Currency Wars

[don]

“Currency warfare is the most destructive form of economic warfare."

Harry Dexter White, US Representative to Bretton Woods

05 May 2010

Currency Wars

"In his latest letter, Mylchreest reckons we are now in the ‘Third Gold War' since the Second World War and this is being waged between the USA in conjunction with other western countries/institutions, notably the IMF, and various opposing sectors worldwide. In his contention, the U.S. and its allies lost the first of these ‘gold wars' to the French (then under De Gaulle) and the second to the Middle East, helped significantly by the then pro-gold stance and purchasing power of the German Deutsche Bank .

This latest Gold War has been/is being fought covertly. "High profile sales of physical gold have, for the most part, been replaced by sales of "paper gold" in the form of futures, OTC options and unallocated gold, etc." asserts Mylchreest. But this time he reckons the veil has been lifted and the whole charade is beginning to unravel. Instead of France or Arab nations, the opponent this time is China - the 800 pound gorilla - potentially an even more formidable opponent, with a huge treasury of trillions of dollars with which to back its moves. It's not just that it is the Chinese government which is the major participant, but also now that gold and silver ownership is being promoted to the populace there by government institutions, there is the huge pent-up, and growing interest in precious metals of the rapidly increasing Chinese middle class and its potential to affect the global demand patterns."

China: the Gorilla in the Third Gold War, Lawrence Williams

The gold war as described above is just one front in a greater and more general 'currency war' that is evolving as the empire of 'the US dollar as the reserve currency,' which has been in place since the end of WW II, declines and finally falls in the profligacy and crony capitalism of the Federal Reserve Bank and the Treasury.

This battle may manifest itself more publicly later this year in the debate over the reconstitution of the basket of currencies that the IMF's Special Drawing Rights (SDR) will contain.

What Will Be the New World Reserve Currency

Russia Calls for Changes to the SDR

The SDR may not be the successor to the dollar hegemony in the short term. The BRICs may lobby hard enough to legitimize it, and even to include some gold and silver content in addition to the fiat currencies of a greater number of countries. I do not believe that they can be successful without some support from the Petrodollar countries in the Mideast.

I realize that the SDR is just another fiat currency, a somewhat artificial construct for the accounting of international trade, a fiat of fiats if you will. It may even be inherently unstable in the midst of the controlled demolition of most fiat currencies that is now underway.

But from a portfolio perspective it could be useful to take some of the power to control the world's money supply away from the Anglo-American banking cartel and its politicians who have proven themselves to be unworthy of such a great responsibility.

I don't think a direct transition to specie is feasible. Inclusion of gold and silver in the SDR provides an evolutionary path.

One cannot help but wonder if the current bear raids on the EU and the euro by the financial predators and economic hitmen, the gangs of New York, is designed to bring them to heel in the SDR debate in this phase of the currency war, and to diminish the potential role of the euro in the newly created basket of world currencies.

from Jessie's Cafe Americain
http://jessescrossroadscafe.blogspot...ency-wars.html

[Mega]

Re: Currency Wars

Hi Don
Yep, please see my post "Gold @ $5,000"
Mike