Turmoil in the Second House – The U.S. Pluto Return (2021-2023) Part 3: History Rhymes (3)

Nixon Shock, The Aftermath

THE COST OF COMPROMISE

SHOCK WAVES FROM WASHINGTON

“…the dollar may be our currency, but it’s your problem…”

–Treasury Secretary John Connolly (Nitchter 2015)

Nixon’s announcement upended the international monetary system (Burns 2010), and caused mayhem in the currency markets. Countries that chose to hold their reserves in U.S. dollars suffered heavy losses and faced widespread economic turmoil. By mid-1973 the U.S. dollar had fallen by 25 percent on average, relative to the major Western currencies (Hammes and Wills 2005). “Shock waves from Washington’s decision to break the link with gold have rippled down the decades. The creation of the euro, the hollowing out of US manufacturing, the arrival of cryptocurrencies and the ability of central banks to print seemingly unlimited quantities of money can all be traced back to August 1971” (Elliott 2021).

I’m really very concerned about the way that things are shaping up politically in every one of these countries. Italy has a recession […] Germany has a recession […] we’re going to Moscow, but Japan is a mess. Western Europe is in a mess. We’ve given up our friends to our enemies.

—National Security Advisor Henry Kissinger, November 16, 1971 (Nichter 2015)

In December 1971, after months of negotiations, the Group of Ten (G-10) industrialized democracies agreed to a new set of fixed exchange rates in the Smithsonian Agreement. U. S. dollar was devalued by 8.5% against gold to $38 per ounce. Europeans revalued their currencies by a similar amount and Japan agreed to revalue Yen by 16.9%.

Dubbed “the most significant monetary agreement in the history of the world,” by president Nixon, the agreement was doomed from the start. On February 12, 1973, U. S. dollar devalued by another 10% to $42 per ounce of gold. Speculation against the dollar pushed other major currencies to float against the dollar and rang the death knell for the fixed rate exchange regime. Gold rose to $90 an ounce in mid-1972 and reached $195 by the end of 1974.

Gold Price (per ounce) in U.S. dollars, 1970-1976. Sources: FastMarkets, ICE Benchmark Administration, Thomson Reuters, World Gold Council. Courtesy of https://www.gold.org.
Inflation, stagflation, and Price control

Having talked until recently about the evils of wage and price controls, I knew I had opened myself to the charge that I had either betrayed my own principles or concealed my real intentions. Philosophically, however, I was still against wage-price controls, even though I was convinced that the objective reality of the economic situation forced me to impose them. …

What did America reap from its brief fling with economic controls? The August 15, 1971, decision to impose them was politically necessary and immensely popular in the short run. But in the long run I believe that it was wrong. The piper must always be paid, and there was an unquestionably high price for tampering with the orthodox economic mechanisms.

–President Richard Nixon, RN: The Memoirs of Richard Nixon

By all accounts, “Nixon’s economic package was a short-term success. Throughout 1972, the United States enjoyed the largest real growth (5.7 percent) and the lowest rise in consumer prices (3.3 percent) since the Johnson administration. Unemployment declined to 5.1 percent, and the American balance of payments deficit shrunk drastically from $29.8 billion in 1971 to $10.4 billion in 1972 (Nitchter 2015).


The 90-day wage and price control sought to “shield” the American people from the monetary shock and solve the inflation-employment dilemma. Such policy was supposed to allow the administration to maintain a loose fiscal policy without fanning inflation. However, inflation soon reignited after the election. In 1973 another round wage and price freeze failed to curb the inflation and was followed by stagflation.

When mandatory wage and price controls came to a complete end in 1974, the aftermath was far from pleasant. Energy shortages and high food costs contributed to an increase in inflation and to recession, and the pressure that built up after the period of controls lead into the destructive double-digit inflation that plagued the early months of the Ford administration. Three years after controls had complete [sic] ended, both unemployment and inflation hovered around 7 percent, and there was even nostalgia for the “good old days” in 1971 when we had only 4 percent inflation and 6 percent unemployment.

–President Nixon, RN: The Memoirs of Richard Nixon

Unemployment hit 9% in May of 1975. Inflation reached double-digit in 1974 and 1979. The U.S. dollar price for a barrel of oil rose from $3.35 in January 1970 to $32.50 by the end of the 1970s. The U.S. consumer price index rose by 106 percent during the 1970s. The high interest-rate that followed brought on the recession in the early 1980s.

Unemployment rage, Prime Loan Rates, and Consumer Price Index (CPI-U), 1968-1987

“The U.S. and other western countries struggled to cope with the inflationary shock. Corporate profitability suffered, encouraging firms to move their production plants to parts of the world where labour costs were cheaper. By the time the US started to take draconian steps to curb inflation at the end of the 1970s, Deng Xiaoping was launching the reforms that would turn China from an economic backwater into an industrial superpower. Fifty years after the collapse of the Bretton Woods system, China has emerged as a bigger threat to the US than the Soviet Union ever was”. (Elliott 2021)

The current official price for gold stock on Fed balance sheet is at $42.22 per ounce (as of October, 2022, source https://www.federalreserve.gov/data/intlsumm/current.htm). By the end of the 1970s, gold had risen 1200% to more than $455. The open market price in 2022 is between $2091 and $1621 (as of November 25, 2022).

Gold price data as of November, 2022. Source https://www.gold.org/goldhub/data/gold-prices

THE CANTILLON EFFECT

Income inequality has significantly increased since the late 1960s, coinciding with the onset of the great inflation and welfare expansion. Since the Nixon presidency, richest Americans has experienced the fastest income growth while the real household income stagnated. 

One often-downplayed consequence of monetary expansion is recognized by Irish economist Charles Cantillon (1680-1734).  Cantillon observed that when money supply expands, those closest to the source of new money benefits the most, because they can purchase assets before the inflation occur. Those farthermost from the source of new money suffer the most, because they will bear the burden of inflation before their wages catch up with the price increase.

In other words, when massive amount of new money is created, not only does it lead to inflation but also chooses winners and losers. In our modern economy, the money expansion by central banks favors government, large corporations (that lobby the congress), and investors of these corporations. The accumulated effect leads to Plutocracy (government by the wealthy, of the wealthy, and for the wealthy) and Plutonomy (concentration of wealth), and threatens democracy. This effect is demonstrated by the stagnant real median household income over the past decades while asset price soared with the cost of living. When politicians advocate the “multiplier effect” of loose monetary policy “for the poor,” they conveniently leave out the fact that such policy exacerbates income inequality and worsens economic conditions for savers, people on fixed incomes, and wage earners, whose income increase persistently fall behind the inflation.

Consider the following recent headlines that demonstrate the Cantillon Effect in action, and how it bestows power and spreads corruption through central bankers, government insiders, and investment firms:

The New York Times, September 27, 2021. https://www.nytimes.com/2021/09/27/business/fed-rosengren-kaplan.html

Defense News, March 9, 2022. https://www.defensenews.com/congress/2022/03/09/bidens-ukraine-aid-package-is-getting-super-sized-by-congress/

Politico, April 11, 2022. https://www.politico.com/newsletters/politico-influence/2022/04/11/business-booming-for-hunter-biden-linked-firm-00024459

Reuters, April 29, 2022. https://www.reuters.com/world/pelosi-hopes-pass-33-bln-ukraine-aid-bill-as-soon-possible-2022-04-29/

Reuters, August 8, 2022. https://www.reuters.com/world/europe/exclusive-us-send-45-billion-more-ukraine-budget-needs-2022-08-08/

Defense News, August 8, 2022. https://www.defensenews.com/opinion/commentary/2022/08/08/even-in-a-challenging-period-publicly-traded-defense-stocks-thrive/

Reuters, August 18, 2022. https://www.reuters.com/world/biden-administration-readies-about-800-mln-additional-security-aid-ukraine-2022-08-18/

Reuters, September 26, 2022. https://www.reuters.com/world/us/us-congress-negotiators-set-12-bln-new-ukraine-aid-2022-09-26/

Defense News, September 29, 2022. https://www.defensenews.com/congress/2022/09/29/republicans-push-biden-to-use-21-billion-ukraine-aid-set-to-expire/

The Wall Street Journal, Oct. 11, 2022. https://www.wsj.com/articles/government-officials-invest-in-companies-their-agencies-oversee-11665489653

Reuters, November 9, 2022. https://www.reuters.com/world/europe/biden-says-he-expects-ukraine-aid-continue-uninterrupted-2022-11-09/

Defense News, November 15, 2022. https://www.defensenews.com/congress/budget/2022/11/15/white-house-requests-38-billion-more-in-ukraine-aid/

BlackRock press release, November 16, 2022. https://www.blackrock.com/corporate/newsroom/press-releases/article/corporate-one/press-releases/blackrock-financial-markets-advisory-to-advise-ministry-of-economy-of-ukraine

Reuters, November 23, 2022. https://www.reuters.com/world/europe/us-authorizes-400-mln-new-military-aid-ukraine-2022-11-23/

The Wall Street Journal, November 21, 2022. https://www.wsj.com/articles/sam-bankman-fried-ftx-team-among-top-political-donors-before-bankruptcy-11668949205

The Washington Times, November 27, 2022. https://www.washingtontimes.com/news/2022/nov/27/hunter-bidens-dubious-business-dealings-raise-spec/

Reuters, December 6, 2022. https://www.reuters.com/world/us-lawmakers-authorize-800-million-more-ukraine-defense-bill-2022-12-07/

Reuters, December 9, 2022. https://www.reuters.com/world/biden-authorizes-new-275-mln-military-aid-ukraine-white-house-2022-12-09/

Bloomberg, December 12, 2022. https://www.bloomberg.com/news/articles/2022-12-12/ftx-bankruptcy-puts-73-million-of-political-donations-at-risk?sref=ZMFHsM5Z

Epoch Times, December 16, 2022. https://www.theepochtimes.com/more-than-80-cities-counties-using-federal-pandemic-aid-to-fund-guaranteed-income-pilot-programs_4927888.html

Reuters, December 21, 2022. https://www.reuters.com/world/europe/us-announces-185-billion-additional-military-assistance-ukraine-2022-12-21/

Bloomberg, December 29, 2022. https://www.bloomberg.com/news/articles/2022-12-29/bankman-fried-met-white-house-aides-in-pre-collapse-crypto-push?srnd=premium

Bloomberg, December 29, 2022. https://www.bloomberg.com/news/articles/2022-12-29/biden-signs-1-7-trillion-funding-bill-that-includes-ukraine-aid?srnd=premium

IS THIS TIME DIFFERENT?

Money Supply Growth and Inflation, 2015-2022. Source: https://www.atlantafed.org/blogs/macroblog/2022/08/31/can-1970s-help-inform-future-path-of-monetary-policy.aspx

There are two leading causes of inflation we’re seeing today.  The first cause of inflation is a once-in-a-century pandemic.  Not only did it shut down our global economy, it threw the supply chain and demand completely out of whack…
And this year we have a second cause — a second cause: Mr. Putin’s war in Ukraine.
You saw — we saw in March that 60 percent of inflation that month was due to price increases at the pump for gasoline.
Putin’s war has raised food prices as well, because Ukraine and Russia are two of the world’s major breadbaskets of — for wheat and corn — …

Normally — normally, we’d have already begun to export them into the market. … But it’s difficult because, again, of Putin and the Russian invasion of Ukraine.

– President Joe Biden, May 10, 2022
Housing Price Index and Consumer Price Indexes January 2020 – October 2022. Beginning of grey area indicates the start of Covid pandemic; end of grey area indicates the beginning Fed bond buying program (March 23, 2020-March 2022, including $87 billion in Treasuries and $34 billion in mortgage bonds); orange line indicates the start of Russian-Ukraine War (February 2022).

At the time of writing, the third and final conjunction of U.S. Pluto return is fast approaching. The difference between a Pluto trine in the 1970s and current Pluto return is that this time around, the transiting Pluto is both working for and against the U.S. The outward destruction and inner transformation –both constructive and destructive –work as one. The corruption (Pluto) in value (2nd house) is more intensified; so is the downfall and resurrection.

Pluto energy is both intensifying and transformative. Collectively, this energy rarely acts under freewill. What we’re presently witnessing (as of December 2022) is a strong and self-destructive force that will not quit until both fundamental change and significant collateral damage occur.   

U.S.’s second house Pluto historically triggers money, currency and trade issue during important transits, this time is no different. Economists and market observers have come to the realization that the inflation/stagflation is resurfacing. This time, the Fed, caught between high inflation and high interest rate, is out of arsenals. “If the Fed runs down the SOMA (System Open Market Account. Fed’s asset portfolio containing the assets acquired and to be sold during open market operations) portfolio too much, they will break something in the market. If they don’t, we are stuck with inflation.” (Chavez-Dreyfuss 2022). Currently, the National debt to GDP ratio is at the highest since World War II.  The debt servicing cost is at a steady up trend, and the treasury market liquidity is at crisis-level low. 

U.S. Net Exports of Goods and Services

Reminiscent of the great inflation of the 1970s, we are facing social and geopolitical tensions, overreaching government, volatile financial markets, and high inflation. In addition, we have unsustainable level of government and private debt, and a formidable geopolitical opponent to whom we continue to transfer funding, data, and advanced technology. In Nixon’s words: “the most formidable enemy that has ever existed in the history of the world –China.

We won’t know to what extent and how this Pluto Return will manifest until the dust settles. If history is any guide, the inflation will not be transitory and the recession will not be shallow. Whatever temporary fix for structural problems will have long-lasting impact and unintended consequences.

It would be prudent to review major legislation and executive orders during the crucial Pluto return period (between March 2021 to December 2023). The policies that aim to solve long-term problems with political compromises –or worse, outright corruption –will not work as intended, and will likely carry pernicious consequences. It’s not too late to recognize the folly of our experts and officials, and the destruction the political class can inflict on our lives. The least we can do is to insulate ourselves as much as possible in the wake of their short-sighted and disastrous policies.

Federal government budget surplus or deficit (Green)
Government current expenditures: Welfare and social services (Blue)
Federal Government: National Defense Consumption: Expenditures and Gross Investment (Red)

Conservatives are always at a disadvantage when speaking about economics because their belief that some pain may be necessary now to save the patient later is conventionally interpreted by liberal politicians and commentators as “heartlessness” or “callous indifference to human suffering.”

It is unfortunate that the politics of economics has come to dictate action more than the economics of economics. Not surprisingly, when prudence clashes with political reality, the latter sometimes triumphs.

—President Richard Nixon, RN: The Memoirs of Richard Nixon

ADDITIONAL READING

REFERENCE

Abrams, Burton A. 2006. “How Richard Nixon Pressured Arthur Burns: Evidence from the Nixon Tapes.” Journal of Economic Perspectives, no. Volume 20, Number 4: 177–88. https://fraser.stlouisfed.org/title/journal-economic-perspectives-1167/richard-nixon-pressured-arthur-burns-evidence-nixon-tapes-2388.

Bordo, Michael D. 2018. “The Imbalances of the Bretton Woods System 1965 to 1973: U.S. Inflation, The Elephant in the Room.” NBER. National Bureau of Economic Research. December 2018. http://www.nber.org/papers/w25409.

Bordo, Michael, Eric Monnet, and Alain Naef. 2017. “The Gold Pool (1961-1968) and the Fall of the Bretton Woods System. Lessons for Central Bank Cooperation.” National Bureau of Economic Research. 2017. https://economics.ucdavis.edu/events/papers/copy2_of_417Bordo.pdf.

Bryan, Michael. 2013. “The Great Inflation .” Federal Reserve History. November 22, 2013. https://www.federalreservehistory.org/essays/great-inflation.

Butkiewicz, James L., and Scott Ohlmacher. 2021. “Ending Bretton Woods – The Economic Historian.” The Economic Historian. December 7, 2021. https://economic-historian.com/2021/12/ending-bretton-woods/.

Chavez-Dreyfuss, Gertrude. 2022. “Analysis: Nagging U.S. Treasury Liquidity Problems Raise Fed Balance Sheet Predicament.” Reuters. November 8, 2022. https://www.reuters.com/markets/us/nagging-us-treasury-liquidity-problems-raise-fed-balance-sheet-predicament-2022-11-08/.

Eichengreen, Barry. 2000. “From Benign Neglect to Malignant Preoccupation: U.S. Balance-of-Payments Policy in the 1960s.” National Bureau of Economic Research, March.

Elliott, Larry. 2021. “Rise of Cryptocurrencies Can Be Traced to Nixon Abandoning Gold in 1971.” The Guardian. August 15, 2021. https://www.theguardian.com/business/2021/aug/15/rise-of-cryptocurrencies-can-be-traced-to-nixon-abandoning-gold-in-1971.

Ferrell, Robert H. 2010. Inside the Nixon Administration: The Secret Diary of Arthur Burns, 1969-1974. University Press of Kansas.

Ghizoni, Sandra Kollen. 2013. “Nixon Ends Convertibility of U.S. Dollars to Gold and Announces Wage/Price Controls.” Federal Reserve History. November 2013. https://www.federalreservehistory.org/essays/gold-convertibility-ends.

Ghosh, Atish Rex. 2021. “From the History Books: The Rethinking of the International Monetary System.” IMF Blog. August 16, 2021. https://www.imf.org/en/Blogs/Articles/2021/08/16/from-the-history-books-the-rethinking-of-the-international-monetary-system.

Ghosh, AtishRex. 2021. “Behind Closed Doors.” International Monetary Fund|Finance & Development. September 2021. https://www.imf.org/en/Publications/fandd/issues/2021/09/book-review-three-days-at-camp-david-garten.

Hammes, David, and Douglas Wills. 2005. “Black Gold: The End of Bretton Woods and the Oil-Price Shocks of the 1970s.” The Independent Review.

Hetzel, Robert L. 2013. “Launch of the Bretton Woods System.” Federal Reserve History. November 22, 2013. https://www.federalreservehistory.org/essays/bretton-woods-launched.

Humpage, Owen. 2013. “The Smithsonian Agreement.” Federal Reserve History. November 22, 2013. https://www.federalreservehistory.org/essays/smithsonian-agreement.

Lehrman, Lewis E. 2011. “The Nixon Shock Heard ’Round the World.” The Wall Street Journal. August 15, 2011. https://www.wsj.com/articles/SB10001424053111904007304576494073418802358.

Lowenstein, Roger. 2011. “The Nixon Shock.” Bloomberg Businessweek. August 4, 2011. https://www.bloomberg.com/news/articles/2011-08-04/the-nixon-shock.

The Washington Post. 2019. “How Paul Volcker Beat Inflation and Saved an Independent Fed.” Washington Post. December 10, 2019. https://www.washingtonpost.com/business/economy/how-paul-volcker-beat-inflation-and-saved-an-independent-fed/2019/12/10/7e58d7ae-1b64-11ea-87f7-f2e91143c60d_story.html.

Mandelman, Federico, and Brent Meyer. 2022. “Lessons from the Past: Can the 1970s Help Inform the Future Path of Monetary Policy?” Federal Reserve Bank of Atlanta. August 31, 2022. https://www.atlantafed.org/blogs/macroblog/2022/08/31/can-1970s-help-inform-future-path-of-monetary-policy.aspx.

Manly, Ronan. 2021. “British Requests for $3 Billion in US Treasury Gold – The Trigger That Closed the Gold Window.” BullionStar. August 16, 2021. https://www.bullionstar.com/blogs/ronan-manly/british-requests-for-3-billion-in-us-treasury-gold-the-trigger-that-closed-the-gold-window/.

Meltzer, Allan H. 2005. “Origins of the Great Inflation.” Federal Reserve Bank of St. Louis Review, March 2005.

“Milestones: 1969–1976 – Nixon and the End of the Bretton Woods System, 1971–1973.” n.d. Office of the Historian. Accessed November 15, 2022. https://history.state.gov/milestones/1969-1976/nixon-shock.

“Money: De Gaulle v. the Dollar.” 1965. Time, February 1965.

“Money Matters: An IMF Exhibit — The Importance of Global Cooperation | System in Crisis (1959-1971).” n.d. International Monetary Fund. https://www.imf.org/external/np/exr/center/mm/eng/sc_sub_3.htm.

New York Times. 1971. “Call to Economic Revival,” August 16, 1971.

Nichter, Luke. 2015. Richard Nixon and Europe. Cambridge University Press.

Nixon, Richard Milhous. 1978. RN: The Memoirs of Richard Nixon. Touchstone Books.

Nixon Tapes, Oval Office 570-44. 1971. 12:07-12:53 pm

Ohlmacher, Scott W. 2009. “Ths Dissolution of the Bretton Woods System, Evience from the Nixon Tapes, August-December 1971.” Honors Degree Thesis, University of Delaware.

Rand, Ayn. 1967. Capitalism. Signet. Gold and Economic Freedom by Alan Greenspan

Rothbard, Murray N. 2018. “The Monetary Breakdown of the West.” Mises Institute. March 7, 2018. https://mises.org/library/monetary-breakdown-west.

Strong, Bill, John Hathaway, and Stephanie Pomboy. 2021. “ ‘Nixon Shock’ 50 Years Later, Remembering the 1970s.” Sprott Insights. August 15, 2021. https://sprott.com/insights/video-nixon-shock-50-years-later-remembering-the-1970s.

“The Challenge of Peace: President Nixon’s New Economic Policy.” 2014. Richard Nixon Foundation. August 15, 2014. https://www.nixonfoundation.org/2014/08/challenge-peace-nixons-new-economic-policy/.

“U.S. Spent $141‐Billion In Vietnam in 14 Years.” 1975. The New York Times. May 1, 1975. https://www.nytimes.com/1975/05/01/archives/us-spent-141billion-in-vietnam-in-14-years.html.

Wapshott, Nicholas. 2021. Samuelson Friedman: The Battle Over the Free Market. W. W. Norton & Company.

Yergin, Daniel, and Joseph Stanislaw. 1997. The Commanding Heights.

©2022 Brave New Real. All rights reserved.

Turmoil in the Second House – The U.S. Pluto Return (2021-2023) Part 2:

Born on the Battlefront

In part 2, the birth of U.S.A. is examined against its Pluto themes outlined in part 1 to demonstrate the nation’s character, values, and priorities. These are the factors that shape the nation’s destiny. With this understanding comes a new perspective and framework that could help us make sense and navigate through this complex and bewildering time. — Author

Contents:

Introduction

The Founding of America

The Declaration of Independence

National Interest Equals Business Interest

A World War, A Civil War, A Currency War, and A Trade War

An International Affair

Business Overseas

Plutocracy are Us

Introduction

From the astrologer’s perspective, the quality of time and history is cyclical. It unfolds around a giant clock face with multiple converging forces traversing through different stages in the evolutionary cycle; the patterns and energies are distinctive. In order to understand how the U.S. historically handled and manifested its Pluto energy, I will review the crucial points of the U.S. Pluto cycle in part 2 and 3 of this series.

We start by exploring the themes and events surrounding the creation of U.S.A. For the sake of precision and clarity, I used a narrow 1-degree orb. It means that I only included events that took place when Pluto was within one degree of forming a major aspect (0, 60, 90, and 120 degrees) with the U.S. Pluto. Due to Capricorn’s slowness, some relevant events will inadvertently be omitted, since they occurred after the cut-off date.

First, a quick recap of the astrology of U.S. Pluto (detailed in part 1):

Capricorn second house: wealth equals status, prioritized conformity and social order, wealth acquisition, economic hardship, greed.

Pluto in Second house: Plutocracy and plutonomy (corruption, control, and consolidation), violation of personal freedom and property rights, currency manipulation, economic boom-and-bust.

Pluto in Capricorn: governmental and institutional surveillance, corruption, coercion, intimidation, violent struggle.

Pluto at 27th degree of Capricorn, potential solution in 27th degree of Cancer: discontent, abandoning the status quo, rebellion, exceptionalism, natural laws.

Scorpio 12th house and antiscion (2nd degree of Sagittarius) in 12th house: drug wars, prosecution of minority, slavery, surveillance, espionage, covert ops, geopolitical maneuvers, opaque and misleading foreign policy, diplomacy, foreign wars.

The founding of America

Active Periods:

April 2, 1775 – May 24, 1775

January 23, 1776 – August 17, 1776

November 26, 1776 – February 1, 1777

August 6, 1777- December 10, 1777

Themes:

  • Departure from the status quo
  • Separation from ineffectual peers
  • No middle ground
  • Appeal to natural law and common sense
  • Short-term conformity at the cost of long-term stability
  • Profits trump principles
  • Wealth consolidation and re-distribution
  • Last resort as the only option
  • Foreign entanglement with allies and saboteurs
  • National debt, currency devaluation, and hyperinflation
  • Trade war and financial warfare

On April 19, 1775, amidst mounting tension and state of rebellion in New England, the British force set out to preemptively confiscate the colonists’ weapon stockpiles and was met with well-coordinated resistance. During the stand-off, shots were fired by an unknown gunman, and the skirmish quickly escalated into a full-scale conflict, thus commenced the American Revolutionary War.

The fateful turn of events was perceived by the colonists as the testimony of Britain’s brutal oppression and solidified the colonists’ resolve against the British rule. The unavoidable war of independence had dawned. George Washington, upon hearing the news of the battle, wrote:

 “Unhappy it is, though, to reflect that a brother’s sword has been sheathed in a brother’s breast and that the once-happy and peaceful plains of American are either to be drenched with blood or inhabited by a race of slaves. Sad Alternative! But can a virtuous man hesitate in his choice?”

In the aftermath, the colonies gathered and signed declarations and resolves to sever their ties with Britain. In January 1776, Thomas Paine published “Common Sense”, claiming that the polite discussions had been ineffectual:

“Volumes have been written on the subject of the struggle between England and America. Men of all ranks have embarked in the controversy, from different motives, and with various designs; but all have been ineffectual, and the period of debate is closed. Arms as the last resource decide the contest; the appeal was the choice of the King, and the Continent has accepted the challenge.”

Paine’s forceful argument aligned with the energy of Pluto. Piercing through the pacifists’ delusion, he called out Britain’s pretension and advocate a departure from the status quo and forging new alliances:

As much hath been said of the advantages of reconciliation, which, like an agreeable dream, hath passed away and left us as we were,…We have boasted the protection of Great Britain, without considering, that her motive was INTEREST not ATTACHMENT; and that she did not protect us from OUR ENEMIES on OUR ACCOUNT; but from HER ENEMIES on HER OWN ACCOUNT, from those who had no quarrel with us on any OTHER ACCOUNT, and who will always be our enemies on the SAME ACCOUNT. Let Britain waive her pretensions to the Continent, or the Continent throw off the dependence, and we should be at peace with France and Spain, were they at war with Britain.”

Coincidentally, Paine foretold the U.S. Capricorn second house, i.e., wealth equals security:

“Besides, what have we to do with setting the world at defiance? Our plan is commerce, and that, well attended to, will secure us the peace and friendship of all Europe; because it is the interest of all Europe to have America a free port. Her trade will always be a protection, and her barrenness of gold and silver secure her from invaders.”

Paine’s rousing call to common sense appealed to the colonists’ inner knowing that they deserve to be free –a Cancerian principle. In the Pluto fashion, his words “had swept through the colonies like a firestorm, destroying any final vestige of loyalty to the British crown.” (Ellis, American Sphinx.)

Whenever men become sufficiently dissatisfied with what is, with the existing regime of positive law and custom, they will be found reaching out beyond it for the rational basis of what they conceive ought to be. This is what the Americans did in their controversy with Great Britain. And this rational basis they found in that underlying preconception which shaped the thought of their age -the idea of natural law and natural rights.”

Becker, The Declaration of Independence

As the revolutionary war raged on and hostility escalated, the hope of reconciliation with Britain was all but lost. The southern colonists, fearing a slave insurrection, set aside their distrust and banded together with the northerners, heading for the only way out of the crisis perpetrated by Britain.

Benjamin Franklin, Join, or Die

Not all colonists were swept up in the revolutionary spirit, however. Three days before the formal declaration, South Carolina and Pennsylvania delegates voted against independence. New York declined to vote on the day of the formal Declaration and only waited until July 15 to formally join the rebellion.

The Declaration of Independence

The Declaration of Independence thrust the U.S. onto the world stage and marked the triumph of the Enlightenment and political radicalism.

The founding document listed 27 grievances, listing the deliberate and systematic abuse that drove the colonists to desperation [Pluto]. In their own words, to “resisting force by force… (and) be ready to sacrifice our lives and fortunes to secure her freedom and safety” (Liberty Point Resolves). The oppression and maltreatment represent the distinct characteristics of a dysfunctional and malicious Pluto in Capricorn Second-house placement, as well as the Scorpio 12th house influences:

Deliberate sabotage of the colonial legal system [Pluto in Capricorn, antiscion in Sagittarius]; burdensome bureaucracy and repressive martial law [Pluto in Capricorn]; hijacked local government [Pluto in Capricorn] and justice system [Pluto’s antiscion in Sagittarius]; restricted trades and revenue [Capricorn second house]; destroyed properties [Pluto in the second house]; and imposed taxes without consent [Pluto in the second house].

In addition, foreign soldiers from Germany (Sagittarius antiscion), American Indians [Capricorn] and slaves [Scorpio 12th house] were used as mercenaries. American armed vessels and their crews were forced into the British force to attack their own people [Pluto at the cusp of Aquarius].

By the same token, the colonists’ answers to such perils also confirmed the modus operandi of U.S. Pluto, as discussed in part 1:

Separation from ineffectual peers:

“… it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume …the separate and equal station” … a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.”

Departure from the status quo (out of moral obligation and necessity):

“…whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government

“But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”

“Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government.”

“We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.”

Appeal to natural law and common sense:

“…to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.”

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

Safety and conformity as priorities:

“…laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

In addition, on July 19, 1776, an added resolution inserted the word “unanimous” to the final official copy.

Commercial interest and short-term stability at the cost of moral principles and long-term prospects: This is demonstrated by the removal of the anti-slavery language to protect the business interests of the slave owners and traders.

National Interest Equals Business Interest

Thomas Jefferson’s “rough draught” of the declaration was thoroughly debated and suffered “mutilations” (in Jefferson’s own words) that betrayed and undermined the original founding principles and sow the seed of future discord. The glaring omissions include the anti-slavery passages and the accusation that the British Crown waged war on humanity by forcing the slave trade on the colony:

“He has waged cruel war against human nature itself, violating its most sacred rights of life and liberty in the persons of a distant people who never offended him, captivating & carrying them into slavery in another hemisphere or to incur miserable death in their transportation thither.  This piratical warfare, the opprobrium of infidel powers, is the warfare of the Christian King of Great Britain.  Determined to keep open a market where Men should be bought & sold, he has prostituted his negative for suppressing every legislative attempt to prohibit or restrain this execrable commerce. “

Jefferson called out his morally compromised peers:

“The pusillanimous idea that we had friends in England worth keeping terms with, still haunted the minds of many. For this reason those passages which conveyed censures on the people of England were struck out, lest they should give them offense. The clause too, reprobating the enslaving the inhabitants of Africa, was struck out in complaisance to South Carolina and Georgia, who had never attempted to restrain the importation of slaves, and who on the contrary still wished to continue it. Our Northern brethren also I believe felt a little tender under those censures; for tho’ their people have very few slaves themselves yet they had been pretty considerable carriers of them to others.”

Jefferson, The Writings of Thomas Jefferson: 1760-1775.

The hypocrisy also attracted criticism from contemporary observers:

“…only I could wish to ask the Delegates…, how their Constituents justify the depriving more than an hundred thousand Africans of their rights to liberty, and the pursuit of happiness, and in some degree to their lives, if these rights are so absolutely unalienable;…”

Hutchinson, Strictures upon the Declaration of Independence

The blaring omission of anti-slavery language in the nation’s founding document speaks volumes about U.S.’ priorities and values as a country, which has always been wealth for the few [Plutonomy]. In the pursuit of short-term profit and stability, we sacrifice fundamental principles, undermine long-term peace and prosperity, moralizing and justifying as we go.

Jefferson was haunted by this national moral lapse ever since and considered it the seed of the nation’s destruction. He wrote in 1820:

“…this momentous question, like a fire bell in the night, awakened and filled me with terror. I considered it at once as the knell of the Union. it is hushed indeed for the moment. but this is a reprieve only, not a final sentence. a geographical line, coinciding with a marked principle, moral and political, once concieved and held up to the angry passions of men, will never be obliterated; and every new irritation will mark it deeper and deeper.”

Thomas Jefferson to John Holmes

A World War, A Civil War, A Currency War, and A Trade War

In essence, American Revolution was ignited by the tax burdens and trade restrictions implemented in the aftermath of the Seven Years’ War. Despite an overwhelming victory, the war doubled Britain’s national debt and brought about a postwar recession. The colonists’ protest of the revenue-generating measures was not only ignored by Britain but responded with more punitive policies. The animosity from both sides escalated to the point of no return, and a series of conflicts built up to a full-scale, multi-front war.

Young America immediately faced existential crisis. Conflicts between the patriots and loyalists marked the first civil war of the new country as the political divide shattered families and destroyed social fabric. Citizens who refused to swear oaths of loyalty were declared traitors and faced prosecution –there was no middle ground.

Economically, the country was also off to a rocky start. The Continental Army suffered from financial deprivation and was short on training, essential equipment, and sustenance. The soldiers were owed salary and would not re-enlist, leaving the Continental Army on the brink of dissolution.

“We are now as it were, upon the eve of another dissolution of our Army—the remembrance of the difficulties which happened upon that occasion last year . . . that unless some speedy and effectual measures are adopted by Congress; our cause will be lost.”

The Papers of George Washington

In 1775, Continental Congress issued Continental Dollars to finance the war. The new currency was backed by future revenue alone and its value fluctuated with the military’s triumphs and defeats. After a series of military routs and the resulting currency devaluation, the congress responded with massive issuance, which coincided with Britain’s devastating counterfeiting campaign. The loss of confidence lead to merchants’ refusal to accept the Continental as payments for military supplies as well as the immediate, severe erosion of the army salary. The vicious cycle in turn diminishes the army’s morale and battle readiness.

Depreciation of the Continental Dollar, 1775 through 1781: Various Estimates (Farley, 2008)
The tea-tax-tempest, or the Anglo-American revolution (1778)

In 1777, 12 of the states passed confiscation legislation to seize and assumed control of loyalists’ land – amounted to millions of acres – to fund the war. Most of the prime properties were purchased by wealthy officers and politicians at a heavy discount, which contributed to the consolidation of wealth and political influence [Plutocracy]. The Patriot’s financial prosecution of their political opponents lasted well into the early 1800s, decades after the war was won.

An International Affair

From a global perspective, the American revolution was just one of the battlefronts in a world war – specifically, a century-long international conflict about empire-building and trade. Our major allies, French and Spain, sought to revenge for the bitter defeat by Britain during the previous war; supporting American Revolution happened to provide the long-awaited opportunity.

“We should be driven to the Necessity of Declaring ourselves independent States, and that We ought now to be employed in preparing a Plan of Conferation for the Colonies, and Treaties to be proposed to foreign Powers particularly to France and Spain, … That these three Measures, Independence, Confederation and Negotiations with foreign Powers, particularly France, ought to go hand in hand, and be adopted all together…. That foreign Powers … could not be expected to acknowledge Us, till We had acknowledged ourselves and taken our Station, among them as a sovereign Power, and Independent Nation. That now We were distressed for Want of Artillery, Arms, Ammunition, Cloathing and even for Flynts. That the People had no Marketts for their Produce, wanted Cloathing and many other things, which foreign Commerce alone could fully supply, and We could not expect Commerce till We were independent.”

Adams, John Adams autobiography, part 1, “John Adams,” through 1776

Foreign relation was among the top concerns for the colonists during the Revolution. Resolution of Independence, passed on July 2, 1776, was introduced because according to its author Richard Henry Lee: “I am clearly of opinion that unless we declare openly for Independency there is no chance for foreign aid. In another letter, he further declared “no state in Europe will either treat or trade with us so long as we consider ourselves subjects of Great Britain.” (Ferreiro, Brothers at Arms)

Without foreign aid – in particular, France’s material supply and amphibious military support – the Revolutionary cause would have been lost. This acknowledgment has largely faded from today’s collective consciousness, and we are now out of touch with our foreign policy and oblivious to U.S.’ military and intelligence covert operations overseas [Scorpio and Sagittarius 12th house]. U.S.’ attempt to maintain leadership and moral posture [Capricorn] jeopardized democracy at home and around the world, and kept the pursuit of ambiguous “national interest” out of the public eye and into the shadows of unaccountability and hypocrisy.

Business Overseas

The secrecy and our collective ignorance of our foreign policy and operations are the symptoms of the U.S. Pluto antiscion (2nd degree of Sagittarius) in the 12th house. The 12th house is the realm of self-undoing and ignorance, it’s our vice that we mistake for salvation. Mundane ventures rising from the 12th house are jeopardized by misinformation and sabotage from within and without.

For example, Battle of Quebec, an attempt to draw French-speaking Canadians’ support for the revolutionary cause, was U.S.’ first foreign war and the prototype of foreign policy blunders. The colonists failed to persuade the populace of their causes of democracy and equality, and suffered catastrophic failure, due to overestimation of strength and miscalculation. 

In recent U.S. history, our two-faced foreign policies and opaque “national interests” have been hidden [twelfth house] from public scrutiny. Meaningful and open discussions were exiled from mainstream media; dissidents and skeptics are labeled unpatriotic and treasonous. Pluto’s business is deep, dark, and unsavory. However, ignorance is not an option, neither is isolationism –it is not in the stars. In order to plot the best course forward, it is crucial that we grasp U.S.’ role in global trade and finance, and the truth about our covert operations and standing in the world.

Plutocracy are Us

Our country is one born on the battlefront of a multi-front world war; violence and warfare have always been in our nation’s DNA. Even during peacetime, all forms of aggression are glorified and consumed in large doses as mass entertainment. We, collectively, delight in seeing things being blown up and enjoy picking sides in conflicts –we can’t help it. As the biggest exporter of violent imagery and weaponry in the world, we inherently see peace in any corner of the world as our detriment. This is the uncomfortable truth we must recognize and content with. Peace and virtue were not indicated in the birth chart of this nation.

The U.S. second house (house of resource) is truly unparalleled. The vast geography spans two immense oceans, providing natural barriers from hostile invaders even during the worst internal conflicts. Its territory contains abundant natural resources and massive arable land. A seemingly endless inflow of ambitious and brilliant talents, driven by overwhelming desires for success, propel innovation and enterprise [Pluto in Capricorn-Aquarius second house]. Our talents and gifts run deep and wide.

This unique geography and demography shaped our character: an amoral and naïve optimism that combines shortsightedness and willful arrogance. Pluto in the Capricorn second house indicates a desperate and unrelenting drive for power and wealth –to counter-productive extremes.

Through relentless drive for control, Pluto investigates, meddles, and corrupts any system it touches. It destroys and reshapes all that stands in its way until the ultimate consolidation is achieved. The result is a power so intense and concentrated that it either becomes a super weapon or collapses under its own weight. Either way, discord and disorder ensue, and in the messy dysfunction and deterioration, the process restarts.

We have a Plutocracy. The destructive and regenerative cycle of Pluto is most fittingly allegorized as a snake eating its tail. In the case of America, the destruction and rebirth play out in the social order [Capricorn] and financial [Second House] arena. In the background, it operates in the realm of deceit and ignorance [twelfth house], particularly when it comes to foreign relations, controlled substance (drugs and alcohol), and prosecuted minorities. This imprint has and will continue to unfold and manifest in ways we collectively respond as the recipient and the personification of this energy.

America was never about freedom and liberty, not since the founding moment. The principle of our country has always been and will always be “in profit we trust” –trading short-term profit for the few at the cost of long-term peace and prosperity of the general population. Implementing policies that promote superficial social cohesion while continue to drive power and profits to fewer and fewer hands. The process is legitimized by laws and (de)regulations, promoted domestically and around the world under the guise of national interests, American value, free-market economy, social and economic progress, freedom and democracy.

Under this scheme, we the people are considered as the state’s subjects — consumers of propaganda, participants in private and public revenue-generating, and supporters of the status quo –detracted, intimidated, overwhelmed by a web of predatory complexity and weaponized disinformation. Without recognizing this sobering fact, we cannot come up with a realistic solution for national and personal survival. Clarity and awareness is just the first step.

It’s an obvious choice. We can exhaust our resources to reinforce the failing status quo and delay the inevitable decay and disintegration. Or, we can detach from the current system – depart from our ineffective peers, and reclaim what we believe as universal, natural and true. We don’t need fact-checkers, experts, government officials, or virtue-signaling mobs to confirm the common sense.

In part 3 of this series, we’ll continue to examine the patterns of how U.S. Pluto manifests and interacts throughout history. (To be continued)

Further Reading:

Hugh Percy Duke of Northumberland. (1902). Letters of Hugh, Earl Percy, from Boston and New York, 1774-1776.

Fischer, David Hackett. Paul Revere’s Ride. Oxford University Press, USA, 1995.

Becker, Carl. The Declaration of Independence: A Study in the History of Political Ideas. Harcourt, Brace and Company, 1922.

ushistory.org. “Thomas Paine: Common Sense.” Independence Hall Association, 2022. https://www.ushistory.org/Paine/commonsense/.

Ellis, Joseph J. American Sphinx. Vintage, 1998.

National Archives. “Declaration of Independence: A Transcription | National Archives,” November 1, 2015. https://www.archives.gov/founding-docs/declaration-transcript.

Jefferson, Thomas. The Writings of Thomas Jefferson: 1760-1775, 1892.    

Hutchinson, Thomas, Strictures upon the Declaration of Independence, 1776.

Library of Congress. “Thomas Jefferson to John Holmes – Thomas Jefferson | Exhibitions – Library of Congress.” Accessed February 24, 2022. https://www.loc.gov/exhibits/jefferson/159.html.

Library of Congress. “Jefferson’s ‘Original Rough Draught’ of the Declaration of Independence – Declaring Independence: Drafting the Documents | Exhibitions – Library of Congress.” Accessed February 24, 2022. https://www.loc.gov/exhibits/declara/ruffdrft.html.

AmRevNC. “Imagine the Scene – Liberty Point | Cross Creek – A Fifer and a Constitution.” Accessed February 25, 2022. https://amrevnc.com/cross-creek/. Archived /web/20220226055751/https://amrevnc.com/cross-creek/

George, Alice. “The American Revolution Was Just One Battlefront in a Huge World War.” Smithsonian Magazine, 28 June 2018. https://www.smithsonianmag.com/smithsonian-institution/american-revolution-was-just-one-battlefront-huge-world-war-180969444/.

Ferreiro, Larrie D. Brothers at Arms. Vintage, 2017.

John Adams autobiography, part 1, “John Adams,” through 1776, sheet 22 of 53 [electronic edition]. Adams Family Papers: An Electronic Archive. Massachusetts Historical Society. http://www.masshist.org/digitaladams/.

“Covert Operations Fail More Often than Not, so Why Do Leaders Order Them?” Modern War Institute, 30 Sept. 2021, https://mwi.usma.edu/covert-operations-fail-more-often-than-not-so-why-do-leaders-order-them/.

Bell, John. “Confiscation Acts.” NCpedia, 2006, https://www.ncpedia.org/confiscation-acts.

Gallo, Marcus. Property Rights, Citizenship, Corruption, and Inequality: Confiscating Loyalist Estates during the American Revolution: Confiscating Loyalist Estates during the American Revolution. John Carroll University, 2019, https://collected.jcu.edu/cgi/viewcontent.cgi?article=1067&context=fac_bib_2019.

“From George Washington to John Hancock, 25 September 1776,” Founders Online, National Archives, https://founders.archives.gov/documents/Washington/03-06-02-0305. [Original source: The Papers of George Washington, Revolutionary War Series, vol. 6, 13 August 1776 – 20 October 1776, ed. Philander D. Chase and Frank E. Grizzard, Jr. Charlottesville: University Press of Virginia, 1994, pp. 393–401.]

Milestones: 1750–1775 | Parliamentary Taxation of Colonies, International Trade, and the American Revolution, 1763–1775. Office of the Historian, Foreign Service Institute, United States Department of State, https://history.state.gov/milestones/1750-1775/parliamentary-taxation.

Grubb, Farley. “The Continental Dollar: How Much Was Really Issued?” The Journal of Economic History, vol. 68(01), Cambridge University Press, Mar. 2008, pp. 283–291.

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