Failing Fiat Currency: Now Middle Eastern Oil Exporters Want Unified Currency Like a Euro
By Elaine Meinel Supkis
Using the American dollar as the "fiat" currency of the world off of which all other currencies are measured, is beginning to shake at the base. As we exploited our powerful position just like all previous empires exploited their control over currency matters, we begin to cheat everyone, tempted to cut corners so we can rake in goods with increasingly worthless script. This is why no currency stays on top for more than 100 years no matter how big the empire.
From the Middle East Forex:
The Gulf states hope to reach agreement on the principles of a monetary union next year and press ahead with preparations for a single currency along the lines of the euro, Bahrain Monetary Agency Governor Rasheed Al Maraj said in an interview released yesterday. He told the Financial Times Deutschland in an interview to be published today but released in advance:And so it goes. Iran is opening a bourse where it will trade energy using only euros as the fiat currency. This is because the euro has been more valuable than the dollar. The Japanese keep the yen artificially cheap by buying up much of the excess paper money America merrily prints. This is becoming rapidly more and more difficult to do since paper printing can, as Germany proved in the mid 1920s, easily printed into infinity.
"We are in the process of drawing up the convergency criteria. Our aim is to reach agreement on the details by 2006."
As is the case in the euro area, countries wanting to join the single Gulf currency would have to fulfil certain economic conditions.
Obviously, the oil selling nations are getting annoyed with our tendency to float our curreny on their oil. Right now, they suckered us into providing them with full military protection from each other and whoever, but this expensive project projecting our power is now pulling us under.
Despite the impending collapse of American fiat supremacy, Wall Street is acting as if we are in the old system whereby the entire planet has to prop us up, financially, if they want to keep our currency valuable so they can use it instead of euros. From Money.CNN:
"The market is ignoring higher oil prices and focusing on the good earnings over the last few days, especially from Microsoft and the other techs," said Peter Cardillo, chief market analyst at S.W. Bach & Co.See? The obviously onimous bad news is good news because we will simply make interest rates way below the rate of inflation. Americans aren't saving anything, anymore, because interest rates are ridiculous, thanks to the world buying up frantically all our red ink in the hope of keeping our paper script with some value! So we imagine this nifty theft of goods will continue, unabated, forever.
Investors may have also taken comfort from a weaker-than-expected gross domestic product growth (GDP) report, in that it played into hopes that the Federal Reserve can end its rate-hiking campaign sooner rather than later.
I don't know the exact date when this will collapse but the two places to look are the Middle East and China and I see storm clouds over both places.
Thanks to the Japanese, Greenspan could pretend that interest rates are like a gas pedal, you press down and drive them higher, the car slows down (a preverse car!) and if you let up and drop interest rates, the car speeds up! Whoopee! Everyone bought into this ridiculous idea. So, to keep the economy afloat when it was sinking, he set interest rates so the economy could boom...When there was no economic reason to create a boom. This boom will bust us all because it pulled everyone and everything into a vast, gigantic pit of debts that are now nearly impossible to climb out of, like the gravity pool of a black hole.
From Associated Press:
The economy grew at only a 1.1 percent annual rate in the fourth quarter of last year, the slowest pace in three years, amid belt-tightening by consumers facing spiraling energy costs.This "growth" means mostly buying foreign goods. Period. We went on a buying binge which is why our trade deficit shot through the roof, going over $800 billion this year! This is impossible to sustain.
Even with the feeble showing from October through December, the economy registered respectable overall growth of 3.5 percent for all of 2005 — a year when business expansion was undermined by devastating Gulf Coast hurricanes.
The purchase of energy in particular, isn't good news. That grew, a lot, in dollar denomination. But we didn't use more energy, everyone, absolutely everyone, is frantically trying to cut back and this causes a side boom in energy-efficiency purchases which will peter out as the money runs out for the lower classes can't buy energy efficiency or energy soon enough!
I am so lucky I own an extensive woods and heat my home with it.
Relations with Canada and Mexico, our neighbors and nearest trade partners, deteriorates as our own situation deteriorates. From AP:
It has been a trying week for Mexico-U.S. relations: a tense border confrontation between U.S. agents and apparent drug traffickers, a Mexican group's offer to print maps of the Arizona desert for illegal migrants and an exchange of terse diplomatic notes.The GOP is getting very nervous about the coming two elections because they just might be run out of office if the Democrats can get their act together (gads!). They know, the average American is very aware that their jobs bring in less and less because bosses can hire illegal aliens under the table and this is undermining wages in many industries such as home construction.
The administration of Mexican President Vicente Fox has its share of quarrels with other countries, but this promised to be one of the trickiest — involving the country's northern neighbor and largest trading partner at a time when the U.S. Congress is debating immigration reform.
For Mexico, migration to the United States is a mainstay of the economy; U.S. officials, on the other hand, see the issue in terms of national security and border safety.
So, just like in the twenties when we shut down immigration from Europe to a great degree and eliminated it from Asia, the race to protect the Homelands will now begin to pick up steam. And we will discover the flat world isn't flat at all, it is very round.
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