The U.S. dollar will remain the world’s reserve currency because no other major currency offers such liquidity, depth of financial markets, and store of value.
Some years ago, I attended a small luncheon on the outlook for the U.S. dollar. Paul Volcker, the former Federal Reserve chairman, was the guest of honor. In response to a chorus of Cassandras who argued that the U.S. economy’s all too apparent weaknesses wouldlead to an inevitable dollar collapse, Volcker made a simple observation: For the dollar to depreciate, he said, it would necessarily have to depreciate against another currency. And in Volcker’s view, at that time, the U.S. economy was fundamentally no weaker than that of any competing countries.
Volcker’s logic would seem equally pertinent today in responding to the many critics who believe that the Federal Reserve’s unprecedented quantitative easing policy will lead to the dollar’s imminent demise as a reserve currency. If the dollar is to lose its reserve status, as epitomized by the fact that more than 60 percent of the world’s foreign exchange and more than 85 percent of world trade is still denominated in U.S. dollars, some other currency would need to replace it. A close examination of the world’s other major currencies reveals that a currency is yet to emerge that offers the liquidity, depth of financial markets, andstore of value that the U.S. dollar does.
To be sure, when viewed in isolation, there are many reasons not to be complacent about the U.S. dollar’s long-run future. After all, the U.S. economy is only now emerging from its worst economic and financial crisis since the 1930s. At the same time, itsdysfunctional political system is yet to come to grips with the country’s long-term budget issues, while the Federal Reserve has more than quadrupled the size of its balance sheet to its present level of around $4 trillion in an effort to get the U.S. economy moving again.
But until now much of this was in the realm of hearsay and general wishful thinking. After all, surely it is “ridiculous” that a country can seriously contemplate to exist outside the ideological and religious confines of the Petrodollar… because if one can do it, all can do it, and next thing you know the US has hyperinflation, social collapse, civil war and all those other features prominently featured in other socialist banana republics like Venezuela which alas do not have a global reserve currency to kick around.
Or so the Keynesian economists, aka tenured priests of said Petrodollar religion, would demand that the world believe.
However, as much as it may trouble the statists to read, Russia is actively pushing on with plans to put the US dollar in the rearview mirror and replace it with a dollar-free system. Or, as it is called in Russia, a “de-dollarized” world.
Voice of Russia reports citing Russian press sources that the country’s Ministry of Finance is ready to greenlight a plan to radically increase the role of the Russian ruble in export operations while reducing the share of dollar-denominated transactions. Governmental sources believe that the Russian banking sector is “ready to handle the increased number of ruble-denominated transactions”.
According to the Prime news agency, on April 24th the government organized a special meeting dedicated to finding a solution for getting rid of the US dollar in Russian export operations. Top level experts from the energy sector, banks and governmental agencies were summoned and a number of measures were proposed as a response for American sanctions against Russia.
Submitted by Tyler Durden on 11/01/2013 12:09 -0400 When even Bank of America’s Michael Hartnett has a note titled “It’s getting frothy, man“, and joins such other bubble-warners as JPM, Bill Gross, Larry Fink, and David Einhorn, one can be absolutely positive that the Fed will do… absolutely nothing. From Bank of America:
It’s Getting Frothy, Man!Equity funds: 3rd straight week of big inflows ($12.4bn); YTD, equities have seen $231bn inflows versus a mere $16bn inflows to bond funds (Chart 1)
Global Flow Trading Rule: another $8-9bn of inflows to long-only equity funds over next 2 weeks would trigger a contrarian “sell” signal (Chart 2). Bullish investor flows dovetails with our Bull & Bear Index, which is on course to trigger a cautionary riskoff signal in mid-November Crowded trades: this week investors continue to funnel money into Europe, Japan, HY and Floating-rate debt
Editor’s Note: This issue of Review & Outlook is based on a series of posts I made at the USAGOLD blog over the course of the past month. China has imported an unprecedented amount of gold bullion in 2013. So much so, that if it were to maintain the current pace, it would import nearly the equivalent of global production for the year. When the news first filtered out of China on the amounts of gold being mobilized through its Shanghai Gold Exchange, the numbers seemed too large to be believed. The obvious question became “What is the source of this extraordinary amount of gold bullion?” It was only in October when Reuters reported that much of that gold had been shipped from London-based exchange traded funds to Switzerland for refining into smaller Asia-friendly bars and then on to Hong Kong and Shanghai that the full picture came into focus and the extraordinary numbers gained credibility.
Below I detail how the China gold trade mechanism works, the reasons for it, and why China’s interest in gold is likely to remain of paramount importance to the global market for many years to come. I have updated the original statistics from recently posted reports at the Koos Jansen website based in the Netherlands — a research source specializing in the China gold trade. To stay abreast of the China situation as well as other developments in the gold market on a daily basis, I invite you to visit our blog page linked above.
Part One – The London-Zurich-Hong Kong-Shanghai gold conduit
According to a recent Reuters report, the United Kingdom’s gold exports to Switzerland jumped from 85 tonnes to 1,016 tonnes in the first eight months of 2013 — a twelve times increase. Some bullion market watchers attribute the huge increase to withdrawals or sales from exchange traded funds (ETFs) — an explanation that covers only half the story…….if that. When one learns where this gold ended up and why it went there, the true importance of this unusually large deployment begins to take shape.
It is no measure of health to be well adjusted to a profoundly sick society.
– Jiddu Krishnamurti (1895 – 1986)
Abstract I: Intent of this Article
With all the patriotic, good government, world beacon of freedom and democracy, and America is the greatest nation propaganda that Americans are indoctrinated with since childhood; most are hard-pressed to face the reality that the United States is now exhibiting striking attributes that it is sinking toward a closed fascist society. – Image courtesy of antemedius.com.
I need to stress three points about this article. Please recognize that it is an editorial and an analysis of current affairs. This means you will not see referenced citations for all points discussed because most facts are well established in the historical record and therefore not in dispute. However, plentiful links and embedded videos by credible and independent sources are provided that inspired some of the content and analysis.
The purpose of this article is not to repeat the facts and news stories of other texts and articles. The intent is to illustrate the true nature of the United States government by using freely available information to connect the dots in a way that may not have been considered before.
Abstract II: Defining Fascism
The new face of fascism isn’t necessarily white anymore. It may come in different flavors however it is still served in the similar cold dish of collectivism with the main course a government by the people for the government for the corporation. And, we the people always pick up the tab. Perhaps there is such a thing as a “free lunch,” for the very lucky few. – Image by unknown.
Secondly, what is fascism? Although I may have difficulty defining it I know it when I see it. However it is always best to begin with the dictionary definition to determine if it reflects what we are seeing today. Dictionary.com defines fascism as:
(sometimes initial capital letter) a governmental system led by a dictator having complete power, forcibly suppressing opposition and criticism, regimenting all industry, commerce, etc., and emphasizing an aggressive nationalism and often racism.
This of course is the traditional meaning of fascism as racism does not play a key role in American fascism. Moreover, the dictator is not a single person but a group of elite or ruling class despots all working together for their own interests. For a thorough definition please visit the Wikipedia definition for fascism.
The primary element of any fascist state is collectivism. It places a higher value on the concerns of the group over the rights of the individual. Thus the needs or even life of any single human being or all people of any smaller group can be sacrificed for the greater good. However, this term is really just a misnomer because it is almost solely applied by those who drive public policy to serve their own hidden illicit agendas.
Thus American fascism is rooted in the trading of other people’s wealth and liberty by those in power in exchange for personal gain and it is done without the consent or knowledge of those being compromised. A paraphrase from the Gettysburg Address nicely packages democracy (and freedom) – a government by the people for the people. With traditional fascism we have a government by the people for the government. With contemporary American fascism government becomes a conduit for a third party – a government by the people for the government for the corporation.
Congressman Ron Paul (R-Tx) describes American fascism as soft fascism. This is also known as corporatism. This means fascism is a spectrum with the most extreme form being that of Benito Mussolini’s Italy, Hitler’s Germany, or Stalin’s Soviet Union.
To prove that the United States reflects many traits of traditional fascism this article will reveal how all people are manipulated with questionable principles to support public policies that are harmful to society; demonstrate how our elected leaders are eroding our civil rights; disclose how the government is managed by an elite class of despots through corporatism, other private interests such as labor unions, and because of foreign interests such as the Israel lobby (AIPAC) and European banks; and advance why democracy is very limited to anemic representation in Washington and other levels of government.
Others have taken a point by point approach and these also inspired my analysis. These are very good for a quick overview but they do not examine how the collective mind of the public is systematically shaped to support public policies that lean toward fascism.
Laura Dawn Lewis What is Fascism (The 7 Conditions that Foster and Fuel Fascism).
It is dire to correct this before it becomes too deep otherwise just like Third Reich Germany, there is a possibility of history repeating itself and we may have reached a point of no return. I sincerely hope my analysis will motivate readers to take effective action whatever form that may take.
The following embedded video is of the whole interview of Ron Paul on NBC’s Meet The Press with Tim Russert. Before moving on it is important to note that most republics (states) now exhibit a sort of states-level soft fascism through labor unions who represent government workers.
English: One Dollar with the owl of the Illuminati (Photo credit: Wikipedia)
Illuminati – the Illuminati is a secret orginazation of the most powerful and influential elite in the world. They go back for centuries and maintain the same bloodlines. They set up the council on foreign relations,the bilderberg group and the tri-laterial commission. Those 3 groups all meet to plan the fate of the world. They consists of international bankers,top government officials,leaders in the energy cartel and media monopoly owners and have control over the U.N. and Unesco. Their subdivisions reach into everyones daily life without most sheeple even being aware of it. They also have ties to the freemasons,skull and bones, and the knights templar.Their ultimate goal is for a one world government which they will control,also a one world currency, and they want control and ownership of all land, property, resources and people. Also they manipulate political parties,and the legal and illigal drug trade and federal agencies related to all matters listed above.
Taken from urbandictionary.com One needs to read about Zagami below this article~jude
By Henry Makow PhD 1-7-7
At the New Year, Leo Zagami, 36, has an urgent message.
The Illuminati plan to “Nazify” the West by the year 2012 and persecute all believers in God, using the pretext of war, terror and economic collapse.
The scion of an ancient Illuminati family, Zagami had a religious conversion (to Islam) last June and rebelled. He’d had enough of the horrifying Satanic, black magic rituals, mind control and torture that was going on inside the lodges, behind closed doors.
On Saturday he posted on his web site Illuminati Confessions~[Website Taken Down]~jude
http://www.illuminaticonfessions.webfriend.it/#news1 names of high ranking Masons who are ready to do battle with the Satanists. He has organized his own security detail and even posted a personal phone number to answer serious questioners about his sincerity.
“These are the end times; it’s no joke,” Zagami says in an January 3 interview on his website.
“The cosmic alignment on the 21st of December 2012 gives you 6 years to prepare… So its about time you all wake up and fight for your right to stay free under one God before they take complete control and start persecuting the true believers in the one God. Get your swords and get ready to fight to defend your faith or perish. This is a war against Satan so please wake up in the western countries or you might wake up in a nightmare one morning in December 2012.”
“From 2010 you will start feeling the big changes in the air more and more but in 2012 you will have the clear evidence of the end of this civilization in front of your eyes.the total NAZIFICATION of the western countries by 2010 before the economic situation starts to badly crack for everyone. Then social tension will hit a peak never seen before and internal conflicts could eventually become in 2012: CIVIL WAR!”
“Are you ready to die for God and your believe in a positive change for the world or are you all a bunch of cowards in the hands of the devil, just talking and talking with no sense of reality?”
As an ex-member of the Comitato Esecutivo Massonico – Masonic Executive Committee (MEC) of Monte Carlo, Zagami was, until recently, a true insider, a 33rd degree Freemason, and a high-member of the infamous Freemasonic P2 (Propaganda 2) Lodge. He was the “prince”, prepared to take over from the older Illuminati “king”, Licio Gelli.
http://usawatchdog.com/ - Chris Duane was a 30 year old millionaire working at his family’s East coast car dealerships when he walked away from it all to become a citizen journalist. He sold his house in 2005 and started renting just before the real estate crash. He began warning anyone who would listen about the collapse and paradigm change coming to America. His YouTube channel - http://www.youtube.com/user/TruthNeverTold has gotten 3.5 million views-in less than a year! He says, “The collapse is going to unwind all social and financial contracts worldwide.” He tells people to, “Get out of every single paper asset you own because it’s all going to be worth nothing. . . . If you’re not ahead of the curve, you’re going to be historical road kill.” He also thinks sometime in the next three years, “the dollar will be completely worthless.” When that happens, Duane predicts, “mass hysteria, power grabs and food riots.” His number one investment is physical silver because it is in short supply and extremely undervalued. Greg Hunter of USAWatchdog.com goes One-on-One with Chris Duane.
Europe considers “pursuing dispute settlement” against producers
Strategic resources are carefully protected by countries owning them. Bolivia still has 50,000 metric tons of pure silver in Cerro Rico, Potosi. This is the same amount extracted by the Spaniards during colonial times in that place. Bolivia’s strategy is to keep this vast richness for the uncertain future, when fiat money might collapse. A similar strategy was adopted by the USA with respect to its oil. The USA has the 13th largest oil reserves in the world; yet it is the world’s largest oil importer, purchasing more oil than the entire European Union, which rates only 23rd in reserves. This assures that the USA will improve its competitiveness in this market. Yet, in odd cases, ownership of strategic resources may become a liability. Apparently this is the case with rare earth minerals in China; this country exhibits an odd behavior towards one of its most unique resources. A new study by the European Commission hints that China’s peculiar reaction may be an early response to yet another Western attempt to colonize and control strategic resources. Unsurprisingly, even Israel is involved.
Rare earth elements are not especially scarce on Earth; the problem is that they are dispersed and thus difficult to extract. Rich deposits are rare, thus their name. These seventeen elements were used until recently only in esoteric applications; if you didn’t need special types of superconductors, lasers, or nuclear devices you were unlikely to even hear their names. Yet, in recent years they have become increasingly used, especially in thin, bright-color screens and computer memories. Since 1984, China is the world’s largest supplier of rare earth elements; it is the only supplier of the heavier ones, including dysprosium. The 2010 Critical Materials Strategy Report by the U.S. Department of Energy identified this element as most critical in terms of import reliance. The vast majority of Chinese production originates in Bayan Obo, Inner Mongolia. One last datum; China doesn’t own the largest reserves of rare earth minerals. Is it committing commercial suicide?
Bayan Obo, Inner Mongolia | in 2012, the largest source of rare earth minerals
China vs. the World
Roughly until 1950, Brazil and India led the world supply of rare earth elements. South Africa took over then, only to be replaced by the USA in the mid-sixties. Since the 1980’s the USA production is in decline despite this country having discovered new deposits of this rare goods. Despite having been initially discovered in Sweden, Europe doesn’t produce any significant quantities. Japan owns large quantities in the form of old electronic products; nowadays it is recycling them at a very slow pace, so that it develops the technologies without flooding the market.
For weeks commentators have been discussing the possibility of Greece leaving the eurozone and how a return to the drachma might be facilitated. But when it comes to currency, the drachma is not Greece’s only option. If Greece does exit the eurozone an alternative currency could emerge or an already existing one could be adopted. In some parts of Greece social entrepreneurship, technology, and skepticism of politicians have already given rise to alternate trading mechanisms and created an environment where cyrptocurrencies could become increasingly popular.
As the euro crisis worsened many Greeks began hoarding euros, and more recently there have been small runs on banks. Spending on goods has gone down and prices have been rising. In the Greek city of Volos social entrepreneurship has resulted in a modest but inspiring solution to this trend. One Volos resident started TEM, an online bartering system that allows residents to purchase groceries and other goods in exchange for services while keeping their euros to pay the rent.
With a Greek exit form the eurozone a very real possibility such examples of social entrepreneurship may well become more and more common as the crisis deepens.
Greeks have contradictory opinions on the euro. While the overwhelming majority of Greeks want to stay in the eurozone, a majority of the Greek public is also strongly against the austerity measures required in the bailout agreement. George Zarkadakis, a Greek novelist, journalist, and entrepreneur, explained the political paralysis in Greece to Reason. “The Greek idiocy was that nobody wants to reform,” he says. “Greece is a state-controlled economy, the Greek political class wants to rescue their civil service and nothing has been done in the past two years.”
The euro crisis provides an example of the kinds of situations where competitive currencies might prove useful. Modern technology has only made the development of these “currencies” easier and in many ways more desirable. Safe from the level of regulation suffered by government-issued money, cryptocurrencies are more flexible and convenient for purchases and sales.
The most prominent of these cryptocurrencies is bitcoin. Bitcoin frees those who use it from political uncertainty, fiat policies, and is less affected by international money markets than traditional currencies. Isolated from the political environment in Europe, bitcoin offers Europeans a viable alternative to the euro and to a return to traditional currencies. There have been reports of more Europeans using bitcoin as their confidence in political solutions diminishes.
(Article continues below video “Bitcoin and the End of State-Controlled Money.”)
Both TEM and bitcoin offer some welcome relief from the current situation in Europe. There is no government interference (yet) and transactions are free.
This is not to say that there are not concerns over bitcoin. George Selgin, professor of economics at the Terry College of Business at the University of Georgia, points out that bitcoin breaks the dichotomy of fiat vs. commodity money proposed by the pioneering Austrian economist Carl Menger. Selgin calls bitcoin a “quasi-commodity system” and argues that it is not money. Bitcoin is not widely used for transactions, and according to Selgin the euro crisis is not serious enough for bitcoin (or something similar) to spontaneously emerge with any degree of influence. Even in the Weimar Republic Germans resorted to using already existing currencies like the British Pound rather than creating a new currency. For Selgin the unorthodox status of bitcoin, the lack of historical precedent, and its mono-linguistic culture makes a mainstream bitcoin emergence in Europe unlikely.