The following is a condensation of the Rumor Mill News Reading Room Forum, report dated December 30, 2001, entitled: The Euro, Gold and the Dollar. The complete report is available at: <http://www.gold-eagle.com/editorials_01/atocha112601.html>.
The Euro currency was initiated in the European Union on January 1, 2002. Consisting of seven denominations of banknotes and eight denominations of coins, it was the new currency for more than 300 million people in Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain. The European Union now constitutes the second most powerful economic market in the world. Twelve other nations are considering joining the Union.
Other nations, who have not officially adopted the Euro, are also setting up Euro bank accounts and are pricing their products and services in Euros. In some countries, it is the de facto currency, because it is more stable than the local stuff and/or currencies in some nations track other national currencies which have a fixed exchange rate with the Euro.
Much of the several hundred billions of United States dollar greenbacks, which circulate outside the U. S. may be replaced by paper Euros, sending a potential tidal wave of dollars back to the U.S. While the predominant world-wide foreign exchange reserves of nations,
banks, businesses and individuals, are dollars, many of these will in time become Euros.
For decades the United States standard of living has been artificially increased by having a pure Fiat Currency as the reserve currency of the world. The hundreds of billions of greenbacks overseas were printed at negligible cost, while the explosion of trillions of overseas electronic dollars were created at essentially no cost. Yet, their first international transaction was to purchase natural resources, finished goods or labor services for Americans and the American economy. This is an unearned, unmerited and secretive economic windfall. As long as these fiat dollars remain overseas, as public or private reserves, the United States economy has in effect received “something for nothing”.
There is the possibility that the US Treasury will selectively repudiate domestic and foreign dollars as part of the war on terrorism and the war on drugs. The Presidential and establishment news Media
Euro advertisements in Europe have stressed the importance of gold reserves for the Euro. These ads proclaim that most Europeans believe that gold reserves create confidence for strong economies, and that the vast majority of Europeans believe that the Euro should have gold reserves equal to the national gold reserves. The Euro ads proclaim that the gold reserves of the Euro-zone central banks are the world’s largest.
From its creation by Nixon, the primary adversary of the fiat dollar has been gold. The true weakness of the dollar is documented by the nature of the dollar supporters war against gold in order to prop up the weak dollar and artificially lower the gold/dollar currency exchange relationship. By: 1) Liquidating a continuing portion of central bank physical gold reserves; 2) the essentially unlimited selling of dollar denominated paper derivatives of gold; 3) ridicule of gold; and 4) shamelessly promoting unsound investments that are either directly, or indirectly, dollar debts; the purchasing power of gold has been artificially compressed into an overheated pressure cooker. At the same time, the purchasing power of the elastic dollar has been artificially expanded like the air in an elastic balloon. The gold/dollar currency exchange relationship has been severely artificially distorted by this mostly covert United States government/Wall Street war on gold as currency. But there is a very good possibility that gold will resume its historic role as the currency of the world. The pressure cooker will explode and the elastic balloon will implode. These two consequences are mathematically unavoidable.
At the same time, the idea that “gold will resume its historic role as the currency of the world,” is at peril. There is also silver. But the dollar forces have attacked silver in much the same way that they have attacked gold: Shorts backed by apparently unlimited dollars, paper derivatives and ridicule. However, the bankers have spent their ammunition of physical silver. For years an annual production supply/demand shortfall of silver has used up most of the above ground supplies of silver. An increasingly apparent shortage of physical silver now threatens runaway bull markets for silver and gold. A lack of physical silver causing a runaway silver bull market would probably set gold free in a parallel runaway gold bull market.
There are over a billion Muslims. Most with wealth, are westernized in monetary and banking matters. The Islamic Dinar is a gold coin that weighs 4.3 grams. The Islamic Dirham is a silver coin that weighs 3.0 grams. Traditional Islamic banking, based on Islamic Law, excludes fractional reserve banking and interest-bearing debt. The coins are minted as mediums of exchange, based on metallic content. Rebirth of these historic Islamic practices is in its infancy. Yet, considering the size of the Muslim population, even a partial return to historic Muslim banking and currency practices would severely impact all fiat currencies and fractional reserve banks (such as The Federal Reserve).
Euroland central banks have gold; but, in reality the Euro, as presently constituted, is just another Fiat Currency like the dollar. The ECB ‘talks the gold talk’ in its advertisements promoting the Euro currency. However, the ECB and the euro do NOT ‘walk the gold walk’. Neither domestic European Euros; nor foreign Euros, are redeemable for the token gold reserves of the ECB; or, for the substantial gold reserves of the national member central banks. The Euro may thus be a Trojan horse. As it is presently constituted, the Euro is gold paint on the outside; and another band of criminal, conquering and looting white collar barbarian central bankers on the inside. The Euro may be simply a de facto young step-child of the dollar -- as presently constituted, simply Fiat Reserve Dollar # 2.
The lack of backing for the Euro will allow the Europeans to join the Americans in looting and plundering the purchasing power of the world in order to artificially raise the standard of living in Europe. If the Euro wins; then, the Europeans would become the ruling white collar barbarians; able to do as the Americans have done for more than a half-century. If the Euro wins, the Europeans will in due course replace the Americans as the most hated people in the world.
Imperialism has evolved. It is no longer necessary to send armies to plunder and loot foreign lands of their gold and silver. Banksters can be sent instead. Banksters, with their computer entries of no intrinsic value, can replace armies, in demanding other countries’ natural resources, their finished goods, and their labor.
It is the biggest criminal con game in the history of the world. The leaders of those countries under siege, go along with this exploitation (to their personal benefit), while a deep world-wide festering hatred builds of America and everything American. To the rest of the world, the ‘ugly American’ is a banker with a computer. The international public and private global banks profess altruism and such noble intents to third world nations. All the while the bankers are criminally plundering their purchasing power and creating decades of countless deaths by starvation throughout the world.
Gold is the major battlefield in the Euro war with the dollar. It is a battlefield carefully selected by the Euro as the best available high ground. Gold is the pivot of the seesaw. The plank on one side of the seesaw pivot represents the dollar at war with gold. The plank on the other side represents the Euro as a pronounced gold advocate. If the dollar plank goes down on a sustained basis, the Euro and gold should go up in relative purchasing power.
Some may hope that the Euro will in time evolve into a true gold-backed currency with eventual redemption of all Euro currency units for gold. But this is highly unlikely. It’s too good a con -- or at least, for as long as it lasts.
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