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Perpetual Geo-economic Strategic Machine

In the summer of 1944, an international geo-economic conference took place in Breton-Woods, New Hamphshire, where the Dollar was crowned the official currency of the world. The British pound became chief deputy to the dollar. All trade and commercial transaction were to be done in US dollars. In addition, all foreign currencies would be connected to the dollar. The dollar was convertible into gold at 35 dollars an ounce. The British pound had some role in the so-called Sterling Area composed of the British colonies and ex-colonies. The Swiss Franc had a unique function because of Switzerland being an international banking center. Dollar surplus countries had the choice of keeping their surpluses in US treasuries or in gold at the Federal Reserve Bank of New York. So through the dollar, the US became the Master of the World.

“Control the cash box and you control the world.” Immortal words spoken by the character Mr. Jorkin in the 1951 televised version of “A Christmas Carol” by Charles Dickens. The US, by owning the dollar, became the controller of the world. The dollar has been the ruler of the world since 1944. The USSR and its allies had to trade in dollars with foreign countries. The main reason for Cold War started by the US was to exhaust the USSR.

The USSR fell because Marxist ideology was alien to the Russian soul. The Khrushchov de-Stalinization of 1954 broke the myth of Soviet Mythology. People yearned to return to the ancient Slavonic values and the Greek Orthodox religion. It was only matter of time before the system would collapse. Before the 1st World War, Russia was the greatest producer and exporter of wheat in the world. By the 1970s it was an importer of wheat. The Soviet Union could have been reformed, but with leaders such as Gorbachov and Yeltsin was not possible. The Soviet Union was dissolved and the constituent republics were let go. It is not likely that the US would dissolve itself.

With the dissolution of the USSR, the US became the world’s absolute hegemon. The dollar’s position was enhanced as the reserve currency of the world. Debt was the modus operandi of US control.

The US economic system is based on debt, and it is flawed. Debt must grow for the system to be viable, but recently the growth of debt has slowed down; a bad sign.

Dollar debt has two components: external and Internal. External debt is the dollar debt of foreign countries which is the key factor. If the external component of debt is rising, then the dollar will be strong and bank profits will rise from interest payments and will keep indebted countries compliant. That is, they must follow instructions from Washington and Wall Street. If they refuse, they get punished with sanctions and or a coup d’état or military action. The growth of external debt keeps the system afloat. It is the very essence of our economic system.

Internal debt is no problem. After all “we owe it to ourselves.” Very Orwellian thinking, but it works as long as the rest of the world needs dollars for trade.

The rest of the world is experiencing an epiphany. More and more countries are trying to avoid the dollar. The perpetual geo-economic strategic machine is breaking down.

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What Will 2017 bring?

 

The world, in 2017, will continue to move away from subservience to independence and to free association of independent states. This is evident in South East Asia where countries are moving away from Western orientation towards rapprochement with China and Russia. Even Japan is moving closer to Eurasia.

A similar process is going in Africa. African states yearn to breath free and not be subservient to the West and exploited by the West for their natural wealth of which it has in abundance. They want to remove the final vestiges of Colonialism. Africa will continue its orientation East, despite Western propaganda. The Western press uniformly condemns Africa for corruption. They are no more corrupt than the West. Corruption is the Modus Operandi of the West to control the rest. It has been going on for centuries.

Latin America, which extends from the Rio Grande in the North to Tierra Del Fuego in the South, has been independent since the early 1800’s, but has been dominated by the US. Remnants of colonialism still exist in Latin America such as in las Islas Malvinas (the Falkland Islands). Neo-Liberal governments are in power in major Latin American countries: Brazil, Argentina, Peru, and Colombia. Venezuela is suffering from hyper- inflation and US sanctions. Cuba is without Castro. The people of Latin America are socio-economically very conscious. Argentina, for instance, has a very powerful labor movement, as does Brazil and others. Latin America will drift from subservience to independence in 2017, regardless of who is in power because the people demand it. Most Latin American economies are in super-depression. In 2017, it will be much worse. Violence and revolutions are possible. Mainstream media reports only on how bad things are in Venezuela.

There are three pivotal areas of the world that might change the flow of world history: the South China Sea, the Ukraine and Europe, and the Middle East. The South China Sea will be an irritant. It will not lead to any major confrontation or war, but China will stay firm. India-Pakistan will be very tense. Border clashes will occur along the lines of demarcation but no war.

In 2017, Europe and the Ukraine will undergo profound change. French elections in April will usher in new policy in France. If Marine Le Pen is elected president, a strong possibility, she will pull France out of NATO and the EU. Latin Europe ie., Italy, Spain, Portugal, will follow. German elections will be in the fall. Merkel is a candidate but she has been wounded by the recent Berlin tragedy. The elders of the Christian Democratic Party might dump her and appoint a new leader. The Social Democrats or Alternativa fur Deutschland might have a chance in the election. But whatever government is formed, it will tiptoe to rapprochement with Russia. The present policy of Merkel with respect to the Middle East, migrants, and Russia is very unpopular in Germany. The only faithful allies of NATO are the UK, Poland, the Baltic states, Romania, Norway, Denmark, and the Low Countries. The Baltic states are in an economic depression. They might buckle and ask Russia for favors, and a Finnish type of arrangement may follow. The EU economy is in recession and worse can be expected in the coming year.

The Ukraine is a different problem. It was a coup d’état organized by the US that went terribly wrong. The US coveted the Crimea and domination of the Black Sea and lost. The present Kiev government has no longevity and the Ukrainian economy has entered a black hole. Ukrainians are working in Russia and by sending money home, are helping the Ukrainian economy to stay afloat. In 2017, the Ukraine regime will have to resort to war or there will be internal revolt. The present leadership will be arrested and brought to trial. Some will try to escape. The nightmare may finally end later in 2018.  The Ukraine by its very nature is Russia, and Russia is the Ukraine.

The biggest threat to world peace is the Middle East. The underlying cause is the Arab-Israeli conflict. The problems of Israel are essentially two: the non recognition of Israel by Arab masses and the shortage of fresh water. The two are inter-connected. Israel is a very powerful state. It is a nuclear state but lacks water. Lebanon and Syria by Middle Eastern standards have an abundance of water. To obtain the waters of Syria, war by proxy has been concocted. ISIS was created to partition Syria and Iraq. It is not working too well. Turkey is switching to the Iran- Russia side. Israel may attack Iran. If it does wider war and possibly nuclear war may result. The US unconditionally supports Israel.

In 2017, the US and world economies will be much weaker than they were in 2016. The velocity of money in December of this year is the lowest it has ever been. Work force participation is the lowest since the Great Depression. The Baltic Dry Index is below 1,000, way below the 11,793 reached on May 20, 2008. Conditions will worsen. The stock market or bond market collapse cannot be excluded in 2017. The dollar may also experience severe depreciation.

We only have to wait and see what will happen in 2017.

Exitus Acta Probat

The Modus operandi of modern imperialism  is based on the principle of Exitus Acta Probat, Latin for the end justifies the means. Imperialism and Capitalism are two sides of the same coin. It can be said that without colonialism there can never be imperialism, and, subsequently, no capitalism. The main proponent of Capitalism is the British-American Alliance, and the instrument of that power is the Dollar.

The World Capitalist System is in severe crisis because of negative energy flow, that is, the extraction of wealth from the rest of the world is decreasing, while the energy needed to maintain the viability of the Anglo-American System is increasing. That is not sustainable.

The Anglo-American leadership is convinced that, if it  took control of the regions of the former Soviet Union and the natural wealth of that area, it would be in control of the world for the next several centuries. As a result, the confrontation with Russia is inevitable. Only time will tell.

Will it be inflation,deflation,or economic collapse?

The economy of the world is very uncertain.Nobody really knows what is going to happen.Main stream economists and “celebrity” economists are saying things are improving and that the economy is entering “escape velocity” for take-off. There has been no “take off” and there will be no take off.The US and the world economy are in slow motion collapse.The Federal Reserve cannot fix the economy because they do not know how. If they did,they would have fixed it by now. Zero interest rates and quantitative easing have propped up the system,but not repaired it or rejuvenated it. After the Winter sleep,comes the awakening and rebirth.There has been no rejuvenation of the economy. There is lethargy, except for the bond market,the stock market,and high end real estate. In other words there is shunting in the economy. Liquidity is being shunted into financial assets based on debt. This has driven the dollar higher. Money from the rest of the world, both legitimate and illegitimate is running into US financial assets. Salto mortale is just around the corner…

The reason I say that economic salto mortale is around the corner is because energy entering the US economic system is decreasing,not increasing. Whatever energy is available is being shunted into paper. In other words, the US economy is suffering from a financial shock. In medicine septic shock is a  well known condition, a very serious one. Patients end up in the ICU. The patient suffers from an infection and goes into sepsis, a generalized infection throughout the body. It is usually a complication of a surgical procedure. The patient suffers hypoxemia even though the patient is on oxygen.This is due to shunting. The right ventricle pumps venous blood into the lungs to get oxygenated but the alveoli of some lobes are collapsed and then blood does not get oxygenated. The patient develops hypoxemia and acidosis. Then they are intubated and placed on a respirator with controlled respiration, on post end expiratory pressure, or PEEP. Very careful monitoring is needed: the US and world economies are ready for the ICU.

It is immaterial whether it is deflation or inflation. One thing is certain: the living standard of Americans is rapidly deflating. Rents are going up. Health care costs are going up. Food prices  are going up (or the size of packaging is getting smaller but the prices are remaining the same). But wages are not keeping up. American corporations,as well as European have embraced the principle of the PRECARIAT: total uncertainty for workers. Society is being frayed.Socio-economic conditions are worsening. Violence is increasing.This is now becoming a socioeconomic problem. The Federal Reserve is doing plenty of talking,but cannot do any walking,because it is in a wheel chair. It does not matter whether it will be inflation or deflation,salto mortale is around the corner. We shall see and time will tell…