such-and-such amount, and give him a thousand dollars, or something of the sort, in U.S. dollars, and then have the bank buy the gold and put it in there. This is not I could do, but I could buy the gold someplace else and put it in there, as long as they didn’t know I’d done it. But anyway, so I left town for {?} don’t you realize that you {?} are no longer free? {?} you know, to hear somebody else say it is pretty horrible, then the other things is that when we {?} chatting, that the {?} of the propaganda coming out of the U.S. is so {?} and he said, “Well, I don’t see why you are so terribly concerned because the American dollar is down{?}, and you’re a rich country,” and I said, “You bet we’re a rich country, but let me tell you how {?} the American dollar is,” and {?} gentleman looked at me and he looked at me and he said, “Are you going to say anything?” {?}

So that is what happened to me when I went {?}

[Audience] We did the same {?} they send them a lot of them over here to work for two or three years. I mean, it’s the same old stuff, just ground out of the same machine, and they all say the same old story.

[Rushdoony] One last word, I think our time is just about up. Gary North, this last weekend and all this week through Friday is at an economist conference at Claremont, and one of the things stated there by someone until recently with the FCC, was of interest. He said now, by federal order, all stock brokers wires are tapped continuously by the FCC. In other words, they want, just as there’s microfilming of every check you write, this way, too, there’ll be a total knowledge of where the money goes, who’s buying it and selling it, and so on. So there’ll be full records kept, and this man spoke precisely on this. It’s a routine thing now, so your conversation with your stockbroker is now public information with the FCC.

[Audience] Rush, just one last question. Last night, the Herald carried a small article to the effect that the Franc had fallen yesterday to the lowest allowable point. In other words, it was 4.954 and isn’t that pretty serious?

[Rushdoony] Yes. When you read that the Franc, or the pound, or the dollar is being discounted, this is what it means, that the people who are doing business will not accept it unless it is discounted because they don’t figure it is worth what it claims to be. In other words, the dollar isn’t worth a dollar. Now, at this point, the governments in question have to step in and buy all these dollars and make up the difference to support it at that level, and they have to refund the people who are in the exchange business with gold. When the Marys were over in Europe, there was this tremendous run on German Marks, dollars, pounds, Francs being converted at a discount. That meant that the German banks that were taking these pounds, and dollars, and Francs at this discount, the U.S. government and the French government, and the British government had to step in and support them and vie{?} them with gold. So there was a tremendous gold outflow at that time. Yes?

[Audience] Can you figure any reason for why gold stocks went up so terribly yesterday?

[Rushdoony] Yes, they went up. Gold went up, of course, the bullion, but when the stock market drops, usually mining stocks go up, and gold and silver bullion go up, and the stock market has been sick lately, and the only thing that is remarkable, Mary, is that mining stocks did not go up sooner, and that silver didn’t shoot up, and bullion as well.

[Audience] Well, I was wondering why {?}

[Rushdoony] Yes, it was a delayed reaction.

End of tape