Has
The Perfect Moment To Kill The Dollar Arrived?
Brandon
Smith
8
August, 2012
The
idea of “collapse”, social and financial, comes with an
incredible array of hypothetical consequences ranging from public
dissent and martial law, to the complete disintegration of
infrastructure and the devolution of mankind into a swarm of mindless
arm chewing cannibals. In an age of television nirvana and
cinema overload, I have found that the collective unconscious of our
culture has now defined what collapse is based only on the most
narrow of extremes. If they aren’t being hunted down by
machete wielding looters or swastika wearing jackboots, then the
average American dupe figures that the country is not in much
danger. Hollywood fantasy has blinded us to the tangible crises
at our doorstep.
The
reality is that collapse is not a singular event, but a process.
It is a symphony of doom, composed of a series of exponentially more
powerful crescendos. If the past four years since the implosion
of the derivatives bubble have proven anything, it is that
catastrophe has the ability to drown a nation slowly like a river of
molasses, rather than sweep it away like a flash flood. That
said, almost every recorded collapse of modern societies in the past
century has been preceded by a primary trigger event; a moment in
which the mathematical certainty of failure becomes clear, even if
the psychological certainty is muddled.
In
2012, we still await that trigger event, which I believe will be the
announcement of QE3 (or any unlimited stimulus program regardless of
title), and the final debasement of the dollar. At the
beginning of this year, I pointed out that we were likely to see such
an announcement before 2012 was out, and it would seem that the
private Federal Reserve is right on track.
Last
month, the Fed announced that it was formulating a plan to “expand
its tool kit”. This includes an openly admitted possibility
of a third round of quantitative easing starting as early as
September:
This
timeline appears to coincide perfectly with the breakdown of the EU,
which may also see a climax event in September. In that month,
EU policymakers will return from summer holiday. German courts
will make a ruling which could put an end to any chance that the
country will support a eurozone rescue fund. The Dutch, which
are anti-bailout, will vote in elections. Greece will be
attempting to renegotiate its financial lifeline. And, the ECB
will have to assess the impending chaos in Spain and Italy:
As
far as the Fed’s ability to remedy the fiscal situation goes, let’s
clear something up right here; the Fed has NO TOOLKIT. Sorry,
but central banks have only two options when attempting to shift the
tide of the economy: They can lower interest rates to zero,
and, they can print-print-print. That is it. We’ve had
TARP, numerous bailouts, QE1 and QE2, Operation Twist, and interests
rates have been kept near zero for years! These so called
solutions have been strapped like millstones around our necks and
absolutely nothing has been accomplished since 2008.
Real
unemployment still stands at over 20%. The housing crisis
remains an unstoppable juggernaut. Europe is on the verge of
meltdown (despite the trillions in American taxpayer dollars handed
to EU banks). The national debt continues to grow at a pace far
beyond what the Obama Administration and mainstream economists (who
should have been fired long ago) predicted in 2010. There are
no secret magic tricks up the sleeve of Ben Bernanke. Even if
the Fed actually wanted to save our financial system, and our
currency (which they don’t), there is nothing they can do except
make the situation worse. Central banks are perhaps the most
useless institutions ever devised, unless, of course, their true
purpose is to diminish the financial health of a country and siphon
away its economic sovereignty…
Enter
the death of the dollar.
The
IMF has been consistently calling for the end of the dollar as the
world’s reserve currency, and for its replacement by the SDR
(Special Drawing Rights):
The
new president of France, Francois Hollande, has recommended the
expulsion of the dollar as the go-to reserve, a deeper relationship
between France and the BRIC nations:
China
has been demanding an end to dollar primacy for years:
And
so has Russia…
And
so has the UN…
It’s
not as if it’s a big secret that the dollar is on everyone’s hit
list. Until recently, alternative economists could only point
out circumstantial evidence that this sentiment was a product of
collusion between the world’s central banks and elements of various
governments. Suggesting that China, Russia, the UN, the IMF,
and the Federal Reserve were working in tandem to devalue the dollar
and replace it with a global currency has always elicited at least a
few jeers and the ever present standby catch-all accusation of
“conspiracy theory”. However, the times they are a’
changen’…
With
the exposure of the Libor Scandal, we now have definitive proof and
even open confessions from international banks, the Federal Reserve,
and the Treasury, admitting that the true debt problems of major
institutions have been hidden, deliberately, in tandem with multiple
agencies in multiple countries, from the general public, with the
full knowledge of numerous governments. The most vital and
shocking element of the Libor Scandal is that it shows, beyond a
shadow of a doubt, that there is indeed a conspiracy which has melded
the corporate world and the political world into a single ominous
creature.
The
collusion has become so brazen, central banks around the globe now
institute policy initiatives within the same hour of each
other:
Years
back, I wrote an article about the most important signs to watch for
when facing a heightened state of collapse. One of those signs
was the advent of openly admitted corruption on the part of the
banks. When criminals become absolutely transparent and
nonchalant about their criminality, it is usually because they no
longer fear the threat of justice or reprisal. This is exactly
the atmosphere we have in 2012. But, what could possibly have
made the banksters so confident that they are willing to flaunt their
racket to the world? I can only surmise that an event is on the
horizon. One so distracting that the hucksters believe we will
forget all about them.
Looking
at it from another perspective; if I was a globalist hell bent on
undercutting the dollar as the world reserve and replacing it with a
centralized standard while turning the U.S. into a third world pit in
the process, I would probably pull the plug soon. Here are some
reasons why:
Drought
Crisis Provides Inflationary Cover
The
drought which has struck half of the U.S. agricultural centers and
which has also hit Russian production is the perfect cover event for
dollar devaluation. The full view of crop production and yields
will be revealed this autumn, and according to the mainstream, the
numbers will be dismal. Maybe they will be, maybe they won’t,
but the likelihood of inflation in food prices all over the planet is
high. If the Fed announces QE3 and sets an implosion of the
dollar in motion, the price spikes this will cause in commodities,
especially grains and other foodstuffs, can be easily blamed on
drought, rather than the destruction of the greenback. At least
for a time.
Syria And Iran Theater
If
the UN pulls observers from Syria, expect an attack by either the
U.S., Israel, or both is on the way. Expect Russia to be quite
unhappy. Expect China to respond with financial warfare.
Expect Iran to fulfill its mutual defense pact with Syria and come to
their aid. Expect hard core catastrophe. I have been
warning about Syria as a catalyst for global crisis for quite some
time. Long before anyone ever heard the name “Assad”:
Every
time I catch a glimpse of the MSM, whether it be MSNBC, CNN, or FOX,
they are all spewing the same rhetoric: The U.S. should have
invaded Syria months ago. It would seem that the American
people are being psychologically prepped for a new war, but in
reality, they are being prepped to be distracted from the banking
sector’s primacy in the economic calamity that is about to
unfold.
European
Seesaw Of Destruction
With
the EU in shambles, and only getting worse, the ECB has been
attempting to work around the rules of its own charter which forbid
the infusion of capital directly into governments. The latest
weapon in the fight against the financial stupidity of EU member
countries? European stimulus! That’s right folks, the
U.S. is not the only country that will be raping its own currency
this year! Be sure to catch the euro-sized version of
QE:
I
believe, in keeping with the collusion central banks have already
shown, that the Federal Reserve and the ECB will announce new
stimulus measures very close to each other, if not in tandem.
The continued devaluation of the Euro will help to hide the effect of
the falling dollar as the two currencies seesaw back and forth,
allowing for a delayed reaction from the public as well as investment
markets. Investors looking for a safe haven currency will be
scrambling in confusion.
Stocks
Ready To Bust
Finally,
it is very likely that the Fed will wait for markets to dive in the
wake of faltering demand for goods and raw materials in all major
economies, as well as declines in manufacturing. As I have said
in the past, the Fed wants us to beg for QE3. The only reason
this decline has not occurred yet is because investors that are still
participating are salivating for new stimulus and expect it shower
them with riches soon. So, to put this in perspective, the Dow
is above 13,000 right now because investors have already priced in a
QE package not just in the U.S., but in the EU as well. If they
do not get it fast, they will pull out, and stocks will plummet.
The market addiction to fiat injection is so pervasive now, I cannot
imagine how they would react if the pipeline was cut off. It
would probably induce a fiscal bloodbath.
What
Will Collapse Really Be Like?
I
expect the event will be spectacular in some ways, but subdued and
subversive in many other ways. Triggers may be swift and
startling, but the reactions of the populace slow, uncertain, and
presumptive. There will be fissures in our foundation, but the
complete extent of the danger may take a few more years to become
evident. While the public continues to maintain its fixation on
some Mad Max nightmare scenario, the real collapse will be taking
place right under their noses in the form of 25%-50% increases in
food and fuel, tightened job availability with pensions swallowed by
austerity, food lines hidden by food stamps until the government
finally defaults and pulls the rug out from under entitlement
programs, etc. For a time, it will look and feel like a
slightly darker version of today, and not the cinematic melodrama
that we have come to envision. The worst of times that we often
find extolled in the pages of history books come at the cost of years
of almost equal disparity, and usually, the lead up is far more
difficult to handle than the finale…
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