Wayne MADSEN
After permitting Wall Street to enrich itself at the expense of the American taxpayers, the Obama administration is poised to pass on the product of its ersatz economy to the rest of the world. We can all look to post-World War I Europe to understand what happens when a nation floods its economy with worthless currency. Germany printed marks and hyper-inflation resulted. Soon, the German people looked for a savior to bring them out of their economic depression and deliver them from the evils of unchecked capitalistic greed. Adolf Hitler's National Socialists promised German people something better. They and the rest of the world were plunged into World War II.
At the G-20 summit in Seoul, the leaders of the world's largest economic powers failed to come to an agreement on the U.S. Federal Reserve Bank's program to dump newly-printed $600 billion into the international economy. China stated that it is adamantly opposed to a move that is a de facto devaluation of the U.S. dollar.
Weakening the strength of the U.S. dollar, while making American exports a better bargain, will also cause investors like China to avoid investing in the ersatz U.S. economy. The specter of trade wars resulted in a statement in Seoul by British Prime Minister David Cameron in which he likened the present global economic situation to inter-bellum Europe in the 1930s. Cameron said currency wars, trade barriers, and economic nationalism could result in a replay of the 1930s.
Writing in the Christian Science Monitor on November 13, former U.S. Secretary of Labor Robert Reich emphasized that Seoul was big on generalities but lacking in specifics. Reich wrote, "The three-page [G-20] communiqué that also emerged from the session brims with bromides about the importance of 'rebalancing' the global economy, 'coordinating' policies, and refraining from 'competitive devaluations.'" Reich adds a dire warning about the failure of the Obama administration and the Chinese government to reach an agreement, ". . . not a single word of agreement from China about revaluating the Yuan, or from the United States about refraining from further moves by the Fed to flood the U.S. economy with money (thereby reducing interest rates, causing global investors to look elsewhere for higher returns, and lowering the value of the dollar)."
In other words, Reich says both the United States and China are on a collision course: both nations are intent on boosting exports to boost the purchasing power of their respective consumerist middle classes. An economic collision between Washington and Beijing has ramifications for the rest of the world.
Germany, a nation that knows all-too-well about the dangers of currency devaluation, joined China in criticizing the United States’ dollar devaluation. Emergent economic power Brazil joined China and Germany in criticizing the Americans over the Federal Reserve's dollar dumping plans.
President Obama did not help his cause in Seoul when he said that the Federal Reserve's plan to flood the economy with $600 billion in newly-printed dollars was not aimed at devaluing the U.S. dollar. China, Brazil, and Germany knew Obama was being disingenuous, especially when former Fed chairman Alan Greenspan, himself responsible for the collapse of the U.S. housing market by advancing the scheme of sub-prime mortgages, wrote in the Financial Times, that the Fed's quantitative easing, the fancy name for printing ersatz dollars thus devaluing the dollar, was aimed at "currency weakening."
Canadian Prime Minister Stephen Harper, considered a lap dog of Washington, was one of the few leaders in Seoul who came to Obama's defense and supported quantitative easing of the dollar. However, Canadais so interlinked to the downfall of the U.S. economy through the fakery known as the North American Free Trade Agreement (NAFTA); it has no other choice but to stick with floundering American economic policies and its dying neighbor.
It is with a degree of schadenfreude that emerging market economies (EMEs) like China, India, Russia, Brazil, and Turkey are witnessing the meltdown of the economies of nations like the United States, Britain, and France, nations that once ruled the nations of Asia, the Middle East, Latin America, and Africa through the club of economic and financial dominance.
The Obama, Cameron, and Sarkozy governments are instituting austerity plans that will pass on the costs of the chicanery and greed brought about by Wall Street and the global bankers to pensioners, the poor, and those dependent on government-subsidized health care and education. The emergent economic powers want no part of plans to "internationalize" the financial excesses of the Western governments and their banking friends.
President Obama's National Commission on Fiscal Responsibility and Reform is already stating that the impending retirement of America's "baby boomer" population will stress Social Security, Medicare, and Medicaid beyond the breaking point, a fact stressed for years by former Comptroller General David Walker before he resigned in disgust. But the Obama administration and the newly-invigorated Republican opposition, intent on continued spending on defense, which more aptly should be called "war," and continued bailing out of Wall Street criminals, will expect the inevitable cuts in social safety net programs to come at the expense of the poor and middle class.
The U.S. Treasury Department now plans to pass on the $259 billion losses to Fannie Mae and Freddie Mac, caused by foreclosures on risky mortgages they ultimately guaranteed, to the American taxpayers. This outrage comes after the American taxpayers were forced to bail out the U.S. auto industry and Wall Street financial firms.
Riots, general strikes, and mass street protests in Greece, Italy, Britain, and Spain over the passing on of the greed of the global bankers mean that business as usual for those who periodically gather at Bilderberg, Davos, Trilateral Commission, G8, G20, and other closed-door conclaves is over. No longer will workers, unemployed, students, and pensioners sit idly by while the wealthy elites engage in their secretive alchemy of quantitative easing, credit default swaps, collateralized debt obligations, hedge fund intrigue, and other vulture capitalist contrivances while the middle class disappears and the poor grow more desperate.
South African President Jacob Zuma expressed the feelings of many of the world's developing nations when he stressed the need for transparency in the development of any new international economic system. Zuma said there must be "transparent ways to implement "well thought-out rules" for the global economy.
G20 protesters in Seoul were tightly restricted by South Korea's military-police regime and their messages of opposition to the G20 were strictly censored by the international and domestic South Korean media. South Korea's "special law" permitted police to swoop in on and arrest protesters who managed to get close to the summit site in south Seoul. Those who claim that the future of the world is determined by an effete elite of smug and self-effacing individuals have a point. When it comes to the global conclaves that determine the future of workers, currencies, industries, and nation-states, secrecy is the rule and transparency in virtually non-existent.
Billions, not millions, of people around the world will soon vent their anger at those who plunged the world into financial collapse: the vipers, vampires, and vultures of modern capitalism.
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