China May Call EurAmerica’s Bluff and Let the Western Financial System Collapse

Brazil taught the world that what was behind the Wizard of Oz’s curtain was pure smoke and mirrors. When two MBA’s transformed Brazil’s rapidly deteriorating economy by simply creating a second currency and stating that it, unlike its hyper-inflating counterpart, had a constant value, and by sternly imposing political discipline on the new currency, they showed the world that currency is not the purview of international banks that create it from thin air. Currency is the will of a nation to share its productivity on an equitable basis.

China had not learned this lesson at the end of the barrel of EurAmerica’s gunboat diplomacy and suffered millions of casualties in the years after 1840 as a result. But China has learned it since and has taken advantage of her hard won understanding by playing the West’s own mirage of money against its immobile institutions. Through sophisticated manipulation of our businesses, banks, and politicians, China has reaped the rewards of EurAmerican pursuit of maximum quarterly profits and interest rates. The entirety of EurAmerica is now neck deep in its own debt that has provided China with tens of thousands of factories at EurAmerica’s workers’ detriment. Our citizens will languish in decades of debt repayment, wage decline and underemployment as a result.

Now that EurAmerican leadership has transferred massive amounts of real wealth to China’s shores, building the armaments of the world’s next century of commerce, our captains of industry, fathers of finance, and patrons of politics are now asking her to protect the financial instruments that procured those resources. Certainly, after how the West scourged China less than two centuries ago, she owes no allegiance to the West’s economy. In fact, China may already have ascertained that the end game cannot afford a prosperous West in the face of China’s emerging commodity and consumption needs.

If China does not responsibly act to assist the global crisis, she will surely suffer in the short term from it. However, as the Long Depression of 1871 proved, the country emerging from the depression with the abundance of real assets emerges more quickly and with a stronger position to consolidate hegemonic power. And the Great Depression proved that the country holding the world’s financial wealth emerges as the dominant reserve currency. In that case, America held the majority of the world’s gold.

It may be in China’s strategic best interest then to allow the world to financially collapse. China has the productive assets. She has a surplus of fiat money. She has the commodity relationships. She has built a substantial reserve of gold bullion as a backup source to restart her economy. And more importantly, China’s state run bank recognizes that the curtain protecting the Emerald City protects only a fiat monetary system built upon the premise of an existing western caste system commanding allegiance to debt derived money.

If EurAmerica collapses, it will take years for our political system to sort out a restructuring of power and debt obligations. In the meantime, China will surge ahead in re-establishing a world order built on a constructive new monetary and credit system with China at the center. She will then selectively engage with companies and institutions of the West as she strategically sees fit. Our current debt and credit default swap bubble has created dinosaurs of the West walking aimlessly into financial tar pits. It is unfortunately a house of cards that and I am afraid China is going all in to call EurAmerica’s bluff.

The Gingerbread Corporate Man (A Bedtime Story)

After having travelled across the Atlantic Ocean to build their little stone baking mill, an elderly American couple wished for a son. Knowing that America considers corporations to be citizens, they decided to bake a gingerbread corporate man. They added equal amounts of capital, toil, and love to bake their son. Upon coming out of the oven, he immediately began to delight his parents.

He worked side by side bringing them prosperity and joy. However, as he grew older and collected more capital unto himself, he grew haughty and began to think, “Why do I toil for the benefits of my parents. I am the capital of flour and sugar, and they are but mere laborers.” So one day to his parents’ horror, he ran down the dirt road for other worlds singing, “Run, run as fast as you can, you can’t catch me, I’m the gingerbread corporate man.”

As he ran down the path, he happened upon the mayor of the town who asked, “May I take but an arm or a leg to help feed the townspeople?” The gingerbread corporate man would have none of it, running away shouting, “Run, run as fast as you can, you can’t catch me, I’m the gingerbread corporate man!”

A little further down the road he met a tree hugging, spotted owl who exclaimed, “Slow down your development! I want to eat you.” But sidestepping the owl’s advances, he ran away shouting, “Run, run as fast as you can, you can’t catch me, I’m the gingerbread corporate man!”

Over the Wall, he dropped to the street finding a gaggle of banker geese honking, “Don’t stop! We will collect all of the flour and sugar in America and give it to you for your journey.” The gingerbread corporate man, thought a moment and asked, “You don’t want to eat me?” “No”, they cackled. “We want to eat a bit of every bag of flour and sugar we take from the little old ladies of America and give the rest to you so that you grow big.” “You’ve got yourselves a deal!” shouted the gingerbread corporate man as he ran down the street.

As he neared the seashore, he came upon a bevy of bakers from the baker’s union who shouted, “Stop, you have all our flour and we will be without a livelihood if you run away.” “Will you bake until the midnight hours toiling in heat?” asked the gingerbread corporate man. “No, will you let us eat you?” retorted the baking guild. Instead, he ran down to the sea shouting, “Run, run as fast as you can, you can’t catch me, I’m the gingerbread corporate man!”

As he reached the shore looking back toward the mayor, spotted owl, gaggle of geese, and bakers all running after him, the gingerbread corporate man shouted, “Oh no! They will catch me. How can I cross this deep ocean?” At that moment, he came upon a crafty Huli Jing, a Chinese fox lingering at the shore. The fox exclaimed, “Climb upon my tail and I will swim across the Pacific.” “You won’t eat me?” asked the Gingerbread corporate man. “Of course not”, said the Chinese fox, “I want to help you.”

As the gingerbread man climbed aboard, he brought the huge bags of flour and sugar that weighed down the fox. The fox said, “Climb upon my back so you won’t get wet.” As they swam closer and closer to China, the gingerbread man added more and more of the capital onto himself, making him bigger and bigger, weighing down the sly fox further.

When China appeared on the horizon, the fox said, “You are much too big and powerful for my back and I am tired. If you want to enter China, you must bring all your fast ideas with you and hop upon my nose to keep dry.” Wanting to escape the Americans who wanted to eat him, the gingerbread corporate man did as he was told.

As soon as they reached the Eastern shore, the Huli Jing tossed the gingerbread corporate man into the air, opened his mouth, and snap, that was the end of the Gingerbread Corporate man!

Gold Will be the Electric Starter of the New World Order

I no longer cut a lawn, preferring to live the condo by the seashore lifestyle. However, when I began my lawn cutting phase as an adult, I sat on an 18HP John Deer tractor. How much nicer it was to start and run than the power, walk behind lawn mower of my father’s that I started by pulling a cord attached to a spring coil starter to engage the gasoline powered engine. How much easier his was than the mechanical blade mower powered by human pushing that I used to cut my grandfather’s lawn every summer when we visited.

Human powered lawn mowers still exist today but think of how much less grass would be cut if we had to go back to using them throughout the world. How much less grass would be planted, how much less watering and fertilizing would occur? To get back to a world fully manicured and adorned with seas of short, systematically cut and aligned blends of Rye and Bermuda grasses, uniformly greened by additives, and rid of pesky bugs by sprayed on poisons after having to revert the entire world to mechanical push mowers, well that just sounds disastrous.

But what if there were a few industrious persons that hoarded some engine starters in stockpiles so that after all the gasoline powered mowers were taken from the earth and replaced with push mowers and the world’s most lush lawn nations had long since been overgrown with weeds, perhaps these industrious persons could triumphantly bring out these saving graces and restart certain oases of cultivated lawns once again. What if by hoarding these mower starters, they could eventually regenerate an entire region of lawn cutters?

After the world capitulates to a collapse of the fiat money system, the new order will either revert to the manual push mowers of much less commerce and trade or they will be rescued by the electric starters of a new money system. Unfortunately, the electric starter that all nations will rely on as a trustworthy trading commodity will be that of the world before Bretton Woods, GOLD.

China has understood this end game and has created entire cities to mine this precious commodity. China now is producing more gold than any other nation, and she is buying more than any other as well in preparation for the collapsed economy. The dollar, the Euro, and the Yen are all bloated by debt and the world wonders how our fiat currencies will survive. At some point, when the first chicken blinks, we might find that gold is once again the only answer.