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WAR and PEACE
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| A Look at the Big Picture, Cracks in the D0llar Hegemon |
| 04.02.07 22:22 |
Economics |
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 Looking back it all seems like a dream to me; pretty soon it will have been four years since I stumbled upon Venik’s website that brought us the GRU updates of what was happening in Iraq. A lot has happened in the world since George Bush opened up Pandora’s Box on March 20th, 2003. Those were amazing times indeed; the web can definitely serve as a medium to bring us closer together in our understandings of the world all around us. I think looking back it’s hard not to view events as a dream because there is so much fantasy that exists in how many view the world. For those of you who view the D0llar Hegemony as the leading cause of why and how much of this fantasy gets created, the world is a completely different place then it was just four short years ago.
Looking ahead clearly the Kings and Queens of the world and their henchmen and bondsmen that serve them must be trembling in their shoes, because much of how they controlled the world is disappearing very rapidly before their eyes. Gone very soon will be the elaborate system of Debtors Prisons that have been created and much of how the world is ruled going forward will be decided upon this year. The world is truly in need of a Jubilee, it’s been too long since Alexander II freed the serfs in Russia and Lincoln broke the chains of man to be exchanged for the chains of the Federal System we find ourselves enslaved by today. Much has happened, much still needs to happen and I’m sure the Central Bankers of the world aren’t done playing their hand.
I have a pretty simple view of the D0llar Hegemon and what gives this Hegemon the power that it exerts over the world. I view the Hegemon as a stool with three legs that provide the support. First and foremost is the usury that the d0llar uses that requires the accumulation of d0llars to pay for this interest. Giving away a countries natural resources and labor in exchange for d0llars to pay for the loans is a very significant prop to the D0llar Hegemon stool. Second I view the trading of hydrocarbons almost exclusively through the spot markets of London and Wall Street Bourses as the second leg to support the stool. This demand for d0llars in order to receive oil causes much of the worlds other resources to trade in d0llars as well. Finally I view the Narco D0llar as the third leg of support and viewing that there is about $1 trillion d0llars worth of addictive d0llar demand should not be overlooked. This one simple tactic during the opium wars enslaved an entire country to silver, which was controlled by the Bank of England at the time. These three legs of the stool support are how the D0llar Hegemon taxes the rest of the world through inflation to pay for its armies, navies, air force and henchmen that enforce the Federal System. In the last few years the world has done much to remove these supports.
In looking at the first leg of the D0llar Hegemon stool the amount of global loans that the IMF had outstanding at the end of 2002, heading into the invasion of Iraq in March of 2003 and it’s subsequent occupation was $70,469,709,809. Keep in mind IMF loans create a snowballing effect as these loans are taken to create other loans with the Paris Club or other international lending institutions. A billion d0llar IMF loan can easily turn itself into $20 billion or more of external foreign debt for a country borrowing the money, all of which needs to be paid back in d0llars. Usury hit its high water mark at the end of 2003 when the IMF had total world loans outstanding of $71,912,955,980. Today the IMF has an outstanding balance of $13,666,660,759 this is a drop of 81% over the last 3-years and should drop even further by the end of this year. Over the last 22-years this is the lowest level of loans outstanding that the IMF has held, I could only find 22-years worth of data so this could very well represent the lowest level of loans outstanding since the IMF was created. The amount of usury received to support the D0llar Hegemon has never been lower. Things are getting so desperate for the IMF that last week Toni Blair floated the idea that the World Bank and the IMF should merge. Last week the Turkish Press reported that some big name moneychangers Andrew Crockett former head of the Bank for International Settlements, Jean-Claude Trichet the current President of the European Central Bank, People’s Bank of China Governor Zhou Xiaochuan and Sir Alan Greenspan himself all suggested that the IMF sell 400 tons of gold to help cover expected shortfalls.
Just two weeks ago the newly elected President of Ecuador Ricardo Patino announced that out of the $11 billion of foreign external debt that Ecuador owes, 60% of that debt is onerous. An onerous debt is one that is attained illegally, meaning when the banks lent money to Ecuador’s military dictators who where installed by these banks in the first place, those loans become personal and not a national debt to be paid for by the people. This will be an interesting announcement to keep an eye on, when Mexico made this claim back when they achieved their independence the French sent troops to ensure that the loans were paid. An $11 billion debt for a nation of just 13-million is a very large burden to bare. A lot of schools, hospitals, roads and other infrastructure can be built for the people of Ecuador if their nation’s debt turns out to be $4.4 billion instead of $11 billion. How many other countries will also say they have onerous debt? I can’t imagine that Bolivia and Chile don’t make the same claim. How many nations in Africa currently hold onerous debts? Was the money that Marcos borrowed meant for the Philippines or to line his own pockets? This should turn into an interesting year to see how this gets settled, regardless of how these events pan out the World certainly isn’t borrowing more d0llars.
Looking ahead the country to watch will be Turkey, since Turkey is the last major holder of IMF debts. It was entertaining to see that the World Bank President Paul Wolfowitz with his Holy Socks was just in Turkey last week. Much is at stake in Turkey this year and in fact in just the next few months Turkey will hold national elections. Turkey is being courted by everyone thanks to Turkey’s central location and warm water ports. Natural Gas pipelines are coming from everywhere into Turkey and what currency will be used for how this Natural Gas is sold is decided by what currency is required for Turkey to pay back their loans. There is a lot at stake for Russia who has completed their Blue Stream pipeline in Turkey and they have just started construction on the second leg of this pipeline, where the second leg ends up will be determined by which currency is used for the sell of the Natural Gas. It was just announced that China is freeing up about $200 billion of their foreign reserves in order to make investments across the world this year. It certainly wouldn’t surprise me to see much of these investment d0llars freeing up Turkey’s d0llar based loans, similar to how two years ago China and Russia helped free up Brazil and Argentina’s d0llar based loans.
Wall Street and London are rapidly losing their control over how hydrocarbons are sold to the world. Thanks to this many other commodities are also being sold in alternative currencies. A lot of work was required to get the world where it is today. I believe the first step of this journey was when Russia and China agreed not to use the d0llar for their cross border trades. I believe at the time this represented about $15 billion in exchange. I believe by the end of the year this trade will represent something close to $80 billion. It’s interesting to note that the major economies in South America by this summer will be doing away with using the d0llar for their cross borders trades as well. Venezuela has been busy purchasing Brazilian and Argentine Bonds in order to allow for this to occur. Mercosur will really start to exert some influence in South America this year. Chavez has stated he is going to remove the independence of Venezuela’s Central Bank and has called to nationalize some key industries in Venezuela. I would have to guess that Chavez is planning on accepting something other than d0llars for Venezuela’s oil with their trading partners in South America this summer. I would think this allows Bolivia and Ecuador to do the same at a later date. This will free up a lot of money in South America in order to pay-off other d0llar denominated debts and buy back some d0llar denominated assets. Chavez is also talking about funding the Bank of the South that will handle future South American loans to nations that will require something other than the d0llar to be paid back.
The second leg of the D0llar Hegemony stool has come under some serious attack in the last few years. Hydrocarbons trading for Petrol D0llars are being converted to other currencies one pipeline at a time. Since this latest Belarus disruption, I would have to guess that the amount of crude transiting across Poland to sell for Petrol D0llars to the rest of Europe is something less than the 1.6 million barrels per day that was transiting across Poland before the crisis. Russian shipments of crude to China rose by 30% last year and are expected to rise by 65% this year. This oil certainly isn’t trading in d0llars. Russian ports have been updated and capacity has been added to transit more crude via tankers as well. Russian Baltic exports of crude have grown from12 million tons in 2001 to 65 million tons in 2006 and Putin just stated he wants to see an addition 50 million tons exported from Primorsk this year. Oil to this day continues to be exported out of the Sudan in Euros, no matter how much the US/UK/Dutch/I coalition would like to see that situation change. Sakhalin II has been converted from a d0llar port of exit to a multi-currency port for Russia. When the Seven Sisters were running Sakhalin II oil and gas production stopped for three months every year during the winter. I would imagine with just a little work Russia will be able to continue production for those three months and give a large boost to Russian hydrocarbon capacity. I noticed an article stating that Russia just completed a nuclear powered Ice Breaker and has plans to build ten more. South Korea has been busy building Oil Tankers that can continue operating in the Artic winter as well.
China for their part is doing everything they can to increase electricity generating capacity using hydro, nuclear, solar and wind generating technologies. The largest hydro-electric power plant in the world at Three Gorges has gone completely operational. In December of last year China started work on another hydro-electric project that rivals the Three Gorges project in terms of electrical power generation. China is now several years into their ambitious 50 nuclear power plants to be completed in the next 14-years. China recently gave Japan a very large order to help them build these nuclear power plants and maybe this will help Japan from having to serve United States interests for regional matters. China is also installing solar panels to urban roof-tops with the hope that solar power will provide 15-20% of the electrical needs for their urban areas. China is also producing very large wind power generating plants as an alternative source, with hopes that wind power can provide about 2-5% of the total electrical requirements for China. Russia is also talking about doubling their nuclear power generating capacity which would allow them to export more oil and natural gas.
There’s a good chance that South Korea will be able to enter the battle against D0llar Hegemony later this year as well. Russia has upgraded their Siberian Railroad capacity and South Korea has upgraded North Koreas rail line in order to transit goods across Russia getting these products to European markets one week sooner than shipping them by ocean. I’m certain that Russia will not require the d0llar for the transit tax that South Korea would need to pay. I would imagine that North Korea’s nuclear ambitions get worked out this year, or Kim Jong-il is no longer the ruler of North Korea.
On a side note I read an article about Putin’s recent trip to India where he was asked if it was true that Russian diamonds are no longer required to ship to either the Netherlands or Israel before they are shipped to other markets. Putin stated that this was true, so Russia is actively taking a swipe at the De Beers Diamond Cartel. I think Russia’s taking on Wall Street, London and the Seven Sisters is one thing, but when Russia takes on the De Beers Cartel I think that’s very telling to just how confident Russia is with their place in the world.
It looks like Iran will continue to serve as Wall Street and London’s whipping post for much of the year. The Bushehr nuclear power plant is not scheduled to receive fuel until March and is not expected to start providing electricity until September. Construction has been started for two additional nuclear power plants but they are several years into the future. Wall Street and London will continue to use Iran for saber-rattling in order to keep the price of crude and other commodities as high as possible for as long as possible. Iran continues to serve the Federal Reserve and the Bank of England’s need of creating a weaker d0llar in order to fund their wars through inflation. I would expect some of the $200 billion that China is freeing up in their foreign reserves will continue to be invested into Iran.
It’s certainly no accident that addictive drugs sell in d0llars, with annual estimates being anywhere from $800 billion to $1 trillion of addictive Narco D0llar demand. Some of the richest families in the world made their wealth from the Chinese opium trade that demanded silver controlled by the Bank of England for payment. I notice to this day, opium dealers in China are dealt with a quick bullet to the head, understandably so. From the supply side it would appear that the Federal Reserve and the Bank of England are firmly in control of illegal drugs. NATO troops in Afghanistan are helping to secure world record production of opium. Historically Afghanistan was the major supplier of opium to China during the Opium Wars as well. Columbia is the last Narco D0llar country left in South America but President Álvaro Uribe Vélez seems to be firmly in control. The recent Mexican election also saw President Vincente Fox’s drug runners being replaced by President Felipe Calderón’s drug runners without a lot of bloodshed. The Narco D0llar seems to be doing very nicely, or at least the supply of illegal drugs is firmly in control. The election of President Juan Evo Morales Ayma in Bolivia is the only sign of weakening control of supply. Hopefully from a demand side for illegal drugs there have been some gains. Recently here in California Federal Agents made raids on California’s legal medical marijuana clinics. I would like to think this is a sign that demand for illegal drugs isn’t what it used to be if Federal Agents are cracking down on those who medically are dependent on marijuana in an effort to have these people buy on the black-market. Maybe today’s children aren’t so easily enticed into a life of drugs. Hopefully this year more effort is made to fight Narco D0llar demand.
2007 promises to be a very exciting year in the fight against the Hegemon. President Putin steps down in March of 2008 so I would think that President Putin would like to be at the helm when Russia pays back those that raped and looted his country. After the recent elections in South America, South America seems set on creating one of the poles the world needs in what will soon to be a multi-polar world. While the American Empire spends $200 billion to keep Iraqi oil in the ground and control Afghanistan poppy production, China will be spending their $200 billion on something much more rewarding for the world. After last summers overwhelming defeat of the Israeli invaders, Israel seems to be losing much of its influence in the region and in the world. I would like to think that by the end of this year we will all have a much better idea as to what lies in store for our future.
“When we are in partnership and have stopped clutching each other’s throats, when we have stopped enslaving each other, we will stand together, hands clasped, and be friends. We will be comrades, we will be brothers, and we will begin the march to the grandest civilization the human race has ever known.” Eugene V. Debs
Peace.
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