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The Anglo-American Century and Why the Financial Engineers Hate Gold and Silver

Currencies / Fiat Currency Nov 29, 2011 - 11:17 AM GMT

By: Jesse

Currencies

Best Financial Markets Analysis Article'Nominal GDP targeting' is a way of raising the Fed's inflation target without admitting to it explicitly.

Nominal GDP means that one can meet their growth target simply by inflating the money supply to make up the difference between 'real growth' and 'headline growth.'


NGDP targeting is so obvious and clumsy that I doubt that the Fed will try and hide their future monetization of the debt under such a small fig leaf, as Jim Rickards suggests, except to direct attention away from their more serious efforts.

I think the major monetization is already occurring in the Eurodollar markets, and an ongoing stealth bailout of European debt, in order to save the big money center banks at home and broaden the reach of the Dollar.

And this is why the Fed stopped reporting on Eurodollars some years ago, as a component of M3. It was to pave the way for the monetary equivalent of a financial neo-con, to addict European governance to the US dollar and pave the way for a stronger position for the dollar as a one world currency.

Money is power, and the ability to control the distribution and value of money and wealth is power in its most refined and effective state. One only needs relatively small armies to retain the power to control the money in order to subordinate vast resources and peoples.

I believe that the original intent of this effort to shape the world economy was well-intentioned, or at least sold to many participants as the logical solution to the wars that repeatedly bloodied the last century. Most of what is transpiring now has not been planned, but events make the moment, and moment gives rise to the man. And history shows us that too much power in too few hands never fails to end in exploitation. With the rise of a single world super-power, no matter how good it might have been at its heart, the tide of corruption rose to with it. This is why central planning invariably fails.

The dominant global currency regime 'could' come in the form of the SDR for global trade if the composition of the SDR continues to contain a significant dollar-pound component. Yes, the IMF has the ability to 'print' SDRs, but the SDR is a currency for use between nations, and its value is linked to a basket of individual domestic currencies. Hence, it cannot be printed limitlessly, but must be linked to the value something else, some external standard.

Here is a prior blog entry here that explains the struggle for the SDR that is now occurring. Even the 'reformed' basis for the SDR is ludicrous, with its over-representation of the dollar and the pound. And now proceeds the dismantling and pacification of the eurozone. And the hysterical antagonism by the Western bankers against the inclusion of gold and silver in the SDR basket as proposed by the BRICs.

Here is a broader overview of what I call the Currency Wars.

A slightly different plan has been underway for Asia, whose economies have become addicted to export production for US dollar paper, which makes up a huge portion of their reserves and financial system.

At some point those Eurodollars may come home, in the event that Europe finds a way out of its dilemma that was caused in part by the US banks and hedge funds, and of course Europe's own political weakness and greed. And the Fed is confident they have a way to stem that tide of dollars 'back in the system.'

But they do not expect this to happen, because the ratings agencies and the funds have the power to submit any government to a relentless credit assault on their sovereign debt.

Have you ever bothered to wonder why there have been no real investigations and prosecutions of the bankers and the credit ratings agencies? And why they have been permitted to continue to operate, largely unimpeded? The credibility trap is one explanation, but it fails to include so many other seemingly random events. Some of the banks may have become instruments of state policy, too big and important to prosecute. They and the state are becoming one.

As I have suggested in the past, the model has been to bring the system to a crisis, and then to have the bankers' representatives make an 11th hour 'offer which they cannot refuse' to the people of the nation, as they did in the adoption of TARP in the US. 'Adopt our plan, or suffer the consequences.'

And I believe that the Anglo-American banking cartel will make this same play again, but this time with Europe and the world. Financial crises are an effective tool in the mass redistribution of wealth and power, and often done in secret, making their appearance only at the offering of terms.

In a remarkably effective ploy of misdirection and mass persuasion, the kleptocrats and oligarchs have focused the attention and the anger of the middle class on the 'welfare state,' the poor and the elderly and the weak, under the moralistic banner of austerity. Meanwhile they are scooping up the income and wealth of nations for the top one percent, who are ironically portrayed as champions of freedom.

The sticking points in the US financiers plan are the key commodities, precious metals like gold and silver, and of course food and oil. It is a pivotal point of control that will become much more prominent in the future. China and Russia will play that card with some of their BRIC allies. But in the short term the Anglo-Americans are solidifying their power in the oil rich Middle East, since like gold and silver, oil is a powerful piece in this global chess game.

To paraphrase von Clausewitz, 'Currency war is the continuation of politics by other means,' especially when global military war has been rendered economically unviable in the post-atomic age.

If you at least understand the objective of the game, what is happening on the field can begin to make more sense. This currency war is happening now, and it is something new in the history of warfare, because I do not believe that a fiat currency regime has ever existed before to this extent on a global scale, with a mutually destructive threat like nuclear power dampening the impulse to wide scale military conflict.

But as in all war, some things never change.

"When the rich wage war, it is the poor who die."

Jean-Paul Sartre

At some point the dawn will come, but first the darkest hour.

In the meantime, here is an exposition of 'Nominal GDP targeting' so you can become familiar with it, in case it does make an appearance.


By Jesse

http://jessescrossroadscafe.blogspot.com

Welcome to Jesse's Café Américain - These are personal observations about the economy and the markets. In providing information, we hope this allows you to make your own decisions in an informed manner, even if it is from learning by our mistakes, which are many.

© 2011 Copyright  Jesse's Café Américain - 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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