Des Pensable copyright 2016
Time is money. The world runs on money. International trade is good for us. The TPP and TTIP will be good for us. We hear this from our government all the time but we also hear comments from its critics. We need to reduce inequality as poverty is increasing and Climate Change is the biggest economic threat in the world in 2O16. So what does the TPP/TTIP/TISA have to do with the US dollar (USD) and Global Warming?
The world today was largely shaped by an important event way back at the end of WW2. In 1947, the industrial base in many countries was largely destroyed. The exception was the USA. The leaders of most of the western countries had a meeting and decided a new world currency would help reconstruction and trade.
The US dollar (USD) was selected on the understanding that the dollar was convertible at any time to gold. This is widely known as the Bretton -Wood accord. One ounce of gold was pegged at $US35 to stop currency speculation.
It worked well for two decades but in the late 1960’s some European countries were worried the inflationary economic policies and the expensive militarism of the USA. Germany and Japan were challenging USA in industrial power. The Europeans were worried about the USA ability to convert the USD to gold so they started to redeem their paper US dollars for gold.
At first the USA complied but this depleted US gold stocks so much that the US President Nixon suddenly shocked the financial world by declaring in 1971 that its currency was a fiat currency which basically means the strength of its currency was solely based upon USA economic / military might rather than gold.
This had consequences. To maintain the value of its USD it had to be and remain to be the world’s most powerful country. It had to be the world hegemon. (Russia wasn’t happy about this of course and the Cold War eventuated.)
To help it remain the world hegemon the USA realised that all modern economies relied on the use of fossil fuels so it decided to tie the value of the USD to trade in oil.
The USA politicians knew the middle east had the world’s biggest reserves of oil at that time. They knew a modern military moved on oil and they knew the post Ottoman empire borders in the middle east were a huge mess randomly dividing ethnic, religious and sectarian groups. They knew some countries were blessed with bountiful oil and others had little or none.
They knew that other nearby oil-poor countries within the chaotic border system would covet that oil so they made a deal with the Saudis. They would supply arms and protect the Saudis against all others if the Saudis agreed that they would only sell oil in USD. The Saudi government agreed and later all the OPEC countries agreed as well. They created a monopoly that set the prices that world had to pay.
That meant that all countries in the world (including China and Russia) needing to grow their economies would need USD to buy oil so the USD would have to be held by all countries to pay for that oil. The Petrodollar was invented. The strength of the US dollar was no longer based upon gold but upon trade in fossil fuels and would continue to be the world’s main currency.
A very smart part of the deal was that any country trading in oil that had surplus USD would invest any surplus USD in US treasury bonds. This was supposed to stop the oil supplying nations from upsetting world finances by speculating with their spare currency.
However, this effectively gave the USA an enormous foreign loan to do with as it pleased. The US Treasury loaned this money to banks who loaned it to the finance industry who began to speculate with it. The result was that the USA was awash with money that it hadn’t actually earned.
It was ideal for spending on spy networks and military interventions all around the world to maintain its hegemony. It was also ideal for sanctioning countries that didn’t do what the USA wanted them to do. The US government could declare economic war on a country by withholding or refusing its trade in USD, by sanctions and by speculating on its currency and it did.
Even better, since the world needed to keep USD in their treasuries to pay for oil it could print paper money and exchange it for goods. In fact for decades now, unlike a barter system, or a monetary system based on something real like gold, where something of value is swapped for something else of value, the US has been trading and consuming the world’s goods with printed paper.
It can only continue to do that while people believe that its paper has some value. Several times throughout history where countries have tried fiat currencies like the USD it had failed dismally. All the paper currency ended up worthless.
If people of the world stop believing that the US paper dollar is worth something then they will stop trading their produce for worthless USD paper currency and the US will plunge into a massive recession bankrupting the rich and causing massive unemployment and undoubtedly a revolution.
To protect its currency and its ability to trade paper for produce the USA must be seen as the most powerful nation of Earth. To do that means that it had to stop anyone else becoming a serious competitor. It had to stop anyone trading oil in currencies other than USD and it did.
Iraq broke with the oil for USD rule and started trading oil for Euros. Iraq was invaded by the USA and its new puppet government resumed trading in USD. Libya suggested that Africa move to a currency based on the Libyan gold dinar a currency backed by hundreds of tons of gold and silver for all commodity trading. Libya was overthrown by US/ French / NATO forces and its gold and silver vanished. It’s now a ruined state.
Recently, the Brazil, Russia, India, China and South Africa (BRICS) set up an alternate world trade and banking system backed by thousands of tons of gold and silver in an attempt to re-establish and stabilize the values of world currencies based upon real goods they produce rather than US military power backed paper dollars. This directly challenges the USA and USD hegemony and we are yet to see what happens.
The US is the most debt ridden country in the world through fighting countless wars to maintain its hegemonic world empire but it now faces a serious enemy greater than any county and that is Nature itself.
The power of its dollar was built on trading fossil fuels which are causing Global Warming which in turn are destroying our world. At the Paris Climate Change conference in December last year 200 countries around the world agreed to phase out using fossil fuels and switch to other renewable fuels such as solar, wind, wave and geothermal power. That means the death of the fossil fuel industry, no more petrodollars and no more cheap loans of foreign currency for the USA finance industry.
So while monster fossil fuel corporations like Exxon have delayed Global Warming action using corporate funded misinformation and denialist campaigns and others will probably continue this for some time yet, inevitably the USD will have to be based upon something other than fossil fuels trading if the world is to survive a Global Warming catastrophe.
With the death of the petrodollar at hand, the US political and corporate elite believe that USA/ USD hegemony can be re-established with a new world trading system devised in secret by a consortium of transnational tax dodging companies and USA/European corporate bankers. The same bankers that brought on the Global Financial Crisis in 2008 and were never jailed because they were too big to fail.
The dozens of chapters and thousands of pages of this new trading system are embedded within the TPP/TTIP/TISA agreements which might well be labelled the 3T agreement as it is about Trade, Transnationals and Tyranny. It’s primarily about US world trade hegemony.
These new highly restrictive and punitive trading agreements herald in the changes needed by the USA led consortium to create the new international order which of course will continue to use the USD and MANDATES an authoritarian antisocial neoliberal economic continual growth philosophy. Corporate rule rather than democracy.
Thus the value of the USD will soon be based on US led corporate controlled world trade in goods and services produced by the TPP/TTIP countries which effectively become vassal states within a US corporate hegemonic sphere of influence.
There are many dangerous things about the TTP/TTIP/TISA agreements however from the point of view of this article the four most dangerous changes that the TPP/TTIP/TISA agreements will do is
- allow free unrestricted movement of currency within the TPP/TTIP/TISA countries
- set up a new legal system (ISDS) that settles disputes between governments and the transnational banks and corporations beyond control of all governments and not answerable to the people of the world.
- mandate that all the governments must privatise ALL government run services such as power, water, education and health etc.
- Totally ignores Global Warming and mandates trade is more important than the environment.
These changes will allow the transnational corporations and bankers currently holding massive amounts of USD paper money held in tax havens estimated at up to 32 trillion USD to be used to buy real estate, farms, businesses and privatise ALL government run services and pollute the environment at will. This has already started as they are buying up the world’s fresh water. Take a minute to think about what this means.
They will use printed USD paper to buy the world and then rent it back to the people living in those countries. Everything will be owned and everyone owned through their debt to the banks. This includes ALL the citizens of all the countries poised to sign the TPP/TTIP/TISA. Your lives are soon to be traded for paper USD. If you don’t know what being sold as a slave means your children and theirs will know.
In return the US military will protect its TPP/TTIP vassal states from others such as the BRICS states thus creating a new Cold War. The USA is already the biggest supplier of armaments so business in that area is assured. Your kids will be able to get a good job as cannon fodder.
Does this remind you of the Roman Empire as there are plenty of analogies? The only truly free people will be outside the US corporate TPP/TTIP/TISA controlled hegemony. So where do you live? It might be a good time to move.
Halleluiah! The USD can be saved. All the US corporate controlled world will continue to need USD and the USA can continue to get goods for printed paper as long as it manages to keeps this artificial system from collapsing. The question is can it?
There are four major problems.
- TPP/TTIP/TISA agreements will hinder Global Warming mitigation.
- The growing world population will increase Global Warming.
- The BRICS consortium threatens the USA corporate banking domination.
- Action to Fix the Global Warming problem considered the world’s most important problem that threatens its very existence will be hindered by 1-3 above.
All of these issues are interrelated and will DOMINATE the next few decades and the outcome will determine whether our civilisation survives or not.
These issues will be further examined in future blogs.
NOTE : The countries of the world have not yet signed up to the TPP/TTIP/TISA agreements. Now would be a good time to reconsider whether this really is in our best interest.
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