In my previous post, “Quantitative Easing 0-1-2-3∞ & The Federal Reserve’s Love Affair with its Banks and Mortgage Bonds: Levitating The Black Hole,” the data points to the system being levitated by faith-based accounting and money printing since the banking and financial collapse in 2008.

We are entering a stage of open money printing that other countries recognize as accelerating (unofficial) U.S. currency devaluation as the media whips the public into inflation-deflation voodoo. Inflation is the printing of dollars beyond the capacity to earn them through the production of goods and services; this has been substituted in the past decade with the Federal Reserve system’s largest member banks’ production of over $1,000 trillion in derivatives – legal financial contracts based on money and assets that do not exist. The term currency devaluation would scare most people, so it is called ‘inflation’.

Comment: I was asked what was meant about devaluation, as many countries are engaged in currency wars, i.e. competitive devaluation. While this is the case, some devalue from a position of relative strength, for instance to maintain a competitive edge in export trade. Others devalue indirectly for example, through QE, from a position of relative weakness as currency is printed as a remaining means to pay or monetize debt, gain advantage in trade, or perhaps to achieve other objectives. There are internal effects in how it affects the purchasing power of consumers and external effects in how it affects exchange rates, how it affects capital flows to other countries, as the challenge here is the world reserve currency that is the international medium for trade settlement. Other ways to devalue could be intervening in the currency markets or official declaration, and other less obvious ways, etc. In the context of the scale of the banking and financial crisis-collapse since 2007/2008 and indebtedness of many countries facing severe recessions, the ‘currency wars’ signals volatility and instability in the monetary system. 

The quantity of dollars (or euros) printed to levitate the system is unlimited but there is a constraint on time as other countries move to insulate themselves from the effects of The Black Hole. This includes alternative currency arrangements and quiet accumulation into gold, what was the domain of the U.S. dollar (U.S. Treasury bonds) as the world reserve currency – the accepted medium for international payment of goods and services, a requirement for oil.

Let’s look at the big picture to see the far-reaching consequences of what is unfolding here to consider its intersection with global security issues. Another follow-up post indicates the shifts have been quietly underway and what that may look like for future generations, as we will return to other mechanisms being used to levitate the system.

Russian President Vladimir Putin’s Prepared Remarks at the 43rd Munich Security Conference (February 10, 2007)

A conference of world leaders in Munich, Germany. The transcript is also in the Washington Post (February 12, 2007). There is a mention of hiding missiles under pillows and market manipulation. (Disappeared from You Tube LINK). Here is a copy 43rdMunichConferencePutin.mp4 and Transcript.

Putin (in Russian): Thank you very much dear Madam Federal Chancellor, Mr  Teltschik, ladies and gentlemen! I am truly grateful to be invited to such a representative conference that has assembled politicians, military officials, entrepreneurs and experts from more than 40 nations.

This conference’s structure allows me to avoid excessive politeness and the need to speak in roundabout, pleasant but empty diplomatic terms.

This conference’s format will allow me to say what I really think about international security problems. And if my comments seem unduly polemical, pointed or inexact to our colleagues, then I would ask you not to get angry with me. After all, this is only a  conference. And I hope that after the first two or three minutes of my speech Mr Teltschik will not turn on the red light over there.

Therefore. It is well known that international security comprises much more than issues relating to military and political stability. It involves the stability of the global economy, overcoming poverty, economic security and developing a dialogue between civilisations. This universal, indivisible character of security is expressed as the basic principle that “security for one is security for all”.

As Franklin D. Roosevelt said during the first few days that the Second World War was breaking out: “When peace has been broken anywhere, the peace of all countries everywhere is in danger.” These words remain topical today. Incidentally, the theme of our conference — global crises, global responsibility — exemplifies this.

[The “Unipolar World”]

Only two decades ago the world was ideologically and economically divided and it was the huge strategic potential of two superpowers that ensured global security. This global stand-off pushed the sharpest economic and social problems to the margins of the international community’s and the world’s agenda.

And, just like any war, the Cold War left us with live ammunition, figuratively speaking. I am referring to ideological stereotypes, double standards and other typical aspects of Cold War bloc thinking.

The unipolar world that had been proposed after the Cold War did not take place either. The history of humanity certainly has gone through unipolar periods and seen aspirations to world supremacy. And what hasn’t happened in world history?

However, what is a unipolar world? However one might embellish this term, at the end of the day it refers to one type of situation, namely one centre of authority, one centre of force, one centre of decision-making.

It is world in which there is one master, one sovereign. And at the end of the day this is pernicious not only for all those within this system, but also for the sovereign itself because it destroys itself from within. And this certainly has nothing in common with democracy. Because, as you know, democracy is the power of the majority in light of the interests and opinions of the minority.

Incidentally, Russia – we – are constantly being taught about democracy. But for some reason those who teach us do not want to learn themselves. Continue reading →