Franklin Sanders Explains How to Support Local Economies
By Jeff West
The following article appeared in the September 30, 2009 issue of The Times Examiner
Christian economist Franklin Sanders gave a lecture in Columbia on Monday on how to promote local economies based upon Biblical principles. Sanders has a farm in south-central Tennessee which he manages with traditional farming methods. He said that in our current un-Biblical Federal Reserve system, banks create credit out of thin air and the financial success begets excesses. He said all of U.S. history can be understood as a fight between Jeffersonians [anti-central banks] and Hamiltonians [pro-central banks].
Sanders said that deflation is a decrease in the money supply, and since the 1930s, the government has built into the system the impossibility of deflation. The system is designed to continually increase the money supply. The financial reserve requirements are so lax now that a bank only has to keep 0.75% in reserve, as opposed to 35% in the 1930s. That means that $13,330 can be created for every dollar in reserve.
Federal Reserve Chairman Ben Bernanke has repeatedly stated that he will inflate at all costs. Sanders predicts a severe price rise or even hyperinflation, i.e. price increases of 50% or greater per month. He predicts the government will pursue the same policies of the New Deal and waste tax money trying to stimulate the economy. There was no recovery in the ‘30s until WWII. Sanders predicts a recovery will take 8-10 years, and says we probably have a real unemployment rate of 19%. He foresees that eventually one out of three people will lose their jobs, which will lead to violence, and if accompanied by hyperinflation, chaos will result.
Sanders believes the government will lose jurisdictional control over sections of cities. He said a policeman friend in Memphis showed him a map they had of the city 20 years ago which delineated different areas run by various gangs, to whom control had been unofficially ceded by the police, as they were no longer able to enforce laws in the gang territories.
Sanders gave some advice to prepare for these difficult times. He said there can’t be any lone rangers, that we must all help each other. He said to get a job where you won’t be laid off, and to quit thinking about dollars, but think in terms of making wealth. He gave as an example how a sow and a boar hog produce real assets, i.e. piglets. He said that we need to acquire assets that produce real wealth.
The second thing to do is to escape monetary risk by investing in assets in a long-term uptrend, i.e. gold and silver. Stocks and real estate are in a primary downtrend and should be avoided. Sanders said, regarding real estate, that it usually takes ten years after a peak for a bubble to deflate, so he doesn’t think real estate has bottomed. While it has dropped 50% in some areas, it has not declined as much nationwide.
Sanders said that gold and silver were so undervalued in the long-term cycle that they will be in a long uptrend. He said silver always rises faster in bull markets so he recommends silver over gold. He recommended staying away from paper gold funds, because some aren’t backed by enough gold and will eventually fail.
Sanders said we got into this crisis through centralization of local economies. He said that in our own lifetimes power will flow away from power centers and back towards the local level. He said that in 1905 there was a panic in New York City, but what did it matter to the citizens of Columbia, S.C.? Today it would have an impact. He said agriculture was destroyed when Henry Ford introduced the Fordson tractor in 1917. Agriculture was at its peak and most of the money was spent locally. Use of the tractor necessitated sending money to Detroit, New York City and other locales out of the local town, never to return. Farmers then planted fencerow to fencerow to pay for the new equipment, and there was an eventual commodity crash in 1921, preceding the Great Depression, from whence agriculture has never recovered.
Agriculture henceforth came under the hand of the government, which has led to our modern-day farm subsidies and restrictions. The wealth of the world comes from what we take out of the ground, and 70% of this is farming. Every dollar produced by agriculture results in eight dollars in the local economy.
Sanders said that manufacturing began to replace agriculture and kept wages low. Workers got less exercise and ate worse diets, eventually resulting in increased diabetes and high blood pressure by the third generation. This then necessitated health insurance, etc. He said that the Chambers of Commerce found the need to bring in money from outside, when we’re standing on acres of diamonds. This has destroyed economies throughout the South. He said that the megafarms produce unhealthy foods, e.g. 15% of pork can’t be eaten because of a condition called pale pork exudate.
“The system is not working,” Sanders said. “A collapsing national economy is not a cause for mourning, it is a cause for rejoicing. It gives us a chance to free ourselves from debt slavery.”
Sanders, an Episcopalian minister, said that the economy should be run by love, not greed. He said God’s law is rule by love. He said “The commandment not to steal has a positive bidding, that we should make sure that other people are doing OK.” He said that we’re going to have to learn to live with our neighbors, and that the best people doing something to help local economies are actually left-wing environmentalists.
Sanders suggested some things to stimulate local economies. He said to refuse any government money, grants or advisors, because government de-capitalizes you. The same goes for corporate dollars. He said to map your local cash flow for things people need, such as food, and start a campaign to encourage local production, marketing and sales. He said we need to start by repealing laws for two years, because there are thousands of laws controlling business to keep newcomers out. He said, “We need the government to stop treating us like children.” Finally, Sanders said we need to encourage use of a local currency to keep money in local circulation, advising the use of gold and silver. He said that gold and silver can be used if specified in a contract, e.g. on a sign in your store. Rather than concentrating solely on gloom and doom, Franklin Sanders is a positive leader who left the audience with a sense of hope by providing solutions to the troubled times that we face.