The U.S. dollar is bailed out again. The British government introduces a drastic budget. The gold rush subsides. What will happen now? And what about YOUR future, is there a way you can be assured of financial security?
ONCE AGAIN the Central Bankers of Europe have rescued the dollar. In so doing, the world's fragile monetary structure, based upon the dollar and its relationship to gold, has been saved from collapse. The most volatile international financial flare-up since the dark days of the Depression 1930's has subsided — at least for the time being.
Only Way Out
Meeting in Washington D.C. on March 16 and 17 in a crisis atmosphere, the West's leading central bank chiefs (excluding France) took the only available avenue open to them to halt the rush from paper money into gold. The new stop-gap scheme — the so-called "two-price" or "two-tier" system for gold — is aimed at keeping private hoarders and speculators away from official gold stocks. The jarring alternative the bankers sought desperately to avoid was a hike in the price of gold. Such a step would have led to a global chain of currency devaluations.
U.S. Gold Loss — 2½ Billion Dollars
Before the U.S. and its monetary allies — Belgium, Netherlands, West Germany, Italy, Switzerland and Britain — initiated their rescue operation in the global game of "fiscal brinkmanship" their official stocks had taken a severe pounding. The U.S. was especially hard hit, having provided nearly three-fifths of the gold funneled out through the London gold pool. Since November, 1967, U.S. gold reserves have plunged over two and one-half billion dollars! The U.S. gold stock now stands officially at $10.48 billion, down from $13.36 billion approximately four months ago. All of this is now "free gold" having been emancipated from behind the nation's currency. President Johnson removed the 25 percent gold cover provision on March 19. And barely in time! For on the same day the President signed the bill, the Treasury Department announced the transfer of $750 million in gold, bringing the official gold reserves backing the dollar down perilously close to the 25 percent minimum level.
Will New Arrangement Work?
All bankers, all government officials, all economists of every persuasion agree on one thing — the gold crisis is not over. With one accord they admit the latest stop-gap measure to be just that — stopping the gap, plugging the holes, taping up the torn and tattered dollar. Confidence in the dollar and its sister currency, the British pound, is very weak. It's all up to the U.S. now. "Our European partners have given us time to put our own house in order," said Rudolph A. Peterson, President of the Bank of America. "It is vital that the United States use this time to restore confidence in the dollar by immediate slashes in government spending and increases in taxes. We must have fiscal action now." Federal Reserve Board chairman William McChesney Martin also admits the Washington meeting only bought time for the dollar. Said Martin, "If we do nothing about our budgetary and balance-of-payments deficits, I don't think we have too long." In a speech in Detroit, Martin called the new two-price gold arrangement "a form of monetary gadgetry." By this Mr. Martin implied that the new plan only gets the United States temporarily "off the hook." But it DOES NOT ATTACK THE CAUSE of America's (as well as Britain's) monetary ills — overspending, habitual red-ink federal budgets and negative balance of payments records — plus another virtually unrecognized, yet most important cause of all! The U.S. seemingly ignores the facts of life and instead continuously implores its chief financial partners to help treat the effect. Out of pure self-interest, the Continentals have shown willingness to assist again and again. Collapse of the dollar now would mean collapse of their economies as well, since many European countries hold large amounts of dollars as part of their reserves. New York Times columnist Albert L. Kraus reported on March 20: "Europe has the power to keep the monetary structure glued together a bit longer. But unless the United States demonstrates its will to keep the house intact, destruction is inevitable."
What Britain Is Forced to Do
It's politically unpopular in Washington, but higher taxes, plus significant cuts in government spending are inevitable. And they must be severe enough to impress the Europeans, who now call the shots on monetary measures. The British government has already announced a drastic new budget in return for yet another loan from the International Monetary Fund (IMF). Britain is now $4 billion in hock to the IMF. The new British budget is calculated to pinch the pockets of both poor and rich alike. Taxes on gasoline (petrol), alcoholic beverages (except ale), tobacco, autos, appliances, luxuries, all will rise. The greatest hike is to be levied upon investment income. Here the rich take a soaking. Above certain levels the tax is over 100%. A British millionaire earning $120,000 a year in investment income will be taxed 136%. He will pay all of it to the government, plus $43,000 from his savings. Now that's a tax! America is heading down this same road, unless there is firm action by government and individual citizens alike — namely labor union members — to hold the line on spending and requests for higher wages. Are the American people willing to take action? Do they understand the peril they are in?
Another Favor Extended
And now consider what has happened at the international monetary conference in Stockholm, Sweden. At this high-level confab a "Special Drawing Rights" (SDR) project has been tentatively approved. This so-called "paper gold" plan has been pushed by the world's two chief deficit nations, Britain and the United States. And once again the Continentals have displayed reserved willingness to go along with the latest "monetary medicine." The sole exception is France which believes — and can she be blamed for doing so? — that the "paper gold" scheme will only extend new sources of credit to London and Washington. Even U.S. Treasury Secretary Henry Fowler was forced to admit in Stockholm: "Unless we [the U.S.] take the course of financial responsibility, all other efforts [meaning the SDR plan] may be in vain." America and Britain are being given every chance to reform their ways. But their record for the past decade when similar chances, respites, and outright financial rescues were affected is not a good one. How long will patience by the Continentals be extended to the U.S. and Britain?
Total collapse of the global monetary network will not occur this year — or the next — or possibly even the next after that. There will, however, be more "gold bubbles" — each one successively worse. After each "bubble" — another patch-work, stop-gap scheme will be worked out. Additional time will be bought. The whole process will probably end when the U.S. has lost all of its gold — or places an embargo on its remaining shriveled reserve. But why the continuous series of last-ditch rescues of the dollar and the pound? For ONE reason! This Work of God proclaiming the truth of God's Word to the entire world is not yet finished! The message of God's soon-coming intervention in world affairs has to go to ALL NATIONS for a witness (Matt. 24:14) "... and then shall the end come" — the end of man's 6,000 years of rebellion against the government of God.
What Can You Do?
You need to be deeply concerned over the economic picture! Is now the time, as some have asked us, to invest heavily in gold mining shares, silver bullion — or such like? What is the WISEST INVESTMENT you could possibly make for the future? It's simple! INVEST IN GOD! That sounds strange to many people in this "modern" age. But it's true, nevertheless. The Almighty God who EXISTS, and who CONTROLS the destinies of nations, has laid down specific rules of finance in His revelation of essential knowledge to man — the Bible. Ignorance of these financial laws is the single greatest reason for all of the fiscal misery that individuals — yes, even WHOLE NATIONS — are experiencing today! Notice the book of Malachi, the last book in the Old Testament, chapter 3, verse 8: "Will a man rob God? Yet ye have robbed me. But ye say" — as many of you may ask — "Wherein have we robbed thee?" God Almighty answers: "IN TITHES AND OFFERINGS." It's not pleasant for people to discover they have robbed God, of all persons. But the plain truth remains. Verse 9 says: "Ye are cursed with a curse." Doesn't this acutely describe our financial plight today? "For ye have robbed me, even this whole nation." Whom is God addressing? The modern day descendants of the ancient ten-tribe House of Israel, at a time just before the return of Jesus Christ to set up His world government on earth (Mal. 1:1, 4:5). These peoples are primarily the nations of the United States and the British Commonwealth of nations! What our nations need to do is far more than just to return to "conservative monetary policies." That such is needed should be obvious by now. But what we as a people need to do MOST OF ALL is to repent of this THIEVERY against God and to pay Him what is rightfully His. Then these terrible financial curses upon our nations would be lifted. Should we as individuals or indeed our entire nations wholeheartedly turn to God to straighten out our personal and national financial messes, God has already promised what He would do. Notice verses 10 and 12 of Malachi 3: "Bring ye all the tithes into the storehouse, that there may be meat in mine house and prove me now herewith, saith the Lord of hosts" — here God challenges mankind to prove His very existence by these financial laws — "if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it..." "And all nations shall call you [our nations] blessed, for ye shall be a delightsome land, saith the Lord of hosts." God stands willing to confer this blessing upon all who will start obeying His financial laws. He inspired John to write in the New Testament, "Beloved, I wish above all things that thou mayest prosper and be in health..." (III John 2). Why don't you take up the challenge from your Creator, given in Malachi? — to "prove Me now herewith." Even if our nations as a whole refuse to heed God's warning, you individually can know the laws of financial success. Read our free booklets, Ending Your Financial Worries and The Seven Laws Of Success. They give the keys you have been looking for.