söndag, oktober 15, 2006

I startgroparna

Göran Hägglund presenterar den nya linjen i en DN-intervju. Privatkapitalet ska in och kalasa på skattepengar. Stopplagen ska bort. Samhällets grepp över hälsovården urholkas ytterligare. Ett system med växande inslag av privatförsäkringar uppmuntras.

Den uppluckringen av vård- och omsorgssektorn som sattes ingång under 90-talet har redan fått sina väntade effekter. Jag skrev för några veckor sedan (och lite innan dess här) om företaget Attendo (vars bonus-VD för övrigt är bror till den nyss avgångne Handelsministern) och om det pris vi betalar för privatiseringarna.

LO-tidningen publicerar i senaste numret en artikel om det land som levererar målbilden för borgerlighetens sjukvårdspolitik, USA. Läs den noga, som kommentar till Hägglunds mysprat. 46 miljoner människor är oförsäkrade i privatsjukvårdens USA. Antalet har vuxit kraftigt de senaste fem åren.
I ett internationellt perspektiv befinner sig sjukvården i USA i en absurd situation. Landet lägger ned mest i hela världen per capita på sjukvård, över 15 procent av BNP enligt OECD. Men vårdförsäkringarna omfattar den minsta delen av befolkningen och i fråga om livslängd delar landet jumboplatsen i västvärlden med Danmark. Allt fler i USA börjar undra var pengarna tar vägen.


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Och apropå LO-tidningen; missa inte Bo Bernhardssons mycket intressanta eftervalsanalys.
Den senaste partikongressen slog fast att den fulla sysselsättningen gäller som politikens överordnade mål. Även om kompromissen med partiledningen ledde till att fyraprocentsmålet, som ett delmål, finns kvar i principprogrammet. […] Sen åkte vi hem från Malmökongressen och dess beslut lades till handlingarna. Någon omprövning blev det inte. […] Summa summarum; om arbetarrörelsen menar allvar med den fulla sysselsättningen, då måste vi våga diskutera om inte en och annan helig ko på det ekonomisk-politiska området kanske borde slaktas.
Jag skrev i november förra året om en intressant vänsterpartiinterpellation till dåvarande finansminister om just detta. Den klargjorde just att målet ”lades till handlingarna” efter s-kongressen.

36 kommentarer:

Per sa...

"Allt fler i USA börjar undra var pengarna tar vägen."

Det gör verkligen jag med. Ser att Sverige har världens högsta skattetryck på 51.1% av BNP och att Kanada och Schweitz klarar av att leverera sina völfärdssystem för 33.5 respektive 30% enligt OECD. Schweitz har också en betydligt djupare och rättvisare demokrati där betydligt fler frågor avgörs i bendande folkomröstningar.

I Sverige har läkaren telefontid mellan 8.30 - 9.15 och banken 8.00 - 20.00, i stället för 24 timmar om dygnet 365 dagar om året. Vilken innehållslös välfärd, rena rama skiten. Tandvården får vi betala till 87%. SVT/SR kostar 4 miljarder per år, dvs lika mycket som två tandvårdsreformer. I Sverige är det viktigare med fri TV än det är med fri tandvård, snacka om felprioritering. Sälj SVT och betala tillbaka pengarna till licensbetalarna.

Neoliberal Agenda sa...

Om nu vänstern nödvändigtvis måste leka planekononomi så kan ni väl göra det in någon mindre viktig sektor av ekonomin, tex. TV-spel eller konst.

Men lämna livsnödvändiga saker så som mat, bostäder och sjukvård åt den fria och profitdrivna marknaden. Köer och resursbrister i dessa sektor kostar människoliv.

Anonym sa...

Mer resurser till den gemensamma sektorn med andra ord.

Lämna trivialiteterna till kapitalisterna men låt dem få skatta ordentligt för sig först..

Anonym sa...

Så här ser problemet ut, det stavas USA och den globaliserade apartheidfascismen.....



Crisis of the U.S. Dollar System

by F. William Engdahl

October 14, 2006
GlobalResearch.ca

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Text of author's presentation at an international conference held in Feldkirch, Austria, September 2003.


It's accepted wisdom that the United States, despite recent problems, is still the strongest growth locomotive for the world economy, the pillar of the global system. What if we were to discover that, instead of being the pillar, that the United States was, in fact, the heart of a dysfunctional economic system, which is spreading instability, unemployment, and depression globally?

No other nation on earth comes near to the commanding US military superiority in smart bombs, military IT, or in sheer force capabilities. The US position in the world since 1945, and especially since 1971, has rested on two pillars, however: The superiority of the US military over all, and, the role of the dollar as world reserve currency. That dollar is the Achilles heel of American hegemony today.

In my view, the world has entered a new, highly dangerous phase since the collapse of the US stock market bubble in 2001. I am speaking about the unsustainable basis of the very Dollar System itself. What is that Dollar System?

How the Dollar System works

After 1945, the US emerged from war with the world's gold reserves, the largest industrial base, and a surplus of dollars backed by gold. In the 1950's into the 1960's Cold War, the US could afford to be generous to key allies such as Germany and Japan, to allow the economies of Asia and Western Europe to flourish as a counter to communism. By opening the US to imports from Japan and West Germany, a stability was reached. More importantly, from pure US self-interest, a tight trade area was built which worked also to the advantage of the US.

That held until the late 1960's, when the costly Vietnam war led to a drain of US gold reserves. By 1968 the drain had reached crisis levels, as foreign central banks holding dollars feared the US deficits would make their dollars worthless, and preferred real gold instead.

In August 1971, Nixon finally broke the Bretton Woods agreement, and refused to redeem dollars for gold. He had not enough gold to give. That turn opened a most remarkable phase of world economic history. After 1971 the dollar was fixed not to an ounce of gold, something measurable. It was fixed only to the printing press of the Treasury and Federal Reserve.

The dollar became a political currency—do you have "confidence" in the US as the defender of the Free World? At first Washington did not appreciate what a weapon it had created after it broke from gold. It acted out of necessity, as its gold reserves had got dangerously low. It used its role as the pillar of NATO and free world security to demand allies continue to accept its dollars as before.

Currencies floated up and down against the dollar. Financial markets were slowly deregulated. Controls were lifted. Offshore banking was allowed, with unregulated hedge funds and financial derivatives. All these changes originated from Washington, in coordination with New York banks.

The dollar debt paradox

What soon became clear to US Treasury and Federal Reserve circles after 1971, was that they could exert more global influence via debt, US Treasury debt, than they ever did by running trade surpluses. One man's debt is the other's credit. Because all key commodities, above all, oil, were traded globally in dollars, demand for dollars would continue, even if the US created more dollars than its own economy justified.

Soon, its trade partners held so many dollars that they feared to create a dollar crisis. Instead, they systematically inflated, and actually weakened their own economies to support the Dollar System, fearing a global collapse. The first shock came with the 1973 increase in oil by 400%. Germany, Japan and the world was devastated, unemployment soared. The dollar gained.

This Dollar System is the real source of a global inflation which we have witnessed in Europe and worldwide since 1971. In the years between 1945 and 1965, total supply of dollars grew a total of only some 55%. Those were the golden years of low inflation and stable growth. After Nixon's break with gold, dollars expanded by more than 2,000% between 1970 and 2001!

The dollar is still the only global reserve currency. This means other central banks must hold dollars as reserve to guarantee against currency crises, to back their export trade, to finance oil imports and such. Today, some 67% of all central bank reserves are dollars. Gold is but a tiny share now, and Euros only about 15%. Until creation of the Euro, there was not even a theoretical rival to the dollar reserve currency role.

What is little understood, is how the role of US trade deficits and the Dollar System are connected. The United States has followed a deliberate policy of trade deficits and budget deficits for most of the past two decades, so-called benign neglect, in effect, to lock the rest of the world into dependence on a US money system. So long as the world accepts US dollars as money value, the US enjoys unique advantage as the sole printer of those dollars. The trick is to get the world to accept. The history of the past 30 years is about how this was done, using WTO, IMF, World Bank and George Soros to name a few.

What has evolved is a mechanism more effective than any the British Empire had with India and its colonies under the Gold Standard. So long as the US is the sole military superpower, the world will continue to accept inflated US dollars as payment for its goods. Developing countries like Argentina or Congo or Zambia are forced to get dollars to get the IMF seal of approval. Industrial trading nations are forced to earn dollars to defend their own currencies. The total effect of US financial and political and trade policy has been to maintain the unique role of the dollar in the world economy. It is no accident that the greatest financial center in the world is New York. It's the core of the global Dollar System.

It works so: A German company, say BMW, gets dollars for its car sales in the USA. It turns the dollars over to the Bundesbank or ECB in exchange for Marks or Euros it can use.

The German central bank thus builds up its dollar currency reserves. Since the oil shocks of the 1970's, the need to have dollars to import oil became national security policy for most countries, Germany included. Boosting dollar exports was a national goal. But since the Bundesbank no longer could get gold for their dollars, the issue became what to do with the mountain of dollars their trade earned. They decided to at least earn an interest rate by buying safe, secure US Treasury bonds. So long as the US had a large Budget deficit, there were plenty of bonds to buy.

Today, most foreign central banks hold US Treasury bonds or similar US government assets as their "currency reserves." They in fact hold an estimated $1 trillion to $1.5 trillion of US Government debt. Here is the devil of the system. In effect, the US economy is addicted to foreign borrowing, like a drug addict. It is able to enjoy a far higher living standard than were it to have to use its own savings to finance its consumption. America lives off the borrowed money of the rest of the world in the Dollar System. In effect, the German workers at BMW build the cars and give it away to Americans for free, when the central bank uses the dollars to buy US bonds.

Today, the US trade deficit runs at an unbelievable $500 billion, and the dollar does not collapse. Why? In May and June alone, the Bank of China and Bank of Japan bought $100 billion of US Treasury and other government debt! Even when the value of those bonds was falling. They did it to save their exports by manipulating the Yen to dollar to prevent a rising yen.

Because the world payments system, and most importantly, the world capital markets---stocks, bonds, derivatives—are dollar markets, the dollar overwhelms all others. The European Central Bank could offer an alternative. So far it does not. It only reacts to a dollar world. German banks destroy the German economy as they rush to imitate US banks. The Dollar System is destroying the German industrial base. German national economic policy as well as Bundesbank and now ECB policy is oriented on the far smaller export sector, to maximize trade surplus dollars, or to the big banks, to attract as many dollars as possible.

China plays a key role today

The biggest dollar surplus country today is China. Globalization is in fact just a code word for dollarization. The Chinese Yuan is fixed to the dollar. The US is being flooded with cheap Chinese goods, often outsourced by US multinationals. China today has the largest trade surplus with the US, more than $100 billion a year. Japan is second with $70 billion. Canada with $48 bn, Mexico with $37 bn and Germany with $36 bn make the top 5 trade deficit countries, a total deficit of almost $300 billion of the colossal $480 deficit in 2002. This gives a clue to US foreign policy priorities.

What is perverse about this system is the fact that Washington has succeeded in getting foreign surplus countries to invest their own savings, to be a creditor to the US, buying Treasury bonds. Asian countries like Indonesia export capital to the US instead of the reverse!

The US Treasury and Greenspan are certain that its trade partners will be forced to always buy more US debt to prevent the global monetary system from collapsing, as nearly happened in 1998 with the Russia default and the LTCM hedge fund crisis.

Washington Treasury officials have learned to be masters at the psychology of "monetary chicken." Treasury Secretary Snow used an implied threat of letting the dollar collapse, after the Iraq war, to warn Germany about the risk of trying to be too close to France with the Euro. Some weeks after the dollar had fallen sharply, and German export industry was screaming pain, Snow reversed his stand and the dollar stabilized. Now the dollar again rises as foreign money flows back in.

But debt must be repaid you say? Does it ever? The central banks just keep buying new debt, rolling the old debts over. The debts of the USA are the assets of the rest of the world, the basis of their credit systems!

The second key to the Dollar System deals with poorer debtor countries. Here the US influence is strategic in the key multilateral institutions of finance—World Bank and IMF, WTO. Entire countries like Argentina or Brazil or Indonesia are forced to devalue currencies relative to the dollar, privatize key state industries, cut subsidies, all to repay dollar debt, most often to private US banks. When they resist selling off their best assets, tehy are charged with being corrupt. The growth of offshore money centers in the Caribbean, a key part of the drug money cycle, is also a direct consequence of the decisions in Washington in the 1970's and after, to deregulate financial markets and banks. As long as the dollar is the global currency, the US gains, or at least its big banks.

This is a kind of Dollar Imperialism more slick than anything the British Empire even dreamed of. It is a part of the current America "Empire" debate no one mentions. Instead of the US investing in colonies like England to earn profits on the trade, the money comes from the client states into the US economy. The problem is that Washington has allowed this perverse system to get out of all control to the point today it threatens to bring the entire world to the point of collapse. Had the US instead promoted long-term policy of investing in the economic growth and self-sufficiency of countries like Argentina or Congo, rather than bleeding them in repayment of unpayable dollar debts, the world would look far less unstable today.

The internal debt bomb in the USA

The question is if the Dollar System is reaching its real limits? The Dollar System for the past 30 years has been built on growing dollar debt. What if the rest of the world decides it no longer wants to give its savings to the US Treasury to finance its deficits or its wars? What if China decides that it should diversify its risk by buying Euro debt? Or Japan or Russia? That day may come sooner than we think.

In addition to colossal debts to the rest of the world, the US internal debt burdens have reached alarming levels in the past three decades, especially the past decade.

The total US debt—public and private—has more than doubled since 1995. It is now officially over $34 trillion. It was just over $16 trillion in 1995, and "only" $7 trillion in 1985. Most alarming it has grown faster than income to service it, or GDP.

Since the Asia crisis in 1998, the US debt situation has exploded. The heart of the debt explosion is in US private consumer debt. And the heart of consumer debt is the home mortgage debt growth, helped by two semi-government agencies—Fannie Mae and Freddie Mac. Since 2001 and the collapse of the stock market wealth, the Federal Reserve has cut interest rates 13 times to a 45 year low.

US Households took on new home mortgage debt in the first six months this year at an annual rate of $700 billion, double the debt growth in 2000. Total mortgage debt in the US totals just under $5 trillion, double the debt in 1996. It has grown far faster than personal income per capita. That is larger than the GDP of most nations.

The aim has been to inflate a housing speculation market in order to keep the economy rolling. The cost has been staggering new debt levels. Because it was created with record low interest rates, when rates again rise, millions of Americans will suddenly find the burden impossible, especially as unemployment rises. Fannie Mae and Freddie Mac combined guarantee $3 trillion in US home mortgages. The US banking system holds much of their bonds. When the housing bubble collapses, a new banking crisis is pre-programmed as well, with JP Morgan/Chase, Wells Fargo and BankAmerica the worst.

The US economy has only managed to avoid a severe recession since the collapse of the stock market three years ago, by a record amount of consumer borrowing. "Shop until you drop" is a popular American expression. The Federal Reserve has pushed interest rates down to 1%, the lowest in 45 years. The aim is to keep the cost of the debt low such that families continue to borrow, in order to spend! Some 76% of the US economy GDP today is consumer spending. And most of that is tied to a record boom in home buying.

But the rate of new debt growth among families is rapidly reaching alarm levels, while the overall manufacturing economy continues to stagnate or decline. Today US factories only operate at 74% of capacity, near historic lows. With so much unused capacity, there is little chance companies will soon invest in new factories or jobs. They are going to China.

So Greenspan continues to rely on foreign money to prop up his consumer debt bubble, at low interest rates. Were foreign money to stop propping the US economy, now at some $2.5 billion daily, the Federal Reserve would be forced to raise its interest rates to make dollar investments more attractive. Higher rates would trigger a crisis in consumer debt, mortgage defaults, credit card and car loan failures. Higher rates would plunge the US economy into a depression. This may be about to happen, despite poor George Bush's desires to get reelected.

There is a limit how much debt US families can pay to keep the economy afloat.

There is no US recovery, merely a debt spending boom based on this home buying explosion.

Total US household debt reached a high in June of $8.7 trillion, double that of 1994. Families are agreeing to longer debt payments for basics like homes or cars. The length of new car loans now averages 60.7 months, and the amount of car debt financed increased to $27,920, and the average new home costs $243,000.

With rapidly rising unemployment and a real economy that is not growing, at some point there will come a violent reality clash, as the market for home lending reaches its limit. At that point the danger is the consumer will stop buying, and the manufacturing economy will not be able to create new jobs and a real recovery. The jobs have gone to China!

We might already be at or very close to that point. In the past six weeks, US interest rates have risen sharply, as owners of US bonds have started to sell in panic levels, fearing the bonanza in real estate may be over, and trying to get out with some profit before bond prices collapse. The European Central Bank is advising member banks to not buy any more US Freddie Mac or government agency debts.

The problem is this process of creating debt, domestic and foreign, to keep the US economy going, has gathered so much momentum it risks destroying what remains of the US manufacturing and technology base. Henry Kissinger warned in a conference of Computer Associates in June, that the US risked destroying its own middle class, and its key strategic industries via outsourcing to China, India and other cheap areas. Today only 11% of the total workforce is in manufacturing. In 1970, it was 30%. Post-industrial America is a bubble economy about to pop.

Fed chief Greenspan even warned China about the rate of its trade increase with the US, pressuring China to upvalue the Renminbi to make its goods less competitive in dollar markets, and slow the job loss. But this is dangerous. China holds $340 billion in US Treasury bonds and other reserve assets. The US needs the Chinese dollar savings to finance its soaring deficits.

It is caught in its own web: American jobs, hi-tech jobs as well as factory jobs, are vanishing permanently as US factories source to China, India or other cheap areas. If Washington pressures China and others to cut back exports they risk to kill the goose that lays golden dollar eggs. Who will buy that growing Government dollar debt? Private bond traders are desperately trying to sell their US bonds. Germany can only buy so much dollar debt, also Japan.

The US waged war in Iraq not out of fundamental strength but fundamental weakness. It is economic weakness however, not military.

Oil and food, and money as strategic weapon

The fundamental reason for the Iraq war, beyond agendas of Richard Perle or other hawks, is hence, strategic in my view. US economic hegemony in this distorted Dollar System increasingly depends on a rising rate of support from the rest of the world to sustain US debt levels. Like the old Sorcerers' Apprentice. But the point is past where this can be gotten easily. That is the real significance of the US shift to unilateralism and military threats as foreign policy. Europe can no longer be given a piece of the Third World debt pie as in the 1980's. Japan has to cough up even more, as does China now.

Even ordinary Americans have to give up their pension promises. If the Dollar System is to remain hegemonic, it must find major new sources of support. That spells likely destabilization and wars for the rest of the world.

Could it be that in this context, some long-term thinkers in Washington and elsewhere have devised a strategy of establishing US military control of all strategic sources of oil for the one potential power rival, Eurasia, from Brussels to Berlin to Moscow and Beijing? The dollar vulnerability and debt problems are well known in leading policy circles.

As Henry Kissinger once noted, "Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world."


F. William Engdahl is a Global Research Contributing Editor and author of the book, ‘A Century of War: Anglo-American Oil Politics and the New World Order,’ Pluto Press Ltd. He has completed a soon-to-be published book on GMO titled, ‘Seeds of Destruction: The Hidden Political Agenda Behind GMO’. He may be contacted through his website, www.engdahl.oilgeopolitics.net.

Johan i Kanada sa...

Esbati,

På vad grundar du påståendet att USA är "målbilden" för den borgerliga sjukvårdspolitiken?

Eller pratar du medvetet osanning? Vad kallas en medveten osanning?

Amir Sariaslan sa...

Ali: "46 miljoner människor är oförsäkrade i privatsjukvårdens USA. Antalet har vuxit kraftigt de senaste fem åren."

Neoliberal agenda: "Men lämna livsnödvändiga saker så som mat, bostäder och sjukvård åt den fria och profitdrivna marknaden. Köer och resursbrister i dessa sektor kostar människoliv."

Slutsats: Låt fattiga dö. Bemedlade människor skall inte behöva stå ut med sådant. Det är orättvist i den nyliberala världen.

Ali Esbati sa...

Q: "Vad kallas en medveten osanning?"
A: Valmaterial för de nya moderaterna

Lennart sa...

Ali: Bra skrivet om ett synnerligen viktigt ämne! Jag vill bara rätta dig på en punkt: 'Allt fler i USA börjar undra var pengarna tar vägen.'. Vi som bor här i USA undrar inte vart sjukvårdspengarna tar vägen, vi vet vart dom tar vägen: till de företag som driver privatsjukhusen. :-)

Intressant nog så finns det också ett stort antal skattefinansierade sjukhus här i landet, nämligen militärsjukhusen och gissa vad, de är högeffektiva och ofta betydligt bättre och modernare än privatsjukhusen

Jag skrev tidigare om den här på min egen blogg:

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Men det finns också en viktig poäng som svenska progressiva ofta missar. Timbro och andra svenska högergrupper ‘äger’ för länge sedan USA i Sverige och de drar sig inte för att förvandska lärdomarna från USA för sina egna ändamål. Om den svenska vänstern, hur man nu definierar den, vore mer insatt i amerikanska förhållanden skulle Timbro knappast vara lika inflytelserikt som det är idag. Man vinner nästan alltid på ren walkover.
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Så det är viktigt att vi inte låter Timbro och KD förvandska sanningen om hur for-profit sjukhusmodellen verkligen fungerar här i landet.

Ali Esbati sa...

Lennart, jag vet. Citatet är från LO-tidningens försiktiga skrivning. Just sjukvården är ett sådant uppenbart och pågående "marknadsmisslyckande" att man blir svettig bara av att läsa Hägglunds drapor.

Tack för tipset också.

Neoliberal Agenda sa...

Slutsats: Låt fattiga dö. Bemedlade människor skall inte behöva stå ut med sådant. Det är orättvist i den nyliberala världen.

1) USA är inget nyliberalt land.

2) Det finns socialistiska program(medicare och mediaid) för fattiga, handikappade och pensionärer i USA.

3) Bara för man inte har försäkring så betyder det inte att man inte kan få vård.

Anonym sa...

neolib agent,

nej det är klart man kan få vård på annat sätt.

1. man kan be sin polare operera samtidigt som han berättar historier om hur det var att vara i irak

2. man kan betala kontant, genom att till exempel köpa och sälja crack

/j

Neoliberal Agenda sa...

Varför inte vara realistisk?

ALLA kan inte få vård och i synnerhet inte högklassig sådan så varför inte låta de som kan betala för sig få den och de övriga en vård som inte tär på goda statsfinanser, en kostnadsfri vård på volontärbasis.

Jonas N sa...

Väl talat. Skönt med några kloka röster mitt i allt sosseri. Vi måste utveckla det civila samhället i Sverige och därför är jag glad att kd har hand om sjukvårdsfrågorna i Alliansregeringen.

Micke sa...

I den enda valdeull mellan Person och Reinfeld jag såg så hävdade Person ungefär 37 gånger att Reinfeld skulle börja sälja ut sjukhus.37 gånger svarade Reinfeld att så inte var fallet eller att Person fabulerade.

Varför ljuger Reinfeld?

Micke sa...

ALLA kan inte få vård och i synnerhet inte högklassig sådan så varför inte låta de som kan betala för sig få den och de övriga en vård som inte tär på goda statsfinanser, en kostnadsfri vård på volontärbasis.

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Det var nog den dummaste kommentaren jag läst på nån blogg nånsin och samidigt den mest cyniska.
För ett ögonblick trodde jag den var skriven att ett troll men förstår att så inte är fallet.

ta från de rika istället sa...

Ja det är klart, att vi (staten)sitter på "goda finanser" och stryper transfereringarna är ju något den globaliserade bankirmaffian alltid velat.

För superfängelser övervakning polis och militär finns dock hur mycket pengar som helst.

Vem är ekonomin till för Ali? Du som är ekonom?....

Ali Esbati sa...

Vad menar du? Det är ju precis det synsättet som kritiseras. Det är så att säga poängen.

Anonym sa...

Death and Resurrection of the US Dollar
A Review Article

by Adrian Salbuchi

October 15, 2006
GlobalResearch.ca

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Analysts the world over are starting to recognize the early warning signs of a gathering storm regarding the strength of the international financial system in general, and the stability of the United States Dollar, in particular.

This essay provides an alternative view on this impending crisis, written from the viewpoint of an Argentine analyst whose country has undergone recurrent monetary and financial crises over the past forty years, albeit on a domestic rather than an international scale.

Argentina experienced banking system collapses, inflation, hyperinflation, public debt defaults, stock market crashes and just about anything else you may care to imagine in terms of financial and monetary crises. Chronic inflation was so bad that since 1970 the Argentine currency – the Peso – was revamped four times and had a total of 13 zeroes knocked off in order to cope with inflation, the result being that One Peso which today will just barely buy you a bus ride in Buenos Aires City, is equivalent to 10.000.000.000.000 pesos from 1970, which at that time would have allowed you to purchase the entire country and left some change in your pocket.

In this country, we therefore have a lot of practical first-hand experience on these matters and we believe that we have much added value to contribute if we apply our practical knowledge and experience to what seems to be a cross-roads situation afflicting the global financial and monetary systems.

Today’s financial turmoil rings a lot of familiar bells to us and the sickly US Dollar is certainly looking a whole lot like the old Argentine Pesos and “Australes” of yore. Perhaps too, some lessons can still be learned and the damage from these enormous risks can be somewhat mitigated.

Adrian Salbuchi, June 2005[1]

Getting the Job Done

Last January, US President George W. Bush began his second term in office by declaring foreign policy objectives with clear imperial overtones that seem to promise increasing violence and disruption on a worldwide scale. Aside from the on-going illegal military occupations of Iraq and Afghanistan, we can most certainly expect other major crises and convulsions of a military, political, economic and financial character. One of these has specifically to do with the use and abuse of the US Dollar as an instrument of Imperial World Power by the Bush Administration.

In today’s “globalized” and “interdependent” world, hi-tech applied to geopolitics, economy and finance have transformed all of us into potential victims of a vast number of virtual tsunamis which do not involve oceanic waves but rather waves of technology-driven social catastrophes, financial collapse and artificial crises resulting in civil wars, external invasions, genocides and collective disruption on a scale never seen before. And even though these may be virtual tsunami, the harm and suffering they cause are very real.

The world is on the verge of experiencing the controlled destabilization and collapse of the US Dollar, which will be replaced by a “New Dollar” backed by Official “Good Gold.” The primary driving forces behind this global process are the Bush Administration allied to major private financial-industrial interests in the United States and elsewhere, focused on private Overworld geopolitical planning emanating from a network of think tanks, primarily the New York-based Council on Foreign Relations.

The Controlled Destabilizing and Collapse of the US Dollar.

“The King is dead! Long Live the King!” Such has been since Medieval times, the cry announcing the demise of an English Monarch and the immediate enthroning of the chosen Royal Successor. If the US Dollar is the “king of world currencies” and governs today’s usury-based international financial system, it is no doubt an old, decrepit, tired and sickly sovereign. Since the Empire will never allow his throne to remain empty and subject to unpredictable forces, we can be sure that old and sickly King Dollar already has an appointed blue-blooded royal successor, with rosy cheeks, golden locks and solid health.

In a short while, the world shall hear loud and clear an announcement declaring that “The Dollar is dead! Long live the New Dollar!” Then, the Throne of Usury in the temple of the god in whom the multitudes seem to trust, shall usher in a new sovereign who will enforce that centuries old creed, “business as usual...”.

In recent years, the United States has driven and presently maintains gigantic and massive printing of Dollar bank notes. No one seems to know for sure just how excessive such currency printing really is, but estimates fix it somewhere between four to eight times the monetary circulation that would actually tallies with the size of the US Economy (with a 2004 Gross Domestic Product of almost u$s 13.000.000.000.000).

The reader may ask how come we do not know what the amount of Dollars in circulation really is? Well, this is highly confidential information almost impossible to discover mainly because, contrary to what most people believe, the US Federal Reserve Bank (Fed) is a private agency, even though the US Government may exert some influence over it.2 I.e., the public institutions of Government cannot require the Fed to render this information, especially when you consider that the Governor of the Federal Reserve, Alan Greenspan need only inform Congress on a quarterly basis what his monetary policy shall look like. We would emphasize that he need only inform what his policies will be, not seek instructions or consensus or agreement from Congress or the Executive branch.

If we add to this the gigantic aggregates of Dollar-denominated banking instruments and stocks & shares which are spread throughout all world markets, then this amount becomes almost incalculable. However, it is quite clear that the sum total of Dollar bills, Treasury bonds and bills, financial instruments of all types, stocks and shares, and all kinds of public and private financial instruments must equal a sum several times more than the total sum of physical assets and services available in the entire planet.3

In 2004, the US Budget Deficit was more than u$s 450.000.000.000, while the Current Account Deficit (foreign trade) was of around u$s 670.000.000.000 (i.e., more than twice and thrice, respectively, the size of Argentina’s foreign public debt). Additionally, the Bush Administration announced that both Deficits will increase in 2005 and there are no indications that this situation will improve in 2006, 2007 or 2008. Quite the contrary, in November 2004 president Bush asked Congress for authorization to increase the limit of the US Public Debt from u$s 7.600.000.000.000 to almost u$s 8.300.000.000.000, which will be achieved by issuing US Treasury Bills and Bonds, and printing more and more Dollar bills by the US Mint.

The invasion and occupation in Iraq is estimated to cost more than u$s 120.000.000.000 annually, to which must be added the occupation cost of Afghanistan, the direct financing by the US of the State of Israel’s war machine, and the costs of preparing other future war theatres, notably in Iran, Syria, North Korea, Venezuela and other “axis of evil” countries. And we better not even start thinking about the US’s “greatest enemy” for the long term, i.e., China… Only a few months back, president Bush got Congress to support him with a further u$s 80.000.000.000 to cover military costs in Afghanistan and Iraq and all indications are that these military contingencies will necessarily increase in both of these war theatres.

The sheer enormity of these figures can help us understand why the US Federal Budget for 2004 of u$s 2.400.000.000.000, suffered a shortfall of more than u$s 400.000.000.000. There is, however, no indication whatsoever that this shortfall will force the United States to limit its war efforts in Iraq or Afghanistan, or curb domestic social policies, or freeze other war expenditures. Quite the contrary, these are increasing them more and more. So, the obvious question then is:

Where does the United States get the financial resources it lacks to pay for all of this?

The answer to this question is quite simple: it raises this money by printing US Dollar Notes and US Treasury Bills and Bonds (5 and 30 year maturities, respectively), taking advantage of the high “export” factor the Dollar enjoys, which enables the US Government to issue money and immediately push it out of its domestic economy and primary industrialized country financial circuits, thus avoiding what would otherwise be severe inflation of the Dollar. If we look at the gigantic figures involved, we can quite properly see this whole phenomenon as covert (hyper)inflation which remains hidden from public view….for now.

Fed Chairman Alan Greenspan recently warned that the increase in the Budget Deficit could lead to an economic crisis. He also pointed out that the Deficit is unsustainable and warned that “this could lead to a stagnant economy or worse”. Only in February 2005 the Deficit reached a record monthly figure of u$s 113.940 millions.4

The US Dollar: that un-backed currency…

“Who needs Dollars?” – Juan Perón

In 1971, President Richard Nixon withdrew the legal foundations of the US Dollar’s convertibility into metallic gold or silver, or anything else for that matter. Since then, the Dollar is no longer convertible into anything having any intrinsic value whatsoever. Today, the cornerstone of the Dollar is US economic and industrial strength which, in turn, is based on the military might the US, consolidated after the Second World War which left Europe and Japan conveniently devastated. Additionally, military victory brought with it the looting of hundreds of thousands of German, Japanese and other national patents and inventions, and highly sensitive technological and military secrets were stolen outright. All of this enabled the US to consolidate its superpower status and global prestige5

Thanks to the fact that the Dollar has virtually become the world’s key currency – albeit, imposed by the combined actions of the Federal Reserve Bank (Fed), the International Monetary Fund (IMF), the World Bank (WB), the Bank of International Settlements (BIS) and, in our own region, the Inter-American Development Bank (IDB) – the United States has been able to finance its Budget Deficits by exporting US Dollars to the entire planet through various complex mechanisms and channels that guarantee that those Dollars and Dollar-denominated financial instruments will flow in an orderly and balanced manner, all in favour of US National Interests and that of its key allies. This process could be kept more or less in place until 2001 when the European Union launched its own currency bringing the Euro on the scene. The Euro is a far more solid and stable currency than the US Dollar and represents a major challenge to the Dollar which could very well unseat it as the preferred global currency.

Over the past two years, the US Treasury Dept. and the IMF have succeeded in suggesting/imposing on around thirty national central banks in different countries – Argentina’s Central Bank included – that they must “soak up” US dollars from their domestic economies and hoard these in their vaults as “reserves” for their own local currencies and for foreign debt payment. In other words, these countries invest in US Dollars which implicitly means that they are financing for free a chunk of (uncontrolled) US public spending which is done by printing Dollar bills. This process is headed by Japan which today has Dollar denominated instruments in its central bank reserves to the tune of over u$s 670.000.000.000; strangely, followed by the “Marxist” Peoples Republic of China with u$s 470.000.000.000, then by South Korea with u$s 220.000.000.000 plus a long list of other countries which suddenly awoke to the “need” to “soak up” US Dollars and hoard them silently in their central banks whilst they issue, as a counterpart, their own local currencies to fuel their respective domestic economies (something, by the way, which China has been doing fiercely, maintaining an undervalued Yuan much to the displeasure of the Bush Administration).

In the case of Argentina, this phenomenon helps shed some light as to the true origins of our false “economic recovery” which is basically due to the fact that the Argentine Central Bank has issued important amounts of local currency based on its Dollar Reserves, which has suitably fueled economic growth. This will work nicely until such time as Argentine monetary authorities receive the suggestion / counter-order from the US Federal Reserve Bank or the Treasury Dept. to stop doing this. At present the Central Bank has reserves for over u$s 22.000.000.000 and rising fast, which is Argentine President Nestor Kirchner’s pride, because with those dollars he can pay our country’s basically fraudulent public debt to…..the IMF, WB, IDB and other international creditors, thus helping to keep the global usury ball rolling!

You want money? OK….just print all you need!

Let me give a simple example of how the system actually works. The Federal Reserve Bank issues a 100 Dollar bill which is given to the Bush Administration so that the Dept. of Defense can give it to the US Army who buy some ammunition for their soldiers’ rifles, who can then use it to kill iraquis in their invaded land. Now, the last thing that the Bush Administration wants is for that 100 Dollar bill to flow back into the US financial system as that would be potentially inflationary. Because the process we described is repeated over and over again, millions upon millions of times and allows the Bush Administration to purchase not just ammunition, but, more importantly, barrels of oil, tanks, F16 fighter-bombers, Apache helicopters, guided missiles of all sorts, sizes and shapes, napalm, aircraft carriers, cluster bombs and all those other much needed instruments to promote “freedom and democracy” throughout the world, the secret is to ensure that these zillions of Dollar bills do not flow back into the US economy uncontrollably. Otherwise, that would have an inflationary – even a hyper-inflationary – effect.

What the US Government needs and gets is that, once each 100 Dollar bill the US Mint prints has been used to buy war material (or whatever), that it then gradually flows out of US domestic and primary financial circuits and that it stays out for as long as possible. I.e., that those Dollar bills eventually get “soaked up” by somebody somewhere far away: in Japan, Malaysia, China, India, Brunei, Saudi Arabia, Brazil, Indonesia or Argentina. Anything, as long as they make sure that those Dollars do not come back (at least not anytime soon), into US financial circuits and those of the primary supranational banking system.

From this point-of-view, we can well understand the huge pressure exerted by the United States on foreign central banks – especially those of subordinated countries – so that they permanently “soak up” US Dollars, which is equivalent to saying that they take them out of circulation. That gives the US some urgently needed respite and breathing space. Why does the US need to do this, you may ask? Simple: so that they can continue issuing as many 100 Dollar bills they need, in order to give them to the Dept of Defense who give it to the Army to buy some ammunition….well, you know the story…. And the cycle goes on and on and on….

By now you might be thinking that if you can get others to pay for your expenses and costs like this, then anybody can play at being a superpower. Well, that’s precisely how the system works. If George W. Bush needs money to finance his imperial appetite (which has grown voraciously in recent years, generating pathological and potentially catastrophic Deficits), then, no problem: he need only ask Alan Greenspan to issue all the Dollar bills he can spend; in this way he gets literally “all the money in the world”.

The key factor is to make sure that the spiraling wheel keeps turning and churning and turning and churning; printing, circulating, and then “soaking up” those dollars through the channels and at the speed which fit the Imperial need of ensuring they are dispatched far, far away. The real danger is if the wheel were to suddenly stop turning and churning because then all this vast and complex global financial engineering would simply collapse under a huge load of worthless paper with the ensuing dire consequences for our 21st Century Wizards of Oz.

For the United States to maintain global superpower status, there must always be somebody somewhere as far away as possible, on whom to dump vast quantities of unbacked US Dollars, continually and uncontrollably printed by the Fed so that once the US War machine has consumed that money, it can be silently and discretely removed from further circulation (i.e., “soaked up” and hoarded in foreign central banks, private savings, etc.). They need to make sure that these Dollars “disappear” after they have been consumed; at least for a while. And it really doesn’t matter whether they “disappear” into central bank vaults abroad or into individual investors’ safes and mattresses in Mexico, Indonesia, Argentina, Nigeria or Brazil. That’s not really the issue.

In short, every time one of us “foreigners” (or “Aliens” as the US government sweetly calls us), buys Dollars as savings, or our national central bank “soaks them up” from domestic markets in order to maintain whatever rate of exchange the IMF requires in order to maintain a “sustainable economy” (Anne Kruger, dixit) - i.e., so as to ensure that we can pay back foreign debt loans - what we are really doing is helping finance the US Budget Deficit. In the worst case scenario, we are helping to pay for the cost of killing iraquis and afghanis, preparing invasions against Iran, Syria, North Korea or Venezuela, or torturing POW’s in Guantanamo and Abu Ghraib.

This will enable us to better understand why in countries like Argentina, successive caretaker governments presided by the likes of former presidents Carlos Menem, Fernando de la Rúa, Eduardo Duhalde and Néstor Kirchner always bow down to help the US in this way, through successive Argentine Central Bank governors, notably in recent years, Messrs. Mario Blejer, Alfonso Prat-Gay and, today, Hernán Martin Péres Redrado6. Over the past three years, these gentlemen have all implemented policies of “soaking up” US dollars from the market in order to maintain the rate of exchange of the Peso to the Dollar.

As a counterpart, these market-economy puppet central bankers have had no problem in issuing Argentine Pesos to buy Dollars in the local market and the IMF and US Treasury Dept suitably applaud them for doing so. However, if the Central Bank were to issue Argentine Pesos to finance the building of our much needed national social and strategic infrastructure, then all “experts” and “media analysts” would go haywire to the scream of “Inflation!” Why is it that these “experts” insist that a 600 km four-lane highway is not proper “collateral” for issuing local currency, whilst neat piles of Dollars sleeping in the Central Bank is. Ah, the mysteries of global finance…

May we once again stress that the real backing which the US Dollar has nowadays is US economic strength, US prestige and, above all, the immensely powerful and apparently invincible armada of US military might which, since 11th September 2001 is permanently perched ready to attack, bomb and invade anybody anywhere for any reason. Not bad as a “convertibility” scheme: today, the US Dollar is convertible into bullets, bombs and tanks, not to mention covert CIA actions which could even include highly complex and costly domestic terrorist attacks like 911 which served as a casus belli for pro-israeli neocons in the Bush Administration to declare war on the entire world. Maybe someday we may know what really happened on that clear morning of September 11th, though that wont happen anytime soon…

In short and as a crude example of what we are saying, every time the Argentine people need to buy a barrel of oil, we must, as a community, work and toil to earn u$s 57 to buy it. However, every time the US government needs to buy a barrel of oil, it just has to ask the Fed to print u$s 57. Clearly, there is a great difference…

Again: like that, it’s easy be a global superpower.
Mafia + Usury = “Market Economy”

But, as the old adagio goes, “all good things must come to an end”. And it would seem that with George W. Bush the era of printing all the money you want is fast coming to an end. In Argentina, we know only too well what happens when you print “all the money in the world” to pay for uncontrolled government spending. Former president Raúl Alfonsín did just that and collapsed the economy into 5000% hyperinflation in 1989 with the ensuing hunger, street riots, violence, unemployment and suffering among the population.

Long before George W. made it to the White House, the perverse process had begun whereby Finance and Money which should always be subordinated to the Real Economy of Work and Production went out of control and – like a virtual tsunami – grew and grew into the monster which is today. Swamping and drowning out the Real Economy, destroying the forces of Labour, deconstructing Production and generating mass poverty and unemployment on a worldwide scale.

Indications of the geometrical swelling of this tsunami are everywhere to be seen, even though local and international so-called “analysts”, academics and the specialized media do not seem to notice it. An indicator of what we say can be found in the Dow Jones Industrial Average (DJIA) Index. Right after the collapse of the former Soviet Union, when George “It’s the economy, stupid!” Bush Sr. lost the 1992 elections to the young and upcoming Bill Clinton7, the Dow sat placidly at 3.700 points. Eight years later, however, when Clinton ended his second term in office in 2000 the Dow was at 10.900 points and had a short time earlier peaked at 11.700 points; that’s 300% growth over eight years!

The obvious question is: did the US economy also grow 300% between 1992 and 2000 as the DJIA did? The answer is clearly, no. Economic growth in the nineties in the US was very good but only averaged 3 to 4 percent per annum, so that during the entire Clinton era aggregate economic growth was not more than 40%.

Now, if the Real Economy only grew by 40% in eight years, how is it that the “Virtual Economy” of Finance and Speculation grew by 300%? Something is clearly rotten and not exactly in the State of Denmark. The key to all of this can be found in factors like Usury, printing of Fiat money, and rampant speculation which are embedded into the very fabric out of which today’s global financial system is made of. Money is created out of thin air by the Federal Reserve Bank and by the private mega-banking system by the billions of Dollars.

This all clearly carries with it a deep moral and ethical problem as the real force behind the “miraculous growth” of the US economy is “unlimited greed” (Greenspan, dixit), soulless egotism and homicidal profit-grabbing. In recent years, the stench could no longer be contained nor checked. The criminal frauds and inhumanities perpetrated by “world-class” Fortune 500 Corporations and Banks hit the headlines daily: Enron, WorldCom, Tyco, Nike, Marsh & McLennan, American International Group, Wal-Mart, K-Mart, Arthur Andersen, Halliburton (Dick Cheney), Harken Energy (George W Bush), Pacific Gas & Electricity, Adelphi, Qwest Communications, Global Crossing, amongst so many others. Huge fines for money-laundering and corporate misbehaviour were paid by top banks as CitiGroup (money-launderers’ favourite bank), JPMorganChase, Franklin National Bank of NY, Credit Suisse First Boston, Morgan Stanley, Merrill Lynch, Goldman Sachs, BCCI Bank of Commerce & Credit International (closed down – linked to CIA), Brown Brothers Harriman (Bush), HSBC (originally born out of the British imperial Opium Wars fought against China in the mid-nineteenth century which gives this bank great drug money-laundering expertise)…

The list goes on and on, and this spirit of Usury and Immorality spans the entire world: A-Hold in Holland, Parmalat in Italy, The Maxwell Group in the UK, Yukos in Russia, Vivendi in France… Their top corporate bosses are investigated and even jailed: Kenneth Lay (Enron), Bernhard Ebbers (WorldCom), Jeffrey Greenberg (Marsh & McLennan), Maurice Greenberg (AIG)…

Again, we Argentines know what this is all about!! We’ve had our share of corporate crooks in such scandals as Yabrán, Beraja/Banco Mayo, Yoma, IBM, CitiBank, Moneta, ENTEL, YPF, Southern Winds, not to mention one billion dollars plus in Public Funds belonging to Santa Cruz Province in southern Argentina which mysteriously “disappeared” since 1993 when president Nestor Kirchner was governor of that province…

The problem is that this whole process seems to have been taken several steps too far, so now the whole edifice is on the brink of collapse. The international financial system resembles a planetary Las Vegas managed by the Shylocks and Al Capones of this age, who sit in corporate boardrooms in Wall Street, the City of London, Paris and Zurich. They are starting to realize, however, that their luck is definitely about to run out. For decades they have danced themselves to a dizzy frenzy around the Golden Calf, stuffing their pockets whilst generating hunger, war, social turmoil, sickness and suffering for untold millions around the world. However, the “Game Over” sign is about to go on.

When Fed governor Alan Greenspan was asked in 1996 how he explained the fact that the DJIA had reached the unheard of level of 11.700 points, whilst the NASDAQ index had peaked at 6.000 points (today it has slumped to 1.600 points), his most eloquent reply was that this whole complex phenomenon was caused by “irrational exuberance”... You got it?
Just do it…

The truth of the matter is that the United States will stay in Iraq and Afghanistan all the time it wants, and will continue financing Israel limitlessly so that it can continue repressing and persecuting the Palestinian people in their own land, and new attacks will be made against today’s expanded “Axis of Evil” which - Condoleeza Rice, dixit8 - now includes North Korea, Syria, Myanmar, Zimbabwe, Venezuela….

President Bush recently declared that he will continue promoting “freedom and democracy” throughout the world, thus honoring a shrewd recommendation contained in an old book which is a true blueprint for world domination, which recommends that Imperial Sovereigns impose their will by exerting “Force and Hypocrisy” Brute force we have plenty of just about everywhere. Hypocrisy is constantly voiced by our presidents, prime ministers, ministers, secretaries, government spokesmen, media and corporate leaders. This gigantic planetary machine needs oil to operate properly; lot’s of oil. And not just the Iraqui, Venezuelan and Saudi hydrocarbon variety, but also virtual “oil” which today is the US Dollar which allows this infernal machine to run, grow and spin out of control.

But, alas! The US cannot continue printing Dollar bills indefinitely. Today’s global financial system is bursting at the seams, and growing concern is marked on the brow and voice of the Alan Greenspans of this world. How much longer until there is a final crash? One year? Two years? Nobody knows for sure. We do, however, know that the US Dollar can collapse virtually at any moment if an unforeseen / unmanageable crisis were to arise.

This was one of the reasons why the plan to oust Saddam Hussein had to be speeded up in 2003. Since 2001, Saddam had been selling oil in Euros to the European Union under the Oil for Food Program, implicitly inviting other OPEC (Organization of Oil Exporting Countries) to do the same. Had this led to the world oil market quickly switching over from trading in US Dollars to trading in Euros as its base currency, this would have had the effect of generating an enormous, sudden and uncontrolled influx of US Dollars from the whole world back into the United States economy with immediate inflationary effects which would have probably evolved into a hyperinflationary catastrophe for the US. The invasion of Iraq in March 2003 quickly dealt with that and stopped Saddam dead in his tracks, at the same time sending a clear message to all other oil producing countries who may have been playing with the idea of abandoning the “Dollar Area” in their oil tradings for the Euro. “If you do that, you’ll end up like Iraq…”, was the message, and nobody else did do that.

But the US also naively thought that invading Iraq would be like a joyride, that the proud Iraqui people would welcome the US invaders as liberators, and that a quickly subdued Iraq would speed up massive cheap oil flows from their oil fields to US gas stations at a cost of not more than u$s 15 per barrel, which would have certainly eased the pressure on the US economy. But things did not quite turn out that way and the “cheap oil” objective was never reached. Today, Iraq is looking more and more like Vietnam whilst world oil prices have reached u$s 57.60 a barrel and rising. This forced the Bush Administration to take such emergency actions as, for example, opening up vast virgin natural reserves in Alaska to the contaminating oil industry. The US economy’s voracious addiction to oil is very much out of control.

Today, excessive printing of US dollars has passed the point of no return. Monetary collapse can no longer be avoided. At best, it needs to be managed. Naturally, the US elite power Establishment and its key allies in the United Kingdom and the State of Israel are not stupid and they will not allow a hyperinflationary crisis to collapse their economies. There are various, creative and innovative ways of re-directing and detouring monetary catastrophes so that they hit somebody else somewhere else, and there are ways of ensuring that damage control at home and at our friends’ homes is kept at acceptable levels. It is precisely this “Plan B” which is presently on the drawing boards in the key think tanks headed by the New York-based Council on Foreign Relations, the London-based Royal Institute of International Affairs, and the Trilateral Commission.

It even appears as though “Plan B” consists of letting the present mass of US Dollars continue growing for a bit longer, all the way up to the brink of collapse, taking advantage as much as possible of the fact that this serves to ensure that the rest of the world finances the US Budget and Trading Deficits. The first part of Plan B, then, consists of making sure that the party lasts as long as possible, fueling all on-going military adventures.

We would even say that just a George W. Bush’s main purpose during his first term was to serve as a suitable figurehead for the “War on Terrorism”, his primary purpose during his second term in office will be to lead a highly professional team which is taking advantage, promoting and managing the very complex monetary and financial engineering necessary for the demise of the Dollar, then ensuring its orderly replacement by a New Gold-backed Dollar.

Let us consider a possible scenario of this sort.
The “New Dollar” is coming!

“Plan B” has a second part. Sometime during the next 12 to 24 months, our TV screens will tune in to CNN, CBS, BBC, CNBC, Fox and other world media as they announce urgent “Breaking News” involving important financial developments amid growing panic and dark rumours. Such news will come on a Friday afternoon, after 4 or 5 PM when the New York Stock Exchange and banks in New York City have closed. We will learn that Alan Greenspan – probably accompanied by Treasury Secretary John Show – have a very important announcement to make to the people of the United States and the world. His speech will be short, terse and filled with carefully selected banking jargon.

Greenspan will state something along the lines that “in an effort to uphold and reinforce the US economy and that of its key allies; to protect consumer interests and those of major corporations; to preserve the international financial system and to thwart a potential financial meltdown; to balance the Budget and avoid a stock market collapse, the United States will effective immediately implement a far-reaching Economic Reform and Financial overhaul, declaring an extended banking and exchange holiday”. In Argentina, we have lot’s of experience on this!.

He will then inform that President George W. Bush, with the full support of Congress, will sign a series of emergency executive orders whereby the US Dollar will be placed on a Gold Standard. Correspondingly, this will necessitate introducing a New Dollar convertible into metallic gold and this new currency shall replace all the “old dollars” in circulation which, as we have seen, are only backed by worthless paper, i.e., Fiat money. What’s going to happen with those “old” dollars? They will have to exchanged for New Dollars, of course.

All persons holding US Dollar Notes and Treasury instruments who are citizens of the US or are domiciled in the US, together with US corporations, and persons, corporations and organizations domiciled in countries allied to the US (most notably, the United Kingdom and State of Israel) shall have their “old” Dollars exchanged for New Dollars on a 1-to-1 parity.

In the rest of the world – i.e., Asia-Pacific, Central and South America, Africa, Russia, the Muslim World – changing “old” Dollars for New ones will depend on the local “exchange markets” which will fix the “proper” rate of exchange between the extremely plentiful “old” Dollars and the extremely scarce New Dollars. And what will that rate of exchange be? One-to-one? I doubt it, because supply and demand will set in almost as fast as panic. Two “old” Dollars for One New Dollar, then? Or, maybe, 3-to-1? Or 5-to-1? Or 10-to-1? Who knows? “Let the laws of the free-market economy – supply and demand – do their bidding”. And whatever happens elsewhere will certainly not be the concern of the US.

We will then see millions upon millions of desperate and panicky people, companies, banks, operators, players of all sorts throughout the planet running amok all at the same time trying to unload their “old” Dollars and exchange them for New Dollars. Again, in Argentina we have a huge amount of experience on this…

Alan Greenspan is definitely the man to micromanage this whole process, with the political support and backing of president George W, Bush, because he has always been a Gold Standard buff, since a long, long time ago. One of his first key academic articles dating back to 1967 proposed just that: placing the US Dollar on a Gold Standard.

And then along came the Euro…

Another key factor which helped trigger and speed up this impending crisis was the launching in 2001 of the greatest challenge to the Dollar so far: the Euro. As the monetary unit of the European Union (EU), the Euro carries the economic might of an entire continent with a combined GDP which is almost the same as that of the United States. Powerful stuff, indeed.

If we project future growth of both economies over the next twenty years, we find that the EU economy has greater potential than the US economy simply because the countries surrounding the UE are anxiously asking to be allowed into this vast and sophisticated economic and monetary system which in the long run will probably end up including even Russia itself. Each of the countries still outside the UE – Ukraine, Belorussia, Lithuania, Estonia, Latvia, Hungary and others – have great added value to contribute to the UE economy, both in terms of the economy, as well as geopolitically.

By comparison, the US can only expand its regional economy into Central and South America, where the countries in that region resist aggressive US penetration and, for more than a century, resent arbitrary US military interventions, invasions and repeated humiliations.

Quite a difference! Whilst the countries still to join the UE wish to do so voluntarily and anxiously await their turn, the US has no choice but to impose AFTA (American Free Trade Agreement) on unwilling neighbours that will permanently resist the regional hegemon. More importantly in the short term, there are a series of symmetries and asymmetries between the present Dollar and the Euro worth pointing out:

Comparison between the US Dollar and the Euro

Structural Strength (Technical Factor) Low

* The Dollar is over-issued by a factor of 4 to 8 times (there being no trustworthy information available), because over the past years successive US administrations have abused the Dollar’s high prestige and printing has gone out of control;
* Growing evidence of this structural weakness generates inflationary - even hyper-inflationary - risks which can be triggered by some internal or external political or financial crisis

High

* The Euro has only been just launched (2001). The European Central Bank in Frankfurt Germany issues clear public information showing that the amount of currency placed in circulation since 2001 is consistent with the size and productive capacity of the UE economy. No doubt, the Euro runs no inflationary risks at the present moment.

Cultural and Psychological Strength
Very High

* Intelligently, the US has kept the same format (i.e., the same national leaders, monuments and mottos) on its Dollar bill for more than a century.
* This gives the Dollar a feeling of unmovable stability: the effigies of Washington, Lincoln, Hamilton, Jackson, Grant and Franklin appear on 1, 5, 10, 20, 50 and 100 Dollar bills together with symbols of US power: the White House, the Treasury Department, Congress, the Lincoln Memorial, the Great Seal of the US (with its esoteric, Masonic and millenarian symbolism including the pyramid topped by the all-seeing Eye of the Great Architect of the Universe ushering the Illuminati New World Order announced since 1776).
* Each Dollar bill bears the credo “In God we Trust”, although people increasingly wonder what “God” the US government is really talking about…

Low (still)

* The design chosen by European monetary authorities for the Euro is rather unfortunate. No doubt, finding consensus amongst fifteen countries was not an easy task. The Euro is bland, insipid and uninspiring, bears the sole word “Euro” and shows gates and bridges which rather than depicting real monuments merely reflect abstract architectural styles.
* Clearly, the Euro is an oxymoron designed by a committee, which brings to mind what our former president Juan Perón once said to the effect that “a camel is a horse designed by a committee…”. And a camel is what the Europeans got…
* The Euro contains no compelling symbols, which is something almost incredible coming from a continent having some of the most beautiful monuments in the world which could easily serve as very powerful symbols: the Roman Coleseum, the splendid cathedrals of Rheims or Cologne, the Parthenon of Athens, the Alcazar in Toledo…



In short, the Dollar is a structurally weak currency with enormous psychological strength and prestige, whilst the Euro is a structurally strong currency with substantial cultural weakness. Today, the US Dollar resembles those high-class families of yore which, having lost all their wealth, nevertheless maintain their noble appearances and pride. So much so, that people continue respecting them as if they still were powerful and rich lords. When reality finally catches up with the Dollar, its collapse could come quickly and violently. Meanwhile, the Euro can continue to mature solidly as long as the monetary, financial and geopolitical structures of the EU move forward. Clearly, in monetary affairs time runs against the US and in favour of the EU.

And then there’s China. In a few years more, the most powerful economy in the world will be the Chinese economy and on top of that they are a nuclear power. With its two-currency and capitalist-socialist system, China has succeeded in implementing some of the fundamental concepts involving the use of Sovereign Currency – by way of the Yuan – to promote enormous internal development and growth. No doubt, in the long run, what really gives the US-UK-Israeli Empire leadership sleepless nights, is China.

One last comment for this section: in the Table above, we describe the great cultural strength of the US Dollar which has hardly been altered over the past century. Significantly, in recent years – and for reasons not yet clearly explained – the Federal Reserve Bank decided to begin slightly altering the physical appearance of the Dollar. The effigies of Franklin, Grant, Jackson, Hamilton and Lincoln were slightly displaced to the left and enlargened, security factors were introduced and, most notably, various color experiments changing the traditional green and black colors were also introduced. It began some years back with a new series of blue-coloured 20 Dollar bills, then came later red-coloured u$s 50 Dollar bills, thus breaking the traditional “green” tradition for which the dollar is known the world over.

Might this be a way to prepare the collective psyche for the “great change” that will take place when the New Dollar is finally and suddenly introduced at the same time that the old dollars are withdrawn from circulation? It is hardly necessary to remind readers that general acceptance of any currency is basically a social convention which thus carries a decisive psychological factor. All Nation-states know that acceptance of its currency – inside and outside of the country – depends on factors which need to be properly linked and tuned to the collective psyche, and which have to do with the Trust and Prestige emanating from the issuing agency. And this Trust and Prestige is not so much geared on a particular government (Administrations come and go), but rather on the strength of the issuing Sovereign Nation-State (which should permanently consolidate and increase its Power). Very possibly, the New Dollar shall have a totally different design than today’s Dollars. It may even be of different colours and sizes.

Bases for a New Dollar.

These are relatively simple and can be described as follows:

*
A Monetary Unit convertible into Gold at an official and mandatory rate of exchange fixed by the US Federal Reserve Bank, in coordination with the Bank of England and key supranational public and private financial players.
*
The Gold backing the New Dollar will not be just any gold. Only special “officially approved New Dollar Gold Bullion” will be used and accepted, which will be specially minted and proof. It will no doubt carry an embedded chip or bar code or some other foolproof and failsafe anti-counterfeit element, ensuring total control by the monetary authorities.
*
“Common” gold – i.e., non-officially approved and treated gold, will be worth maybe three, five or ten times less than the Special Approved Gold Bullion. This “Good Gold” is in all likelihood already being minted and amassed in the vaults of the Federal Reserve Bank in New York, the Bank of England in London and elsewhere.
*
You may be thinking that this will trigger a gigantic worldwide financial crisis. No doubt, it will. That this will place the better part of the international financial system on its head. Of course it will. That there will be even more hunger, hardship, poverty, sickness, wars, epidemics and catastrophes of all sorts. Certainly… However, those who are “in the know” beforehand – i.e., the Empire’s most trustworthy allies and friends (both in terms of countries as well as financial, economic and industrial groups and even a Mafia here and there) in the US, the UK and Israel – will receive all the necessary foreknowledge enabling them to mitigate the impact of this crisis and make ready. In Argentina we remember only too well own domestic monetary and financial meltdown in December 2001. The private banks and certain key individuals who were “well informed” got their money out of the system in a timely manner and when the crisis came, it was the populace at large that bore the brunt. The banks and major corporations came out surprisingly unscathed and today they are for the most part back to “business as usual”, whilst more than 50% of the population sank below poverty levels.
*
China, Japan, India with their vast reserves will feel the blow. They will loose vast amounts of money. Japan will see its economic recovery delayed for years to come. China will see it huge growth slowed down, the aggregated effect of the global financial collapse will greatly harm exports from India, Taiwan, South Korea, Brazil…
*
China herself seems to be making ready for this, as they are already transforming great chunks of their Dollar-denominated reserves of more than u$s 470.000.000.000 – in “old” Dollars, of course– into physical assets (i.e., investments in South East Asia and in South America, and they are shedding dollars and buying Euros). Japan and South Korea cannot budge as swiftly and easily because they are military underdogs and politically subservient to the United States. To a great extent, their lots have been cast unless…. Unless, as Samuel Huntington insinuated in his 1997 classic “The Clash of Civilizations”, Japan and China were to forge an alliance similar to the one which Germany and France were able to reach over half a century ago. Imagine Japanese technology allied to the Chinese powerhouse and its military clout… Then South Korea might even be able to move forward towards reunification with the North under the aegis of China which wields the necessary influence over the North Koreans and can soften up their outmoded authoritarian style. This latter scenario most definitely keeps the US-UK-Israeli imperial leaders wide awake at night…

The “controlled collapse of the international financial and monetary system” is the next “Great Crisis” which the Real Power Structures of the New World Order have entrusted to George W. Bush and his team, knowing that they have the necessary psychological profile to promote this virtual fraud and robbery on an unprecedented planetary scale. The whole world has witnessed speechlessly at the incredible audacity with which George W. Bush and his team look into the TV cameras and blatantly lie without a blink in their eyes.

In this brief essay, we have described a possible future scenario, resulting from a series of technical factors (the extreme over-printing of US Dollar bank notes and Treasury bills and bonds), economic interests (mainly the Empire’s wish and need to have free access to major oil fields around the world), and long term US-UK-Israeli geopolitical objectives (in the Middle East, in the short/medium terms; in South America, in the medium term; and in the Far East, in the long term). If we add to this the Empire’s hunger for conquest, triggered and “justified” by the strange events of September 11, 2001 then we feel that the scenario described herein is not only possible but also probable.

Implications for countries like Argentina are enormous, for this will entail great threats of all sorts, but also unexpected opportunities as well. For example, why does the present Argentine government make such unsustainable and unrealistic efforts to “renegotiate” our huge Dollar-denominated foreign debt, when a collapse of the “old” Dollar could very well carry with it the virtual liquidation or, at least, vast reduction of that public debt?

Clearly, there is much food for thought in all of this, and many lessons to be learned from the past. Whatever may happen, if you have a large part of your assets in US Dollars – whether in bank notes, Treasury Bills, stocks and shares, investment funds, banking accounts or whatever - perhaps you would be wise to reconsider. In the coming collapse of the international monetary system, the safest thing to do will be to invest in the Real Economy and not in the unreal financial economy. In other words, consider buying tangible goods: real estate, companies, machinery, land, equipment, precious metals and stones, and the like. No matter how bad an economic crisis may be, tangible goods will not disappear whilst the balance on your bank account appearing on an ATM screen can quickly vanish into nowhere. Oh, and don’t forget: paper money is just that: paper.

Think about it..


Notes

1 Adrian Salbuchi is an Argentine writer, researcher and journalist. Member of CREAR, Consejo Regional Estratégico Argentino, the Project for a Second Argentine Republic and the Centro de Estudios Económicos Mariano Fragueiro, all located in Buenos Aires. Autor of various books on geopolitics and economics, amongst them, “El Cerebro del Mundo: la cara oculta de la globalización” (Ediciones del Copista, Córdoba, Argentina, 4th Edition, 2003, 470 pages).

2 More than 95% of the Federal Reserve Bank’s share capital is owned by the private member banks, which can, in turn, be traced back to key traditional finance dynasties, both in Europe and in the US: Rothschild, Warburg, Schroeder, Mellon, Bleichroeder, Montefiori, Montagu, Rockefeller, and Harriman, amongst others. Cfr. The Federal Reserve Bank, Purposes & Functions, Washington DC.

3 The sum of all international financial operations (exchange, stocks and shares, investment funds, etc) is of almost u$s 2.000.000.000.000 daily (yes, daily). If this is projected annually, we find that the internacional financial system (i.e, the Virtual Economy) has a turnover of around u$s 700.000.000.000.000 (seven hundred trillion Dollars), however, the aggregate sum of the GDP’s of all countries in the world (i.e., the Real Economy) does not exceed u$s 45.000.000.000.000, i.e., an amount fifteen times smaller. We can thus conclude that Internacional Finance – the world of speculation, usury and fiat money – is fifteen times larger than the Real Economy of Labour and Production. If finance is to be considered as the “oil” which makes the Economic “engine” run, then we can see that that “engine” is overstuffed with a veritable oil glut which will grind it to a halt.

4 See “Clarín” newspaper, Buenos Aires, 15-Mar-05, article “Greenspan encendió una luz de alerta por el déficit de EE.UU”.

5 Regarding the nature of Power, I would refer readers to my essay “El Poder: ¿de dónde viene?, ¿quién lo tiene?, ¿adónde va?” (“Power: where does it come from? Who has it? Whither is it going?” soon to be translated into English), available in www.eltraductorradial.com.ar

6 Before being named president of the Argentine Central Bank under the De la Rúa and Duhalde Administrations, Mario Blejer was for 18 years director of the Institute for Monetary Affaire at the IMF in Washington DC and today he is Director of the Bank of England in London. Alfonso Prat-Gay, president of the Central Bank during the last part of the Duhalde administration and first part of the Kirchner administration was a director at J P Morgan Investments, London and he was “recommended” to the Argentine government by the Bank of England based on Blejer’s suggestion. Hernán Martín Péres Redrado, the present Central Bank president comes from the Fundación Capital, idelogically linked to the extreme liberal policies of former president Carlos Menem.

7 Member of the Council on Foreign Relations and the Trilateral Commission.

8 Secretary of State and member of the Council on Foreign Relations.


© Adrian Salbuchi, Buenos Aires, 05 June 2005 Reproduction allowed if the source is clearly named.
www.eltraductorradial.com.ar
asalbuchi@infovia.com.ar

Anonym sa...

Jag är en av de som då och då blir censurerade av Ali och vill ändå uppmana till lite censur.

Bitte, ta bort alla inlägg som består av typ 7000 copyade o klistrade tecken. Spelar ingen roll om det är nyliberalt eller socialistiskt.

Iofs kanske bara 1 av 100 orkar läsa eländet men det sliter på scrollhjulet.

Anonym sa...

Kan inte folk sluta jämföra med USA hela j-a tiden? USA är milslångt från Europa i sina förutsättningar. Jämför med den närmare omvärlden istället, och bli chockade över hur Sverige har halkat efter.

Oldtimern sa...

Är det inte dags att ta bort de iklistrade inläggen som är lika långa som en halvmara? Bättre att sätta ut en länk gott folk?

Tror att fler och fler medborgare i landet börjar vakna upp efter bakfyllan och ågrenen på vad man gjort och röstat fram. Det kanske vart lite tokigt ändå det hela..

Anonym sa...

Gamlingen,

Varför det?
För att någon eller några ministrar har gjort saker som sossar anser klandervärda? Jag tror inte det spelar så stor roll jämfört med den faktiska politiken som påverkar 9 miljoner människor i deras vardagsliv -oavsett vad journlisterna tycker.

Enrique sa...

Skönt att de kloka borgarna visar sitt rätta jag nu.

"För att någon eller några ministrar har gjort saker som sossar anser klandervärda?"

Svart arbetskraft? Underlåtelse att betala TV-licens i 15 år för att sedan bli högsta hönset inom public service?

Om det bara är sossar och journalister som anser det klandervärt vill jag inte leva i det landet du vill bygga.

Det fanns uppenbarligen aldrig något sådant som "De nya moderaterna"...

Anonym sa...

Den korta livslängden i USA och Danmark är inte så svår att förklara med kulturella faktorer, man lever kortare om man äter fet man, dricker mycket öl, röker och kör bil istället för att promenera.
Sett till statistiken är vi svenskar sjukast i Europa, hur förklarar man det med tanke på vår höga levnadsålder?

Även vår före detta justitieminister har haft svart arbetskraft och vår käre Gudrun S fuskade med bokföringen (hon kom undan på en teknikalitet), klandervärt ja mänskligt javisst.

Anonym sa...

Micke:
Är det inte landstingen som beslutar om eventuell utförsäljning av sina sjukhus (jag vet faktiskt inte)? Bara en tanke regeringen Reinfeldt agerar inte i ett maktvakuum
Föresten är utförsäljning av sjukhus inte samma sak som att tillåta privata aktörer att starta egna sjukhus
Att tillåta privata skolor är likaledes inte samma sak som att sälja ut de kommunala

steven sa...

Jag har alltid undrat vad som händer med pengarna staten tjänar på att sälja ut allt som har finansierats offentligt i åratal.

Blir det en del av finanserna i samma område? Är det någon som vet?

Oldtimern sa...

Självtänkte jag på politiken kommande budgeten ta från de fattiga ge för dom rika. Klassisk högerpolitik!

Micke sa...

Anonymous said...
Micke:
Är det inte landstingen som beslutar om eventuell utförsäljning av sina sjukhus (jag vet faktiskt inte)? Bara en tanke regeringen Reinfeldt agerar inte i ett maktvakuum

....................
Jo det är Landstingen och dom moderatstyrda landstingen är ivriga att sälja ut.

Det var detta som Reinfeld viftade bort.
Landstingen arbetar inte heller i ett vakum.Vare sig dom borgerligt eller socialistiskt styrda och om dom säljer sjukhus så är det redan befintliga sådana.

Jag är inte emot privata intressen i vården men jag är emot den grundläggande iden att sjukvården som helhet uteslutande ska vara vinstdrivande.

-------------------------------

Så här säger en av Nyliberalerna på den här bloggen.Jag har sett likande resonemnag förut men dom har alltid framtått som teoretiska.

Med Neoliberals inlägg så blir det klart och tydligt vad nyliberalismen kärna är i praktiken.

-------------------------------

Citat Neoliberal agenda

"ALLA kan inte få vård och i synnerhet inte högklassig sådan så varför inte låta de som kan betala för sig få den och de övriga en vård som inte tär på goda statsfinanser, en kostnadsfri vård på volontärbasis."
--------------------------------

Det betyder i klartext att han anser att en höginkomstagares barns har större rätt att leva i kraft av att dennes föräldrar har gott om pengar och att den vars föräldrar inte kan betala för t.ex en benmärgstransplantation ska vara utlämnad åt höginkomstagarnas godtycke.

Med tanke på det nyliberala mullvads (osynligt för väljarna) inflytandet i den nuvarande regeringen så har alla som inte utgör detta höginkomsttagar skikt anledning att i högsta grad oroa sig över vad "Alliansen" kommer att ägna sig åt när det gäller vården.

Polhem sa...

"Med tanke på det nyliberala mullvads (osynligt för väljarna) inflytandet i den nuvarande regeringen så har alla som inte utgör detta höginkomsttagar skikt anledning att i högsta grad oroa sig över vad "Alliansen" kommer att ägna sig åt när det gäller vården."

-Du har bade ratt och fel har.
Naturligtvis ska ALLA ha ratt till sjukvard, inget snack om saken.
Problemet har ar av ideologisk natur, inte praktisk.

Det rader inget tvivel om att privat sjukvard ar bade mer effektiv och battre an statlig.
Problemet blir att alla inte har rad med samma kvalitet av sjukvard vilket mer ratt kan anses vara orattvist.

Dar jag bodde i Sverige kom en privat aktor in och erbjod battre sjukvard an det kommunala alternativet .

Detta ar val inga problem sa lange det finns ett kommunalt alternativ ocksa.

Som resultat far ingen samre sjukvard men vissa far battre.


Tyvarr ar den svenska statliga sjukvarden under all kritik.
Den ar enormt inefektiv och nastan alla pengar gar at till helt och hallet vardelosa landstings administratorer som enbart skyfflar papper fram och tillbaka.

Anonym sa...

"Dar jag bodde i Sverige kom en privat aktor in och erbjod battre sjukvard an det kommunala alternativet .

Detta ar val inga problem sa lange det finns ett kommunalt alternativ ocksa.

Som resultat far ingen samre sjukvard men vissa far battre."

I verkligheten blir tillgängligheten till den offentliga sjukvården också bättre, eftersom många väljer att betala dubbelt -d.v.s dels via skatten till det offentliga, och dels privat för snabbare behandling. Därmed avlastas den offentliga sjukvården. Vänsterns skräckpropaganda kan vi bara glömma. Den är bara bisarr.

said sa...

Ju fler som använder extra, privata pengar på lyxsjukvård, ju mindre resurser ges den offentliga sjukvården. I slutändan har man en sjukvårdssituation som liknar alla u-länders.

Anonym sa...

said:

Ju fler partitoppar i sovjet som importerade lyxbilar från väst desto mindre resurser gavs till de offentliga lådbilsfabrikerna.

Erik

sosseliberal i mitten sa...

Said: varför får de kommunala alternativen mindre pengar om fler nyttjar ”lyxsjukvård”. Som det är idag har vi många som reser till Polen för sjukvård, på vilket sätt ökar de köerna i Sverige?

Roger sa...

Jag tror man ska vara lite försiktig med att göra det så lätt för sig som "sosseliberal" försöker göra det.

Det är ju inte helt problemfritt att släppa in vinstintressen i vården och den som påstår det gör det rimligtvis mot bättre vetande.

Bara systemet med köp/sälj i vården skapar i sig intressemotsättningar mellan medicinska och ekonomiska avvägningar.

Aron & Josef sa...

Underbart. Sälj ut Svenska spel, Apoteket och Systembolaget också!

Anonym sa...

Är det dina kompisar som kastar järnskrot på sverigedemokrater? Kan du vänligen förklara för dem (personligen eller via din blogg) att de medverkar till att förstärka sverigedemokraternas stöd. För du förstår väl själv detta mycket enkla samband?