We are drawing similarities between the Battle of the Alamo and our upcoming troubles: debt and defending the republic.
“The eternal choice of men… to endure oppression or resist.”
From the movie The AlamoLet’s start with what “the Alamo” is. It is a fortress and lasted almost 300 years. It was designed as a church and not as a defensive position against an enemy army, and it is made of 4-foot-thick blocks of limestone.
Now, the Battle of the Alamo was a battle fought in 1836 which was a milestone in the history of Texas in their independence from Mexico before they were an independent republic, and before they joined the United States of America. Those 4-foot-thick blocks of limestone, not that it would have made a difference, because in 1836, 189 brave souls defending their land down in a sleepy little town called San Antonio de Bexar proved that courage alone will not stand. Some of the bravest frontiersman of all time, Davy Crockett and Jim Bowie and William Travis and their respective group of rugged frontiersman and Texas militia made a stand in the garrison alongside the old chapel set deep in the San Antonio River near today’s Riverwalk. 189 fiercely independent souls fighting for what they believe in against an army of around four thousand Mexican soldiers. Additional reinforcements were supposed to arrive, but did not and all 189 Texas heroes died on March 6, 1836. The people fighting inside the Alamo that day knew they were badly outnumbered, outgunned, and on their own. They also knew that by delaying Antonio Lopez Santa Anna, it allowed General Sam Houston to continue to build his army and prepare to fight Santa Ana for the freedom of Texas. How many people today would make that stand? How many would make that sacrifice knowing that it would help further the cause of the formation of an independent republic, which later became the Republic of Texas and then the state of Texas?
Why are we talking about Texas you ask? Well I like it better than California and I was tired of talking about their weather, which is getting worse by the way, but more on that later… No, I wanted to talk about the Alamo because it can provide keen insights for what is going on today with the national debt. We have a national debt that is growing at $1.5 T a year and some people don’t seem to think that it is anything to worry about. Well we just paid down the Federal Reserve’s balance sheet $600 billion and we have had two of the 20 biggest banks in the United states go broke, inflation is over 6% a year after it peaked at over 9% last summer and the Fed has raised interest rates at the fastest rate in history. The Alamo was a fortress much like the United States economy, thick limestone walls for one, a reserve currency, abundant natural resources, and a capitalist society for the other.
The United States economy used to be a fortress like the limestone walls of the Alamo, we used to be a net exporter and the largest creditor nation on earth but we are no more, but doesn’t mean that we aren’t still formidable but much like those excellent fighters protecting the Alamo and its walls- they kept killing Mexican soldiers coming through that wall and yet more came, and they killed more and still more came… It will be like that with our debt, we will pay some off and the interest will hit us and more will come and we will be deeper in debt. We will make some adjustments and we will still be deeper in debt, we will even raise taxes and we will still be deeper in debt. The numbers are what won the battle that day and the numbers will defeat our economy as well. Debt will paralyze us in the end.
Our leaders will be forced to make tough decisions like the one France is making by raising the retirement age from 62 to 64. The country is burning, the refineries are being shut down, trains are not running and the garbage is piling up everywhere. That will be but a prelude to what we have to do in this country. Social security restricted or gone, medicare same, defense spending might be a holdout but probably same, taxes will be higher, people will lose their homes because they can’t afford the property taxes, people will be unemployed in huge numbers but unemployment benefits will be cut or eliminated. The numbers would get us, the numbers that the debt would require to service. A greater and greater % of our disposable incomes would go toward meeting the debt, trying to find a job, and securing capital would be next to impossible.
The other alternative is to inflate the money away. Print money like there is no tomorrow, but we have talked about stagflation and even hyperinflation. If the world thinks our money is no good we lose the reserve currency and we are forced to change our entire way of life. We have studied Argentina and how they have lived with an inflation problem for over 60 years and counting. Savings would be destroyed, Contracts would be good for days not years because the money just isn’t stable. It would also be the numbers that would destroy the currency in the end.
“Remember the Alamo” became a popular refrain during the Texas War of Independence, and there is no denying their bravery or honor in dying for what they believed to be right. I always scratched my head a little and said, but they lost? They all died. I like to think I would have said maybe this isn’t such a good idea, I can do the math here and this is a problem. Perhaps, I am not as courageous as they, well I know that to be true, but that is also what Jim Bowie was saying. Why stand and fight, why not attack and run, and attack and run? You see when you make a final stand like that you are often reduced to two choices, winning or losing, living or dying. You had best be right.
The problem that we face today is that the numbers are not on our side: like Santa Ana more and more numbers are arriving to fight against us every day. The debt clock is spinning like a turboprop on an airplane. So we can run straight into that buzz saw or be can attack and run. We will need to fight our fight in small pieces. The surest way to choke on a steak is to try and eat it without cutting it up into small pieces. We need to attack our debt. We can start at the household level, maybe even locally or in our state. We will need to prepare ourselves for doing with less, mentally and physically. We must prepare for floods of bankruptcies as companies that have been living on debt are suddenly unable to refinance or raise more capital. We must attack with our voices and politicians to demand that the government stop spending. Good luck with that, but we must fight. We must fight for our very financial lives because the biggest bubble in world history has been blown: in bonds, real estate, and the stock market. Governments have used Covid to expand the money supply at the fastest rate in history and now they have turned the spigot off.
Off.
I wish we could turn the government spending off, but it will have to be turned down eventually. All empires end as we have covered here in detail with the reserve currency empires declining histories. When Benjamin Franklin left the meeting where the founding fathers started our country a woman on the street was rumored to have asked:
“Mr. Franklin, what sort of government have we?”
He replied,
“A Republic, if you can keep it.”
It reminds me of one of my favorite quotes from the movie about the Alamo:
“Republic. I like the sound of the word. It means people can live free, talk free, go or come, buy or sell, be drunk or sober, however they choose. Some words give you a feeling. Republic is one of those words that make me tight in the throat. The same tightness a man gets when his baby takes his first step or his first baby shaves and makes his first sound like a man. Some words can give you a feeling that make your heart warm. Republic is one of those words. ” Davy Crockett in the AlamoWe will have to fight again for our Republic if we are to keep it. We will have to fight a different fight than before, this will be a war of ideas as we are quickly becoming bifurcated. We are losing sight of what’s right and wrong. And we can’t fight each other and the numbers. The numbers might be the Chinese or the Russians, or a disregard for our currency. We will have to make sacrifices like Bill Russell did to win. We must all ask ourselves, are we prepared to show the same courage as the people at the Alamo. If we aren’t, then I doubt we can keep our Republic. If we do, then I like our chances, but it is going to be tough.
Finally, There’s a song in the Alamo movie that has a line that goes:
“Now the bugles are silent and there’s rust on each sword” We will have to awaken those bugles and polish the rust off those swords and I hope that we here at the CTPC can assist in the fighting of this battle.
“Remember the Alamo indeed”
Sincerely Yours,
C Thomas Printer
This week’s financial tip
Find a place to track three numbers every day this week; the dollar, the gold price and the silver price. I personally do so at CNBC where you can search for the .DXY (which is the dollar index made up mostly of the Euro and Japanese yen). You will want to become familiar with these three prices in the future so start familiarizing yourself now.
On this date in history
157 years ago to be exact- the numbers won again, this time it was the Union Army numbers that overran the Confederate capital in Richmond Virginia, forcing the Confederates to evacuate.
Also born on this date
The Father of Europe Charlemagne in 747AD.