Cyprus Update - The Calm Before the Storm - One Europe?

I am sure you are aware of the events unfolding in Cyprus, at least if you follow the financial news and the internet.

The vote in the Cyprus Parliament has been postponed until Tuesday, most likely because the votes were not there to pass a resolution that was acceptable to the EU.

The bank holiday has been extended to Thursday, and it is doubtful they will reopen until the Parliament has sorted out a plan of action.  The shutting of the banks while the politicians wrangle over the details of the confiscation is not designed to heighten confidence.

As you may recall, the President of Cyprus, Nicos Anastasiades, a member of the conservative Democratic Rally (DISY) party, was elected in February of this year with about 58% of the vote. He is known as a blunt, chain-smoking 'strong man' with strong ties to the right wing politicians of Europe. Indeed, these connections and his promise of a solution favorable to Cyprus were strong factors in his recent electoral victory.

The extenuanting factors here are that Cyprus is viewed as a bellwether for Italy and Spain. There are many who would dispute this, and point to the particularities of the size and structure of the Cyprus banking sector. But there is a widespread perception that the heavy hand of Germany is running the EU these days, and prior pledges and principles cannot be trusted if the central rulers of the EU are willing to confiscate the insured deposits of private citizens, no matter how they try to rationalize it.

I tend to view this as the overall progress in the foregone drama of an inherently unstable European Union that has fallen into a financial plutocracy. Any actions they take now are merely delaying the inevitable. And the consequences for the global financial sector are profound.

The EU and the Fed may be able to paper over the problems and achieve an uneasy stability that could last a year or two, but without profound changes to the European financial arrangements that include transfer payments, a single currency spanning such diverse national economies is inherently unstable.  It is the child of the overreach of bureaucratic arrogance and economic fairy tales.

This *could* be a rather clever move to force at least a portion of Europe into a single political government of twelve or fifteen members, but I hate to give the plutocrats that much credit for planning. 

I know there is and has been talk for quite some time of dividing the world into five or six major spheres of political influence, including North America and a few South American client states, Europe, Russia, China, and Japan.  The particularities of southeast Asia and the Pacific are very much in play, along with the status of various economic colonies in the Third World including Africa.  India and Australia are major outliers.  The UK has been particularly troubled by its relatively minor role, and aspires to be the financial center and interface to the world for the rest of Europe.

Whether any of this happens or not is very much open to question.  But the establishment of a 'new order' in the world has quite a few globally powerful adherents who are willing to work for this in the long term.  It should be remembered that the fashions of 'centralization and decentralization' of power have their swings, seemingly like a natural ebb and flow over time,  quite similar to what we often see in the corporate world.

Excerpts of Alleged Letter from Troika to Greece

This appeared today on the web at Zerohedge.  It is a letter purported to be from the Troika to Greece, with the appearance of a set of demands that was leaked by an anonymous source.

If it is legitimate, and that is a big 'if' given the sources, then it is a bit of an eye-opener, perhaps not so much in the terms themselves, but in the level of micro-managing the Troika wishes to impose on a purportedly sovereign people.

As you may recall the Troika are the European Commission (EC), the International Monetary Fund (IMF), and the European Central Bank (ECB).

From what I have read, the 'bailout' is really a bailout of the debt which is owed to the banks of France and Germany among others, incurred by corrupt administrations heavy with insiders and influenced by banks such as Goldman Sachs, much in the manner of Iceland, Ireland, and other peripheral countries.

The track record of the IMF in such proposed 'reforms' is a national devastation.

I do not believe at all that these measures are stable, practical, or given in good faith as a solution. In other words, they will be back for more. The capitulation on such draconian interference is the path to a parasitic existence, in the manner of the most servile type of colonialism.

Greece might well consider a default on the existing external debts, the issuance of a national currency, reforming the financial system, the imposition of immediate capital controls, democratic safeguards against the rise of extreme domestic elements, and self-sufficiency at any and all costs in the spirit of a war time economy of a nation under siege.

Area: Flexibility of labour arrangements

Measure: Increase flexibility of work schedules:

Increase the number of maximum workdays to 6 days per week for all sectors.

Set the minimum daily rest to 11 hours.

Delink the working hours of employees from the opening hours of the establishment.

Eliminate restrictions on minimum/maximum time between morning and afternoon shifts.

John Ralston Saul: The Collapse of Globalism

"The transnational corporations and the money markets have declared the era of human-designed regulations over. Now the market must reign. Because few people in the business community are paid to think about phrases such as 'western civilization,' they don't seem to realize that they are proposing the arbitrary denial of 2,500 years of human experience...

Ever since the democratic systems permitted their various courts to give corporations the status of persons, the individual as citizen has been on the defensive. How could it be otherwise? If you are a person before the law and Exxon or Ford is also a person, it is clear that the concept of democratic legitimacy lying with the individual has been mortally wounded...

If allowed to run free of the social system, capitalism will attempt to corrupt and undermine democracy, which is, after all, not a natural state...Capitalism was reasonably content under Hitler, happy under Mussolini, very happy under Franco and delirious under General Pinochet."

John Ralston Saul


“The powers of financial capitalism had a far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences."

Carroll Quigley, Tragedy and Hope

Globalism, or globalization, is the theory that the world marketplace should be free of local, nation, and regional limits. It is founded on the belief that unregulated markets are the epitome and center of rational decision making, described as the most profit maximizing in the aggregate and therefore the most 'efficient.'

Globalism elevates economic measures as the arbiters of policy, and subordinates society and individuals to economic outcomes. Its value system is dominated by money and corporations, which are monetary organizations, in contrast to nations which are organizations of people.

"Bankers: Pillars of society who are going to hell if there is a God and He has been accurately quoted."

John Ralston Saul

The Secret State and the Tyranny of the Faceless and the Lifeless

“A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself.

For the traitor appears not a traitor; he speaks in accents familiar to his victims, and he wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist.”

Marcus Tullius Cicero


"Corporations have neither bodies to be punished, nor souls to be condemned, they therefore do as they like."

Edward Thurlow, Attorney General and Lord Chancellor of England

Golem XIV, aka David Malone, highlights a lesser understood aspect of the corporatism that seems to be taking the developed nations by storm.

The recent moves by the Supreme Court and the Congress to extend personhood and the rights of individuals to corporations as 'super people' are more dangerous than most realize.

All individuals are not equal in terms of influence and power. And if organizations such as corporations can become 'individuals,' that Frankenstein monster will be able to dominate as effectively as any tyrants in history.

The cure is transparency and accountability, and the recognition that the human individual alone is uniquely protected by the Bill of Rights. Corporations are not asked and expected to fight and die for the benefit of the State. They do not suffer and bleed, nor stay awake at night in worry about their children and their care. Corporations are lifeless.

The Sarbanes-Oxley law was designed to give the people who use corporations as their instruments no place to hide. But as we have seen, it is a law rarely used, and itself under determined resistance to be overturned as was Glass-Steagall.

"Every thing secret degenerates, even the administration of justice; nothing is safe that does not show how it can bear discussion and publicity."

John Dalberg Lord Acton

Corporations are but the artificial constructions of men, often designed to eliminate individual risk and accountability. When things go wrong, no one seems to know what happened. Money just vaporizes away. When recklessness leads to horrific accidents such as Bhopal, the corporation retreats into the aether of words and corporate laws, often held in disinterested foreign hands.

The modern Corporation aspires to the power of the unaccountable State.

Corporations are without sin, no matter what actions or even atrocities they may as a collective commit in pursuit of profits, because they are lifeless. They do nothing, really, except to hide and often excuse the actions of real men and women. Corporations live only in the courts. It is all upside.

And it is the great irony of our time that the platforms and agendas of the Tea Party reformers and the Christian Right  have been perverted by their representatives and their money men to become the proponents of the anti-human, the corporate ascendancy over human rights and individual life.  And that the elected reformers of the progressive left have largely sold themselves to Wall Street since the 1990's.

The definition of 'individual' as a living being with a soul thereby granting them inalienable rights, which is at the very heart of the American experience, is under determined assault by the power of the global monied interests, not from some godless enemy, but most effectively from the corruption of power within.

Secret State
By Golem XIV
June 19, 2012

"...We are all now sadly familiar with the role of Off-shore tax havens. They allow companies to avoid having to pay tax. They also allow companies to hide any dealings they may not want scrutinized by prying regulatory authorities. Tax havens are, as Nicholas Shaxson in his wonderful book Treasure Islands has suggested, better thought of as ‘secrecy jurisdictions’. They are purpose built for shrouding in impenetrable and legally protected secrecy any morally dubious financial arrangements which might be embarrassing or costly if revealed to regulators or governments. The world of Off-shore provides a legal and moral nul-space in where most things can be arranged for a price.

But that nul-space is growing and more than simply growing it is maturing.

Recently Off-shore havens have added to financial secrecy another valuable service – data and communications secrecy. There are now companies based in off-shore havens which offer to protect emails and data caches from prying regulatory or legal scrutiny...

Suddenly not only is it possible for corporate finances to be moved beyond the reach of national oversight and regulation, but now corporate emails and other data can also be removed from national democratic and legal oversight. Corporation can now operate within any nation, making their profits there. but without the elected government, the tax officials, financial regulators, courts or police having any power to see what the corporation is doing. The police could not force the disclosure of emails because those emails would not be under UK jurisdiction. It would be entirely possible for a company to be breaking the law, exactly as News International did, but now most if not all (depending on how careful they were) the evidence required to bring their illegal activities to light, would be beyond the reach of any authority in this country...

I look at it and think to myself – so now we have vast financial power shielded from any national, democratic regulation or legal oversight. We have data similarly hidden away from the pesky prying eyes of civilian democratic and legal accountability and we now also have the parts of the global military that routinely operate outside of democratic oversight and who regularly break the most fundamental national and international laws, being organized to operate together under an aspiring supra-national command...

In the week of May 21st of this year in Tampa Florida, Special Operations Forces from 90 countries got together at a Special Forces Convention. You can see a video of what they got up to here.

The purpose of convention, which is a regular thing now, is (from their web site):

The International Conference objective will be that U.S. and International SOF leaders recognize USSOCOM as a Global Command and gain a better understanding on how to become active partners in that partnership.

Who is USSOCOM? It is the umbrella US military command for all US Special forces. So here we have a programme the purpose of which is to integrate the operations and even the command structure with the US at the top, for the Special Forces of 90 nations. Is this anything to be concerned about? Well on one level, if you have Special forces why not have them work together well? Seems sensible. Except that Special Forces are by design the part of any nation’s armed forces which operate routinely and as a matter of course, outside of the law and beyond democratic oversight...

What this this and other documents now clearly indicate is that through this command and others the US can now commit troops to hostile actions without the Congress having to give its consent or even be informed. Now of course we all know this happens. SO what is new. In a sense nothing. In another sense it clearly shows how our governments, or at least elements within them, are keen to follow global finance’s lead in being able to operate outside of democratic oversight, outside its own laws and outside of any democratic accountability. This I think is, if not a new desire, a new maturation of the capability.

There is a clear disdain for democracy being voiced among those who run and own global finance, who make up the supra-national world of the IMF, the WTO and other non-national, non-democratic global technocratic bodies. We all know what disdain the global financial and media companies have for the laws which ‘regulate them’. We know how far outside their own laws and international law our governments have gone in rendition and torture of civilians.

It seems to me you don’t have to subscribe to any conspiracy theory to find this enough to worry about.

Read the entire article here.

The Question Is 'How Best To Default' and Not 'How Best to Maintain the Unsustainable'

"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks."

John Dalberg Lord Acton

Greece is the most awkward of the EU countries by far in terms of economic fit.

There is no conceivable way that Greece can remain in a single currency union without regular transfer payments from the rest of the EU to compensate them for holding a highly overvalued currency relative to their own economy, geared more to the Germans and the French.

The problem is that the political structure of the EU does not accommodate this sort of adjustment, and within the current political character of the EU the notion of such payments is abhorrent.  The Germans, for example, have never thought of themselves as 'fellow Europeans' with a country such as Greece, and the economic structure of Europe does not easily lend itself to de facto payments.

Compare this to the US, with Greece as one of the poorer states, which receives much more in tax receipts and federal projects than the tax revenue that they send in.

It 'works' in the US because it is one nation by structure and by character. Despite their regional differences, most Americans can comfortably think of themselves as 'Americans' first wherever they might live. Unless they are urban cowboys from Texas perhaps (lol).

Every time I look at the structure of the EU politically and economically with the one currency I ask myself, "What were they thinking?"  There is no way to go by halves with a single currency and no accompanying political union. 

But this is the sort of building by half measures to which Europe has often been susceptible.  Bureaucrats love compromise, often blinded to how weak and unsustainable that compromise might be. Any deal is not always better than 'no deal,' except to the dealmakers.

So either the EU will change politically, which is highly unlikely, or Greece will leave the EU and once again obtain its own currency.

I think that outcome is almost predetermined. Now it is only a question of 'how' and mostly with regard to the possibilities of cross-contamination in the financial realm.

The best solution is for Greece to simply leave the EU, default on its debts, nationalize its banks, and restore the drachma at some highly devalued level. I think Iceland shows the way in this. This will greatly disappoint the private financiers who are licking their lips at the prospect of buying real national assets on the cheap with overvalued paper.

The worst problems will be for the European banks who hold Greek debt.

I would consider seriously an action that allows the banks to simply write off the Greek debt, and declare all CDS on Greek sovereigns null and void except for those who actually hold Greek bonds, to the extent of fifty percent of their nominal value.

If this is not workable, I would suggest that Europe also should nationalize and restructure their banks. This is what ought to have been done in 2008, and much of what has been done since then is waste. The greatest resistance to this will come from the one-worlders and their friends in the Anglo-American financial cartel. They would also like a single world currency, which is unworkable without government by a 'new world order.'

The absolute worst model is the American way, in which the banks are given the keys to the Treasury, the markets, and the political process, and allowed to do as they please, while maintaining a thin facade of legitimate government by the people.

They may as well get this done, and stop the charade. And then the rest of the world can begin thinking of how they might reform international trade, replace the existing reserve currency system, and bring the Anglo-American privateers back under control once again.

The Trap: James Goldsmith on GATT and the Consequences of Multinationalism and Policy Failures

This interview was done in 1994, when Bill Clinton was promoting free trade and multinationalism, but had not yet made a deal with China to allow them to devalue their currency and then receive favored nation status.

You can decide for yourself, with the benefit of retrospect, the value of the arguments presented.

"Free trade" as defined by neo-liberal policies is a leveling tool that creates a few big winners and many more big losers, and reduces the middle class to the lowest common denominator of indentured servitude. 

The goal of multinationalism is to destroy local government, choice, and sovereignty, through financial and military means.   The will to power cuts across diverse forms of government, because of its attitude of the power of the few and the worth of the many.  It defines what is 'human' to suit its needs of the moment.

The primary problem with unregulated trade, not considered within the context of overall social and public policy,  is that it becomes a natural weapon for oligarchies and multinationals to use against local and regional government and public policy decisions, taxation, environmental laws, human rights.  It is a major stepping stone to world government. There is a recurring movement among the powerful to bring the world under their control. It is the natural extension of their greed for power. There is never 'enough.'  Sociopathic greed is a disease, and it sows the seeds of its own destruction.  Always. 

And this is why idealistic models of unregulated free market economics fall apart in practice, always.

Trade *could* be used to uplift the developing world, if it was accompanied by local reforms and progressive public policy, but in practice is most often used to create a huge social divide in the developed countries, and promote a return to a feudalistic political structure. Rather than uplift, it reduces the world to the least common denominator of quality of life and freedom. 

One of the most significant problems is mercantilism, employed by oligarchic countries and multinational corporations, within the context of a fiat currency system wherein they are relatively free to short circuit all the market mechanisms that would prevent a few countries from creating enormous trade imbalances in a partnership with powerful elites and the privileged around the world.

Macro-economics has never been a pure science, but is often represented as such by those who are promoting theories that are purely political, cloaking them in false objectivity. Macro-economics is a social science, more like sociology than physics. In reality it is a subset of public policy discussions, highly slanted to ends and assumptions, attitudes and points of view about what is 'good' and valuable rather than what is a hard and replicable principles of nature, objectively true based on some endurable physical law. 

So for example, if someone were to come out and say, "I think we should adopt the social structure of a nation and form of government your father spent much of their lives fighting and dying, where you give up most of your wealth and freedom to serve the powerful few who run the state," there would be a general uprising. But if the proposition is structured as the logical consequence of 'hard economic choices,' and a serious of crises, people can be led off the cliff, a few steps at a time.

"The liberties of our country, the freedoms of our civil Constitution are worth defending at all hazards; it is our duty to defend them against all attacks. We have received them as a fair inheritance from our worthy ancestors. They purchased them for us with toil and danger and expense of treasure and blood. It will bring a mark of everlasting infamy on the present generation – enlightened as it is – if we should suffer them to be wrested from us by violence without a struggle, or to be cheated out of them by the artifices of designing men."

Samuel Adams

If this trend continues, I would imagine the next step is civil unrest, and political crises that will be used to tighten the control over the public in the 'free countries,' and repress them for their own safety.  We are seeing this now in the Anglo-American client states and unpopular dictatorships overseas.

Most men are easily fooled, entrapped by their emotions, easily herded by clever arguments and the dialectic of false enemies. It is only when they step back, and look at what is happening, who benefits and who is above the law, that they begin to realize the truth. But they will not do this for quite some time, because to do so is to admit that they have been fools.  

How sad that the heirs to the 'greatest generation,' almost surely the most privileged generation in history, have in their excess become selfish, petty, and cruel.

The corollary of a few "Too Big To Fail" is that there are many individuals and small businesses who become "Too Small To Care" and then "Too Weak To Survive."

And so the weak and the undesirable are eliminated, first slowly and then with growing efficiency, for the good of the chosen few, the ubermensch, however a society chooses to define it.

Does this sound *conspiratorial* and outlandish? Check back in another ten years, and let me know how you and your children are doing. There was a budget surplus in the 1990's.  And now the nation is throwing the middle class and the weak under the bus for the sake of the financial sector and the wealthy.

Once a single global currency is achieved, it is the end game for freedom for all but a few. Those who imagine that they are part of the few are all for this, although they are sadly mistaken.  The few view them as useful idiots, disposable, and prey.

What the few themselves may not yet realize is that tyrants and empires tend, almost inevitably, to fall in disgrace, blinded and betrayed by the will to power, overcome by the love of freedom and the tide of history.  So there is hope.  But sometimes hope can become a distant memory, and freedom regained only by significant pain and loss of life, once you have released it from your grasp.

"When I despair, I remember that all through history the ways of truth and love have always won. There have been tyrants, and murderers, and for a time they can seem invincible, but in the end they always fall. Think of it--always.

Mohandas K. Gandhi

America Trapped in a Massive Coverup of Control Fraud and Corruption

I think most readers with an economics background would be familiar with a liquidity trap, which is a situation where monetary policy is unable to stimulate an economy suffering a non-cyclical credit contraction, either through lowering interest rates or increasing the money supply because expectations of adverse events (e.g., exogenous deflationary factors, insufficient aggregate demand, or civil or international war) make persons with liquid assets unwilling to invest.

America is caught in a confidence or credibility trap, in which the changes, investigations, and reforms necessary to restore trust to an economy or market are rendered unlikely because doing so would expose a pervasive corruption that the principals fear would destroy the careers of politicians and business people who may have permitted and even appeared to facilitate the control fraud that caused the financial crisis in the first place. Personal risk trumps public stewardship.

The fraudulent activity is covered up and therefore continues or at the very least appears to continue, crowding out most productive business investment and activity which cannot possibly hope to compete with the highly profitable fraudulent activity ad asset bubbles under such opaque and uncertain circumstances.  Informed market participants are unwilling to invest their liquid assets in a system which they suspect is riddled with accounting fraud, insider trading, and regulatory weaknesses, except of course in a few situations and somewhat ironically in some existing frauds, such as a bubble in equity valuations for example, which they think they understand.

The American government is indeed acting as if it is involved in a massive coverup of a control fraud and corruption that could perhaps be the worst in its history.  I think many people who are looking at this know in their hearts that all is not well, that there is something not quite right in the current situation.  How else can we explain such massive and widespread financial fraud, with so few meaningful indictments, or even ongoing investigations with credible disclosures?  And the worst perpetrators appear to be dictating the remedies and reforms to the system for this government sponsored recovery.

Hank, Tim, and Ben alluded to the consequences of the discovery and uncontrolled disclosure of this fraud, and it frightened the Congress so badly that they immediately gave up and signed over 700 billion dollars, and many billions more, to facilitate the coverup of this under the guise of recovery and stabilization.  I would like to imagine that those in charge are attempting to prevent a panic while they put out the fires, but I see little serious remedies designed to save the public, much less than to perpetuate the firetrap.  And so the corruption continues to smolder and fester, and thereby debilitate the nation.

More than an American scandal, this fraud reaches deep into the halls of power in Europe, some of whose national governments are already failing. What had been the Keating Five is now the Global Finance 500.

People say they understand this, but they really do not understand the implications of it. They intellectualize and theorize around it, try to deal with it by smashing it down into something they can get their mind around and accept. They may even try to turn it to their short term personal financial advantage. But they are not dealing with it and certainly not facing up to it.

The US banking system controls the issue of the reserve currency of the world, which impacts the price of  virtually everything that is bought and sold.

And as you might expect there are many whose vested interest is to distract and to change the subject away from it. There is a great deal of money to be made by serving the desire to turn people's attention away from the problem to find someone else to blame, some other problem to focus upon, and some new victim class to absorb the public anger. It is an old story, often repeated in tragedy.

Thirteen Ways to Hide the Truth

But unfortunately, confronting the truth and fixing the situation is key to any sort of sustainable recovery. And this is the trap of crony capitalism and control fraud, when it has nearly exhausted its victims, and is having difficulty finding new ones to maintain its growth and facade.

Until that time there will be a procession of scapegoats, defaults, bailouts, and property seizures, both implicit and explicit, and a growing toll of innocent victims and systemic destruction, ending finally in the collapse of the US national currency and international trade.  

If it had not been that the US is so large, and for the time being controls the bulk of the world's reserve currency, it is likely this would have already come to some conclusion before spreading so widely and pervasively.  But the situation remains highly unstable and threatening, despite assurances to the contrary.

William K. Black is telling us something very important, as Harry Markopolos had been trying to tell some simple but important things to the investors in Bernie Madoff's investment scheme.  The Madoff investors preferred to vilify and ignore him.  It appears that the same thing is happening to William Black.  And the final outcomes may be similar.

What can one person do besides to spread the word, and demand the truth in their own place and their own way?  Support those who stand and tell the truth, sometimes at great cost.  Insulate and remove yourself from the fraud as best you can to preserve your wealth and your integrity. 

Above all resist the disinformation, propaganda, and distractions,  and all the insidious rationalization and convenient skepticism to complicit apathy, making it clear that you will be neither a willing victim nor a silent bystander to the intoxicant of blame and hatred, and the victimization of others designed to turn the people on one another, be they Gypsy, Muslim, Jew or Christian, black, white, Asian, Hispanic, disabled, old, poor, ill or weak, or any other variety of outsider and convenient target. 

For once the madness starts, it can never be controlled, and will eventually come for all, and consume all.

The Great American Bank Robbery
Video - Lecture
By William K. Black

1. Why do we have repeated, intensifying economic crises?
2. What can white collar criminology add to our understanding of what's going wrong?

Note: The William K. Black video was first served at this Cafe in August of 2009 in a post titled The Great American Bank Robbery. It was not so widely received at that time as it seems to be now. I view this as a promising development. The events of the past few years are opening people's minds to the possibility that things are not as they appear, and that the financial crisis and reform did not happen for reasons which they had not yet seriously considered.

Russia Continues to Build Its Gold Reserves Ahead of the SDR Discussions

Thanks to Dave at Golden Truth for this updated chart.



As you know, Russia, India, China and some of the BRIC-like countries will continue to push hard for a gold and silver content in the new formulation of the SDR this year. The US and UK are vehemently opposed.

Europe is still wallowing in confusion and is virtually leaderless, as the most recent financial crisis in Greece shows. This may not be all bad, because it highlights the weaknesses in their union, and gives them the incentive to take it to the next step.

One cannot have a common currency with uncommon fiscal policies and laws. While there is some room for discretion, it is sorely tried in changing economic conditions and social attitudes. America went through a bloody Civil War for this reason.

This is why a one world currency, except for international trade only and at the discretion of trading partners, is so dangerous. One cannot maintain their sovereign freedom when someone else controls the supply of their money: either you cheat or you submit. All serious economists understand this; too few of the voting public do.

What Will the World Currency Become? The Stakes Are Enormous

And the Winner Is...the SDR?

This is the fallacy of the US dollar as the reserve currency for the world. It 'worked' as even Mr. Greenspan noted, as long as the US dollar was able to demonstrate the objective stability of an external gold standard relative to other currencies. That lasted for a few years, and the rest is foreign policy and currency wars. The time for its replacement is long past. The BRIC's understand this, and are playing their hands accordingly.

If one submits to a single world or regional currency for domestic use, they may as well take their constitutions and individual rights and throw them away. And globalization has been serving as a proxy for this, paving the way.

Gold and Economic Freedom: Did Greenspan Know What He Was Doing? - ZeroHedge

The moves here are slow and subtle, since great nations are involved. I get the impression, though, that most traders are playing checkers at a chess match. Well, that works for the daytrade. But only time will tell what will happen, and when. But sometimes events can break free and move quickly. Best to gather those nickles off the freeway before the rush hour commences.

Or as the man behind the .50 cal would say, 'Git some. Come git some.'

Obama to Tell the G20 to Fix the US By Changing the World

When you can't run a state, run for President. When you can't run your country, attempt to run the world.

This directive to the G20 is probably going to make the Organizer-in-Chief's recent pathetic sermonette on altruism and self-denial to Wall Street seem effective by comparison.

Unless he is as prime an example of boobus Americanus as he appears to be by his actions, we suspect that this proposal is intended merely to be a blue sky diversion to a broadly unachievable goal from a genuine agenda for reform and action on the table including regulating bankers' pay, which might be an annoying hindrance to Obama's constituents on Wall Street. It has been estimated that the reforms on the table from Europe, for example, might cut the trading revenues at Goldman Sachs by a third.

What Obama does not say, and perhaps does not realize, is that the majority of the problems that exist in the US's imbalanced trade relationships is the position of the US dollar as the world's reserve currency.

Owning the reserve currency is a significant benefit for your government and financial sectors, but it makes your manufacturing and productive economy the target of every mercantilist command economy around the globe that is by definition hungry for dollars.

Reuters
Obama wants G20 to rethink global economy
By Jeff Mason and Dave Graham
Mon Sep 21, 2009 12:29am EDT

WASHINGTON/BERLIN (Reuters) - U.S. President Barack Obama said on Sunday he would push world leaders this week for a reshaping of the global economy in response to the deepest financial crisis in decades.

In Europe, officials kept up pressure for a deal to curb bankers' pay and bonuses at a two-day summit of leaders from the Group of 20 countries, which begins on Thursday.

The summit will be held in the former steelmaking center of Pittsburgh, Pennsylvania, marking the third time in less than a year that leaders of countries accounting for about 85 percent of the world economy will have met to coordinate their responses to the crisis.

The United States is proposing a broad new economic framework that it hopes the G20 will adopt, according to a letter by a top White House adviser.

Obama said the U.S. economy was recovering, even if unemployment remained high, and now was the time to rebalance the global economy after decades of U.S. over-consumption. (The recovery is as tenuous as Mr. Obama's prospects for a second term - Jesse)

"We can't go back to the era where the Chinese or the Germans or other countries just are selling everything to us, we're taking out a bunch of credit card debt or home equity loans, but we're not selling anything to them," Obama said in an interview with CNN television. (How about a system where Wall Street thinks it can defraud the world, and take usurious rents on every financial transaction in every market? - Jesse)

For years before the financial crisis erupted in 2007, economists had warned of the dangers of imbalances in the global economy -- namely huge trade surpluses and currency reserves built up by exporters like China, and similarly big deficits in the United States and other economies. (Greenspan dismissed every growing problem with an unswerving prevarication, and the corportocracy provided air support. - Jesse)

With U.S. consumers now holding back on spending after house prices plunged and as unemployment climbs, Washington wants other countries to become engines of growth. (Most of the world would like to cure its problems by net exporting to other countries in unbalanced trade relationships. The Asian preoccupation with mercantilism is in some ways the natural outcome of the US dollar reserve hegemony. There is a bit of a standoff here. - Jesse)

"That's part of what the G20 meeting in Pittsburgh is going to be about, making sure that there's a more balanced economy," Obama told CNN.

China has long been the target of calls from the West to get its massive population to spend more. It may be reluctant to offer a significant change in economic policy when Chinese President Hu Jintao meets Obama this week. (The only way they can spend more is if they get higher real wages, a neat trick when your national policy is based on exploiting the exploitation of your laboring class - Jesse)

The U.S. proposal, sketched out in a letter by Obama's top G20 adviser, Michael Froman, calls for a new "framework" to reflect the balancing process that the White House wants.

"The Framework would be a pledge on the part of G-20 leaders to individually and collectively pursue a set of policies which would lead to stronger, better-balanced growth," said the letter, which was obtained by Reuters. (Kumbaya, my lord, kumbaya... Jesse)

Without naming specific countries, the proposal indicates the United States should save more and cut its budget deficit, China should rely less on exports and Europe should make structural changes -- possibly in areas such as labor law -- to make itself more attractive to investment.

To head off reluctance from China, Froman's letter also supported Beijing's call for developing countries to have more say at the International Monetary Fund. (Say = talk, but it does not imply that anyone will listen and take any action. The US owns the IMF. - Jesse)

The IMF would be at the center of a peer review process that would assess member nations' policies and how they affect economic growth...(Most statists are by nature Ponzi politicians who really cannot run anything complex, and have to keep expanding their power and span of control or collapse and be exposed as frauds. Its been a perennial source of mischief throughout history. - Jesse)