Andrew McKillop: Currency Collapse – Where Now ?

• What are the likelihood of a global currency crisis? 100% certainty. The Illuminist bullion banksters have been whacking gold and silver very hard these 2 days. The Illuminist financial MSM has been pushing the gold bubble meme. It is pure nonsense. Did the financial MSM get it right with the NASDAQ, real estate…. bubble? Their job is to protect the fiat monetary hegemony of the Anglo-American Illluminist cabal.
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• The smart money knows: gold (and silver) has been money for 5000+ years! People are flocking to gold not because of the weakening economy. They are doing so because they see the potential for a financial and monetary system meltdown, worldwide currency debasement!
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  Currency Collapse – Where Now ?
  by Andrew McKillop, http://www.marketoracle.co.uk/
  One thing is sure and certain. Permanent avoidance of economic, financial and monetary reality has resulted in the USA, European Union and Japan facing unmanageable and self-reinforcing debt spirals that – logically – should lead to currency collapse. By political decision, the “only solution” is to decree harsh austerity plans cutting economic growth and government tax revenues, and paper over the problem with massive amounts of newly printed currency. The only logical result is a stampede into gold and other precious metals. Occasionally, and without conviction, there will be a partial selloff in gold and some dip buying of eroding and fragile equities.
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  In a process of declining confidence, even  though currencies are no longer “gold backed” and are printed like  share certificates or government bonds, they are increasingly being  “redeemed” for gold in the marketplace.
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  The political and economic process destroying confidence dates from four decades in the past. The 40th anniversary of Richard Nixon’s decision to “close the gold window” and terminate automatic convertibility of the US dollar to gold was on 15 August. For decades, we have had a pernicious form of laisser aller-laisser faire reflected in the sad and dangerous spectacle of the USA, nearly all European countries and Japan becoming so economically stagnant, deficit riddled and indebted their national  budgets can almost never logically or conventionally return to balance –  without the ‘soft option’ of constantly  debasing their currencies.
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  FROM LEHMAN BROS TO STANDARD & POORS
  Political wrangling in Washington has  certainly damaged the financial credibility of the United States, but similar wrangling, inertia and refusal to decide has allowed the same zero sum game to emerge in the other developed countries. The long overdue US debt downgrade by ratings house Standard & Poor’s is often given the same ‘shock and awe’ media treatment as the Sept 2008 collapse of investment bank and broker Lehman Bros, but this debt downgrade is no more unwarranted than similar downgrades, by S&P and other ratings houses, for the sovereign debt of Europe’s PIIGS countries. The underlying reality is the same in all cases, but the S&P debt downgrade of the USA more specifically weakens a fundamental pillar supporting the dollar as the de facto global reserve money.
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  In Europe, which for essentially political  reasons created and launched the euro currency in 17 countries, the  unwillingness of politicians to face the fatal structural defects of the euro  system and Eurozone is now driving a gathering storm cloud, with global  impacts. One of these is the impossibility of the euro to in any way replace  the US dollar. Another is the simple and proven effect of high levels of  sovereign debt driving economic recession, generating more and larger sovereign  debt defaults, repeating the European banking crisis of 2008-2009, and laying  the basis for a euro currency collapse. The euro’s former and supposed  “bright potential” of replacing the dollar as the global reserve  currency has disappeared in the space of 9 months.
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  In exactly the same way as US, European and Japanese banks, insurers and financial players “piled in” to the US subprime mortgage finance bubble, with Lehman Bros only one of the most glaring and public examples of insolvency when the bubble collapsed, European (and international) commercial banks repeated the same fatal errors, this time with sovereign debt in the Eurozone: since early summer 2011 they are correctly seen by analysts as vulnerable to further EU sovereign debt defaults.
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  Of course, exactly like the George W Bush  regime, Obama regime and Japanese deciders, the German-French political axis controlling the EU, Merkel and Sarkozy, will act when sufficiently prodded by market panic to transfer toxic bank assets to increase already massive debt in the public domain. This will further raise sovereign debts, and further erode euro  credibility – which however may stay fixed at the “market rational” exchange rate of around 1.4 US dollar for 1 euro, only underlying the sad reality that both moneys have no credibility.
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  Both moneys will continue to devalue or depreciate, against gold, other precious metals, food commodities and oil, for as long as the global economy does not collapse into recession. Even more dangerous, and possible, we can fear these real assets could continue to appreciate against the paper moneys even in recession, intensifying a potential global economic collapse.
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  …. for the full article click here!

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