As the British and American Media outlets focus on the downed Malaysian Airlines aeroplane, flight MH17, we have to look beyond the headlines, and the claims and counter-claims to look at the why…
The issue might even be taken to the United Nations. Words expressed. Actions condemned. Grand Speeches spoken. Accusations made and fingers pointed.
As I said in a former post, the crisis in Ukraine, may be the flashpoint that triggers the next round of the global currency war. And when we have currency wars, they usually end in hot wars.
(See here: https://moneymatterstoo.wordpress.com/2014/06/09/revenge-on-the-bankers/)
The events in the Ukraine, may be the prelude to a new hot war, just as in 1914 on 28 June 1914 the assassination of Franz Ferdinand sparked the First World War almost exactly one hundred years ago.
Archduke Ferdinand, (1863-1914) was born in Graz, Austria. As the heir to the Austro-Hungarian empire, he and his wife Sophie’s assassination, in an open topped car in Bosnia ended the attempts by Ferdinand to make European reforms.
Ferdinand, was asked to visit the capital of Bosnia, Sarajevo, to inspect army manoeuvres by General Oskar Potiorek of the Austro-Hungarian Army. Bosnia and Herzegovina were provinces that had been under Austro-Hungarian administration since 1878, by international agreement. Austria annexed the provinces outright in 1908, a controversial move which upset many governments in the west; however, some in Greater-Serbia were outraged.
They wanted the provinces to be part of a Serbian led pan-Slav state, (as finally actioned by Marshall Josip Broz Tito after WWII in the state of Yugoslavia) rather than part of the Austro-Hungarian empire. Ferdinand was also considering the idea of a federalism made up of 16 European states – an early version of the Euro Area perhaps?
A Serbian terrorist group, the Black Hand, resolved to assassinate Franz Ferdinand during his visit to Sarajevo on 28 June, thereby stalling his proposed reforms.
While riding in the motorcade through the streets of Sarajevo, Franz Ferdinand and his wife Sophie were shot and killed by Gavrilo Princip, a Bosnian member of the Black Hand; and due to alliances across Europe, the continent was dragged into a war, it could neither afford, nor avoid. Britain was forced to leave the Gold standard to pay for munitions, without giving up the Gold it held, it would not be able to buy the equipment and train its army.
BUT, the bankers got their pound of flesh… They always do. Notice something here?
Without Bankers and their flexible currencies, governments of all political persuasions, would have to balance their budgets and pay for things with real money – Gold and Silver. And if governments don’t have that gold or silver, they have to pay with promissary notes – a kind of I.O.U.
That’s what the origins of paper currency were… you can tell by the words on them…
“I promise to pay the bearer on demand the sum of…” It used to say “in gold” or “in silver”.
The British Pound was once literally a receipt for a one pound weight of Sterling Silver. And the British Guinea was a one ounce coin of pure gold. Latterly the gold sovereign, that became popular in the 1800s, and made the British Empire, was seen in the film: “From Russia With Love”. James Bond played by Sean Connery, is given 50 gold sovereigns to take on assignment, and this became the coin of choice for international transactions.
And Foreign governments, they want paying in Gold or Silver too, especially as paper currencies can be manipulated – devalued. You buy things with paper currency, then you devalue that currency, and the foreign nation feels aggrieved because it thought it was going to get full value for its goods supplied.
Just as President de Gaulle in 1965 sent his dollars to the Gold window to “cash them in” and Britain too requested $3billion in gold in 1971 just days before President Richard Milhous Nixon, announced to the world, that he was closing the Gold Window on August 15th, 1971.
As the BRICS nations – Brazil, Russia, India, China and South-Africa last week on 16th July, held a conference in Brazil, where they unveiled a new financial institution, as they had signed a deal to create a new $100bn (£58.3bn) development bank and emergency reserve fund – Is this the first volley in the battle against the U.S. and the Dollar hegemony, with its puppet-masters the IMF and Worldbank? Or is it just one of many recent nails in the dollar’s coffin?
The New Development Bank’s first president will be from India while the board’s chairman will be Brazilian, according to the declaration released at a summit in Fortaleza, Brazil.
Tuesday’s deal was reached after intense last-minute negotiations to settle a dispute between India and China over the headquarters of the new bank.
Brazilian President Dilma Rousseff, said setting up the currency reserve was a priority for the countries to protect themselves from crisis scenarios: “It will be a kind of security net to increase protection for BRICS countries as well as other countries. It’s a question of our security.” Those other members are expected to be many of the South American nations, with the number of citizens involved over half the world’s population.
The other four leaders present were Russian President Vladimir Putin, Chinese President Xi Jinping, Indian Prime Minister Narendra Modi and South African President Jacob Zuma.
The bank and fund are seen as counterweights to the U.S. dominated World Bank and International Monetary Fund, which BRICS nations say needs more reform to give emerging nations more voting rights.
India’s presidency of the new BRICS bank will be for five years, according to Reuters, but no decision has been made yet regarding which country will hold the next presidency.
The bank is expected to make its first loans in 2016. Is that date significant?
The BRICS countries have a shared desire for a bigger voice in global economic policy, given that they now account for 21 percent of global economic output and have contributed 50 percent to world economic growth these last ten years.
Given China’s entry to the World Trade Organisation, which requires a freely floating currency, by 2015, will China’s gold acquisitions mean that it will gravitate towards Global Reserve Currency? I suspect so, and that might mean that the 2016 date IS significant.
India, in 2009, bought over 200 tons of Gold from the IMF at market rates to provide liquidity for the bank. So is the next volley to be fired in this global currency war likely to be this year?
And is the downing of the plane in Ukraine, and the political commentary, especially by David Cameron, a timely reminder of events in Europe of a hundred years ago?
It is just possible that Ukrainian forces might have deliberately targetted the plane to engage outside forces in a military campaign for their own ends. The “Why” is the question. “Qui Bono?”
And if this does become a hot war, between east and west, what price Gold and Silver, as hard up western governments have little or no gold left to sell. And most of the existing Gold has headed east. So, if you were trying to limit your opponents military, which minerals would you be stockpiling or removing from global markets? And what price on world markets? (See my previous post: Revenge on the Bankers)
As I’ve said before, when any currency falls due to banking madness and political lunacy, there’s only one solution really…