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Below is an excerpt from a much
longer article which you can read in its entirety here.
It is an interpretation told from a
certain perspective, but overall does a fairly decent job of laying out the
general boundaries for the currency war that has been brewing in the
background since 1971 with the collapse of Bretton Woods.
It is more visible to us now because it
started manifesting more overtly in the 1990's and since then has slowly been
gaining momentum.
If an analyst does not understand this,
even if they do not agree with this particular interpretation, then they have
a poor grasp of the major trends that are driving so much financial and
political activity in the world today.
And fortunately or unfortunately, gold
and silver are deeply involved as the traditional supra-national world
currencies.
To put the entire thing in a nutshell, in
1971 the US arbitrarily ended the Bretton Woods Agreement by closing the
'gold window,' and placed the world on an entirely fiat reserve currency
which the US controlled. Since the US is making monetary policy to suit its
own domestic agenda, and increasingly so over the past twenty years, the
stresses that this creates in the world have become unacceptable to many
other countries, some of which are in a position to push back against this.
This tension between the dollar and the
rest of the world is either going to end in an acceptable and workable
compromise, or will result in a split of the world into regions of power and
financial influence, most likely three or four. This will be accompanied by
conflict on all the usual levels: diplomatic, economic, and military. We are
seeing this today.
Compromise is being thwarted by a
neo-conservative, militaristic and nationalistic group in the States, with
clients in other countries, that view an American hegemony as the natural and
highly desirable outcome of the end of the Cold War. However, this is a
patriotic cover story for what is essentially a bid for more money
and power for a privileged few who have no patriotism and little decency, who
serve only themselves and their patrons. To quote Edward Abbey, their
motives are 'old as Babylon and evil as hell.'
Whether you agree with this or not does
not matter so much, because it is painfully obvious to those thought leaders
in countries like the BRICs that this is the situation. And they
are acting on this, and the US is reacting in response. But from reading the
literature of the neoliberal economists and neoconservative politicians, it
seems hard to come to any other conclusion based on facts and specific
actions which have been taken by the US, the UK, Canada, Germany and Japan.
In some ways the situation in Europe,
with Germany and a few northern countries driving the ECB and its monetary
policy, is a microcosm of the type of tyranny of monetary
policy which is held globally by the US Dollar
. This does not even have to be
purposeful, but is the natural outcome of a fiat currency held as the major
exchange mechanism over a region without political and fiscal
unity. It is as inevitable, and manifests in other economic problems
such as Triffin's Dilemma.
So why do some people keep promoting
these types of unsustainable mechanisms? As always, money and
power. And they rationalize this, as Polyani noted, "by
indulging in prejudice and sentimentalism. The improvidence of the
poor is a law of nature, for servile, sordid, and ignoble work would
otherwise not be done. Also what would become of the fatherland unless
we could rely on the poor? 'For what is it but distress and poverty which can
prevail upon the lower classes of the people to encounter all the horrors
which await them on the tempestuous ocean or on the field of battle?'"
The role of the many is to suffer,
labor, and die for the select few, however they may choose to define
themselves, and assert and maintain their dominance. This is
nothing new, but again, a theory 'old as Babylon and evil as hell.'
Exceptionalism is the very rationale for evil, and pride, the
father of sin.
I do not think it is too much to say that
we are experiencing a type of 'world war.' This seems to be the type of
settling of differences and adjustments that follow major economics shifts,
as we had seen in the first half of the 20th century.
So what are we to do? Look
then, carefully, how and where you stand. For you cannot serve two
masters, for you will love the one and hate the other, no matter how you wish
to hide your true allegiance, even from
yourself. And the only tragedy is how many will be
found wanting, and for so little.
"The Fed effectively acts as the
world’s central bank, but sets monetary policy only in its own interest.
Under the pressure and the orders of financial oligopolies, it fixes interest
rates and prints money to suit itself, sending economies across the globe
into tailspins...
These policies aren’t enacted with the
express goal of kicking the global South in the stomach, but this outcome is
a necessary and predictable result of the domination of the global financial
order by a sole country whose interest is to keep its hegemonic status. Other
measures are taken precisely toward this end. This latest round of financial
warfare has to be seen in the context of financial imperialism in general.
Countries struggling for sovereignty are also being hit by sanctions,
speculative currency attacks, commodity price manipulation, biased
evaluations from US ratings agencies, massive fines on some banks for what
the US has deemed inappropriate practices, and the prohibition of certain
banks from participating in the international banking system...
Not only does the dollar enable the US
empire, but also protecting the dollar’s status is a major reason for US
imperial wars. American financial and military strength is based upon the
fact that the dollar is the world’s reserve and international trade currency,
creating a global demand for dollars which allows the US to print as many
greenbacks as it likes. It then pumps them into the overbloated finance
capital system and uses them to fund its criminal wars...
Without this international demand for
dollars, the dollar would “correct,” and US hegemony would eventually,
inevitably, come to an end. Therefore the US pressures and attacks countries
that attempt to free themselves from the dollar’s yoke, not only because they’re
guilty of lese majesty, but in order to force the world to maintain the
status of the dollar and thus preserve US domination...
Although it has so far been unsuccessful,
the idea of rebalancing the world monetary system is extremely threatening to
the US, and goes a long way toward explaining recent US wars and
warmongering, which may otherwise seem irrational...
The dollar is rallying less because of
any supposed US recovery than because of higher global demand for dollars due
to investors’ risk aversion, in the wake of the Fed pulling the plug on QE.
Parenthetically, the US economy is definitely not recovering..."
"Plunderers of the world, when
nothing remains on the lands to which they have laid waste by wanton
thievery, they search out across the seas. The wealth of another region
excites their greed; and if it is weak, their lust for power as well.
Nothing from the rising to the setting of
the sun is enough for them. Among all others only they are compelled to
attack the poor as well as the rich. Robbery, rape, and slaughter they
falsely call empire; and where they make a desert, they call it peace."
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