September 22, 2008
Russia-China Prepare Massive Gold ‘Shock’ For Global Economy
By: Sorcha Faal, and as reported to her Western Subscribers (Traducción al Español abajo)
A visibly angry Prime Minister Putin addressing the media during his visit with French Prime Minister Francois Fillon in Sochi blasted the United States plans for dealing with the collapse of the Western Banking system by stating, “We all need to think about changing the architecture of international finances and diversifying risks. The whole world economy cannot depend on one money-printing machine”.
Putin’s warning, however, has fallen upon deaf ears in the United States as that financially beleaguered Nation prepares to further implode their economy by injecting a staggering $1 Trillion into their stock and banking markets by doing nothing more than printing up more money as they have completely bankrupted themselves, and which has brought them to this latest crisis.
Not being explained to the American people, in the millions of words currently assaulting them by their propaganda media about their economic collapse, is the almost childlike equation that their Nations debt is virtually worthless on the World markets as the US Dollar has no real value as their US Federal Reserve System is broke, and as we can read from their own statement, but in much more convoluted terms designed to completely confuse their own people:
“The Federal Reserve has announced a series of lending and liquidity initiatives during the past several quarters intended to address heightened liquidity pressures in the financial market, including enhancing its liquidity facilities this week. To manage the balance sheet impact of these efforts, the Federal Reserve has taken a number of actions, including redeeming and selling securities from the System Open Market Account portfolio.
The Treasury Department announced today the initiation of a temporary Supplementary Financing Program at the request of the Federal Reserve. The program will consist of a series of Treasury bills, apart from Treasury’s current borrowing program, which will provide cash for use in the Federal Reserve initiatives.
Announcements of and participation in auctions conducted under the Supplementary Financing Program will be governed by existing Treasury auction rules. Treasury will provide as much advance notification as possible regarding the timing, size, and maturity of any bills auctioned for Supplementary Financing Program purposes.”
In simple terms: When the US Federal Reserve System announced it was broke, the US Treasury turned on its printing presses to create new Treasury Bills which have no value whatsoever, except giving the illusion of liquidity to the unsuspecting American public so they will cease withdrawing their dollars from their crashing banks and stock markets prior to their savings becoming completely worthless.
To the astounding plan unveiled by the US Government to address their financial collapse, one could justifiably be confused to if they are reading a pronouncement from the old Soviet Politburo, instead of the largest capitalistic economy system in the World, and as we can read as reported by the Bloomberg News Service:
“The Bush administration sought unchecked power from Congress to buy $700 billion in bad mortgage investments from financial companies in what would be an unprecedented government intrusion into the markets.
Through his plan, Treasury Secretary Henry Paulson aims to avert a credit freeze that would bring the financial system and the world's largest economy to a standstill. The bill would prevent courts from reviewing actions taken under its authority.
“He's asking for a huge amount of power,'' said Nouriel Roubini, an economist at New York University. ``He's saying, `Trust me, I'm going to do it right if you give me absolute control.' This is not a monarchy.'”
As we had reported in our September 20th report, ‘Seven Days That Shook The World’: Democracy In America Dies, US Senator Jim Bunning was, indeed, correct when he stated, “The free market for all intents and purposes is dead in America. The action proposed today by the Treasury Department will take away the free market and institute socialism in America.”
But, to the fullest extent of this US financial crisis we can read as reported by the Washington Post News Service:
“What we are witnessing may be the greatest destruction of financial wealth that the world has ever seen -- paper losses measured in the trillions of dollars. Corporate wealth. Oil wealth. Real estate wealth. Bank wealth. Private-equity wealth. Hedge fund wealth. Pension wealth. It's a painful reminder that, when you strip away all the complexity and trappings from the magnificent new global infrastructure, finance is still a confidence game -- and once the confidence goes, there's no telling when the selling will stop.
But more than psychology is involved here. What is really going on, at the most fundamental level, is that the United States is in the process of being forced by its foreign creditors to begin living within its means.”
And, what the American economy, and its people, are not even close to being prepared for is how both China and Russia are going to be dealing with the new “Peoples Republic of Wall Street” in demanding their debts be paid immediately in full.
One particularly crushing response to the United States current crisis circulating in the Kremlin today, written by Alexander Dugin, described as the “New sage of the Kremlin”, advocates the combining of both Russia’s nearly $500 billion and China’s 20,000 tons [est.]gold reserves to back a new gold-backed Eurasian Currency modeled on the Euro, and which if implemented would ‘shock’ the American dollar to such an extent that it would cease exist on International markets.
This report further notes that the United States is already preparing for such a response from Russia and China by this past weeks invoking of the Gold Reserve Act of 1934 by the US Government in a desperate move to protect their money markets for the first time since the Great Depression, and of which the vast majority of Americans remain oblivious to the fact that their personal gold holdings can still be confiscated by their officials at anytime of their choosing despite the 1975 laws allowing these people to own gold again.
In all of these events, and as we have mentioned many times before, the greatest enemy of these American people appears to be their own ignorance as they, seemingly, have absolutely no idea on how to protect themselves, but which even Russian schoolchildren knows is the exchanging of a collapsing currency for one that is doing better, and which millions of ordinary Russians did during the collapse of the Soviet economy by purchasing American Express Travelers Cheques in US Dollars and British Pound Sterling.
To whatever becomes of these American people entering what is, in essence, a Third World Economy, it remains a main fact that they continue to ignore the many warnings from outside their country of the many catastrophes still to come, even to their false bravado of laughing these warnings off as they plunge into the abyss.