The World Economy is Saved!!!
By Dene McGriff
The world economy looks pretty bleak at the moment. As I have written in the last three articles, there is way too much money and debt sloshing around in the world, too many entitlements, too much complaining and too little production. Interest rates are increasing in Italy, Spain and even France. The debt/death spiral has begun. But what if I told you that we have a temporary fix? Just remember, you heard it here first. I’m not going to back this up with a bunch of links because no one is talking about it and no one is supposed to even know about it. This is hush-hush. But the “powers that be” are about to come upon trillions of new dollars.
Let’s all say it together: “Now wait a Wall Street Minute . . . how could that be?” Printing money and monetizing debt will only lead to ruinous hyperinflation. What you see is what you get. There is no unfound wealth left in the world and gold’s nearly at $2,000 per troy ounce. Ah, grasshoppers, but what if there is and you just don’t know about it? What if the government doesn’t want you to know about it?
Before I get to the meat of this, let me ask you a question: Just how did Bill Clinton not only balance the budget but come up with surpluses in his last couple of years in office? These surpluses were in terms of how the budget is figured … there weren’t real surpluses if you count unfunded liabilities. Notwithstanding, for the first time in years, these surpluses showed up out of nowhere.
Now, let me ask you: Is that because President Clinton was such a frugal spender?
Was that because Congress all of the sudden got fiscal religion and stopped “ear marking” legislation for their districts? Was that because they cut back on military spending? The answer is “no” to the first two questions and a qualified “yes” on the last one, referring to military cutbacks. But hidden in there is a dirty little secret. The First Gulf War was paid for – not just by the Saudis but also by the Kuwaitis.
During the war the value of the Kuwait Dinar collapsed to pennies, but the U.S. and a few speculators accumulated billions. There is no way of knowing exactly how much but that is the main source for the Clinton surplus. It took seven or eight years to see it, but it finally paid off. The dinar went from pennies to about $3.60 to one dinar, making it one of the most valuable currencies in the world!
When the second Gulf conflict began, Bush and Cheney assured us all that the war would pay for itself. Bush set a plan in motion. When the first Gulf war began, the Iraqi Dinar went from $3.22 to one dollar to a fraction of a cent to the dinar and has stayed there for the past two decades. The Iraqi Dinar has been absolutely worthless for two decades. It is currently at about 1280 dinars to the dollar.
There are many other currencies that are worth much more than their current value, the most notable is China’s, the Yuan Renmimbi; which is worth about 6.8 to the dollar. We are convinced that China has a competitive advantage because it is held at a low value.
Another example is the Vietnamese Dong which is worth about one hundred dollars per million Dong. Many believe the value is more like 20 Dong to the dollar. That is quite a difference, i.e., 0.0001 vs. .20 – an astonishing differential.
Now, let’s shift gears back to the world monetary system for a moment before we come back to Iraq. The International Monetary Fund (IMF) realizes that the system of fiat currency isn’t working because it is based on the good faith of the individual government printing the currency and governments have proved down through the ages they can’t be trusted. Meanwhile, there is a huge hue and cry to return to the gold standard because it at least bases value on something tangible and keeps us honest. The problem with the gold standard is that there isn’t enough to go around basing a world economy on it. So, what to do?
Over the past few years the IMF has been working on complex formulas which would determine the value of a country’s currency based on their resources and productive capacity. This could mean agricultural, mineral or other natural resources or manufacturing output, intellectual resources (e.g. those who create technology) and so forth. The idea is to come up with objective, quantifiable criteria. They are currently in the process of revaluing 133 national currencies. Some could go up and some could go down. If this were done on a fair basis with every country, every country would get credit (value) for whatever they produced.
Now let me ask you: What would happen if all of the sudden a currency was revalued? What if the Chinese currency suddenly went up by thirty percent? That would mean there is a lot more money in circulation. We read about how the IMF and the central banks are trying to come up with a scheme to inject needed cash into the system. Well this is it!- especially given the horrendous financial crisis now gripping the Euro and member nations whose currency exchange is based on the Euro.
BABYLON ON THE TIGRIS-EUPHRATES RIVERS TO THE RESCUE
Now let’s go back to little Iraq. Little Iraq was the number three in oil resources, but remember, because of all of the wars and instability, only about one quarter of Iraq was explored. Now they are up to about 40 percent and the amount of reserves continues to grow. The strange thing is that Saudi Arabia’s oil reserves never seem to go down even though they have been pumping like crazy for the past 100 years. When drilling for oil in Iraq, you are more likely to hit oil than water and it is sweet crude, the best in the world. Some think it will end up being number one in the world. It is already the first in natural gas. Iraq is also rich in minerals and has historically been the bread basket of the Middle East. It is the site of the original Garden of Eden with the Tigris and Euphrates rivers flowing through it year round. After decades of being ravaged by war, it can once again become a major agricultural producer.
So what does this mean? Based on IMF calculations, the value of the Iraqi Dinar should be around the $2+ range. This is not unreasonable considering other Middle Eastern oil producing countries average about $3 to $1. “So what!” you say. It is estimated that the U.S. government is holding 3.5 trillion Iraqi Dinar (IQD). If it were to revalue to the $3 level, that would be $10 trillion new found dollars (US)! Imagine what fun our legislators would have with that? Of course, they could pay down the national debt, but I suspect they would just rather spend it and look like heroes, balancing the budget and all. We can also safely assume that France, Germany, England and even the PIIGS are sitting on IQD. That would really help as well.
Many countries will see their currencies go up. This has been alluded to in the news. This would certainly help solve the immediate crisis. It would inject much needed cash into the Euro-zone, America and the rest of the world. But will it solve the world problems? I seriously doubt it in the long run but it may support a nice little recovery for a few years. That won’t deal with the problem of excess liquidity – too much money and in this case, even more of it sloshing around in the world. Our leaders have shown that rather than let banks and countries fail and restructure, as in “work the debt out,” instead, they pour more good money after bad, only greasing the pockets of the bankers and the elites. No wonder the “Occupy” movements are so upset!
As I said above, you won’t read this anywhere else. You won’t find it in the newspapers, CNN, CNBC, Fox or Bloomberg. This is a little secret the politicians will pull out to save the economy, save Obama and save their legislative posteriors. People will think they are brilliant and re-elect them. Currencies led by Iraq, China, Vietnam and a few others will revalue, injecting trillions into the world economy. This will put a temporary patch on Europe and even the US, only postponing the pain for a few more years.
Again, the revaluation of these currencies around the world is designed by the IMF (whose engagement is “international monetary policy”) to reflect tangible (minerals, resource assets) and intangible (intellectual, technological capital) worth of a nation’s currency – the more assets, resources and intellectual capital a nation possesses, the greater will be its currency’s worth…most nation states will find themselves in a strengthened currency (more valuable) – some, like Vietnam and Iraq will reap a bonanza.
This is just my little prediction. The IMF, the central banks and the governments of the world will ride high for a few more years while the real trouble brews in the Holy Land!
Read follow-up articles:
- Iraqi Dinar: Scam or God-Send?
- None Dare Call It Conspiracy – Rethinking our Lives
- Can the World Economy be Saved?
- Saving the Global Economy
- The Rise and Fall of Greco-Roman Man…the Collapse of the Euro-Empire
- Catastrophes and Conspiracies
Copyright 2011 Dene McGriff
Subject Related article by the author:
- The Rise and Fall of Greco-Roman Man…the Collapse of the Euro-Empire
- After the Bailout…a happy landing? – Recognizing Deception