On July 23, I will officially launch Silver Justice, my latest novel – the fifteenth release in thirteen months.
Silver Justice represents a kind of turning point for me. In it, I combine everything I know about storytelling and craft with an attempt at explaining what is perhaps the single largest disruptive societal issue of our lifetimes – the 2008 financial crisis.
In an earlier blog I hint at the volume of research that I had to do to flesh out my understanding of it, as well as the disparate sources I had to consult to get a clear picture of the true cause of the cataclysm that is still causing aftershocks today, and has gutted a large chunk of the American middle class. I won’t belabor that – readers can evaluate the book’s ideas for themselves, and are invited to share in the journey of research that has been my daily reality for the last few months.
Instead, I am offering for your amusement an excerpt from the novel, and a brief commentary on an earlier financial dislocation that changed the landscape of America: The Great Depression.
I read an article on the web the other day in which the Fed chairman, Bernanke, stated that the causes of the Great Depression were basically unknowable – as steeped in mystery as the years during which it occurred. Which is pure revisionist hogwash that serves nobody except for the financial interests that robbed the country blind back then, and continue to do it today.
Here’s my take. The Great Depression happened because after the 1929 stock market crash, which was brought about by a combination of radical margin requirement tightening in the days preceding it, an increase in interest rates that further dried up the cash that was being used to buy stocks, reaction to the floor vote reporting on the Smoot-Hawley tariff bill (which made it clear it would pass), and a concerted selling/manipulation effort by Wall Street’s biggest players, the economy was in shock.
That shock was made far worse when Roosevelt was elected, and promptly took a number of steps that guaranteed a recession would continue to develop into the worst depression in U.S. history. These have been described by history books as “regrettable mistakes,” which I don’t buy for a minute. The man deliberately ignored the expert advice of three different treasury secretaries who quit because of his actions, and he did things that couldn’t have been more damaging.
He raised taxes at a time when the average family was near or in starvation mode, he confiscated all of the nation’s privately-owned gold and then promptly devalued the dollar by 40% (reducing the buying power of any saved dollars by almost half overnight), he raised bank reserve requirements numerous times (taking yet more cash out of the real economy so it could be hoarded in vaults), he actively supported a trade war with tariffs that created massive global imbalances (some would argue ushering in the rise to power of fascist regimes that would have had no chance in times of prosperity), and perhaps most damning, rather than plowing most of those raised tax dollars back into the stalled economy, he instead bought gold on the global markets for the government and sequestered it, keeping it from backing new dollars (monetary expansion, which most understand is required to turn a recession around) and instead further crushing the economy – and not just the US economy. From 1933 to 1940, the US government bought 1.3 million metric tons of gold – draining the global system of the precious metal and causing catastrophe for most gold-backed currencies due to a shortage of gold to redeem for whatever notes backed by it. That coupled with the disastrous tariffs caused a global lack of liquidity/monetary contraction that made a recession a global depression, with untold misery inflicted on populations around the world. To put that into perspective, the US government’s assets increased fourfold during that period, to over 200% of all other governments’ gold holdings by 1940 combined.
So why would Roosevelt do such a thing? Why ignore every bit of financial advice from his team, and why take a series of steps that guaranteed disaster for most?
I believe it was because while it caused disaster for most, it didn’t cause it for all. For a few privileged interests, those he went to school with and grew up rubbing shoulders with – the royalty of New York’s banking circles – that period enabled their dynastic wealth to explode and transferred untold riches from the former middle class to the elite.
When the Federal Reserve cut bank lending by HALF in the midst of all this turmoil, it predictably caused massive liquidations by banks that were suddenly and unexpectedly cash strapped. Assets sold for fractions of pennies on the dollars, because there was nobody with cash to buy them – except for the already wildly wealthy, who scooped up the farm for a song – literally.
The actual cause of the Great Depression isn’t unknowable. It’s not some inscrutable cypher that requires arcane knowledge to grasp. That’s the big lie. The truth is that it’s fairly easy to grasp, but unflattering to the interests that still control policy today – the very, very rich who essentially own the financial systems all over the world. Those interests don’t want the worker ants to get all riled up and smell a rat. They want a nice, docile population that buys big screen TVs and a new car every three years that it can’t afford, on credit extended to it by…the same banks owned by those interests. You see, if you start educating yourself instead of consuming with money you don’t actually have, you might cause problems, and that can’t be tolerated. An educated population is far harder to bilk out of its wealth than an ignorant one. Which may give you a hint as to why the educational system is such a trainwreck as well. I have come to the conclusion that what is desired is a population just smart enough to operate the machines, but too stupid and apathetic to ask what the machines do.
I stay away from history, or at least ancient history, in Silver Justice, preferring to weave the story around the events of 2008. But a little context is always fun. I figured it would be more appropriate in a blog that cluttering up a book.
Which reminds me. If you would like to read an excerpt of Silver Justice, you can do so by clicking here. Or you can just buy the damned thing. I put it up a few days early so I could get some reviewers early copies. So early followers of my blog can lord it over those not in the loop and torment them with having gotten to it far before they did. A small victory, but a victory nonetheless. You’re welcome.