The collapse of global financial markets is caused by an evolving paradigm shift that is reshaping our world.

The return to parity between the East and West is part and parcel of a greater paradigm shift now underway - a shift that is rebalancing fundamental polarities on a global scale, a shift that is affecting not only global economic and political alliances but gender as well.

- Page 98, How to Survive the Crisis And Prosper In The Process

The credit boom is built on the sands of banknotes and deposits. It must collapse… If the credit expansion is not stopped in time, the boom turns into the crack-up boom; the flight into real values begins, and the whole monetary system founders.
Ludwig von Mises, Human Action, 1949

I first attended the Canton Trade Fair in October 1976. All Chinese men and women were dressed in blue shirts and blue pants, bicycles were China’s main mode of transportation, Chairman Mao had just died and China’s mantra, “We will continue to support the policies of Chairman Mao Tse-Tung and criticize the policies of Deng Xiao-Ping”, was heard everywhere.

But three years later when I received White House invitations to attend the Washington DC reception for the Vice-Premier of the Peoples’ Republic of China, it was Deng Xiao-Ping who arrived; not a hard-line inheritor of Chairman Mao’s revolutionary precepts.  

On April 3, 1024, “the imperial Sung Dynasty began to print and circulate chiao-tzu notes [paper money] in the province of Szechwan”. p. 11 Ralph Foster, Fiat Paper Money: the History and Evolution of Our Currency, 2nd ed., 2008

In China, paper money was a monetary form of ‘Hamburger Helper’, an addition to the royal treasury that allowed Chinese dynasties to stretch their budgets by allowing them to spend what they didn’t have.

In the West, paper money had a different purpose. There, the invention of paper money would also allow governments to spend more than they possessed; but, in the West, governments would have to borrow their own money from bankers.  

On August 21, 2007, Darryl Robert Schoon delivered a talk before Session II of Gold Standard University Live (GSUL) in Szombathely, Hungary. Session II of Gold Standard University Live focused on the economic theories of the Austrian School of Economics, a school of economic thought based on free markets. Professor Fekete is a strong believer in these ideas. Darryl Robert Schoon's talk, Where We Are, How We Got Here, & Where We're Going" is available to you here as an audio download. - Click here.

DRSCHOON.COM features the articles of Professor A. E. Fekete of the Gold Standard University, a leading expert on gold and its role in financial markets and the economy.

Premature Obituaries

It is open season for wild monetary prognostications. More premature obituaries on the dollar have been posted on the Internet. For example, see Jim Willie’s The US Dollar Paper Tiger (Gold-Eagle, January 11) with epitaphs like “the U.S. dollar rising to the cemetery”, or “dollar death dance”. Or see another article, Jeff Nielsen’s entitled Maximum Fraud in U.S. Treasurys(Gold-Eagle, January 3). Itbetrays maximum misunderstanding about keeping the dollar on a life-support system. It assumes that the Fed and the U.S. Treasury are fighting tooth and nail to keep the value of government debt high lest it collapse in want of supportfrom Japan, China, and other countries.

These views hang the picture upside down. In actual fact, the Fed and the U.S. Treasurydesperately want to beat down the value of the dollar. The greatest obstaclefrustrating their effort is the stubbornly high and still increasing value of U.S. Treasurys. Captains of the world’s monetary system are yanking levers and twisting throttles which are no longer connected to anything. The captains are no longer in control. Yet they continue to wave their batons feverishly and pretend that the orchestra is paying attention. They want Jim Willie, Jeff Nielsen and everyone else to believe that the falling interest-rate structure is the outcome of their deliberate monetary policy. In fact, the Fed and the U.S. Treasury are trying to stop the rate of interest from falling further. They instinctively realize the threat offalling interest rates brings deflation and depression in its train.The dollar is much too strong, contrary to the wishes of policy-makers.It is not so easy to beat down the value of the dollaras suggested by Keynesian textbooks, even if you have the key to print shop where the presses are running.The dollar’s strength prevails in spite of the withdrawal of Chinese and Japanese support of the U.S. bond market, andin spite of the destructive monetary policies of the American guardians of the dollar.