I recommend that this be read in conjunction with my previous article http://www.news24.com/MyNews24/The-world-tomorrow-20120725
The world’s worst invention - Fiat Currency
By definition Fiat Currency is any currency that a government has declared to be legal tender. In the past currencies were backed by physical commodities, usually gold or silver. Fiat money dates from 11th century China, the ancient Romans embraced the concept by gradually reducing the amount of silver content of coins until nobody accepted it as tender.
All major world currencies today are fiat currencies, including the euro and the dollar. This means they aren’t backed by gold, or anything more tangible than faith. They are in effect backed only by the debt that a country issued. This is why only “legal tender” is printed on today's bank notes and not “redeemable in gold” as it used to. The notes are intrinsically worthless. This means that national central banks around the world can print as much money as they like, which gives these banks the power to in theory (and in practice) manipulate markets. Economics is fundamentally based on trading something for something in a market. You can’t have something for nothing. These manipulated markets create artificial prices. This is not capitalism. Former Federal Reserve chairman Alan Greenspan said in an interview on 8th August 2011 that the USA “will never default on their debt because they can print money to pay off their debts”. Even though I think the US will eventually default on its $16trillion national debt, I find this statement appalling. The citizens of the country experience a decrease in wealth thanks to the inflation created by this. Fiat money is perhaps the ultimate bubble, and its bursting might well be the more rapid and violent than that of any before it.
The London Interbank Offered Rate (LIBOR) is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks.
It affects everything from bond rates, to currency exchange rates to the stock market. Although there was very limited media coverage of a series of fraudulent transactions resulting in the so-called LIBOR scandal in June this year, it affected nearly every human on the planet, and has affected transactions of more than 300 trillion dollars. We know that the Bank of England was aware of the manipulation, but decided to ignore it. This is collusion. Because the Libor rate is used as a base for almost all transactions, it influences most bonds and debt instruments. The manipulation resulted in lower Libor rates, supressing the yields of bonds and other financial instruments. Lower bond rates mean higher prices; this means that these banks’ balance sheets were being artificially propped up. As soon as interest rates rise, and bond prices fall, the huge holes in the balance sheets of these banks will be visible for all to see. These big Wall Street and City of London banks are all technically insolvent.
Looking back in history, most stock market crashes had taken place in October. I am very deeply concerned about the direction the world is heading financially, and I fear that a major economic collapse is inevitable, and very, very close. Such a collapse could very well be followed by a currency collapse. The US is bankrupt, and confidence in the dollar is waning. The US, like Europe, will experience mass unrest, and in the wake of the increased radical nationalism and violent anger, their government will declare martial law. This will also lead to political and civil conflict around the world. A US attack Iran in order to create some sort of diversion or kindle patriotism is also likely.
Money is the root of all evil, Central banks are the root of all money
With the help of a printing press and some creative accounting, the powers that be have defied the laws of economics and created one prolonged Ponzi scheme. Ponzi schemes cannot last and neither will this one, but rather result in a crash that will dwarf that of 2008. In the coming months, if not weeks there will be major civil unrest around the world, the Ponzi scheme will start to unravel. As bond prices fall the Fed will have to print more money to buy bonds and create an artificial demand to stop rates from rising. The Federal Reserve will have to impose even more aggressive, unlimited quantitative easing measures to stop rates from rising. Quantitative easing involves a central bank creating new money to buy financial assets from commercial banks and other institutions, carrying with it the risk of higher inflation, while doing very little to stimulate the economy in the short term, and not leading to sustainable growth at all. It pumps up the equity markets, because the investors simply reinvest the money in stocks or bonds. The problem isn’t that there isn’t enough money in the system, there is. The problem is that the money isn’t moving fast enough.
There are no solutions to Europe and America’s debt problems. They can print money to kick the can down the road, all the while exacerbating the problem - but can’t do so forever. The whole world economy is imploding. Why aren’t people panicking? There are no solutions to Europe and America’s debt problems. Politicians are for the most part sociopaths who only care about surviving until the next election, and none of them want the financial collapse to happen on their watch.
As I discussed in my previous article (The World Tomorrow: http://www.news24.com/MyNews24/The-world-tomorrow-20120725), a large part of all this manipulation is to keep interest rates low (close to 0%). These lower interest rates around the world mean that speculators can gamble and drive up markets at virtually no cost. Central banks’ policy and programs keeping rates low has an adverse effect on savers (people who have money in a savings account, typically the middle class, and the backbone of any well-functioning economy). Because all central banks are privately owned (they are owned by unknown banks and shadow groups - central banks are not government or public institutions), they are more representative of the speculating oligarchs, than the middle class savers. If megabanks and speculators are protected from suffering losses as a result of low interest rates and bailouts, they won’t stop speculating.
The day of reckoning might be looming as far as the world financial system is concerned. By the end of 2012, the dollar might be dead. The fundamental world currency has almost always been gold, and if there were to be a major crisis, gold will be the currency of choice, not FIAT debt paper issued by a bankrupt country. A gold standard (currency backed by gold reserves) is not necessarily even a good system. But in times of uncertainty, and for most of the past 6000 years, gold has been the final extinguisher of debt. Central banks around the world have been buying tonnes of gold as a safe haven. Countries like China have discreetly been buying large quantities of gold as they sell their foreign reserves.
All the quantitative easing measures are failing in bringing the recovery that experts keep talking about. There is no recovery. The Chinese economy is slowing down, with inflation at 1.8% and exports falling by 16%. Brazil, India, Indonesia, Australia and South Africa have all had to cut interest rates in attempts to stimulate their economies. All these developing countries exports’ are slumping. If America and Europe stop buying, Asia stop producing, and Africa and South America stop exporting raw materials. All these countries are devaluing their currencies in an attempt to increase exports. This is known as currency wars, and is simply a precursor to real wars.
Real wages are declining, and GDP is contracting. The gulf between the rich and poor is the widest it has ever been and increasing, and lurking in its wake are social upheaval and unrest that might lead to governments turning on their own citizens. Laws introduced by Obama include the National Defence Authorisation act (which allows for the indefinite detention of Americans), and Executive Order 13603, which allows the president to seize any property and declare martial law under a ‘potential threat’. Add to this the 1.4 billion rounds of ammunition that the US department of homeland security are stockpiling, and it is clear that they are preparing for chaos. In Europe, there is increasing talk of forming a federation, run by globalist technocrats, a New World Order if you like. In an interview with the Telegraph, the Czech Republic president Vaclav Klaus warned that “destruction of Europe’s democracy is in its final phase”.
Blowback: How many countries do you bomb before it’s called a world war?
America’s obsession with war and the Middle East has nothing to do with spreading ‘freedom and democracy’. These wars only serve the special interests, the military industrial complex and neo-conservative ideology. The recent uprisings in the Middle East had nothing to do with Muslims hating western ‘freedom and liberty’, neither were they about some crude YouTube video berating Muhammad. It is the result of decades of aggression towards, interference with, and exploitation of the Middle East by the US and its allies. This has led to the rise of radical Islamism.
Washington has used all the weapons at its disposal to overthrow the dictatorial rule Iraq and Libya, leaving them in chaos, and with growing scepticism as to the legitimacy of its reasons.
Saddam Hussein intended to trade oil for Euros, and not US dollars. Subsequently Iraq was invaded, he was murdered and his country left in ruin. Muammar Gaddafi wanted to start trading oil for gold instead of US dollars. Subsequently his country was invaded, he was murdered and his country left in ruin.
We are entering by far the most dangerous time in human history. An attack on Iran by Israel or the United States would be the beginning of world war 3. And it won’t be a conventional war; it will be a dirty war. It will be like nothing the world has ever seen. A war of suitcase size nukes, remote controlled drones and chemical and biological weapons. And the war drums are beating louder than ever. With Israeli Prime Minister Benjamin Netanyahu saying: “Until Iran sees this clear red line and this determination, it won’t stop advancing its nuclear program. Iran must never be allowed to acquire nuclear arms”. A top Iranian General responded: "If the Zionists act against Iran, it will be a historic opportunity for the Islamic Revolution to wipe them off the world's geographic history”.
And it doesn’t matter who wins elections. Obama vs Romney? Besides the fact that they don’t differ on opinion about anything, they are both controlled by the same special interests and shadow groups who have come to rule the world.
The world needs to undergo a peaceful, intellectual revolution. People need to become more informed about politics and economics, and be free to question authority. Only then can humanity confront any small group of people whose actions could lead this world to ruin.
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We need to work hard to get this kind of information out there. We need to inspire people to become educated about economics and politics if we are to avoid the potentially catastrophic future that awaits us. Things will only change if the people change.
Hopefully this is something fresh when compared to the typical ANC bashing and endless religious debates found on this section of news24.
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