Sunday, 2 June 2013

Currency Wars - Race to the Bottom

The alarmist media always seeks to sell papers or broadcast ratings, built on the unswerving fear that followed the financial meltdown, the banking establishment profits from the debt liquidation panic. The lack of stability in fiscal confidence certainly abounds, but the schemes to paper over the mountain of liability obligations, develop at even a more rapid pace. The implied result of a real currency war is that nations are acting or defending their own national interests. The truth is that fiat currencies, designed to depreciate, benefits the moneychangers as the loss of purchasing power penalizes taxpayers and consumers.
The financial press spins the "so called" harmonious unity of the industrial nations, in a lame attempt to ease concerns that the money markets can be trusted. An example is the
G20 summit to focus on 'currency war' threat to economy. This Independent article, lays out the implications of the current currency row.
"G20 officials are set to disregard key parts of the G7 currency statement while making no direct mention of new debt-cutting targets – something Germany is pressing for but which the United States is opposed to.
CMC Markets analyst Michael Hewson said: "What the G7 basically said this week is that it is fine to manipulate your currency as long as you don't talk about it. These 'currency wars' are more like phony wars. The bigger problem the G20 has is not currency wars, it is a lack of growth."
Substitute the term currency war, for coordinated inflation, cloaked in the public announcements, out of the globalist ministers for a
single world currency. Do not doubt for a moment that the ultimate goal is to create managed crisis, in order to push soveriegn countries into incessant serfdom. The Fiscal Times in the article, How a Fake Currency War Panicked Global Economies, concludes.
"What we have been calling "the currency wars" these past couple of weeks is nothing more than a process of adjustment. Exchange values will settle. We have entered a period where economic priorities are changing on a global scale. This reflects a shift in views even from last autumn, when austerity was still the faith. This adjustment will have its effect on currency values, let there be no question. Do not mistake it for a war."
This kind of monetary distortions is the inevitable outcome with the abandonment of the gold standard. Currency trading is the largest market on the planet. Artificial gains are derived from intentional imbalances, since gambling has replaced business as the path to riches. True wealth is build upon the fruits of commerce. The dangerous notion that a cheap currency is desired because it expands exports is a sure formula for national demise. This point illustrated by George Smith, provides a more realistic assessment in his essay,
Currency wars are fiat wars.
"According to the U.S. Department of Commerce, exports accounted for 13.8% of GDP in 2011, a record high but still a small fraction of the total. Devaluing the currency for the alleged benefit of a small segment of the economy hardly makes economic sense when it penalizes all participants with higher prices. It also buttresses the sense that the currency wars will ignite a shooting war and end like all wars, with only a handful of winners and millions of losers. As we know Keynesians star-struck with World War II believe otherwise, and Keynesians run the economy."
The observation that the global financial potentates are Keynesian disciples is undeniable. The fable that an actual currency war is upon us, avoids the valid supposition that replacing the present floating exchange system with a contemporary fixed currency standard would restore equilibrium and fiscal discipline, and curtail much of the collusion among central banks. Welcome a genuine currency crusade that eradicates the globalist infidels and reinstates trusted and stable coinage to a legitimate free enterprise economy.
As long as script money is used as an accounting medium for central financial planning, honest coinage will be attractive as an alternative to depreciating paper values. The race to the bottom is more a rush away from legal tender to actual commodities.
The Japanese Yen’s dramatic drop in comparison to most currencies is just the beginning of a rotating realignment that sees world purchasing power reduced for average citizens. The essay,
Bretton Woods II - The Final Enslavement of Mankind, provides the hint of the end game.
"These financers are admittedly the evil rulers of society. Any attempt to force a singular currency and a universal taxation levee is a fulfillment of the final enslavement of man-kind. Bretton Wood II is an outline for things to come. The debt created money cartel is ready to impose their captivity on sovereign governments."
As the revolving musical chairs plays out, the planned calamities drive the "Nervous Nellies" into the arms of the banksters cabal for a fabricated, but temporary, stability. This staged scenario keeps the one world combine administering their "Pollyanna" existence at the expense of the exploited. The financial elite are living in a dream world of their own creation.
The factual result from this cooked up currency war raises international debt obligations, out of an urgent hope of serving their roll over refinance, with even cheaper currency values. The worldwide financial system, desperately entrapped in a black hole of lower economic growth and wealth generation, cannot combat the consequences of compound interest.
When the sad song stops, interest rates will explode upward. At that point, all paper money will lose the confidence of the financial markets, as the derivative bubble breaks. The final bottom is anybody’s guess. The political response will take the appearance of a unified front to save the intercontinental financial system. The literal result will be that the New World Order elites will consolidate their power and control over an inventive substitute for national currencies. The valid conclusion is that the actual war is one against the entire banking charade. Money is a mere bookkeeping device.
James Hall 

“Lenin was right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”  John Maynard Keynes
Inflation also means that all the talk about how higher taxes will be confined to “the rich” is nonsense. Inflation is a hidden tax that takes away the value of money held by everyone at every income level.
— Thomas Sowell; Dismantling America
The primary cause of inflation is the government printed money, which increases the money supply. Inflation is caused by the purchasing power of your money going down as more and more dollars flood the existing pool of money, which means prices of many essential products, such as food, fuel, and services, go up as more dollars chase the same amount of goods. Inflation is often called “the invisible tax,” which is hardest on the poor, elderly, savers, low-income workers, and fixed-income retirees.
— Robert Kiyosaki; Rich Dad’s Conspiracy of The Rich
Because the United States is printing money, all other countries will probably have to print money. If other countries do not print, then their countries’ currency will become too strong against the dollar and exports to the United States will slow down, causing a slowdown in the exporting country’s economy. This probably means inflation in every country that trades with the United States.
— Robert Kiyosaki; Rich Dad’s Conspiracy of The Rich
The quality of work will decline in an inflation for a more subtle reason: people become enamored of “get-rich-quick” schemes, seemingly within their grasp in an era of ever-rising prices, and often scorn sober effort. Inflation also penalizes thrift and encourages debt, for any sum of money loaned will be repaid in dollars of lower purchasing power than when originally received. The incentive, then, is to borrow and repay later rather than save and lend. Inflation, therefore, lowers the general standard of living in the very course of creating a tinsel atmosphere of “prosperity.” — Murray Rothbard; What Has Government Done to Our Money?
Inflation, then, confers no general social benefit; instead, it redistributes the wealth in favor of the first-comers and at the expense of the laggards in the race. And inflation is, in effect, a race—to see who can get the new money earliest. The latecomers—the ones stuck with the loss—are often called the “fixed income groups.” Ministers, teachers, people on salaries, lag notoriously behind other groups in acquiring the new money. Particular sufferers will be those depending on fixed money contracts—contracts made in the days before the inflationary rise in prices. Life insurance beneficiaries and annuitants, retired persons living off pensions, landlords with long term leases, bondholders and other creditors, those holding cash, all will bear the brunt of the inflation. They will be the ones who are “taxed.”
— Murray Rothbard; What Has Government Done to Our Money?
One of the reasons that economics have been so successful is obscuring the source of inflation is that they have short-circuited the very definition of the word. Nearly everyone believes that rising prices means inflation. So if prices aren’t rising, there must be no inflation.
But rising prices are merely the results of inflation! The inflation is the expansion of the money supply.
— Peter Schiff; How an Economy Grows and Why It Crashes
The banking cartel holds a monopoly in the manufacture of money. Consequently, money is created only when IOUs are “monetized” by the Fed or by commercial banks. When private individuals, corporations, or institutions purchase government bonds, they must use money they have previously earned and saved. In other words, no new money is created, because they are using funds that are already in existence. Therefore, the sale of government bonds to the banking system is inflationary, but when sold to the private sector, it is not. That is the primary reason the United States avoided massive inflation during the 1980s when the federal government was going into debt at a greater rate than ever before in its history. By keeping interest rates high, these bonds became attractive to private investors, including those in other countries.15 Very little new money was created, because most of the bonds were purchased with American dollars already in existence. This, of course, was a temporary fix at best. Today, those bonds are continually maturing and are being replaced by still more bonds to include the original debt plus accumulated interest. Eventually this process must come to an end and, when it does, the Fed will have no choice but to literally buy back all the debt of the ’80s — that is, to replace all of the formerly invested private money with newly manufactured fiat money — plus a great deal more to cover the interest. Then we will understand the meaning of inflation.
— G. Edward Griffin; The Creature From Jekyll Island
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold…. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the “hidden” confiscation of wealth. Gold stands in the way of the insidious process. It stands as a protector of property rights.
— Alan Greenspan; as quoted by G. Edward Griffin in The Creature From Jekyll Island