Category Archives: economic catastrophe

Brief Observations

North Korea, I have said in my tweets, is a side show. The US is caught in Zugzwang. If it opts for war it will lose all its teeth and lower jaw. South Korea and Japan would be severely damaged or even destroyed. The US fighting North Korea is like a lion fighting the porcupine. If a porcupine quilt gets into the lions mouth, the lion will have a miserable fate. The US will huff and puff, but will back off. The nuclear option is off. However, tension could increase to war if the dollar position as reserve currency is threatened. China will start trading oil in yuan backed by gold. The US is upset and may sanction China. The chance of war with the Koreans will considerably increase?

The Ukraine situation is critical. The Ukraine is dying. Ukrainians are ready to revolt. Most of the Ukraine is Ethnically Russian. The Ukraine will rebel. The uprising will be massive. Donbass will help liberate the Ukraine. Poroshenko and company will be hunted like rats. The Ukraine will return to Russia. The US and EU will huff and puff but will be helpless.

Venezuela will not buckle. The opposition has no credibility. They are sold souls. External forces with the help of the opposition will try to overthrow Chavismo but they will fail. The barrios and armed forces will not allow Chavismo to fail. Venezuela is abandoning the dollar. It will set an example for the rest of Latin America.

Middle East Conundrum. A huge Islamic Alliance is forming: Hesbollah of Lebanon, Syria, Iraq, Iran, Turkey, Qatar, Yemen, and others. This alliance has thrown its weight behind Assad of Syria. External forces will try to assassinate Assad, but they most likely will not succeed. Panic is gripping Israel and Saudi Arabia. Assad is winning and that is anathema to Israel and the US. Big war is in store over water, strategic resources, and control of the area.

The biggest problems facing the world are the debt and the dollar. Debt is  becoming unbearable for most countries. Most debt is denominated in US dollars. This has given the US a power that has no parallel in world history. It is unique and flawed. This system is neo-slavery. By trapping the Third World in dollar debt, the US gets all the natural resources on a dollar plate for free. The enforcers of this arrangement are the International Monetary Fund and the World Bank, backed by the Pentagon.

But the world is waking up and questioning this arrangement. Nations are moving away from subservience to economic independence, and this is the Achilles Heel of this economic arrangement. As more nations abandon the dollar, a huge economic crisis of epic proportions is unfolding.  The system is entering Kaput stage which could lead to war. We will see.

High stock prices are a danger to the US economy

How could high stock prices be a danger to the US economy? It just can’t be so, but it is. Paradox? Not really. How could persistently rising stock prices be bad for any economy? That is not possible, because people who own stocks feel wealthy. They will spend more, consumption goes up. Firms rev up production, hire more workers, wages rise, and the virtuous cycle is established; if only this were true!

Persistently rising stock prices suck the blood out of the economy and direct financial energy into the stock market. Corporations buy their own stock with cheap borrowed money, close plants, move operations overseas and leave US cities delapidated ghost towns. Tax revenues collapse, infrastructures collapse and the US slowly turns into a third world nation. This is the dark side of persistently rising stock prices.

In rising stock oriented society, wages do not grow.  In fact, the buying power of wages actually falls. Poverty, anxiety, chronic illnesses, obesity, and violence increase.

Economists, academics, decision makers, politicians sing the same ol’ song: “The US economy is resilient!”, and they point to the rising stock market. It is not!

Another component contributing to the rising stock market are persistently low interest rates, draining savers of their deserved interest income.

It would be better if the stock market was at 5000 and the economy was humming with rising wages, job growth, universal single payer health care system, affordable quality education, massive infrastructure renewal programs, quality affordable housing, etc. but this will never happen.

It will never happen as long as the rising stock market sucks the blood out of the economy, turning the country into an economic desert with areas of oases where the 2% ownership class lives with the 5% overseer class.

It will never happen as long the Federal Reserve and US Treasury’s economic policy is to support the stock market. The stock market will continue to suck the blood out of the economy until the final collapse.

No change will occur without the final collapse.

 

The Precariat Class

In my previous posts I stated that the economic system of the US is based on three pillars of paper, and all three are based on debt. The three pillars of paper are the dollar, the bond and the stock market. If one falters, all three will collapse, and the economic system which is so blindly venerated will collapse. The capitalist system of the West has become totally parasitic, and it no longer can  grow  at the rate that is needed to sustain itself. The debt or usury rate has to grow. Every year the growth of debt has to be much bigger than the previous year. If debt grows but not as fast as in previous years crisis develops which may lead the system into total collapse. This is happening right now.

The Western economic system since 1980 has had no real growth. Immense debt growth has been used to claim that there was real growth. Reaganomics was the last “hurrah.” The middle class has collapsed because the good jobs have disappeared. Now we have three economic classes in the US: the ownership class {one percent], the overseer class {five percent}, the Precariat class {ninety four percent}. Precariat means uncertain in Latin. Ninety four percent of Americans live in great uncertainty, hence, the Precariat Class.  The country is decaying: infrastructure, education, health, housing. The Precariat class senses that there is something profoundly wrong with the country, and that it will get worse. No recovery but great upheaval is awaiting the country.

Will the dollar be defended to the end?

In many  of my previous posts, I have stated that the US Economic System is based on three pillars of paper, and all three of these are based on debt. The three pillars of paper are the dollar, the bond market, and the stock market. Of the three, the dollar is the most important because it is the essence and instrument of US power. In the 1951 film version of Charles Dickens’ short story “A Christmas Carol”, there is a character, Mr. Jorkin, who says: “Control the cash box and you control the world”. The US has been controlling  the world since 1944, when the Bretton Woods Agreement was signed. The dollar became the reserve currency connected to gold at 35 dollars an ounce, and other convertible currencies were connected to the dollar. Nearly all trade and debt was denominated in dollars. Economically and financially speaking the world became dollar centric.

However, the dollar is still connected to gold, because the dollar without gold is like a fish without water. It cannot exist as the Reserve and Official currency of the world. It can only exist as the local currency in the US, because in the US, the dollar is the Legal Tender. The Petro Dollar depends on the whims of OPEC. It is not reliable. Gold, on the other hand, has the full backing of Mother Earth. Gold was created  when the Universe was created, and has the Energy of the Sun. Petroleum can be consumed, but gold cannot be consumed nor destroyed.

For the dollar to be convertible into gold, gold must be available in dollar terms at any price anywhere in the world. If that relationship ceases, the dollar can no longer be the reserve currency of the world. Powerful non Western countries are accumulating gold on the cheap, at around eleven hundred dollars an ounce. In one of my previous posts I stated that gold is leaving the West and going to the rest, especially to the East.

There is a “purpose” to this lunacy. By keeping the, dollar “artificially” strong, the US is destroying the countries of the world which are indebted in dollars. They are further pushed into economic slavery by the International Monetary Fund, {IMF}, and the World Bank. Both banks are agents of the US, despite international sounding names. Indebted nations are in severe depression. They are selling their natural resources for pennies on the dollar. They cannot buy any manufactured goods from China, South Korea, Japan, and Europe, so these regions are slowing down which further puts pressure on commodities. First world countries like Canada, Australia are entering severe recession, if not depression, while counties such as Brasil, Venezuela, Argentina, and others are entering depression. The currencies of these and other countries are collapsing. Russia and China are special targets. These two countries must be destroyed or neutralized for the US to have  total world domination. High Noon is fast approaching.

Russia is the “special” target. Russia has the capacity to be totally self-sufficient as it was during Second World War when it was the Soviet Union.  Germany in 1942 controlled all of  Russia just west of Leningrad, west of Stalingrad. The Soviet Union could not be defeated despite the fact that Germany controlled all of Europe. A similar situation exists today. For the US to control the world it must subjugate Russia. How to do that? Simple: economically. The first stage was to tear the Ukraine from Russia. So far it has not succeeded. The Ukraine is a political, economic, and moral mess. It is on the verge of collapse. When the Ukraine collapses, people will rise up, take over, and join Russia. Nuclear war against Russia is unthinkable for it would mean catastrophe for Humanity and all life on Earth, although the possibility of nuclear war is at its highest ever. The only alternative is economic strangulation.

To strangle Russia you simply have to tear it apart economically. Because of the Ukraine and Crimea, sanctions were imposed by the West and the countries closely associated with the West such as Japan. The Russian currency was attacked and devalued but not destroyed. The oil price was made to collapse  with the help of Saudi Arabia and Gulf Arab States. Military pressure was applied on the president of Syria. Propaganda against Putin was increased. Russia calmly responded; counter sanctions against the West. They are hurting badly. Devaluation of the Ruble is essentially positive, but the low oil price is not. Russia is the number one oil producer in the world and exports two thirds of its oil. There is a cushion of profitability. Russia suffers but will not buckle.

Russia is fighting back. It is avoiding the dollar like the plague. It is signing trade deals with other countries in their respective currencies. It is developing its own SWIFT,or Society for Worldwide International Financial Transfers. It is also developing worldwide tele-communication systems which exclude the West. With the help of Iran and Hesbollah it is successfully fighting ISIS in Syria. Yemeni Houthis have check mated the Saudis in Yemen. The oil price collapse which the Saudis helped to engineer is hurting them economically. Rebellion is brewing in the country. The Shia, in the Eastern Provinces where the oil is, are very restless. Foreign workers and native Sunnis are also very restless. In one of my previous posts I stated that Saudi Arabia will first implode then explode. This will be very negative for the dollar.

China is being courted to let the renminbi join the IMF currency system which would enable the dollar to continue to be reserve currency of the world. China will play the game even though it does not trust the game because it has no choice; it is trapped in the US financial  web. China is trying to extricate itself slowly from this trap. China is buying gold and selling US Treasuries. It is expanding non US trade and aid using the renminbi; the dollar is under attack.

But the US is fighting back. The TPP, Trans Pacific Partnership, was negotiated with some South East Asian and Latin American countries. Japan, Canada, Australia, New Zealand, and Mexico are included. The idea behind the agreement is to consolidate the use of the dollar in trade. A similar agreement is being negotiated with the European Union, the Trans Atlantic Trade and Investment Policy. Will the US succeed in keeping the dollar official currency of the world?Nobody knows.

If the dollar is dethroned, it will be catastrophic for the US. The US will lose the instrument of enslavement. It will no longer be able to exploit the rest of the world through usury. It will no longer be able to finance itself without inflation, followed by hyperinflation. It will no longer be able to maintain military bases in other countries and project its power. The US stock and bond markets may collapse, and the dollar may follow. The people who control America are strong believers in the saying: “It is our way or the highway”. “High Noon” is around the corner. If the US fails, it will become the third world country of North America. In many ways, it already is. Only time will tell.

 

 

 

 

 

The velocity of money and the Baltic Dry Index.

The world economy is dying. Powerful people of the world are in denial. They think they will be able to correct the situation, but the world economy cannot be saved. The two indicators of a dying economy are the velocity of money and the Baltic Dry Index.

Let us examine the velocity of money. The simple definition is the speed with which money circulates through the economy. The more dynamic the economy, the more optimistic people feel about jobs and economic security, the more they feel relaxed and the more likely they will spend, travel, feel good about the country, the government, the people, and themselves. Presently, the velocity of money is collapsing. Whatever money ordinary people earn and have they do not want to spend. Also, many, many people have no money to spend. The situation is very dire, but one would not know by watching the “evil vision”. On evil vision, attractive women in eternal spring dresses, and men in impeccable suits with or without neckties constantly proclaim prosperity. The only people enjoying prosperity are the less than one percent of the ownership class and about five to ten percent of the overseer class to which the stars of the evil vision belong. (Evil vision is TV.) There is so much discontent in the country that it threatens the stability of the country. The economy is getting worse. Just look the stock market and the high yield bond market!

Another measure of how bad the US and world economy are is the Baltic Dry Index. Just last week it dropped below four hundred. Before the “Great Recession” of 2007-09, it was registering in the several thousands. After the so called Great Recession ended, it recovered to almost 2000. Now, after seven years of recovery it dropped to below 400, in the year of 2016. Any intelligent person, non-brain washed, knows that there was no recovery. In one of my previous posts, I stated that economic recovery in the US is impossible, because the energy entering the US economic system is decreasing, while the energy needed to maintain its internal and external operations is increasing. The Reserve Status of the dollar in the world is enabling the US to maintain its operation internally and world wide as long the rest of the world is accepting the dollar. That ability to maintain its operations is based on debt. As long as the rest of the world accepts American debt there is no problem. But that is ending and that is the problem. When the dollar is rejected it will be kaput.

The Baltic Dry Index {BDI} is indicating that world trade is collapsing. Empty ships are being anchored in ports. Oil tankers, full of crude, are anchored. There are few buyers of crude. Some experts are telling it is going to get worse. Collapsing BDI is possibly signaling world wide depression. Decreasing velocity of money is indicating that the majority of people have no money to buy even basic necessities.  Why are 94,000,000 people not in the labour force? Why are 47,000,000 people on food stamps? Why are wages for the non overseer class stagnant and decreasing? Why is the infrastructure of this nation dilapidated? Up until 2016, there was plenty of money for Wall Street. Now the stock markets and the bond markets of the world are collapsing. It could be that the world is entering the Economic Black Plague State. Only time will tell.

 

Dollar vs. Gold II

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

The Turkish downing of the Russian plane in Syria is a serious provocation with unknown long term consequences. It was planned ahead by two countries, Turkey and the US, because they both support the Islamic State or ISIS. They want control of Syria, Iraq, and Lebanon by hook or by crook…

The US is building the Wall of Enmity between Europe and Russia via the Baltic States, and Poland, through the Ukraine, which I mentioned in one of my previous posts. It wants to extend that Wall of Enmity to the Middle East via Turkey, Syria, Lebanon, Iraq to the Persian Gulf and the Indian Ocean. The five pivot states of this extended Wall of Enmity would be Poland, Ukraine, Turkey, Saudi Arabia, and Israel. Lebanon, Iraq, Syria, and possibly, Jordan would be partitioned or re-arranged to serve the interests of the US and some other key countries such as Israel. But Russia and Iran stand in the way, and Syria, Lebanon, and Iraq are the battle grounds. The airspace of these three countries is constantly being violated by Israel and the US with not a peep about it in the Western press.

How have events been developing in the Middle East? The US has been bombing ISIS for more than a year, with absolutely no effect, because they were not really bombing ISIS but Syrian infrastructure. Western analysts and media were predicting the collapse of Syria and the removal of Assad. Russia, Iran, and Hesballah stepped in, and now, it seems ISIS and other groups are on the run. This panicked the US and Turkey. The US and Turkey could not send troops into Syria to help ISIS. What would the world say? Turkey was never friendly to Russia. It milked Russia via construction projects in Russia, Russian tourism, and cheap Russian gas. The Russians, being sincere, mistook this for friendship. It was far from it. The Turkish stream was a vague arrangement. The US did not want a Russian South stream, why would they want a Turkish stream? The US secretly agreed to help ISIS with which Turkey whole heartedly agreed, and which Turkey already was helping along with the Saudi Arabian and Gulf Monarchies. The US and Turkey planned this provocation, especially now with ISIS on the run. The Paris tragedy confused the situation but did not derail the planning. The plan was to shoot the Russian bomber, and accuse Russia of a violation of Turkish airspace. The Russian pilot would have supposedly been given warnings to steer clear. Imagine, ten warnings in five minutes. The Turks showed some real concern, and then shot the plane from behind. A “real stab in the back” as declared by President Putin, who knows what he is talking about. President Obama defended the Turkish action by saying that every country has a right to defend itself. Of course every country allied with the US does, but Syria not allied with the US so it has no right. This is how the world works these days.

Turkey went to NATO, crying that Russia violated its airspace, and despite repeated warnings, had no choice but to shoot the plane from behind. Turkey was hoping that NATO would use Article 5 (an attack on one is an attack on all) to confront Russia, but this did not happen. Why it did not happen is because the TRUTH sabotaged the plan. The whole world knew that Turkey stabbed Russia in the back. Vague support was given to Turkey but nothing else. President Hollande of France came to the White House on November 24 to organize an aggressive response to ISIS, but “Francois’s”   ideas were only politely considered. Today, November 26, the President of France is in Moscow conferring with Putin.

What will be the consequences of all this? President Obama has probably instructed Turkey to be tough. Initially, Russia wants a sincere  apology and compensation, but Erdogan will offer nothing. Russia should be concerned of what is going on in Ukraine, for instance the cutting off of electricity to the Crimea and the banning of all Russian flights. The Ukraine is also mobilizing troops in Donbas. A sudden Ukrainian attack cannot be excluded. Americans are training Ukrainian troops as we speak. Ukrainians are waiting for the US order to attack. Novorussia must be ready. The possibility of an ISIS attack in Russia should not be dismissed. The Black Sea passage blockade can also not be excluded,but I am sure Russia has alternative contingencies for everything.

Turkey will face some serious consequences in spite of the bravado of Erdogan and the economic losses will be severe. Russian tourists, food exports, Turkish firms working in Russia will all be lost or cut. The losses will be in the billions of dollars and will send Turkey into a severe recession, if not a full-blown depression. The world will shun Turkey for openly supporting ISIS. The Kurds of Turkey will rise up. There could be coup d’état in Turkey. Socio-economic upheaval cannot be excluded. Morally and ethically speaking, Turkey has been severely damaged. Russian efforts in Syria will intensify and this “stab in the back” will not be soon forgotten,

The US is entering a serious phase of economic crisis, and it’s just around the corner. Now, the whole world knows that secretly, the US is supporting ISIS. Whether the US succeeds in building the Wall of Enmity from the Baltic to the Persian Gulf and the Indian Ocean remains to be seen. Nemesis is waiting down the road. Many European states, large and small, will distance themselves from NATO, Turkey, and the US. Only time will tell.

 

 

The Middle East is the Pivot of World History.

The Middle East is on the verge of great conflict.  The lines of conflict have been drawn up. The policy of the US since 1948 has been to secure the existence of Israel. This policy still exists today. The US is more involved in the Middle East than ever before. The policy of Israel and the US is to destroy or fragment any state that opposes the existence of Israel. Israel is a very powerful state, militarily and technologically. Some consider Israel the fourth most powerful state in the world, after the big three countries, China, Russia, and the US. The Achilles Heel of Israel is water. It has to import almost half of its water, mainly from Turkey,  a clearly pivotal state to the existence of Israel. The Armenian Genocide of 1916 in the Ottoman Empire caused  by the Turks is not recognized by Israel nor the US. It is understandable as to why.

Egypt and Jordan have been neutralized and diplomatic relations with Israel established. This relationship is precarious at best though. Libya and Iraq have been severely damaged but not yet destroyed.The last man standing has been Bashar al Assad of Syria. The US has decreed that Assad must go, but he is not going anywhere. A famous Prussian general, von Clausewitz, declared that war is a diplomacy by other means. Creation of the Islamic State by the West is diplomacy by other means. ISIS or the Islamic State has been declared by the US to be a terrorist state…but not really. The US bombs ISIS.. but not really. With all those shiny, new Toyota trucks and modern weapons ISIS is moving with the speed of light across Iraq and Syria. Volunteers are coming from all over the world. Volunteers are mainly Moslem Youth. One famous US senator was photographed with the Islamic State group. Even so, Iraq and Syria are still standing. Russia and Iran have stepped in. A sort of alliance has been formed, composed of Hasbullah  of Lebanon, Syria, Iraq, Iran, and Russia. The opposing forces are ISIS, the US, Israel, Saudi Arabia, and the Gulf States. The massive refugee problem which has been created by US policies in the Middle East is destabilizing Europe. The economy of Europe, already weak, is being weakened further by the onslaught of refugees from the Middle East, North Africa, and Afghanistan. The vaunted economy of Germany is standing on one leg only. German exports are collapsing. Sanctions are hurting Europe more than they are hurting Russia. If Syria and Iraq win against ISIS, there will be a geo-strategic shift in the Middle East. The Palestinians are sensing this. A massive Palestinian uprising is in the making. China is developing new Silk Roads to Europe and Africa avoiding sea lanes controlled by the US Navy. Latin America is moving closer to Afro-Eurasia. Highways and high speed rail roads will be criss-crossing Afro-Eurasia. The US and its closest allies will face isolation…

Europe must re-consider its position vis a vis Russia. The Wall of Enmity that the US is’ building between Russia and Europe is not going to succeed. It is just a matter of time before the  people of the Ukraine rise up against the Kiev Junta and take their country back (with Russia where it belongs). The future of Europe is with Afro-Eurasia and Latin America. If the Palestinian Intifada turns massive and Israel feels threatened, it may use the nuclear option. Saudi Arabia also cannot be ignored, it is one of the key players in the Middle East. The Saudis are involved in mortal combat in Yemen with the Houthis and are about to lose big. If the Saudi dynasty is overthrown in the not too distant future and replaced by an anti-western leadership, you can kiss the petro dollar good bye. The dollar and the US economy would collapse. The US would face a series of crises it has never yet faced in its entire history. The Israeli economy, which is dependent on the US, would most certainly collapse. Perhaps, instinctively, the Palestinians are sensing that. I repeat again, a massive Intifada is in the works. No question, the Middle East is the pivot of world history.

No economic recovery is possible,if ever.

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 collapse of the present economic structure is inevitable.

The collapse of the present economic system is inevitable and cannot be prevented despite all the efforts of the individuals that run and benefit from the system. A system based on lies and deceptions cannot last. It cannot be sustained. As I mentioned in one of my earlier posts,the US economic system and power is based on three  pillars: paper, the dollar, the bond and stock markets; all three are based on debt denominated in US dollars.

Many people in the know  think that the weakest pillar of the three is the dollar, but that ain’t necessarily so. Remember, the dollar is essentially the official currency of the world. Most  financial transactions are done in dollars. Most of the world’s debt is held in dollars. Also,most of the drug  trade,prostitution and pornography are transacted in dollars. In other words,most economic human activity is  carried out in dollars. In addition, countries that have trade surpluses hold their reserves in dollars. De-dollarization is taking place all over the world, but the process has been slow. It may accelerate in the future, but the future has not yet arrived. The dollar is good for at least two, if not, five years. Five years in economic terms is a long time. Still, many people and countries are moving towards the exits…

US Treasuries are connected with the dollar policy. Treasury bonds are debt issued  by the US Government for its operation. The claim is made that it is as good and safe as gold. Each individual should decide for herself or himself. Foreign governments are parking their dollar reserves in US treasuries. Narco money is also parking its money in US Treasuries. Many important counties are divesting themselves of Treasuries and investing in the ultimate money, which is GOLD. The process is slow but it will accelerate in the future, but the future has not arrived.

The third pillar of paper is the stock market. The US Stock Market is Casino Royale and can close and collapse any moment. The future of the world will be decided on Wall Street. If Wall Street collapses suddenly it would be an earth shaking event, the kind that happens only once or twice in a millennium. It may also be slow process of decay. Which ever process takes hold or if a mixture of the two, it will ultimately be catastrophic. The US Government and the Federal Reserve  will try  their best but will fail, because the energy entering the economic system is decreasing and will go to its equilibrium level whose depth is unknown. It will be known in due time. The Economic System which is blindly venerated will no longer be viable. It will collapse from septic financial shock and die. Chaos and long transition will follow. Countries will fragment into smaller units. The US may face fragmentation.People living on the land will do reasonably well. The Amish will be admired. Only time will tell.