HEART of Darkness: The REAL reason the Dollar is doomed

While the mainstream media is busy maligning comparitively plausible economic theories by putting them in league with the thoroughly discredited supply-side scam, a deep, dark malignancy continues to destroy world economies unopposed.

The root cause of all this [misery] is the basic precept of Western economic science, which is that the ultimate objective of all economic activity is maximization of the satisfaction of the individual.

Economists like Adam Smith believed that self-centered pursuit of economic activity would lead to perfect competition, and this would eventually level society.

But, wait a minute, you say. There’s nothing wrong with self-centered activity. I do it all the time.

BUT, there is something wrong with it when taken to extremes.

Based on the consequences, self-centered activities can be so qualitatively different from eachother that to ignore these differences is to court disaster.

For example, no reasonable person would argue that just because it would be ‘in my interest’ to have a city all to myself that I could legitimately eliminate all other inhabitants. Doing so would qualify as self-centered activity, but not the kind that civilized society can tolerate.

Therefore, in order for human beings to coexist with each other, there MUST be some very important qualifications to a principle that encourages each person to maximize their own self-interest.

Yet, from observing self-interest run amok in financial markets – specifically at the US Treasury – it’s apparent that world economies have not yet internalized this perfectly obvious limitation.

Treasuries may extend their biggest drop in a decade as international investors shun U.S. assets because of the dollar's decline.

Treasuries lost 2.04 percent this year . . . The dollar's 9 percent decline against the euro and 6 percent drop versus the yen is making returns even worse for international investors, who own more than half the $4.2 trillion of U.S. government bills, notes and bonds.

“There's further for the dollar to drop and that might make people even less inclined to buy Treasuries'' [.]

* * *

“The dollar has been knocked around by politics” and reports central banks sold the U.S. currency [.]

“This is a great time to be buying U.S. bonds.” Goldman said central bank dollar sales have been “marginal.”

Now, WHY exactly is it ‘a great time’ to buy Treasuries?

(For those unfamiliar with them, Treasury bonds are legally binding financial instruments that represent debt the federal government carries and the premium owed on that debt, i.e. interest or ‘yield.’)

"Yields move inversely to bond prices."

This is true whether they’re sold at auction or traded in an 'open market.'

And THAT is at the HEART of everything that's WRONG – not just with the dollar – but with the world.

What does it mean when yields move inversely to bond prices?

At auction, it means that the bond issuer (a.k.a., the borrower) ‘must pay a higher yield’ ‘in return for less money.’

What does THAT mean?

It means that the bond buyer (a.k.a., the lender) is unwilling to lend money to the borrower except at higher yields than they would collect under different circumstances (more favorable to the lender).

And WHY is that?

Higher risk – higher interest, that’s how the free market works, they say – Econo 101.

BULLSH*T.

We ALL know that financial markets are no more ‘free’ than the Federal Reserve Banks are ‘federal.’ The system is thoroughly rigged – from the private monopoly of the banking system to the private counterfeiting scheme they euphemistically call fractional reserve banking.

A cursory look at the rules of the game reveals that ALL exits are sealed and that the system is irredeemably corrupt.

[F]or anybody thinking of melting down a tonne of copper coins: don't. It's illegal; and by the time you find enough small change, it will be too late.

And the logical conclusion of allowing risk alone to justify a return on investment is that the highest risk among us must be exterminated.

So, it's not the principle of 'free markets' at play, but another entirely different and malignant one.

Not surprisingly, the term ‘interest’, as in ‘interest on money loaned,’ is also the term that describes ‘interest’, as in ‘self-interest’, ‘special interests’, and all sorts of interests that include some people’s interests but exclude the interests of others.

When a lender extracts more ‘interest’ from a borrower in exchange for less money loaned, that lender is in effect saying:

• ‘It is not in my interest to lend money to you.’
• ‘I am better than you.’
• ‘I deserve to be in the position that I am in, not by luck (or a rigged system), but because I am qualitatively better than you.’
• ‘You deserve to be in the position that you are in, not by luck (or a rigged system), but because you are qualitatively lesser than me.’
• ‘If I thought you were like me, subject to the same rules and the same God’s wrath, then I would lend you my money and you could repay it in kind.’
• ‘BUT SINCE I AM BETTER THAN YOU, there is NO reason for me to lend money to you UNLESS you can pay me for extending that privilege to you.’
• ‘The more badly you need that money, the more money I will demand from you in return for that privilege before I am gracious enough to lend it to you.’

Among polite company, this attitude would be reviled as self-centered, egotistical, antisocial, and utterly without social redemption. The person or persons exhibiting this quality would fairly quickly be short on friends.

Yet, in business it’s applauded and facilitated with a system that relies on INTEREST-based debt to fuel ALL economic activity, which in turn is fueled by self-interest run amok.

The logical conclusion of this attitude is complete and utter subjugation of one group of people by another — in short, slavery. And those who refuse to be slaves are annihilated.

In the last two months, Sweden's Riksbank almost halved its dollar reserves and banks in Kuwait, Qatar and United Arab Emirates said they were increasing holdings of the euro. Russia's finance minister complained about the dollar's “instability.”

“We're definitely more defensive,” said Kevin Cronin, who oversees $67 billion as chief investment officer for fixed income at Putnam Investments in Boston. Rising interest rates around, higher commodity prices and the falling dollar work against Treasuries, he said in an interview last week.

Why would they be 'defensive', if they were not at WAR?

What's the opposite of ‘I’ as in ‘me’? Let's agree that it's ‘everyone else’.

But, if the goal is to co-exist as equals under God, ‘I’ cannot be opposite to ‘everyone else’.

On the other hand, if the goal is to subjugate one another, where one of us prevails tyrannically over the other, then yes we are opposites and there is room in this world for only one INTEREST – yours OR mine.

If the world were to replace the US dollar today with a currency that functions by the same misguided fallacy that opposing interests can co-exist in this world, it would be doomed to the same miserable fate.

You cannot adopt a ‘standard’ currency for the benefit of mankind and then expect it to ‘work’ for the benefit of a few without wreaking havoc on the rest of humanity. The whole premise of adopting a STANDARD, to begin with, is to facilitate productivity, trade, exchange, cooperation – among ALL people.

Money is an organizing principle without parallel, precisely because it is a STANDARD with which everyone is free to do whatever their heart desires. BUT, IT MUST BE WITHIN LIMITS. The most important of these limits is the boundary between co-existence and exploitation.

Once you cross that line, you enter the heart of Darkness.