Today we bring you this piece from gold bullion investment company The Real Asset Co.
Joe Biden went to Costco last week to fight for them. Obama visited a toy factory to speak out in support of them and House Minority Whip Steny Hoyer referred to them as hostages, kidnapped by the Republicans’ demands.
Who am I talking about? The middle-classes.
It seems they can’t fight their own battles anymore and instead represent a much favoured toy in this fiscal tug-of-war.
Why are they being fought over? Because they’re the 90% who will suffer if the 1 Jan tax increases are allowed to go ahead. They’re the ones with the most to lose; too rich to sit in the governments’ cotton-wool cradle, but too poor to flee the country when it all goes kaput. They’re sitting ducks, who haven’t quite clicked onto who and what really caused the financial crisis.
They suffered the most in the financial crisis, thanks to the housing crisis and high levels of personal debt. Between 2001 and 2007, according to a study by Edward N. Wolff, the middle classes owed 61 cents for each dollar of their wealth, a 50% increase from 2001.
Yet they still believe in the American Dream, fed to them straight from Washington.
They’re following a dream sold to them long before they were born, believing they can better themselves and their democratic country and elected government will help them do it.
But this is rarely the case now.
A recent study, by Wolff, found between 2007 and 2010 the median net worth of U.S. households fell by 47% i.e. their wealth went ‘poof!’ and disappeared. Even when incomes appear to be increasing, this is rarely the case in practice. Not only has the value of their possessions also gone AWOL but, as the most recent US census found real incomes remain the same as they were in the early 1970s.
When the middle classes do eventually realise that the American Dream has moved nowhere since the 1970s and how much the government have been creaming off them in the longest daylight robbery ever seen, will they revolt? The chances are pretty slim I suspect.
Every day I sit and discuss with people why more people aren’t getting really angry about what’s going on – the theft of savings, income and living standards declining. Is it because they haven’t realised yet or because they’re sheeple? Just following whoever’s barking the loudest and not making them think on their own. ..or worse, lying to them.
Here in the UK, a recent survey showed 94% of those polled believed the UK government were working hard to slash the debt. They’re not, they’re increasing it.
When it comes to the fiscal cliff in the US– we all know what‘s going to happen – a compromise. Everyone will compromise. Everyone that is except the people who are actually affected by it. They’ll just continue taking the beating they’ve been getting for the past few years, and why not? As Bill Bonner explained the other day – the further governments go, the further the voters expect them to go. But what happens when the government can’t go any further, what then?
We can now see a near-global perspective when it comes to dealing with this crisis: fake it and print it. This is unlikely to change in the foreseeable future. In every election in the socialist Western world, the middle classes appear torn over the desire to protect themselves and the need to provide a safety net for those who have less than themselves and are really suffering right now.
Someone needs to remind everyone around today that the ability to look after oneself and your sovereignty is a precious commodity, and one which is being rapidly lost and devalued by those who no longer care for it.
I’m convinced however that once the middle-classes wake-up and realise the daylight robbery which is happening in front of their very eyes, they will be a formidable force.
In the 1923 book The Irresistible Movement of Democracy, Jeremy Bentham’s work to educate the middle-classes during a campaign for parliamentary reform, is described.
‘[Bentham] instituted a school of thought and criticism which aimed to awaken the middle and intellectual classes to the need of reform. It taught the middle-classes that good government rests upon the basis of the sovereignty of the people.’
History shows that great change comes about when the people, those middle classes, rally together to educate themselves and campaign against government.
Stop the Duke, Go for Gold! Is a story John Butler, of Amphora Capital, told me a while back which has played on my mind ever since. It’s a story of middle-classes fighting back at politicians, their weapon? Gold.
In protest to the Duke of Wellington’s overturning of a majority Parliament (on the King’s orders), a campaign was started by the middle classes in May 1832, after a long and hard-fought fight against the Duke. Posters appeared overnight in the middle of London calling for people to ‘Stop the Duke! Go for Gold!’ in response the people drew $1.5 million in gold from the Bank of England. In June 1832 the Reform Bill received Royal Assent, the people had won. They had won by taking their money – gold – out of the hands of those who were abusing their sovereignty.
Like all successful strategies, this can easily be replicated today. As is often said on this site, gold investment is not only your way of protecting your wealth from government policies but also from those who decide you no longer have the right to decide what happens to your money.
Just over 70% of the American people hold savings accounts, so over two-thirds of the population are losing money thanks to negative real interest rates. It also means over two-thirds of the Americans are helping to prop up the US banking system – which in turn is supported by the Federal Reserve who are printing away not giving a thought to the US people’s savings and standards of living.
The Occupy movement, whilst well intentioned will not work. Intelligent, covert protest by the middle-classes is what will make our governments sit up and pay attention. It’s our job to now tell people that good government rests on our own sovereignty and the most effective way to protest is to buy gold.