On Friday 4 November French state television channels and state radio stations were instructed to give blanket coverage to the coming "fireside chat" between US president Obama and French president Sarkozy. This was screened on one private TV channel, TF1 owned by the billionaire friend of Sarkozy, Martin Bouygues, and on one state TV channel, FR2, Friday evening.
The interviewing journalists were given very strict instructions on how to follow up their scripted questions.No departures from script were permitted.
The G20 meeting was momentous in what it said - and more so by what wasn't said. European debt is now impossible even to service (let alone repay), meaning that total Monetary Union under a federal European coordinated "technocrat government" is now the "only way forward". This is the default no alternative choice. In near-open and ever closer liaison with Obama's administration, one secret but certain option for this new de facto European federal monetary union operated and run by technocrats is the coordinated abandonment of both the US dollar and Eurozone euro.
This is no longer just possible, but probable.
In the week culminating with the G20 Cannes meeting, European monetary federalism leapt ahead. Germany and France now have a total stranglehold on European monetary - and economic - decision making. EU27 countries including Italy, the UK and Spain are now second-rank and have been pushed to the sidelines. They are now completely subservient.
The shift to all-party coalition government by "technocrats" has moved ahead at lightning speed. In the case of Italy, Berlusconi will be turfed out of power soon, and replaced by an unelected ruling all-party coalition government, of exactly the same type that Greece will have in coming days, and that Spain may have when Zapatero quits power in the very short term future.
Never before have so-called Left-Right political differences had such little meaning. The higher goal of total monetary union and abandoning and replacing the dollar and euro is now the only goal. Neither national identity nor democracy have any role to play in the process.
HINTS AND WHISPERS
The near-term abandonment of the dollar and euro will of course never be announced - until it is immediate and irreversible. Before that moment however, hints and whispers will play a major role.
The Obama-Sarkozy fireside chat screened on November 4 was of course forcedly amical, heavily staged regarding its content, and very similar to the frequent and similar Merkel-Sarkozy chats which preceded it, but it supplied major hints all the same.
The Obama-Sarkozy duo are fervent advocates of "Global Governance", extending to their military adventures in Afghanistan and Libya with the loss of tens of thousands of civilian lives (and the installation of a Shariah government in Libya !). Their economic adventures since 2008 are considered, by many of their citizens, as equally criminal and incompetent. Like Merkel of Germany, Italy's Berlusconi, Spain's Zapatero and Japan's Kan the Obama-Sarkozy duo have shown desperately incompetent economic decision making. The result is that the US, virtually all European countries, and Japan now have such massive debts, and often massive annual budget deficits, that these cumulative debts cannot even be serviced, let alone paid down. This is clear. The fireside chat of Obama and Sarkozy, in "coded language", admitted this.
The major change forced by the debt crisis and totally incompetent economic management in Europe, is that the European Union, like the USA for at least the last 10 years, has shifted to complete federal monetarism. This is a very special type of monetarism which transcends and telescopes previous political divisions, for example in the USA between nominally "Republican" or "Democrat" federal monetarists. By sheer necessity this federal monetarism can only be "fiat money', that is printed money. Confidence in this New Money will only come from complete and total political power.
Democracy has no place in this program. One party technocratic rule is the only option.
The post-2008 crisis which has now spiraled into unprecedented dimensions has specially weakened the bank-insurance-finance sector. In their fireside chat, November 4, both Obama and Sarkozy reiterated that the age and era of Tax Haven financing, in the global circuit of moneylaundering - a large revenue and profit earner for all major banks in all countries - has terminated. But Obama and Sarkozy did not say why the world's Tax Havens are finished.
This is for a monstruous reason: the world's major banks have failed. Their bad debt and risk exposure has spiralled, with the crisis. This was shown by the panic reaction preceding and during the G20 Cannes meeting, to only the possibility that Papandreou's now collapsed government would call a national referendum on the Greek debt bailout program. European and US banks would have taken a 50% "haircut" on their Greek debt holdings, under the plan, but a "No" answer to a referendum in Greece asking if people want to go on with the bailout program would have menaced a 100% loss on their Greek debt holdings.
Some major Eurozone private banks, such as France's Societe Generale suffered one-day share price losses of 20 percent or more, on this news.
Greece has 2.2% of Europe's population and its GNP is far below 0.5% of world GNP. The menace of Italy's debt mountain of around 1900 billion euro quickly becoming "toxic" and subject to double digit interest rates on loans to service this debt, Greek style, is very easy to understand. Waves of bank failure across Europe and across the world would be the only possible result.
The scene is therefore set for quickly creating and forcing the entry of The New Money.
How it is introduced, when it is introduced is unknown but likely soon. The reason is that due to the fantastic debt spiral of the USA, Europe (and Japan - which is usually forgotten), these debts can no longer be serviced, let alone paid down. They can never be paid down. The G20 Cannes meeting, and the Obama-Sarkozy fireside chat underlined this, with a forest of hints and signs.
The units of account denominating this debt - dollars and euros - must be eliminated, destroyed and suppressed. They must be replaced by "something else".
All and any kind of discussion on what the New Money could or might be is possible, but under any rational thesis it can only first be hyperinflationary - prices explode - followed by the exact opposite of hyperdeflation as the economy collapses and global trade shrivels to a fraction of current volumes. This sequence is almost certain, and known by the architects of New Money: only military and martial rule, preceded by all-party "technocratic" coalition governments can prevent civil war. As we noted above, democracy has no place in this program. As we noted at the G20 Cannes meeting and its immediate aftermath, all-party national unity "technocrat" governments are coming fast in Europe.
The first preparatory phase - of replacing previous Left/Right governments in Europe with technocratic all party governments - raced ahead in the space of one week. By end-December, countries in Europe with this type of "post democracy" government may include: Italy, Greece, Spain, Belgium.
The New Money - possibly even a collapsed, converged and fused dollar-and-euro or "Dolleuro" - will certainly generate geopolitical tension, able to flare into world war if not carefully planned and executed with the right associated large scale geopolitical events. It is totally sure and certain that when dollars and euros are eliminated (with the debts they denominate): their suppression will not be welcomed by few but very dangerous Major Creditor Nations. These of course include the Arab Petrostates but their military significance is almost zero, they could be militarily destroyed in hours or days. However Russia, China, India, Brazil and Turkey, among others, will remain very dangerous - because they will react and respond to a "total debt haircut", through sudden demonetization and replacement of both the dollar and euro, decided in secret and announced by surprise, by our new one-party technocratic Global Governors.
The Major Creditor Nations will react to the loss of wealth they will suffer on what they consider to be their hard-earned holdings of Western debt. We can therefore soon expect warnings and rumblings, with an increasing reprisal threat content, from these Major Creditor Nations.
THE DIVERSIONARY SPARK
One possible and perhaps even likely diversionary tactic, for our Global Governors, is pre-emptive war against Iran. This will be a major geopolitical diversion indeed because its "nuclear potential" is high !
Immediate results will be a massive rise in oil prices followed by pure and simple physical rationing of oil in the major OECD countries. Economic conditions will soon shift to extreme, making it ever easier to pass from the remaining and shrinking symbols of "democracy" to full military and technocratic rule.
The "temporary phase" of this rule will of course be extended as Iran shows "surprising resistance" and war spreads across the Middle East, further cutting oil supplies and intensifying global economic collapse. This collapse, in turn, will cause the Major Creditor Nations to abandon their previously hostile and retaliatory stance against the Global Governors, due to world survival being threatened.
The New Money may initially be issued as wartime food coupon-type payment means, and similar or related payment means (for clothes, lodging, transport, etc). Dollars and euros will be progressively and physically removed from circulation, and destroyed. Debt writedowns will be massive, possibly starting as high as 75% and soon extending to 99% or "penny on the obsolete dollar or euro".
By this stage, within as little as 6 months, very large amounts of total dollar and euro amounts previously in circulation can be removed. Residual and heavily controlled and verfied nominative-only amounts of dollars and euro will be permitted outside the USA and Europe, only for named persons (and companies, etc). These specified amounts will be continually tapered down "due to adverse economic conditions" enabling compete and total demonetizing of all US, European and Japanese debt in less than 1 year, in a collapsed global economy.
End of Money scenario writing has become massively less fantasist or unreal in the space of one week, we can note.Keep tuned.
By Andrew McKillop
Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights
Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.
© 2011 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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