Category Archives: capitalism

Dollar vs. Gold II

Leave a reply

In my previous posts I stated that gold does not need any paper currency, but that the dollar needs gold. The dollar has to be convertible into gold, because the gold price world wide is quoted primarily in dollars, and that’s due to the dollar being the official currency of the world. Everything in the world is traded in dollars. Just imagine the power that the US possesses by owning the official currency of the world, so it goes without saying that the US will do anything in its power to retain that authority over the financial system of the world; it will even resort to war.

The key to financial world domination is not the petro-currency status of the dollar but its relationship to gold, Nature’s Money. The Bretton Woods agreement of 1944 made the dollar official currency of the world. The dollar was pegged at 35 dollars an ounce of gold, and the rest of the world’s currencies were pegged to the dollar. The US would keep the gold and print the dollars, while the rest of the world would keep the dollars in US Treasury Notes. The US had free use of their hard earned money, the perfect scam. General Charles de Gaulle immediately saw this for the scam that it was and took action. He exchanged the French dollar surplus for gold, as was allowed by the Breton-Woods Agreement. Run on gold began, in 1971, President Nixon closed the gold window. This is how the dollar became the “Petro” currency. Nixon told OPEC to increase the price of oil as much as they could but make sure it is traded in dollars. Surplus dollars flowed into US Treasuries, more than ever before, and the US got free breakfast, lunch, and dinner. This policy continues to this day…

The Crisis of 2007-8 was very severe. It nearly collapsed our entire economic system. Massive infusion of artificial money {printed dollars} only managed to prop up the system, and did not ultimately save it. The System barely meanders. A series of quantitative easing was introduced, QE I, QE 2, and QE 3. No real improvement. QE 4 is coming down the road. During the crisis, gold rose from around 250 dollars in 2001 to 1920 in 2011. Interest rates went down to almost zero. There was the danger that if the price of gold went any higher,  that dollar would not be convertible to gold. If that had happened, the Capitalist System would have collapsed. Something had to be done.  “Paper shorting” of precious metals was begun. The dollar can only have validity if it is convertible into gold.  Presently, the convertibility of dollars into gold has a severe price. Dollar surplus countries and individuals are buying gold on the cheap.

Gold, presently, is in backwardation. Individuals and countries are paying higher prices for gold delivery now than in the future. Shortages of gold availability are coming. The price of gold may sky rocket over night. By shorting paper gold the monetary policy of the US is extremely tight. It is in essence destroying the economy of the world. Increasing interest rates is sheer lunacy. Gold, silver, platinum, and palladium will demand their rightful value which is precious. They will be not be available in any currency at any moment. The rush for Nature’s Money, gold, will be the beginning of the end of the Capitalist System, as was the rush for gold the beginning of the Capitalist System, and when Christopher Columbus first “discovered” the “New World”. If the World survives, a totally new age will begin. Only time will tell.

TURKISH BOOMERANG II

Leave a reply

Geopolitical changes of great significance are taking place in Eastern Europe, specifically in the Ukraine but also in the Middle East. The US wants at all cost to build the Wall of Enmity from the Baltic to the Persian Gulf, and to the Indian Ocean, possibly to South East Asia, as far as the Philippines. But for the moment, let us study and analyse the Wall of Enmity from the Baltic to the Persian Gulf: the US wants to expel Russia from the Ukraine and Syria, that’s very clear. It would also like to control Iran, but to do that, it would have to destroy it.

The US would like to reduce the relationship between the European Union and Russia to a bare minimum, but to do that it needs alternative sources of energy with which to supply Europe. The Middle East would be that source. The greatest oil and natural gas reserves in the world are located in the Middle East, and if the US and its friends were able to control those resources and their channels of delivery, it would be able to control the destinies of the entire world, East or West, North or South. So, these wars we have now in the Ukraine, Syria and Iraq are struggles for the control of the World…

Let us make some suppositions. Suppose the US and its allies win. They would end up controlling all that natural wealth, and be able to control energy supplies to Europe, China, and the Indian subcontinent. They would dictate the price denominated in DOLLARS. The dollar would become the permanent official currency of the world. In addition, if they got control of Iran, they would also control the production and export of gas from Turkmenistan. China and India would be subject to US blackmail, just as Japan was before the Second World War, with the so called ” Japanese Effect”: surrender or war. The Japanese, being proud people, chose war.They needed to get control of Indonesian oil which at the time was under Dutch control. To do that, they had to eliminate the US Pacific Fleet stationed at Pearl Harbor, Hawaii which at the time was a colonial possession of the US. By the DOLLAR becoming the permanent official currency of the world, the US would rule the world and its closest Allies would enjoy immense privilege. I will leave it to the reader or readers of this humble essay to figure out which country or countries would benefit the most…

But let us suppose the West loses. Suppose the Resistance Axis of Syria, Iraq, Iran, Russia, and Hesballah of Lebanon win. Also suppose that in the struggle going on presently in the Middle East, the Saudis and the Gulf States collapse, and the Arab Nationalists who are vehemently Anti-West win. That Turkey slides into civil war, and the Kurds, who are about 20-25 %  of the Turkish population, rise up and seek their INDEPENDENCE. And, suppose that the Palestinians start their Third Intifada, sensing the victory of the Axis of Resistance… What would Israel and the US do? Would a Third World War begin???

The majority of the world agrees that ISIS or Daesh is evil, including the US, but it is secretly supporting it. It’s been bombing ISIS for more than a year with nothing to show for it! Why is Turkey, a NATO ally, openly supporting it?  If ISIS is evil, then countries fighting ISIS are on the side of Good.  Turkey, the US, the Saudis, and the others supporting ISIS are on the side of Evil. The Morals and Ethics of the Universe are on the side of Good. It is self-evident that the side fighting for Good against Evil will win. And by supporting evil, the US will not be able to build the Wall of Enmity. Also, sooner or later the dollar will not be used in world trade. So, the Turkish Boomerang will have disastrous consequences for the world, but especially for the US…

Let us be frank. The modus operandi of the US and its allies is lies and deceptions. The modus operandi of Russia and its allies is IRONY, the cosmic manifestation of truth and justice. Edgar Cayce, an American, once predicted that Russia will become the hope and salvation of the world. Only time will tell.

How much is the dollar really worth?

Leave a reply

The dollar is a fiat currency. It is created out of thin air through debt. A person goes to the bank and wants to borrow 10,000 dollars and if the borrower meets the criteria of paying back the sum plus interest agreed on, the bank issues a cheque of 10,000 dollars or direct deposits the amount to his account. Money has been created out of nothing to enslave that person for 10,000 dollars which he must now pay back at a certain interest rate for a specific period of time. In other words, he sells his labour, his life force, to pay the debt. He is exploited, he is a slave. This is the essence of capitalism, and the fiat currency is an instrument of enslavement.

Initially, the dollar was a gold backed currency as were other world currencies. President Franklin Delano Roosevelt, early in his presidency devalued gold from 20.67 dollars an ounce to 35 dollars an ounce. Also, he made it illegal for Americans to own gold, unless it was in a jewelry form of 18 karats or less. The Bretton-Woods Convention made the dollar the Reserve Currency of the World. The US would keep the gold and the rest of the world would keep the dollars. Other central banks could exchange dollars for gold at 35 dollars an ounce. Gold, however, would be stored in the US and some would be stored in London. This arrangement was propped up by fear that “the Communists” would take over if the gold was not stored in the US. Publicity  made Fort Knox, Kentucky, infamous as the storage place  for the world’s non-communist gold. General Charles de Gaulle, President of France, was not fooled. He realized it was the perfect scam. He had never trusted the Anglo-Americans. He knew how perfidious they were during the Second World War II. The Anglo-Americans hated him, and of course, he reciprocated. He withdrew France from N.A.T.O. and sent French warships to retrieve French gold from the US. Other European countries followed. A run on gold followed…

The gold drain from the US followed. President Nixon closed the Gold window. This closure was permanent, contrary to the President’s statement that  it was temporary. The US was running trade deficits and the Vietnam War was draining the country of its real wealth, gold. The dollar paper drainage was no big deal, because it was only paper. The Arab oil embargo saved the dollar and the US. The US told the oil producers to increase the price of oil but just have it denominated in dollars. The excess dollars of the world poured into US treasuries and helped finance government operation. The decade of 1970’s showcased growth throughout the world but with inflation. Gold was allowed to reach its equilibrium value of 850 dollars an ounce. Silver, taken out of circulation in 1965, went to 50 dollars an ounce in 1979-80. Interest rates were high because demand for money was high. Demand for real money, gold and silver, was high. But the dollar was losing value. In 1969, one could get four Swiss Francs for one dollar, but in 1979-80 period, the Swiss Franc was on parity with the dollar.

President Carter appointed Paul Volcker Chairman of the Federal Reserve Bank. The Prime Rate went to almost twenty percent. The price of precious metals collapsed and value of the dollar rose. Money from all over the world poured into the US. By 1992, the USSR and communism had disappeared in Europe. The end of history was proclaimed. The plunder of the ex-USSR and Eastern Europe, along with the rest of the world began with increasing tempo. A unipolar world of ten years duration was achieved. In Nature, when one extreme is reached, opposite forces start building momentum, and new forces started brewing on the horizon…

Vladimir Putin was appointed Prime Minister of Russia in 2000, and the economic decay started in the first decade of the New Millennium in the West. It is now worsening and encompassing the entire world. The central player in all this has been the dollar. It has no intrinsic value like gold, land or water, but is the instrument of US power. The US wants to maintain that power come hell or high water, and in order to maintain it, debt in dollar terms has to grow. The IMF and World Bank, along with other private organizations, are working overtime to trap more and more countries into unsustainable debt and milk them for all they are worth. This is the MODUS OPERANDI of capitalism…

But opposing forces are rising, and the de-dollarization of the world has began. The World is trying to dis-infect itself from the dollar. Very interesting and dangerous times are approaching. But the US will not willingly give up its instrument of power. It is negotiating trade deals with Europe, South America, and South East Asia to insure the dollar to be the supreme currency. It is confronting China in the South China Sea, but at the same time, it is enticing  it to join the IMF arrangement of Special Drawing Right Currency. The US wants the China to row the dollar-SDR boat, and the US would steer it. Whether China falls for it or not remains to be seen. China, Russia, Brazil, Iran, and other countries that have backbone are trading amongst themselves in their own currencies. The river of history is flowing and it cannot be reversed.

How much is the dollar really worth? Nothing. It is merely an instrument of power, intimidation, and war, like aircraft carriers. And history will be unkind to both. Only time will tell.

The North Atlantic Concept is Dying.

Leave a reply

In many ways, the present world situation was created in the 1930’s. The Soviet Union was considered the main threat to Western control of the world. The Soviet Union supported anti-colonial struggles throughout the Colonial World, which was controlled by Western European States and the US. Hitler was appointed Chancellor of Germany by President von Hindenburg on January 31,1933. The Nazis were the largest party in Germany. Every leader in the West knew who Adolf Hitler was. German-American and British-German friendship societies were formed glorifying German-Nordic race and culture. France and other Latin Countries of Europe were not included, even though they were the main pillars of European and Western Civilization. One cannot imagine Europe without its Greco-Roman foundation. All the sophisticated aspects of the English language are Latino-French.

Overnight, Germany became the dominant European power under Hitler. France, on the other hand, was not as influential and demanding as Germany; it had lost élan, vital in the Franco-Prussian War of 1870-71. Germany became unified under the leadership of Otto von Bismarck, the Iron Chancellor. France was easily defeated, and the Emperor, Napoleon III, was captured at Sedan in northeast France. France with its Allies was victorious in the First World War but the war was highly exhausting and destructive. In the interim period between the world wars, France had weak governments of short duration. Britain was also weak, but enjoyed a special relationship with the US. France, despite being the longest running ally of the US, did not have this special relationship…

The USSR was isolated. Despite its efforts to form an Anti-Hitler coalition, Russia had been spurned. The only ally remaining to it was Mongolia. The USSR and Mongolia defeated the Empire of Japan in the Battle of Khalkhyn Gol, Mongolia in 1939. Europe was sliding towards war. The only western European leader who could have prevented the Second World War would have been General Charles de Gaulle. Had he been the president of France during the 1930’s, he would have formed a military alliance with Russia. Germany, under Hitler, then would have been contained. De Gaulle would also have been able to restore the French elan.

In the 1930’s Hitler was on the march. All his foreign demands had been met and it was Anschluss with Austria in the spring of 1938 and then the takeover of Czecho-Slovakia in the Autumn 1938, via Munich Agreement. The USSR wanted to defend the  Czech interests but was not invited to attend Munich. The secret British and American idea was to entice Hitler to attack Russia, and establish Lebensraum {Living space}, for Germany in the East, which had been Hitler’s goal from the very beginning. The wheels of war were set into motion secretly by the West. When the Soviet-German Non Aggression Pact was signed in August,1939, the West was indignant. Russia, how dare you ! Only the West is allowed such games. The invasion of Russia was then postponed, but not for long…

When Hitler attacked Poland on September 1, 1939, Britain and France declared war on Germany with reluctance. The “Phony War” followed on the Western Front. Britain and France were more interested in helping Finland in the Soviet-Finnish War than fighting Germany. After the French defeat and the British graceful exit from Dunkirk, Hitler was ready to attack Russia on June 22, 1941. The Western press gloated. Germany would win in about six to sixteen weeks. There would be tripartite control of the world, the British Empire, Germany, and the US. Germany would control the USSR land mass, Britain and the US would control the rest of the world. The US and Britain gave Germany about three years to defeat the USSR, but it never happened. By 1944, it was apparent that Germany would lose the war in the East,  and the Western Allies panicked. The Second Front was organized with the Normandy invasion to share in the division of Europe. The Cold War started long before the Second World War had ended. Operation Unthinkable was suggested by Churchill, as well as other plans by the Americans to destroy the USSR. And the Cold War never ended when USSR dissolved…

The Cold War continues today in multiple forms. NATO is expanding even though it is decaying. The Montenegro elite want to join NATO. The currency war against the ruble is raging. Oil prices were decreased in an attempt to hurt Russia. Sanctions and trade embargoes are being waged. Russia and ISIL have been declared enemies of the US. This is crazy. This US wants to destroy Russia to save its failing economic system which ultimately cannot be salvaged. The boomerang of sanctions and embargoes against Russia are only hurting the European Union. The European economy is just as bad as the US’s, if not worse. The onslaught of refugees is destroying the fabric of Europe. The Russian plane and Paris tragedies are changing the very policies of Europe. Europe will drift away from the North Atlantic and embrace Afro-Eurasia. Latin America is already embracing Afro-Eurasia. The US is Introducing counter measures such as the Trans-Pacific Partnership and Trans-Atlantic Trade and Investment Policy, which may or may not work.

The US is in a difficult position. The world is coalescing around Russia and China, and it cannot do much about it. The US  has only known one means of control: the policy of confrontation and intimidation it has used since its very inception. The Ruling Elite of the country will not change, although some members of the Elite perceive the danger. In a previous post, I said that US finance capitalism is supported by three pillars: paper (the dollar), the stock market, and the bond market, and that all three of these are based on debt. If one falters, all three will fall and the US economy will enter a black hole, and the European Union will drift away from Canada and the USA. Only time will tell.

 

 

The Dollar vs Gold

Leave a reply

There is a battle going on between the International Community of the West and he International Community of the Rest. This has been going on since the beginning of Colonialism. The Colonial Powers of the West have practiced a policy of conquest and exploitation, which still continues. Its’ instrument of exploitation is the dollar. The US owns, prints, and uses the dollar to its advantage. Even the European Union States, in trade amongst themselves, must use the Dollar. Such is the power of the dollar and the US, and the US wants to preserve this power…

But now the dollar is under attack, even though the US Dollar Index is above 90. (Actually, it is around 97.) The Index measures the value of the dollar versus other convertible currencies such as the Euro, Yen, British pound, Canadian and Australian dollars, and of course, the Swiss Franc. The Dollar Index has gone as high as above 120, and as low being below 80. A range between 90 and 100 is ideal. Not too hot, not too cold. It is hot enough to destroy or devalue currencies of natural resource countries such as Brazil, Venezuela, Argentina, etc; countries that have an independent economic and foreign policy. These and other countries suffer from immense dollar debt. As dollar value rises their debt burden rises and becomes unbearable. Social upheaval follows. Regime change takes place, either peacefully or violently, and a friendly regime is installed that does what the US wants it to do. Lately this Modus Operandi has not been too successful in Latin America.

It has contributed to the destruction of Socialism. The CIA has probably infiltrated every socialist government in Eastern Europe, including the Soviet Union. Émigré groups have played a key role. How does one explain the fate of Nicolae Ceausescu who went from being the “de Gaulle of Eastern Europe” to being executed by firing squad together with his wife, Elena?  Simple. He had after all, paid his dollar debt to the West by practicing severe austerity. And now, Romania is again in debt, and its economic conditions are not very good. It is member of NATO and the European Union. Now, Romania, has no real say on the world stage as it had under Ceausescu. Such is life. Since the collapse of the Soviet Union, the success has not been that great. Afghanistan has been occupied but not conquered. The Taliban will most likely win. The US will be kicked out. Opium trade which is controlled by the US will probably be lost, and the dollar will lose its significance in the opium trade. The opium and illegal drug trades are huge. Trading in drugs is the number one trade in the world. It dwarfs oil, natural gas, and automobiles. And, it is based on dollar. Wonder why US wants to be in Afghanistan? The drug trade supports the dollar.

The dollar is fiat currency based on debt. When debt in dollar terms grows, the power of the US grows. The indebted countries are manipulated according to the needs of the dollar country. Zero interest rates entices more countries into debt, because these countries do not know the other side of the story. The other side of the story is that low interest rates are a “put” or support for US stock and bond markets. Money from all over the world pours into the US stocks, bonds, and high end real estate market. The value of the dollar goes up, indebted countries start suffering. Their currencies collapse, commodities collapse,  inflationary depression and coups d’état follow. This is what is going in geo-economic terms  in the world presently.

The International Community of the West under US leadership wants the money of the world to go into stocks and bonds. It does not want the money to go into gold. Gold has been pushed into artificial hibernation via paper shorting. The interesting side effect of this artificial hibernation  has been that gold has been moving from the West to the Rest, and is not coming back. China is the number one producer of gold in the world and keeps it at home. Russia is the number four producer of gold and keeps it at home. Gold mining of the world is dominated by western corporations, whether it be in Africa, South East Asia, North or South America, or Central Asia. They also participate in the suppression of gold. These gold corporations are instructed to supply it to keep the price suppressed because it benefits them. There is less revenue sharing with countries where gold mines are located. Also, they are protected from being responsible for enormous environmental damage. Gold mining is environmentally very destructive. It is one of the most destructive, on par with oil fracking. However, it does not produce earth quakes as do oil and gas fracking.

The dollar is strong and it will stay strong as long as the dollar index stays in the range between 90 and 100. In this range, it is strong enough to cause havoc to the currencies of most of the world, including the currencies of its two closest allies, Australia and Canada. They are collateral damage. Gold is weak in order for the dollar to be strong. It is a very artificial relationship. It is a severe form of dis-equilibrium which frequently develops in nature. Dis-equillibria in nature are rather frequent. Weather patterns are classical examples. When weather dis-equillibria develop they manifest themselves as tornados, hurricanes, lightning, snow storms, etc, until the energy of dis-equilibrium  is dissipated and normal weather patterns return.

Financial disequilibria are all unnatural whether they be the Mississippi Bubble, the South Sea Bubble, or the 1929 Crash. The consequences of crashes are usually very severe for the people. We are approaching such an event now. There are warning signs as in the weather. There are mini crashes preceding the big one. The Big One will come without any warning. The US Treasury and the Federal Reserve are doing their best to prevent one, but they will not succeed. It is simple. One cannot violate the Laws of Nature. It will be very interesting, and only time will tell.

What is the prospect for gold? It is Nature’s money. Nature’s money is a form of energy. If one looks at gold it has the color and the energy of the sun. If one looks at the fiat note it has a picture of some famous individual, number, coat of arms, and the name of the country. Fiat can be printed, but gold cannot be created nor destroyed. It is eternal. It was created when the Universe was created. The equilibrium price of gold with the present buying power of the world’s reserve currency would be at least 3000 dollars. The people of Afro-Eurasia are buying gold. The Chinese government is encouraging  its citizens to save in gold. It is wise to invest in Nature’s money. Gold represents TRUTH.

 

 

The Dollar, the American Thunder Bolt of Zeus

2 Replies

Most people do not know how much power and control the US holds over the world by the fact that the dollar is the reserve currency of the world. Until recently, it was the official currency of the world. By controlling the reserve currency, the US in fact, controlled the world. At Bretton-Woods, New Hampshire in 1944, the dollar was crowned Emperor of the World. The International Monetary Fund {IMF}, the World Bank, and the Bank for International Development were created to impose the rule of the dollar. These institutions have international sounding names, but they are as American as a McDonald’s hamburger…

After the Second World War, the Colonial World of Asia, Africa, Latin America, and the Carribean  were decolonized. Instead of being free and totally independent they went right into ” dollar debt dependency”. They jumped from the pan into the fire. In this Salto Mortale, they were guided and helped by, what do you know, the IMF, the World Bank, etc. The agenda was set by the US Government to fight Communism. They have been in hell ever since. Any leader who rebelled was overthrown, assassinated, hanged or impaled. Many communist countries of Eastern Europe were infiltrated and enticed into the beauty of dollar debt. Poland, Romania, Hungary, and Yugoslavia come to mind. Hungarian dollar debt was referred to as “Goulash Communism.” Communism is gone but the dollar debt remains. Also, Yugoslavia is no more, but the debt of the successor states has increased markedly.

Presently, the world is so indebted that debt can hardly grow. The burden of debt of the Third World and many countries of the First World has become unbearable. Individuals, countries, nations, and other entities  will start going into default. The US is the most indebted nation in the world ,but that is no big deal, because it is indebted in its own currency. The rest of the world supports the US debt by holding dollars. In the process it is subservient to US interests. In other words, whatever the US wants, it gets and the rest of the world pays, because US possesses the Thunder Bolt of Zeus.

It is immoral to entice individuals, and/or nations to go into debt, Christianity and Islam condemn usury; it is a criminal act. The Western media constantly encourages people to go into debt. Capitalism without debt is like life on earth without water. It cannot exist and thrive. The world’s debt is slowing down, hence consumption is decreasing which is leading to a deceleration of growth.  Wages are stagnant or decreasing. The velocity of money is at an all time low. The Baltic Dry Index is going down. World trade is decreasing. The recovery in the US has not been ” recovery”. Instead, it has been stagnation to the down side, with 94.5 million people in the US no longer in the labor force. The reported unemployment rate is 5.1. That is an outright lie and deception. Eric Blair, aka, George Orwell said that telling truth in an Age of Deception is a revolutionary act. We live in an age of lies and deception. The Modus Operandi of the present economic system is lies and deception. US power will persist as long as the Thunder Bolt of Zeus has juice. How long will it last? Nobody knows. The US will do everything possible, including war, to maintain it. However, it will be the rest of the world that will determine the longevity of the dollar. The Zeus of antiquity and his thunder bolts are no more.

No economic recovery is possible,if ever.

Leave a reply

There is constant talk that economic recovery in the US is taking place. Bluntly stated, there is no recovery. What is taking place is economic “shunting” of electronic money created by the Federal Reserve into paper assets. The Federal Reserve calls this shunting “channeling”. They must be psychic. No channeling will save the system. The life force (or energy) is leaving the US economic system. This is evident in that 94.5 million people are not working. 47 million people are on food stamps. The infrastructure is collapsing. In other words, the Main Street is dying. It means that energy is leaving the Main Street and going to Wall Street. Medically speaking , in septic shock shunting is a very grave sign…

Channeling is a very ineffective policy. It is also brutal. It seems to imply that as Wall Street gets richer they will spend more but things don’t really operate that way: the people who have been blessed by Wall Street already spend as much as they need. Instead, the denizens of Wall Street with excess profits speculate even more. Bubbles are created in which the rich wallow, be they stocks, bonds, high end real estate, and various forms of derivatives. They serve no useful purpose. They are parasites. They extract wealth from working people and Mother Earth. How long can this go on? Not very long.

Wall Street claims that it is the center of wealth creation. False!! In the casino which Wall Street is money is lost by the majority; only the casino wins. Gambling chips are no wealth, neither are paper investments. They are very , very ephemeral like late spring snow. All wealth comes from Mother Nature using human labor and ingenuity. As Leonardo da Vinci said, “God sells everything for the price of labor”. If labor is cheap or free as in slavery, Mother Nature sells its treasures for essentially nothing. For more than five centuries Western Europe and subsequently the US harvested the wealth of the world. Now,  this harvesting or plunder is decreasing.  Not enough wealth is harvested from the rest of the world to keep the system going.

Enticing the Third World Countries into debt was another way of controlling the resources of the country. If  the leader of the country rejected the policy of indebtedness, that person was demonized and subsequently overthrown. From Mossadegh of Iran, Patrice Lumumba of the Belgian Congo, Sukarno of Indonesia, to Allende of Chile, (and many others such as Saddam Hussein and Gaddafi), attempting to control the resources of the earth has been and is a very bloody business. The natural resources of the world are the food of capitalism; human labor its’ oxygen. There is plenty of oxygen, but the amount of food is decreasing. Right now, there is a struggle going for control of the food. Developing countries want to control their own natural resources. That means saying no, no to the US and to multinational corporations. Presently, natural resources are very cheap because the demand for resources is slowing the world over. Also, Third World Countries are also slashing prices to gain dollars to service the debt which is denominated in US dollars. This is one of the reasons why the dollar is so strong at the moment. The indebted countries of the world are caught in a vice  between a strong dollar and a huge debt denominated in US currency.  The end result will be  multiple country defaults, riots, violence, and revolution. This will have boomerang effect on  the US economy. The US depends on the rest of the world. If the debt of the rest of the world slows down as it is doing already the US economy cannot grow, hence it cannot recover. The US economy depends on the exploitation of the rest of the world…

What is in store for the West? Slow decay initially, then sudden collapse. The US will be one of the last dominoes to collapse.  One of the three pillars of paper on which the US economy is based has already started to collapse, and that is the Stock Market. The month of October is crucial. The Federal Reserve and Plunge Protection Team will do everything to save the system. Hopefully, they might succeed, but, it is unlikely. When the stock market starts falling in earnest, multiple bankruptcies will occur in banks, large and small; corporations, large and small; insurance companies large and small; private pension funds, large and small; fracking and mining companies large and small; hedge funds and derivatives, large and small. Personal bankruptcies on a large scale will occur. A year or two later the bond market and the dollar will follow. Possibly, all three will collapse almost at the same time. No recovery will happen. What will happen after is anybody’s guess. Possibly chaos, a long transition, and the development of a new socially responsible system. Or, nuclear war. Only time will tell.

The future is very uncertain.

Leave a reply

The future of the world is very uncertain. Thermo-nuclear war and the life as we know it could end instantly. In a matter of hours or days, in fact. Life on earth would be close to extinction. Most people do not think in those terms,but the individuals who plan wars do. Most people are concerned about personal matters, such as family members, their own general well being, jobs, love, and their health. In the past, world events did not have such an all encompassing effect as they do now. Presently, the whole world is interconnected. So, let us speculate about our world’s problems…

Economically, tensions are building every where. Let us look at China. Every body is claiming that China is slowing down, but so what? It is natural that China should grow at its own pace. China is resilient and the Chinese people know how to suffer and take pain…

Presently South East Asia is the most dynamic region of the world. Let us list the countries located there : the Philippines, Vietnam, Laos, Cambodia,Thailand,Singapore, Malaysia, Myanmar, and Indonesia. Also, Australia, New Zealand, Papua New Guinea, the Fiji Islands and the Solomon Islands are a part of this huge region. There are some disputes amongst themselves and the Chinese concerning the resources of the South China Sea, specifically, the Spratly  Islands. Without outside interference, resolutions will be peaceful. China wants peace. This is the place where the Silk Road will start. It will have two paths: one through India, Pakistan, Iran, Iraq, Syria, Turkey to Europe. The other route will go through Saudi Arabia over the Gulf of Aquaba to the Sinai, Egypt and into Africa. Also it could go across the Red Sea into Africa. The other major branch of the Silk Road will go through China, Mongolia, Kazakhstan, Russia to Europe. In other words, Africa and Eurasia will be interconnected and intertwined. There will be no place for foreign interference. Japan will have to join or be doomed. This will be a huge community of nations of Afro-Eurasia based on equality and co-operation. The Trans Pacific Partnership will not succeed. The TPP will fail...

The nations of Latin America  and the Caribbean will join in. Trade between Latin America -Carribean  and Afro-Eurasia will use the southern routes of the Pacific and Atlantic Oceans. The US and Canada will try to prevent this inter-continental coalescence but will not succeed. They will have to join in or face isolation. Nuclear war or any major war would prevent the inter-continental coalescence.

It is precisely for this reason, that the US and its allies want to build a Wall of Enmity between Europe and Russia. As I mentioned in a previous post The Wall of Enmity , this wall would run from the three Baltic states of the north-east through Poland to the Ukraine in the south-east of Europe. That is why the Ukraine is so important to the permanent division of Europe and its subservience to the US. Many politicians and political parties of Europe are aware of this and will oppose the scheme. I do believe that Ukrainians will decide their own fate and will not join the European Union which is in serious crisis. The Ukraine and Russia are one country and one people. They have a common heart and common soul. The present junta regime in Kiev is undergoing decay. Socio-economic conditions of the country are worsening by the day. More than one million refugees have been welcomed into Russia like family members and not as refugees. It will not be European nor American gas that will keep Ukrainians warm in the winter but Russian gas. Whether war is restarted or not, Ukrainians will rebel and overthrow the Junta and foreign influence. It will be a sight to behold…

One of the key ponts of change will be in Canada and the US.These two countries are intertwined culturally, linguistically, ethnically, and historically. They are entering the greatest crisis of their existence; both are in denial. I will only discuss the US, but this discussion more or less applies to Canada as well. The strongest power on the planet is the US but its power is essentially ephemeral. The US economic system does not have strong foundations. A strong foundation for the US would be if seventy percent of the population lived and cultivated the land. The population is now too big to be fully employed in services and industry. If 200 million people lived as guardians and cultivators of the land, they would be independent and not the slaves of a debt system.They would have their own marketing and credit outside the big banks. They would become the strong back bone of the country. Instead,they are wards of the state. This is the age of Finance Capitalism based on a slavery called DEBT. This is the essence of capitalism. The US power is based on three pillars of paper,the dollar,the stock and bond markets. All three are based on debt. Will they fall together or separate remains to be seen. Time will tell….

One region that must be discussed is the Middle East. It is the cauldron of cauldrons ( see my post Large Middle East cauldron is brewing around the corner…). The structure of the Middle East has been destroyed. Iraq has been destroyed. Libya has been destroyed. Syria is being destroyed now. Saudi Arabia and the Gulf States will meet their destiny in Yemen and it will be very soon. Egypt has been neutralized for the time being. Turkey is on the verge of civil war. The only countries standing tall are Israel and Iran. Iran is essentially self sufficient, but Israel is not. Sanctions against Iran hurt but do not destroy it. Iran became stronger. Israel,on the other hand, depends on a lot of aid, especially from the US and Germany. Also, Israel lacks water. It covets the waters of Lebanon. War for water is inevitable. Presently,Israel imports water from Turkey. Efforts to desalinate water are underway but it’s not enough for a high tech country such as Israel. All this destabilization of Arab countries is essentially for the benefit of Israel without the necessity of overt Israeli involvement. Israel is just waiting to pounce. And Iran is watching the situation very carefully, giving aid to the Syrian government and the Huthis of Yemen. War seems inevitable. Which side will win? It will to a large extent depend on the US economic situation. Only time will tell….

(These are some of the scenarios for the next year or two.)

 

 

 

Deflation is impossible under fiat currency regime.

Leave a reply

The fiat currency regime is a profoundly parasitic system. It is parasitic because the dominant currency (the US dollar),also known as the reserve currency or official currency of the world sucks the energy and blood of the rest of the world. It affects the whole non Anglo-American World.

The system was set up in Bretton-Woods, New Hampshire in 1944. The sucking instruments were the International Monetary Fund, the World Bank, the Agency for International  Development and others. The modus operandi  was the creation of debt denominated in dollars.The plan was and still is to place into debt the entire world, especially the Third World and the former Communist World.

Being in debt in a foreign currency implies that a country must earn that currency by selling its own natural resources  at ever cheaper prices. Devaluation of the local currency ensues, inflation follows. The local population, already poor, is faced with a threat to its survival but the creditors’ mission has been accomplished. This method of operation is repeated over and over again. The governments of these miserable countries are blamed and if they rebel they are overthrown. Hyperinflationary  depression is the end result.

A similar fate is awaiting the US. Since 1945 the US has been sucking the blood of the rest of the world. First, on the basis of the dollar being linked to gold at thirty five dollars an ounce. When this policy became too costly, the US simply defaulted. The US was losing too much gold. New policy was introduced, the petro dollar,by inducing oil producing countries to sell their oil only in dollars. The Shah of Iran played a key role and his role in this policy sealed his fate. One must remember that Iran is a millennial civilisation. Also, all trade and debt continued to be based on dollars. In the nineteen seventies the dollar weakened and precious metals spiked as inflation spiked to almost hyperinflationary levels. Interest rates were raised to almost twenty percent. Savers were doing great. The Cold War intensified. The Soviet Union dissolved itself. Japan entered a declining phase. China accommodated the US, formed a “modus vivendi” with the US but Russia was on its knees. It was plundered by the the  West  via Yeltsin and the oligarchs. Europe was compliant to the US and the dollar reigned supreme.

Good things never last. The tech bubble burst in 2000. The housing bubble inflated. 911 happened. The sympathy of the world was on America’s side. Wars were started. First Afghanistan,then Iraq. In Afghanistan, the Taliban were US allies but then they reduced the production of opium to only ninety six tons. That threatened the value of the dollar. The US attacked  Afghanistan. The excuse was El-Quaida  and 911. The production of opium went from ninety six tons to six thousand four hundred tons. In dollar terms, this is over six trillion annually and all traded in dollars. That trade supports the dollar and keeps domestic inflation at bay because the opium or drug trade is the biggest form of trade in the world (it is bigger than even the automobile or oil industries! ) Weapons of mass destruction were the reason given to attack Iraq. The real reason was Saddam Hossein wanted to sell Iraqui oil for Euros.  Libya was destroyed because Gaddafi wanted to use Gold Dinar.

Housing and the debt bubble collapsed. The system was shaken to its foundation. Zero interest rates were introduced. Quantitative Easing was instituted. Easy money poured into the stock market, the bond market, high end real estate market, and various kinds of speculations. Money poured into the US from all over the world. The dollar rose. Gold and other precious metals went into collapse. All commodities went into collapse mode. The third world is entering hyperinflationary depression. In the US, they are talking about deflation. The only deflation that is being experienced in the US is the standard of living of ninety percent of Americans. This has never happened before. During the nineteen thirties, the standard of living of people who worked rose because the prices of everything had collapsed, including the dollar. Dollar was devalued with respect to gold to thirty five dollars an ounce from twenty dollars and sixty seven cents.

There is no deflation in America except in living standards for ninety percent of its people. The prices of everything including groceries, services, health care, rents,etc are going up. Wages are stagnating. The buying power of the dollar is going down. Since 1945, the US has been exporting inflation to the rest of the world. The rest of the world is slowly de-dollarizing. The dollar will be abandoned. Nobody will want a  piece of paper that is backed by nothing except  the “Full Faith and Credit” of the United States. Inflation is coming to the US. If the dollar were gold backed currency, the US would not be having these problems. Under fiat currency deflation it is not possible. Only gold or gold-backed currency leads to deflation. Time will tell.

 

The FED will defend the stock market to its’ last breath

Leave a reply

The FED claims that it does not watch the market. It is concerned but not overly.This is further from the truth than one can imagine. The two things they are concerned with is debt and the stock market, because the essence of the economic system is debt and the stock market. Debt is the blood of the system and the stock market is the heart.The economy is a living organism. Let us compare it to a human body.The key components of the human body are the blood and the heart. The heart cannot do without the blood, and blood cannot do without the heart,and the whole body cannot exist without either of them. Massive heart attack and the patient dies. Massive blood loss,if a transfusion is not available, and the patient dies…

What happens when the stock trading opens and there are no bids? The market goes into free fall. The “Plunge Protection Team” moves in and artificial bids are created to stabilize the market. Most of the time the Plunge Protection Team is successful and they blame the situation on some “glitch”. But one day they will NOT be able to prevent the crash.The crash will occur,the stock market will be closed and the consequences will be catastrophic, equivalent to a massive heart attack in a human being: the FED will and must support the stock market.

What happens when the credit ceases? There will be no blood.The FED will try to infuse liquidity, but if credit infusion is insufficient or inappropriate, the system will collapse. The patient will die. So the FED will try to do everything to save the system but may not succeed. This will signal the death of the economic system and the beginning of the new age. It will be very, very interesting!