The Slow but Sure Death of the US Dollar

On September 13^th the Chairman of the US Federal Reserve, Ben Bernanke announced the latest round of QE (Quantitative Easing) but with a dangerous twist. Unlike previous rounds in 2009 and 2010 although large in scale included limits, this time there are no limits and Bernanke effectively indicated that the government will do whatever it takes to achieve various targets, notably employment growth. It is very doubtful that this new policy will work, the previous rounds have summarily failed to stimulate employment and the economy continues its lethargic path. But of far greater note is the open ended nature of the current commitment, and its disastrous consequences on the US dollar and in fact fiat currencies globally.

QE

Quantitative easing is a convoluted way of describing money printing, and printing with nothing to back it up. As with all economies, companies or indeed families, it is not unusual for budgets to not balance, for short term deficits to arise, for loans to be required. Yet the US economy is in chronic deficit, with an enormous $1.5 Trillion dollars yearly shortfall within its $15 Trillion economy. For Obama’s last budget he expected to overspend their tax revenues of $2.5 Trillion by $1.33 Trillion (53%). Like the recalcitrant debtor which never balances the books the US is taking advantage of several factors in its favour.

Of paramount importance to the US is the status of the US dollar as the defacto world currency, a position it has held for most of the past century since Bretton Woods in 1944, with a fixed conversion rate of $35 to an ounce of gold, from which the rest of the world then set fixed rates against the dollar, the US had the strongest economy and the most gold. The US again set the pace when unilaterally Nixon took the US and the world, by default, off the Bretton Woods form of gold standard and launched our current reality of free floating exchange rates, with no world currency backed by any tangible assets. The results have been predictable with currencies unilaterally devaluing against gold rapidly. Since 1971 the US dollar has devalued by 98% from $35 per ounce to $1780 per ounce. The latest ruse of Bernanke’s with open-ended QE shows all likelihood to take the dollar to complete nothingness. However, the US is leading the other main economies of the world down the same path. Faced with a global recession a competitive devaluation of your currency versus your export competitors policy is rampant, its a “beggar thy neighbor” stance where your exports will be cheaper – but is in effect an impossible policy – over the longer term no one can win, and the British, Japanese, Brazil and now likely Europe and even China are following fast in the QE train. If all are devaluing their currencies it becomes difficult to gain an advantage, but the costs to the economies are enormous.

The main cost is of course via inflation whether overt or hidden, printing of substantial amounts of new money without growth in goods and services (the economy) means inflation. That it is not so obvious yet is due to the governments covertly changing their measurement of inflation in ways that underplay its true reality (since the time of Clinton the calculation of the consumer price inflation basket of goods has changed in such a way that the inflation rate has effectively halved) and due to the banking industry salting away much of the newly created money to strengthen their heavily weakened balance sheets.

Ben Bernanke’s recent announcement is nothing but a continuation of the policies to prop up a bankrupt banking system. Since 2007 he has:

• Cut interest rates from 5.25% to .25%
• Taken on $30 Billion in Bear Stearns junk mortgages prior to its sale to JPMorgan
• Provided virtually open-ended lending facilities to US and related global banks
• Provide up to $400 Billion for the Fannie Mae Freddie Mac bailout
• Taken over the bankrupt AIG Insurance group for $85 Billion, then provided a further $45Billion
• Provided $700 Billion for the euphemistically named “Troubled Assets Relief Programme” (TARP) for the Banks – effectively buying Bank junk assets to bail out the banks from imminent collapse.
• Provide $540 Billion in back up loans to money market funds
• Provided $280 Billion to back up Citigroup (Oct 08)
• Provided $140 Billion to back up Bank of America (Jan 09)
• QE1 of $1.25 Trillion of mortgage debts and government treasuries (Mar 09)
• Further QE of $200 Billion in Aug 10)
• QE2 of $600 Billion in Treasuries in Nov 10
• Operation Twist (Nov 11)
• And now QE3 of $40 Billion of mortgage backed securities every month from now on (Sept 12).

There is a consistent theme to the above spending, apart from there being no real money surplus to meet the payments! They are predominantly geared around the banking/financial collapse. Rather than feed money to those that are losing their homes (home price/jobs collapse) Bernanke has channeled the money to those holding the mortgages and losing derivatives gambling stubs (the bankers). With the bankers jealously holding onto the money to rebuild their balance sheets. To add insult to injury the provision of more money to banks in buying Mortgage backed securities (the latest QE) will enable the Federal Reserve to take over the multitude of mortgages which were packaged together into instruments like Collateralised Debt Obligations – many of which have severe ownership issues. The Fed will be in a strong position to foreclose on those homes where the banks dithered and struggled under a barrage of legal challenge. With partial ownership and influence (including over Board membership) of the Federal Reserve exercised by the major US banks, it is little surprise that the policies of this body overwhelmingly meets the interests, bailout and liquidity needs of those least deserving from the banking sector.

Organised theft

Bernanke caveated the latest “potentially unlimited” QE with the aim of getting the stubbornly poor employment figures of the US back on track. None of the earlier versions of QE have helped employment in the US or elsewhere, we are in the midst of a deep recession and throwing money at banks to keep them afloat is not helping employment other than Bank executives which of all people should be the first into the dole cue.

In this US election year Obama is sweating over the official unemployment rate which is stubbornly over 8%, and has remained above 8% throughout his administration, yet like the inflation “figures” the administration is adept at presenting as good a picture as possible. The 8% figure is only possible by taking more people from the labour participation rate in the US which is now at an anaemic 63.5% (less than two thirds of the population are even included as working or looking for work – and not all of the 36.5% are retired or under-age). Also little comment is made of the fact that many of the jobs that have come into the economy in recent years are part time. Western economies are severely compromised, governments are facing growing deficits and no growth. Unemployment is rising. Unofficial, yet credible independent employment statistics (shadowstats.com) show US unemployment at 22.8% with no signs of recovery on the horizon.

A Golden future?

Perhaps the biggest scandal of QE is that it is a direct theft of wealth from the masses. The constant devaluation of currencies is nothing but a hidden and oppressive tax on a massive scale. Anyone with monetary and related assets finds their purchasing power constantly eroded and wages do not keep pace with the real inflation created by money printing. The 1% are well protected, know the game, and act accordingly – keeping their wealth in commodities and real assets like land in these inflationary times. The poorest in society suffer from the lack of jobs and opportunity and without assets of note generally depend on societal welfare programmes (46.5 million Americans depend on food stamps for survival). The rest – the vast majority in society – whether in work or looking over their shoulders as companies close and austerity programmes bite, are having their wealth stolen. The high and rising costs of energy and food are strong indicators of the inflation working into the system, and it will only get worse.

The only protection that populations have in the face of this theft is via real money – gold and silver – which has a history of acting as a true store of value over millennia. As assets which cannot be produced at the flick of a central bankers computer print button, and which have intrinsic value (jewellery, industrial use, etc) they are really the only suitable medium of exchange the people deserve. The central bank dominated capitalist world will fight against gold and silver and their right to inflate tooth and nail. It is really left to the Islamic world under the Caliphate system which obliges gold and silver as currency, to lead the way back. Of course the Bernanke’s of this world are walking a tight rope between printing and a deflationary depression. The academic inside of Bernanke (he produced his doctoral thesis on the 1930’s depression) is convinced he can control the printing presses he administers without falling into a hyperinflationary spiral which will destroy not only the US dollar but most western economies, plunging the world into a protectionist and depressionary mess. Even if they can avoid hyperinflation, the high levels of inflation which his “unlimited” QE will cause, is slowly but surely killing the US and defacto world fiat currency.

Ironically the latest phase of the currency wars has seen the US attack the Iranian Rial via sanctions and market operations as part of its covert war to stop Iran’s nuclear march (the Rial has lost 80% of its value this year). The unintended consequence of which is the use of gold again in international transactions in the settlement of oil deals between Iran and China. The BRIC (Brazil, Russia, China and India) countries are already settling increasingly with their own currencies rather than the US dollar, and for very good reasons.

Jamal Harwood

America is the World’s Largest Sponsor of Terrorism

American Officials Admit that the U.S. Is a Huge Sponsor of Terrorism

The director of the National Security Agency under Ronald Reagan – Lt. General William Odom - noted:

Because the United States itself has a long record of supporting terrorists and using terrorist tactics, the slogans of today’s war on terrorism merely makes the United States look hypocritical to the rest of the world.

 

Odom also said:

By any measure the US has long used terrorism. In ‘78-79 the Senate was trying to pass a law against international terrorism – in every version they produced, the lawyers said the US would be in violation.

 (audio here).
The Washington Post reported in 2010:

The United States has long been an exporter of terrorism, according to a secret CIA analysis released Wednesday by the Web site WikiLeaks.

The head and special agent in charge of the FBI’s Los Angeles office said that most terror attacks are committed by our CIA and FBI.

Wikipedia notes:

Chomsky and Herman observed that terror was concentrated in the U.S. sphere of influence in the Third World, and documented terror carried out by U.S. client states in Latin America. They observed that of ten Latin American countries that had death squads, all were U.S. client states.

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They concluded that the global rise in state terror was a result of U.S. foreign policy.

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In 1991, a book edited by Alexander L. George [the Graham H. Stuart Professor of Political Science Emeritus at Stanford University] also argued that other Western powers sponsored terror in Third World countries. It concluded that the U.S. and its allies were the main supporters of terrorism throughout the world.

Some in the American military have intentionally tried  to “out-terrorize the terrorists”.

As Truthout notes:

Both [specialists Ethan McCord and Josh Stieber] say they saw their mission as a plan to “out-terrorize the terrorists,” in order to make the general populace more afraid of the Americans than they were of insurgent groups.

In the interview with [Scott] Horton, Horton pressed Stieber:

“… a fellow veteran of yours from the same battalion has said that you guys had a standard operating procedure, SOP, that said – and I guess this is a reaction to some EFP attacks on y’all’s Humvees and stuff that killed some guys – that from now on if a roadside bomb goes off, IED goes off, everyone who survives the attack get out and fire in all directions at anybody who happens to be nearby … that this was actually an order from above. Is that correct? Can you, you know, verify that?

Stieber answered:

“Yeah, it was an order that came from Kauzlarich himself, and it had the philosophy that, you know, as Finkel does describe in the book, that we were under pretty constant threat, and what he leaves out is the response to that threat. But the philosophy was that if each time one of these roadside bombs went off where you don’t know who set it … the way we were told to respond was to open fire on anyone in the area, with the philosophy that that would intimidate them, to be proactive in stopping people from making these bombs …”

Terrorism is defined as:

The use of violence and threats to intimidate or coerce, especially for political purposes.

So McCord and Stieber are correct: this constitutes terrorism by American forces in Iraq.

The U.S. has been supporting Al Qaeda and other terrorists in Afghanistan, Bosnia, Libya, Syria and Iran.

(The U.S. has also directly inserted itself into a sectarian war between the two main Islamic sects, backing the Sunnis and attacking the Shiites. See this, this and this.  Because Saudi Arabia is the seat of the most radical sect of Islam – Wahhabism- the U.S. unquestioning support of the Saudis  is indirectly supporting terrorism.)

Torture – which the U.S. has liberally used  during the last 10 years – has long been recognized as a form of terrorism.

Wikipedia notes:

Worldwide, 74% of countries that used torture on an administrative basis were U.S. client states, receiving military and other support to retain power.

Of course, some would say that the American policy of assassination – especially using drone strikes on people whose identity isn’t even known – is a form of terrorism. And see this and this.

Particularly when the U.S. is using the justifiably-vilified Al Qaeda tactic of killing people attending funerals of those killed – and targeting people attempting to rescue people who have been injured by – our previous strikes.

Some Specific Examples …

The CIA admits that it hired Iranians in the 1950′s to pose as Communists and stage bombings in Iran in order to turn the country against its democratically-elected prime minister.

The former Italian Prime Minister, an Italian judge, and the former head of Italian counterintelligenceadmit that NATO, with the help of the Pentagon and CIA, carried out terror bombings in Italy and other European countries in the 1950s and blamed the communists, in order to rally people’s support for their governments in Europe in their fight against communism.

As one participant in this formerly-secret program stated: “You had to attack civilians, people, women, children, innocent people, unknown people far removed from any political game. The reason was quite simple. They were supposed to force these people, the Italian public, to turn to the state to ask for greater security” (and see this)(Italy and other European countries subject to the terror campaign had joined NATO before the bombings occurred).

As admitted by the U.S. government, recently declassified documents show that in the 1960′s, the American Joint Chiefs of Staff signed off on a plan to blow up AMERICAN airplanes (using an elaborate plan involving the switching of airplanes), and also to commit terrorist acts on American soil, and then to blame it on the Cubans in order to justify an invasion of Cuba. See the following ABC news report; the official documents; and watch this interview with the former Washington Investigative Producer for ABC’s World News Tonight with Peter Jennings.

Nine months earlier, a false flag attack was discussed in order to justify an invasion of the Dominican Republic. Specifically, according to official State Department records, Under Secretary of State Chester Bowles wrote on June 3, 1961:

The Vice President [Lyndon Johnson], [Attorney General] Bob Kennedy, Secretary [of Defense Robert] McNamara, Dick Goodwin [who was Deputy Assistant Secretary of State for Inter-American Affairs], [head of the Joint Chiefs of Staff] General Lemnitzer, Wyn Coerr, and Ted Achilles were here. Bob McNamara and Lemnitzer stated that under the terms of the contingency paper, they were required to be prepared to move into the island on short order if required to do so, and this, in their opinion, called for substantially more troops that we had in the area. After some discussion we considered two more aircraft carriers, some destroyers, and 12,000 marines should be moved into a position some one hundred miles off the Dominican Republic shore…

The tone of the meeting was deeply disturbing. Bob Kennedy was clearly looking for an excuse to move in on the island. At one point he suggested, apparently seriously, that we might have to blow up the Consulate to provide the rationale.

His general approach, vigorously supported by Dick Goodwin, was that this was a bad government, that there was a strong chance that it might team up with Castro, and that it should be destroyed–with an excuse if possible, without one if necessary.

Rather to my surprise, Bob McNamara seemed to support this view …

The entire spirit of this meeting was profoundly distressing and worrisome, and I left at 8:00 p.m. with a feeling that this spirit which I had seen demonstrated on this occasion and others at the White House by those so close to the President constitutes a further danger of half-cocked action by people with almost no foreign policy experience, who are interested in action for action’s sake, and the devil take the highmost …

[At a subsequent meeting], Bob McNamara went along with their general view that our problem was not to prepare against an overt act by the Dominican Republic but rather to find an excuse for going into the country and upsetting it.

Department of Justice lawyer John Yoo suggested in 2005 that the US should go on the offensive against al-Qaeda, having “our intelligence agencies create a false terrorist organization. It could have its own websites, recruitment centers, training camps, and fundraising operations. It could launch fake terrorist operations and claim credit for real terrorist strikes, helping to sow confusion within al-Qaeda’s ranks, causing operatives to doubt others’ identities and to question the validity of communications.”

As Chris Floyd and many others have noted, this plan has gone live.

United Press International reported in June 2005:

U.S. intelligence officers are reporting that some of the insurgents in Iraq are using recent-model Beretta 92 pistols, but the pistols seem to have had their serial numbers erased. The numbers do not appear to have been physically removed; the pistols seem to have come off a production line without any serial numbers. Analysts suggest the lack of serial numbers indicates that the weapons were intended for intelligence operations or terrorist cells with substantial government backing. Analysts speculate that these guns are probably from either Mossad or the CIA. Analysts speculate that agent provocateurs may be using the untraceable weapons even as U.S. authorities use insurgent attacks against civilians as evidence of the illegitimacy of the resistance.

There is substantial additional evidence of hanky panky in Iraq.

Western Propagandists Attempt to Trigger Catastrophic Turkish-Syrian War

October 6, 2012 - Bloomberg, Guardian, Ynet, and others are all posting in their headlines an identical unconfirmed report that Turkey and Syria have "agreed" to establish a 6 mile wide "buffer zone" running the length of the Turkish-Syrian border. 

The report states specifically (emphasis added): 

The Syrian government has told its military to keep aircraft at least six miles (10 kilometers) from Turkey’s borders after a deadly shelling incident left five Turks dead, according to the Turkish news website Today’s Zaman.

The news site cited Turkey’s ntvmsnbc.com, which quoted “reliable sources” yesterday as saying that Syrian President Bashar al-Assad’s regime has ordered its warplanes and helicopters to honor the buffer. Neither Turkey’s government nor Syrian officials confirmed the report.

Accompanying this report are stories such as Reuters' "UN: Syria buffer zone plan raises questions," which states:  

The United Nations said on Thursday proposals to set up secure safe zones in Syria to help end the 17-month conflict raised "serious questions" and would need to be studied carefully. 

Ahead of a meeting on the humanitarian situation in Syria, France and Britain warned Syria's President Bashar Assad that military action to secure buffer zones for civilians inside the country was an option.

 Reuters goes on to "warn:"  

Creating a buffer zone for displaced Syrians would be difficult because a U.N. Security Council resolution would be needed to set up a no-fly zone to protect the area, and Russia and China would not approve such a move, diplomats said.

It is not the first time Russia has posed difficulties for the United States and its allies on the Security Council. In the 1990s, Moscow strongly supported Serbia in the Balkan Wars and acted as Belgrade's protector on the council.

After an ineffectual UN presence failed to stop genocide in the 1992-1995 Bosnian War, the United States and its European allies infuriated Russia by bypassing the deadlocked Security Council and turning to NATO to halt the Serbian onslaught in Kosovo with a bombing campaign against Serbia in 1999.

While the idea of a buffer zone is meant to look like a knee-jerk reaction to a still unjustified exchange of fire on the Turkish-Syrian border, with lingering conflicting reports over who was responsible for initially targeting the Turkish town of Akcacle, in reality this has been planned since at least March of this year, where the idea was proposed by the corporate-financier funded Brookings Institution in their "Middle East Memo #21" "Assessing Options for Regime Change" where it stated specifically (emphasis added):

"An alternative is for diplomatic efforts to focus first on how to end the violence and how to gain humanitarian access, as is being done under Annan’s leadership. This may lead to the creation of safe-havens and humanitarian corridors, which would have to be backed by limited military power. This would, of course, fall short of U.S. goals for Syria and could preserve Asad in power. From that starting point, however, it is possible that a broad coalition with the appropriate international mandate could add further coercive action to its efforts." -page 4, Assessing Options for Regime Change, Brookings Institution.

 
Image: The Brookings Institution, Middle East Memo #21 "Assessing Options for Regime Change (.pdf)," makes no secret that the humanitarian "responsibility to protect" is but a pretext for long-planned regime change.

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Brookings continues by describing how Turkey's aligning of vast amounts of weapons and troops along its border in coordination with Israeli efforts in the south of Syria, could help effect violent regime change in Syria:  

In addition, Israel’s intelligence services have a strong knowledge of Syria, as well as assets within the Syrian regime that could be used to subvert the regime’s power base and press for Asad’s removal. Israel could posture forces on or near the Golan Heights and, in so doing, might divert regime forces from suppressing the opposition. This posture may conjure fears in the Asad regime of a multi-front war, particularly if Turkey is willing to do the same on its border and if the Syrian opposition is being fed a steady diet of arms and training. Such a mobilization could perhaps persuade Syria’s military leadership to oust Asad in order to preserve itself. Advocates argue this additional pressure could tip the balance against Asad inside Syria, if other forces were aligned properly. -page 6, Assessing Options for Regime Change, Brookings Institution.

Clearly,  a "buffer zone" is the next step for Western designs aimed at exacting regime change in Syria and would be a move the Syrian government would not readily agree to. It was also a step that merely needed a pretext to move forward. It appears that the West has found (or manufactured) their pretext. The unconfirmed reports floated by allegedly "reputable" news agencies, citing "high placed sources" in the Turkish media reeks of propaganda, public perception management, and psychological warfare.


Image: A satellite image of the Turkish-Syrian border and the town of Akcacle. NATO-backed terrorists had attacked and overrun the border post, situated directly amongst the sprawl of Akcacle with extends right up to the border. Turkish PM Erdogan is solely responsible for allowing armed terrorist groups, many not even Syria, but Libyan in origin, to use Turkish territory to carry out attacks. The loss of Turkish civilian life is an inevitability when Al Qaeda terrorists are permitted, even encouraged and enabled to use Turkish towns as staging grounds for their activities. It is still not clear who was responsible for initial mortar rounds that allegedly landed in Akcacle, but it is certain that NATO and their proxy Erdogan are attempting to use the incident to pressure Turkey into a wider conflict with Syria.

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Additionally, it should be noted that this policy of seeking a "buffer zone" IS NOT A TURKISH POLICY. It was imagined, planned, and is being ceaselessly promoted by corporate-financier interests emanating from the United States, the United Kingdom, and France, and is merely being parroted by increasingly unpopular elements within Turkish politics, specifically the government of Turkish PM Recep Tayyip Erdogan. 

Protests erupted in Turkey's capital of Ankara, not in support of Erdogan's government, but to protest against it and attempts to use the nebulous border incident to initiate a wider conflict. The Turkish parliament has recently passed a bill authorizing the type of cross-border military operations needed to establish and protect Wall Street think-tank Brooking's prescribed "buffer zone."

It appears that the West, faced with reluctant proxies along all of Syria's borders, has begun both pressuring it's own allies with increasingly belligerent moves, while attempting to stoke increased cross-border tensions between Turkey and Syria. If the unconfirmed reports of a "buffer zone" agreement turn out to be false, it would confirm that the West is engaged in a concerted propaganda campaign to stoke a mutually destructive conflict that would destroy both Turkey and Syria, while benefiting only itself. If the "buffer zone" agreement has been made, Syria will have taken the first step in opening itself up further destabilization at the hands of terrorist proxies wielded now for over a year from Turkish territory, with wider US, British, French, and NATO backing. 

Image: (Left) Time's cover depicting the "War Without End" between Iraq and Iran which lasted 8 years and cost well over a million lives. (Right) Donald Rumsfeld sent as a US envoy, meets with Saddam Hussein during the opening phases of the war to offer support to the man he would later play a role in killing. It may have seemed like a good idea in the beginning, with Iraq's Hussein receiving substantial support both politically and militarily from the US, Britain, and France, but ended in both the destruction of Iraq, and Saddam's eventual downfall. We can see a similar scenario developing with Turkish PM Erdogan now playing the role of an early 1980's Saddam Hussein. 

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For people on both sides of the border, it would be wise to unite against the self-serving, destructive Western policies that endanger not only Syria, but Turkey as well. Like Iraq in the 1980's, when President Saddam Hussein was encouraged to begin the destructive 8 year failed invasion of Iran, costing over a million lives and leaving his nation permanently weakened - even setting the stage for eventual Western invasion, occupation, and decimation, Turkish PM Erdogan is likewise jeopardizing not only the security and safety of his nation by allowing it to serve host to terrorist forces invading a neighboring nation, but jeopardizes Turkey's entire existence, should he continue forward with the "Saddam option."