Szabo On Conspiracy Theory
"Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence.
Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values.
Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: 'Account overdrawn.'" 
In his missive of December 19, 2006, Mr. Szabo discusses various conspiracy theories concerning the precious metals and monetary theory in general. The following rejoinder addresses several of the issues Mr. Szabo raises.
We could discuss almost every sentence within the above referenced report, but we will not tire the reader with excess baggage. Instead, two paragraphs will be quoted, and a discussion of the main points will then be offered. At the end there are three additional quotes taken from the same report. The full report is available at Welcome to SILVERAXIS!
We have taken the leeway of splitting Mr. Szabo's original paragraphs into two paragraphs per the original, as it leads to an easier presentation and grasp of the several issues placed before the reader. This means that the two original paragraphs have become four (4), which added to the end three (3) gives a total of seven (7) segments discussed.
"Now, I should point out that arguing against these conspiracy theories is pointless. For example, assume that I were to point out the logical inconsistency that central banks -- whose very survival depends on fiat currency -- are allegedly owned and controlled by the same old money which is supposed to be hoarding gold in order to take over the world. Well, I'd probably be told that this makes sense because the central banks are really just trying to fool people into holding fiat currencies while the banks help the old money acquire all the real money -- gold -- at artificially depressed prices. See See Can the U.S. Return to a Gold Standard?.
At least that argument is logical, but it isn't one that remains uncorrupted for long. Sooner or later, the theories would be back to something like the central banks being nothing more than an unconstitutional inflation tax on the working stiffs of the world. This despite the fact that it is actually those who seek income -- the wealthy and lenders (banks) -- who stand to lose most from the decreasing purchasing power of fiat money while borrowers, the working classes and others with little to lose are consequently likely to gain (wages always rise during "real" inflations). For a detailed explanation see: See Gold's Hidden Secret: The Moral Hazard of Fiat Money.
Once again, a logical answer to this can be supplied via the supposed fact that the wealthy and banks not only control money supply but most of the productive capital (farms, factories, natural resources, etc.) as well and therefore they would receive the disproportionate share of the increase in money supply such that inflation would actually increase their wealth on a relative basis.
To which I would reply by first asking that if inflation is good for central banks and the wealthy, why would they not want to encourage it, and second, if the wealthy by definition already own the productive capital, why do they need conspiracies to increase their wealth? The answer to the first part would of course be that too much inflation will destroy the fiat currency and the wealthy don't want that because they like the status quo. The answer to the second part is simple, that wealth begets greed."  See Honest Money: What It Is and What It Isn't - Part 4 Store of Wealth.
The very first sentence sums up one of the underlying weaknesses of the entire missive, as it states: "Now, I should point out that arguing against these conspiracy theories is pointless." Then why bother to spend time on that which is pointless - according to one's own words? Cui Bono?
Next is offered what is called a point of logical inconsistency, to whit: "for example, assume that I were to point out the logical inconsistency that central banks, whose very survival depends on fiat currency - are allegedly owned and controlled by the same old money which is supposed to be hoarding gold in order to take over the world."
So far there is no logical inconsistency in the quoted material, and Mr. Szabo offers no explanation of any inconsistency. He then goes on to say, "well, I'd probably be told that this makes sense because the central banks are really just trying to fool people into holding fiat currencies while the banks help the old money acquire all the real money -- gold -- at artificially depressed prices."
The first important point in regards to Mr. Szabo's third sentence is found in the words "well I'd probably be told" - so Mr. Szabo is not only discussing that which he considers pointless, but he also is assuming what another's position on the issue would probably be, and what their response to him would most likely be. This is grasping for straws blowing in the wind, which deflects attention away from the most important issues of monetary theory.
Mr. Szabo even admits in his very next sentence that "at least that argument is logical, but it isn't one that remains uncorrupted for long." So we have Mr. Szabo, at least up to this point, admitting that what he has offered to be proof against conspiracy theory, is actually logical and so far - uncorrupted. Fascinating to say the least.
The second point in regard to the first paragraph quoted above is that Mr. Szabo's assumption can be completely ignored, as it can not stand on its own merits, but is offered as a possible assumption that is not grounded in reality: as it has not been stated nor offered as a detailed explanation by anyone for anything. It merely resides in Mr. Szabo's mind as a figment of his imagination.
Therefore the first sentence quoted as to what conspiracy theorists claim in regards to central banking remains standing upon its own two feet, and is indisputably not refuted by any logical argument offered, but is instead attacked by the mudslinging of maybe, what if, should of - all pure speculation.
The third point is that Mr. Szabo does not provide any evidence as to who owns the majority of stock in the 12 Federal Reserve banks, and especially of the Bank of New York, which is the citadel of power from which all open market operations of monetary policy are directed and implemented from. If he wants to prove that the central banks are not owned by what he refers to as the old banking families, then the easiest way to do that would be to provide evidence of just who does own them.
For example, if I were interested in showing who owns the majority of the stock of the New York Federal Reserve Bank I would offer the following:
"The stock in the original twelve regional Federal Reserve Banks was purchased by national banks in those twelve regions.
Because the Federal Reserve Bank of New York was to set the interest rates and direct open market operations, thus controlling the daily supply and price of money throughout the United States, it is the stockholders of that bank who are the real directors of the entire system.
The Federal Reserve Bank of New York issued 203,053 shares, and, as filed with the Comptroller of the Currency May 19, 1914, the large New York City banks took more than half of the outstanding shares.
The Rockefeller Kuhn, Loeb-controlled National City Bank took the largest number of shares of any bank, 30,000 shares.
J.P. Morgan's First National Bank took 15,000 shares. When these two banks merged in 1955, they owned in one block almost one fourth of the shares in the Federal Reserve Bank of New York, which controlled the entire system, and thus they could name Paul Volcker or anyone else they chose to be Chairman of the Federal Reserve Board of Governors.
Chase National Bank took 6,000 shares. The Marine Nation Bank of Buffalo, later known as Marine Midland, took 6,000 shares. This bank was owned by the Schoellkopf family, which controlled Niagara Power Company and other large interests.
National Bank of Commerce of New York City took 21,000 shares.
The shareholders of these banks, which own the stock of the Federal Reserve Bank of New York, are the people who have controlled our political and economic destinies since 1914. They are the Rothschilds, of Europe, Lazard Freres (Eugene Meyer), Kuhn Loeb Company, Warburg Company, Lehman Brothers, Goldman Sachs, the Rockefeller family, and the J.P. Morgan interests.
These interests have merged and consolidated in recent years, so that the control is much more concentrated. National Bank of Commerce is now Morgan Guaranty Trust Company.
Lehman Brothers has merged with Kuhn, Loeb Company; First National Bank has merged with the National City Bank.
In the other eleven Federal Reserve Districts, these same shareholders indirectly own or control shares in those banks, with the other shares owned by the leading families in those areas who own or control the principal industries in these regions." 
Or according to the Fed's own reports I might submit the following:
Federal Reserve Directors: A Study of Corporate and Banking Influence Staff Report, Committee on Banking, Currency and Housing, House of Representatives, 94th Congress, 2nd Session, August 1976.
Mr. Szabo states in the second paragraph that "sooner or later, the theories would be back to something like the central banks being nothing more than an unconstitutional inflation tax on the working stiffs of the world." See Honest Money, Part I: The Constitution and Honest Money.
We will ignore the assumption as expressed by the words "something like" and give Mr. Szabo the benefit of doubt that he is on track. Be it noted, as the following will show, he does not agree with the above statement regarding unconstitutional inflation.
Next he writes: "This despite the fact that it is actually those who seek income -- the wealthy and lenders (banks) -- who stand to lose most from the decreasing purchasing power of fiat money while borrowers, the working classes and others with little to lose are consequently likely to gain (wages always rise during "real" inflations)."
It is correct to say that the wealthy and lenders seek income. The next part of his statement, however, reveals a complete lack of understand of monetary policy and theory. Mr. Szabo believes that it is the wealthy who stand to loose the most from decreasing purchasing power of fiat money. See Honest Money: What It Is and What It Isn't - Part 2 Quality Theory of Money
Remember, by the wealthy it is meant those that Mr. Szabo refers to as the controlling old European banking families such as the Rothschilds - who are a step or two (actually many) above central bankers, as it is they who invented central banking; and for a very good reason: it's the perfect wealth transference system to siphon wealth away from the masses to the elite few who control the money power. See the series 1-8 Honest Money, Part I: The Constitution and Honest Money
On Purchasing Power
Now the part that Mr. Szabo doesn't quite get. Inflation or the loss of purchasing power affects the currency - it is a monetary phenomenon. Most people are not rich, as a matter of fact in today's New World Order both parents usually have to work just to make ends meet. Why? - because of inflation: the loss of purchasing power of their LIMITED INCOME or pay. See Honest Money: What It Is and What It Isn't - Part 7 Problems With Debt Money
It is the decrease in the purchasing power of the currency that requires more units (quantity or supply and hence higher prices) of the currency to be able to buy the same amount of goods. Because most people have a limited supply of money, the loss of purchasing power of the limited supply, greatly affects their ability to purchase all of the goods and services required to support a family. It harshly affects their standard of living.
This is not so for the super rich or wealthy, especially those near the top of the food chain - the old world family banking dynasties. First of all, they have such huge incomes that the loss of purchasing power (quality of money) is made up for by the sinful amounts (quantity) of money or income that they take in each year. They do not find it difficult to make ends meet, nor difficult to live extravagant lifestyles of decadence and consumption.
The Elite Collectivists
Secondly, when one is talking about the social and political circles of central bankers, and those above them - the elite collectivists of the world, which includes the international bankers, it is they who are responsible for the creation of money by the central banks, money created from nothing but thin air.
It means nothing to them to add several billion dollars to the money supply or to their own coffers, and it means nothing to them to remove several billion - through whatever means, including inflation or loss of purchasing power.
It is quite difficult to "lose" money when you create it out of nothing, and it is of no cost to you; and to then lend it out by fractional reserve banking policy, which multiplies the affect of the increased money supply on prices, via increased liquidity; and to then collect interest for lending that which they do not truly have.
Monetization of the Government Debt
Lastly, this monopoly money is lent to the government - it subsidizes the government by monetizing Treasury Bonds (debt) - by buying them with money created from nothing. This vile practice allows monetized government debt to circulate as the currency. You cannot pay debts with other debts, all that can be done is to discharge or roll over the debt to another, or to default on the loan.
"There is a distinction between a 'debt discharged' and a debt 'paid'. When discharged, the debt still exists though divested of it's charter as a legal obligation during the operation of the discharge, something of the original vitality of the debt continues to exist, which may be transferred, even though the transferee takes it subject to it's disability incident to the discharge." 
Note how Mr. Szabo glides over the constitutional aspect with just a few words - apparently he doesn't consider this to be a worthwhile and important issue. Perhaps he hasn't read the Constitution, which would explain his lack of understanding of the constitutional crime that has been committed by the use of paper fiat debt-money.
Article I, Section 8, Clause 5. The Congress shall have Power...To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.
Article I, Section 10, Clause 1 . No State shall...coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt. 
Now perhaps I'm mistaken, but the above two articles from the Constitution not only mandate that only gold and silver coin are a tender in payment of debt, they also specifically mention the DISABILITY to emit bills of credit, i.e. paper fiat money.
A constitutional amendment has never been passed to retract these clauses, and others that mandate a hard money system of silver and gold coin - hence, any deviation from them is undeniably unconstitutional; as any law not in pursuance of the Constitution is null and void - as if it never occurred. See Letter to Congress
The next paragraph by Mr. Szabo states that: "to which I would reply by first asking that if inflation is good for central banks and the wealthy, why would they not want to encourage it, and second, if the wealthy by definition already own the productive capital, why do they need conspiracies to increase their wealth?" See Gold Wars: Intervention and Manipulation
To ask why the central banks do not encourage the use of paper fiat debt-money - if the inherent inflation born within such currency is good for them, does not make any sense. Central banks do encourage the use of paper fiat, as a matter of fact one of the by-laws of the International Monetary Fund is that no nation may be a member if it uses a gold backed currency. This is what made the Swiss give in, as the honorable Ferdinand Lips wrote in Gold Wars.
Also, another way that paper fiat's use is encouraged is by legal tender laws, which favor paper over silver and gold coin. Take a look at a new shiny one ounce gold eagle. On it you will read $50 dollars. This is the coins legal tender value - the "value" that the government would place on the coin if you submitted it towards your tax payments. Yet this very same coin is trading in the marketplace for almost $650 dollars or nearly 12 times the legal tender value. A perfect example of debasement of the currency by the deadly combination of legal tender laws, fractional reserve lending policies, and inflation. See The Constitution of the United States & Honest Money 6
Regarding the question as to why, if the wealthy own most of the productive capital, that they need conspiracies to increase their wealth - is asking a question based on a misunderstanding as to how the elite use the money power to their advantage. See Honest Money: What It Is and What It Isn't - Part 6 The Money Power
First, the wealthy elite made their fortunes by conspiring to be at the top of the food chain, by either establishing central banks that controlled the money power, or by supporting such establishment from which they garner special privileges that allow them to easily increase their wealth; especially by facilitating the relationship between the central banks and the government, such that the government debt can be monetized, which in turn means more money (wealth) is transferred into their coffers.
Those of the inner circle of this manifestation cannot ever have enough money or wealth - they can never be satiated no matter what the amount. They are driven by the greed and lust for power over others that the money power gives them. Also, it is important in their eyes to leave their progeny with the wealth needed to carry on the family tradition - of tyranny over others. They worship at the altar of Lucre who now rules over their lives and exacts tribute from them of a different sort.
The following quotes are from Mr. Szarbo's missive and can be found prior to the ones we have just discussed. We have chosen to comment on them last, as it will make more sense coming after the above review, as such order will facilitate an easier understanding due to the information already offered.
"I'm not sure the people who peddle this nonsense are aware of the fact that these conspiracy theories are creating a dangerous 'groupthink' where alternate viewpoints become more and more ignored while the general public is kept at a distance by this weird, cult-like behavior."
"Out of these three, the only one which can beat the markets in the long term is the independent contrarian. That means not being married to any particular idea, being open-minded and flexible, avoiding obvious or irrelevant truths, thinking for yourself, etc."
"In fact, only the independent contrarian, not married to any particular beliefs, has the ability to straddle both sides. Thus, only the independent contrarian has a chance at making money in the markets all the time. This is the reason why conspiracy theories in gold and silver are the independent contrarian's true friend. And while I do bitch and moan about the nonsense all the time, in secret I am very thankful." 
From the above we see that Mr. Szarbo states that these conspiracy theories are creating a dangerous groupthink. If he truly believes this why does he then go on to say: "thus, only the independent contrarian has a chance at making money in the markets all the time."
"This is the reason why conspiracy theories in gold and silver are the independent contrarian's true friend. And while I do bitch and moan about the nonsense all the time, in secret I am very thankful." It appears not to be as dangerous as Mr. Szabo first stated, especially if he can profit by it. Fascinating perspective.
The groupthink idea can be viewed on many different fronts. For example, the following well known individuals are all in agreement with the adamant belief that central banking is a curse - not a blessing. See Gold Wars: Gibson's Paradox & The Gold Standard
Thomas Jefferson, James Madison, President Andrew Jackson, Congressman Buffet, Congressman Patman, Congressman McFadden, Congressman Lindburg, Ludwig von Mises, Murray Rothbard, Noble Price winner Hayak, GATA, FAME, Congressman Ron Paul, Constitutional lawyer and author of the 1900 page opus on money and the Constitution titled Pieces of Eight - Edwin Vieira; Edward Griffin, author of Jekyll Island (900 page work on the Fed), Professor Antal Fekete, Ferdinand Lips, James Sinclair, Harry Schultz, Richard Russell, and James Turk - to name but a few.
In response to the heightened awareness and interest on the subject of honest money, a one and a half hour video has been made and put on the internet with free access to all who want to watch the story of the unconstitutional creation of the Federal Reserve. The main speakers during the video are: Congressman Ron Paul, Constitutional Lawyer Edwin Vieira; and author and Freedom Fighter Edward Griffin, author of the 900 page work Jekyll Island - all about the Federal Reserve.
It would be tough to put together a more distinguished group of individuals that are experts in monetary matters - both intellectually, theoretically, and in practice. You can watch the video by clicking on the following link: Go to video...
Finally let's examine the statement that: "in fact, only the independent contrarian, not married to any particular beliefs, has the ability to straddle both sides." There are two points to be made here. The first will be dispensed with quite quickly.
Note the words "has the ability to straddle both sides." Apparently Mr. Szabo is looking for the Holy Grail that can straddle both sides of the monetary/investment equation - thus enabling money or profit to be made no matter what. We are reminded of the song: Easy Money.
"The easier it looks the hotter it hooks
There ain't no such thing as easy money" 
The second point has to do with the words, "not married to any particular beliefs." This is a very critical and widely misunderstood issue amongst even gold bugs. The ideological belief that silver and gold coin should constitute our monetary system as our Constitution states, is a completely separate and different issue then investing in silver and gold to make a profit. And there are even two further subdivisions of the investment aspect.
One should not invest in silver and gold for profit because one believes that they are going to return to their rightful place as the sovereign of sovereigns and fulfill the role of the currency in circulation. You do not marry the precious metals as investments because of ideological beliefs about their validity as the coin of the realm.
Then again it can be argued that one should not invest in silver and gold as an investment, for how is one going to realize or book the profit - by selling the metals for paper fiat dollars, dollars that have lost more purchasing power, which is why the price of the metals denominated in dollars has gone up. Such is no different from the hamster in his cage running on his treadmill. Gold and silver can be and should be procured as the ultimate Store of Wealth - never sold for worthless paper fiat dollars, except in life and death emergencies. For a complete and detailed explanation see Can the U.S. Return to a Gold Standard?.
We trust the above is sufficient information for the reader to discern truth from falsehood. A reading of any of the linked articles will provide even more information. This is not an easy subject to understand as our educational system pushes the Keynesian mindset upon us since grade school. We are inculcated with incorrect belief systems from the very beginning. It takes much work and fortitude to step outside this "box" and to think for oneself. But once again this is just our opinion - we leave it up to you the reader to decide what is best for you.
"All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation." 
 Ayn Rand
 Szabo - SilverAxis - On Conspiracy Theories Dec. 19, 2006
 Secrets of the Federal Reserve
 Federal Reserve Directors: A Study of Corporate and Banking Influence Staff Report, Committee on Banking, Currency and Housing, House of Representatives, 94th Congress, 2nd Session, August 1976.
 Stanek vs. White, 172 Minn. 390, 215 N.W. 784
 US Constitution
 Szabo - SilverAxis - On Conspiracy Theories Dec. 19, 2006
 Easy Money by Ricky Lee Jones
 John Adams in a letter to Thomas Jefferson