|25/12/03||It’s the Fiat Dollar Stupid by Doug McIntosh|
It is not unexpected how little the mainstream, corporate whore press has covered the ongoing collapse of the USA fiat dollar. Nor is it surprising the decisive, dominant economic story of the year, the dollar’s collapse, has been routinely ignored in the pig press. It’s not surprising the corporate media blobs are nervous to the point they deny the problem exists. The focus on the rigged stock, precious metals and faked unemployment numbers is to be expected. It is also to be expected the media focus will be on celebrities, whether they are Saddam, Whacko Jacko or Kobe Bryant. The modern media is designed to have the same effect on rational thought as a stun grenade. The reason the global elite has intentionally created at least three generations of ignorant people, is fools are easier to control. Unfortunately for our mutant elite, the sheeple will eventually notice a dollar collapse. The reason Patriot Two was slyly passed last week, was our leadership understands Argentina is looming. Unlike the hapless Argentinean people, who were reduced to banging pots and pans as the elite drove by in their armored cars, the American rabble is well armed and has a mean streak. The sheeple have no idea how nasty things are going to get.
In the five years I have been writing here at www.gold-eagle.com many of the things I warned about have come true. Some of you are fond of telling me there has been no economic collapse and the sun has come up every day. People ignore is the balance sheet, focusing instead on who is getting drunk at the Christmas party. The stock market represents the Christmas party. It is totally detached from the current American economic reality. The Stock Market, with its wave of scandals, innate corruption, greed and amoral opportunism has destroyed capitalism. Capitalism is an economic system which will not long survive the predator filth now in charge of corporations, government regulatory, dare I even use that word?, agencies and the media. The United States has failed to hold either political or economic leaders accountable to basic human decency. We have allowed a corporate cabal to concentrate political and economic power with the result the USA is a privately owned company run by a few families. The rest of us are peons, the hired help.
The greatest uncovered economic story of the last year, besides the dollar collapse that is, was the recent comments by OPEC to stop pricing oil in US fiat dollars. If you want to know why I despise mainstream economic coverage; why I openly call them whores, incompetent fools and kept pets, here is the reason. The day OPEC stops pricing in fiat dollars, is the day the USA will collapse. The reason the fiat dollar game has gone on as long as it has is we are the global reserve currency. OPEC damn near took the system down and the media barely said a word. Capital inflows to the USA have collapsed since September. The bond market is making judgments about our soundness. The dollar reaches new lows against the EURO on a daily basis. The European newspapers report this is due to our $500 billion federal budget deficit and our $500 billion current account, or trade, deficit. Nary a word on the evening news, or radio, or newspapers. The greatest economic story since the Great Depression and the American media, sinthey are corporate whores, ignore it.
Just because you ignore a live grenade in the corner doesn’t mean it won’t go off. After over five years of watching Mr. Magoo and his ilk in action, I am now convinced it is the foreign bond market, foreign investor, foreign Central Banks and our foreign enemies who will unleash the economic deluge. Mr. Magoo, Bush, Clinton et. al will deficit spend, fake the numbers as long as the rest of the world lets us. Mr. Magoo will buy up the $40 billion a month foreign investors no longer want. By doing so, Mr. Magoo is now fueling a dollar collapse. Mr. Magoo is increasing the supply of fiat dollars as demand for them is declining. Here are some of the results of this which will happen in 2004.
The price of gold has increased from a low of $250 to a recent high of $408. Now that Red China has opened the spigot of demand by allowing private purchase, demand will explode from all corners. Mr. Magoo, who is forced to finance our so called conservative Republican President Bush and his out of control budget, will run the printing press madly. At the same time Mr. Magoo is doing that, foreign demand for dollars will continue to erode. Our $500 billion trade deficit means our trading partners are swamped with fiat money. They are now choosing not to invest it in the stock market, or buy our treasury bonds to finance our debt. 2004 will be the year foreign central banks try and decide what to do with this mass of money. It is also clear the fiat dollar is losing its broad based appeal as a global currency. In order to eventually protect the falling dollar Mr. Magoo will have to start raising interest rates, seriously raising them. He will do all within his power to avoid doing this before the election. We ay very well stagger through 2004. You cannot run 1 trillion dollars in budget and trade deficits without having consequences in the real economy.
The gutting of the real and productive American economy will continue. The USA doesn’t produce entire classes of things any more. We are a Fed Ex economy. We import stuff and ship it. We are a distribution and retail economy. We still have a few corporate farms left, but the family farmer is going the way of the passenger pigeon. It would take the USA ten to fifteen years to rebuild its manufacturing capacity. We would have to physically build the plants and machines sent overseas; then we would have to train a new generation of machine tool operators. The USA has lost the physical capacity to manufacture things, make shoes, make textile products, televisions, personal electronics and a laundry list of items. We allow the government to spend money which does not exist. We transfer blips of information along fiber optic cables in our financial sector. We have turned Wal Mart and Target into our economy, a vast shop vacuum sucking in the goods of China’s slave labor camps to fund our lifestyle. We drive oil guzzling vehicles and base our foreign policy on the ability to import oil from places we would be best ignoring. We call this wisdom; I call it stupidity. We call this our economy. An tower of Babel built on deceit, debt, greed, arrogance and fraud.
The USA is a country which acts like it has no need of anyone else in the world. The greatest folly of the United States is the belief it doesn’t need $5 billion a day in foreign capital simply to make it another 24 hours. No doubt, Mr. Magoo and Bush will do what they can to make it until the election. Our destiny is in the hands of our foreign owners. We are slaves and persist in calling ourselves free. The day is coming when our foreign masters will pull on the leash and let us know what it really means to sell your Revolutionary War heritage for a pile of credit cards. It doesn’t matter now. The hammer will drop when the foreigners pull the trigger. It is amazing the American people still believe we make our own economic and political decisions. They will find out the day interest rates go to 25%, the dollar collapses, gasoline goes to $5 a gallon and the government defaults on Social Security.
Three decades ago I had a conversation with a young German about the future of the US Army in Germany. She was complaining about our “occupation.” I simply told her to be patient. The day would come when we would leave and Germans would regret our going. That day is now here. Pax Americana is now over. Our Imperial Overreach ends when the dollar collapse goes critical. We will default on our 7 trillion dollar federal debt and lose the capacity to borrow. This is the future for our children. The only real issue is when the creditor forecloses.
In honor of Christmas this year, I have composed my very own version of Bing Crosby’s classic, “White Christmas.” I hope you like it.
I’m dreaming of an Orange Christmas