Currency manipulation destroys Capitalism
During the last century, the question about which economic system would survive was answered when the Soviet Union collapsed and China adopted capitalistic methods. China transformed itself into the second largest economy and attracted trillions of dollars from investors around the world. Meanwhile, the economies in the western world have imploded and their labor market is rapidly disappearing.
As effective as capitalism is, it requires free market economics to function. Currency manipulation, like China’s fixed exchange rate, destroys the free market system. Any country that agrees to trade with another country that uses a fixed rate currency cancels out the benefits of a free market in their own economy. A fixed currency controls the price by guaranteeing a lower cost of goods and labor as opposed to a free market economy where price is driven by quality, productivity, and demand.
The loss of the free market economy in the US has become so pervasive that Americans no longer even think of the country’s economic problems in terms of free markets or global competiveness but in terms of how government give-aways can be increased and extended.
American consumers have been happy to ignore China’s currency manipulation because it resulted in ever cheaper manufactured goods. American companies have been happy to ignore the currency manipulation because it guaranteed them an easy increase in profit by moving production overseas and lowing labor costs and taxes. Investors have been happy to ignore currency manipulation because it made it easy to “invest” their money in Chinese companies since it pays higher returns and is less risky than in a free market system. The big losers in the scheme have been the American workers and small business owners as the free market economy that rewarded them for being smart and working hard is all but gone and they alone are left to tax in order for the US government to fund their give-aways.
Allowing China to fix their currency to a value less than the US dollar, rather than floating it based on actual market value, has effectively ended capitalism in the US. Not only does a fixed currency make it impossible for US made products to compete, it makes it impossible for the US economy to compete for capital investments. US produced goods will always be more expensive against an artificially, lower currency rate and capital investors will be drawn to an economy where the fixed currency rates assures them of a higher rate of return.
Capitalism is based on free markets. Without a free market there is no capitalism.
If we want to return to a capitalistic economy and restore jobs and the high standard of living that capitalism brought the US, all of our trading partners must allow their currencies to be traded freely in the global currency markets. If we allow the world's second largest economy to continue to operate with a fixed currency rate, we do so at our own peril, as the current situation in the US and Europe demonstrates.
Politicians in Washington have considered global currency manipulation a minor issue that is not worth their time. We can only hope that the unemployed and unhappy country of voters will “educate” our current politicians to the importance of the free market system for a healthy, capitalistic economy in the US.
MONDAY, SEPTEMBER 13, 2010
http://hiloliving.blogspot.com/2010/09/currency-manipulation-destroys.html
I'm not sure if we can relate Iraq's fixed exchange rate to China but I wanted to post this so you folks can make your own analysis. I thought this part was interesting: "China transformed itself into the second largest economy and attracted trillions of dollars from investors around the world. Meanwhile, the economies in the western world have imploded and their labor market is rapidly disappearing."
I wonder if the "elite" or the "powers that be" are starting to focus more on the less developed nations because of the simple fact that "The basic premise of the Global Debt Bubble is that it’s mathematically impossible to repay all principle and interest on global debts by borrowing more money." So they move on to the next country so to speak...
http://www.timeline2012.net/index.php/en/prepare/social-economic-impacts/global-debt-bubble
The basic premise of the Global Debt Bubble is that it’s mathematically impossible to repay all principle and interest on global debts by borrowing more money.
By now, it should be a well known fact that through insidious and careful planning, the “powers that be” have successfully gained control over a majority of the world economies and governments through fiscal manipulation and economic slavery. Although this is not difficult to understand, it is often ignored by those who continue to maintain their convenient denial of the facts.
The following explanation provides a reasonable and rational understanding of how personal wealth and monetary control have created the current Global Debt Bubble.
The majority of global currencies are printed and controlled by the “powers that be” through a variety of global organizations and corporations known as the Bilderberg Group, International Monetary Fund (IMF), Group of Eight, Group of Twenty, and The Federal Reserve, etc. (hereto referred to as the “Elite”).
Most global currencies are printed for the governments and countries by or on behalf of the Elite and not by the governments and countries for themselves.
All currency that is printed by the Elite is then loaned to the government or country with interest and without any object, mineral, or substance as backing, security, or collateral. In other words, the currency is simply created out of thin air or in this case, paper.
As the amount of currency in circulation is increased (i.e. printing more money), the value of all currency in circulation is decreased and the principle and interest on the debt to the Elite is increased. The result of increasing the currency in circulation is that purchase prices for goods and services must increase in order for any business to maintain the same profit and the same lifestyle. This is known as inflation which is a combination of increasing prices and currency devaluation.
As the amount of currency in circulation is decreased (i.e. removing and destroying money), the value of the remaining currency in circulation is increased and the principle on debt to the Elite is decreased. The result of decreasing the currency in circulation is that purchase prices for goods and services will decrease as fewer people have access to the currency through lower incomes and a reduced lifestyle. This is known as deflation which is a combination of decreasing prices and an increase in currency valuation.
The only way for any country to repay just the principle on a debt to the Elite is by removing all currency from circulation and returning it to the Elite. It is important to note that there would be no currency remaining in circulation for anyone to purchase goods and services or to ever repay the interest on the debt to the Elite. Such an attempt would result in immediate economic collapse, poverty, and famine.
With any monetary system that is based on borrowing currency from the Elite at interest, it is mathematically impossible to ever repay both the principle and interest on the debt. Since the Elite know this fact, it can be concluded that all such currencies are designed to siphon off profits in the form of interest on the debt until the currency is forced to collapse through inflation and devaluation.
The only way for any country or government to maintain the same amount of currency in circulation and pay any interest on a debt to the Elite is to have the Elite print more currency for circulation. Of course, all currency printed for repayment of the interest on the debt is borrowed from the Elite at additional interest.
As the population of a country expands, the country must borrow more currency from the Elite for circulation in order for a majority of that population to have access to the currency for the purchase of goods and services and to maintain some semblance of a similar lifestyle.
Posted ImageWith this debt currency model, one might ask “How would a country every get out of debt to the Elite?” Answer: NEVER.
Although unlikely and unrealistic, one possibility for a government or country to eliminate this debt would be if the Elite forgave all debt of interest and principle from the government or country. It doesn’t take a genius to realize this is not a realistic option.
Another option might be to remove all currency in circulation, destroy it, and then replace it with a new currency that is devalued to an equivalent of the principle and interest on the previous currency in circulation (debt). This option would give the false and misleading appearance of a new currency with no existing debt, but would also result in an instant devaluation of all new currency in circulation. With this option, any future debt would only be incurred when additional currency is printed by the Elite and placed into circulation. This option has already been planned for implementation by the Elite as soon as an existing currency reaches the point of total collapse. This is also why the IMF is having ongoing discussions on the creation of three (3) new global currencies.
During the last century, the question about which economic system would survive was answered when the Soviet Union collapsed and China adopted capitalistic methods. China transformed itself into the second largest economy and attracted trillions of dollars from investors around the world. Meanwhile, the economies in the western world have imploded and their labor market is rapidly disappearing.
As effective as capitalism is, it requires free market economics to function. Currency manipulation, like China’s fixed exchange rate, destroys the free market system. Any country that agrees to trade with another country that uses a fixed rate currency cancels out the benefits of a free market in their own economy. A fixed currency controls the price by guaranteeing a lower cost of goods and labor as opposed to a free market economy where price is driven by quality, productivity, and demand.
The loss of the free market economy in the US has become so pervasive that Americans no longer even think of the country’s economic problems in terms of free markets or global competiveness but in terms of how government give-aways can be increased and extended.
American consumers have been happy to ignore China’s currency manipulation because it resulted in ever cheaper manufactured goods. American companies have been happy to ignore the currency manipulation because it guaranteed them an easy increase in profit by moving production overseas and lowing labor costs and taxes. Investors have been happy to ignore currency manipulation because it made it easy to “invest” their money in Chinese companies since it pays higher returns and is less risky than in a free market system. The big losers in the scheme have been the American workers and small business owners as the free market economy that rewarded them for being smart and working hard is all but gone and they alone are left to tax in order for the US government to fund their give-aways.
Allowing China to fix their currency to a value less than the US dollar, rather than floating it based on actual market value, has effectively ended capitalism in the US. Not only does a fixed currency make it impossible for US made products to compete, it makes it impossible for the US economy to compete for capital investments. US produced goods will always be more expensive against an artificially, lower currency rate and capital investors will be drawn to an economy where the fixed currency rates assures them of a higher rate of return.
Capitalism is based on free markets. Without a free market there is no capitalism.
If we want to return to a capitalistic economy and restore jobs and the high standard of living that capitalism brought the US, all of our trading partners must allow their currencies to be traded freely in the global currency markets. If we allow the world's second largest economy to continue to operate with a fixed currency rate, we do so at our own peril, as the current situation in the US and Europe demonstrates.
Politicians in Washington have considered global currency manipulation a minor issue that is not worth their time. We can only hope that the unemployed and unhappy country of voters will “educate” our current politicians to the importance of the free market system for a healthy, capitalistic economy in the US.
MONDAY, SEPTEMBER 13, 2010
http://hiloliving.blogspot.com/2010/09/currency-manipulation-destroys.html
I'm not sure if we can relate Iraq's fixed exchange rate to China but I wanted to post this so you folks can make your own analysis. I thought this part was interesting: "China transformed itself into the second largest economy and attracted trillions of dollars from investors around the world. Meanwhile, the economies in the western world have imploded and their labor market is rapidly disappearing."
I wonder if the "elite" or the "powers that be" are starting to focus more on the less developed nations because of the simple fact that "The basic premise of the Global Debt Bubble is that it’s mathematically impossible to repay all principle and interest on global debts by borrowing more money." So they move on to the next country so to speak...
http://www.timeline2012.net/index.php/en/prepare/social-economic-impacts/global-debt-bubble
The basic premise of the Global Debt Bubble is that it’s mathematically impossible to repay all principle and interest on global debts by borrowing more money.
By now, it should be a well known fact that through insidious and careful planning, the “powers that be” have successfully gained control over a majority of the world economies and governments through fiscal manipulation and economic slavery. Although this is not difficult to understand, it is often ignored by those who continue to maintain their convenient denial of the facts.
The following explanation provides a reasonable and rational understanding of how personal wealth and monetary control have created the current Global Debt Bubble.
The majority of global currencies are printed and controlled by the “powers that be” through a variety of global organizations and corporations known as the Bilderberg Group, International Monetary Fund (IMF), Group of Eight, Group of Twenty, and The Federal Reserve, etc. (hereto referred to as the “Elite”).
Most global currencies are printed for the governments and countries by or on behalf of the Elite and not by the governments and countries for themselves.
All currency that is printed by the Elite is then loaned to the government or country with interest and without any object, mineral, or substance as backing, security, or collateral. In other words, the currency is simply created out of thin air or in this case, paper.
As the amount of currency in circulation is increased (i.e. printing more money), the value of all currency in circulation is decreased and the principle and interest on the debt to the Elite is increased. The result of increasing the currency in circulation is that purchase prices for goods and services must increase in order for any business to maintain the same profit and the same lifestyle. This is known as inflation which is a combination of increasing prices and currency devaluation.
As the amount of currency in circulation is decreased (i.e. removing and destroying money), the value of the remaining currency in circulation is increased and the principle on debt to the Elite is decreased. The result of decreasing the currency in circulation is that purchase prices for goods and services will decrease as fewer people have access to the currency through lower incomes and a reduced lifestyle. This is known as deflation which is a combination of decreasing prices and an increase in currency valuation.
The only way for any country to repay just the principle on a debt to the Elite is by removing all currency from circulation and returning it to the Elite. It is important to note that there would be no currency remaining in circulation for anyone to purchase goods and services or to ever repay the interest on the debt to the Elite. Such an attempt would result in immediate economic collapse, poverty, and famine.
With any monetary system that is based on borrowing currency from the Elite at interest, it is mathematically impossible to ever repay both the principle and interest on the debt. Since the Elite know this fact, it can be concluded that all such currencies are designed to siphon off profits in the form of interest on the debt until the currency is forced to collapse through inflation and devaluation.
The only way for any country or government to maintain the same amount of currency in circulation and pay any interest on a debt to the Elite is to have the Elite print more currency for circulation. Of course, all currency printed for repayment of the interest on the debt is borrowed from the Elite at additional interest.
As the population of a country expands, the country must borrow more currency from the Elite for circulation in order for a majority of that population to have access to the currency for the purchase of goods and services and to maintain some semblance of a similar lifestyle.
Posted ImageWith this debt currency model, one might ask “How would a country every get out of debt to the Elite?” Answer: NEVER.
Although unlikely and unrealistic, one possibility for a government or country to eliminate this debt would be if the Elite forgave all debt of interest and principle from the government or country. It doesn’t take a genius to realize this is not a realistic option.
Another option might be to remove all currency in circulation, destroy it, and then replace it with a new currency that is devalued to an equivalent of the principle and interest on the previous currency in circulation (debt). This option would give the false and misleading appearance of a new currency with no existing debt, but would also result in an instant devaluation of all new currency in circulation. With this option, any future debt would only be incurred when additional currency is printed by the Elite and placed into circulation. This option has already been planned for implementation by the Elite as soon as an existing currency reaches the point of total collapse. This is also why the IMF is having ongoing discussions on the creation of three (3) new global currencies.
