Thursday, April 24, 2014

The Next Turn ...

So what have we learned here in the U. S. of A., and what is the way forward?

Is wealth the domain of derivative traders, risk-protected bankers, re-insurers and executives of multi-national conglomerates leveraging the wage arbitrage and outsourced production of globalism? That model was arguably successful for as long as U.S. consumption of foreign made products was running at the speed of confidence, and incomes among middle class consumers were still producing the required flow of capital.

But today, the American middle class has long spent the fraudulent equity in their homes, leaving their piggy banks filled with debt, and their job prospects transformed into low paying service and part-time employment, which in turn has fewer and fewer middle class spenders to subsist upon.

We could languish interminably over the gloom and doom of the declining empire, and predict that the only way forward is to "fix" the current system of globalism with an improved version that includes free markets, particularly a free market in gold.

However, I would argue that globalism has failed in it's present form, and that it's prime failing is that (by its very nature) it is has no competing system which struggles for dominance. How can there be a free market within globalism, when globalism itself is the very antithesis of free markets. Globalism is, in essence, a "world monopoly" with no possible competing system to drive improvement or performance ... until now.

But back to the question at hand ... "what to do" ... in the land of the dominant proponent of the current iteration of globalism? In the U.S., we drifted into a consensus decision to make our fiat currency the denominator of all assets in the global marketplace, and that has afforded us a temporary exorbitant privilege which has run its course and now become an emerging disadvantage for our own working class.

If the pendulum swings and the "haves" became the "have nots" in a systemic flip flop from a debt based to an equity based global system, we would see relative currency exchange rates reversed and it would take, say, 6 dollars to equal one Yuan, or 35 dollars to equal one Ruble.

In a world like that, Russia and China would be building factories in the U.S. to take advantage of the reversed wage arbitrage. Our middle class would be assembling I-gadgets here in the states for $35 dollars an hour (the equivalent of 7 yuan or 1 Ruble) to ship to emerging middle class markets. If energy is still cheap enough to make trans-Atlantic shipping viable, Russia and China will gladly pay U.S. assemblers the equivalent of 1 Ruble per hour (or 7 Yuan) to build smart phones "designed and made by the U.S." for sale to the emerging middle classes, with Russian and Chinese corporations earning big Ruble and Yuan profits to spend in Russia and China.

What would be so wrong with that?

The U.S. will now have a middle class production economy to grow its localized dollar-based service economies, which will need to make full use of local raw material inputs due to the high dollar cost of foreign goods, which will in turn promote further growth in regionalism of the dollar economy. So the American middle class will grow and thrive in an environment like this

So then who is hurt by this?

U.S. corporations of course, and any .01% elite holders of dollar based wealth. So the dollar faction of the current corporatist system does not want to see this change. Furthermore, they do not want to see a regional system, based on the freely traded "free market" convertible gold standard to germinate as a competing system (even though this is already happening) as it has a real chance of being the only catalyst for change from the present system to a new, more sustainable, more equitable system.

Furthermore, if the "dollar heavy" were to suddenly and simultaneously cash out of fiat into gold they would bring about this change by crashing the system, suddenly and violently. So they are caught in a paper trap from which there is no quick escape.

The U.S. has a real problem. A TRUE leader for the people (not the Obama "brand" as a cover for corporatist interests) has to not only accept the emergence of a competing equity based system, but to actually embrace it, against the strong objection of his or her most deep pocketed potential supporters.

It is somewhere between highly unlikely and impossible for the U.S. to bring forth a leader like this, unless the middle class is fully informed, fully empowered and fully engaged in a change it really might rather continue denying.

But ... if a competing system emerges ... without war ... one that is able to maintain low energy costs in a free market (a very big "if" by the way) then that system can co-exist and compete with the current, in effect gradually overtaking the older, declining system.

I feel the change at hand, of a regional system competing with the present global system for world wide middle class approval and eventual dominance is both inevitable, and desirable, as long as the dollar faction wealth elite do not insist upon WWIII in order to maintain control of the present globalist world oligarchy.

Aside from trying to make aware the possibilities of change, to those who would clearly benefit from it, there is little to do but wait, and guard against those who will fight to the death to maintain the status quo.


  1. Haha...That's what i thought. A coward! All gobshite, no testicles. Having corresponded with fofoa today on the matter, he cnfirms he will continue his path of deception and claim he knows nothing. He recommends i stop 'teasing' and make public everything, except FOA's ID and our (fofoa's and my) correspondence. Yes, fofoa at his customary illogical, dual-standard best! The challenge/wager stands. All notifications saved, and ready to post a blog on. You want to be publicly exposed as a fraud and even bigger fool? Come on, loser, take the wager! Why not? You know best. Don't you?

  2. Very valuable comment Pete, we all learn so much from your wisdom and poise. By all means, carry on. :)