Warp Drive To Holy Roman Super Empire!

June 11, 2008

Elaine Meinel Supkis

Europeans who just rebuilt the Holy Roman Empire are angry that the US dollar is weaker than the new euro. This is despite the fact that Europe has enjoyed a trade surplus with the US for the last 35 years! They want the dollar strong so this surplus will grow even more! This is insane. Speaking of insane, David Brooks displays terminal stupidity while trying to figure out how to encourage savings and stop lending. He can't figure out the magic of 'higher interest rates' and how this creates savings and stops lending! And we visit the LaRouche web site for some sensible talk about the collapse of global banking. Hey, where is that darn savings glut? Eh?

Email from faithful data hound, Ron:

Spock: Captain, the Lehman ship has uncloaked and is nearing the event horizon. They’ll be drawn in to the black Morgan and disappear. Shall we shoot the photon torpedos?

Kirk: Sulu, don’t shoot; short that bitch! And go long Morgan! And turn towards Port Royal so we can collect our loot! Boy I love it when that happens! Do you have confirmations yet??

Spock: Captain, the Lehman ship has disappeared. I think I saw a flash of light at the end. The Morgan has now increased it’s pull and the event horizon is moving towards us.

Kirk: Dammit Sulu, get us to Port Royal! Warp drive!

The Weak-Dollar Threat to World Order

How disillusioning to discover that the leading proponents of open global trade – the ones who insist on a "level playing field" – think nothing of adopting policies that render our products overly expensive for their consumers, even as they proffer their goods around the world at inordinately discounted prices.

Now you know how members of the European Union feel these days.

As former New York Fed economist David King recently observed, the value of the U.S. dollar against the euro has fallen drastically in the last few years. In December 2002, one dollar was equal in value to one euro; today, it requires more than half again as many dollars to equal one euro. For American consumers, that means prices of imported European goods are more than half again higher than they would be had the dollar retained its value relative to the euro.

Too bad for our esteemed friends across the Atlantic. If the steep price rise was the result of a tariff imposed by the U.S. government, they could haul us before the World Trade Organization on a complaint that we engage in unfair trade practices. But since it's accomplished through loose monetary policy for domestic purposes and bolstered by plausible deniability at the highest levels – "A strong dollar is in our nation's interest" – there is little the Europeans can do about it.

This is what happens when no one is honest. By artfully leaving out vital information, anyone can prove a point. International relations are by definition, very complex. So there are no simple answers! Only thing we can do is go to history for our guide.

In this case, History, one of the nastier of the Three Goddesses--Mother Nature and Libra being the other two---History sharpens Her raven quill pen and writes: 'The empire with the biggest size and biggest economy is the main currency for trade. No ifs, ands or buts.' So, Germany, after WWII, sought to enjoin France against a common enemy, England. What's that? They are allies?

HAHAHA, says History as She wipes blood off Her sheet of paper. Or maybe she uses a computer! She loves snark. So She snarks over this irony: Germany failed twice in trying to unite Europe into one big happy Holy Roman Empire. The First Reich was pre-Napoleon. This empire was very old and very badly put together. As one wit said, 'It is neither Holy nor Roman.' But it was German. German romatics dreamed of a New Reich and Bismark made the Second Reich come true. This alarmed England and France and both forgot 1,000 years of mutual hatred and slaughter and they joined in fighting off the Second and Third German Reichs.

After WWII, Germany lay low but as the US economic domination of the planet began to collapse due to several hot wars and one long, bitter Cold War, Germany began to reassemble the Holy Roman Empire that is neither Holy nor Roman. First, the French decided it was a good idea to unite against England. The European Union started off as a classic Zollverein, a toll-free zone. Bit by bit, other nations joined and Germany and France thought, 'Wow! We didn't have to march on Moscow to get this thing going!'

Well, every year, as Russia and America lose imperial power, the ability of Germany and France to enlarge this already huge new empire grew! Suddenly, just 10 years ago, Germany and France launched Stage II of the New Sort of Holy Roman Empire and created a Zollverein currency, the euro. Then, as the EU had a much bigger trade SURPLUS with the US, they chortled about this power which allowed them, under the aegis of US military power, to be STRONGER than the US that sheltered them from...RUSSIA!

The US spends nearly a trillion dollars a year, protecting trade rivals like Japan and this huge new empire, the European Union. As the US military obligations grew and grew, the EU expanded and expanded. All of this expansion paid for, militarily, by the US taxpayers, not Europeans. The EU also ran a trade DEFICIT with Russia which is why the rulers there are very eager to menace Russia with US military might on US taxpayer's dime.

Despite Russia warning Germany and France to not invade Russian spheres of influence, they did this. Just as they ALWAYS do this. History sits back in Her chair of carved ivory bones and laughs sardonically. Well, thanks to this desire to control the front porch of Russia, Germany and France invited Poland and the other Eastern European countries into their newfangled Sort of Holy Sort of Empire that isn't very Roman.

This TIPPED THE SCALES. Dear Libra who guards the Gates of Death and the Cave of Wealth suddenly noticed that the EU was now BIGGER than the US economy! This meant the dollar would rapidly sink versus the euro due to the US economy being out of whack with the EU which, up until last year, enjoyed a fine trade surplus with the US. Rule of thumb: trade MUST eventually balance. And with the 'floating currency' concept, this is done via the currency of the trade deficit country dropping in value until the trade deficit vanishes.

Europe doesn't want this! They want the uneven trade to go on forever and ever even as this goofy empire expands grossly. And they want the US to be stuck with the vast majority of the costs of defending this new empire! Talk about INSANE AS HELL!!!! It can't happen, it won't happen and the US is going bankrupt trying to please these 'allies' who are building an empire AT OUR EXPENSE!

Ms. Shelton continues:

Edouard Balladur, France's former prime minister, called for a union between Europe and the U.S. in a 120-page essay published in France last November, asserting it is time "to put an end to the disorder of floating currencies, which threatens the prosperity of the world and its progress, and which, in the end will destroy the very idea of liberalism." Nobel laureate Robert Mundell suggests a multiple-currency monetary union among the dollar, euro and yen that could be patterned similarly to the process that brought about European monetary union. Both men have invoked the possible inclusion of gold in a reformed international monetary system, recognizing the importance of protecting its integrity through automatic mechanisms and sanctions beyond the control of governments.

So the solution is a mega-currency between the US, Japan and the huge Holy Roman Empire? HAHAHA. Only if these people also pay THREE QUARTERS of our military costs! Period! This means taxing all of them rather heavily! HAHAHA. I won't see that happening. Why replace a free ride with a costly taxi service?

The G7 community wants desperately to think they are an alliance. This alliance is collapsing as the US is bled dry by allies who want unbalanced trade and shirking responsibility for defense. The alliance is rapidly dying and it MUST die. It is out of date. It is harming various parties. Note how the Europeans are NOT demanding Japan raise the value of the yen. Japan has a trade surplus with the US, too. The yen is very weak against the euro. But Europe is NOT exporting huge amounts to Japan. Japan is a closed fortress nearly impossible to penetrate. But the US is open and easy to dominate.

So Europe is frantic to restart the horrid, unsustainable lopsided trade ONLY with the US. Now we go off to visit the always utterly stupid David Brooks:

Brooks: The great seduction

The people who created the United States built a moral structure around money. The Puritan legacy inhibited luxury and self-indulgence.
*snip*
Sixty-two scholars have signed on to a report by the Institute for American Values and other think tanks called, "For a New Thrift: Confronting the Debt Culture," examining the results of all this.

This may be damning with faint praise, but it's one of the most important think-tank reports you'll read this year.
*snip*
The list could go on. But the report, which is nicely summarized by Barbara Dafoe Whitehead in The American Interest (available free online), also has some recommendations.

First, raise public consciousness about debt the way the anti-smoking activists did with their campaign.

Second, create institutions that encourage thrift.

HAHAHA. David Brooks always cracks me up. The institutions that used to collect and protect savings were called "BANKS". Got that, David, honeybuns? So why create a new entity? Should we call this 'The Cave Where Money Is Protected From The Federal Reserve'? I.e., gold coins? Why raise 'consciousness'? Just open a 'BANK' and put up a big sign, 'Savings will get you 8% return if you deposit your money here!' Hell's bells! The doors will crash open with mobs of happy savers!

Of course, all Bernanke has to do is imitate Volcker and make lending more expensive and savings more lucrative. Lucre is an old word for gold. So, why have 'think tanks' work on this sort of garbage if it is instantly easy to spot, how to fix it? What AILS these idiots? HAHAHA. They get paid good money to think that we need something mysterious and UNKNOWN to fix the savings deficit. Not higher interest rates.

Gads. I am happy Volcker is in the news again. The Cone of Silence has been lifted. But even if he and I and others scream loudly, 'RAISE THE DAMN INTEREST RATES' it won't happen. This is because the US is addicted to easy credit. We are going bankrupt and all bankrupt people love more credit, not less credit. Savers want more return on savings, dead beats want more easy loans. It is that simple. Gads.

Now, onto something sensible, Lyndon LaRouche publications [who, until this year, was considered to be a total nut case like Ron Paul, Kucinich or heaven help us all, myself]:

The Banking Crisis Is Back

by John Hoefle

Since this financial crisis began last year, the world's banks—commercial and investment—have written off nearly $400 billion in assets and credit losses, led by the big institutions. Citigroup, UBS, and Merrill Lynch have all taken writeoffs in the $40 billion range; HSBC has written off nearly $20 billion, and Royal Bank of Scotland, Bank of America, and Morgan Stanley hover around $15 billion each.

These are big numbers, but they pale in comparison to the monies the central banks have injected. Since last Summer, the central banks, led by the Fed and the European Central Bank (ECB), have made some $3.5 trillion in loans to the banks, an intervention unrivalled in human history.

In the United States, the Fed has created a number of what it calls "lending facilities" as the crisis has deepened. In mid-December, it created the Term Auction Facility (TAF) as a way to make loans to depository institutions. The first TAF auction occurred on Dec. 12, 2007, offering $20 billion; the demand was high, with 93 banks submitting bids totalling $62 billion. Another $20 billion was auctioned Dec. 20, with 73 banks seeking $58 billion. In this way, U.S. banks were given $40 billion in December to help them clean up their books at the end of the year. In January, the Fed increased the loan limit at its twice-monthly TAF auctions to $30 billion each, and in March, bumped it up again, to $50 billion. In May, the limit was raised to $75 billion; and for June, the Fed plans to hold three auctions instead of just two. To date, the Fed has lent $585 billion through the TAF, with another $150 billion available later in the month. Assuming all the money is taken—and it has been every time—that would bring the total to $735 billion in just a bit over six months (Figure 2).

John continues along the same lines I follow:

The danger, as is becoming more visible every day, is that the attempt to save these beasts—and the money they represent—is sending the dollar into a hyperinflationary frenzy. There are consequences to pouring trillions of dollars into such a process to try to save it, instead of shutting it down. Those consequences can be seen every time you go to the gas station or the grocery store, in soaring prices, and if that's where you see them, you are one of the lucky ones. In a growing number of countries, the food is too expensive for most people, and in some places, the food simply isn't there.

In a very real sense, there is no banking crisis because the banking system is already gone.

As I keep saying, the banking system is bankrupt. There is no banking system. We can't get one until we figure out that banks have to have SAVINGS in order to be banks! They have to attract savings and then lend it out at a slight, NOT HUGE, profit. The savers make a small, NOT HUGE, profit and the bankers make a small, NOT HUGE, profit, too! And everyone is happy. But ONLY if there is no surging inflation. The minute inflation takes off, this breaks down totally. And so it is: there is no savings ergo, there are no banks. There are entities writing loans which are totally inflationary since money is not pulled out of the system before handing out new money!

The entire structure of banking is based on the concept that TOO MUCH MONEY IS BAD. Gold or paper, if there is too much going out, we get inflation. When Spain raided the New World for gold, inflation raged in Europe. When banks think they can write endless loans based on whatever, if they do this too much, we get raging inflation! Period. So, to balance this out, the Libra response was to set several barriers up: reserve ratios would rise if the Funny Money™ from new debts grew too fast. And if there was too much Funny Money™ floating around, this would be sopped up by luring it BACK into the bank vaults via higher interest rates! The banks essentially buy back the dollars they create via loans.

This is what the Fed was supposed to control: force the banks to raise ratios and interest rates to attract the excess dollars produced by too much lending. Well, it isn't happening, the opposite is happening. Dollars are NOT being attracted to these stupid banks. So they are now going bankrupt. And the Fed is lowering interest rates and desperately trying to create MORE lending which is slamming into markets creating now, hyper inflation.

Fixing this is laughably easy: RAISE THE DAMN INTEREST RATES, GUYS. NOW. Or else. Damn, I can't wait. My money loses value in the bank. I would dearly like to have it retain value, not lose it. Thank you.

Email this post

Culture of Life News Main Page

Comments

[blues]

Hey, Elaine! I just cannot read any of this with my old software! The regular page just goes to a "not found!"

[GK]

Must read 'hilarious' article!!!

http://www.informationclearinghouse.info/article20066.htm

The time is now and it falls to us. This is the mission of our generation. Just as my father and his three brothers fought in World War II while Prescott Bush brilliantly profited with investments in both American and Nazi industries supplying vital munitions and equipment for both sides, it is time for our generation to carry on that tradition.

It’s time to take the gloves off. If you can’t beat us, join us. Either you are with us or you are with the terrorists. Get with the program. Europe did; South and Central America did; South Africa did; Russia did; China did; the Middle East is; and everyone, one way or another, will. Listen to the people who know, like, to name a few, Rupert Murdoch, Rush Limbaugh, Ann Coulter, Michelle Malkin, Dennis Miller, Bill O’Reilly, Sean Hannity, Karl Rove and Dick Cheney. Especially Dick Cheney.

Unrestrained money and power are capitalism. Capitalism is strength. America is capitalism. America is strong. Let’s keep America strong.

[Pete Murphy]

It's also time for the U.S. to take a flea bath (by enacting tariffs) and rid ouselves of the parasitic free trade fleas that have been biting away our economy.

[Anon]

Controversial Obama Smear Book Released