Why does the dollar continue to strengthen, has it really recovered?

Why is it so hard to find somebody who understands the reason for the strengthening Dollar. I will explain my understanding of the dollar's recent improvements and it will take the future to support my analysis, as well as the reader's belief, in my understanding of the points I am about to make.

Reserve Currency Status origins.
First and most importantly, it must be understood that the dollar is the Reserve Currency of the world. Yes, there is a basket of currencies, or SDR, they have more to do with pegging currencies today and are used by the IMF and others as part of the system of world trade -and are not used directly for payments, as, is the dollar. This dollar status has existed following the Bretton Wood Conference of 1944. As the majority of gold in the world was held by the US, followed by France, due to the international payments made by states to the US during WW1 and leading up the Second World War. America found itself with an opportunity to put itself forward, as the world reserve currency, as well as establishing itself as the newly formed world banker, with the addition of the IMF and World Bank. All of these new roles including the Food and Agriculture Organization (FAO) and the Nations Relief and Rehabilitation Administration (UNRRA) came from the Bretton Wood Conference.

This has given the US a unique opportunity above all States in the world. America is able to export its Fiat Currency and monetize (or print) its dollar with impunity to some degree. For as long as it continues to be the Reserve Currency. When central bank's monetize their currencies and are limited to that nation state's borders, this QE activity results in inflation, in most cases.

The background on inflation, QE style.
Now, lets look at how this helps the US at this time, more than any period of the past. When Quantitative Easing takes place with a State's Central Bank(S) (with the exception of the US), printing new Fiat Currency, as a rule, produce results that are very predictable in its effect on the economy. The group who first receive the new fiat currency or QE, feel 'all' of the benefits, because, it has not reached the pockets of the people or purchasers. By that I mean 'below,' the Central Bank(s), Government and Finance as well as Merchant Traders of the system -and specifically in that order. Once the newly available money is borrowed into existence, this money begins to circulate and compete for the existing commodities, goods and services, which begin to drive up the costs due to competition for the limited or existing resources. Where the full damage is felt, is, in the costs of goods and services to the ordinary person, who see the costs of their goods and services rise, due to competition, the additional Fiat Currency which now circulates, dilutes and increasing the costs of those goods and services.

War as an option.
The additional mechanism or option, which must also be mentioned is War. War has historically been very productive for the State and Private Finance, for economic reasons. Firstly, you can print with impunity again. Why? Because armament spending does not reach the streets, comparatively to peace times, during the war effort, due to the concentration of heavy manufacturing, away from consumer manufacturing. People are also more likely to be asked to support the war effort by reserving their expenditure and putting their savings into State Bonds to help the effort. At the end of the War, the potential inflation can be taken off the streets before it circulates -usually, by taxation and social service cuts, (or public spending). This allows the fiscal resources to accumulate, which can be destroyed or taken out of the economy before their effects are felt. The wealthier business owners are very happy to join the State during such times, as it enriches them, during the state contract procurement opportunities that are on offer.

Summary of the above.
With this backdrop, we can now look at how the US is benefiting at the present time. Because of the dollar reserve status, the QE policy of the US can leave its country's boarders avoiding the monetizing effects, as the QE circumvents the lower levels of the internal economy and goes abroad. The US or IMF are securitizing the bailout funding and the new US monetizing policy, can only be describe as the production of monopoly money, as it goes abroad, outside the internal economy and into the international economies of the EU, et al. Why? Because it is used to purchase foreign goods and services (or assets). The IMF are in the process of buying foreign assets with these new loans offered to distressed EU states, with debtor obligation and interest costs attached. Not to mention their sovereignty, which now comes under US controls. All paid for with newly printed Dollars and Bonds, which are sterilized in the process. The IMF/World Bank's debtors, are the real potential economic recovery machine for the US economy. There are very few reasons why the US could not continue to print any amount of fiat currency, without immediate danger to itself, as the US has cleverly expanded its internal monetary system to a world US dollar system.

Potential Danger 1.
The danger, as I see it, comes from a very small number of sources, of which I will now list. The EU monetary system could compete for the Reserve Currency status or be chosen by a group of nations, who no longer trust or are unhappy with America's position and economic condition. This makes the EU's present crisis, the first and main reason for the US dollar strengthening. As long as this EU crisis diverts attention from the US -and the European wealth holders worry, money will run to the only option open between the Reserve Currency options of the US dollar or Euro. Also, I believe they are aware of this point and are choosing to support the dollar as the preferred resting place. This will be more to do with the possibility, that, the EU monetary system is now being judged as a terminal case, to the real wealth holders in the European Monetary System.

Potential Danger 2.
Next, there are countries who are developing alternatives to the dollar system. Iran have been taking steps to develop an International Exchange alternative system to compete with many of the US and UK exchange services for the trade oil exchange markets. It should be remembered what happened to SH for selling oil in Euros back in the late 80's and early 90's.

Potential Danger 3.
Finally, there is a concerted effort on the part of a number of Eastern Block States to look for an alternative mechanism for international or global payment system as well as strengthening member relationships. These organizations were originally open to Anglo-American membership but were looked at as de jure by the western powers they are now de facto and the offer of membership no longer exists.

Summary
Looking back over the above objects and trying to give a view of which of these outcomes may be on the horizon, unfortunately, my understanding of the overall macro political environment sees the second danger having the most likely outcome. If the global powers can not make use of the EU crisis to improve their position and the issues move back to the parities listed in the statement. I see a real possibility of the expansion of offensive foreign policies expanding in the Middle East. This global crisis has not -and will not, go away. Why, because the systems have not changed in their intentions or direction, it has simply moved the next stage of the game.

I little bit of reality, from the late great George Carlin in 2005, a truly missed individual. George died on the 22nd June 2008. His warnings in the show are HERE AND NOW!

Where is the Systemic Crisis now in 2010-11, are we on the way out?

In response to the heading, it depends upon how you interpret the phrase "on the way out". Let's look at the facts. Deflation has taken hold of the world's GWP to the tune of -12% in 2009-10. The US is in a deflationary spiral. Whilst the UK is showing some inflationary conditions, and is throwing sugar coated sovereign debt at the diabetic Deflationary Monster. Where do I see the outcome? Where it has been since 2008, knowing the situation of the financial system of the Central Banking Cartels. The system is bankrupt. The global financial system of capital is completely fraudulent. This is not a politically extremist statement this is an informed objective summary of the state of global finance.

Players in the Crisis.
I see the attempts by Governments and Central Banks who are trying to retake control of the failed financial system of capital, which has developed into a struggle to control and regain control and power. The Systemic controllers and currency value manipulators (Central Banking Cartels and International merchant Banks, Forex and Stock Market players et.al and Industrial Cartels) and the State system, which unlike the bracketed group have civil society to answer too in addition to those groups. The reality is, they (governments) are armatures (prefects' with a badge), part timers, in the art of government and finance. They have no control over their real masters who control the flow of money, and sit in Foundations around the world, philosophising on public policy, the state and money; old money only infer to such subjects.

Quantitative Easing Crisis Response.
So what does the future hold for the West? The Central Banking System and BIS, is doing what they were created to do, to inflate the Fiat Currencies of the world. Even if the Global GWP grows over the next year or two (from its present decline), it will be the result of the East not the West. I see more real deflation (even if Governments become the national employer). Sovereign Debt will continue to rise at an unprecedented rate over the coming years. BIS's national Central Banks with their Quantitative Easing programme have become the Caboose and the coal mine for the economic engine. Whilst this action has helped the Banksters and their minions, it will only rob the average man, woman and child of their comfort -and their futures. I said back in 2008 that, "the inflation of the 1970s will look quite tame" and it will! The interest rate issue will also need to be added to this pot, once cheap money and the BIS stop buying Bonds/Securities and look for private market buyers through improved incentives and their guarantees must be assured. The present Bond Market is already showing explosive fuses and from every marketable type of Bond that is T-Bills and Bonds.

Interest Rates.
By the BIS inflating currencies as is their primary role in life, as previously stated. Their logic is as follows. Monetary Inflation takes place annually in good times, but, whilst the system is debt ridden, QE is the natural mechanism of the central bank, allowing the debt to become both cheaper and payable. The objective is, as the servicing of debt becomes overwhelming to the groups (Banks, Commercial and public as well as private borrowers), by a QE policy you reduce the debt to the Banks and the commercial, public or government groups, with new money. This in tern reduces the value of products and services so increasing the cost to the public. Ironically, the people in turn are expected to produce the market's insulin with their transacting, which will become scarce under such deflationary conditions. Also, reducing their risk of defaulting on their recorded debt with banks et.al. With low interest rates for the banks and high interests for the public, comparatively, lenders gain some control of the system of debt default and can adjust their pressure on the risks.

Deflation and summary.
The double hammer on the cards and unaccounted for by the BIS's system of money control and inflationary policy is the [deflationary hammer]. If the system continues to see deflation and particularly if government interference can not halt the continuing deflation of real GDP, and monetary inflation continues, then, the system has a real risk of collapsing.

What is quite obvious when you consider the facts. How can you have a reduction in production -and labour value, whilst still servicing your debts at a time of inflation? This can only have one outcome under such circumstances DEFAULT. But, when that combination of excessive sovereign debt, debt ridden finance system, systemic market fraud and public debt. And yes there is more. Deflationary market economy, with an economic depression and quantitative easing programme, buying state debt and devaluing the products and services and producing inflation when real incomes are going down. Do I need to say more? Can you see these elements in our western liberal societies. Can you see the markets going back to pre 2007 excesses? I see a real possibility of 20-25% deflation in the West, in real terms on previous output, when you recall production during the credit and debt accumulation period, when both were in vogue.

The East has all the cheap labour and internal markets among themselves. The UK and US and Europe in general, though not so for Europe's Germany, will continue to have balance of trade issues, due to their poorly competitive export products, untrusted and out of vogue, at the table of exports. Equally bad too, after seeing the corruption in the West's finance system the East have no reason to trust the finance services coming to them from the West, where some have already flown off to new markets. Those fresh Eastern markets will be where the West's new Head Offices reside in the future, adding to the Hedge Fund Manager and Bankers already there. In addition to well educated and locally speaking cheap general labour, who are on tap. The developing and new Cartels will be centring themselves in the East in the future, on a flight from the West. It's worth taking a look at my 2008 posts and look for the options and choices to be made.

Where is the Crises, as Christmas is upon us?

Where is the BIS and the nation states' Central Banks and what is the economic and political conditions of the UK and US Governments, as 2009 comes to a close.

Banks and Conglomerates continue to collapse and if the condition of some of the first group of supported institutions like Fannie Mae, Freddie Mac and GMAC as well as A.I.G are an example of the crisis and bailout's effects, the system has not recovered, contrary to the Treasury Secretary's view and, is still on the edge of a precipice.

The growing number of Zombie institutions express the future of a number of the 'To Big To Fail' groups, who will require permanent infusions to keep these Zombie institutes from total collapse. These institutes will continue to drain the working man of their future, as these group's debt are passed on through taxes, much of which will be hidden in inflation and interest rate increases in the future.

It should be noted, that there will be a period of contradiction born out of the infusions and QE effects, before the negative effects express themselves. The amount of quantitative easing that has taken place, particularly in the UK and US, is likely to express itself as new credit and green shoots, you cannot put trillions of dollars into the system without mutating the effects of the systemic crisis. Inflation and the devaluation of these national currencies will result from these policies, although only when, as in Germany in the 1920s, the following conditions are met will the full effect be realised.

When quantitative easing took place in Germany as a result of reparations, forced on Germany from 1919-23 following WW1. The result of quantitative easing led to hyperinflation. The act of QE is the only act, which has the potential of effecting currency values, leading to hyperinflation. Whilst the additional Fiat Currency stays off the streets, the effects will not be felt. But, if that currency goes outside the commercial environment and into the general economy, the only way to stop its negative effects on the economy, is to take the QE out of the system as taxes -and not allow it rotate or be reinvested into the economy. As this will not happen in reality, the effects will be to over inflate the value of goods and services.

Whilst the German people were fearful they stored their cash and held back on spending the QE, which locked away the natural effects of QE on the system. The false idea that quantitative easing had limited effects on the economy, was the general view at the beginning. The problem came when the people felt things were beginning to improve. The German People's actions in spending their stored cash, triggered the beginning of the hyper-inflationary conditions, which spiralled out of control, as QE followed more QE.

The following video expresses the conditions surrounding the German crises at that time, which led to their national economic collapse. By considering the circumstances or causality one can see the potential dangers, whilst not as catastrophic, one would hope, many millions will loose their livelihoods and or homes. And, with a real risk of Economic Depression looming. Governments are trying to re-inflate bubbles and promote new bubbles to delay the effects of the crisis, none of these policies are solving the systemic crisis. The system under such conditions, has, on more than one occasion, used war to purge and redevelop the system to produce new markets and deliver the interests of the powerful oligarchs. The present foreign policies, do little to make one feel confident, that these options aren't under consideration of further expansion in the future.



The difference between the story of the quantitative easing resulting from Germany's reparations and today, is, that the reparations of today, are set by the Governments on behalf of the International Finance System and the interest of International Corporations. In addition too the long term interests of the US and UK government's Foreign Policies and national interests.

Are things returning to 'bussines as normal'?

The UK Government in support the US Government and FED Policies, are stating, there is more than green shoots, there is a developing crop growing from the systemic crisis of 2008-9. Can this be believed? Well, for those looking for a comforting bed-time story to make them feel good, for that one illusive good-night's sleep, maybe they should think before swallowing the following reality pills. These videos should not be watched until the morning. The reality of the situation and the Policies of the UK and US have done nothing, but slow and deepen the agony these economies are experiencing. Their destination is being assured by these policies, not just a recession but depression, equal to, if not greater than, the Great Depression.

If you were over-leveraged in your private and public life, you would at best, be suffering at the hands of your creditors. You would then be expected to come up with a plan to repay those debts, with demands by your creditors for self control and consistency. This would require financial constraints and no more debt accumulation and, a real reduction in spending. The size of the debt, also has an exponential service debt issue. The bigger the debt the greater and longer those accruing interest charges will be impacting on your leveraged position. Would you then plan on a 'new debt policy' to cover the old debt issues? No, of course not! So, why do the UK and US governments think this is the way forward? Passing the infusions to the group who have been exposed. The answer to that question, who are the group who will pay for these policies, is, it will not be those responsible. It will be the tax payer, the low income families, the retired, as well as the Unemployed who will pay for the system's collapse!

The Mantra of job protection and economic stability covers all decision making and infusions to the Banks, et.al and the accruing national debt. How will these policies express themselves in the future, as we prime the system for the next crisis? Inflation and more Inflation was well as Taxes. Debt and Financial Fraud has put the system of finance and many economies where they are today. Can you see more debt resolving the system's crises. The Fraud in the system needs to be exorcised out of the system, for the future of a national and international trading system. Well, welcome to the UK and US economies. Who are the two Government's solving the problem and how. Oh yes, by giving trillions to those responsible and removing all risks from their future speculation and passing on the whole issue of future leverage and speculative risk to the people. In fact, there's no risk for the chosen few RBS, Lloyds, Goldman Sachs and J P Morgan/Morgan Chase This practice of support has helped to shift the balance of power in the lending markets

On the Edge with Max Keiser - 23 October 2009 (2/4)

On the Edge with . . . Paul Craig Roberts (3/4)



On the Edge with . . . Paul Craig Roberts & The New Welfare Queens (4/4)

On the Edge with . . . Paul Craig Roberts & The New Welfare Queens (4/4)

Max Keiser - The Original Death of the Dollar



On the Edge with Max Keiser - 16 October 2009 (2/2)

What is their direction, in the future of Banks and Capital?

I said back in October 2008 where I believe we will see the Markets for Banks and Capital and Investment, as a result of the systemic crisis, which continues to develop, well, here are some examples:

George Soros who is quoted as saying "I'm having a Good Crisis". David Harding's success and future Strategy for his company's future, looks to the East for new markets and away from the recessionary States of the West



Geithner Oligarchs and Economist William Engdhale

Are we seeing the 22nd December 1913 at its next level?

Are we looking at what the Finance Market’s call, the Bottom Out position? Is up the only way now? The present situation is too serious for me not to state my own opinions. This action by the governments, to bail out the Banks will feed the group that collectively expose the Nature of the Banking world.

At the risk of destroying the credibility of myself and my Site, if my worst suspicions were correct, we could be looking at the beginning of the end of the Finance System not just the beginning of a change in the system. If the sums or debt are as bad as they may well be, the debt in the system could be above 99:1 or hugely above this figure. No amount of newly printed money will restart the system under a call to Tax Payers around the world, to take hold of such a debt ridden system. Governments will not get or share the facts as various groups attempt to hide the facts from one-another. The system is not recoverable without re-rationalisation of debt and loses. In this situation my opinion is to allow the system to go down to its real position of value of tangible commodities as the only way to avoid an environment primed for Hyper Inflation in the future of many States.

My best/worst position in concerns are that, we will still see the outcome of Major Recessions and potentially Hyper inflation in a number of Western Liberal Democracies and their Associative States, as well as other Economies around the world. This has been made worse by the global Government Lending to the failed system of finance. Now, that the system has the resources, the Banks with this pregnant pause, have shown they will not support the Finance Market's. Their past and present actions, lead me to believe their next move after recovery, will be to find new markets away from the areas of depression and collapse, whilst looking for profits. Not immediately, but in an insidious and covertive manner over the next five years. Inflation and Depression do not have the Bank's profit margins in them.

The present banking system will only invest where profit and growth exists. We only have to look at the crisis to see, that, even under systemic pressure and an injected liquidity to the environment, as well as the sale of the Markets bad debts, bought by governments', as Assets and Share purchases. The future is bleak for many Governments’ who try to manage the peoples’ economy through banks. I dread to think of the Climate issues we are seeing as well as those that are developing, as growth requirement of the New Order continue to take effects. The picture of our future will be painted by both forces clashing massively in the near future.

So what is next? I feel the Banks but less so Finance Markets have taken their biggest gable yet -and won over governments. They will only restart the machine when it suites their interests. By the end of the finance crisis for the banks and their Colonic Purging of debt (Dead Assets etc.), Sub-Prime Assets and Equity and Liquidity Requirements, which we see through the collection of government bailouts. We are now seeing their position improve with these Government Purchases of debt and Colonic waist. All this appears to be a logical manoeuvre by Banks under the present conditions, if One can control the system. Let's not forget who the professionals in this crisis are.

As their terminal experience appears to of passed and the poison venom consumed by Governments that venom from banks and the finance markets have been swallowed. We will begin to see the Asian Industrial Markets and The Adriatic Regions of Eastern Europe as the next short term fertile ground for investment. Banks will leave the Recession Markets without the support they need to recover. The Banks will say that the Recession belongs to the Governments of the world, whilst they get on with looking for growth markets. We’ll see if they are prepared to support those who pulled them from the abyss.

For those who can be bothered to read this summary of our position in my view. Look to the East for the location of Capital and Development in the future of the Capital Markets.

My last view can not be substantiated by a single peace of evidence, as there are many elements to this perspective. The European Monetary System may be on its way out. Much to the long term objective of certain groups and their ideological long term interest are playing themselves out. With the continuous developing power of Europe, as a collective Monetary System and the Euro as well as its Markets. There will be those who would celebrate the removal of this collective group in the present form. So, watch this subject in the short and long term crisis ahead.

We have by concurrence and silence supported the present failed system. We have given life and renewed vitality to a system that has failed and will fail again, due to its systemic nature and appetite. Leaders and intellectuals have warned us repeatedly through history. He who controls the flow of money controls the world.