Tuesday, December 31, 2013

What would I do if I were China and Russia getting screwed by dollar hegemony?

It is no secret that China and Russia are getting screwed by the hegemony of the dollar.  Part of it is their fault of course.  You can't get screwed by a con man if you don't play his game.  Of course, it's not always that easy.  Let's say you and your friend meet a con man.  You both get the old song and dance.  He falls for it and you don't.  A month later, your friend is driving a new car courtesy of the con.  Any good con allows you to win something at first lest you never expose yourself to the eventual destruction that awaits you.  Remember the movie, "The Sting"?

So there your friend is, driving a shiny new sports car.  You know that the hammer is going to come down on him sooner or later but right now he looks smart and you look dumb.  If it were just you alone then you could take it.  But this is the 3rd time you've caught your beautiful young girlfriend looking at your friend as he drives past.  You know it's only a matter of time before she drops you and begins to follow your friend.

Let's face it.  If you have not been working with the US as it built the dollar debt Ponzi into what it is today then you are a poor nation indeed.  Those that have worked the the with the US government hate it but are now trapped into the con and in many ways they depend upon it.  The con gives Chinese overproduction a place to go but for every scammy dollar printed from thin air in the US, other governments have to print an equivalent amount of counterbalancing cash in their nations.   Failure to do this makes their currencies too strong on a relative basis which means they cannot export to anyone because their prices are too high.  This is why all the nations of the world were initially in a race to ZIRP (Zero Interest Rate Policy) and it is also why all the nations are printing up money at a history-busting pace.

So what would I do if I were China and Russia?  First off, I would play along.  I would not start any war yet.  The US is way too powerful militarily.  Maybe in a couple decades after the US has weakened we might be worth taking a run at but not now unless something unexpected happens and there is no choice (never say never).  So I would keep taking worthless dollars for my manufactured goods but I would also be:
  • Making economic relationships with other trading partners.  Nations that are economically codependent tend to get along better than those who have nothing to lose by attacking the other (or staying on the sidelines while a 3rd party does the attacking of your neighbor).
  • Quietly build up a massive stock of gold.  One day when China and Russia make their move on the world, they will need to win confidence of the people. 
  • Tell my people to put their savings into metals.  I would warn them early on to do it so that they will be well positioned when the massive turbulence associated with regime change occurs.  Happy citizens do not lynch their corrupt leaders.
  • In the final couple years preceding the global coup I would try to show the people that I'm really a nice guy who has been wrongly painted with a tyrant's brush. I would let massive numbers of nonviolent prisoners out of jail and I would repeal or at least greatly soften any hard line stance I might normally have taken with my servants, errr, I mean citizens.  Remember, you don't automatically get control of the world's money supply because you have gold.  The only way to change it is to incentivize the herd to change and that has to start with building confidence in the new con.  As I wrote some years ago in my summary of the global monetary system, the US didn't just get control of the world's money supply by being able to back it with gold.  That was necessary but not sufficient.  The US at the time had
    • Lots of gold in hand, including other people's gold that was (and is) still stored on US soil "for their own safety".
    • World class military that it could use to defend itself from anyone trying to disrupt the central bank of the world.
    • The most robust and productive manufacturing economy in the world (all others had been bombed into rubble).
    • Reputation for being good guys even under pressure of war.  In the post linked above I wrote:
"The mechanics of the Bretton Woods repayment plan (although it was never called such) was that the US, having a bunch of gold in its vaults and having a manufacturing infrastructure that had not been touched by enemy bombs, was clearly the strongest (militarily and economically) and most trusted country in the world.  The logic was that the rest of the world should have confidence in US ownership of the global money supply given all this earned trust.  It's the same technique used by con men today on a daily basis to fleece their victims.  Some of this trust was earned though self-control during the war.  It is to the credit of the US military that it never gained the reputation of committing systematic or massive atrocities upon their conquered foes.  The same could not be said of, for example, the treatment of German or Japanese POWs.  The fate of the Jews under Hitler is self evident.  However, the Chinese were also especially trodden under the heel of the Japanese war machine and it has created social wounds that have not healed between the two countries to this day.

The US used its new found central importance to suggest during Bretton Woods that, after the war was over, countries of the world should no longer back their currencies with their own local gold reserves. "


Trust me, none of these things were accidents of fate.  They were carefully planned by some very smart con men in the US.  We restrained our military and always propagandized the US as holding the high moral ground so that we could wrap our tentacles around the global money supply.  The writings of Amschel Rothschild were applied globally: "Give me control of a nation's money supply and I care not who makes its laws".  The owner of the global reserve currency effectively controls the money supplies of all nations.

If I were China and Russia I would be learning from all of these things.  I would be winning the hearts and minds of all the people of the world.  I would do it with the singular goal of wrenching control of the global money supply out of the hands of greedy Uncle Sam.  I might not even try to get control of it for myself at first.  It would be enough of an initial success to simply pry it out of the greedy hands of the US central bank.

Well, review the list above and you will see that China and Russia are doing all that and more.

Look at Russia and China scramble almost in locked step to pimp up their reputations in the global community.  At the same time, the US reputation is falling faster than a $2 hooker on payday.  There will be a coup attempt at some point but not before Russia and China are ready.  All they have to do is have a few global press conferences about starting up a new, gold backed, global currency that replaces the dollar as the reserve currency.  Give the US an equal seat at the table just like everyone else, no better, no worse.  Then demand all members provide an audited accounting of their gold so that the committee can determine how to peg each country's fiat currency to the new global currency standard.  If all of this is done above board and without threats or without purposely trying to crash the US economy then the world will not back US aggression should Uncle Sam decide to deploy its military diplomacy.

Keep an eye on those guys.  They have to keep the mask of honesty on until they are ready to make their move.  Of course, they are as dirty and as corrupt as the US government.  All of them seek to own and control everyone else.  What  a bunch of dirt bags, the lot of them.

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