Analysis: Tide of history runs against would-be G20 grand bargain … Speculation of a grand bargain by the Group of 20 to rebalance the global economy is swirling ever faster thanks to China's surprise decision to raise interest rates for the first time since 2007. Higher rates ought to push up the yuan, one element of the mooted deal. Whispers that the Federal Reserve will go easy with an expected second round of quantitative easing – printing money to buy government bonds – point to the quid pro quo for China, which is alarmed at the prospect of the dollar's debasement. – Reuters
Dominant Social Theme: Saving the world from currency misalignments is tough, but it's worth doing.
Free-Market Analysis: What do you know about Lady Gaga's (left) concert schedule? The riots in France have kept her from honoring several commitments in Paris, and there were a good many articles on the subject (generally) last time we checked Google. But we could not find a single one on a topic we consider nearly as important – the upcoming G20 meetings in Korea that may help determine the rest of the world's economic history in the 21st century. Sub dominant social theme: "Please read up on Lady Gaga because she is an interesting entertainer and economics and the G20 are boring subjects."
We are dedicated and professional meme watchers, and to us the upcoming G20 meetings in Korea promise to be interesting indeed, whether or not the mainstream media wishes to put them in the appropriate context. From OUR point of view, the world is increasingly approaching a tipping point and people who wish the best for their families and also for their portfolios will want to watch what is unfolding in Korea. If the West and the IMF can pull it off, then true global governance moves one step closer – maybe a big step. If they do not, then a 100-year's worth of planning may begin to be in jeopardy.
This is important, is it not? The Bell tries to predict whether the truth-telling of the Internet is undermining – and rendering ineffective – the fear-based promotions of the Anglo-American elite. In this case, "currency wars" are obviously a meme that the elite has chosen to flog. The idea is that if each big country goes its own way the world will collapse into a hodgepodge of bickering nation-states and any hope of rationalizing currencies and avoiding a ruinous trade war will be lost.
Entropy exists nonetheless. But the Western elite conspiracy always seeks to turn setbacks to its advantage. In this case, it is proposing, as a result, that the International Monetary Fund should function with a single currency as a kind of global central bank. In the past we scoffed at the idea that the IMF would be able to offer a replacement to the dollar reserve currency, because contrary to popular belief, there likely has only been one reserve currency in the history of the modern world – the dollar – and it achieved its pre-eminence only after every other nation-state had been laid low during World War II.
Our point in past articles has been that the dollar reserve currency derives its power from a process that Mao was most familiar with – the barrel of a gun. Of course the mainstream media would never explain it this way. The most common explanation is that "countries hold dollars to purchase oil." What is never added is that the US itself set up this particular parameter after World War II. And we doubt the US asked politely. It simply told Saudi Arabia and the other oil producing nations what they were going to do and how they were going to do it.
But of late, we have been reminded mostly by the IMF's actions, that the IMF too is an Anglo-American creature, as is the World Bank and even the International Bank for Settlements. The UN, too, is Anglo-American controlled. Thus we can see, if we want to be blunt about it, that the entire apparatus of world government is an Anglo-American invention. So it doesn't really matter if the dollar is part of the deal, so long as the Anglo-American axis retains control of the reins of governance.
In fact this is where the rub is. The post-war dominance of the Anglo-American axis is no more. If the Anglo-American axis wants to set up a truly worldwide government complete with a global currency and central bank, it will have to do considerable power sharing. And even then we are not sure that leaders of such countries as India, China and Brazil are in the mood to erect yet another economic Pax America, even if it is one in which they have considerable say.
Yesterday we noted that Brazil has declined to participate in some of the runup meetings to upcoming G20 confabs. "Reuters reported on Friday that Finance Minister Guido Mantega would not be attending the meeting and would unveil new currency measures aimed at containing a rapid rise in the real BRBY this week." So not only did Brazil not attend, it also was busy instituting NEW currency measures.
Meanwhile, the Chinese leadership, aghast no doubt at continuing real-estate inflation, raised rates in a surprise move this week. But the West's mainstream press covered the rate increase as if it were some sort of gift to the IMF and the West. China had raised rates to avoid a currency war not a real-estate meltdown. There was even speculation (see article excerpt above) about an agreement between American Federal Reserve Chairman Ben Bernanke and the Chinese. Bernanke would proceed less aggressively with the upcoming planned spate of money-printing (QE2) and the Chinese in turn would raise rates, easing the dollar.
From our humble perspective this is truly grasping at straws. The West and the IMF will at this point do or say ANYTHING to give the appearance that the Anglo-American axis still firmly holds the tiller and is pointing the ship of global governance away from dangerous twin shoals of Selfish and Disruptive National Interest that lie dead ahead. It is quite a comedown for the axis in our opinion. Only 50 years ago the globe was mostly prostrate and America alone controlled 50 percent of the world's industrial output. But it wasn't good enough for the elite. They stage-managed the West into an economic breakdown in order, apparently, to negate homegrown resistance to their schemes. Now they may be left with their ruined national bases and yet without the Holy Grail of global leadership.
There are some in the alternative Internet media and news community that believe the Anglo-American power elite is purposefully undermining the dollar in order to make IMF SDRs (and eventually the bancor) look more and more attractive. But if they are doing so, they are taking another big risk. They would be likely undermining an established world currency (the dollar) with no guarantee that the IMF will be able to impose its ambitious agenda on the unruly G20.
There are plenty of other currencies that are being discussed by various countries around the world. Various baskets of commodities and even gold and silver have been proposed. It may well be that the IMF is not the only game in town. As we were about to finish this article up, a feedbacker brought the following AP article to our attention. It begins: "TEHRAN, Iran – The leaders of Iran and Venezuela hailed what they called their strong strategic relationship on Wednesday, saying they are united in efforts to establish a 'new world order' that will eliminate Western dominance over global affairs."
For 100 years, the Anglo-American axis pursued (in our view) a secret conspiracy to run the world. But in this era of Internet truth-telling, the conspiracy is not a secret any longer and even Western money power is losing its ability to intimidate. Here's more: "Iran and Venezuela are united to establish a new world order based on humanity and justice," Ahmadinejad said, repeating his predictions that those who today seek "world domination are on the verge of collapse." (-AP)
The upcoming G20s meetings are going to be a critical ones. The Anglo-American axis badly needs to present a unified face to the world. There used to be an inevitability about Western promotions, but today? After 100 years, Anglo-American efforts to build world government are becoming both frenetic and labored. Assuming the elite is not printing money to bring down the Western system, then the reason to continually "stimulate" is to try to breath life into moribund Western systems so as to kick-start employment. Why would the elite bother unless it was worried about civil unrest and even insurrection? One could conclude that things are not exactly going to plan.
The ramifications of all this are gigantic and the plot will be played out over the coming weeks and months. If G20 countries do choose to go their own way, the painstaking legal construct of trade treaties, banking regulations and UN supervised financial approaches will begin to totter. The ruinous, authoritarian edifice that Western powers-that-be have erected during the past century could start to topple. The world would be freer, not less free. This is almost as important as whether or not Lady Gaga opens in Paris.
Subscribe to The Daily Bell and immediately access our free guide:
Freedom in Two Years
How to stop caring about political “sides” and focus your efforts on what will truly make a difference in your life.
This is a guide to individual, not political, action.Yes, deliver THE DAILY BELL to my inbox!