#the dollar won't be the standard currency though anyway

[swordrose-fluidflux]

Confessions of an Economic Hitman

Excerpt from Chapter 35

There also was another possible outcome, however; OPEC might attempt to reassert itself. If the United States took control of Iraq, the other petroleum-rich countries might have little to lose by raising oil prices and/or reducing supplies. This possibility tied in with an- other scenario, one with implications that would likely occur to few people outside the world of higher international finance, yet which could tip the scales of the geopolitical balance and ultimately bring down the system the corporatocracy had worked so hard to con- struct. It could, in fact, turn out to be the single factor that would cause history’s first truly global empire to self-destruct.

In the final analysis, the global empire depends to a large extent on the fact that the dollar acts as the standard world currency, and that the United States Mint has the right to print those dollars. Thus, we make loans to countries like Ecuador with the full knowledge that they will never repay them; in fact, we do not want them to honor their debts, since the nonpayment is what gives us our leverage, our pound of flesh. Under normal conditions, we would run the risk of eventually decimating our own funds; after all, no creditor can afford too many defaulted loans. However, ours are not normal circumstances. The United States prints currency that is not backed by gold. Indeed, it is not backed by anything other than a general worldwide confidence in our economy and our ability to marshal the forces and resources of the empire we have created to support us.

The ability to print currency gives us immense power. It means, among other things, that we can continue to make loans that will never be repaid — and that we ourselves can accumulate huge debts. By the beginning of 2003, the United States’ national debt ex- ceeded a staggering $6 trillion and was projected to reach $7 trillion before the end of the year — roughly $24,000 for each U.S. citizen. Much of this debt is owed to Asian countries, particularly to Japan and China, who purchase U.S. Treasury securities (essentially, IOUs) with funds accumulated through sales of consumer goods—including electronics, computers, automobiles, appliances, and clothing goods — to the United States and the worldwide market.

As long as the world accepts the dollar as its standard currency, this excessive debt does not pose a serious obstacle to the corpora- tocracy. However, if another currency should come along to replace the dollar, and if some of the United States’ creditors (Japan or China, for example) should decide to call in their debts, the situation would change drastically. The United States would suddenly find itself in a most precarious situation.

In fact, today the existence of such a currency is no longer hy- pothetical; the euro entered the international financial scene on January 1, 2002 and is growing in prestige and power with every passing month. The euro offers an unusual opportunity for OPEC, if it chooses to retaliate for the Iraq invasion, or if for any other reason it decides to flex its muscles against the United States. A decision by OPEC to substitute the euro for the dollar as its standard currency would shake the empire to its very foundations. If that were to hap- pen, and if one or two major creditors were to demand that we repay our debts in euros, the impact would be enormous.