Sunday, August 3, 2008

How to build an empire

I have argued in the past that America is a worldwide financial empire. I could point to the 700 US facilities located in 170 of the 200 nations in the world. I could point to the global posture of our naval forces, particularly our carrier groups. I could point to the cases where US diplomats bully smaller nations into accepting WTO "free trade" agreements specifically designed to benefit our industries at their expense. But I don't have space here.

It's not just that America is a rich nation. Money in itself is no threat to anyone. The most insidious aspect of our financial empire is the export of our debt and inflationary currency onto other nations. Thomas Jefferson said, "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations ... will deprive the people of all property until their children wake up homeless on the continent their fathers conquered." Jefferson was very prescient, but he did not go far enough. National control of the issuance of currency is no better than private control. Europe's national banks are inflating their currencies just as heavily as the United States private central banking system, the Federal Reserve, is.

Back to the point, the United States is leveraging its strategic military advantages to coerce smaller nations to accept the US dollar as backing. Dr. Hans Hoppe explains how it all works in this article.

Let me condense it here. For my condensation to make sense, you must understand the following propositions which Hoppe elucidates in the article:

a) Governments seek to monopolize money creation
b) As a monopolist of money creation, the government has unlimited power - within its jurisdiction - to devalue the currency
c) The government uses this power to steal the savings of citizens by transferring the spending power in their bank accounts to itself

This is the mechanics of inflation. It is the same mechanism by which a counterfeiter transfers money to himself and away from everyone else.

Now, Dr. Hoppe explains the international nature of inflation:

Let us consider a world in which the process of political concentration has been effective for some time. As the result of interstate wars, large and mighty superpowers exist such as the U.S. and smaller, militarily defeated and dominated countries such as Germany. In contrast to the situation between two “equal” countries, France and Italy, monetary relations between the U.S. and Germany are significantly different and reflect this power difference.

... All countries are on a pure fiat money standard. The U.S. initiates the process of inflation, and by using dollars as reserve currency, U.S. inflation is exported to U.S.-dominated countries, while goods flow into the U.S. in the same way as described before. Yet a run on the U.S. gold reserves is no longer possible, of course. Even this system is unsatisfactory, however. In a world of many countries, and even if the U.S. is a superpower with troops stationed in well over 100 countries around the globe, this system of coordinated inflation is bound to crack again and again. ... a U.S.-dominated country may inflate less than the U.S., its currency would appreciate against the dollar, and, if this became a trend, the dollar would lose trust and might be abandoned in favor of the other, harder currency.

As the final solution in the drive toward monetary imperialism and as a decisive intermediate step in the drive toward world government, the U.S. has been working long and hard to establish a U.S.-controlled world central bank issuing a single, world-wide accepted paper currency. Only then are all obstacles to government counterfeiting eliminated because then the currency can no longer rise or fall against any other as no other currencies are left. The monetary integration currently under way in Europe, the establishment of a Europe-wide EURO, is an important step in this direction. The EURO will be more inflationary than the least inflationary of the previously existing national European currencies, the German mark. And it is easier for the U.S. central bank to “cooperate” with a single European central bank than with some fifteen or so different banks. Moreover, whereas these fifteen odd banks also could (and in fact did) use other reserve currencies besides the dollar, namely those of other European currencies (notably the German mark), with these other currencies gone, what else but the dollar can the European bank use for this purpose?

Do not forget, however, that success in this attempt to establish a world central bank requires public support, and to secure this support it is necessary to promote another myth. Indeed, the same myth that is propagated currently in Europe to establish the EURO. This is the myth that a single currency reduces transaction costs. There will be no more tedious exchanging of money when you travel from Germany to Italy, for example. This myth contains an important half-truth - and this makes it particular dangerous and potentially effective, because it is indeed true that money more truly serves its purpose as a medium of exchange the more widely it is used. International trade and economic calculation is in fact facilitated by the existence of a single money. Commodity money such as gold, which emerges as the result of markets and market exchange, has the tendency to become a world-wide used commodity money as trade expands.

Matters are fundamentally different, however, if this money is a fiat money produced by a government world central bank. Given the nature of government, we can safely predict that such a money will be more inflationary and lead to a more massive redistribution of income and wealth in favor of government and its favorite supporter-clients at the expense of the general public than anything seen so far. Indeed, if we are to have a fiat money (rather than a commodity money), and the only alternative is to have competing national paper currencies or an international paper money, the choice is clear: As much as competing and fluctuating paper currencies are dysfunctional as facilitators of exchange, the former alternative is infinitely better. [Emphasis added]


It is because of the portion that I highlighted that I think it is crucial that the public begin to critically examine the imperial activities of the United States in the financial realm. It is bad enough that every government of the world inflates its own currency and thereby regressively redistributes wealth from its people to big business and political cronies. If the project of American financial imperialism succeeds, the plumbing for which is being created by the World Bank and IMF, we can expect to see ever increasing levels of inflation.

The terminal goal would be abolition of money altogether. Without money, as corny as it may sound, we are effectively serfs, vassals of the government, completely dependent on political beneficience. Of course, I think this goal is unachievable since barter and primitive currency would constantly sprout up as unstoppably as prohibited drug imports. But it will not be for lack of trying since there is no greater ideal which elites punch-drunk on political power could desire. There is no conceivable dominion more absolute than a worldwide, moniless empire. Even the dystopias depicted in 1984 and Brave New World would look like patty-cake by comparison.

This idea that the United States government is working to create a worldwide financial empire by establishing a World Bank and uniting world currencies is not an interpolation. See this Wikipedia article on the Amero, the currency which the Bush administration has quietly been working to establish (and I'm sure whoever succeeds him will continue working to establish) that would be a united Canada-US-Mexico currency. There is information on the internet that similar projects are in the works for a united African currency and Asian currency. The obvious next step would be a single world, fiat currency. Wiki also has an article on that (just search "world currency").

Fortunately, there are two huge strategic obstacles to this unsettling trend.

First, as far as I know, China isn't playing ball. The Chinese are smart, and I'm sure they understand exactly what all the World Bank and IMF wheeling and dealing is about. They invented paper money, inflation and were the first to experience hyperinflation under Kublai Khan. China holds very large national gold reserves and has just recently legalized private gold ownership. It also holds what I think of as a "dollar bomb" in the form of more than a trillion US dollars. It can dump these into the world market at any time to weaken the dollar if it so chooses. I used to think that they were primarily holding all these dollars for a military strategic purpose. However, I am beginning to wonder if they're holding all those dollars as a lever against Western pressure to cooperate with a worldwide currency empire.

Second, Islamic nations, as far as I can tell, also don't seem to be playing ball. Islamic banking is full reserve (though their governments have worked around that limitation and inflate their national currencies, as well). The Arab nations have plenty of bright people, too, so I have no doubt they understand the strategic moves to create a world currency. However, it must be understood that Islamic banking is older than European banking. The Islamic world still makes heavy use of gold (the dinar) in transactions and it is an integral part of their culture. I am not aware of any cooperation between the Islamic nations and the Western nations to unite their currency, and my guess would be that the Islamic nations have told Western banking interests to f off, since such a union would have the completely one-sided effective exporting our debt problems onto them.

Is it a coincidence that the #1 and #2 strategic enemies of the United States are an Islamic country and a Far East country (Iran, North Korea)? I can't imagine that the effective demonization of Islam since 9/11 and the subsequent invasions of Afghanistan, Iraq and sabre rattling at Iran have absolutely nothing to do with the Islamic non-cooperation in formation of a world currency.

The most disappointing thing to me is that the people that should be tracking this just aren't. The news media is reporting all the individual facts. But academics, who should be doing this, are not putting the puzzle pieces together and indicting this imperialism for what it is. The only academics that I hear of denigrating US imperialism also want world government and worldwide socialism, which is exactly what a world currency is tantamount to. The only reason I can think of for why not more academics are exposing this situation is that their funding in large part comes from the inflationary machine. What a travesty.

Stop trusting your government but don't stop trusting in the basic goodness of your fellow man.

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