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A Must Read: The Mogambo Guru

Tuesday, June 06, 2006

Below is a link to an article that I highly recommend you read. The following excerpt talks about foreign exchanges, the pegging of foreign currency to the U.S. dollar instead of gold, and the possibility of the dollar's collapse when foreigners decide they've had enough and drop it. Can you say "inflation" when all those foreign-held dollars come back home?

Whatever Happens, It Will Be Expensive 

by Richard Daughty ("The Mogambo Guru")

...And, to make matters worse for the dollar, there are also indications of an Asian Currency Unit forming, mostly consisting of China and Japan, to trade goods and services [in] their currencies, too.
And it is not just the Chinese setting up shop, or the Iranians, or the South Americans, but also now the Russians have decided that they want to open an exchange to trade in oil, gas, and other goods, and for it all to be paid for with rubles.
Another big reason, aside from the prestige, is that the velocity of money will, necessarily, increase, as it comes pouring through the many intermediaries in the Russian marketplace. No doubt Mr. Putin was looking at the past century, where gigantic money flows in the American oil market produced American-made fortunes, as each American intermediary raked off another few bucks as the money went boinka, boinka, boinka through the system, and then, multiplied by the Required Reserve Multiplier, into the economy as "growth." And that is good for profits, higher local real estate values, wages, economy, standard of living and a feeling of prosperity that makes for easy-pickings in the corruption department.
How soon will all of this happen? Well, Julian Phillips of the reports that Putin said "work on making the national currency fully convertible should be completed by July 1, almost six months ahead of the original January 1, 2007 deadline." July first! Of this year!
So are foreigners ganging up on us? Yeah, I figure they are. And for good reason: We Americans treat every treaty like the ones we made with the American Indians. Without exception (as far as I can tell), we Americans gave them the short end of the stick. From there we lied, broke every treaty, stole everything they had, and then killed most of them if we ever had the slightest reason, no matter how slight or temporary, to do so.
And (fast-forwarding to today) like the dirty, deal-breaking, little back-stabbing crooks that we now are, we have also allowed Alan Greenspan and the Federal Reserve to renege on the international deal whereby every country gave up pegging their currencies to gold and, instead, pegged their currencies to the dollar, while we, (aka "Great White Father in Washington"), would promise to faithfully hold the dollar constant, in terms of buying power, thus achieving the stability of the gold standard without all those inconvenient gold-standard duties, not to mention the restrictions on government spending and bank revenue.
Although nobody literally said "We smoke-um peace pipe. Make mark on white man's treaty paper!", the result was exactly the same. And now they are angry, and simply want their money back. Or at least get the hell out of the system.


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