Part IV

Part IV

Reserving The Right To Destroy

The Dollar

Beyond Government Economic Reporting
MONEY SUPPLY SPECIAL REPORT

And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads: And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name. Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is
Six hundred threescore and six (Rev. 13:16-18).

Shadow Government Statistics
Analysis Behind and Beyond Government Economic Reporting
MONEY SUPPLY SPECIAL REPORT
Practical Measurement and Analytical Uses Of Money Supply in Assessing Inflation

Oct 13, 2008 (10-19-08)
JohnWilliams' Shadow Government Statistics
Analysis Behind and Beyond Government Economic Reporting
MONEY SUPPLY SPECIAL REPORT
Practical Measurement and Analytical Uses of Money Supply in Assessing Inflation
Issue Number 44
August 3, 2008
http://www.shadowstats.com/article/335

"Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."

The Fed has the will, the perceived mandate and the ability to create as much new money as is needed to prevent a deflation in the prices of goods and services, as measured by the CPI. Where loan defaults can affect money supply, however, is when a losing bank — shy on capital — has to reduce its new lending. That impacts the creation of new money supply and is one reason why Mr. Bernanke is working so feverishly to provide liquidity to a solvency-impaired banking industry. Although off its historic high annual growth of 17.4% in April, year-to-year M3 change was roughly 15.8% as of the June 2008 average. Outside the present period, the current high rate of growth was last seen in 1971, just prior to President Nixon closing the gold window and imposing wage and price controls in August of that year. That current circumstance, based on M3 and other factors signals an intensifying inflationary environment well into 2009.

Reserving The Right To Destroy The Dollar

Oct 11, 2008
Reserving the right to destroy the dollar
Richard Daughty editor of The Mogambo Guru economic newsletter
http://www.atimes.com/atimes/Global_Economy/JJ11Dj02.html

(The) Total Fed Credit went up by another staggering $253.6 billion last week! A quarter of a trillion dollars in (one week)! Gold adviser Ed Bugos at Agora Financial says, "The news that should be driving gold prices to the moon is out! The Federal Reserve has just expanded its balance sheet more in one month than it has in almost all of its first 86 years of existence. This number is unprecedented. It is difficult to predict gold's short-term response to this shock, but the market cannot ignore the fundamental effect of this crackup for long. With interventions like this, we should get a few more $100-up days soon enough."

Total Fed Credit (TFC) is credit to banks which instantly appears, at the literal push of a button at the Federal Reserve. This credit in the banks is the operation from which money will be multiplied by the banks a hundred times over, a thousand times over, a million times over, all of it used to make new loans, all courtesy of the Fed known as fractional-reserve banking. The Fed has, in the last two weeks alone, created over half a trillion dollars' worth of new credit, which is turned into unknown amounts of dollars when the banks get finished multiplying it through degrees of fractional-reserve banking.

And it is not just American banks, either! The Federal Reserve, on behalf of the people of the United States, is giving hundreds of billions of dollars to foreign central banks to bail them out also. Those selfsame foreign central banks used this money to buy $43 billion of US government and agency debt last week. The Federal Reserve is a private bank which has no real reserves but can create money anytime it likes. The Fed created some money and then used the money to buy government bonds for itself. The Fed's ownership of government bonds rose last week by $8.27 billion.

The government borrowed most of this new money, as realized when we see that Treasury Gross Public Debt went up by $336 billion last week, reaching the staggering total of $10.124 trillion. In fact, in the last 12 months, the national debt went up by $1.062 trillion. Not only is the federal budget $3 trillion in the $14 trillion American economy, but Congress is now spending an average of $88 billion per month, every month, more than the government's revenues, which is 30% more than what they budgeted. And why not? The Federal Reserve can just print more money to pay this debt if they wish.

All of this money created by the Federal Reserve - trillions and trillions of new dollars and credit - increases the money supply, which will increase prices in a persistent, grinding inflation, which will destroy America as it has destroyed every country that tried such an irresponsible thing. John Williams of shadowstats.com writes, "In (October 2) Money Stock Measures, seasonally-adjusted M2 - the currently official broad money measure - reportedly exploded in the week-ended September 22nd by $165.5 billion to $7,900.0 billion, an annualized growth rate of 200%. M1 rose at an annualized 800%, up $60.9 billion to $1,272.2 billion."

Playing Monopoly With The Devil:
Dollarization And Domestic
Currencies In Developing Countries

Oct 13, 2008
Playing Monopoly with the Devil
Dollarization and Domestic
Currencies in Developing Countries
by Manuel Hinds
A Council on Foreign Relations Book

“Dollarization as a policy idea is much more discussed than tested. Manuel Hinds has helped put it to the test in El Salvador with some impressive results. This book makes a powerful argument: It should be read by all who wish to act or opine on the critical question of whether one country, one currency is right for the twenty-first century.” —Lawrence Summers, former Secretary of the Treasury of the United States and President of Harvard University

Why should a developing country surrender its power to create money by adopting an international currency as its own? This comprehensive book explores the currency problems that developing countries face and offers sound, practical advice for policymakers on how to deal with them. Manuel Hinds, who has extensive experience in real-world economic policymaking, challenges the myths that surround domestic currencies and shows the clear rationality for dollarization or the use of a standard international currency.

The book opens with an entertaining story of the devil, who, through a series of common macroeconomic maneuvers, coaches the president of a mythical country into financial ruin. This ruler’s path is not unlike that taken in several real developing countries, to their detriment. Hinds goes on to introduce new ways of thinking about financial systems and monetary behavior in Third World countries. Suddenly, when he created his own currency, Dema Gogo found himself living in a nonlinear world where all the magnitudes that had been certain now moved wildly with each shift in the exchange rate. He also discovered that he had become a prisoner of the law of unintended results, as each of the actions he took to manage the exchange rate could have negative impacts on multiple variables. These included, among others, the level of output and the rate of inflation, the interest rates, the level and currency composition of bank deposits, the debtors’ ability to service their obligations, and the health of the financial institutions.

All these variables reacted so pronouncedly to movements in the exchange rate that he had to take all these and many other things into consideration each time he decided to pursue a certain monetary or exchange rate policy. As the population’s standard of value and the value of the gogo (the name of the currency in this allegory) drifted apart, the reactions of the population to these policies became increasingly weird, to the point that Gogo saw the effects of the same causes reverse themselves. In this way, he watched how increasing the amount of money in circulation led initially to a boom and then to depression. Interest rates increased when he devalued and when he did not, depending on what people thought would be his future devaluation policy.

With time, the unintended reactions of the economy to Gogo’s monetary manipulations became treacherously sudden. Before the introduction of the gogo, for example, a bank with bad loans representing, say, 5 percent of its portfolio, knew that it had a problem of that magnitude and could plan its solution with reasonable certainty. With the gogo and its exchange rates in place, this amount could explode to 20, 30, or 50 percent as a result of a single devaluation. This happened, if not because their loans were denominated in dollars, then because the interest rates on the gogo loans increased so much that the borrowers could not afford to service them. Thus, as it has happened in so many developing countries, banks could find from one day to the next that they were bankrupt, not by actions they have taken but by decisions made in the central bank.

Dema Gogo realized that the divergence between the inflation and devaluation rates introduced serious complications because the gogo was no longer the population’s standard of value. Then he tried to keep the two rates going at the same pace, although he did not understand why keeping the two variables moving at the same pace was better than stopping both of them. Yet, keeping the balance of the rates of change was also hard because the possibility of having the rates of inflation and devaluation diverging opened the door for political pressures coming from groups that could benefit or suffer from such divergence. In this way, for example, workers found that just keeping the level of salaries constant in real or dollar terms required continuous pressure on the government to keep wage inflation ahead of devaluations. At the same time, he had the pressure of the exporters, who demanded reductions on the real wage, which required higher rates of devaluation than inflation.

Conclusion

Why the planned bankruptcy of the United States, Canada, and England? Americans, Brits, and Canadians will not stand for a common, regional currency. The forced bankruptcy of those nations will bring the citizens pleading for a common currency to maintain their lifestyles. England still has not accepted the Euro and they will be bankrupted into pleading to switch over to the Euro.

The Bible prophecies of 10 kingdoms that will arise during the end-times (see Playing Monopoly With The Devil). These kingdoms will be taken over by the anti-Christ and a one world government will be born, the new world order. The ten kingdoms will be 10 federated unions which are currently being formed. Each of these unions will form their own currency until the one world government will demand all currencies be joined to one central bank with one global currency. The "Phoenix" was a name for that currency being talked about during the early 1980's.

Once the global currency is established, a truly global and cashless society will be forged. All exchanges will be done electronically. No one may buy or sell unless they have an electronic number to bank with, which will eventually be implanted in the right hand or forehead. The new number will be tied to worship of the anti-Christ. Anyone who refuses to worship the anti-Christ and take his number will not be able to buy, sell, bank, or pay bills.

And the ten horns which thou sawest are ten kings, which have received no kingdom as yet; buy receive power as kings one hour with the beast. These have one mind, and shall give their power and strength unto the beast. (Rev.17:12-13)