Category Archives: the Capitalist System

The Struggle for Brazil

Brazil, a pivotal state of the Western Hemisphere, and one of the pivotal states of the world is in trouble. It is in trouble because it is not totally independent despite the fact that it is a member of the BRICS block and MERCOSUR. Brazil is still controlled by the Wall Street and London banks. The administration of President Dilma Rousseff is not liked by the international banks because her policy of independence threatens the control of the Anglo-Americans, hence President Rousseff on any pretext must go. With the help of a fitfth columnist, including vice president Temer, Dilma is facing a serious possibility of Impeachment.

If President Dilma is impeached, it may not be victory for neo-liberal forces and their external banking allies. President Dilma has immense support amongst the masses of Brazil, as has former president of Brazil, Lula da Silva. (Ex-president Lula is also charged with some corruption concerning some car wash.) Brazilian society is deeply corrupt but in this case, the reactionary forces are making a mountain out of a mole hill. The whole world, and, in particular, the whole of Latin America is watching.

As the world economy is entering recession, if not depression, Brazil has entered depression because of the external debt denominated in dollars, and the subsequent collapse of the commodities on which Brazilian economy is dependent. Domestic, neoliberal media is blaming President Rousseff, yet Dilma cannot be blamed for the economic situation of the world, and, subsequently, of Brazil. If, Brazil were debt free it would be able to manage quite effectively its economic problems, and impeachment of the President would not be possible.

Brazil is a huge country with a surface area of over 3 million square miles and a population of over 200 million people. The biggest problem as I have mentioned is foreign debt denominated in dollars and the collapse of the price of commodities. President Dilma’s foreign and economic policies are a thorn in the side to the banking interests, so why not carry out a ‘legal coup d’etat’ against a popularly elected President by using impeachment based on phony corruption charges. It will backfire badly. The world economy is collapsing, including the US, and the Brazilians know that, and they will turn violently against vice president Temer if he becomes president. Violent revolution in Brazil and the rest of Latin America is inevitable. The true liberation of Latin America has barely begun. 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.