There will be many messages coming from Shanghai when the Presidents of Russia, China and Iran meet. In my lifetime there has never been an American war that I liked or even thought was necessary. But to people like me who yearn for peace the end of American wars of aggression and greed will be the Good News of Shanghai.
The Bretton Woods agreement of 1944 made the Federal Reserve Note the accepted means of settling international trade. Prior to 1776 Americans who wanted to buy things from overseas either had to have gold coins or English pounds. The English pound like the Federal Reserve Note is created when the government takes out a loan. If we ever paid off our debts, we would have no money. The Banker has the right to charge us interest on money they created out of nothing. This system transfers all wealth from those who toil to those who create the currency.
In 1972 Michael Hudson wrote the book Super Imperialism. He explained that because America was allowed to print dollars which foreign nations needed to buy or sell goods and services from any of more than a hundred countries that America had used its printing press to print dollars to pay for its wars and its occupying armies. He was asked by the State Department and by the Pentagon to give talks on his book. A general who finally grasped what Dr Hudson was saying said, “Wow. We are ripping people off.” I might make two points. 1972 was the year of President Nixon’s trip to China which opened the door to the deindustiralization of America. It was also the year that the war against American Dollar Imperialism began.
On August 15, 1971 President Nixon closed the gold window. The US violated the Bretton Woods Agreement by not allowing Federal Reserve Notes to be exchanged for gold at $35 an ounce. Henry Kissinger devised the Petrodollar as a replacement to the Bretton Woods agreement. The Saudis during the Arab-Israeli war of 1973 had tripled the price of oil. That was a great benefit to the America Treasury Department. The Petrodollar arrangement required the Saudis and the Gulf States to buy US Treasury bonds to fund the America fiscal deficit and to invest in the American stock market to make it seem that the dollar trade deficit was not really that bad. Of course this meant that the US could never allow the price of oil to go so low that America could not fund its budget deficit.
A funny story about Colombia and the NYSE. The President of the NYSE, Dick Grasso, went to Colombia to talk to the FARC leadership about investing their cocaine profits in the American stock markets. They declined the offer. They wanted to invest in Colombia to benefit their people. Dick Grasso returned to New York. Six months later the Clinton administration announced Plan Colombia. This was a plan to drop bombs on the FARC supporters and to drop herbicides onto their fields so the bad revolutionaries would not have any cocaine profits. Their competitors who presumably were preferred clients of the New York banks did not receive this treatment.
America fought two wars in the 21st century purely to force nations to sell oil in dollars. The first was against Iraq when President Saddam Hussein sold his oil for euros. The second was against Libya which was standing up to Dollar Imperialism and had attempted to gather African nations around an alternative gold backed currency. No more funny money created as a loan at interest. 144 million ounces of Libyan gold was stolen. $98 billion in bank account deposits were stolen by the Bankers. They needed the cash to pay off bad loans and to fund a round of bonuses. Homes in London and New York are very expensive. That 40,000 black Libyans were massacred after the war was of no concern to the ‘Liberals’ on the government payrolls in London and Washington.
Fast forward to today. The dollar’s role as an international currency is being attacked daily. Brazil, Russia, India China and South Africa formed an alliance called BRICS that was powerful enough to say No to the Federal Reserve and to the Pentagon. That has been augmented by other nations. There are now at least 82 (if not 85 or more) nations working together cooperatively in the BRICS Alliance to take down the dollar. These nations are doing the hard work of preparing the way to replace the dollar not with one currency but with many. Some might be gold backed. Others might choose a combination of gold and oil or another commodity to back their currency.
There are people inside the Turkish government and certainly their banking system working to establish a gold backed Gulf currency. The Turks are members of NATO. Yet they are helping the BRICS nations. Turkey is allowing the CIA to use their air base at Incerlik to transport heroin out of Afghanistan prior to distributing it around the world. That 100,000 people every year die from heroin overdoses is of no concern to NATO member states. That the average age of a first time heroin user in the United States is 14 does give joy to the Bankers of New York.
When the dollar looses face and looks like it will no longer be treated as gold was in the 19th century, its value will begin to slide even more rapidly. There are many billionaires in the world and many men in charge of billion dollar investment portfolios. When they see the dollar’s value begin to seriously slip, they will dump their dollars. Recently, Paul Craig Roberts wrote of the case of Belgium’s acquisition of US Treasury bonds. The Federal Reserve had been buying US bonds and said it would taper off. Roberts pointed out that the FED tapering was compensated for by clients in Brussels buying Treasury bonds using money created by the Federal Reserve and wired to accounts in Belgium. Stories like these and the business news coming out of the Shanghai Summit will convince those money managers that the dollar will slide. It’s just a matter of when.
When the dollar does drop in value, it could be the result of a deliberate policy. Jim Rickards is the author of Currency Wars and a member of the Council on Foreign Relations. He is a Pentagon financial consultant and advised them during War Game exercises concerning what happens the Day The Dollar Dies. He says the dollar will face a series of 20 to 30% devaluations until it loses 80% of its value. That means imported goods will cost 500% more. It also means that foreigners will be able to buy food off our shelves because it will look awfully cheap to them. Some families in Mexico might have to start sending money to their poor relations in Texas and California. It would definitely mean the end of Dollar Imperialism.
It might not mean the end of US soldiers as mercenaries. Erik Prince, the founder of Blackwater, is now working as a mercenary for China in Africa. America might become a breeding ground for soldiers. But they will be working for the Chinese, the Russians or the UN Security Council. The American government will soon no longer have the ability to finance wars overseas.
The President of Iran will be at the Shanghai Summit. This clearly is a message to the crazies in the US and Israel that Iran cannot be attacked. Vladimir Putin has until recently been restrained in his support of Iran. He is constrained by Russia’s Jewish Lobby which includes many very powerful billionaires. He has refused to sell the Iranians either the S-400 or S-300 anti-aircraft systems so the Iranians had to build their own S-300. He limits Iranian missiles to Mach 3 speed. He has not sold them his Iskander SRBM which even in its export version has Mach 5.5 speed. Putin will be selling the S-400 to China. This will put an end to Obama’s Pivot to Asia policy. It also means that China will be selling their version of the S-400 to Iran in 2 years. The Israelis sold America’s Patriot missile to China. The Chinese combined that with the S-300 and called it the HQ-9 which they sold to Iran. If American and Israeli pilots ever confront Iran, they will properly regard Israeli politicians as traitors.
I have been writing for more than six years that neither the US nor Israel will attack Iran. Let me say this one more time. The Iranians have not fought an aggressive war in over 200 years. According to all 16 US Intelligence Agencies, the Iranians do not have a nuclear weapons program. An attack on the active nuclear reactor at Bushehr could release enough radiation when coupled with the ongoing catastrophe at Fukushima to kill 30 million people downwind. Millions of those people will be Chinese. That is a non-starter in Beijing.
Iran, Hezbollah and Syria conservatively have at minimum 150,000 missiles to fire at Israel in case they are attacked. This is a minimal estimate. One of the reasons the Syrian Army was slow to respond to US funded Al Qaeda attacks was that they had no National Guard to protect local communities. They have created one. Many Hezbollah supporters volunteered. An Israeli journalist said there are all sorts of Hezbollah supporters in the Syrian National Guard sitting on caches of rockets. The Iranians are mass producing Mach 3 speed rockets with 610 kilogram (1,344 pound) warheads and Russian guidance systems. The Iranians have also reverse engineered CIA drones. Hezbollah used a cheaper German made drone to map rocket targets inside Israel. They said they can knock out Israel’s electricity for six months. Good luck getting a transformer from China after you irradiated their people.
A former head of the Mossad said attacking Iran is STUPID. Israel would face 150,000 incoming missiles. Others in Israel have said 175,000. Many would be primitive but they would overwhelm Israeli missile defense. The Israelis have a limited number of very expensive missiles to fire at that incoming barrage. The majority of Israeli Jews live in metropolitan Tel Aviv and Haifa. There will be a sufficient number of incoming missiles to take out all Israeli military bases, their electrical generation plants, their nuclear works at Dimona and the homes and businesses of the majority of Israeli Jews. In short as the former Director of Mossad said, “Attacking Iran is STUPID.”
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