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‘Millions to rebel’ over ID cards
Robert Winnett and David Leppard
The forecast is made in documents released by the Home Office under the Freedom of Information Act. The papers show ministers expect national protests similar to the poll tax rebellions of the Thatcher era, with millions prepared to risk criminal prosecution.
The government is predicting that some 15m people will revolt against Tony Blair’s controversial ID card scheme by refusing to produce the new cards or provide personal data on demand.
Opposition MPs said the new documents proved their case that the programme would never work. David Davis, the shadow home secretary, said: “This will cripple the system. Fifteen million is a massive number. What the Home Office is accepting in private, but refuses to accept in public, is that a massive number of ordinary law-abiding citizens simply will not go along with their scheme.”
Davis, whose party’s policy is to scrap the cards, added: “This will render it completely useless as a security or check mechanism of any sort.”
The documents, quietly released during parliament’s Easter break, also show that the government is planning to make ID cards compulsory in 2014, despite the expected revolt.
The first cards are due in 2009, alongside new passports. Labour has said it will make the scheme compulsory if it wins the next election.
Moscow signals place in new world order
Julian Borger, diplomatic editor
Wednesday April 11, 2007
The news that an arms race may be underway once more between Washington and Moscow has brought back some unpleasant memories, but it is also a pointer to a more complicated future.
The Kremlin's threat to counter US missile defence installations in eastern Europe is a sign that Russia will no longer acquiesce in a Pax Americana.
What seemed in the west like a post cold-war honeymoon in the nineties is remembered more as a rape by Moscow's new leaders. In their eyes Russia was taken advantage of at a moment of economic weakness by Washington, London and a band of unscrupulous Russian oligarchs. A new Russian foreign policy, published by the government in recent days makes it clear that Moscow believes the era of American hegemony is now over.
"The myth about the unipolar world fell apart once and for all in Iraq," the review says. "A strong, more self-confident Russia has become an integral part of positive changes in the world."
The policy document is an elaboration of an anti-American polemic delivered two months ago by Vladimir Putin to a roomful of shocked western diplomats in Munich. "The Munich speech may be an event ... we look back to and say: that's when everything changed, but we should have seen it coming," said Cliff Kupchan, a former US state department official now at the Eurasia Group, a political risk consultancy.
Around the world, Putin's Russia has been serving notice for some time it is prepared to challenge US leadership of the international community. It is beginning to push back hard against missile defence and Nato's eastward expansion. It has resisted tough sanctions against Iran, and so far refused to go along with a UN-brokered plan to hand Kosovo autonomy. Moscow is also signalling it wants to be treated as a serious player in the Middle East, meeting Hamas officials at a time they are being ostracised by the US and western Europe.
While there are cold war echoes in the Russian rhetoric over missile defence and in the intractability of some of the disputes in the UN security council, there are more differences than similarities between today's friction and the constant rivalry of the Soviet era.
For one thing, disputes are no longer played out against a backdrop of mutually assured destruction. Most US and Russian intercontinental nuclear missiles are pointing at each other, but they are not on a hair-trigger. Nor are the two countries engaged in a global ideological struggle. Washington may be in the throes of intellectual ferment over the Bush doctrine, of defeating extremism by exporting democracy, but the Putin doctrine is by contrast, an exercise in pragmatism. It stresses the importance of national sovereignty and the primacy of the UN in resolving disputes. The common theme is Moscow's demand for its views to be taken into account.
The roots are economic, and they reach back into the era of Boris Yeltsin, when an impoverished Russia offered itself as a eager junior partner to the west. That period is seen by the Kremlin occupants as a national humiliation. "What drives Putin's Russia is an obsession forged in the nineties," said one diplomat. "They detest its instability and the weakness it brought to Russia."
Soaring oil and gas prices have transformed the environment. Russia is no longer a debtor nation. A new self-assuredness was on show when the Russians hosted the G8 meeting at St Petersburg in 2006. "Suddenly, they had all the right suits, watches and the right cars," said a western official who was there.
Along with all the trappings of western affluence came a new determination that Russia would not be absorbed by the west. The Yeltsin government toyed with the idea of joining the European Union, but that idea is now dead. In an article to mark the EU's 50th anniversary, Mr Putin stated openly that Russia has "no intention of either joining the EU or establishing any form of institutional association with it".
Moscow's relationship with Europe is now defined by its role as the continent's oil and gas supplier. Its tactics have been those of a giant corporation seeking to maximise its market power. Rather than deal with the EU as a whole, Russia has negotiated individual deals with different European countries - agreeing with Germany the construction of the Nord Stream pipeline under the Baltic, and the extension of another gas pipeline to Hungary. Moscow has thus undermined the EU's communal efforts to reduce its dependence on Russia by bringing Caspian gas through Turkey.
After Moscow turned off the gas tap to Ukraine, Belarus and Lithuania, there are fears that it will ultimately try to translate its market power over Europe into a new political hegemony. But Dmitri Trenin, a former Russian military strategist, argues those fears misunderstand the Putin era. Russia, he says, is simply striving to extract maximum profits from its customers.
Says Neo-Cons would have created a false flag to justify war had it not
been for WTC attack, questions official story
April 13, 2007
Paul Joseph Watson
A GOP insider, former Bush 41 speechwriter and close friend of the Bush
family writes in his new book that before 9/11, the Neo-Cons in control
of the Bush administration were eager to seize upon a manufactured
provocation to go to war - just as LBJ had done with the Gulf Of Tonkin
in 1965, and questions the official 9/11 story.
Victor Gold is a veteran GOP campaign operative who worked closely with
George H.W. Bush on his presidential campaign and also co-wrote his
autobiography. He was also tasked with writing the profiles for Dick and
Lynn Cheney for the official Inauguration program in 2001.
In his new book, Invasion of the Party Snatchers: How the Neo-Cons and
Holy Rollers Destroyed the GOP , Gold slams the current administration
and exposes their zeal for creating a pretext for a war that was planned
many years in advance.
Gold confirms that war in Iraq was decided upon from day one, and that a
fake pretext was readied and anticipated before 9/11 happened. Though
Gold still pins the blame on Al-Qaeda, in acknowledging the fact that
the Bush administration would have staged a false flag attack anyway had
it not been for 9/11, he is one small step away from intimating that the
attacks on the WTC and Pentagon were an inside job.
"There would be regime change in Iraq," writes Gold, "All that the
Neo-Con war hawks, in the Bush administration and out, needed to bring
it about was an excuse to invade. Looking back a half-decade and knowing
what we now know, who could doubt that if al Qaeda hadn't obliged the
Neo-Cons with 9/11, the Kristolites would have torn a page out of
history and, with Rupert Murdoch playing the role of William Randolph
Hearst, given us a reprise of the sinking of the Maine?"
William Randolph Hearst was the founder of Hearst Publishing, which
today owns Popular Mechanics, the government's foremost mouthpiece for
selling the official 9/11 story . Look in the encyclopedia and Hearst is
the very definition of yellow journalism . He colluded with the McKinley
government to manufacture and propagate through his chain of newspapers,
the hoax that the Spanish had sunk the USS Maine in 1898, an event that
provided the catalyst for the Spanish-American war.
"Had it not been for 9/11, the Bush White House, determined to go to
war, would no doubt have seized on some synthetic provocation, on the
order of the one LBJ used to push through the Gulf of Tonkin Resolution
in 1965," Gold writes.
The Gulf of Tonkin incident, where US warships were apparently attacked
by North Vietnamese PT Boats, an incident that kicked off US involvement
in the Vietnam war, was a staged event that never actually took place.
Declassified LBJ presidential tapes discuss how to spin the non-event to
escalate it as justification for air strikes and the NSA faked
intelligence data to make it appear as if two US ships had been lost.
According to the ZTalk blog , in his book Gold also, "Takes pains to
point out the holes in the official line (of 9/11) and has some acerbic
comments about Israel's peculiar responses."
For Gold, a lifetime Bush family friend and a GOP darling, to go
turncoat and detail how the Neo-Cons were feverishly preparing for a
false flag event to justify their pre-planned war, while questioning the
official 9/11 story, is a resounding slap in the face to those who claim
that 9/11 couldn't have been an inside job because whistleblowers would
foil the conspiracy.
Hundreds of experts and professionals in all sectors of government, the
military, science and industry have blown the whistle, but whenever they
attempt to garner media attention, they are harangued as anti-American
traitors by loudmouth TV shills who are on the payroll of the very
criminals that carried out 9/11.
It took insiders like E. Howard Hunt nearly 50 years to spill the beans
on the fact that Kennedy was killed by the government, and yet we
already have a plethora of respected individuals sounding the clarion
call about 9/11 being an inside job, and in the very least - as in the
case of Victor Gold, slamming the fairy tale that is upheld as the
government's official story.
As expected, North Dakota has become the second state in the U.S. to ban
the forced implanting of radio frequency identification (RFID) chips in
Computer World | April 13, 2007
The two-sentence bill, passed by the state legislature, was signed into
law by Gov. John Hoeven last Wednesday. Essentially, it forbids anyone
from compelling someone else to have an RFID chip injected into their
skin. The state follows in the steps of Wisconsin, which passed similar
legislation last year.
"We need to strike a balance as we continue to develop this technology
between what it can do and our civil liberties, our right to privacy,"
Hoeven said in an interview. He emphasized that the law doesn't prohibit
voluntary chipping. Military personnel who want an RFID chip injected so
they can be more easily tracked will still be allowed to get a chip.
There are also potential uses for the technology in corrections or in
monitoring animals, he noted.
Marlin Schneider, the state legislator who sponsored the Wisconsin law,
said he is glad to see an antichipping legislation trend. However, such
statutes don't go far enough to curb the ability of private sector
retailers and manufacturers to "implant these things into everything we
Ultimately, with RFID tagging systems, corporations "will be able to
monitor everything we buy, everywhere we go and, perhaps as these
technologies develop, everything we say."
But Michael Shamos, a professor who specializes in security issues at
Carnegie Mellon University in Pittsburgh, believes the law is too vague
to do much good. For instance, it only addresses situations where a chip
is injected, even though RFID tags can also be swallowed. And it doesn't
clearly define what a forced implant really is; someone could make
chipping a requirement for a financial reward.
"Suppose I offer to pay you $10,000 if you have an RFID [chip]
implanted?" he asked. "Is that 'requiring' if it's totally voluntary on
The idea behind the law isn't bad, but "it looks hastily drawn and will
have unpredictable consequences," said Shamos.
From the Desk of Judicial Watch President Tom Fitton:
Judicial Watch Releases New Poll on Illegal Immigration
In today’s contentious political climate, it is difficult to achieve a substantial majority on any given issue. Illegal immigration appears to be an exception.
According to a recent poll sponsored by Judicial Watch, in partnership with Zogby International, the vast majority of likely voters want more emphasis on law enforcement to address the illegal immigration crisis. An even greater majority of likely voters are opposed to so-called “sanctuary policies” that reward illegal alien lawbreakers. (Earlier this week, CNN’s Lou Dobbs highlighted the results of Judicial Watch’s poll. Click here to watch the report.)
While the basic data from the poll are compelling in their own right, when you dig a little deeper, you find some really interesting results. Here is a breakdown of some of the statistics.
Overall, 66% of likely voters believe that more emphasis should be placed on law enforcement when addressing the issue of illegal immigration, including 51.6% of Hispanics and 56.8% of self-described political “liberals.” Only 5% said the emphasis on law enforcement should be diminished, including 3% of Hispanics.
79% believe public officials should not use taxpayer funds to operate day laborer sites that help illegal aliens, including 71.9% of Hispanics and 70% of self-described political “liberals.”
72% of likely voters believe local law enforcement officers should help enforce federal immigration laws, including 40% of Hispanics and 55% of self-described political “liberals.”
These numbers represent staggering majorities for a no-nonsense approach to addressing the illegal immigration crisis. Virtually every voter demographic – even those supposedly most sympathetic to illegal aliens – want our illegal immigration laws to be strictly enforced.
In other words, when it comes to illegal immigration, the American people speak with one voice. Why aren’t politicians listening?
On Monday, April 11, President Bush was in Yuma, Arizona, an illegal immigration “hot zone,” to, once again, pitch his plan for addressing the crisis at our southern border. A large component of the president’s strategy involves a “temporary worker program” for illegal aliens who are already here. We know from government documents we’ve previously uncovered that such proposals are almost certain to worsen the dangerous and chaotic situation on our border with Mexico as illegals flood across to take advantage of the program. And given these poll numbers, it is a far cry for the strict law-and-order approach most Americans seems to favor.
Meanwhile, in cities across America, local public officials continue to implement so-called “sanctuary policies” that reward illegal aliens, such as taxpayer-funded day laborer sites that help illegal aliens find employment, and policies that prohibit police officers from inquiring about an individual’s immigration status and cooperating with federal immigration authorities.
The results of Judicial Watch’s poll are impossible to ignore, especially if you are a politician whose livelihood depends on securing votes. And this poll undermines the myth that Hispanics support leniency for illegal alien lawbreakers. When it comes to handling the illegal immigration problem, politicians and public officials need to get themselves in line with both the law and the views of the overwhelming majority of American people.
Milk and Monsanto... Organic Consumers Association March 18, 2007
Over 20 years ago, experimental recombinant Bovine Growth Hormone (rBGH)
dairy products made by Monsanto were sold illegally to students, staff,
faculty, and patients at the University of Wisconsin.
At the time, Dr. David Kronfeld showed that much of the published
research on rBGH was fraudulent. He was ridiculed by the drug companies,
and he was ultimately demoted and his career nearly destroyed. The
passage of time, however, has proven him correct.
For two decades, consumer groups have worked to expose the dangers of
rBGH to the public. A recent breakthrough came with the May 2006
discovery that expectant U.S. mothers who consumed rBGH milk experienced
problems as a result of elevated levels of Insulin-Like Growth Factor
One, which has been linked to cancer.
A year later, California Dairy Inc. (CDI) announced that it would be
going rBGH-free as of August 1, 2007 as a result of "consumer demand."
CDI processes 45 percent of California's milk. Other dairy companies,
and a number of large grocery store and restaurant chains, have also
On February 20, 2007 a petition was submitted to the FDA on behalf of
the Cancer Prevention Coalition, Family Farm Defenders, and the Organic
Consumers Association, requesting a suspension of rBGH approval pending
a reevaluation of its human health hazards.
Doomsday for the Greenback
By Mike Whitney
“Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money.” Daniel Webster
04/10/07 "ICH" -- -- -The American people are in La-la land. If they had any idea of what the Federal Reserve was up to they’d be out on the streets waving fists and pitchforks. Instead, we go our business like nothing is wrong.
Are we really that stupid?
What is it that people don’t understand about the trade deficit? It’s not rocket science. The Current Account Deficit is over $800 billion a year. That means that we are spending more than we are making and savaging the dollar in the process. Presently, we need more than $2 billion of foreign investment per day just to keep the wheels from coming off the cart.
Everyone agrees that the current trade imbalances are unsustainable and will probably trigger major economic disruptions that will thrust us towards a global recession. Still, Washington and the Fed stubbornly resist any change in policy that might reduce over-consumption or reverse present trends.
The investor class loves big deficits because they provide cheap credit for Bush’s lavish tax cuts and war. The recycling of dollars into US Treasuries and dollar-based securities is a neat way of covering government expenses and propping up the stock market with foreign cash. It’s a “win-win” situation for political elites and Wall Street. For the rest of us it’s a dead-loss.
The trade deficit puts downward pressure on the dollar and acts as a hidden tax. In fact, that’s what it is--a tax! Every day the deficit grows, more money is stolen from the retirements and life savings of working class Americans. It’s an inflation bombshell obscured by the bland rhetoric of “free markets” and deregulation.
Consider this: In 2002 the euro was $.87 on the dollar. Last Friday (4-6-07) it closed at $1.34-- a better than 50% gain for the euro in just 4 years. The same is true of gold. In April 2000, gold was selling for $279 per ounce. Last Friday, at the close of the market it skyrocketed to $679.50---more than double the price.
Gold isn’t going up; it’s simply a meter on the waning value of the dollar. The reality is that the dollar is tanking big-time, and the main culprit is the widening trade deficit.
The demolition of the dollar isn’t accidental. It’s part of a plan to shift wealth from one class to another and concentrate political power in the hands of a permanent ruling elite. There’s nothing particularly new about this and Bush and Greenspan have done nothing to conceal what they are doing. The massive expansion of the Federal government, the unfunded tax cuts, the low interest rates and the steep increases in the money supply have all been carried out in full-view of the American people. Nothing has been hidden. Neither the administration nor the Fed seem to care whether or not we know that we’re getting screwed --it’s just our tough luck. What they care about is the $3 trillion in wealth that has been transferred from wage slaves and pensioners to brandy-drooling plutocrats like Greenspan and his n’er-do-well friend, Bush.
These policies have had a devastating effect on the dollar which has been slumping since Bush took office in 2000. Now that foreign purchases of US debt are dropping off, the greenback could plunge to even greater depths. There’s really no way of knowing how far the dollar will fall.
That puts us at a crossroads. We are so utterly dependent on the “charity of strangers” (foreign investment) that a 9% blip in the Chinese stock market (or even a .25 basis point up-tick in the yen) sends Wall Street into a downward spiral. As the housing market continues to unwind, the stock market (which is loaded with collateralized mortgage debt) will naturally edge lower and foreign investment in US Treasuries and securities will dry up. That’ll be doomsday for the greenback as central banks across the planet will try to unload their stockpiles of dollars for gold or foreign currencies.
That day appears to be quickly approaching as the 3 powerhouse economies are overheating and need to raise interest rates to stifle inflation. This will make their bonds and currencies all the more attractive for foreign investment; diverting much needed credit from American markets.
Just imagine the effect on the already-hobbled housing market if interest rates were suddenly to climb higher to maintain the flow of foreign capital?
The ECB (European Central Bank), Japan and China are all cooperating in an effort to “gradually” deflate the dollar while minimizing its effects on the world economy. In fact, China even waited until the markets had closed on Good Friday to announce another interest rate increase. Clearly, the Chinese are trying to avoid a repeat of the 400 point one-day bloodbath on Wall Street in late February ‘07.
Japan has also tried to keep a lid on interest rates (and allowed the carry trade to persist) even though commercial property in Tokyo is “red hot” and liable to spark a ruinous cycle of speculation.
But how long can these booming economies avoid the interest rate hikes that are needed for curbing inflation in their own countries? The problem is, of course, that by fighting inflation at home they will ignite inflation in the US. In other words, by strengthening their own currencies they weaken the dollar--it’s unavoidable.
This is bound to hurt consumer spending in the US which will ripple through the entire global economy.
The problems presented by the falling dollar can’t be resolved by micromanaging or jawboning. In truth, there’s no more chance of a “soft landing” for the dollar than there is for the over-bloated real estate market. Greenspan’s bubble economy is headed for disaster and there’s not much that anyone can do to lessen the damage. As housing prices fall and homeowners are no longer able to tap into their equity, consumer spending will slow, the economy will shrink and the Fed will be forced to lower interest rates.
Unfortunately, at that point, lowering rates won’t be enough. Interest rates need at least 6 months to take hold and, by then, the steady drumbeat of foreclosures and falling real estate prices will have soured the public on an entire “asset class” for years to come. Many will see their life savings dribble away month by month as prices continue to nose-dive and equity vanishes into the ether. These are the real victims of Greenspan’s low interest rate swindle.
The Federal Reserve is fully aware of the harm they have inflicted with their low interest rate boondoggle. In a 2006 statement the Fed even acknowledged that they knew that trillions of dollars in speculation was being funneled into the real estate market:
"Like other asset prices, house prices are influenced by interest rates, and in some countries, the housing market is a key channel of monetary policy transmission."
“Monetary transmission” indeed?!? Trillions of dollars in mortgages were issued to people who have no chance of paying them back. It was a shameless scam. Still, the policy persisted in a desperate attempt to keep the US economy from collapsing into recession. The upshot of this misguided policy was “the largest equity bubble in history” which now threatens America’s economic solvency.
Author Benjamin Wallace commented on the Fed’s activities in an article in the Atlantic Monthly, “There Goes the Neighborhood: Why home prices are about to plummet—and take the recovery with them”:
"Let's assume for a moment that enough people get fooled, and the refinancing boom gets extended for another year. Then what? The real problem hits. Because if you think Greenspan's being cagey on refinancing, the truth he's really avoiding talking about is that we're in the midst of a huge housing bubble, on a scale only seen once before since the Depression. Worse, the inflated housing market is now in an historically unique position, as the motor of the rest of the economy. Within the next year or two, that bubble is likely to burst, and when it does, it very well may take the American economy down with it."
Or this from Robert Shiller in his “Irrational Exuberance”:
"People in much of the world are still overconfident that the stock market, and in many places the housing market, will do extremely well, and this overconfidence can lead to instability. Significant further rises in these markets could lead, eventually, to even more significant declines. The bad outcome could be that eventual declines would result in a substantial increase in the rate of personal bankruptcies, which could lead to a secondary string of bankruptcies of financial institutions as well. Another long-run consequence could be a decline in consumer and business confidence, and another, possibly worldwide, recession”.
If it is not handled properly, the housing collapse could result in another Great Depression. America no longer has the (manufacturing) capacity to work its way out of a deep recession. While the Fed was sluicing $11 trillion into the real estate market via low interest loans; America’s manufacturing sector was being carted off to China and India in the name of globalization. Without capital investment and increased factory production, economic recovery will be difficult if not impossible. The so-called “rebound” from the 2001 recession was due to artificially low interest rates and easy credit which inflated the housing market. It had nothing to do with increases in productivity, exports, or paying off old debts. In other words, the “recovery” was not real wealth creation but simply credit expansion. There’s a vast chasm between “productivity” and “consumption” although Greenspan never seemed to grasp the difference.
A penny borrowed is not the same as a penny earned—although both may cause a slight bump in GDP. Greenspan’s attitude was aptly summarized by The Daily Reckoning’s Addison Wiggin who said, “GDP measures debt-fueled consumption--it really only measures the rate at which America is going broke”.
America’s biggest export is its fiat-currency which foreigners are increasingly hesitant to accept.
Can you blame them?
They have begun to figure out that we have no way of repaying them and that the “full faith and credit” of the United States is about as reliable as a Ken Lay-managed 401-K retirement plan.
The fragility of the US economy will become more apparent as Greenspan’s housing bubble continues to lose air and consumer spending remains flat. As we noted earlier, home equity withdrawals are drying up which will slow growth and discourage foreign investment. The meltdown in subprime loans has drawn more attention to the maneuverings of the banks and mortgage lenders and many people are getting a clearer understanding of the Federal Reserve’s role in creating this economy-busting monster-bubble.
The 10% to 20% yearly increases in property values are unprecedented. They are “pure bubble” and have nothing to do with increases in wages, demand, productivity, capital investment or GDP. It was all “froth” generated by the world’s greatest Frothmeister, Alan Greenspan.
As Addison Wiggin notes, “There is only one real source of wealth: a healthy and competitive environment involving the exchange of goods coupled with control over deficit spending.”
Elites at the Federal Reserve and in the Bush administration have steered us away from this “tried and true” course and put us on the path to debt and catastrophe. It won’t be easy to restore our manufacturing base and compete again in the open market, but it must be done. Strong economies require that their people produce things that other people want. This is a fundamental truism that has been lost in the smoke and mirrors of Greenspan’s shenanigans at the Fed.
Regrettably, we are probably facing a decades-long economic downturn in which the dollar will weaken, stocks will fall, GDP will shrivel, and traditional standards of living will decline.
The trend-lines in the real estate market will most likely be the inverse of what they have been for the last 10 years. This will dramatically affect consumer spending (70% of GDP) and put additional pressure on the dollar.
The dollar is already in big trouble--the only thing keeping it afloat is foreign purchases of US debt by creditors who don’t want to be left holding trillions in worthless paper.(US debt is Japan’s single greatest asset!) These “net inflows” have created a false demand for the dollar which will inevitably dissipate as central banks continue to diversify.
Last week the IMF issued a warning that there would have to be a “substantial” decline in the dollar to bring the trade deficit to sustainable levels. That, of course, is the intention of the Fed and Team Bush—to reduce the debt-load by deflating the currency. It’s a crazy idea. No one destroys the buying power of their currency to pay off their debts. It just illustrates the recklessness of the people in charge.
Also, on March 20, 2007 the Governor of China’s Central Bank Zhou Xiaochuan announced “that China will not accumulate more foreign reserves and will cut a small amount of current reserves for the formulation of a new currency agency”. Zhou’s statement is a hammer-blow to the dollar. The US needs roughly $70 billion in foreign investment per month to cover its current trade deficit. China is one of the largest purchasers of US debt. If China diversifies, then the dollar will fall and the aftershocks will ripple through markets across the world.
The Chinese are very careful about how they word their economic statements. That’s why we should take Zhou’s comments seriously. Three weeks ago he issued an equally ominous statement saying, “China will diversify its $1 trillion foreign exchange reserves, the largest in the world, across different currencies and investment instruments, including in emerging markets.” (Reuters)
This should have been a red flag for currency traders, but the media buried the story and the markets dutifully shrugged it off. The truth is that our relationship with the Chinese is changing very quickly and the days of cheap credit and a “high-flying” dollar are coming to an end.
70% of China’s currency reserves are in US dollars. The effect of “diversification” will be devastating for the US economy. It increases the likelihood of hyperinflation at the same time the housing market is in its steepest decline in 80 years. When currency crises arise at the same time as economic crises; the problems are much more difficult to resolve.
Doomsday for the Greenback
It is impossible to fully anticipate the effects of the falling dollar. The dollar is a currency unlike any other and it is the cornerstone of American power—political, economic and military. As the internationally-accepted reserve currency, it allows the Federal Reserve to control the global economic system by creating credit out of “thin air” and using fiat-scrip in the purchase of valuable manufactured goods and resources. This puts an unelected body of private bankers in charge of setting interest rates which directly affect the entire world.
Iraq has proven that the US military can no longer enforce dollar-hegemony through force of arms. New alliances are forming that are reshaping the geopolitical landscape and signal the emergence of a multi-polar world. The decline of the superpower-model can be directly attributed to the denominating of vital resources and commodities in foreign currencies. America is simply losing its grip on the sources of energy upon which all industrial economies depend. Iraq is the tipping point for America’s global dominance.
When foreign central banks abandon the greenback the present system will unwind and the “unitary” model of world order will abruptly end.
This may be a painful experience for Americans who will undoubtedly see a sharp fall in current living standards. But it also presents an opportunity to disband the Federal Reserve and restore control of the nation’s currency to the people’s legitimate representatives in the US Congress.
This is the first step towards removing the cabal of powerbrokers in both political parties who solely represent the narrow ambitions of private interests.
The War on Terror is a public relations ploy that is intended to disguise the use of military and covert operations to secure dwindling resources to maintain dollar supremacy. It is a futile attempt to control the rise of China, India, Russia and the developing world while preserving the authority of western white elites.
The strength of the euro portends increasing competition for the dollar and a steady decline in America’s influence around the world. This should be seen as a positive development. Greater parity between the currencies suggests greater balance between the states--hence, more democracy. Again, the superpower model has only increased terrorism, militarism, human rights violations and war. By any objective standard, Washington has been a poor steward of global security.
The falling dollar also suggests growing political upheaval at home brought on by economic distress. We should welcome this. America needs to remake itself—to recommit to its original principles of personal freedom, civil liberties and social justice--to reject the demagoguery and warmongering of the Bush regime—to reestablish our belief in habeas corpus, the presumption of innocence and the rule of law. Most important, we need to reclaim our honor.
Big changes are coming for the dollar; it’s just a matter of whether we allow those changes to bog us down in recriminations and pessimism or use them to create a new vision of America and restore the principles of republican government. It’s up to us. Home