It is November of 2010 and the central bank leaders of the whole world are getting ready for a tough fight. Many of these central bank presidents never imagined they would be caught in a worldwide currency war, actually, they never imagined it to be possible. How could it be? Countries willingly depreciating the value of their currency to such an extend it could jeopardize the very existence of currencies. Well, guess what, the war is looming and the consequences can be tremendous for the Capitalist Religion and especially the Capitalist God, ”MONEY”.
But how did this happen? Who started this and what should we do?
Well, to find a reason for this war we have to go to the “Mecca” of “Money”, the United States. The US has happily been printing money since Nixon abolished the GOLD STANDARD in 1971. The US, however, is not the only one to blame, since it has been doing this with the knowledge and blessing of the rest of the world. It did not really matter how much money was created, the rest of the world was willing to absorb it, mainly to secure their savings. Actually, some countries even got rid of their currencies and adopted the US Dollar as their local currency like Panama and Ecuador for example. The US Dollar seemed to be the safest placement and the most robust currency.
So, what happened, why is the US all of a sudden "secretly" engaging a currency war?
Well, I guess it could be explained with what has been known as the “Dutch disease”. When The Netherlands became a natural gas and oil producer, the income generated by these natural resources made the country lazy. Oil and Gas were sufficient to generate wealth for the population, why bother invest in other industries?
I guess the same thing happened with the US. The “financial engineering industry” was an even smarter idea since it is much easier to print money than to extract oil and gas. However, reality eventually caught up and the US Debt owners started to understand the magnitude of the problem. Actually, the more they owned the bigger the problem because there is no way the US can pay them back. The magnitude of the US Debt is unbearable unless …….., exactly INFLATION.
The smartest heads of the US “financial engineering industry” came together and decided that it was time for the US Dollar to depreciate. How? Well by flooding the market with Dollars.
INFLATION is SALVATION seems to be the new slogan at the FED.
The Chinese foresaw this and started buying gold, silver and dumping their Dollars in Africa, where they are buying all the natural resources they can. Africa once again might be the biggest loser, together with the American citizens.
So, what is the war and what should we do?
The problem the Central Banks are confronted with is not easy. On one hand they maintain positions and savings in US Dollars and see the value of their savings evaporate and on the other hand there will be an increased pressure to lower the value of their currency to be competitive on the global market, thus they will be under pressure to generate inflation too.
The problem is that if the FED wants the destruction of the US Dollar there is nothing the Central Banks can do to stop the FED and if they engage in a devaluation race with the US Dollar it can cause the disappearance of currencies.
My advice, don’t engage in this rat race or currency war. It might be tough to stand the pressure but the FED is on a US Dollar destruction path and seems to be unstoppable in its quest. I think the US is working on a new world currency under the control of the IMF and of course "controlled by the FED" and if Central Banks all around the world enter into the currency wars they will end up losing.
THERE ARE NO WINNERS IN A WAR
There are no winners in a war, only losers, so why should this war be different. The global financial system is rotten like global governance and the supposedly democratic systems. The capital owners, FED, big banks and corporations just went too far this time and they seem to be unstoppable in their downfall. If you ask me, I say, BRING IT. Let it happen because it will bring an end to this corrupt system that is shooting its last amunitions. It is going to be tough wake up call for civilized humanity but let's hope the people will learn from this and start to respect the laws of nature.
There is of course another solution, get rid of “MONEY” but I guess this is too much asked for this phase of human evolution.
James Tector
Critical Citizen
Critical Citizen
