MELTDOWN by BY JOHN CANTLIE
War is on the increase, oil values on
the decrease, and America is printing
$85 billion dollars a month to stave off
total collapse. Economic meltdown is
approaching fast and the world needs a
stable currency it can rely on. For 5,000
years, that currency has been gold
There’s simply too much “money” in the world
these days and as a consequence things won’t run
quite so smoothly within the next few years. You
can see it in every economy of nearly every country.
The cost of living is going up as currencies become
worth less and central banks try and inflate
the problem away by printing ever more pieces of
paper with numbers on them.
It’s been tried dozens of times through history and
it always fails. The dollar’s going down but this
time it’s taking the world with it.
Since 1971, the world’s financial system has been
based on trust. Currencies are only worth something
in exchange for goods because banks say
they are – $5 bought you a coffee and a sandwich
yesterday so you have faith that it will do so tomorrow.
But as trust in financial matters between the
public and governments drops to a low not seen
since the 1930s, and with none of the world’s currencies
tied to anything of true value, the reality
of global economic meltdown draws ever closer.
As the world’s reserve currency and, until now, the
sole currency of trade for oil, the US dollar forms
around 60% of the value of all the currency on the
planet, and over half those dollars reside outside
the United States. So as the dollar collapses, it creates
a domino effect and the rest come crashing
down with it.
At such times, the world looks to something with a
little more worth than paper to prop up its finances.
That thing has to have intrinsic value, a value
that does not climb or descend wildly at the pressing
of a few buttons in a central bank. It could be
a cow, a sack of grain, or a barrel of oil, but for the
last thousands of years the most popular item of
value has been gold.
There is a finite amount, so it will never lose
its value, banks can’t just print more of it when
they choose, and it is worth what the market
says it is, not what banks dictate. It is durable,
you can exchange it for goods, and it’s worth
as much or more today as it was thousands of
years ago. Now that’s real money.
It’s amazing to think that a lump of gold that
may have been used for trade thousands of
years ago is still in circulation. It may have been
melted down and be part of a bullion bar or it
may be worn around someone’s neck, but it’s
still around. Try that with a piece of paper.
WHY ARE WE TALKING ABOUT MONEY?
Last month the Islamic State announced plans
to mint their own range of gold dinars and silver
dirhams in a move to separate themselves
from dollar-linked fiat currencies and to establish
their own money, a currency that has intrinsic
value.
Any country needs its own currency and a
move by the Islamic State to gold dinars would
be a smart one in today’s turbulent markets.
Financial website Quartz wrote, “The gold dinar
taps into a deep history of Islamic coinage
that stretches back almost to the time of Muhammad
himself. The Islamic dinar appeared
in 696 AD, when the Umayyad empire – based
in Damascus – stretched from the Iberian peninsula
to the Indus River in South Asia.”
And the value of gold is soaring. In 2006, I possessed
a 1 kg bar of gold that was worth, at the
time, around $17,000. Sadly it wasn’t mine; a
bullion dealer loaned it to me for an article.
Staff from all over the building heard about it
and would come to ogle over its beauty. Pure
gold makes people go a bit strange like that.
But if I’d had the money to buy it, that same bar
would be worth over $60,000 today.
As they move to expand the Caliphate, it would
be befitting for the Islamic State to introduce
their own dinars and dirhams. It is a workable,
practical form of currency that puts spending
power into the hands of businesses and
consumers. The gold dinar is one of the most
enduring currencies in the world. Gold makes
sense when there is an economic crisis fast approaching
the likes of which hasn’t been seen in
a very long time.
The stranglehold the US dollar had on the world
since the Bretton Woods agreement of 1944 –
when the world’s currencies were pinned to
the dollar, which in turn was pinned to gold
at $35 per ounce – is long over. The world had
sent America their gold for safekeeping during
World War 2 and they’d amassed some 20,000
tons of the stuff. Over the space of a few wartorn
years, the dollar became the reserve currency
of the globe through an internationally
recognized gold standard.
America was rolling in cash. But over-expenditure,
warfare, and plain greed meant that by the
1960s they were printing far more dollars than
they could redeem in gold. The US is estimated
to have spent $546 billion alone during the Cold
War. They were printing dollars like they were
going out of fashion, so the world got nervous,
started returning dollars, and asking for their
gold back instead.
This created a landslide and the Federal Reserve
was forced to admit they didn’t have enough
gold to hand back in return. By 1971, President
Nixon declared America would no longer redeem
dollars for gold unless it was in the “interests
of the United States.”
It was the biggest default in modern history.
Nixon quickly replaced gold with oil in 1973 by
stating that all international transactions with
the oil-producing countries of OPEC were to be
made in dollars. The infamously corrupt Saudi
royal family agreed. In return for using dollars
only as the trade currency for oil and invest
ing billions in US bonds, America would provide
them military support and protect their oil
fields. At Saudi’s bidding, the other OPEC countries
fell into line, and the petrodollar was born.
The dollar had been pinned to gold, now it was
pinned to oil.“
“No dollars, no access to the world’s most important
commodity,” says Nick Giambruno, a
financial advisor at Casey Research. “If Italy
wanted to buy oil from Kuwait, it had to first
purchase US dollars on the foreign exchange
market to pay for the oil, thus creating an artificial
demand for US dollars that wouldn’t exist if
Italy could pay in euros.”
FOR A WHILE, THINGS WENT TO PLAN.
Saudi made trillions. America made trillions.
But then Saddam annexed Kuwait in 1991 and
the US, holding up their part of the bargain, destroyed
his Baathist army. But they didn’t stop
there. They then imposed crippling sanctions on
the Iraqi people themselves that, through poverty,
resulted in the deaths of over 500,000 children
alone, until in 2000, the former Baathist
regime declared they would sell their oil only in
euros and not to “an enemy state.”
America went back in 2003 under the pretense
of “weapons of mass destruction” and the “war
on terror” and, after ruining the country for its
people, immediately turned the oil sales back
into dollars. America would start wars and kill
hundreds of thousands of people to protect the
value of the dollar amongst other economic interests.
This was made obvious when the US
and its allies sat back and watched while Asad
slaughtered more than 200,000 of the people
of Syria. However, as soon as the Islamic State
moved towards the oil fields of Iraq and Arabia,
America immediately got involved.
And despite the aggression to protect the
worldwide value of the dollar, leading US politicians
and financiers know its days are now
numbered. Congressman Ron Paul says a dollar
collapse is imminent. “We will know that day is
approaching when oil-producing countries demand
gold, or its equivalent, for their oil rather
than dollars or euros,” he says.
And that’s what’s happening right now. Russia
and China trade oil in their own currencies and
are amassing so much gold bullion that they are
ready to kill the dollar and petrodollar as international
tools of trade. China has built a gold
mountain of 6,500 tons of bullion. Other countries
are trading in euros and gold or planning
to do so in the near future.
The largest natural gas producer on the planet,
Russian company Gazprom, has recently signed
agreements to switch payments from dollars to
euros. Gazprom is also a huge producer of oil
and it’s a big move in Russia’s de-dollarization
efforts. China will follow suit.
And the military actions of the Islamic State
have further put the squeeze on the American
oil monopoly by attacking, harassing, and taking
over the oil supply in lands they have expanded
into.
Iraq is the second-largest supplier of oil after
Saudi, but Islamic State gains there have heavily
disrupted oil supply. Libyan supply has been
disrupted by Islamic State attacks while Nigerian
production is being hit by mujāhidīn there.
It’s no coincidence and a smart way of hitting
America where it hurts, so the US has to rely
more on its own supply. In a panic to stop the
situation from getting worse, America has invested
billions into their own oil and gas drilling
programs, making them now the largest oil
producer in the world at 11 million barrels per
day and entering into an oil price war with their
Saudi friends.
So suddenly the market is flooded with cheap oil
that everyone can now buy with their increasingly
worthless US dollars. You don’t have to be
a financial expert to see where it’s all headed.
Wars, economic implosion, chronic deflation
and, eventually, a new global financial system
that will emerge from the ashes.
Turning to gold at such times makes sense. Gold
and silver are still considered the strongest
monies in the world because people demand
them. They know their value and have used
them for millennia. Nobody has invented a better
place for humans to live than in a house.
Nobody has discovered a better way for people
to stay warm than wearing clothes. And
nobody has found a more stable money than
gold. In 1944, the dollar was pinned to gold
at $35 per ounce – today it would need to be
$15,400 per ounce to cover the number of
dollars in circulation!
Venezuelan leader Hugo Chavez could see it
coming and started a campaign in 1998 to get
Venezuela’s 211 tons of gold back from the
US. It took a huge amount of wrangling before
their gold came home; countries don’t like
letting go of gold once it’s in their vaults. But
he started the ball rolling and now everyone
wants their bullion. Switzerland, Ecuador, Holland,
and Austria are all shouting for their gold
back. Germany asked the Fed for their gold in
2012 and was simply told it wasn’t there.
Countries are now rapidly distancing themselves
from the dollar before the foreseeable
meltdown occurs. Therefore, it makes enormous
sense for the Islamic State to mint their
own gold dinars. If you’re trading in a money
that has value on the free market when
many other countries are running around
with wheelbarrows of paper money to pay
for a loaf of bread, you’re in a much stronger
position than they. Your economy will flourish
while theirs will collapse.
Gold and warfare have always lived hand
in hand, as financial author David Graeber
writes. “Over the course of the wars of expansion
during the time of the Umayyad Empire,
enormous quantities of gold and silver were
looted from palaces, temples, and monasteries
and stamped into coinage, allowing the
Caliphate to produce gold dinars and silver
dirhams of remarkable purity.”
Of course, many central banks around the
world rubbish the idea of a return to gold or
a gold standard in the 21st Century, citing that
it would be a huge step backwards. But it’s
the job of mega bankers to rubbish gold, because
if the world were to return to a monetary
system based on precious metals, the control
they and governments have over the country
and financial health of the public would cease
to exist. They’d be out of a job. You cannot manipulate
the value of gold. It is what the market
demands it be. But with paper money you can
fiddle around as much as you like. And it’s all
designed to bleed as much money as possible
out of the average consumer’s pocket.
“Our monetary system steals from the middle
class and transfers the wealth to the banks,”
says financial expert Mike Maloney. “We’ve
seen this throughout history and it just repeats
over and over again.”
The world banking system is a scam designed to
feed itself and governments. Nothing tangible
exists, just a huge amount of paper and lots of
numbers on computers. With today’s system,
the governments and banks hold all the gold
while the public have worthless pieces of paper
to play with, and when the economy collapses
guess who’ll still have the gold…
That’s why putting precious metal into circulation
is good for everyone except the banks.
It reverses the process and puts paper money
back into the system while the real wealth, precious
metals, is in the hands of the people.
The US Federal Reserve is now printing over $1
trillion per year in “Quantitative Easing 3” in a
desperate effort to stave off deflation and print
its way out of collapse. They may run out of paper
in their efforts, but it still won’t work. The
dollar’s time is now coming to a close like every
other fiat currency before it, and despite the
deaths of hundreds of thousands of people to
postpone it, history shows it’s inevitable. And
for the first time ever, all the world’s currencies
are also fiat currencies backed by absolutely
nothing. When the collapse comes, it will be
shattering…