My assessment is that 90% of the value of the U.S. dollar comes from the U.S. military. After we had our satellite systems in place, Cheney said “deficits don’t matter.” The US debt and deficit financing is no longer a debt system. It is a global taxation system.
Catherine
John wrote:
Could you expand on this thought just a little? This is one very sober line of reasoning.
John:
Global treasuries and sovereign wealth funds, central banks and a variety of large institutions buy Treasury securities or hold dollars not because there is economic value behind them or because these financial assets are sound fiscally or in terms of credit. They buy them because if they don’t buy them, their current holdings will drop in value faster (that is given their current holdings, they are better off with a managed fall that a precipitous one) and because they are forced to — both in terms of trade agreements — and because they have a gun at their head. If they don’t buy, they and their population will be subject to a wide variety of demonstrations of physical and financial force that will result in loss of life.
Hence, demand for U.S. dollars and government and agency bonds continues even as value falls. The losses on these holdings represents a tax paid to the “Empire.” The fundamental system is as old as the hills. It is based on force. However, this tax is not paid through the income statements, it is paid through the balance sheet. Hence, national legislators do not have to pass bills to authorize their people paying the tax. There is no disclosure.
This global taxation system can be implemented and enforced through the back door without the average global citizen understanding what is happening. Rather, it is invisible to all but the most financially sophisticated people.
What the implementation of this system means is that the household drain I describe here and the community drain I describe here are happening globally. That is, the Slow Burn (described here ) is draining everyone globally, not just in the U.S.
Abraham Lincoln was right, “You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.”
“Denominating oil in something other that the dollar could trigger a chain of events that causes confidence in the dollar to fail.”
Confidence in the dollar is done around the world. The writing is on the wall.
International Oil Bourse,[2] Iran Petroleum Exchange or Oil Bourse in Kish[3] (IOB; the official English language name is unclear) is a commodity exchange which opened on February 17, 2008,[4][5][6][3]. It was created by cooperation between Iranian ministries and other state and private institutions. The IOB is a Petrobourse for petroleum, petrochemicals and gas in various currencies, primarily the euro and Iranian rial and a basket of other major currencies.
And Latin america is setting up banks outside of the West’s central banks:
The Bank of the South is necessary to make the region independent from international banking, Venezuelan President Hugo Chavez warned on Wednesday, as he referred to the US financial collapse as part of “a perfect crisis.”
During the Third Summit of Presidents of Judicial Powers of the Union of South American Nations (UNASUR) in Margarita Island, Venezuela, Chavez explained that the crisis is not only economical, but also affects politics, ethics, ecology, food and energy.
It is a perfect crisis, with all of them becoming one, a real threat. It is no exaggeration to say that human life in the planet is in danger, said Chavez
He said the entire world will be hit by the US financial crash, which he compared to a sinking elephant in a pool, with effects impossible not to be felt by anyone into that pool.
The Japanese, Germans, French, Italians and Canadians, not to mention the Chinese and Indians and Russians and Brazilians, will also want to design the new Bretton Woods system. They will want roles for the yen and yuan, the euro and the rupee, the real and the ruble.
