|
|
"It is only with the heart that one can see
rightly; what is essential is invisible to the eye."
Antoine de Saint Exupéry
'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.' Some parties are raising NGDP as the next policy initiative from the
Federal Reserve.
NGDP targeting is so obvious and clumsy that I doubt that the Fed will try
and hide their enormous efforts at monetization of the debt under such a
small fig leaf, as Jim Rickards
suggests, except to direct attention away from
their more serious efforts. The growth in money supply would be apparent to many
and the Internet would be used to spread the word. No, a more clever and
covert attempt at persuasion is required, and more in keeping with the
Bernanke Fed's penchant for secrecy.
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 form. One only
needs relatively small armies to retain the power to control the money in
order to subordinate vast resources and peoples if you can control their
definition of wealth and the distribution of money, and all that follows from
it.
If you are able to create money at will, and give it to your friends and
allies with even relative discretion, you are able to confiscate, without
visible effort, the labor and wealth of every person who holds that currency,
wherever they are and however they seek to protect it. It is the end of
sovereignty and the right to private ownership of all goods and property that
are valued by that currency. And it is a power too great to be held inviolate
by any small group of men with the ability to act in secret.
I believe that the original purpose of this effort to shape the world
economy was well-intentioned, or at least was represented as such to many participants as the logical solution to the devastating
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 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. But I do not think they can just 'take it' for themselves.
And so the Mideast will remain a very important piece on the board. Perhaps
it will be carved up, and perhaps it will be fought over, in the valley of
Megiddo.
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.
Those who believe that China and Russia will oppose this to the bitter end
believe in the purity of those regimes, and their ability to resist the
temptation to participate in a deal that gives them rule over their portion
of the globe. Since for the most part they are already oligarchies, this does
not seem likely. The apparent disagreement and contention now may be more of
a discussion of terms and territories than principles.
It may devolve into a number of popular revolutions,
or even the rise of a worldly power unlike anything seen before, a new Rome.
Or something else might occur. What that is, obviously no one can say with
certainty for now.
A daunting set of prospects one might say, as Woody Allen once noted in his Speech
to Graduates: "More than any other time in history, mankind faces a
crossroads. One path leads to despair and utter hopelessness. The other, to
total extinction. Let us pray we have the wisdom to choose correctly."
We can take great comfort that we are not the first generation to face
difficulties, and what appear to be fearsome odds. So often when they
appeared to be at the very height of their power, great empires have tumbled,
and the spirit has endured and risen once again. As Dostoevsky noted,
"If they drive God from the earth, we shall shelter Him
underground."
But for now, if you at least understand the objective of the game and the
roles of the players, what is happening on the field can begin to make more
sense.
Even if we cannot yet see it, the greatest probability remains that the monied interests will fail in their overreach and pride,
but many ordinary people will be harmed in the process. And our goal is to do
what we can to limit the damage inflicted upon ourselves and our families,
and our neighbors, and associate with like-minded individuals, to try to
restore some semblance of civility and justice for our grandchildren.
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. Our business is
not to surrender to discouragement, and cooperate with evil, but to carry on
in our missions, whatever they may be, as God gives us light.
"When I despair, I remember that all through
history the way of truth and love has always won. There have been tyrants and
murderers and for a time they seem invincible, but in the end, they always
fall — think of it, always."
Mohandas K. Gandhi
The ascendancy of evil in the world is a shameful episode in history; the
triumph of dark powers in claiming our souls for all time, without end, is a
tragedy.
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.
|
|
