President Barack Obama (left) defended the Federal Reserve's policy of printing dollars on Monday after China and Russia stepped up criticism ahead of this week's Group of 20 … The G20 summit has been pitched as a chance for leaders of the countries that account for 85 percent of world output to prevent a currency row escalating into a rush to protectionism that could imperil the global recovery. But there is little sign of consensus. The summit has been overshadowed by disagreements over the U.S. Federal Reserve's quantitative easing (QE) policy under which it will print money to buy $600 billion of government bonds, a move that could depress the dollar and cause a potentially destabilizing flow of money into emerging economies. "I will say that the Fed's mandate, my mandate, is to grow our economy. And that's not just good for the United States, that's good for the world as a whole," Obama said during a trip to India. "And the worst thing that could happen to the world economy, not just ours, is if we end up being stuck with no growth or very limited growth," he said. – Reuters
Dominant Social Theme: Things are coming together now. The next G20 meeting will be swell and increased world governance must soon follow.
Free-Market Analysis: In this article we would like to delve into the issue of whether a worldwide unraveling would somehow benefit the West, particularly the elite itself and its goal of ever-more elaborate world government. Yesterday in Currency Dreams of the Elite, we discussed the difficulties that Western elites seemed to be having in implementing a worldwide currency, given the pushback of the Chinese and the larger BRIC faction. We also pointed out our surprise at how fast the Anglo-American power elite was moving toward the larger goal of a NWO, a goal that has comprised the basic, underlying dominant social theme of Western elites for at least a century and probably more in our view.
Every part of Western society has been organized around this goal in our view; and only in the 21st century with the advent of the Internet has the larger pattern of what the elites have been up to begun to become clear. The Bell has tried to support this increasing clarity. We regularly chart the power elite's efforts to create world government using dominant social themes – fear based promotions that harry Western middle classes to give up wealth and control to international organizations created by the elites.
The elites of the West, an intergenerational clique of banking families and their enablers with bases in London's City, Brussels and Washington DC, have evidently and obviously conspired to generate such a world government. The 20th century was a time of great progress toward this goal, but in the 21st century in our view, the elite's efforts have started to become undone. In the 20th century, after what we increasingly tend to believe was a second "engineered" war (World War II), the Anglo-American axis set up a worldwide dollar reserve system complete with an IMF (central bank in waiting), a World Bank (lending unit), Bank for International Settlements (coordinating central bank), UN (world parliament) and a global army (NATO).
But not so fast. The elite did not pay any special attention to media (from a formal organizational standpoint) given that during the 20th century elite control of the Western media was unchallenged. It was only with the advent of the Internet that cracks in the facade appeared and the promotions of the elites began to fail, more rapidly in fact than might have been expected. Today, the dollar reserve itself is increasingly in tatters, the IMF is not in good odor with much of its constituency, the World Bank is not seemingly a significant player in world events, NATO is having a bad go of it in Afghanistan and the UN has lost much of its credibility (especially in the US) because of various scandals and, generally, because of the socialist extremism that it espouses.
Against this backdrop of failed and failing Western institutions, we wonder if the Anglo-American axis' latest gambits are motivated as much by desperation as general aggressiveness and confidence. After 9/11 there is no doubt that the powers-that-be increased the level of authoritarianism that today affects Europe and America. At the same time the axis started two wars of control and intimidation in Iraq and Afghanistan. We have long maintained that these wars were part of a larger campaign to "westernize" Islam generally and to finally pacify the ancient tribes of Pakistan and Afghanistan (Pashtun and Punjabi) for purposes of implanting the final stages of global government.
Absent another world war (which strikes us as problematic given the amount of nuclear weapons around), the elite's organizational efforts regarding increased global centralization seem increasingly stymied. But we also are well aware that the elite never ceases to strive toward its goals. We note, therefore, (thanks to feedbacker "Bug") that the elite's inventiveness remains impressive.
One could argue, for instance, that President Barack Obama's inexplicable presence in India has more to do with generating a new source of US bond purchases than anything else. Additionally, it is true that India and China are enemies; by turning up in India, Obama increases pressure on the Chinese prior to the next G20 meeting. (Another feedbacker makes the persuasive point that Australia, too, is escaping from the Anglo-American orbit, but that is a story for different day.)
Anyway, the point of this article is to broach the possibility that the US has concluded the Chinese economy is going to collapse, maybe sooner than later. We have mentioned reports that the Chinese elite are buying houses and apartments and filling Swiss bank accounts with cash. It is possible that Western induced economic chaos increases the pressure on the Chinese economy and eventually tips it into the abyss that it is destined to fall. If this were the case, it is perfectly possible that the Anglo-American elite hopes to "pick up the pieces" and re-establish the power and dominance in China that it once enjoyed.
Seen from this perspective the move to dump another trillion or two into international markets is a kind of dagger aimed at the throat of the Chinese CCP. Eventually, price inflation in China is going to become intolerable and lead to serious civil unrest in our view. The CCP even now is in the unenviable position of choosing between jobs and higher prices. As we have pointed out in numerous articles, we think there is no love lost between the average Chinese citizen and the current government, which has now ruled in various incarnations for some 70 years. We've pointed out that the pact between the Chinese and the party is simple: The CCP provides increased prosperity and the Chinese themselves, all 1.3 billion of them, go along with this program. But just look at this:
China's inflation rate to hit 4 percent in 2011 … China will face greater inflationary pressure in 2011 because of the United States and Japan's looser monetary policies, with the inflation rate estimated to be at least 4 percent, Zhu Baoliang, deputy director of the economic projection department at the State Information Center, said during a forum on Nov. 5.
Zhu affirmed China's achievements in controlling inflationary expectations. Meanwhile, he notes that external factors are posing higher inflationary pressure on China. Zhu believes that the rise in inflationary pressure facing China since September 2010 has primarily resulted from the looser monetary policies successively adopted by Japan and the United States.
Zhu also believes that China's relatively loose domestic monetary policy is the reason to turn inflationary expectations into inflationary pressure. He explains that one of the most basic economic principles shows that price will surely rise when too much money is issued. The prices of China's bulk commodities and some types of grains are currently rising. Furthermore, the rise in wages of low-end labors will also pose further inflationary pressure in the future. – People's Daily Online
This is what the CCP is admitting to. But inflation, actually, is all-but-out-of-control in our view. An entire empty city has been erected in Mongolia based on real-estate speculation and the average, bourgeois Chinese person (there's a contradiction in terms) believes that the speculative purchase of an empty flat is a substantive investment. As world consumerist demand has all-but-collapsed, we fail to see how the CCP is going to sustain its 40-year-old boom.
The CCP is as afraid of civil insurrection as the Western powers-that-be and with good reason. The Chinese nation has seen nothing but insurrection, violence and military conquest for nearly 200 years. The past 30-40 can be seen as a kind of aberration given China's horrible history – much of it initiated by Western powers-that-be. The CCP is in fact in a race against time to provide China's remaining 400 million with a decent standard of living before the economy loses its ability to absorb more workers. But as inflation bites, so do other problems with workers, as the Canadian Times Colonialist informs us in this article excerpt:
China looks to Canada for bargaining model … World's most populous nation eyeing improvements to working conditions … Try to imagine the entire population of Canada crowded into a single city. That's Chongqing, China. With more than 33 million residents, it is the biggest city in the world. Located at the confluence of the Yangtze and Jialing rivers in southwestern China, it is China's "Motor City," producing automobiles, trucks, motorcycles and military equipment, plus the steel and aluminum that goes into making them.
I was there last month because the Central Committee of the Chinese Communist Party has selected the city and its more than 18 million workers to be the focus of an important new experiment in collective bargaining. In the face of recent growing workplace unrest, the Oct. 15 meeting of the Chinese Communist Party Central Committee in Beijing made it clear that income redistribution is to be an economic as well as social priority as the Chinese economy continues to grow at a double-digit rate. – Times Colonialist
Now from our point of view, the Chinese can redistribute wealth all they want. But the old men of the CCP have made a fatal error. They have badly distorted their economy with the quick fix of fiat money. This has turned China into a modern "Westernized" economy but in doing so, the Chinese have become accustomed to the kind of consumerism that is proving unfeasible in the West. It turns out there is no short-cut to prosperity. Only the free-market over decades and centuries can provide people real wealth. The CCP today faces an unsupportable economy, violent inflation and a strong likelihood that whatever additional demand remains in the world is fast drying up.
The result of all this will inevitably be a Chinese implosion, a significant one in our view, as deep or deeper than what affected the US and Europe. But unlike the US and Europe, the CCP has no reservoir of good will, in our view, to fall back on. Everyone in China must know what the CCP is – or was – for they lived through it. An imploding economy will collapse the CCP as well in our view. Hence the reason to transfer assets out of the country. The knowledge that the Chinese economy is close to collapse, or will eventually collapse, is doubtless putting more pressure on the Chinese to compromise with the West. Perhaps this will bring the CCP to the negotiating table.
Is there a plan? Are there blood ties within the Western elite to China that we do not know about? We have heard that powerful Chinese families self-identify as Jewish. Perhaps there is enough commonality between East and West to forge an alliance. If the Chinese economy collapses, or if the global economy continues to fracture as rapidly and inexorably as it seems to be doing, it is possible that global leaders could be drawn together in an effort to salvage what they have.
We mentioned yesterday that World Bank president Robert Zoellick had created quite a stir by writing in the Financial Times that leading economies should consider readopting a modified global gold standard to guide currency movements. Is Zoellick's trial balloon now another factor in East-West discussions over a grand currency compromise? We can't see a strategy that brings the Western elite much closer to its global goals without significant power sharing. We await the next Korean G20 summit with interest. Perhaps it will clarify matters that seem to us to be increasingly murky. Or maybe not.
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