If Russian prime minister
Putin's recent description of America
as "a parasite on the world" was reported
by the US media, little doubt but that most Americans were infuriated. We are
the virtuous people. Without us good guys to police the world there would be
mayhem and wars everywhere, not merely the ones we started in the Middle East,
Asia, and North Africa. Without the American white hats people everywhere would
be starving and dying from natural disasters. It is us chosen ones who provide
the rescue operations and good deeds. How dare the former KGB monster to slander
Is it merely a coincidence
that on August 11, the Swiss announced that they were discarding their monetary
constitution that has prevented inflation in Switzerland and that has made their
currency a safe haven for people everywhere who desired to protect their wealth,
both small and large, from the predatory inflation practices of their own
governments? Or is the Swiss announcement a result of America's financial
irresponsibility, the behavior of a parasite?
The Swiss said that they
are forced to violate their monetary constitution, because the irresponsible
practices of the United States and European Union monetary authorities are
driving so many dollars and euros into Swiss francs that the franc has
appreciated to astronomical heights and is threatening Switzerland with the
collapse of their export markets and Gross Domestic Product.
The EU says it has no
choice but to bail out its private banks as that is the policy of Washington,
DC, and that it must print euros in order to bail out the banks. This
policy is in violation of the
charter of the European Central Bank, but what do rules and laws mean in today's
world? Nothing whatsoever.
Obviously, Washington is
threatening the world not merely with war but also with
After announcing a massive
printing of Swiss francs to absorb the inflow of dollars and euros so that the
exchange value of the franc would not rise further, the Swiss government
announced that it would peg its franc to the euro. That means that the Swiss
will defend the pegged rate of exchange by printing enough francs to offset the
inflows of euros. I think that the Swiss chose the euro as the peg over the US
dollar because the majority of Swiss exports are to Europe rather than to the
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Years ago China pegged its
yuan to the US dollar, not to protect its currency from rising as a result of
flight from the dollar, but in order to demonstrate that the money of what was
seen as a questionable communist currency was "as good as the US
Not long ago China was
forced off the fixed peg by the amount of Chinese money creation necessary to
maintain the peg. China substituted a "moving peg" that allows the Chinese
currency to slowly appreciate against the dollar. The Chinese currency is rising
as the dollar falls, but the "floating peg" is behind events. Consequently,
China's currency is over-valued with regard to the "superpower" dollar, and
China is importing inflation by having to create yuan in order to maintain the
floating peg as the dollar is declining faster than the peg.
Oil producing countries
such as Saudi Arabia and Qatar have their currencies in a fixed peg to the
dollar. If the dollar depreciates too much in currency markets, the price of
oil tends to go up. In other words, oil producers can compensate for US dollar
devaluation by hiking the oil price of their main export.
So, we can begin to see
what Putin means. If the Americans are irresponsible with their monetary policy,
if American banks have loans and credit default swaps to threatened European
banks that require bailouts from the European Central Bank in order to protect
the US banks as well as the solvency of the European private banks, if the price
of oil, which is priced in dollars, goes up to the rest of the world because of
US monetary irresponsibility, the entire world suffers from the Americans'
inability or unwillingness to put their house in order.
If anything, Putin
understated the burden that America is on the world.
How much longer will the
world put up with "the virtuous nation?"