Prefacing and titling this specific article has been difficult, to say the least. It bounces around a lot on the subject of economics, but most importantly, the “manipulation” of the U.S. dollar and the economic repercussions on a world-wide scale. Quite often, when the subject of economics is brought up, people become confused. This is mainly due to the fact that people who usually discuss economics, discuss economic possibilities, not realities.
This article is -solely- based on breaking people out of an ignorance cycle so that they can make informed decisions in regards to their economic futures. For once, let’s leave the politics and predictions out of economics and just gain an understanding of what we’re dealing with.
The state of any economy is based on the price of goods and how much money is available to the consumer to purchase said goods. People, then, base their own individual economic class according to what they can afford to purchase. Let’s say a loaf of bread cost $3 and Joe has: $1, then Joe is “in dire need”, $2, then Joe “poor and hungry”, $3, then Joe is “poor, but able to eat”, $4, then Joe is “middle-class”, $5, then Joe is “upper class”, $6, Joe is “filthy rich. So, we can determine there are two factors that determine the economy for Joe. The price of goods and the money he has available to him.
Unfortunately, most people view economics like Joe and never consider the expanded economic picture [or “macroeconomics”] behind why it takes 3 of Joe’s dollars to buy the same bread that is sold in the United States for $1. Joe’s instinct is to be angry at the bread maker and to petition a government agency or official to either tax or regulate the break maker. If the government taxes the bread maker and gives the money to Joe so he can afford $3 bread, when he goes to the market, he will find that the price has risen to compensate for the tax increase, gaining him nothing. If the government regulates the price of bread, either bread makers will go to a country they can make a better profit on their bread or Joe’s government will have to pay the difference to the bread maker, thus taxing Joe and, still, gaining him nothing. Eventually, Joe dies of malnutrition while business and government bicker. The macroeconomic reality behind Joe’s situation was the value of his currency on the world market, not the bread maker. Joe should have ask himself, “why is my currency worth so little that I can not afford bread?”.
Very few, if any, nations practice true isolationism from the world market place where commodities, such as wheat, rice, grain, pork, beef, soy, fabrics, perfumes, toys, coal, oil; almost anything you can imagine that is legally allowed to be sold or traded. However, currencies are not all equal in value on the world market and so a standard was set in 1971, when the United States dollar became the world’s reserve currency.
This means that, while some currencies can run higher or lower than the U.S. dollar, the majority of businesses and individuals who sell goods in the world market require their customers to purchase their goods in United States dollars. In reality, the U.S. dollar has no “real value” other than the faith that businesses and individuals around the world give it. This faith has allowed America to borrow over $14 trillion dollars from foreign banks, investors, and nations around the world in the last 40 years and kept hyperinflation under control, even while the federal reserve continues to print money “out of thin air”.
The macroeconomic effect of inflation in the United States [specifically because it is the reserve currency] results in the hyperinflation of national economies that must purchase their goods in U.S. dollars. The weaker the U.S. dollar gets, the more of them it takes to purchase commodities. While there are some currencies that exchange at a higher rate than the U.S. dollar, most do not. So when the U.S. dollar falls, countries who must purchase them to buy commodities get hit harder than the United States. This is one reason that Congress will pass “foreign aid bills” that assist struggling countries with billions of U.S. dollars. It is, quite simply, an attempt to keep their governments stabilized when the exchange rate of the U.S. dollar decreases.
The more money the Federal Reserve prints to inflate the United States economy and/or the higher the United States debt gets, the more it hurts other nations that do business with the U.S. dollar. If this continues and the United States debt grows to the point where it can no longer afford to pay the interest on it’s debts, it’s creditors are going to get angry, and rightfully so. You can not just default on a loan and expect other nations to bear the brunt of your spending habits. It is unconscionable that a nation with such privilege would piss it away.
It is a certainty that economic conditions played a big role in people’s decision to start rioting in Britain, France, and Greece, but what of Tunisia, and Egypt? What, originally, caused these people to peaceably uprise against a government they were so used to? Was it that they “suddenly” decided to become democratic or was it the increase in services and goods that people experienced as a result of the inflating U.S. dollar? If it is the latter, as I suspect, a change in their governments will not help their situation.
This would also account for the rhetoric, that Americans hear on a continual basis, stating that capitalism is evil and should be abolished. If you are in a country that pays $6 to $10 a gallon for gasoline, you understand how the price of oil can effect ALL products that are available to you. Oil just happens to be a commodity that, in the past, was only traded in U.S. dollars. This is changing.
Brazil, Russia, India, and China [BRIC] have decided to exchange goods without converting to the U.S. dollar through a joint venture to try to curb the hyperinflation in their own countries. They are, “semi-secretly”,
competing to own the next world’s reserve currency as investors, bankers, and nations of the world begin lose faith in the U.S. dollar as a valid currency.
The size of the national debt and continued “out-of-control” spending that the United States has engaged in is unsustainable. The quantitative easing process has not only resulted in an inflation of the U.S. dollar within America but has caused hyperinflation in other countries. Many of these countries are creditors to the United States and if/when it can no longer afford the interest payments on it’s loans… bankruptcy happens.
At this point, all avenues of possibility are open, and NONE of them look good.
Bankruptcy puts American’s national sovereignty at risk and should be considered more dangerous to it’s national security than ANY terrorist group. Without an economic advantage that keeps communist and/or Islamic countries from gaining an advance on weapons that America can not defend against, the United States will no longer be the free nation it is.
Regardless of your religion, or lack thereof; you have got to admire the genius of the men who wrote, “a Creator”, not a government, “bestows certain inalienable rights to people” into the Constitution of the United States of America. To state in the national Constitution that there is a higher power than government implies that it is not the place of the United States government, on any level, to deny the specified rights to life [as China does by population control], liberty [as Russia does by limiting speech], and the pursuit of happiness [are the Communist and Islamic world “happy?”] . As a direct result of this, the power of government in the United States is limited to the will of the people. So, in essence, the people of the United States grant each other rights [human, civil, or otherwise] and restrictions that are enforced by it’s government. Are Americans ready to give up those rights?
Now, WE [Americans] can point their fingers squarely at politicians for this problem, but the old adage, “when you point a finger of blame at someone, there are three fingers pointing back at you”, seems to be more appropriate. It is time that WE [Americans] woke up to the fact that attempts have been made to sustain social programs by our politicians by borrowing money from foreign entities and it is severely damaging us financially. It is a prime -learning- example of the insidious nature of socialism and how it requires “unending supplies of money” that lead to the demise or tyranny of every country who has tried it.
It is up to US [Americans] to either change this now, or suffer the consequences of our inaction.
Do not let a politician, media commentator, or expert sell you on the idea that paying a little at a time on the principle of a debt is like doing “nothing”. Ask a banker how a person’s credit rating is effected if they default on a loan, rather than make interest payments and make ANY extra to pay down the principle of the loan.
Stop allowing politicians, media commentators, and experts to form your opinions on what you do and do not need. No matter what some flashy person, who has communications skills and an agenda tells you, nothing is free. If you are not paying for it, someone else is.
Stand up against politicians and celebrities who are able to circumvent our judicial system. Money, fame, and/or political clout do not put people above the law. Start demanding that the court cease the contempt process against lawmakers and federal departments who pay fines with tax payer money and avoid personal liability. Hold them accountable and demand they be brought to trial immediately.
Get informed and get involved. As I have stated many times, the internet is the best two way form of mass communication available. Without it, we are back to being barraged by the one way forms of communication that limit disclosure to us [Americans] as to what our government is up to on a world-wide scale. Unless we [Americans] understand and become educated on how we “truly” impact the world on an economic basis, we are doomed to blindly walk off the end of a cliff.
In my place of business, there is a motto among management, “create chaos and confusion so that when something gets changed, no one will notice”. These are confusing times so you had better pay attention and be suspect of everything or else you will not see the change that occurs. With each change, we [Americans] must ACT with vigilance in corresponding to our representatives. The quieter we are, the easier this “change” occurs.
In short, buying gold, grabbing guns and arming yourself to the hilt, thinking that you can survive out in the wilderness, or holding on to the hope that a politician will swoop down to “save the day” are fantasies. You can not hide or defend against the chemical, biological, or nuclear warfare that could, very well, occur over our irresponsible actions. You can, however, demand that your representatives acquiesce to fix this financial mess, that has become a national security threat and has Americans living off the backs of foreign entities.
In case you have not figured it out, the topic of this post is the definition of “manipulation” which is, what I believe, we have been a victim of. If you find this article helpful, send or post the link in suitable forums that allow it.