The Entire Fiat Money System is Bankrupt

[Publisher's Note: This article was published in the Global Research E-Newsletter on November 2nd 2013.]

Demise of the Global US Fiat Dollar Reserve Currency

It’s been a while since I last wrote an article on the on-going financial crisis. I don’t write for the sake of writing, as others do because they have to do so, on account of their subscribers who pay hefty subscription fees and demand their money’s worth.

Major issues or trends do not change on a daily or even monthly basis. A trend may take a few years to run its course and unless there is a major factor that may affect the trend, there is hardly any need to comment any further on the trend or outcomes.

The events unraveling post Bernanke’s decision not to taper QE is most significant because it confirms our analysis that the banking crisis has not been resolved in any significant way after five years of money printing and massive asset inflation. The fiat money system has but one outcome – total collapse. It will also mean the demise of the global US dollar reserve currency.

There are no solutions at hand.

Bernanke is totally discredited and his continued tenure as Chair of the FED would only accelerate the realisation that the FED and all central banks have failed. Hence, the need to change the “leadership” at the FED, but the same policies would be followed with some cosmetic changes to hoodwink the ignorant masses. It is analogous to the transition from the second Bush presidency to that of Obama and all the theatrics of “change” propaganda. In fact, Obama is Bush 2 on steroids! Yellen will be Bernanke on steroids. Why are we so certain of this outcome at Future Fast-Forward?

Our reasons are as follows:

Prior to the Global Financial Tsunami of 2008, I had written several articles exposing the global Too Big To Fail (TBTF) banks as financial rapists and predators and they would cause untold havoc to the financial system.

Post the crisis, I had also warned that these global TBTF banks are all insolvent and the toxic assets on their balance sheets would exceed US$20 trillion at the minimum. The entire fiat money system is bankrupt. Printing toilet paper money by the trillions does not make the system solvent. It is a clear admission that the system is totally broken.

The banking Humpty-Dumpty has fallen from the wall and shattered into a thousand pieces! The confirmation for this is the fact that all central banks led by the FED have only one aim – to create massive asset inflation. How can a stock market of a bankrupt nation be at an all-time high? The FED and central banks the world over are not interested in resolving the unemployment problem because record unemployment would not collapse the fiat money system. It may trigger massive social unrest but that can be put down by a militarised police force, supported by a battle-hardened military as is happening in the US.

In the circumstances, we need to ask the US$ Trillion question – Why are all the central banks focusing on asset inflation via creation of money out of thin air?

The answer: THE FIAT MONEY SYSTEM IS THE ECONOMY, STUPID!

It used to be that the Petro-dollar was the linchpin of the global economy. However, when the derivatives market took off and became a US$800 Trillion global casino, the US$ toilet paper became the currency in global financial trading and speculation.

All the TBTF banks were leveraged to their eyeballs and the collaterals were hypothecated and re-hypothecated so many times over, it became an inverted pyramid joke.

The collaterals were bundled up into CDOs etc. rated AAA by corrupt rating agencies and traded. We need not repeat this old story. The point we are making here is that not only are the collaterals junks but they are supporting a mountain of debts in the trillions. Therefore, when collaterals are impaired the TBTF banks are in a shit-hole from which they cannot get out. The FED and other central banks have no choice but to bail out the TBTF banks if a systemic failure is to be avoided. If all the junk collaterals were to be off-loaded at once in the full glare of public scrutiny, there would be a run on all the banks. So, what was required was a stealth rescue effort. The TBTF banks were allowed to unload the junk collaterals bit by bit by the various schemes of the FED culminating in the US$85 billion a month purchases of treasury bonds and mortgages by the FED.

Additionally, newly “minted” collaterals were used to replace the junks so as to clean up the balance sheets of the TBTF banks. I have stated earlier that the minimum amount of toxic assets needed to be mopped up is US$20 trillion. After five years, the FED has just scratched the surface. It is debatable how many US$ Trillions the FED has actually pumped into the system directly and indirectly. How much and how long more can the FED continue to pump US$ toilet paper into the system without creating a massive loss of confidence in the dollar? When the balance sheet of the FED reaches US$7 Trillion or maybe US$10 Trillion? It is anybody’s guess.

For sure, there will be a point when another US$100 Billion is created on top of the stash of US$ toilet papers which will tip the scale and collapse the entire system. It is a catch-22 for the FED. If it stops creating fiat money out of thin air, the fiat money system would collapse immediately. If it continues with more money creation, it merely postpones the inevitable and more devastating end-game. This is the price we all have to pay for allowing the fiat money system to hold sway for so long.

The world was conned into accepting the biggest Ponzi scheme in the history of banking and finance – the US$ Global Reserve Currency Ponzi Scheme.

This scheme was created on a sand castle of debt, specifically US Treasury Bonds. The world does not need a Global Reserve Currency. Global trade can be conducted in any currency in accordance to the needs and resources of a country.

Why should there be a special privilege given to only one country to have its currency as the sole reserve currency for purposes of trade? It makes no sense as it is the result of US imperialist policies under the pretext of the Cold War. The con was based on the propaganda that the US$ should be the preferred currency and the US Treasury Bond is the “safest asset” to have in the event of an outbreak of war between the Western Imperialist camp and the Soviet bloc. We were told this arrangement was necessary if we are to enjoy the protection of the mighty US superpower!

Yet, when the Soviet bloc collapsed no one questioned the need to perpetuate the system.

Another spin was propagated. The US was the linchpin in the new era of globalisation as the US market was the biggest consumer / export market. Everyone was caught in this web of deceit. The US market was a market built on a mountain of debt. Adding insult to injury, the US consumers paid for the goods produced by millions breaking their backs with US$ toilet paper money!

Some so-called currency experts have asserted that no other currency can replace the US$ toilet paper as the global reserve currency because no other country has a bond market like the US bond market, dominated by the US treasury bonds.  What an idiotic statement!

If a country is not in debt, there is no need for any bonds to be issued. A bond is an I.O.U. A bond is a mere paper pledge to repay a debt.

And anyone who says and continues to perpetuate the myth that a US debt is a better debt and is more secure is an [email protected]#hole!

Why would anyone want to work and produce goods which are sold and paid in US$ toilet paper and then use the surplus US$ toilet paper to lend to the US government who repays the debt by merely printing more US$ toilet paper?

So, do you still think the world needs a US$ toilet paper money as a reserve currency?


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Publisher's Note: Now you know, spread the word!

 

A rash of deaths and a missing reporter – with ties to Wall Street investigations

Another example of how ruthless is the enemy we're dealing with.

http://wallstreetonparade.com/2014/02/a-rash-of-deaths-and-a-missing-reporter-%E2%80%93-with-ties-to-wall-street-investigations/
Wall Street on Parade (“A Citizen Guide to Wall Street”) – Monday 3rd February 2014

by Pam Martens

In a span of four days last week, two current executives and one recently retired top ranking executive of major financial firms were found dead. Both media and police have been quick to label the deaths as likely suicides. Missing from the reports is the salient fact that all three of the financial firms the executives worked for are under investigation for potentially serious financial fraud.

The deaths began on Sunday, January 26. London police reported that William Broeksmit, a top executive at Deutsche Bank who had retired in 2013, had been found hanged in his home in the South Kensington section of London. The day after Broeksmit was pronounced dead, Eric Ben-Artzi, a former risk analyst turned whistleblower at Deutsche Bank, was scheduled to speak at Auburn University in Alabama on his allegations that Deutsche had hid $12 billion in losses during the financial crisis with the knowledge of senior executives. Two other whistleblowers have brought similar charges against Deutsche Bank.

Deutsche Bank is also under investigation by global regulators for potentially rigging the foreign exchange markets – an action similar to the charges it settled in 2013 over its traders’ involvement in the rigging of the interest rate benchmark, Libor.

Just two days after Broeksmit’s death, on Tuesday, January 28, a 39-year old American, Gabriel Magee, a Vice President at JPMorgan in London, plunged to his death from the roof of the 33-story European headquarters of JPMorgan in Canary Wharf. According to Magee’s LinkedIn profile, he was involved in “Technical architecture oversight for planning, development, and operation of systems for fixed income securities and interest rate derivatives.”

Magee’s parents, Bill and Nell Magee, are not buying the official story according to press reports and are planning to travel from the United States to London to get at the truth. One of their key issues, which should also trouble the police, is how an employee obtains access to the rooftop of one of the mostly highly secure buildings in London.

Nell Magee was quoted in the London Evening Standard saying her son was “a happy person who was happy with his life.” His friends are equally mystified, stating he was in a happy, long-term relationship with a girlfriend.

JPMorgan is under the same global investigation for potential involvement in rigging foreign exchange rates as is Deutsche Bank. The firm is also said to be under an investigation by the U.S. Senate’s Permanent Subcommittee on Investigations for its involvement in potential misconduct in physical commodities markets in the U.S. and London.

One day after Magee’s death, on Wednesday, January 29, 2014, 50-year old Michael (Mike) Dueker, the Chief Economist at Russell Investments, is said to have died from a 50-foot fall from a highway ramp down an embankment in Washington state. Again, suicide is being presented by media as the likely cause. (Do people holding Ph.D.s really attempt suicide by jumping 50 feet?)

According to Dueker’s official bio, prior to joining Russell Investments, he was an assistant vice president and research economist at the Federal Reserve Bank of St. Louis from 1991 to 2008. His duties there included serving as an associate editor of the Journal of Business and Economic Statistics. He also was editor of Monetary Trends, a monthly publication of the St. Louis Fed.

Bloomberg News quotes William Poole, former President of the St. Louis Fed from 1998 to 2008, saying “Everyone respected his professional skills and good sense.”

According to a report in the New York Times in November of last year, Russell Investments was one of a number of firms that received subpoenas from New York State regulators who are probing the potential for pay-to-play schemes involving pension funds based in New York. No allegations of wrongdoing have been made against Russell Investments in the matter.

The case of David Bird, the oil markets reporter who had worked at the Wall Street Journal for 20 years and vanished without a trace on the afternoon of January 11, has this in common with the other three tragedies: his work involves a commodities market – oil – which is under investigation by the U.S. Senate’s Permanent Subcommittee on Investigations <http://wallstreetonparade.com/2014/01/wall-streets-oil-and-commodities-empire-under-investigation-by-u-s-senate/>  for possible manipulation. The FBI is involved in the Bird investigation.

Bird left his Long Hill, New Jersey home on that Saturday <http://wallstreetonparade.com/2014/01/david-bird-wall-street-journal-reporter-goes-missing-after-reporting-for-three-months-on-oil-glut-in-u-s/> , telling his wife he was going for a walk. An intentional disappearance is incompatible with the fact that he left the house wearing a bright red jacket and without his life-sustaining medicine he was required to take daily as a result of a liver transplant. Despite a continuous search since his disappearance by hundreds of volunteers, local law enforcement and the FBI, Bird has not been located.

When a series of tragic events involving one industry occur within an 18-day timeframe, the statistical probability of these events being random is remote. According to a number of media reports, JPMorgan is conducting an internal investigation of the death of Gabriel Magee. Given that JPMorgan, Deutsche Bank and Russell Investments are subjects themselves of investigations, a more serious, independent look at these deaths is called for.

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Spread the word!

US NGO uncovered in Ukraine protests

by William Engdahl*

[Publisher's Note: This excellent article, first published in January 2014, gives a revealing glimpse of what is really going on in the Ukraine.]

CANVAS: The US-financed Belgrade training group behind the carefully-orchestrated Kiev protests

The recent protests in Ukraine have the stench of a foreign-orchestrated attempt to destabilize the government of Viktor Yanukovych after he walked away from signing an EU Association Agreement that would have driven a deep wedge between Russia and Ukraine. Glamor-star boxer-turned political guru, Vitaly Klitschko, has been meeting with the US State Department and is close to Angela Merkel’s CDU political machine in Germany.

The EU association agreement with Ukraine is widely resisted by many EU member states with deep economic problems of their own. The two EU figures most pushing it — Swedish Foreign Minister Carl Bildt and Polish Foreign Minister Radosław Sikorski — are both well known in the EU as close to Washington.

The US is strongly pushing the Ukraine EU integration just as it had been behind the 2004 failed “Orange Revolution” to split Ukraine from Russia in a bid to isolate and weaken Russia. Now Ukrainians have found evidence of direct involvement of the Belgrade US-financed training group, CANVAS behind the carefully-orchestrated Kiev protests.

A copy of the pamphlet that was given out to opposition protestors in Kiev has been obtained. It is a word-for-word and picture-for-picture translation of the pamphlet used by US-financed Canvas organizers in the 2011 Cairo Tahrir Square protests that toppled Hosni Mubarak and opened the door to the US-backed Muslim Brotherhood.[1]  The photo below is a side-by-side comparison:

Canvas, formerly Otpor, received significant money from the US State Department in 2000 to stage the first successful Color Revolution against Slobodan Milosovic in then-Yugoslavia. Since then they have been transformed into a full-time “revolution consultancy” for the US, posing as a Serbian grass-root group backing “democracy”.[2]  Who would ever think a Serbian-based NGO would be a front for US-backed regime change?

The Strange Ukraine “Opposition”

Direct sources in Kiev that I have contacted report that the anti-government protestors have been recruited with money from among university students and unemployed to come by bus into the heart of Kiev. The revealing aspect is the spectacular emergence of champion boxed Vitaly Klitschko as presumably the wise politician guiding Ukraine’s future. No doubt spending your career beating other boxers unconscious is a superb preparation for becoming a statesman, though I for one doubt it. It reminds of the choice of a low-grade Hollywood movie actor, Ronald Reagan as President. But more interesting about “opposition” spokesman Klitschko is who his friends are.

Klitschko is being backed by US Assistant Secretary of State Victoria Nuland. Nuland, former US Ambassador to NATO, is a neo-conservative married to leading neo-conservative hawk, Robert Kagan, and was herself a former adviser to Dick Cheney.[3]
Klitschko is also very friendly with German Chancellor Merkel. According to a recent Der Spiegel report, Merkel wants to support Klitschko in his bid to become Ukraine’s president in 2015.[4]

More evidence that a darker agenda lies behind the “democracy” opposition is the fact that the demands of the protestors went from demanding accession to the EU to demanding the immediate resignation of the Yanukovich government. Klitschko and the opposition used an unfortunate police crackdown on protesters to massively expand the protest from a few hundred to tens of thousands.

On December 18, the government took the wind partly out of the Klitschko sails by signing a major economic agreement with Moscow in which Russia agreed to cut the price of Russian gas exported to Ukraine by a third, down to $268.5 per 1,000 cubic meters from the current level of more than $400, and to buy $15 billion of Ukraine’s debt in eurobonds. That gives Ukraine breathing room to avoid a sovereign debt default and calmly negotiate over its future.

Endnotes:

[1]
SysAdmin, Pamphlets in Ukraine handed out during protests and pamphlets that were handed out in Egypt, December 12, 2013, accessed in
<http://12160.info/photo/photo/show?id=2649739%3APhoto%3A1376645> .

[2]
Nebojsa Malic, Invasion of the Mind Snatchers: Empire’s Revolution Business, AntiWar.com, June 24, 2011, accessed in
<http://original.antiwar.com/malic/2011/06/23/invasion-of-the-mind-snatchers/> .

[3]
NTDTV,Ukrainian Opposition Vitaly Klitschko Meets US Official Victoria Nuland, December 6, 2013, accessed in
<http://www.youtube.com/watch?v=0miz548u0WY> .

[4]
Die Zeit, Merkel unterstützt Klitschko, 8. Dezember 2013, accessed in
<http://www.zeit.de/politik/ausland/2013-12/merkel-klitschko-ukraine> .

# # # #
*F. William Engdahl, contributing author & analyst, Boiling Frogs Post <http://www.boilingfrogspost.com/> . William Engdahl is author of A Century of War: Anglo-American Oil Politics in the New World Order <http://www.amazon.com/Century-War-Anglo-American-Politics-World/dp/074532309X/sr=1-1/qid=1165788589/ref=pd_bbs_1/103-9935134-1529436?ie=UTF8&s=books> . He may be contacted through his website at <http://www.engdahl.oilgeopolitics.net/>  where this article was originally published.