The pundits are writing about the US election till the cows come home; right wing, left wing, neocon, neoliberal, alt-right, ad absurdum. Is The Donald a bigot, a misogynist, a white supremacist? Is he part of the 0.1%; is he anti-establishment, what in tarnation is he?
The bottom line is that US voters have bitten the bullet; better the devil we don’t know than the one we do know. Kilary and her $upporter$ were and still are clearly on a path towards confrontation, regime change, war… probably WWIII. With The Trumpster as president, chances are that war will be delayed if not avoided.
In any case, the answer to ‘making America great again’ is at the fundamental level very simple; the choice comes down to America Great, or Great American Empire. No way to afford both… kind of like LBJ’s ‘Great Society’; guns AND butter, rather than guns OR butter. If the new president actually starts to peacefully dismantle the empire, starts to close the ~1,000 US military bases worldwide, stops insane and expensive regime change wars, then Dollars thus saved could be put to good use rebuilding US infrastructure.
With Dollars saved by abandoning empire, the US military may even be able to afford to buy ammunition (cannon shells) for the latest ‘invincible’ US navy destroyer, the Zumwalt… although at $800,000 per shell (!) the price of keeping this marvel (that has broken down again and this time had to be towed out of the Panama canal) armed is insane. Trump will have to truly ‘drain the swamp’… including the totally corrupt US military acquisition swamp… to ‘make America great again’. Good luck to him.
But while this entire Trump business is clearly important, there has been very little attention paid to India; India, the second most populous country in the world, India the world’s largest democracy. Mobster Modi has decided to demonetize the 500 and 1,000 Rupee notes; about 85% of circulating currency in India. The purchasing power of these notes WAS about $7.25 and $14.50 US. The results are devastating to the majority of Indians.
People are robbed of their means of survival, people are dying waiting in line at totally unprepared banks to exchange their ‘money’ -that is no longer money- for new ‘money’… but there is hardly any ‘new money’ to be had, except through the mafia, at a 20% haircut. The underclass is dying, while the criminal class is growing fatter by the moment.
How desperate can a G’man get to do this? Clearly Modi must understand the devastating consequences of his actions, but is so desperate for funds to keep the game going that he has ignored devastating losses. Indeed, he will likely lose the next election… but by then India will have suffered a great setback. The Indian economy was on a path to grow at ~8% yearly, ahead even of China… but this debacle reduces GDP growth by at least 2.5%… if not more.
In the meantime, the mainstream media is reproaching the Indian G’man… for doing a lousy job, for being unprepared, for incompetence… all of which is true, but misses the main point; the MSM is actually in favor of this ‘demonetization’, of forcing Indian people to go begging to the banks, of spreading the lies that demonetization is an effort to ‘overcome money laundering’ and is the proper thing to do… to ‘help the poor’.
In other words, robbing the people of their hard earned cash is fine, as long as the theft is done ‘efficiently’ and with ‘competence’. Oh, my aching back!
But beyond the insanity and desperation, there is another interesting aspect to all this, an aspect that is NEVER discussed, not even whispered about. Why, demonetization is also ‘devaluization’ if I may coin a phrase. By decree, the Indian G’man has not only destroyed ‘money’ but has turned ‘valuable’ paper totally worthless by the stroke of a pen. The flip side of this, of course, is MONETIZATION… that is, turning totally worthless paper into ‘valuable money’ by the stroke of the same pen. How enlightening!
If you take a peek into history, you will see that Silver was ‘demonetized’ by the US G’man in the nineteenth century. By the stroke of the pen, Silver was no longer money (no longer legal tender)… and yet, somehow, Silver was not devaluized. Indeed, a Silver dollar (one Dollar face value coin) made of 90% Silver today buys over 20 US Dollars. Demonetization of Silver money is not equal to devaluization, quite the contrary.
Gold was demonetized in stages, first by FD Roosevelt in 1933, who confiscated (stole) the American people’s Gold and gave them paper in return… at the rate of $20.67 /oz… Then in a few months he marked up the value of the Gold (that is, devalued the paper given to the people) to $35.00 / oz.; a loss of more than 50% of value in a few months.
The demonetization of Gold was completed by Nixon in 1971, when he ‘closed the Gold window’… that is, reneged on the US commitment to redeem every thirty five US Dollars for one oz. of Gold, as per the Bretton Woods agreement. Gold was demonetized fraudulently; the honest approach would have been to devalue the Dollar, to balance all newly printed Dollars against physical Gold reserves.
Again, demonetization is not devaluization; today, the very same OZ of Gold that bought 35 US Dollars in 1971 buys over 1,200 US Dollars in 2016. Demonetization of Gold money is not equal to devaluization, quite the contrary. It is pretty clear that true value resides in Silver and Gold, while the value of paper ‘money’ is an illusion, an illusion that dissolves at the stroke of G’man’s pen. Fiat demonetization is indeed fiat devaluization.
I suggest that inflation is but a form of slow demonetization; the loss of value of Fiat currency such as US Dollars, Euros, Zimbabwe dollars… or Rupees… spread over years. Demonetization is inflation compressed into a few days or weeks. Funny how when North Korea demonetized their currency, robbing North Korean citizens, the world yawned. Now that the country with the second largest population on planet Earth has demonetized its currency, we need to stop yawning and wake up before we all pay the Indian price and are demonetized into the poor house.
Desperation of all G’men is growing rapidly. The theft of a few percent a year… the nominal ongoing inflation of all Fiat currency… is no longer sufficient for the profligate G’men; now it takes confiscation of all wealth to keep the game going for a while longer.
Already the EU has ‘demonetized’ the 500 Euro bill, and Citibank in the US has stopped accepting cash (Dollars; legal tender for all debt, public or private). I usually end my articles by suggesting that you keep cash at home; well, I believe this is still good advice, but I suggest small bills. The $100 Dollar bill is under imminent threat. Of course, the best answer is to hold money that has real, not just imaginary value.
Rudy J. Fritsch – November 2016