Monday, January 12, 2009

Pen Meets Paper Jan 12 '09

Pen Meets Paper

Opinion by Helge Nome

Many of us wonder about what is happening in our own economy, and those of our neighbours, at this time. There is talk of bull and bear markets, inflation and deflation and many people are watching their retirement nest eggs shrink day by day. Why is this happening? What is the dynamic behind these events and where is leading?.

To answer these questions, I would like to enlist the service of a man whom many of you knew personally: Alfred J. Hooke who represented the Rocky Mountain House area in the provincial legislature from 1935 to 1971.

In 1980, during the economic slump at that time, Alfred Hooke published a little book entitled: “Looking Backward To Go Forward” where he recounts what happened to people during the nineteen-thirties because of a lack of money in circulation at that time.

He witnessed the kind of privation that we now find in third world countries, if we get off the beaten tourist track. Economic activity was literally strangled when people in the financial system, bankers, etc. refused credit to farmers, small business people and others because the financial system they were the custodians of was in turmoil.

That turmoil was brought about by excessive speculative activity within the financial system itself which was driven by greed and euphoria. Anyone who voiced a concern over where all this was leading was promptly called down by the “authoritative voices of the day”.

In 1980, Alfred Hooke could see it coming again and on the last page of his book the following statement is made:

“I shudder to contemplate what the results will be when the present (1980) monetary policy is reversed, as it was in 1929, and the world is once again plunged into a Great Depression. There is no doubt that such a one will make that of 1929-1939 seem like a mild recession. There is but one answer to avoid such a calamity.

We the people must through our representatives, control the monetary policy of our nation, or democracy, prosperity, individual and personal freedom will vanish from this great country.”

Since those words were written, the world financial system has been deregulated, turning it into one giant casino: The worst case scenario from the point of view of Alfred Hooke, who had seen it all before.

So, to find out what lies ahead, take Hooke's advice and look backward.

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