A Different View on the US Dollar and Where We Are Headed
-- Posted Friday, 20 February 2009 | | Source: GoldSeek.com
For several months there has been a tendency by Jim Sinclair and others to dismiss the US dollar rally as technical short covering. Now there is a tendency to dismiss the fall of the Swiss franc as dirty tricks among large hedge funds. These are interpretations that trivialize the reality that is unfolding. What we are witnessing is financial warfare, and the USA Empire has several distinct advantages over every other player: 1) The US dollar is the world reserve currency 2) US debts are denominated in US dollars 3) The US Fed and US Treasury act as one and are part of the USA Empire 5) The US Empire has a lot of experience manipulating markets and the SEC, SPIC, rating agencies and NYMEX/COMEX are members 6) Don't forget about the US military.
Back to the war:
Over the last several years Switzerland has sold half of its gold reserves. Ask yourself why in the world they would do that. Swiss bank privilege and privacy that have existed for hundreds of years are being dismantled before our eyes. The Swiss franc could have served as a refuge from the US dollar (or an alternative to gold). Now that possibility is being thrown into doubt. The USA Empire could have dismantled Switzerland any time over the last 30 years. This is happening now because 1) the USA Empire can not allow any viable alternatives to the US dollar (or gold) at this time, 2) because the chaos all around us is providing cover. Likewise, the European monetary union is being destroyed. I discussed the dynamics of this in a recent article [Bressler].
Jim Willie notes that Putin struts into Davos and the Chinese delegation follows suit. He notes that Russia and China enter into bilateral trade agreements that bypass New York, same with Russia and Europe, and we are told that a new monetary system is coming to fruition [Willie]. I submit that this is wishful thinking by those who have their own agenda.
Clearly the USA Empire does not want there to be any viable fiat currency alternative to the US dollar (or gold). There will be no escape, save one, and that will be gold.
Just look at the gold holdings for various central banks [Russell]. What this tells me is that the US dollar will benefit more than any other currency if gold explodes. My contention is that the USA Empire will take away the German gold if they can, and the rest of the Swiss gold a well. Read this article for more details: [Bressler].
The only way out of the unfolding mess is to devalue the dollar against gold, probably by a factor of 10 or more, and then breathe confidence back into the system by linking the dollar to gold. I don't believe that an alliance of other countries can pull this off with the USA Empire fighting to dominate the next world order.
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