Introduction: The editors of the Daily Bell are pleased to present this exclusive interview with Dr. Lawrence Parks, the Executive Director of the Foundation for the Advancement of Monetary Education (FAME) - and a leading proponent of the fight for honest-money.
Dr. Parks has studied the money issue for more than 30 years and was a student of the free-market economist Murray Rothbard. He is a frequent speaker on what he calls "The Fight for Honest Monetary Weights and Measures." He is the author of What Does Mr. Greenspan Really Think? - an easy-to-read book about how our monetary system works. His writings have appeared in Pensions & Investments, The Economist, The Washington Times, The Freeman, The Free Market, American Outlook, The United States Congressional Record, National Review, and others. He has broad experience in academia, in business, and in finance. He holds a Ph.D. in Operations Research from the Polytechnic University. Additionally, he is an active member of many civic and social organizations including The United Association for Labor Education, The National Writer's Union, UAW 1981, AFL-CIO.
The Daily Bell
Daily Bell: We hear an awful lot of confusing mainstream commentary surrounding the current financial crisis. Generally speaking, we are of the opinion that most of what is reported are symptoms of a deeper crisis. What do you think is the ultimate cause of the economic crisis worldwide?
Dr. Parks: The ultimate cause of the current worldwide economic crisis is the flat-out dishonesty in the world's monetary system, from the definition of what constitutes money, to the misrepresentations and non-disclosure of material information about what passes for money in every country. Several of the American Founders foreshadowed this in their strong
moral condemnation of paper money. The world has by circumstance, not rational debate, been
defacto forced into adopting legal tender irredeemable paper-ticket-electronic monetary systems that are inherently fraudulent, coercive, and unstable. With gold-as-money, not the so-called "Gold Standard," which itself is an invitation to fraud, on the other hand, none of the excesses would have been possible.
Daily Bell: Is there really any difference between the results of the Madoff fraud and what the central bankers are doing? Doesn't the current fiat monetary system actually encourage similar behavior?
Dr. Parks: I see the Madoff fraud as one type of a genre I call timing frauds. A timing fraud is one that generates profits for the perpetrator because someone is expecting to be paid
later, while the perpetrator steals the money
now. The first type is the simple Ponzi, whereby early entrants are paid off with money that comes from later entrants. The second type has all the characteristics of the first, except that it has the additional patina of being regulated, e.g., Madoff, or the fraud perpetrated by Martin Frankel some years back. Frankel got control of two insurance companies in Tennessee and proceeded to take their assets into his money management firm. But, instead of managing their assets, he stole them. He bought a big house in Greenwich, Ct., filled it with hookers, etc. His victims, like Madoff's victims, were gulled in large part because his entity was regulated, i.e., folks took comfort that the authorities were supposedly watching. Since the government was involved, in the cases of Madoff and Frankel, the fraud grew much larger than it would otherwise. The third type is one whereby the government not only putatively regulates the *********, but also passes laws that legitimatize the fraud. Legal tender laws in the U.S. that compel people to use as money "dollars" that they would otherwise reject, are not authorized by the U.S.
Constitution, and neither is paper money. The line I like best is that in the 1980s the French Government took over the banks. In 21st Century America, the banks took over the government. There's a lot more to this, but bottom line is that the current system is dishonest, and no amount of regulation or oversight will cure that defect.
Daily Bell: If it is fiat money and central banks that are the real problem here, then why do you suppose financial gurus like George Soros are supporting a ‘beefed up' IMF that would act as a global financial markets regulator and controller of a global currency?
Dr. Parks: Soros believes, or at least he says he believes, that financial markets are "inherently unstable," i.e., from time-to-time they blow up. Keynes made the same claim. He blamed the alleged instability on what he called "animal spirits" taking over the actions of otherwise rational men. Soros, and others, too, reason that since financial markets are prone to blowing up, there needs to be a safety net, e.g., the "lender-of-last-resort" at the Federal Reserve. Thus, unless the monetary authority can create unlimited amounts of new money to bail the system, the system will at some point collapse. It's hard for me to believe that Soros, or anyone else, really believes this "inherent instability" nonsense. Nobel Laureate Robert Mundell told me that he doesn't believe it. More likely, in my view, the financial sector wants to continue with our legal tender irredeemable paper-ticket-electronic money system so that participants may continue to profit.
more in the link....
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