Fighting to save the dollar
This morning I was listening to Matt McGill, former co-host of the Matt & Perry Show on WVON and one of his guest predicted within the next ten years, the money will change. He believes that the U.S. is going to create a whole new system because this one is in trouble and many people are going to lose. The question is – will this happen? According to what has transpired with the discontinuation of M3 we know that this monetary system is indeed in trouble. OnBlast Media wrote an interesting piece as to why and how this system got in trouble and it explains why it is necessary for the U.S. to go to war with any country that threatens the security of the all mighty dollar.
Nixon took office 1969 and that’s when it all began, around or on August 15, 1971, when it ended. Nixon closed the gold window and refused to pay out any of our remaining 280 million ounces of gold. In essence, we declared our insolvency and everyone recognized some other monetary system had to be devised in order to bring stability to the markets. A new system was devised which allowed the U.S. to operate the printing presses for the world reserve currency with no restraints placed on it– not even a pretense of gold convertibility, none whatsoever! Though the new policy was even more deeply flawed, it nevertheless opened the door for dollar “fraud” to spread.
The U.S. authorities, struck an agreement with OPEC to price oil in U.S. dollars exclusively for all worldwide transactions. This gave the dollar a special place among world currencies and in essence “backed” the dollar with oil. In return, the U.S. promised to protect the various oil-rich kingdoms in the Persian Gulf against threat of invasion or domestic coup.
(sorry for this long post)
Cynthia,
Really appreciate your discussion on the implications surrounding current US fiscal & monetary policy. This is a huge area of concern that the press seldom goes into with any great detail. As a result, most of us are simply clueless.
One individual that has written somewhat extensively on the subject is economist Michael Hudson. Below is an interview featured in Counterpunch magazine back in 2003. Very insightful.
Hudson advised the government and Wall Street in the aftermath of Nixon’s closing of the gold window. Here, he lays out the details. His book, Super Imperialsim ($30 paperback, $85 hardcover) is free as a download from his website. The concept of hegemony is explained in clear and cogent fashion.
Go here, http://www.michael-hudson.com/ . Then click “books”. Pdf or word document of Super Imperialism is available free.
excerpt from Michael Hudson interview in Counteerpunch
(see: http://www.counterpunch.org/shaefer04232003.html )
“Shortly after the US was forced off the gold standard, a young economist by the name of Michael Hudson received a grant to study the effect of the demonetarization of gold. His report was made not only to the US government, but also to Wall Street firms such as his former employers, the Chase Manhattan Bank and Arthur Andersen. The problem was that despite his phrasing the situation in the most critical terms, his report revealed that the US was on inadvertently on the verge of the greatest boondoggle of all times.
Hudson himself describes resistance to his message in a new preface to the recently reprinted ground-breaking book Super Imperialism: The Origin and Fundamentals of US World Dominance. Hudson’s is an infuriating story, only partially available in this volume, involving at least two incidents where university board members and economic professors threatened to resign if his books on trade policy were published.
The US Treasury Department even went so far as to alter the way it reports statistic on the balance of payments impact of the u.s. government to prevent further study into how the US government actually made money on its “aid” programs. More important, prof. Hudson explains how the US managed to use its debtor status to exploit the world.
By going off the gold standard at precise moment that it did, the United States obliged the world’s central banks to finance the U.S. balance-of-payments deficit by using their surplus dollars to buy U.S. Treasury bonds, whose volume quickly exceeded America’s ability or intention to pay.
All the dollars that end up in European, Asian, and Eastern central banks as result of American’s excessive import-imbalance, have no place to go but the U.S. Treasury. Because of the restrictions placed on the central banks_ there is no place else for this money to go_these countries were forced to buy US treasuries or else accept the worthlessness of the dollars received through trade.”
Another economist, Walter J. (John) Williams, reveals more on the current situation. He’s featured here in an interview entitled: Shadowing Reality …economist keeps tabs on government’s “Creative” statistical reports.
http://www.weedenco.com/welling/archive/li/v08i04lilogo.asp
“We’ve had three years in a row here where the GAAP deficit has been basically $3.5 trillion. So the deficit and the total obligations of the federal government are increasing by roughly the amount of GDP every three years. In fact, the fiscal 2005 statement shows that total federal obligations at the end September were $51 trillion; over four times the level of GDP. It is unprecedented for a major country to have its actual obligations so far out of whack.
It’s ( the credit bill) beyond control. Keep in mind that 2005’s $3.5 trillion GAAP deficit is roughly 10 times bigger than the “official” deficit. But that is the size of the shortfall.
Even if you were to raise personal income taxes to 100%, take all of everyone’s salaries, and put all those funds into a pot against this deficit, you’d still have a deficit. (If you also threw in corporate taxes, you actually might get it a little bit to the plus side.) But we are at a point where we cannot cover the deficit by raising taxes. So what are we doing? We are lowering taxes to try to stimulate the economy.
People are talking about new big spending programs going forward. Yet you’d have to cut back Social Security and Medicare drastically here, beyond anything that I can imagine is politically feasible, to bring things into balance. Of course, there is no way you can tax all of people’s income. And I think it’s a political impossibility to eliminate Social Security and Medicare, or a goodly portion of it. But that is the political situation we’re faced with right now.
This is why I really refuse to align myself with any of these jokers down in Washington (to use as sensitive, or as gentle a term as I can for them). Those people have a thinking horizon, a planning horizon, of the next election.”
Comment by P.T. — March 31, 2006 @ 1:14 am
BTW:
“While the whole world focuses, even obsesses, over…(the) rantings of both the US and Iran, there are signs that a completely different trend is underway.
Could the US and Iran have already taken the first steps toward normalization without the mainstream media paying attention? Suddenly, two of the biggest casus belli (an event used to justify starting a war) between the two countries have disappeared.
Not Only Will the US Not Attack Iran, It Looks Like the Biggest Thaw in US/Iranian Relations Since 1979 is Suddenly and Inexplicably Underway
48 Hours That Changed the World – Oil Bourse Disappears; US-Iran OK Bi-Lateral Talks – by Michael C. Ruppert
© Copyright 2006, From The Wilderness Publications, www.fromthewilderness.com. All Rights Reserved. This story…may be circulated, distributed or transmitted for non-profit purposes only.
March 27, 2006 1330 PST (FTW) – ASHLAND - March 20 and 21st, 2006 may prove to be historic days.
The Iranian Oil Bourse set to open on March 20th, selling oil in Euros, was quietly “delayed,” instantly reducing the number of mounting international threats to dollar viability.
The only press story we could find anywhere on the delay made it sound like Iran had never planned to open a bourse in the first place, despite about two-dozen stories from around the world last year describing its pending debut.
The next day Iran’s Supreme Leader Ayatollah Khamenei agreed to bi-lateral talks with the US over Iraq, opening the way for the first US-Iranian “state-level” talks since the fall of the Shah of Iran. The moves come at a time when it seems the belligerent rhetoric from both sides couldn’t be more intense.
What gives?”
see The Persian Journal: http://www.iranian.ws/irannews/publish/article14125.shtml
“...they are jumping the gun if they still figure Iran is within days of launching a new international oil exchange that would sell its own and other Middle Eastern oil producers’ black gold in euros rather than U.S. dollars—and which, the theory goes, could ultimately torpedo the greenback and the U.S. economy.
Despite repeated reports over the past 18 months or so that the planned bourse would finally open for business on March 20, 2006—and go head to head with the New York Mercantile Exchange and the ICE Futures Exchange in London—the start date has been postponed by at least several months and maybe more than a year…
“...it’s at a much earlier stage than people would think,” said British consultant Chris Cook, who claims credit for coming up with the idea for the exchange in the first place and is a member of the consortium headed by the Tehran Stock Exchange that is charged with bringing the project to life. Mr. Cook dismissed the idea that Iran’s goal is to use the bourse to sabotage the greenback.
As for trading oil in euros, he said the Iranians likely would find it very difficult, at least in the next several years. “Basically, there aren’t enough euros in circulation, and nor are there likely to be,” he said.
Mr. Cook cited a recent article on Hong Kong-based Asia Times Online by William Engdahl, who specializes in the geopolitics of oil.
“For the euro to begin to challenge the reserve role of the U.S. dollar, a virtual revolution in policy would have to take place in Euroland,” Mr. Engdahl wrote. “First the European Central Bank . . . would have to surrender power to elected legislators. It would then have to turn on the printing presses and print euros like there was no tomorrow.”
A full challenge to the U.S. dollar as the world central bank reserve currency, Mr. Engdahl added later, would entail a “de facto declaration of war on the ‘full-spectrum dominance’ of the United States today,” and that is something no country or group of countries is yet willing to launch.
“You can rest assured, there will not be a crude oil contract, Gulf-based, in my opinion, within a year—and that would be really pushing it,” .
There has been far less talk about the planned bourse in the mainstream media than on the Internet, particularly on websites aimed at gold bugs and other economic conspiracy theorists.
The theory is that all trades through the new bourse would be made in euros, not the U.S. dollar, which for decades has been the world’s primary reserve currency, as well as the one in which oil and most other commodities have been priced. As a result, European nations and other countries, especially Middle East oil producers, tired of having to buy billions of now weakening greenbacks to pay for their energy purchases, would no longer have to do so.
This, the conspiracy theorists contend, would knock the stuffing out of the U.S. currency and hasten the decline and fall of the American Empire, all the while allowing Iran to stick it to the Great Satan.
But, the theory continues, Washington will pre-empt all this by using Iran’s nuclear ambitions as a pretext for attacking the country.
You’ve given me a lot to ponder. Thanks…
Comment by P.T. — March 31, 2006 @ 3:23 am
Hey, PT, I was going to post the same information about the Iranian bourse but I have heard from many sources that it’s a fraud. I wouldn’t doubt for a second that the media is in with Bush in pushing the lie that Iran is very close to building a nuke as an excuse to bomb Iran and prevent oil from being sold in Euros.
Also I remember that Hugo Chavez who is the current president of Venusula ( the US imports 11% of our oil from Venusula) met with the Iranians about a year ago. I wonder if they were hatching a plan to begin selling their oil in Euros or if they were planning to stop allowing oil from Venusula to be exported to the US if Bush continues to threaten Iran.
Just some thoughts.
Comment by Roderick — March 31, 2006 @ 11:48 am
thank you for posting “fighting to save the dollar pt2”. I’ve set up a new blog O’s Observations, I will continue delivering cutting edge news, so check me out…
Orlandus
Comment by O's Observations — March 31, 2006 @ 4:06 pm
Wow, this is very interesting! Nice topic Cynthia! The uncertainty of the dollar makes me happy my profession is mobile worldwide…
Comment by emergingphoenix — March 31, 2006 @ 8:31 pm
Cynthia
I wonder if the same “guest” on the show you refer to belives that they’ll be planting microchips in babies in 10 years? That’s what I love about you conspiracy theorists, the depths that you guys will go to put together dots that just aren’t there.
I guess only time will tell what will become of all of this.
Comment by Mr. Grey Ghost — April 1, 2006 @ 9:28 pm
Cynthia
BTW, as much as we’re on totally different sides of the ideological/political fence, I always respected the fact that you truly believe what you feel and that you could make your points without insulting me or other bloggers. Sorry that your previous disagreements with other bloggers/commenters on my site made you fly the conservative coup, but you’re always welcome to comment on my blog, after all you and James still remain my favorite liberal bloggers.
Thanks GG. It’s good to know that you don’t mind my comments because God only knows, we are definitely on opposite ends of the totem pole. You and Bullfrog were two of my favorite Conservative bloggers until he told me about his disgust for my opinions. I guess that only leaves you now (LOL)...
Comment by Mr. Grey Ghost — April 2, 2006 @ 12:43 am
Cynthia, I changed my blog location again,, I’m over at blogspot now, pls update my link. thanks Orlandus
Comment by O\'s Observations — April 2, 2006 @ 4:01 am
Great work!
[url=http://igobntdz.com/wzlw/urax.html]My homepage[/url] | [url=http://rspxpvgt.com/wdch/ppcr.html]Cool site[/url]
Comment by Lee — May 9, 2006 @ 12:01 am
Good design!
My homepage | Please visit
Comment by Nick — May 9, 2006 @ 12:02 am
Great work!
http://igobntdz.com/wzlw/urax.html | http://vtlwzpah.com/jrsv/xind.html
Comment by Holly — May 9, 2006 @ 12:02 am