–You can probably learn everything you need to know about how precious metals can help protect your wealth by watching a few James Bond films. Everyone from Wen Jiabao to Alan Greenspan is worried about inflation in oil prices and the cost of living, as if it were a mystery what’s causing it. But you don’t have to be a genius to understand that loose monetary policy creates inflation. You don’t even have to be a secret agent.
–Your editor has been revisiting the old bond films thanks to a run of them on Foxtel. It started with Goldfinger in 1964. Bond first plays a round of golf with the villain, Auric Goldfinger. The prize is a bar of Nazi gold (keep that in mind for later).
–But the premise of the film is that Goldfinger has been paid by the Chinese communists to launch an attack on the United States. Ahead of his time, Goldfinger plans to blow up a Chinese nuclear bomb in Fort Knox (where America’s gold is supposedly held) and irradiate America’s money for 58 years (until 2022). It’s an unconventional attack on one of the real sources of legitimacy for the Nation Sate: sound money.
–The plot eventually fails, as it must in a Bond film. But it probably fails because Goldfinger failed to realise the era of the partial gold standard was about to be replaced by the era of the full dollar standard. It was just a matter of time (about ten year years) before America went fully fiat with money not backed by any metal.
–The cost of the Vietnam War and Lyndon Johnson’s Great Society Welfare State propelled America into the era of not choosing between guns and butter. We’ll have both, and charge it to the next generation. The logical consequences of the ever expanding, debt-backed Welfare/Warfare State have now been arrived it. The reckoning has begun.
–But back then, it was still a fair way off. In 1967’s You Only Live Twice, gold again makes an appearance as money in a bond film. The arch-villain (with the collapsible draw bridge over the piranha pond) demands that his clients pay him $100 million in gold bullion before he instigates a nuclear war between the United States and the Soviet Union. He doesn’t ask for dollar bills.
–Then in 1973 gold made another appearance in a Bond film. This time it was in the title. Christopher Lee (Suaruman) played the hired assassin Francisco Scaramanga, better known as or The Man with the Golden Gun. Other than being a weapon, gold didn’t play a role as money in the story.
–But keep in mind that the plot revolved around misusing a powerful solar technology. The theme was hot at the time because the energy crisis had just begun. And the energy crisis had just begun because of what Richard Nixon had done to the US dollar two years earlier.
–On August 15, 1971, U.S. President Richard Nixon suspended the convertibility of the U.S. dollar into gold. It effectively ended the Bretton Woods post-war currency regime that had brought monetary stability (and a great deal of prosperity) to the US. Foreign dollar holders who were alarmed by growing US spending and inflation had been trading paper for gold. Nixon had enough.
—Nixon’s explanation of the move is worth watching. Nixon was no friend of sound money or small government. In fact, though he’s commonly and rightly vilified for the Watergate break-in and cover-up, Nixon probably deserves a caning for his generally anti-liberty positions throughout his Presidency. It’s no accident Nixon went to China. He was fond of State power and had a devout belief in the power of government to do good in life through a relentless attack on personal liberty.
–Economically, Nixon imposed wage and price controls to try and contain the very effects of inflation he helped create. He created many new government agencies. Following Lyndon Johnson’s militaristic rhetoric (and setting the tone for government’s comprehensive attack on personal liberty) he declared “War” on cancer. Johnson, of course, had declared “War” on poverty.
–That’s modern government for you. Always at war with something. Thus the Warfare State.
–Nixon and the Congress shirked their Constitutional responsibility by never declaring war on Vietnam. This is a precedent that cowardly politicians on both the left and right have followed ever since. They have thus avoided the Constitutional check the American founders put on going to war easily.
–We wish we had known all this when we shook Richard Nixon’s hand as a sixteen-year old back in 1989. We were serving as a Congressional Page in the U.S. House of Representatives. Our boss told us to wait inside the entrance of the Cannon House Office Building at the corner of New Jersey and C Streets.
–Nixon was in the middle of rehabilitating his badly damaged historical reputation. He paid a visit to the Cannon Office building for nostalgia’s sake and by then he was a frail old man. But forty-three years earlier, both Nixon and John F. Kennedy had their offices in the Cannon Building when they were elected as freshman Congressman in 1946.
–Kennedy, of course, beat Nixon in the 1960 Presidential election. After Lyndon Johnson served out the end of Kennedy’s first-term and was re-elected, Nixon finally won the Presidency in 1968. Which brings us back to Alan Greenspan, who served as an adviser to Nixon’s campaign at the time.
–In a famous 1966 essay on gold (two years after the release of Goldfinger, and an essay which Nixon probably hadn’t read), the objectivist Greenspan (a friend of Ayn Rand’s) wrote the following explained the relationship between sound money and freedom, and why those who oppose personal liberty invariable hate gold:
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. … This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
–What makes Greenspan such an unconvincing advocate for personal liberty is that he spent the rest of his public life at the helm of a private banking cartel, running up a series of ruinous, wealth-destroying credit bubbles while all the while claiming complete ignorance of his actions.
–And then this weekend, Greenspan has the temerity to go on CNBC and tell us that, “What the gold price is saying is that essentially there are elements in the market place which feel very uncomfortable with respect to what is going on generally.”
–What is going on generally? You must mean the State-sponsored inflation which is gradually destroying standards of living in the Western world?
–Chairman Alan continues: “And it’s not an accident that central banks are going in to buy gold. And one of the reasons is that gold historically is one of the very rare media of exchange which doesn’t require any collateral, or backing, [or] counter signatures.”
–“Gold,” Greenspan continues, “Is universally acceptable as a means of payment. And for example, during World War Two, the Germans couldn’t import anything in 1944 unless they paid in gold. And the history of that is important.”
–Yes it is. The modern Welfare/Warfare State can only expand through the perpetual issuance of new debt. In times of war, when you can’t sell debt to investors, you have to pay with real money. Under a gold standard, war was prohibitively expensive.
–That’s why the gold standard (the convertibility of paper money into gold) was suspended temporarily and then permanently (to make World wars one and two possible, and now lately, the State’s war against everything).
–If gold had an enemies list, Nixon would be on it. Greenspan would be right at the top. And there would be many more. But gold doesn’t hold grudges. It just holds value.
–On the other hand, if gold has a friend’s list, we suspect the late Ronald Kitching would be near the top. We never had the privilege of meeting Mr. Kitching personally. But for the last few years, we were on the receiving end of his almost daily observations in defence of liberty and freedom in Australian life. He was a man with a golden pen, or golden keyboard, or just a golden brain.
–Australia had no greater advocate for personal liberty than Ron Kitching. He will be sorely missed. His example of tireless defence and sound thinking is worth emulating by all liberty-loving Australians. To remember him properly, we turn it over to Benjamin Marks of www.economics.org.au.
Ronald Kitching Obituary
by Benjamin Marks
The Australian libertarian movement has just suffered its biggest setback since the birth of Nugget Coombs in 1906. Ronald Kitching, our greatest letters-to-the-editor writer, died yesterday, aged 81, after a long, brave and arduous fight against government and other cancers. He is survived by 7 children, 10(?) grandchildren, 1(?) great grandchild and millions of other taxpayers.
The taxpayers work in many different industries, especially in the private sector.
As for his children specifically: Ronald Kitching’s family address book will attract large bids from mailing-list brokers, as there are so many of them, all succeeding in different industries all around the country. Kitching’s children work as everything from infants teacher in Tasmania, to power station operator in Karratha, to chief ambulance officer of the Rockhampton district. In light of this — and considering his dubious politics, the occasional appearance of his name in the papers) and his history of welcoming thick-accented foreigners to stay at his home — it would appear that Ronald Kitching was the black sheep of the family.
He first came across the freedom philosophy reading Ayn Rand’s Atlas Shrugged and Capitalism, the Unknown Ideal. Following Rand’s recommended readings led him to the Austrian school. He became such a big fan of the Austrian school of Ludwig von Mises, that, along with Roger Randerson and others he co-sponsored Hayek’s tour of Australia in 1976. Hayek and his wife stayed at his Atherton Tablelands property during a break in the tour to help with some farming. He attended many MPS meetings at Hayek’s invitation, and had much friendly correspondence with Antony Flew, Hans Sennholz and many others. He was well aware of the divide between the Austrian school and the Chicago school, and was firmly in the Austrian camp.
He has had long associations with such fellow Australian freedom advocates as Ron Manners and Viv Forbes. I look forward to learning more about how they met and worked together. Kitching met Roger Randerson after reading his magazine Forecast in the office of John Grover. (More on those two eventually.)
But Ronald Kitching was not only a preaching capitalist; he did have quite a career too. In fact, if you look closely at Julia Gillard, Tony Abbott or Bob Brown’s curriculum vitae, you will find that they have taken the opposite and opposing career path to Kitching.
Many of Kitching’s career achievements were with the company Glindemann and Kitching Enterprises. According to Kitching, they drilled:
- The discovery holes of the fabulous 1100 ore body at Mount Isa.
- The discovery holes of the Black Rock open cut at Mount Isa.
- The discovery holes and subsequent holes at Mary Kathleen Uranium mine.
- The McArthur River Silver Lead Zinc deposit.
- Drilled the discovery holes and then did four years of drilling on the Constance Range Iron ore bodies for BHP. That was in the days (Mid to late 50′s), before the huge rich iron ore deposits were discovered in WA.
- The first holes for coal at Blackwater for Utah.
- The first holes for the new iron ore discoveries at Mt. Goldsworthy in WA.
- Drilled on all of the major iron ore bodies in WA.
- The discovery holes at Telfer, and drilled there for years afterwards.
- The holes which discovered the fabulous super rich gold pod at the Warrego Mine in Tennant Creek.
- Drilled the discovery holes for the Mammoth Copper ore body near Gunpowder Creek North of Mount Isa.
- Drilled the discovery holes of the Esperanza Copper deposit near the Mammoth ore body, North of Mount Isa.
- The Mt. Agnew Nickel Deposit.
- Contracted to sink the first shaft and Crosscut at the MCArthur River Silver Lead Zinc ore body.
- Drilling and grouting on the Swamp creek Dam at Townsville. The East Leichhardt Dam near Mount Isa. The Perseverance Dam at Crows Nest QLD. Khankoban Dam, Snowy Mountains. Geehi Dam, Snowy Mountains. Eucumbene Pressure Tunnels, Snowy Mountains. Jindabyne Dam, Snowy Mountains.
- Discovered the Mt. Colin Ore body near Mary Kathleen and sold it to Mount Isa Mines.
- The company also built numerous roads, dams, light aircraft aerodromes, and camps.
- And drilled discovery and subsequent holes on many lesser known mineral occurrences.
- Kitching was the Father and, with Warman International, the developer of the Universal Drill Rigs. These rigs are produced in 15 different models, to drill holes from 120 metres to 5,000 metres, and are serving on every continent in the world, including the Antarctic, where there is a large model drilling large core holes, (NQ size), 2,800 metre hole through the ice and 1,000 metres into the continent itself.
- Kitching also consulted on exploration drilling problems in Africa, Chile, Argentina, Bolivia and Peru. And advised Principals about drilling operations in Egypt, Cyprus, and many Central and South American Countries.
Kitching’s free market advocacy and business interests overlapped, as they also did with his parenting duties, and also with his story-telling and pranks. In this ripper he tells of his run-ins with the Edufuhrer as he tried to school his children, with his own funds and teacher selection process. And in this gem he tells of how he found a copper ore body in the middle of a mining expo at a sports oval — note the nice political statement at the end of that one.
His book Understanding Personal & Economic Liberty was published in 2005. It is a great introduction to classical liberalism, and contains plenty of recommended reading and tips to finding books online. It is dedicated to Australia’s youth. (You can read Kitching’s brilliant introduction to the book here, which also has a link to where it can be purchased.)
He has been of great support and inspiration for me personally. It’s a pity Kitching couldn’t find anyone deserving of his impressive library: 27 boxes of books, including signed leather-bound Hayek and Hazlitt. But, rather than giving up, he has tried to force the issue, and hopefully one day Kitching’s faith will be justified. The library has been culled slightly and is housed at the Economics.org.au headquarters in Fox Studios, next to the SCG.
There is 24-hour security, so bookings are essential.
Economics.org.au will make available online much of his work.
Please feel free to share any of your memories of Kitching in the Comments section below, or email me it to post online or link.
In terms of his legacy, phrases like “Canberra Kremlin”, which he either coined, got from Roger Randerson or helped save from disappearing, ought to be in common usage. That would be a good start.