Gary North's REALITY CHECK No. 48 March 24, 2000 E-Mail: icetyler@juno.com

A REPLAY: 1924-29 AND 1994-99 I am sending you a link to an article on U.S. credit expansion prior to the Great Depression. It was written by Sean Corrigan. http://www.lewrockwell.com/orig/corrigan2.html Corrigan compares what has happened in the U.S. since 1994 with what took place in the U.S., 1924-29. He makes use of the writings of B. M. Anderson, author of the classic study, ECONOMICS AND THE PUBLIC WELFARE. Anderson wrote for the CHASE ECONOMIC BULLETIN. He was chief economist for Chase Manhattan from 1927-37. Percy Greaves (d. 1985), a disciple of Ludwig von Mises, owned a complete set, and he told me that Anderson's articles were important commentaries on the finances of the era. Late in his career, Anderson taught business at UCLA. My father took a class from him in the late 1930's, but told me that he remembers nothing about it. He freely admits that he was not too interested in anything academic other than ROTC.

Anderson held the Austrian theory of the trade cycle, which Mises pioneered in his 1912 book, THE THEORY OF MONEY AND CREDIT. Mises believed that an expansion of central bank credit would create an economic boom, which would be followed by a bust. The increase in credit would create malinvestments that would be exposed as losers when the supply of credit was stabilized, allowing interest rates to rise. The credit expansion that began in 1924, Anderson said, went into the financial markets. It was not reflected in higher consumer prices, other than real estate.

Corrigan traces the movement of bank credit since 1994 into these same markets. He sees a parallel. Especially ominous is a report from the FDIC REGIONAL REVIEW (4th Quarter, 1999). (The FDIC insures U.S. bank deposits.) It speaks of the deteriorating quality of bank loans. It concludes that "the currently strong economic outlook may be subject to sudden deterioration in the event of market shocks that sharply raise interest rates or lower stock prices."

Corrigan quotes Anderson to the effect that by continuing to expand credit, the Federal Reserve made the subsequent financial crisis that much worse. This is what concerns him today.

Greenspan is trying to engineer a soft landing by raising rates a quarter point at a time. The stock market shrugs off these moves as meaningless. But Greenspan has made it clear that he intends to call a halt to what he regards as a malinvested stock market. He is doing his best to avoid a financial panic. The trouble is, the FED's actions seem marginal. Investors are ignoring these rate hikes.

If Mises and Anderson were correct, there will not be a soft landing. When pricked, bubbles do not deflate slowly. All those people who are rushing into stocks at the end of the longest economic boom in U.S. history will not be able to sell at the top and move into money-market funds.

Someone has said that the second most pleasurable experience is being out of a market that is falling. It more than offsets the uncomfortable feeling of being out of a rising market.

END

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Answers

Those who thought Garee was working on Y2k out of the goodness of his heart need to read every last word on this web site:

http://www.serve.com/thibodep/cr/y2k.htm

Like a character straight out of a comic book, Dr. North knavishly plots and schemes his latest ruse for bringing about 'Christian Reconstruction'. His prognosis of y2k is unmistakably blunt: get out of the cities now or die. Y2K will, absolutely and inevitably, completely destroy the civilized world.

SNIP

"Before every link, I add my comments, my "spin." They don't have to believe it, but as fear spreads to the reporters about their careers and their pensions, my spin will spread."

SNIP

Gary North's Y2K Site: http://www.remnant.org/ or http://www.garynorth.com

"This is why we need a remnant. We need a school of the prophets." Christian Reconstruction, 1982 January/February, p. 2.

SNIP

With only a few days left until the complete destruction of civilization and billions dead, you'll need a two year subscription to Remnant Review to prepare for Gary's next scary. Make sense?

Then order your two year subscription today and save!

SNIP

http://www.serve.com/thibodep/cr/y2k.htm

Gary North &Y2K

In his November and December newsletters, Gary North has quite explicitly abandoned y2k as Gods judgment, and returned to his plans for developing an online publishing house for Christian Reconstruction in the year 2000. The transition will not be as easy for many on his roller coaster ride from cataclysmic judgment to everything-as-usual. Many lives have been dislocated or ruined, partly from their own folly, partly from the machinations of an accomplished scoundrel. Each had their own motive for being misled, from Art Bell and his listeners to Ed Yourdon, from Internet neophytes to the fringe extreme. Many saw aspects of themselves they never knew existed, the barbarous subterranean just beneath the surface of civilized life erupting through groveling insecurity and fear, played as by a consummate artist. Others proudly discovered a new ethic of Christian survivalism. Either way Gary has moved on, ushering to the metronome of his boorish catechization a new remnant of devotees into Gary Christendom, the knave in the image of God, the abyss of raging impotence. Paul Thibodeau, 12/10/99

"So, of course I want to see y2k bring down the system, all over the world. I have hoped for this all of my adult life." -- Gary North

The Plague Has Come At Last "God has a sense of humor." AIDS article, 1987

Economic Forecast for the Eighties "I am increasingly of the opinion that nuclear war is imminent..." Biblical Economics Today, 1980

Impending Judgment "What is an extremist? A prophet." Christian Reconstruction, 1980

Out of the Rubble... "They have no solution. There is no solution." Honest Money, 1986

Prophets, Leaders, Followers, Losers "Rarely does anyone believe a prophet. " Biblical Economics Today, 1993

The Rusting of the Iron Curtain: How Real? "God has raised up Gorbachev to execute this final phase of the Soviet strategy against the West..." Christian Reconstruction, 1990

What Are the Facts? "[The Soviets] now have a new anti-missile defense system in actual production which can hit any of our missiles or planes as they approach Soviet targets with half a dozen or more missiles." TentMakers, 1985

Guns "You need to know how to draw, unlatch the safety, aim, and put two bullets in a man-sized target at 20 feet in a second and a half, total." Successful Investing in An Age of Envy, 1981

Y2K Judgment "We need times so hard that men will turn to God..." ICE Newsletter, January 1998

Gary North's Y2K Site: http://www.remnant.org/ or http://www.garynorth.com "This is why we need a remnant. We need a school of the prophets." Christian Reconstruction, 1982 January/February, p. 2.

With only a few days left until the complete destruction of civilization and billions dead, you'll need a two year subscription to Remnant Review to prepare for Gary's next scary. Make sense? Then order your two year subscription today and save!

And don't worry, Gary's record is 100%. EVERY y2k prediction has failed in vintage Gary fashion. "Only in Remnant Review will you receive the information you need to make decisions in the middle of the worst peacetime crisis this world has seen in this century. You need one source that will keep you informed. The conventional news services dont dare report the full story. Bad news upsets advertisers. The media will not cover this topic until it has toafter the collapse has begun. Dont wait until "Bank Runs Spread" appears on the front page of your local newspaper to make up your mind. In short, dont imitate the U.S. government. Procrastination will cost you far more than you can imagine. Get out your credit card (before you are issued a 00 expiration year card that gets rejected because its expired), pick up the phone, and call 1-888-863-9359. "

"I used to speak with reporters on y2k. I no longer bother. They are simply paid functionaries of the advertising industry, getting rich off y2k denial. (Well, not getting rich. Just making an all-too-easy living.) Anyway, a lot of them asked me this: "But what if everyone believed in y2k? Wouldn't this create chaos?" And the answer is, of course, yes -- as surely as if they all believed that nuclear missiles had been launched five minutes ago, in a nation without civil defense. (Reporters don't like civil defense programs, either.) When a system- wide catastrophe is coming in a short period of time, and 99% of the victims have not prepared, it does no good for everyone to find out about it, except to say a few brief prayers. There are insufficient resources to make preparations. The catastrophe will hit." -- Gary North, April 28, 1999.

Time Bomb 2000 written by Ed and Jennifer Yourdon, is a book about surviving the potential collapse of various infrastructures of civilization from the y2k computer bug, and is based largely on the doomsday analysis of Gary North (according to North 90%). Mr. Yourdon removed the prominent link he had on the title page to Gary North's Y2K Links and Forums when the controversy surrounding North's extreme views erupted. Essentially, the book reduces the absolutism of North to unrealistic and unwarranted 10-15% probabilities (which quickly accumulate to 99.9%) and 1-10 year apocalyptic scenarios. The book has already proven to be embarassing, both socially irresponsible and technically inaccurate (for example, see the Preface, and a utility expert's response). We should be concerned about the y2k bug. We should also be concerned about the deforming bedrock of North's apocalypticism and sensationalistic motivations on the factuality of this book.

Like a character straight out of a comic book, Dr. North knavishly plots and schemes his latest ruse for bringing about 'Christian Reconstruction'. His prognosis of y2k is unmistakably blunt: get out of the cities now or die. Y2K will, absolutely and inevitably, completely destroy the civilized world. The picture is nothing short of a nuclear holocaust. Of course it is precisely just such a widespread belief, coupled with the every-man-for-himself survivalist reaction that Dr. North advocates, that would cause a y2k worldwide calamity in the first place. Remove either hysterical fear, or a self- preservationist ethic, and the facts simply can't support his y2k claims. Much of the public is unaware that North is and always has been a survivalist. Gary North moved to his last residence in Tyler Texas because he thought it was a good location for surviving a nuclear war. He has made false pronouncements of the end of the world in the past, and has prophesied the destruction of civilization all his adult life. Dr. North is the co-founder a movement called Christian Reconstruction. Its goal is to restore God's rule by taking Christian dominion and reinstituting 'God's law' in every area of life. Reconstructionism has gained wide notoriety for its extreme bigotry, misleading and abusive rhetoric, and questionable ethics. It has had a radical influence on the American religious right, infiltrating movements as diverse as the new militia and the Christian Coalition.

Should we be running for the hills? A few Reconstructionists have spoken out against Dr. North's apocalypticism. (also see Okay, Okay, Y2K by Doug Wilson). Reverend Abshire writes: "Look, we live in a fragile technological society that COULD suffer any number of problems. For years, I have recommended that ALL Christians have a six month supply of food, an emergency source of water and the ability to cook your food in case the gas goes out or the electricity isn't running. Gold is a good LONG-TERM investment as a hedge against inflation (and now is a great time to buy some). But these are all insurance type things, just like insurance on your house, your life or car. A prudent man makes preparations for unseen and unknowable eventualities."

"But we do NOT have to become false prophets. And that is the real danger. No man KNOWS the future, for "the secret things belong to God." If we say THIS will happen, and it does not, then we have become a false prophet. If people like Gary North who are scaring people into quitting their jobs, leaving their livelihoods and moving to the hills prove to be wrong on this one, let's hope they have a little integrity, repent of their sins and get out of the economic forecasting business for good."

Compare this with Dr. North:

"When I began writing about yak, hardly anyone had heard of it. Today, the media cover it sporadically. In a year, there will be a tidal wave of articles. And, month by month, fear will spread. Doom and gloom will sell, as it has never sold before. I have positioned my name, my site, and Christian Reconstruction in the center of this fear. All I have to do now is to report bad news. That's just about all the yak news there is. One by one, the media sources will move in my direction, for two reasons: (1) it's as bad as I say it is; (2) the public will begin to panic, and then there will be a feverish demand for more and more information. The "moderates" -- whose position cannot square with the facts of yak -- will be drowned out in a wave of panic. My site will be in the middle of it. The larger the site gets, the more formidable it becomes. The site scares away those critics with a large audience, which Rev. Abshire does not enjoy. When a network TV crew came to Fayetteville to interview me last month, it was my Web site that had hooked them. The site is now irresistible to any reporter who has been assigned the task of writing on yak. I have done their homework for them. I have assembled the documentation. They all have deadlines, and my site helps them to meet it. I have built it; they will come."

"Before every link, I add my comments, my "spin." They don't have to believe it, but as fear spreads to the reporters about their careers and their pensions, my spin will spread."

There is a difference between alarmism and awareness. Is the call for God's judgment: the complete breakdown of civilization worldwide with the consequent catastrophic loss of life, and reconstruction according to Gary North's law (he calls his views: "God's law") by his saved 'remnant', information and awareness? Awareness doesn't try to put a "spin" on anything. In comment after comment, Gary North imputes lying, treachery, idiocy, incompetence, and conspiracy to y2k progress. Does the government report that it's on schedule? You can't believe the Feds. Have organizations achieved compliance? The problem is systemic. Is a y2k test successful? Expect them to say this. Is almost every company and organization on track? Insist that none are compliant or on track without a letter in writing guaranteeing perfect, finished y2k compliancy. Are all mission critical systems of the government, and all major organizations compliant? One non- compliant datum "completely reinfects" a compliant system, which then spreads.

No one opposes Gary North because he is providing y2k "information". It is y2k information that disproves Gary North. Most of the documents he links to undermine the comments that precede them. It is because Gary doesnt let the facts speak for themselves. He comprehensively distorts them.

If the facts speak for themselves, then why the spin? Why such clear tactics of dishonesty and chicanery?

Why has this all appeared before time-and-time again in the well documented track-record of false alarms, hatred of the U.S. system of government and Western democracy, survivalism, sociopathy? Why God's judgment and y2k?

http://www.serve.com/thibodep/cr/y2k.htm

-- The Shadow (shadow@knows.com), March 25, 2000.

CPR/Shadow:

I can tell by your style this is you posting on this and several other messages. Is it really necessary to constantly post these long and, in many cases, almost unreadable diatribes filled with your unique versions of CAPS,*****, and .......? Just give us the links and we can read them if we want to without all the editorial comments.

-- Jim Cooke (JJCooke@yahoo.com), March 26, 2000.

My guess is that The Shadow is Y2k Pro.

-- (thats@my.guess), March 26, 2000.