Wednesday, 30 July 2014

Currency War for Idiots

Why is it a big deal for the 0.001% to maintain the Dollar’s reserve status and petrol prerogative? And why should we commoners even care? 

To answer the second question first, a currency war could end in physical ones, with missiles crisscrossing above head, and our children ruined in the battlefield without knowing why. Even if it doesn’t escalate into major military conflicts, having some idea about the rise and fall of currencies may help to reduce personal losses.
Currency wars are fought for the same noble principles as physical ones: To loot and plunder (or to defend and resist). 

In the old days, tribes fought for land (which meant resources: water and food and grazing grounds) and labour (slaves). Those who pillage big time were conquerers and colonial masters. They took your land by force, and made you a slave: Go work you slug! Plough the field and groom the horses. Small scale operators committing similar crimes were called bandits and pirates. 

In modern times, plunders happen through fiat currency. 

Fake money is literally without cost, but can buy gold, diamonds, water, farmlands, whatever, and, of course, oil. Need more? Abracadabra! Deal? Sign here. Wait! Money is also investment, something to be grateful for. Here’s a factory. Make your lazy folks work would you? Now go on: Make me some running shoes and plastic neckties. Good boy. Take this: Money money money. Say thank you.

Thank you! Can’t say no anyways. Resisting Free Trade is a capital offence.

With fiat currency and Free Trade, looting has increased by orders of magnitude, but unnoticed by most. Furthermore, incredibly, the spoils end up in the pockets of a very few, much less than 1% of Americans in reality. Foot soldiers don’t have a clue how these things work. They’ve been told to kill for Democracy and Freedom etc. in return for a pay check of fake money, or recyclable body-bag. Haha! Clever! 

Yes. Democracy is also critical, without it governments can’t be shaped by money, and politics can’t be controlled by unlimited resources. Keep voting! Eeny meeny miny moe! Hey it’s the same man! That simple.

“That sounds easy. I’d print some too, and get rid of theirs!” Every now and then, some idiots think they have discovered a great idea. 

Saddam Hussein suggested alternative currencies for oil. Dead. Gaddafi of Libya — a country with one of the highest education standards in Africa, and lots of gold — thought about creating a gold standard African currency to trade African resources. Dead in no time. Teeny-weeny Libya was hammered by a coalition of powerful ex-colonials and military superpowers. A Central Bank was hurriedly set up. No one cared. The Free Press is always on the side of goodness. Hurrah! Libya now has Free Trade and Democracy, with a perpetual civil war thrown in for free. Perfect. Let this be a lesson for all.

Reality check: the right to print fake money ultimately stems from the gun barrel.

But looting is more addictive and corrupting than opium in the long run. Greed knows no limits. It’s biology, psychology, sociology, human nature, karma, natural retribution. Nothing can change that. Emperors eventually go mad. Credible usurpers will emerge. The Euro might have tried halfheartedly, then whimpered away. The multi-polar BRICS solution could be a revolutionary army in the making. If not, it’d be something else.

However, when the change comes, it will be turbulent, even violent. Brute force has become the one thing that they know best, a habitual resort to protect the universal looting rights of a few families.
Guo Du 2014.7.29

1 comment:

James Tam 谭炳昌 (过渡) said...

While Hong Kong talks about nothing but Occupy Central in the past few weeks, two very significant events happened without attracting much attention:

1) On Sep 12, the UK becomes the first Western Country to issue a government bond in RMB, effectively making it a reserve currency.

2) On Sep 29, one day before Occupy Central, Euro and RMB became convertible in Shanghai. Big deal? Yes, very big deal, even though the scales are insignificant at this stage.