Killing the Dollar
The recent attempts by the USA to impose huge fines on foreign banks for violating US sanctions with Iran based solely on transactions in dollars is having the same impact as FATCA. The US Justice banking penalties are becoming a threat to the dollar being used in such transactions. While this is unlikely to cause the decline in the dollar as a reserve currency, for transactions, firms and banks are starting to plan to replace the US dollar as a trading currency. This growing fear of the future penalties from the US authorities is starting the process in motion whereby we will eventually move to a new international reserve currency.
The efforts of Russia and China to establish trade in their currencies is interesting but not a threat to the reserve status of the dollar. That is separate and distinct from the trading status of the dollar. One can trade in any currency, but where do you park money? That can still only be the dollar where there is a deep market (reserve). So we must separate the dollar into these two primary categories – trade and reserve. They perform two distinct functions. The Euro never got off the ground as a reserve currency and is second to even the Chinese yuan in trade. Because the Euro would not create a consolidated debt, they prevented the second prong from forming – the place to park money.
You can conduct trade in yuan, but you cannot park trillions of dollars in yuan or rubles no less euros. So you trade in whatever you like, but you convert to dollars to bank it. Major banks can switch out of dollars to for any transaction thereby avoiding US sanctions. After the transaction takes place, the parties can flip into dollars to park it. The US Justice Department will then be defeated.
Nevertheless, FATCA and the drive to punish foreign banks with billions in fines for acts outside the USA is creating the subtle shift toward a world currency at the reserve level for trade and parking. This trend is in motion always. Whatever these people can do to serve their personal interests will set in motion the ultimate drive to a new world reserve currency that cannot be based upon any single nation.
The Age of Censorship
Mainstream media has become a joke. They will not report anything the government tells them not to. Snowden had to go to the Guardian in London because if he walked into any major news agency in the USA, they would have first called the NSA. They all they report only because the Guardian broke the story. I have stated I was told as a matter of fact the NSA was taking all emails of even everyone on the Hill 2 years before Snowden. It was not a secret. So if I was being told that just as a matter of fact, every news agency know it and did not report it.
We have MSNBC that is so far to the left and FOX to the right, and this is what government likes – keep the people focused on social issues and economics is never questioned with respect to how they function. Keep people yelling about gay marriages and other non-economic issues and they will leave the politicians alone to screw us to the wall.
Now governments are all moving quietly against the internet. Russia is moving to control blogs and their Facebook as well. The US gave Obama the internet kill switch he will use during civil unrest. Britain arrested people on the interest trying to organize protests, and now the EU is moving to censor the internet as well.
The EU wants to promote the control of the internet systematically. With the establishment of an Internet Commissioner where a modern censorship authority will arise. So the EU will be able to detect early civil unrest resistance forming on the Internet. Under the pretext of combating terrorism, of course, freedom of speech is being criminalized.
The economic structure of socialism is collapsing. They refuse to revisit the economic design. As pensions and banks fail, they solution is to make the people pay for their mismanagement. The governments can only see their own self-interest – Adam Smith’s Invisible Hand. They will act only to preserve their personal power. Keep the people divided blaming each other and they love class warfare because it deflects blame from government. The famous debate of Thrasymachus v Socrates reveals this has been a systemic problem with governments for thousands of years. It will not change until we have serious political reform.
