This is the 2nd in a series of three articles. In the first article, we examined why ClownWorld, enabled through massive debts facilitated by fiat currency, will collapse. In this article, we’ll explore preparations currently being undertaken by different entities. Finally, we’ll look at the two primary outcomes of a crisis while setting aside the explosive implications for the final article.
China’s Got Plans
China recently announced that it will be issuing crude oil futures contracts denominated in Yuan, not dollars. Much like the old Bretton Woods system, these Yuan will be exchangeable for gold in either the Hong Kong or Shanghai exchanges. This will enable oil exporters to avoid the dollar, in which OPEC has agreed to conduct transactions since the 1970’s.
One thing we should never mistake the Chinese for is stupid. They know we’ve been exporting them IOUs while they send us real stuff. In the past, there wasn’t anything they could do about it. If they wanted to enter the modern economy, they had to keep sending us free shit. The introduction of these oil contracts later in the year is a bold sign that they’re ready to move past that stage. This isn’t something they’d do unless they were looking to diminish the global role of the dollar in order to avoid the American financial dysfunction they see on the horizon. This system has been lauded by partner countries such as Russia who’ve been excluded from the American global system. The Russians have also been earnestly increasing their own gold reserves.
Don’t take this to mean that China will replace the dollar with a new global reserve currency. If that’s even possible, it would be decades away. Rather, this shows that China knows that the US is on the brink and they want to develop a means of exchange within their economic sphere that can’t be disrupted by the dollar.
The IMF is Preparing “Plan B”
In 2008, governments and central banks were able to avert a depression and the failure of every major bank by borrowing trillions to bail them out, slashing interest rates to zero, and creating money to buy up trillions more in assets to artificially keep prices high. This was a temporary fix (they’re still doing it) that has set the stage for a bigger calamity in the future.
Even though they’re not saying it, central banks are cognizant of that fact that these tactics are unlikely to work again because rates can’t be slashed much lower, and balance sheets are already bloated. This is where the IMF might come into play. When 2018 begins, the IMF will introduce a “Distributed Ledger System” based on blockchain technology. This will allow it to efficiently provide its own form of currency, called “Special Drawing Rights” (SDRs) directly to banks.
Currently, the value of an SDR is pegged to a basket of currencies including the dollar. But, fiat currency can be tailored by those who issue it, so it can easily drop the dollar or any other troublesome backing. If national fiat currencies such as the Dollar and the Euro experience a dramatic loss of confidence, the liquidity to prevent an epic breakdown of the banking system would need to come from somewhere else. The only fiat currency-issuing, marquee entity left with a “clean” balance sheet would be the IMF. While consumers would still use national currencies, bailed-out banks would denominate their holdings in SDRs, which could also serve as a new medium of international transaction.
This SDR scenario is a summary of predictions by James Rickards. He was a bailout negotiator for a hedge fund called “Long Term Capital Management” in 1998. It was the first private entity to nearly meltdown the global financial system. He has written several books on these issues. Whether he’s right or not, I find his insights on that world very illuminating. I recommend reading them so that you can draw your own conclusions.
Gold Isn’t a Strong Possibility
Personally, I think that Rickards’ theory has a great deal of credibility. After all, we’re a country that consistently replicates failure. As we’ve seen from our disastrous foreign interventions or diversity experiments, the severity of a policy disaster is exceeded only by the fervency for repeating it. In all likelihood, we don’t even have enough gold to resurrect a version of the Bretton Woods system. Moreover, the adoption of a gold standard would be an admission by those in charge that they’re incompetent to lead because they’ve been wrong all along. In a crisis, decisions will have to be made and implemented fast. A fresh, unsullied fiat currency, distributed quickly by the IMF, will be very attractive. Replicating the 2008 response will be Plan A, but if that fails, then they need a Plan B or else they’ll experience a total failure of the banking system. SDR or not, something of this nature is reasonable to envisage as a desperate measure, not a globalist conspiracy to kill the dollar.
Primary Outcome #1: Loss of Reserve Currency Status
Whatever form it takes, a crisis will have a couple predictable outcomes with a variety of (for us, delicious) dire implications. An enormous consequence will be that the dollar, in which the debt is denominated, will lose its status as the world’s reserve currency. Because we buy everything from abroad with a currency that we can produce in unlimited amounts, these things are cheaper for us than they are for nations without this privilege. When we don’t have it, the cost of importing things will go up, so expect shortages of imported goods that we currently take for granted as being abundant and cheap. Many domestic products require imported inputs, so expect to see less of those as well.
Primary Outcome #2: We’re Forced to Pay as We Go
If America defaults or erases the value of its debt (hyperinflation), we won’t be able to borrow the way that we did in the past. Right now our debt is absorbed in 3 main ways: the Fed creates money to buy it, pensions plans buy it, and countries like China or oil exporters buy it. After a crisis, none of these entities will be willing or able to purchase like they did before. This means that necessity will require balanced budgets.
In part 3, I’ll prognosticate about some of the explosive implications of a dollar crisis, and most importantly, the enormous opportunities that they offer for white nationalism. It’s not realistic to expect that we can alter the path we’ve been placed on through votes or anything else. What the average white person wants is irrelevant. Our prospects will be decided by the consequences of our mandated path to national suicide.
-By Tom Shackleford