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Category Archives: World Reserve Currency

Foreign Currency Inflation Causes U.S. Dollar Deflation


Dangerous Deflation is Death to Debtors [courtesy Google Images]

Dangerous Deflation is Death to Debtors
[courtesy Google Images]

Forbes magazine recently published “Egypt Is About To Slash The Value Of Its Currency To Revive Its Flagging Economy”. According to Forbes,

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Egypt’s Finance Minister Amr El Garhy has said his country needs to move faster in dealing with its currency woes, opening up the possibility of a large and rapid devaluation of the Egyptian pound.”

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Big deal. Egypt is devaluing (inflating) the Egyptian pound. Who cares, right?

Q:  What’s the value of the Egyptian pound have to do with the U.S. dollar and U.S. economy?

A:  Actually, more than you might suspect.

. Read the rest of this entry »

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Are (Draconian) Capital Controls Coming?


Currency Controls:  "I'll give you one green one for three purple ones." [courtesy Google Images]

Currency Controls: “I’ll give you one green one for three purple ones.”
[courtesy Google Images]

Casey Research recently published an article entitled, “Capital Controls Are Coming”—but are they really?

In fact, some capital controls already exist as restrictions on how much cash you can take out of the country.  These capital controls exist at our physical and financial borders and concern international movement of dollars.

Other capital controls exist domestically.  I.e., you can’t deposit more than $10,000 into bank accounts in the U.S. without causing your bank to send notice to the national government.

Until A.D. 1934, we had $500, $1,000, $5,000, and $10,000 bills in circulation.  Now, the biggest bill we can use is $100.  That’s evidence that currency controls have been with us since A.D. 1934.

Article 1.10.1 of the Constitution of the United States (A.D. 1788) declares that “No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts”. That’s a form of “money control” that amounts to “currency control/prohibition”.  Currencies other than gold or silver are prohibited or at least restricted within the States of the Union.

My point is that some form of “currency controls” have been with us for over 200 years.  I doubt that you can find a nation anywhere on earth that hasn’t engaged in some form of “currency controls” over the past century.

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Current Currency Wars


World Reserve Currency Teeter-Totter-- if they go up, we go down

World Reserve Currency Teeter-Totter–
if they go up (inflate), we go down (deflate)

In “Currency Battle Is Tethered to Obama Trade Agenda,” The New York Times recently offered some bases for insight and conjecture concerning currency:

 

 

“A number of countries — China most prominent among them — have long acted to hold down the value of their currencies against the dollar, helping their industries by keeping exports to American consumers cheaper and making goods from the United States more expensive.”

 

Since the fiat dollar is still the World Reserve Currency, there’s a teeter-totter relationship between US dollars and the rest of the world’s major fiat currencies.  When foreign countries hold their currencies down in relation to the dollar, they hold the dollar up. That is, by inflating foreign currencies they make the dollar more valuable and thereby contribute to dollar deflation.

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Grandmaster Putin’s Golden Trap II


Chessmaster?? [courtesy Google Images]

Chessmaster??
[courtesy Google Images]

As I’ve written previously, Russian writer Dmitry Kalinichenko wrote an article entitled “Grandmaster Putin’s Golden Trap”.  I view that article as generally brilliant.  Here are some more of my comments on Mr. Kalinichenko’s observations.

 

Mr. Kalinichenko’s article focused on what he believed to be Russian President Vladimir Putin’s most brilliant financial strategy: buying gold with US fiat dollars.

On the face of it, that “strategy” doesn’t sound like much. Buying gold with fiat dollars?   It’s done every day. What’s so brilliant about that?

Well, the brilliance (or just common sense) behind Putin’s strategy is based on two fundamental premises:

 

1) The fiat dollar is significantly overvalued and thus able to purchase more than it’s really worth; and,

2) The price of physical gold has been artificially suppressed and is therefore far lower than its true price would be in a “free” (rather than “manipulated”) market.

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The Ultimate Prize: Control of Petroleum—or Control of Petro-Currency?


[courtesy Google Images]

[courtesy Google Images]

“. . . they have seduced my people, saying, Peace; and there was no peace . . . .” Ezekiel 13:10)

 

The Muslim faith is divided into two primary sects: Sunni and Shiite. They’ve been at each other’s throat since the death of the prophet Mohammed in the 7th century. Their disagreement is religious and goes to which sect acquired legitimate authority over the entire Muslim faith after Mohammed died. The two sects can go through generations of peaceful coexistence. But every so often, they wage holy war against each other.

ZeroHedge.com recently commented on rising Middle East tensions:

 

“What’s changed [in the Middle East] is the perception that the USA has any role to play any longer even in the diplomatic theatrics. The Middle East is disintegrating faster than any polity in historical memory. It appears that, if anything, the USA has only succeeded in accelerating the process wherever we turn our attentions.”

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The Ultimate Prize: Control of Petroleum— or Control of Petro-Currency?


A New War for a New Petro-currency? [courtesy Google Images]

A New War for a New Petro-currency?
[courtesy Google Images]

“. . . they have seduced my people, saying, Peace; and there was no peace . . . .” Ezekiel 13:10)

 

The Muslim faith is divided into two primary sects: Sunni and Shiite. They’ve been at each other’s throat since the death of the prophet Mohammed in the 7th century. Their disagreement is religious and goes to which sect acquired legitimate authority over the Muslim faith after Mohammed died. The two sects can go through generations of peaceful coexistence. But every so often, they wage holy war against each other.

ZeroHedge.com recently commented on rising Middle East tensions:

 

“What’s changed [in the Middle East] is the perception that the USA has any role to play any longer even in the diplomatic theatrics. The Middle East is disintegrating faster than any polity in historical memory. It appears that, if anything, the USA has only succeeded in accelerating the process wherever we turn our attentions.”

 

The US government directly supports the Sunni rebels in Syria and thereby indirectly supports the Sunni rebels in Iraq—all the while claiming to support the Shiite government of Iraq.

Our gov-co is playing both ends against the middle. It’s fanning the flames of war from both sides. I see only two plausible explanations for this seemingly contradictory behavior:

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Coming Global Economic Reset?


I could quibble about a few of the remarks in this video, but I agree with most it.  More, it’s a brief, but well-done video.

video   00:07:04

 

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