U.S. Debtor Meets G20 Creditors at the Dollar's Funeral

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DrKrbyLuv's picture
DrKrbyLuv
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U.S. Debtor Meets G20 Creditors at the Dollar's Funeral

The Market Oracle has provided what I think is a very provoking and worthwhile read regarding the G20 meeting in London: 

U.S. Debtor Meets G20 Creditors at the Dollar's Funeral 

MAJOR GLOBAL TURNING POINT

Perhaps it was a grand error of judgment to host the G20 Meeting in
London. The epicenter of the financial hegemony, corruption, hidden
agency influence, and financial market destruction has clearly been the
United States and the United Kingdom working in tandem. So great risk
comes with the hosting of this meeting in London. The British Empire,
aka Great Britain, is the site of the most devastating economic and
banking ruin in a century, on a scale much larger than Iceland, but
with a certain hand in the Iceland downfall. Millions of British
citizens are angry, worried, and justifiably so. Their economists,
bankers, and government leaders have presided over at best a severe
national decline that must withstand diverse reform and reconstruction,
and over at worst a national failure of state that must endure a
collapse before any conceivable reconstruction. The decline if not
collapse in the UK seemed for a time to lag that of the US, but lately
events have accelerated inside the harrowed United Kingdom. The United
States has the advantage of just printing trillion$ and floating about
for a bit much like a derelict vessel with feigned movement!

Certainly it was a grand error of judgment at the February Davos
Global Economic Forum for President Obama not to attend. He used
extremely bad judgment in sending TinyTim Geithner as his minion envoy,
the Treasury Secretary who bears Goldman Sachs stripes, and likely GSax
branded skivvies. Obama took harsh criticism for skipping an
opportunity to meet with certain heads of state in attendance, key
banking and industrial leaders. He could have met Russian leaders Putin
and Medvedev, who truly stole the entire Davos show. My guess is that
Obama was deeply intimidated at the Davos prospect, was busy assembling
a staff, but had no choice now. The chorus of criticism, if not revolt
against the US$, has grown deafening. The US$-based global financial
structure is broken, without any doubt irrevocably. The last to notice
are the USGovt and US banking stewards, who are busily looting still.

There are 20 members of the G20 organization. These include the
finance ministers and central bank governors of the following
countries: Argentina, Australia, Brazil, Canada, China, France,
Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia,
South Africa, South Korea, Turkey, United Kingdom, United States. The
20th member is the European Union, which is represented by the rotating
presidency and its European Central Bank. In addition to these 20
members, the following forums and institutions participate in G20
Meetings: International Monetary Fund, World Bank, Intl Monetary &
Financial Committee, Development Committee of the IMF & World Bank.

For the past decade or more, it is well understood and well
documented how the IMF and World Bank are each riddled with US security
agency non-bankers, complete with associated covert activity. Some
accuse them of routine operations that include collusion, kidnapping,
murder, but all for the benefit of the United States and its power
structure. These espionage accusations are not idle, but well
documented. See “Confessions of an Economic Hit Man”
by John Perkins (2004). In it, he provides account of his career that
included his hire by an alleged NSA liaison to become a self-described
economic hit man. My first exposure to Perkins was in 2005 when he
published chapter by chapter, portions of his book in magazine format.
My reading centered on the NSA in Saudi Arabia, to further their
acceptance of the USTreasury Bond and US Dollar as official
Petro-Dollar payment. That Saudi-US contract has been a cornerstone of
the US-based global foundation for a generation. It apparently required
enforcement. Of course, for the greater good.

In the words of the publisher for Perkins, “Covertly
recruited by the United States National Security Agency and on the
payroll of an international consulting firm, he traveled the world, to
Indonesia, Panama, Ecuador, Colombia, Saudi Arabia, Iran and other
strategically important countries... Perkins reveals the hidden
mechanics of imperial control behind some of the most dramatic events
in recent history, such as the fall of the Shah of Iran, the death of
Panamanian president Omar Torrijos, and the US invasions of Panama and
Iraq.”
Perkins has been remarkably open, vocal, and detailed. He
coined the term ‘Economic Hit Man' coyly. The US security agencies
apparently tolerate him, although his promulgated information is quite
ugly, embarrassing, and steeped in both controversy and corruption.

Perkins describes the role of an Economic Hit Men as follows: “Economic
hit men (EHMs) are highly paid professionals who cheat countries around
the globe out of trillions of dollars. They funnel money from the World
Bank, the US Agency for International Development (USAID), and other
foreign aid organizations into the coffers of huge corporations and the
pockets of a few wealthy families who control the planet's natural
resources. Their tools included fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as empire, but one that has taken on new and terrifying dimensions during this time of globalization.”

My March Hat Trick Letter includes an account of the IMF hit performed
against Indonesia, with the counsel of TinyTim Geithner, one decade
ago. The Pacific nation suffered severe damage from their experience
with the IMF, enough that all Asia actively avoids the IMF like plague.

Wikipedia is hardly a pure factual source of unbiased information,
since in recent years it too contains a slant in favor of the power
center that wields its many weapons. Nevertheless, in this light,
Wikipedia contains the following descriptive passage. “According
to his book, Perkins' function was to convince the political and
financial leadership of underdeveloped countries to accept enormous
development loans from institutions like the World Bank and USAID.
Saddled with huge debts they could not hope to pay, these countries
were forced to acquiesce to political pressure from the United States
on a variety of issues. Perkins argues in his book that
developing nations were effectively neutralized politically, had their
wealth gaps driven wider and economies crippled in the long run.
In this capacity Perkins recounts his meetings with some prominent individuals, including Graham Greene and Omar Torrijos.”

These many G20 nations are all too familiar with the hardball games
played by the IMF and World Bank. They keenly have observed for the
last seven months some historical events in WashingtonDC and New York
City. They must be aghast at the parade of funding for failed
companies, fraudulent bonds, and hidden black holes of credit
derivatives. They must be aghast at the parade of criminal fraud cases,
led by Madoff, but also implied by the entire charade of the 911
events. They must be aghast at the parade of Wall Street henchmen still
in charge of dispensing USGovt funds, even though their culpability
seems obvious to all except the other henchmen who continue to sit in
regulatory offices and law enforcement offices. So the G20 country
representations finally have an opportunity to jam the works on the
revolving doors of the global financial machinery. In my view, this G20
Meeting is a global financial turning point of historical implications
and importance. Creditor nations sense deep risk of loss from their
giant savings accounts, as the risk lingers during continued US power
positioning. It marks the beginning of a magnificent change, one to
topple the US-UK hegemony that has been inflicted upon the world for
almost a generation.

US DOLLAR STATUS QUO GONE

The initial comments and press conference so far at this early
preliminary point do not impress anyone. UK Prime Minister Gordon Brown
and US President Barack Obama initiated events with a press conference.
Another between Obama and Russian President Dmitri Medvedev is in
progress. So far, the statements by Obama seem trivial but laced in
words to acknowledge the severity of the situation. Obama has stated
that the US will listen and learn, but not pass up the opportunity to
lead. He seems unaware that US leadership has failed before, during,
and after the crisis began. His body language to me looked nervous,
defensive, and out of his league. To date, most US-based stimulus,
rescue, nationalization, and funding has been confiscated and directed
toward the precise perpetrators.

US syndicates remain beneficiaries and administrators, while regulators and law enforcement chase advocates of free markets. Worse,
the negligent, responsible, and corrupt remain in charge within the US
Dept Treasury, as representatives from monoliths Goldman Sachs and
JPMorgan themselves. Reform is impossible with these people still in
charge. Nothing has changed on the power structure inside the USGovt,
nor the controlled funnel of hundreds of billion$ in funds. The
US president does not seem to understand that the global financial
system designed atop the US Dollar has broken irretrievably, and must
be scrapped, not adjusted.

For several months, the US Federal Reserve has been doubling duty as
a virtual US banking system. For the past several years, a Shadow
Banking System has operated without regulatory oversight, which is so
deeply engrained with corruption that one cannot adequately describe
its depth of depravity to commoners. Yet
the US president acts as though the US remains in the dominant position
in global finance, when the entire world has rejected its catbird seat
post.
THE UNITED STATES NO LONGER SITS IN THE PREMIER
POSITION. That is precisely why so much conflict has come and will
continue to come. The G20 London Meeting is a funeral.

Why is the G20 Meeting a turning point? First of all because the
US$-based global financial structure is broken. In plain words, the US
Dollar is totally broken as the global reserve currency, fully
discredited, and the anchor dragging down the national banking systems
in scores of countries. Also, because the Elite G7 or G8 Meetings,
where the banking power has been greedily and maliciously and jealously
guarded, is replete with bank leaders whose countries are crippled by
insolvent banks and outsized national debts. Who owns the largest
portion of the G8 national debts? The G20 countries, the developing
nations, the upstarts who up to now have owned zero voice in global
banking, PERIOD! Imagine a bankruptcy hearing where the creditor (guy
who owns the debt) does not have a seat at the bankruptcy court, has no
attorney to argue on its behalf, and must listen to rigged outcomes
from a rigged game. The global forces toward deep change have never
been greater.

Thus a turning point. Creditors have the option of simply refusing
to purchase any more USTreasury Bond debt. To a great extent, that is
what is occurring right now. The US responded last week, as its Federal
Reserve announced $1050 billion in monetized USTreasury Bond and
USAgency Mortgage Bond purchases. At least $1 trillion will be printed
for monetized bond purpose each and every quarter from here onward, as
is my forecast. The USGovt will destroy the
credibility of the US Dollar, but at least offer lifeblood to the
crippled US Economy, at the cost of upcoming price inflation.

The United Kingdom has no such privilege. They suffered an important
Gilt Bond failed auction last week, one which brought great
embarrassment upon them.

Last week, China was highlighted at turning the global US Dollar
tables. They have begun to displace the US$ within their domestic
banking system, in favor of the Chinese yuan. Actually, they will soon
be issuing Chinese Govt debt securities denominated in yuan currency.
Doing so involves wave after wave of conversion of USTBond securities
into cash, then conversion further in to Yuan Debt securities, which
still need a new name. How about Dragon Bonds for a name??? The Chinese
will then wear and presumably use the great currency boot, since all
economies that wish to purchase Chinese products must purchase Chinese
Govt bonds!!!

The Chinese are also leading a movement to create an Emergency Fund
for the Assn of Southeast Asian Nations (ASEAN), one which will assist
in defense of any hot money attacks against a smaller Asian nation. In
1997, the Asian Meltdown was triggered by hot money attacks waged
against Thailand and South Korea. My personal belief is that the Emergency Fund will blossom into a pan-Asian Regional Bond Fund for economic development.
The Asian-only fund will essentially serve as a gigantic regional
savings account, free from Western control and pressures, independent
from Western currency risk, and operate as a regional economic
development fund.

The latest big currency news is between t he central banks of China
and Argentina. They reached an agreement for a three-year, $10 billion
currency swap, disclosed by the Chinese Central Bank Governor Zhou
Xiaochuan. One can rest assured that their USTreasury Bonds will supply
the funds. The move follows swap accords between China and Indonesia,
South Korea, Hong Kong, Malaysia, and Belarus. The agreement broadens
Argentina's access to foreign currency reserves in order to achieve
stability. Argentina was excluded last autumn 2008 from the US Dollar
Swap Facility program created by the USFed for emerging markets, which
were designed to aid Brazil and Mexico. Watch Venezuela and Iran be
next for Chinese swap stations. One can conclude that China is
expanding its stations globally for creating the Chinese yuan as a
global reserve currency in competition with the US Dollar
See the Bloomberg story (CLICK HERE ).

Strange but meaningful additional challenges have come, these
centered upon the Intl Monetary Fund. For years, the IMF has granted
loans denominated not in US Dollars but in Special Drawing Rights,
which often function within various currency denominations, if not a
basket of such currencies. The SDR formally is an international reserve
asset already in usage. The SDR has been put in focus, if not under the
microscope lately. Russia has formally suggested that the IMF
be used to establish a new global currency system, to replace the
defunct and broken US Dollar system, and to use the SDRights as a new
formal basket for global banking and commercial settlements.

My belief is that Russia has used the concept as a straw man, just to
place emphasis away from the US Dollar Once accepted, the concept can
morph to another new currency suddenly. China has endorsed the SDR
concept raised by Russia as well, to gain credibility.

My view has been consistent for months. Unless and until the foreign
creditor nations distance themselves from a US$-based banking and
commercial system, they run enormous risks. Their banking system, their
financial markets, their economies, their standard of living, even
their political stability, will all remain at chronic heightened risk.
Alternatives are extraordinarily difficult, challenging, and daunting
to design, construct, and implement. A system built after World War II
was perverted in profound manner when in 1971 Nixon abrogated the
Bretton Woods Accord in a single betrayal stroke. That manoeuvre was
one of the most important violations of a treaty in modern history. It
declared the United States as global financial dictator, enforced by a
powerful USMilitary, aided by a large strong economy. It perversely
invited all major economic nations of the world to join in managing
free money off a printing press, of course with inherent risk.

CREDITORS DEMAND BANK POWER

For many years recently, the G20 Meeting has served as a forum for
paying mere lip service to the raft of foreign creditor nations. They
have been enlisted by the G7 and G8 countries to continue to purchase
USTreasury Bonds, UK Gilts, even German Bund's. They have been invited
to invest in US, British, and European companies, and to become
partners in major international commodity supply corporations,
including energy firms. HOWEVER, THESE EMERGING
NATIONS, THESE CREDITOR NATIONS, THESE SMALLER LESS POWERFUL NATIONS,
WHICH COINCIDENTALLY DO NOT HAVE MILITARY FORCES OF THEIR OWN, HAVE NO
GLOBAL BANKING POWER, HAVE NEVER HAD ANY GLOBAL BANKING POWER, BUT NOW
ARE DEMANDING GLOBAL BANKING POWER.
Such is the revolution triggered in London this week.

For the last decade, China has been given an insult at G7 and G8
Meetings of finance ministers. They have been guests, who essentially
sit in the hallway quietly until invited to enter for briefing
sessions. The largest creditor nation in the world must sit in the hall
while debtor bankers make decisions, issue orders, change structural
procedures, and pretend to be in charge. Never in financial history
have debtors remained in power, and this is no exception.

Creditor nations demand a more solid reliable global reserve currency, or currencies.
They demand some hard asset component to the new reserve currency to be
installed, like one backed by a basket that includes at least gold and
crude oil. This would be sufficient to lift the gold price
substantially, far above its current range, and far higher than a mere
$1000 per ounce. The Chinese are the clear spearhead, uninhibited by US
threats. The crowning blow against the US Dollar supremacy will come
when Persian Gulf nations install a new hard asset currency. At that
time, one quarter of the world will pay for crude oil in a hard asset
currency with a gold component. That is a spike in the heart for the US
Dollar founded in a unipolar world. The G20 Meeting intends to make the
statement that the unipolar world is dead on the financial stage. That
is their agenda. The US agenda is to preserve the system through reform.

US MUST ACCEPT ROLE AS DEBTOR

The clear challenge facing the G20 Meeting is to bring awareness to
the United States that the system is broken, that the US is no longer
dictating policy, and that the US must integrate many more countries
into important global banking bodies. However, much bigger tasks come.
The United States must accept that the US Dollar can no longer function
as before, cannot serve as the primary and only global reserve
currency, and must share reserve currency status with other regionally
crucial currencies.

The new multi-polar currency world must be hatched and
launched. Defiance and stubbornness by the USGovt can no longer be
tolerated. The United States admits to operating a Shadow Banking System that is abhorrent to any credible or justifiable system.

THE JIG IS UP!!! If the USGovt does not cooperate with alternative
global reserve currency usage, then it will be bypassed, with
associated cost. That cost will be lost respect, lost creditor
cooperation, and certain economic consequences within the US Economy If
not careful and cooperative, the US will find itself increasingly
isolated, which is precisely my forecast. This direction is consistent
with a shove down the staircase into the Third World, where credit
shortages and supply shortages and poverty persist.

The quintessential problem, plainly stated, is the United
States Govt leaders and officials insist on sitting apart from the
debtor nations.
They must join the debtors, and be treated in
similar fashion. They must accept terms dictated to them. They must
accept and endure a much lower standard of living. They must institute
policies to rebuild the industrial base of the US EconomyThey must write off trillion$ in bad debt, including some USTreasury debt.
They must liquidate failed banks and corporations that are not in the
least functional or competitive. They must redirect priorities away
from military and defense, and toward capital formation, industrial
production, and job creation, even if initially at prison facilities.
The entire economic structure and financial structure has suffered a
death experience, one not properly acknowledged. In my view, the US
banking system died in September 2008, never to be revived from its
terminal insolvent state. In my view, the US Economy suffered a death
experience, but with a lagged time period. We are witnessing the death
now. Its downward spiral is unmistakable. Each month shows worse data
than the previous. The degree of doctoring data has escalated to unseen
levels, like with seasonality adjustment that amplify raw data
many-fold, not just many percent.

My analysis has frequently described over the last two to
three years the deep risk of internal dynamics called vicious cycles
with nasty feedback loops.
We are witnessing them now in
full force. The bank losses have not ended, not even close. Prime
mortgages are defaulting. Commercial mortgages have finally begun to
default. Job cuts, home foreclosures, and retail shutdowns result in
feedback loops. The underlying millstone remains US housing prices,
down a record 19% in January. The jobless rate is 17% if one counts
those without jobs. An expected 125k retail shops are expected to shut
down in 2009. Aid to mortgage holders on Main Street stands at a
trickle. The bankers must prevent revelations of trillion$ in mortgage
bond fraud and counterfeit, so the mortgage assistance is mostly talk.
And Geithner wants the power to kill whichever financial firms he sees
fit. Things are careening downhill. The US Dollar deserves no respect.
Gold deserves it instead. Foreign creditors harbor growing gold
accounts and greatly dislike what the US does to suppress its price as
it continues to hold it in contempt.

GOLD, THE USDOLLAR & MINING STOCKS

The US Dollar DX index has been struggling again. After the major
news announcement about the $1050 billion in US$-based bond
monetization, the buck fell hard. Unless foreign currency rivals do the
same, and on as large a scale, the US$ will be vulnerable. My forecast
is for the US$ to monetize its debt much more than any other government
and associated central bank, an order of magnitude more. Surely the
British, Swiss, Japanese, and Germans will continue to stimulate and
rescue, even monetize some debt, but nothing will compare to the
magnitude of the USGovt debt being monetized. We are talking about
fullbore pure printing press activity. Notice that the 86 level offers
resistance from both past selling pressure and the 50-day moving
average.

A second (double top) failure erodes confidence to a great extent.
Each hefty decline from the top (in orange ovals) inflicts great
technical damage, undercutting US$ confidence. Confidence reigns supreme in the age of fiat currency without basis, now bone dry.
Notice also that the moving averages in blue, red, green are finally
flattening out, indicative of a topping pattern. The Gold-Dollar
linkage has been somewhat vague and tenuous in recent weeks. However,
if the US Dollar index falls, the benefit to the gold price will be
unmistakable. My expectation is that after a brief period when other
nations announce their rescues and stimulus plans in detail, and the US
falls further into the abyss, a panic will begin to sell the US$-based
assets, a panic that will turn into an utter rout. The erosion and
exposure process has entered full swing.

The gold price has been quiet for a month. An old adage of technical
chart analysis claims the longer a price consolidates, the greater will
be its move when it breaks out of its defined (if not managed) range.
The gold price is forming the Right Side Handle to a reversal pattern
shaped as a Cup & Handle. Strength is being built for the upward
assault. Its top is 980-1000, and its bottom is 710-725. Its target is
in the 1250-1300 range, stated before and still in effect as a target.
The entire G20 Meeting is negative for the US Dollar and positive for
gold.

What an optimistic looking HUI mining stock index finally! Watch for
continued closes above the 325 mark, which signals firm price above the
recent range. The 350 level will provide the next resistance. Once
cleared, it is off to the races to challenge last year's highs. Notice
the bullish indicator, as the 50-day moving average (in blue) crossed
above the 100-day moving average (in red). The reversal off autumn lows
has repaired itself. Momentum aids in breaking above resistance, as new
momentum has been achieved and made apparent.

HIDDEN PROSECUTION PROJECT

Certain contacts of mine have been especially valuable in sharing
information concerning important events behind the scenes. Only about
25% of news ever reaches the public networks. Perhaps another 50%
reaches the myriad internet journals. That leaves 25% which never is
reported, too sensitive, too privileged, too dangerous, too deadly at
times. One colleague has numerous connections on at least three
continents, and has been very active in sending messages over the past
weekend. The news knocked me off my feet! That is not easy to do.

It seems the G20 Meeting has another agenda, as a group has
assembled in the last few months, one with a purpose to pursue justice,
prosecution, restitution, anticipated to employ leveraged actions
behind the curtains.
Details will be provided in the
upcoming April Hat Trick Letter, as events are still fluid and
information is being collected. The Spanish Govt has already begun
criminal proceedings against certain Wall Street executives.

The G20 Meeting is doubling as a forum for legal prosecutors of
unknown identity. They are accepting evidence from players within the
Papa Bush & Bush Jr & Clinton Administrations regarding
criminal syndicate behavior extending since 1980. The climax of the
Carter era was the Iran Contra deal and the disastrous mission to
rescue Tehran hostages. My view is simpler, that the 1981 date marked
the Papa Bush era of control, complete with burgeoning narcotic
activity with protected US security organizations, whose channels of
money reached Wall Street, with full knowledge by the US Federal
Reserve. Those providing evidence, data, documents, and testimony hope
to achieve some degree of immunity from prosecution. Many questions
arise from such a noble ambitious and dangerous pursuit.

They are covered in the April HTL report. My belief is that USTBond
creditor nations, who have been victimized in the trillion$ by US
sponsored bond fraud, are seeking justice before losses are compounded
with USTBonds and USAgency Bond damage. They have formed committees
that at later dates might serve as bankruptcy receivership committees.
The granted authority for prosecution is a big question. Perhaps secret
CIA prisons in Europe will come into usage, and 12-figure accounts will
be frozen. One can only hope. The risks are enormous for syndicate
response in retaliation and defense. They have formidable weapons, not
discussed here.

Note - Conclusing "Credit Crisis Autopsy" Ad/Link Not Shown

Roundhouse's picture
Roundhouse
Status: Bronze Member (Offline)
Joined: Sep 14 2008
Posts: 36
Re: U.S. Debtor Meets G20 Creditors at the Dollar's Funeral

Nice catch, DrKrbyLuv.  I need some time to absorb all this and the implications.

And I just got my doom-meter rewired.... shoot, now there's smoke pouring out of it again!

 

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