Wednesday, October 20, 2010

The Massive Fraud Of Neoliberal Economics Is Coming To An End - Finance Chiefs Fail to Resolve Currency Spat as G-20 Splits

Title link here.

This post is a handful of days past the title link but that's really irrelevant.  This topic ties into many of our long term themes.  As you think through this dynamic, it’s important to understand many of the variables that have impacted our economy over the last thirty plus years and much of the pablum fed to us by crooks and liars as to why certain economic dynamics came to pass.  And of course that many of these were positive development regardless of whether it seemed so at the time.  By the way, most didn't.   That includes all of our trade agreements and why financial liberalization and deregulation of other country's financial systems was the primary variable of concern in those agreements.   Be that Bill Clinton, George Bush, Barack Obama, their cabinets or Congress.  In a follow up post next week we will look at the Greek crisis using much of what is discussed below, something we promised quite a few months ago but never got up. On to the post. 

Finally, it seems some are now arguing that we are bound to see currency wars as countries race to devalue their currency as an attempt to gain competitive favor in the neoliberal game of unregulated capital.  This is something we have written of quite extensively over the years.  But let’s get something straight.   This isn’t something new.  We have had currency wars since the beginning of floating foreign exchange rates.  The last thirty plus years have seen currency war after currency war.  And if you don’t understand that dynamic, you are missing a central tenant to the fraud that exists within global finance, our government and globalization.   That the keepers of the status quo now are howling about possible currency manipulation as the world economy craters is a ruse.  Crooks and liars are simply trying to protect a corrupt system they built for their own personal greed.
   
Banksters and crooks now want to claim that this is protectionism.  What the hell was it for the last thirty years when countries manipulated their currency and it served often crooked self-interest and greed?  It surely didn’t serve democracy or We the People.   This was all completely predictable.  And we predicted it.

So, in support of the title link story, let’s take a look at a few headlines over the past month and year.

Peru intervenes in forex market
Chile Peso at 36 week high
Brazil forex inflows surge
The EU and China cannot agree on currency measures
Japan intervenes to weaken the yen
The ECB buys hundreds of billions of bonds to tame debt (currency) crisis

Under the terms of economic neoliberalism that has been embraced for decades around the globe, everyone is a currency manipulator.   And they have been for decades.  The American banking cartel, Wall Street, has manipulated currency for decades to feed their self-interests.  Interests that are destroying democracy and the rule of law.  Japan has manipulated its currency for decades in its self interest.  China too.   Every single country manipulates its currency either directly or through economic policy.  Under the rules of economic neoliberalism, currency manipulation is a major part of the game.  And it is so easy to do, often with devastating impacts both domestically and internationally.
 
So what’s different now?  We are in a global depression.   So now the supporters of this neoliberal-induced crisis, of which the manipulation of currency dynamics are a major component, are starting to howl because the system is unraveling.   This includes corporatist  politicians in the U.S. and thugs on Wall Street.  This propaganda regarding currencies today is similar in nature to the Smoot-Hawley ruse perpetuated by neoliberals, Wall Street crooks and corporate fascists as a cause of the Great Depression.  A ruse perpetuated by special interests and their brainwashed useful idiots in the press and society as we have remarked numerous times before.  Smoot-Hawley had nothing to do with the Great Depression or making it worse.  The course of events had already been set.

We said the currency markets were due to see change long before the 2008 global collapse.  And now we are seeing central banks and politicians do anything and everything to manipulate the system as it is today to gain competitive advantage in the bureaucrat’s game of  power.  And how do they do that?  By attempting to go broke as we have remarked many times.  ie, By devaluing their currencies.   It’s time we take our economy back from the crooks by voting these political idiots out of office and getting rid of private banking.

By the way, let’s digress a minute for this paragraph.  If you haven’t noticed, crooked participants in global equity markets - American, British, French and German firms (mostly American) – ramp the futures markets at the first hint of central bank intervention in any particular market.  Now why is that?   The Federal Reserve and other central banks all want to devalue their currency as we have said time and again.   As it pertains to the U.S., other countries around the world don’t want this to happen.  Their wealth is predicated on selling cheap goods, mostly cheap junk, to the United States and to a lesser extent, Europe.   And they have been able to do this by manipulating their own currencies for ages.    Germany, Japan and China get high marks for this type of manipulation as do almost all emerging markets.   So when the Federal Reserve gives free money to American speculators, they ramp currencies in emerging markets by literally flooding them with massive new money courtesy of the Federal Reserve.   Yet, everyone is trying to get to the same end state - making their currencies worthless.  So other countries have to counteract this dynamic.   And how do other countries do that?  Well, in large part, by buying dollars in the currency market in an effort to devalue their own currency.   What happens when central banks are forced to buy dollars?  I think you can figure out that supply and demand dynamic.  This allows a predatory Federal Reserve and Wall Street to ease without fear of currency collapse.  Something we wrote about quite some time ago.  Something you won’t read anywhere else because unreasoned histrionics and a lack of understanding of how the world actually works is a driving force behind the howling monkeys and their endless calls of a dollar collapse.
 
Anyway, central bank intervention in currency markets as an attempt to devalue their currency, requires countries to sterilize their operations.  Or to issue debt to ensure these operations do not cause a major impact in their money supply, thus causing severe inflation.  But, Japan, as an example, has not sterilized their actions recently.  Or at least they hadn’t the last time I looked.  So, when Japan or other countries intervene in the currency markets, the crooked financial cabal on Wall Street pushes the buy button on global assets believing that increased money in these economies caused by Wall Street will lead to rampant inflation or higher asset prices.  This all serves the “investor class” in the United States while at the same time putting massive economic pressure on other countries.  It’s a game of political will right now.  Who will sneeze first.  As we have said since this crisis started, these G20 meetings on cooperation are a joke.  Literally.   The seeds of volatility were set long ago by crooks and liars.  There is nothing a roomful of political idiots are going to do to stop it.  Politicians, or those seeking power, are some of the most untrustworthy psychological profiles in any society….Which is why we have a written constitution limiting the size of government.

There are only two choices in currency interventions to stop appreciation.  Pay for it with newly issued debt, or watch inflation run through their domestic economies.  It’s quite apparent what is happening as I write this.   Most emerging markets have been witnessing enormous inflation for the last ten to fifteen years.  Much of it courtesy of Wall Street and Federal Reserve policies.  Their economies are running off of a cliff before their ultimate collapse and their currencies with it.  But Wall Street tells you what has happened is the global economy has recovered.  Hahaha.  Idiots.  The same predatory idiots that destroyed our country and our banking system with the help of crooked politicians are also destroying the rest of the world.  The remarks of currency wars upsetting the global economy are ridiculous.  This has been going on for decades.   And our corrupt government created the trade agreements and the laws in our country to allow it.  Globalization serves one god – corruption.

Anyone who is or has been telling you the dollar is going to zero has no idea how the world works.  And that means everything else they are telling you is likely to be dubious as well.


We are headed for crises in the currency markets, but it won’t be because the dollar is going to zero.  It’s because foreign exchange markets as they are set up today don’t work.  And they never have.   Just like all of the other Wall Street magic that never worked.  Magic that was worshiped until the world collapsed.  This isn’t the start of a currency war.  It is simply a realization that currency wars have defined neoliberalism for the past thirty years.   All brought to us by the elitist crooks who have destroyed our economy for their personal greed.

I don’t know what will break first but at some point we could see almost all currency markets freeze until something is done to change the system.  And if that happens, it’s plausible the dollar demand could actually rocket much higher.  And that means the dollar would go with it. 

What needs to be done is to institute capital controls and to have a fixed exchange rate that is foundational to a new economic model.  And we needed it like thirty years ago to have avoided this calamity.  And what impact would currency or capital controls have?  That's right.  The dollar will rise.  Maybe uncontrollably.  And as we have written, a strong dollar would be exactly what the Federal Reserve and neoliberal idiots don't want.  And as we have written, that could very well force the Federal Reserve to swallow trillions of dollars of debt permanently.  And if that happens, it will expose the fraud of our banking system.  When people realize debt can be erased with a keyboard stroke, they are going to wonder why we paying interest on all of this government-borrowed debt.  And that could very well be the death knell of our corrupt banking system.  Something we should all wish for. 

In closing, let’s pull out a few comments from years past that apply to this post.  Some back many years when the world was celebrating this fraud and corruption. 
  1. Globalization is dead
  2. Global finance is dead
  3. We could see all of the wealth created since 2000 disappear
  4. The dollar is putting in a long term bottom 
  5. Emerging markets were going to collapse
  6. China is a massive bubble the likes of which the world has never seen
  7. Foreign exchange reserves held by emerging markets are a mirage of wealth
  8. The world will shudder and shake when this cycle ends
  9. The United States will once again dominate the world economy unlike at any time in the last fifty years when we clean up this corruption
Currency is a weapon and when allowed, the state will most assuredly use it as such.  You had better believe the state understands this fact.  Absolutely nothing has been fixed.   The crooks are still running the global economy and driving our country into the dirt.  We need a new banking system and a new economic model.
posted by TimingLogic at 5:38 AM

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