"THE CURRENCY OF MASS DESTRUCTION"

History will record that foreigners like the Americans. After all, James Gardner in
The Americanization of Emily brought Hershey bars to England. The Americans brought food to Eastern Europe and created the Marshall Plan. They brought Hilton all over the world, spent money, and truthfully never wanted to grab any foreign territory.

In the year 2030, there will be no more three evil empires. Iraq will be a booming oil country whose stock market will surpass that of Saudi Arabia, Jordan, and with an American type of problem with foreigners keeping Syrians out of their country. Iran would industrialize its country and use the nuclear and oil revenues to surpass Beirut as the Monte Carlo of the Middle East.

The Russians and the Chinese have each built their own financial empire. When in 2005, President Bush and Secretary Snow were arguing with the Chinese about currency rates, the big number somehow escaped attention, the $800 billion which was in Chinese hands - foreign reserves. At that time, America borrowed $2 billion a day. Now, let's assume that Secretary Snow eventually succeeds and by changing exchange rates, the $2 billion forced $1.5 billion or even $1 billion a day.

Art Buchwald, one of America's most famous humorists, after the war when America freely gave credit to every European country, wrote a book, How Much is that in Dollars? The trouble started when America may have reduced the daily deficit to one billion a day or $350 billion a year. And we would have been satisfied. The U.S. Treasury didn't turn to George Soros who would have explained that in Hungary when he was in school, $350 billion annual deficit in ten years, with compounded interest of let's say 5%, would become $4.5 trillion, and $4.5 trillion when it comes to the per capita debt of 300 million Americans is $15 million per person.

The American government didn't turn to George Soros, and Soros could have explained that you don't become rich, you don't retain your money if you have to borrow one billion dollars a day. Not only borrowing a billion a day, it went further. The question is in what currency? For a while people were happy to keep it, governments were happy to keep it in dollars. Then they went to the Euro, then the Euro collapsed and then they went into gold and silver, and suddenly just as in Hungary after the war or Germany in 1929, the hyper inflation created new currencies, namely gold and to a small extent silver. The lender of this billion dollars has to place its money somewhere, and if they get frightened of the Euro and the dollar, then money is placed in gold, in Swiss francs, in yen and then even in rubles.

This will bring about a multi-currency system covering the whole world from South America to Siberia. The crisis started or gave a hint of a crisis in 1979. That is when I met Mr. Sanford Litvack, Esq., senior partner of Hogan & Hartan, an attorney who previously had been vice-chairman of Disney. Even before his illustrious legal career, he was second man in the U.S. Department of Justice under President Carter and President Reagan. The first crisis was private. Private individuals, including the Hunt brothers, believed that they had to diversify from the dollar. What they did was not so dangerous. The danger was when people followed them and financially totally illiterate people were bidding up the price of silver to $50 when the commodity markets when to a level that Dr. Henry Jerecke, the head of Comex and chairman of Mokata Metals, said because of their ineptitude in shorting silver, Mokata is bankrupt.

In 1980, there was somebody or a few people in charge who sized up the margin calls, sized up the problems, and the Federal Reserve replaced the money and the speculation which at that time spread to hundreds and thousands of people slowly unwound and some monetary stability was reestablished. There were a few intelligent people, probably Mr. Walker, Mr. Litvack and others, who could identify the problem, size up the problem, and solve it.

That was the first hint that something was wrong. The recent meeting in Beijing by President Bush and his staff with the Chinese, should have given us an is giving us a sign that something is wrong on a much bigger scale. It is no longer a couple of wealthy, self-made individuals in Texas. It is self-made countries of large size with enormous dollar reserves who are trying to shift their money so their buying power doesn't decline. When the Chinese buy gold, when the Chinese put money in Switzerland, they are not evil. They are not an evil nation. They are not speculators.

They are, in fact, the stabilizing effect of a world which is slowly running out of control.

We are running out of control. We spend money irrespective of the fact that there is no government in the world which can cover Social Security, health insurance, wars, unlimited immigration, tax incentives. It cannot be done. The symptoms of France because of the dislocation of workers from the mother country to the Far East, is only the beginning of a dangerous trend which is dangerous only because there isn't a group of politicians who could review the entire world, our entire system, and maybe a period of two or three decades squeeze expenses to income. This may not be totally impossible, because more and more people enter the workforce. The GNP in most of these countries is growing. But what is out of control is a flow of money totally unregulated and unrestricted in size to satisfy old political decisions.

The catastrophe is about to begin. To paraphrase Winston Churchill, the initial tension in the monetary world has only just begun and the real crisis is about to begin, upon which will depend the survival of Christian civilization, including the United States. If we have an international world of monetary transactions, there is not going to be any kind of restriction about today, yesterday, five years ago, the United States tried to impose on countries with nuclear power. The world crisis is not going to be covered by evil nations with evil armaments. The world in which Iraq, Iran, India, Pakistan, North Korea are industrialized countries and the cumulators of foreign currency is coming. All of these nations and the old nations of Western Europe will be moving currencies unrestricted from one country to another. The fluctuation of currencies will not be saved by ordering excessive amounts of gold, not even at the price of $2,000, and not even silver at $100.

It would require a whole group of international politicians who understand international finance and have the power to moderate national politics within the realm of reality. In the year 2030, we would see at least 25 and maybe 40 nations with currency surpluses that would fluctuation through the international markets and create dislocations and antagonism among themselves. Jobs will move from one country to another. Economic crisis in one country would move to another.

What Henry Kissinger said, that economic decisions are made for political reasons, will have to be reversed because the monetary economics will dictate a new era, a new order. On a typical morning, South Korea may move yen to Swiss francs. Simultaneously, the British would like to increase their position in the Chinese yuan. Russia feels that they have to have more gold. The freely fluctuating currency rate that President Nixon initiated on August 15, 1971, will rage probably 24 hours a day. Transactions in the Far East during the night can affect the early morning hours in New York and London. Every country, however, will have surplus dollars and the mutual and unrestricted devaluation will begin.

The country that for a hundred years represented for whatever success law and order, stopped wars, paid money to have peace, will have a currency that is despised, degraded and neglected all over the world. The day will come when, in effect, the dollar will be depreciated 20% against leading currencies. This is when the dollar will become the currency of mass destruction.

Since the Treaty of Versailles, everything was paid in dollars. Oil was paid for in dollars; armaments was spent in dollars; pharmaceuticals from India was spent in oil; minerals in Africa and Russia was spent in dollars. And the time has come when the State of the Union message was almost like an empty shell. It was not an issue of worldwide interest. The world only wanted to hear how could America absorb the trillions of dollars floating around the world. And the answer was it had no answer. As a result, the unwanted dollars were pushed back and forth between various nations and the various monetary capitals in the world. The world of the President in the State of the Union message was not taken seriously. The congressional gallery was filled with foreign dignitaries -- all wanted to raise unwanted dollars, trillions and billions for anything, even for silver. And that is when the dollar collapsed, and that is when the world realized that the collapse of the dollar was what former Governor John B. Connolly as Secretary of the Treasury said, "Gentlemen, the dollar is our currency but your headache."

And that is when the world realized that the dollar had become
the currency of mass destruction.

(Article 15 - posted December 5, 2005)

e-mail: mlikar@aol.com

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