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RESERVE CURRENCY; DEATH OF GLOBAL DOLLAR DOMINANCE
Of course, the perfect storm within the Perfect Storm can be easily identified as the inevitable devaluation, and eventual collapse, of the once Almighty Dollar. Inasmuch as it has functioned as the primary reserve currency for the world, it is quite easy to understand the many negative ramifications of its rapid demise. As nation after nation has let it go as a means of exchange, the ultimate effects on the US currency can best be described as “that giant sucking sound”. However, the real problem with this giant sucking sound is not just the effects on the US DOLLAR, but that it will be deafening to hear throughout the economies of the world.
The US Dollar interpenetrates not only the financial structure of the industrialized nations, but also the many economies of the 3rd world, so that its fall will serve to radically undermine the entire worldwide financial architecture. “Too big to fail” simply has no relevance anymore now that this genie is out of the bottle. Just ask Iran, or Venezuela, or China, or Russia,or Dubai, or Ecuador, or Bolivia. Or any of the many other nations just waiting for the right moment to break free from this monetary yoke. Sorry to tell you, but the dollar has now caused so much damage throughout the land that it can’t fail soon enough. And the longer it is artificially propped up, and forcefully kept in place, the more damage it will ultimately do.
The ‘Almighty’ do not die very easily, as wehave seen with this note – um – dollar . Just look at what happened to Iraq when they attempted to decouple their oil exportation business from the US dollar. Their expressed intentions to follow throughon this initiative in 2001 brought them a foretaste of armegeddon – US style. Likewise, the establishment ofthe Iranian Oil Bourse has brought a similar curse upon that country, with eventhe same false accusations being leveled at them as a pretext to military invasion, and a future oil industry takeover. Of course, what further inflamed this tension between those committed to global dollar dominance and those wishing to be free of its tyranny was Iran’s request to be paid in non-dollar currencies by all of its petroleum customers. Not quite sure if they deserve an ‘A’ for audacity, an ‘F’ for foolhardiness, or both. Nevertheless, they are doing what is best for the world by breaking free from the planetary plantation and the $$$ master. Quite courageously, they have set a GREAT example for the rest of us dollar addicts, debt slaves and derivative junkies.
The crux of this issue does lie in the factthat the Federal Reserve Bank is nothing but a printing press. The FED can continue to print its Federal Reserve Notes all day long, exactly as it has done for decades; however, history is replete with similar printing presses of money, and they all have the very same destiny. As a matter of fact,fiat money by any name, or run by any game in town, can only produce one outcome in the end – complete and total degradation of the nation’s currency, and eventually its financial architecture and economic infrastructure. Welcome to the USA (and UK) in 2009 ! ! !
It is truly shocking that so many businesses (privately held companies & public corporations), managed funds (pension funds, mutual funds, hedge funds, trust funds, sovereign wealth funds, etc.), governmental entities (villages, towns, cities, counties, states, provinces and nations) and people everywhere, both smart and stupid, bought into this game. Of course the game of GREED knows no bounds or limits, and certainly crosses through all socioeconomic barriers with the greatest of ease. The practitioners of greed neither adhere tothe generally accepted principles of ethics and fair play, or sound business practice and accounting methodology. Nor do they hold in high regard the philosophical bulwarks of Western civilization– reason, common sense or even sanity, for that matter.
Particularly sincethe 1990’s, the dollar was systematically shoved down the world’s throat whether it was wanted or not. The greedy accepted it with gleeful and wanton abandon; the wise did all they could to minimize their exposure to it. In theend, it will be known as the poisonous seed (read GMO) of corrupt, corporate, crony capitalism that was planted so far and wide that not a living thing could claim to be untouched by the fruit of it’s tree.
The long awaited DEATH of the Almighty Dollar is finally here, my friends. Oh, yes, the devaluation process will speed up and slow down, and slow down and speedup, but, in the end, the result will be the very same. It will soon be time to hold a hasty wake, and even hastier funeral service, before this monster tries to come back to life.
DISCLAIMER: We bear no grudge against the original US dollar that was backed by the gold standard. We have no quarrel with the US Government (with the exception of the outgoing and incoming administrations), and we harbor only good will toward the American people.
It is the Federal Reserve Note that is the object of our scorn and ridicule. Likewise, it is the Federal Reserve System that deserves our condemnation and completely justifiable criticism. Why? Because the Federal Reserve Bank (FED) is not legitimate. It is not a properly constituted or legislated organ of government, and is actually a privately owned consortium of banking agents whose ownership is more foreign than domestic. The FED is legally unfit to conduct businesson behalf of the American people since, as a private entity, it lacks the congressional oversight necessary when appropriated funds have been allocated by the legislative branch of government. The printing presses of the FED produce notes – as in promissory notes – which are nothing but instruments of indebtedness for all who possess them. Not too unlike credit cards, actually. Therefore, the money that it prints is counterfeit. Is it surprising that an international, privately owned crime syndicate, which issues fake money, would be the biggest player in the worldwide funny money monopoly game that is bringing the world of commerce/finance/business to a virtual standstill? We are talking about the greatest financial crisis in recorded history, you know?!? And the FED is institutional PUBLIC ENEMY #1 responsible for this multi-decade crime spree.
II. DESTRUCTION OF DEBT; DESTRUCTION BY DEBT; DEFAULT
ON DOLLAR BASED DEBT
Here’s a horse that’s already broken loose and kicked over ‘half’ the public and private sectors of the world. Their initial plan was to simply transform (read destroy) the debt, if you will. We all know very well by now just one oftheir many schemes – hide it by repackaging it, and then somehow convert itinto securities (CDO’s). That’s one plan that really screwed things up. Of course this little scam began with the whole sub prime mortgage fiasco. Sub Prime!!! Questionable adjustible rate mortgages granted by dubious mortgage lenders to unqualified mortgage applicants. Really brilliant! Then they sold the CDO’s all over the worldas triple class AAA “securities” that would round out a conservative investment strategy like the portfolio that was administered (and subsequently decimated by CDO’s) by the town of Narvik, Norway.
The bankruptcy of Lehman Brothers with debts totaling $613 billion is perhaps the greatest example of what’s around the corner. The subsequent unraveling of this single bankruptcy has yet to be felt in all the places where 613 billion dollars are owed. It represents an amount that is still too staggering to comprehend, and yet there have been others since, and many more to follow. The absorption of Merrill Lynch by Bank of America, as well as the purchase of Wachovia by Citibank, are only a couple. However, AIG is perhaps the biggest sleeper of them all in this debt limbo only because of how it intermeshes with so many other businesses, countries, corporations, industries, banks, etc. Insurance, you know, is everywhere. Required to do business, everywhere. And the way AIG wound itself around so many enterprises makes its total exposure, in all of its many and varied forms, oneof the most serious debt bombs in town. Whenever you mix ‘unheard of risk’ with the insurance industry, you know you’re playingwith fire. Watch for this pyrotechnic display very closely; it will dwarf those of last year’s Olympic opening in China.
Even though this ‘pandora’s box’ has been open for quite some time, the DEBT piece of this current phase of capitalism eating itself is often conveniently unacknowledged, or casually underestimated, or altogether overlooked. For several months now, there are massive, unprecedented multi-billion dollar writedowns (and writeoffs) by the ‘blue chips’ of the banking and investment world. Likewise, many formerly solid companies havegone into the debt divestment business faster than you can say bankruptcy. Massive corporations with humongous debtloads are acquiring huge corporations with gargantuan liabilities. The bigger the debt burden, the quicker a suitor is found, and then they’re hitched without so much as a honeymoon. We always thought that a dowry went in the opposite direction. You know, it’s about what you bring to the marriage (read deal), not what you take away, that makes you attractive. WHEW ! ! !
And we haven’t even discussed the specter of the consumer debt bubble burst, or the anticipated fallout from its ensuing mushroom cloud. When you add this looming scenario to the myriad toxic waste sites of incorporated debt, innumerable landfills of national & governmental debt,and countless hazardous waste dumps of securitized mortgages, you begin to see that the entire economic landscape has become one huge, unbroken disposal area with the typical assortment of garbage dumps, junkyards and recycling stations to handle any type of debt you want to get rid of. The brokerage houses ultimately became transfer stations for all of this financial refuse. Is it any wonder that they all had to disappear, and did so in the span of a just a few months!?! The smell coming from Wall Street was getting worse than the foul odors in a Neapolitan neighborhood.
