Has The Perfect Moment To Kill The Dollar
Arrived?
by Brandon Smith
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.
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:
http://www.reuters.com/article/2012/07/05/us-centralbanks-action-idUSBRE8640RN20120705
http://www.reuters.com/article/2012/07/05/us-centralbanks-action-idUSBRE8640RN20120705
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
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”: http://www.alt-market.com/neithercorp/press/2010/01/will-globalists-trigger-yet-another-world-war/
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:
http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/03/maybe-draghis-speech-wasnt-a-disaster-after-all/
http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/03/maybe-draghis-speech-wasnt-a-disaster-after-all/
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.
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…
Brandon Smith, whatever you are smoking is pretty good stuff.
ReplyDeleteWhen EU goes belly up,Chindia will follow and amidst the chaos everyone will be looking to buy shit in the US to save their sorry ass.
So Brandon, pass me the bong.