Here is an important Q&A with Another that I used in part in my last post, now presented in its entirety.
5/5/98 ANOTHER (THOUGHTS!)
A few thoughts for you, as the questions are asked.
Q: ** It seems that both you and your friend believe that the world is splitting up into currency/trading blocks -- much as the world did for both World Wars. There has been much discussion around the world about the imposition of a NEW WORLD ORDER and international one world government. Simultaneously, we see another, opposing force at work -- regionalism, nationalism, even tribalism. What do you make of this? Is the Euro a child of the forces of the New World Order, or the forces of regionalism/nationalism/tribalism? **
I would say, "Old World Order" to return. To understand/explain better: "A very easy way to view this "order", would be to simply say that the American Experience is reaching the end! As we know, world war two left Europe and the world economy destroyed. Many thinkers of that period thought that the world was about to enter a decades-long depression as it worked to rebuild real assets lost in the conflict. It was this war that so impacted the idea of looking positively toward the future. The past ideals of building solid, enduring, long term wealth were lost in the conception of a whole generation possibly doing without! In these fertile grounds people escaped reality with the New Idea of long term debt, being held as a money asset. Yes, here was born the American Experience that comes to maturity today.
New world order, regionalism and tribalism are but modern phrases that denote "group retreat to avoid paying up". The worldwide currency system is truly a reflection of an economy built from war, using the American Experience, the US$ and the debt that it represents. But, for the American dollar to continue as the representative of the global financial system, in the form of being the reserve currency, maturing generations of all countries must accept it, and the tax on real production it clearly imposes! In the very same mindset that people buy the best value for the lowest price (Japanese cars in the late 70s), and leave an established producer to die, so will they escape the American currency and accept any competitor that offers a better deal. And because we are speaking of currencies here, the transition will be brutal!
As you ponder these thoughts, consider that; all economies today are truly equal in production as the exchange rates are the manufactures of profit!
Q: ** Is Europe (led behind the scenes by the BIS) an opponent to the United States?**
A: Sir, Yes, but not in the ways of war, as it is in the feelings of "pride" and "we go our own way". The downfall of the Russia, did allow for the Euro and all that it will build. They now see the debt of the US$, as a reserve money, can be escaped! As even the US citizen will leave its own workers to die as products are purchased "overseas", how much easier will the world also flee the dollar! Opponents? No, I would say they are learners of the "American Way" as they embrace the "American Idea" of a "free world market economy".
Q: *** If so which countries are in which camp? Your associate seems to feel that Asia is split between the United States which has Japan as an ally, and Europe which has China as an ally (a notion I found particularly intriguing). Where is Britain in this? Japan? And most importantly, the Gulf States, particularly Saudi Arabia? **
A: Sir, I feel he is correct in this thought. Europe does grasp for a relationship with Asia as the US did have with Japan. It would build a mighty economy on a foundation of oil and gold as backing for new money. As China and Arabia were once a part of the Europe economy, in a small way, they may now return with no fear of Russia. Britain? A lost nation. Japan? This one is "of the American Economy" and is to live and die by it! They will seek your Alaska oil before loss of face with gold. A dead Yen be a dead Japan.
Q: **Along these lines, I too believe that currency movements will flow through Europe because the Euro currency will be gold backed. Where does that leave Japan with over $200 billion in dollar reserves, let alone its massive U.S. Treasuries' holding? **
A: Perhaps, they be like Korea? Rich in paper until the world says, "this paper, it is not good"!
Q: ***Your associate says that BIS helped China increase its gold holdings. Please tell me what the source of that information is, or is it simply a speculation on his part. ***
A: The BIS is the gold broker for all interbank sales/purchases. Bullion Banks are for sales to other entities. I think, at first, China was leverage against the oil producers. Then Arabia was allowed into BIS for Euro.
Q: **One other item you might clarify for me is "Who is really behind BIS?**
A: Perhaps, "who control them"?
Q: **The Swiss?
Q: **The eurocentral banks?
Q: **Who does BIS really represent?
A: "old world, gold economy, as viewed thru modern eyes" or " way to move from US$ without war".
Q: **Why was Saudi Arabia just included in BIS?
Q: **Has Saudi Arabia gone with Europe?
Sir, there is much more to this, but we talk over time, yes? I will be away for perhaps ten days. We speak again.
Dear ANOTHER, my great respect for you has just deepened further. Have a pleasant ten days and I will consider your words. Yes, we will talk over time. Thank you Mike Kosares
Here is the big Catch-22. The dollar and the $IMFS are dependent on each other for survival, just like Siamese twins that share vital organs. If one dies, so does the other. But in Gold is Money - Part 2, I showed you that the dollar and its system are also at odds with each other, and that only one can be supported at a time - by sacrificing the other! I explained that without a shadow of a doubt, the dollar is being sacrificed in a futile attempt to save the system...
Saving the System - Not its Value
It was said, many years before Paulson, Bernanke and TARP, that the financial system will be saved at any cost! Apparently this statement has proven to be true. But at what cost?
You see they are now faced with a dilemma they will not discuss publicly. On one side is their product, the conceptual unit of credit account, their currency. And on the other side is their offspring, the financial system, Wall Street. What saves one will kill the other. They can save the present value of their product and kill their offspring through starvation. Or they can save their offspring by delivering what it desperately needs to survive... a constant expansion of credit (aka monetary inflation). But this will, of course, kill the value of their product, the currency.
They can save one or the other, but not both. And it was always known, but has now been proven, that the system will be saved at ANY cost. (Unfortunately for them, they did not think it through far enough to realized that the cost of saving their offspring will also kill it and a whole lot more. But that line of Thought is straying a little too far from the topic of this post.)
In order to survive, the system, the financial industry, Wall Street NEEDS a constantly increasing supply of CREDIT! If the population won't give their own blood to save this dying Frankenstein monster, then the CB's and governments WILL! It is happening now. Right under our noses. For more than a year now!
...The bottom line is that the banking system will be "saved" at the expense of sacrificing the market value of every last credit instrument they have created. Anyone and everyone with their savings inside the system will take a serious purchasing power haircut. The only people that will enjoy the full value of their wealth (and more) are the ones who hold it outside of the imploding system. Inside the system, credit of any color, green OR yellow, is only credit.
Perhaps now you can see that "the dollar" clearly represents the transactional function of money, a role in which the specific value of a dollar does not matter. And the $IMFS represents the wealth reserve or store of value function of money. In the dollar's case these two functions are, at the very same time, co-dependent for survival yet they must kill each other through sacrificial abandonment.
Please read the very end of my post Say Goodbye to Wall Street understanding that Wall Street IS the $IMFS...
You see, the Siamese twins, credit and equity, have finally been separated. Gold has been demonetized! It is now a world class wealth asset. A tradable wealth asset. A portable wealth asset. A durable wealth asset. Money, which has been deemed by society to be fiat currency only, no longer needs to carry the heavy burden of ALSO being a store of value. No longer must we raise entire industries that suck in generations of our best and brightest talent for the sole purpose of designing paper wealth derivative products in a vain attempt to make money be a store of value. No longer. Say goodbye to Wall Street.
The US Dollar International Monetary and Financial System is represented in visible form by the big Wall Street banks. These banks control the Fed, the money distribution system, and the debt, the "wealth reserve" distribution system. And the global expanse of the this system can be viewed most easily by simply looking at their websites.
Here is the list of countries where the Goldman Sachs parasite has attached itself as found on goldmansachs.com > Careers > Locations:
Europe, Middle East, and Africa:
United Arab Emirates
Australia & New Zealand
And here is Morgan Stanley's list from morganstanley.com > Global Offices. And yes, there are a few differences like Greece, Hungary, Netherlands, Saudi Arabia and Russia:
United Arab Emirates
As I explained in an answer to a question in a recent comment, there are two things I am watching for right now. The first is any sign that the non-dollar factions are starting to abandon the $IMFS, and the second is the emerging favorability of gold as the reserve of choice to replace the dollar.
Here is my comment:
"My friend, debt is the very essence of fiat. As debt defaults, fiat is destroyed."
What is the problem with Greece and the other so-called PIIGS? Is it profligate public spending/financing, the credit that enabled it, the system that helped hide it, and the mountain of unserviceable debt that resulted?
The difference between the $IMFS and Freegold is that the former encourages and enables the above while the latter never lets it get this far along so as to become a systemic risk. It's called 'balance as you go', as opposed to enabling the growth of an imbalance so large that it finally collapses back into balance.
I cannot give you the blow by blow that you ask for, but I can still show you what must happen. And it is helpful in this regard to work backward from the future until we come to two choices that will both result in the same end.
First is that we are facing a systemic shift from the $IMFS to Freegold. Don't forget that the actual value of an individual transactional currency unit (even a euro) doesn't really matter in the context of its primary function. So even though one currency is built for the new, emergent system, I would still not want to be holding that currency through the transition.
Second is that Greece's debt cannot be paid back in real terms, and neither can the aggregate planetary debt. It doesn't really matter if it is not paid back through default (bankruptcy) or through devaluation of the currency... it will not be paid back in real terms. But devaluation of the currency is certainly the more politically acceptable route.
Third is that all this planetary debt (including Greece's) is a function of the $IMFS. The eurosystem, even though it was built to thrive under Freegold, is still supporting the $IMFS. The action to look for is the passive action of withdrawal of support.
The way the $IMFS works is that, at the very end, it either bails you out or kills you dead, depending on who your friends are. Freegold spanks you along the way with a little pain here and there until you get your finances back in order.
I expect Greece and the PIIGS to get spanked hard at the beginning of the new system. I do not expect Greece to leave the euro, but it will certainly have to get its public finances in order.
You see, the shift is going to be swift and it will reveal a change in perception that is almost impossible to imagine right now. Physical gold is going to rise so high, so fast that it will become known as the most prized treasure a collective state can hold. And immediately upon this recognition Greece will have to either part with or encumber its most prized "monetary" treasure while it restructures its newly devalued debt and its economy.
No longer will unlimited Ponzi finance be an option for ANYONE'S financial difficulties. But at the same time, the worst of the financial predicaments will have been significantly devalued, as they were bad bets by creditors from the start.
This is why it is so important to understand the implications of Freegold now, because the cascade of events once "the plug is pulled" will be mind-numbing. The ability to understand events as they unfold will be quite rare (and quite valuable) as we are in uncharted waters.
And now here are a couple examples of the kinds of stories I am watching for.
Europe Begins Abandonment of the $IMFS
Europe bars Wall Street banks from government bond sales
Monday 8 March 2010 21.36 GMT
"Governments do not have the confidence that the excessive risk-taking culture of the big Wall Street banks has changed and they still cannot be trusted to put the stability of the financial system before profit," said Arlene McCarthy, vice chair of the European parliament's economic and monetary affairs committee. "It is no surprise therefore that governments are reluctant to do business with banks that have failed to learn the lesson of the crisis. The banks need to acknowledge the mistakes that were made and behave in an ethical way to regain the trust and confidence of governments."
And from Jesse yesterday:
Wall Street Excluded from European Government Bond Sales
The Ugly American is a novel that was published in 1958, and was later made into a movie starring Marlon Brando. It tells the story how America was losing the hearts and minds of the people in Asia after its heroic performance in the Second World War by the predatory business practices and exploitation of US multinationals. The book was a bit of a scandal, coming on the heels of Nixon's visit to South America where he was spat upon by angry mobs.
At the time people talked about the way in which US corporations were alienating the developing world (we called it 'third world' then), and how it would create a generation of political difficulties for the US around the world. This was an initial wake up call to the American public, which was lost and forgotten in the fervor of the Go-Go Sixties. What was good for General Bullmoose was good for the USA. Or so we all thought.
Regrettably, once again US corporations, the Wall Street banks, are busy alienating the world against America's interests through their unethical and shockingly predatory business practices. It will be interesting if Asia and South America pick up this theme of banning the Wall Street banks on ethical considerations from doing certain types of business in their regions...
"The Gold Man"
BIS Board elects Christian Noyer as new Chairman
8 March 2010
The Board of Directors of the Bank for International Settlements (BIS) elected as its new Chairman, Christian Noyer, Governor of the Bank of France. His term is for a period of three years, commencing on 7 March 2010.
Mr Noyer succeeds Guillermo Ortiz, Governor of the Bank of Mexico, who served as Chairman of the Board until the end of December 2009, when he left his post as central bank Governor.
Members of the Board of Directors expressed their sincere gratitude to Mr Ortiz for his excellent services to the Bank.
FLASHBACK: JANUARY 1999 - ONE OF THE FIRST ECB PRESS CONFERENCES
ECB: ECB Press conference: Introductory statement
Transcript of the questions asked and the answers given by Dr. Willem F. Duisenberg, President of the ECB, and Christian Noyer, Vice-President of the ECB
Question: I'd just like to talk to you about gold reserves. The ECB said it will readjust the value of its gold reserves on its books each quarter, and I think it is also decided to keep about 15% of its exchange reserves in gold. If there was a major change in the price of gold on the world market, that percentage would be likely to change, and so I would like to ask you if that means that the ECB would buy or sell gold in order to keep its proportion of reserves at that amount of percent.
Wim Duisenberg: Christian, you're the gold man!
Christian Noyer: No, there is no such conclusion to draw, because it was not a decision to hold 15% of foreign exchange reserves in gold, as a structural decision of the Governing Council. The decision of the Governing Council at the time was that in the initial transfer 15% would be made of gold, but that has no consequence on the structure of foreign exchange reserve to develop in the future, nor has it any consequence on the total percentage of gold holdings of the system, including the reserves that are still in the balance sheet of national central banks, and we know that in some cases they have more than 15% gold, and in some cases they have less, but they are for the moment and for the foreseeable future keeping the proportion they have.
Duisenberg: And in this case, the foreseeable future is much longer than in the earlier case
A Final Thought
I'll end with this latest poignant piece from Bill Holter:
U.S. States and Sovereigns
To all; the talk has recently been all about Greece and the PIIGS because that's where the media has steered attention. Of course Moodys downgraded Greece and the media went on its "the Euro is dead" frenzy at a most opportune time as the Dollar was looking very sickly on the charts at the time. Divert attention in other words.
Attention was diverted from several (many) US states that were and still are walking financial zombies. California, New Jersey, Illinois etc. are running deficits and debt levels similar to and in some cases far worse than Greece in percentage terms. What is truly humorous is even with retarded budget projections the numbers aren't working. How many states have "proposed" budgets that have turned out to be pie in the sky dreams after only 6 months? The tax revenue projections that have and are being used by many states are so far out of whack that the ink doesn't even get a chance to dry before a 3rd grader puts a pencil to the projections and figures out they are wrong!
This goes for many big cities, counties, and municipalities. The point is...EVERYTHING is broke! The only thing not broke is the stock market but that's only because of the PPT support and rigging. Unemployment insurance is being extended further and further into the future while tax revenues decline. Much of the so called "employment" has been in the public sector that will obviously weigh further on all government budgets. It is not sustainable in any way even if the credit markets don't seize up.
Anyone who doesn't believe we have a stock market crash and train wreck directly ahead must believe we have a hyperinflationary event coming immediately or they can't do math. You cannot have sovereign governments, US states, cities etc. (and federal government) on the verge of bankruptcy and stocks not panic and stay at these levels. In my opinion the only justification for "Dow 10,000" is the probability (guarantee) of hyperinflation, period!
There is no recovery in real estate, employment, main street or anywhere else except for Wall Street because of the $ trillions pumped in and running through its veins. About once every 10 days or so we hear about the Fed raising rates and withdrawing stimulus. This cannot happen without an immediate fatal heart attack to Wall Street and Main Street taking a final body blow. It is now and has been for years, "inflate or die". The Fed is having a difficult time "reinflating" with their foot through the floor boards on the accelerator, taking their foot off the gas (not to mention tapping the break) is entirely out of the question and nothing more than poor humor..
It is now only a matter of time before investors get spooked by the fear of sovereign defaults spreading like a disease. The day is not far off where ALL paper gets shunned and real money gets bids that swamp actual supply. Once the thought process turns to "there's no place to hide", the amount of fake capital trying to enter metal and the ridiculously small Gold stock arena will bid these assets to never before dreamed of values. When there is no place to hide "within" the system, capital will move outside the system.
The problem is very simple indeed. This week alone the U.S. Treasury is borrowing 1 1/2 times the entire annual global production of Gold. And how much have they borrowed the week before that and the week before that...? The math is impossible and the lifeboat far too small to accommodate anyone even 1 second too late! What could "never happen" 2 or 3 years ago has already happened and then some. Now we wait for sovereigns, U.S. states and cities, even the U.S. Treasury to default...........or hyperinflate. It is only a matter of time now and no longer a question of if! Regards, Bill H.
Thanks go out to HK, GI and Muse for elements of this post.