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The Cross of Bethlehem

The Cross of Bethlehem II

Gold-pegged Yuan; Peso-pegged Dollar

A trillion dollar cup of coffee



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Dance Around the Golden Calf

Dance Around the Golden Calf | Exodus 20:23 neither shall ye make unto you gods of gold


To a large extent, at least in the short and mid terms, the fate of the State of Israel depends on the future of the USA. Last week we got a reminder of that when America vetoed a UN decision condemning the illegal Israeli settlements in the West Bank. Since even the USA doesn't recognize these rat holes as legal, its veto shows again the strange double standards that are so identified worldwide with American-styled democracy: a society of equal corporations exploiting slaves worldwide while favoring club members. Even club-member humans are not all equal. These humans are divided in two classes: "judiciary persons" (like corporations and any other soulless contraptions) who have all the rights and simple persons who have only the right to consume. Was this an exaggerated paragraph? Despite its overstated humor, it is worryingly close to reality.

It seems the USA wouldn't stop its automatic support of an internationally recognized terror inflicting organization known as the State of Israel. Thus, it is only logical for us, Israeli-terror victims, to ask loudly when would the terrorists supporters be no longer a military threat to the free world. After all, we all have the right to be free and equal, even if not having been born to the "Mishpaha Lohemet." During the second American attack on Iraq, I was fascinated by the American administration's rhetoric. We all remember the "weapons of mass destruction" lies, but there was much more than that. "Financing the war" was also a key phrase said by frenzied politicians while looking for juice to run their toys of mass destruction. There was no better testimony to the fact this was a war of choice, and thus unacceptable, aimed to create financial profits through cheap oil and the revival of American military industries than this mantra. The phrase also reflected the American mindset as a world financial center and the main printer of a fiat money known as American dollar, the world's reserve currency at that moment in time. Through these silent subtexts, it also hinted at a very different future.

The USA won't disappear from the international arena as a significant player as a result of a military defeat. Granada won't retaliate for the American crimes; neither would Afghanistan or Iraq. Attacking the weak is another characteristic of America. Two months ago, by the end of 2010, the media was full with articles announcing China having become the second largest economy, bypassing Japan. The same number of articles tried to predict when China would bypass America. In fact, without paying attention to their analytic methods, they were predicting an economic event. Some said 2020, others 2015. All of them ignored a rapidly changing financial situation which would control the economic development in the near future. Most economists use linear models in their predictions, while reality is often non-linear and non-derivative. The reason for that is the low-level mathematics learned at financial faculties. The result of this overlook will be dramatic; probably all predictions will fail.

America is #1 only because economic output is measured in the current reserve money, i.e. American dollars. There is a simple but excellent way of describing the problematic of these statistics. Bolivia is a producer of coffee. A pound of average coffee here costs around one American dollar. In the US, a coffee of similar quality would probably cost around $4. Let's say that both economies sell just one pound of coffee per year. If measuring the production of each economy in dollars, then the US economy could be claimed as being four times larger than the Bolivian one; however, if measuring by weight, both economies would be the same size. The world's economy is measured in US dollars and thus it is highly biased toward the American economy, presenting it as much larger than it is.

In order to keep this illusion of economic size, a key goal of the US government is to keep its currency as the global monetary measurement unit. However, this won't last. It makes no sense calculating the trade between China and India in US dollars; the distortions in such a case are multiple. In the case of Thai products reaching Nepal via India, measuring the events in American dollars is ridiculous. One solution would be adopting a basket of carefully balanced measurements methods; this would probably happen in the next decades. Measuring under a more accurate system, the US would probably rate as the third largest economy in the world. If measuring the EU as one economic unit, then the US would be just fourth.

Moreover, not everyone is happy with the ongoing situation. Last year, Russia and China scrapped the dollar in their mutual transactions. The same applies for a few other countries. At the beginning of February 2011, the IMF issued a report on a possible replacement for the dollar as the world's reserve currency. The report recommends using Special Drawing Rights that could help stabilize the global financial system. Simply, heavily indebted America cannot provide a stable currency anymore. Roughly at the same time, the Asian Development Bank said in a joint study with Columbia University's Earth Institute, that the Chinese Yuan could rapidly become an internationally used currency and serve as an alternative to the US dollar in central bank reserves. In fact, China owns not only a substantial part of the American debt, but also the debt of European countries as Spain, forcing a future in which the Yuan would grow in importance. As such, the opening of the Yuan as a floating currency that can be traded everywhere is almost inevitable. Despite some decentralization in its trading during recent years, Yuan is still heavily controlled by the Chinese government. America and Europe are waiting and pushing for this moment; vulture bankers will pray on the new reserve currency and speculate on its future.

Yet, those thinking China would accept Western ideas just because America, the IMF, or even the ADL, recommend them are wrong. China would not let its currency float freely; its centralistic economy wouldn't be able to survive such an environment. Yet, the current situation in which the Yuan was pegged to the dollar for many years and even now it follows it closely is not acceptable anymore. Simply the dollar is not stable anymore, undermining the main quality search by the Chinese from a reserve currency. There are clear signs the Chinese have a very different plan in mind.

On November 17, the World Gold Council released its third-quarter Gold Demand Trends report, which showed a 12% year-on-year rise in gold demand in the third quarter of 2010. The rise was a result of an ongoing increase in the purchase of gold by China and India. In the fourth quarter the demand increased by another 9%, driven by the same markets. I won't analyze the numbers here since they are intentionally measured by the IMF using a much undervalued system (moreover, it uses unstable dollars). Yet, China has become the fifth largest holder of gold reserves and it seems it aims at growing them even more. In order to keep the prices in line, China cannot announce this as its policy.

Economies of such a size cannot change overnight. That means all planned changes can be seen much before they are implemented. Is the ongoing gold accumulation by the Chinese a sign they would peg the Yuan to a gold standard in the near future? Probably so. If that happens the financial situation would change overnight; economics would change in the following year or so. The American dollar would sink (would it be pegged to the Mexican peso?) and be dropped as reserve money. America doesn't produce much these days, a few cars and military weapons which are used for wars which cannot be repeated in the actual multi-polar reality, and thus a worthless dollar won't change much the exports' attractiveness of this market. Overnight, America would drop a few notches and China would become the world's #1 economy, with no need to wait for the dollar-measured statistics anymore. Would then America still support Israel? Actually, it won't matter anymore…

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Tortured by Bolivia
KIDNAPPED BY BOLIVIA!—I am being tortured by the Bolivian Government

I have been declared a Political Prisoner of Bolivia, a country which does not respect human life. I am held in Bolivia illegitimately, violently and against my will. I am violated daily; I am denied access to water. Please make this public in any possible way. Before writing to me, please read 15-Day Execution Order and the Bolivia section of the website.

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