Cracks in the Financial Fortress

03 Nov

[courtesy Google Images]

[courtesy Google Images]

Jim Willie and the Golden Jackass produced a 3-part video describing the multitude of social, political and economic problems faced by the US.  I find the video’s presentation overly dramatic. For me, it seems like a muted rant that sounds a lot like a conspiracy theory.  The graphic elements are weird and distracting.

Even so, most of the videos’ content is compelling.

One of Willie’s most interesting predictions is that Saudi Arabia may soon start accepting currencies other than the fiat dollar as payment for it’s crude oil.  If that happens, the dollar’s remaining status as World Reserve Currency will crumble, the dollar’s value will plunge, and the price of gold will skyrocket.

The argument makes perfect sense.  And it’s a little bit chilling because in one day, one hour, one moment, the Saudi’s could simply announce that they’d accept payments in currencies other than dollars, and the value of every paper debt-instrument denominated in dollars might fall by 20%, 40% or even 70%.

That extraordinary event isn’t likely to happen soon because the Saudi’s, though fabulously rich, are also fabulously weak militarily. They need a “protector” who’ll do their fighting for them. The US has filled that role since A.D. 1971 but will be increasingly unable to continue to do so.

The next protector?  China. If and when China agrees to protect the Saudi’s, the Saudi’s will agree to accept Chinese yuan in payment for Saudi crude.  The dollar would then suffer a significant decline.  If the Saudi’s also agreed to accept euro’s, English pounds and other national currencies, the dollar would collapse.

I don’t expect China to suddenly replace the US as the Saudi “protector” anytime soon.  I can’t imagine how the US could leave Saudi Arabia today, and China could walk in tomorrow.  Instead, there’d have to a transition whereby a few Chinese came into Saudi Arabia today and few US personnel left tomorrow.  Then a few more Chinese would enter on the next day, and a few more US personnel left the day after.  Transitions take time. Therefore, while Jim Willie’s argument concerning Saudi Arabia makes great theoretical sense, it’s unlikely to take place in the immediate future.

In fact, even Willie doesn’t expect the Saudi’s to break the dollar’s back by accepting other currencies in payment for crude oil.

But Willie does claim that there is already an agreement in place whereby Western governments are voluntarily surrendering their gold to China.  Allegedly, that agreement is already being implemented–and Willie offers evidence to support that contention.  Willie doesn’t tell us when this agreement will be finally implemented, but he does tell us some of the results:  1) a global financial reorganization; 2) a collapsed dollar; 3) a new financial system based on gold rather than fiat currencies; and 4) $7,000 per ounce gold.

I haven’t checked Willie’s evidence, but I assume Willie would not be lying or mistaken about facts presented.  Some of Willie’s opinions strike me as sufficiently speculative to sound like conspiracy theories.  I’m not convinced that Willie’s conclusions are valid.  I’m particularly skeptical of the idea that the Powers That Be have declared gold would be priced at $7,000–at least not $7,000 of today’s dollars.  $7,000 gold seems too low to me.  I’d guesstimate that a new global financial system based on gold would have to price gold between $25,000 and $50,000 of today’s dollars.

Nevertheless, Willie presents an argument that’s informative and worth considering.

video   Part 1     00:10:50

Video  Part 2     00:11:19

Video  Part 3    00:12:24


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5 responses to “Cracks in the Financial Fortress

  1. Jetlag

    November 3, 2013 at 9:32 PM

    The argument that Saudi acceptance of other currencies would hurt the US dollar (and help the other currencies) is valid. But the risk of this ever happening (by a choice of the Saudis rather than the International Bankers) is pretty minimal. Plus, the SCARY story told by Mr. Willie has a few problems with basic logic.

    If the consequences of the Saudis diversifying from dollar-only sales are so severe, it follows that Saudi Arabia will be one of the last places the United Sates pulls out of militarily. And we’re nowhere near having to quit all of our overseas occupations.

    If the behavior of Saudi Arabia is really this critical to the US dollar, our presence there obviously more than pays for itself. So budget problems in the US are a reason to stay, not leave, Saudi Arabia.

    Also, does Mr. Willie think the Powers That Be got where they are by being amateurish or stupid? They have naturally taken the precaution of holding the Saudis’ massive fortunes hostage in their European banks, to prevent any surprises.

    Mr. Willie, lay up your treasure in heaven (Matthew 6:19-21) and turn away from your idol, the golden jackass.

    Thanks for the article.

  2. Daniel M. Parkman, Sr.

    November 4, 2013 at 12:28 AM

    Reblogged this on UeberGlobal.

  3. Pat Fields

    November 4, 2013 at 2:33 AM

    The banknote scheme is a monolithic structure hidden behind a false image of ‘national currencies’. The American banknote ‘brand’ is being strategically denigrated in order to cause significant enough financial mayhem in the world, to obfuscate recognition that the core problem is in fact wholly attributable to the banknote scheme itself, rather than any single country’s government or bank usage of it.

    All banknote currency is loaned solely as principal into existence at interest. That basic structural element is indispensible, or no one would lend anything out into commerce from any level of social strata anywhere, whether personally or indirectly through a governmental apparatus. Because all currency is thus existing principal with the interest servicing currency yet to come into being … the ONLY way to raise servicing funds is to borrow that anew. The reality then is that banknotes incur interest, compelling more banknotes at (now complex compounding) interest, reverberating ad infinitum, best described as a ‘Perpetual Money Device’ sustained in a ‘Positive Feedback Loop’.

    The ‘sharp tacks’ will immediately ascertain that this is an Exponential Progression which mathematically proceeds inexorably into an hyperbolic state, unless modulated by some form of limiter. This is why ‘Central Banks’ came into existence, because that limiter was perceived to be control over current interest rates, commensurate with variances in regional or global economic activity.

    As we’re witnessing, however, in its advanced stage of expansion, the scheme isn’t responsive even to near-zero current rates. This is because debt reaches a Saturation Point, where far too few people are any more willing to engage additional liability and the interest servicing currency creation seizes up. The ‘pool’ of currency stagnates. With both principal and interest service increasingly draining from circulation, productive investment for trade dwindles, then production of even internal consumables suffers for the frantic sake of escaping debt. This is the ‘deflation’ often mentioned … the classical definition … of a shrinking volume of circulating media.

    The central banks have no choice but to crank out the interest servicing currency in begrudging gratis, as a ‘bridge’ in the forlorn hope that economic activity will SOMEHOW re-ignite. But, once Debt Saturation sets into the broadening psyche and becomes a firmly held habit, it will persevere for a generation or more and there will be no alternative (if the banknote scheme is to find a prayer of survival) but to force that existential borrowing by conjuring up wars, destruction and death … leaving abysmal destitution that can only be alleviated by subjugation to the requisite debt.

  4. Jetlag

    November 4, 2013 at 4:03 AM

    The mere existence of the central banking cartel is prima facie evidence of the plan to implode the world’s national governments, to be followed by the dismantling and cannibalization of the world’s nation states by International Usury, since this is the inevitable outcome of the cartel’s loaning the world’s national currencies into circulation at interest, where the interest must also be borrowed at interest.

    That this fundamental, and centrally important, fact is rarely discussed by the “be afraid, be very afraid” serial false-alarm clowns in the false-alternative media is a big hint who their sponsors are.

    • Pat Fields

      November 4, 2013 at 5:23 AM

      Jetlag, focus on ‘usury’ is mis-directed. There isn’t anything fundamentally wrong with compensation for borrowing of things; money being only one in the grand matrix of goods. In fact, it’s a moral obligation.

      Interest on borrowing of money only becomes problematic when practiced in excess, because the interest service on too much borrowing erodes circulation, which in turn impedes the maximum optimal volume of trade among people in the effected community. That’s one of the monumental innovations of Real Bills. They greatly suppress the need for borrowing by supplanting Discount for Interest in compensating pre-market conveyances through the entire chain of credit.


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