True Discernment

Both Joe Biden here: http://blogs.abcnews.com/politicalradar/2008/10/biden-to-suppor.html

And Colin Powell here: http://www.youtube.com/watch?v=_LDBOPcHpeo

Have made statements that said “Watch, we’re gonna have an international crisis, a generated crisis, to test the mettle of this guy.”

In regards to Barack Obama taking office.

We are getting much clearer signals now of what that particular crisis will be.

We all know how the economy in the U.S. and globally is tanking, And we all know how much “money” that the U.S. Federal Reserve (not a Government institution, but one owned by private U.S. and European Banking interests) has been throwing at the problem ($8 Trillion to date). And since the “money” that the Federal Reserve creates is actually nothing more than I.O.U’s from the U.S Treasury (a Government institution) then at some point all that extra debt the U.S. Government has created will have a very nasty after affect: an overhang of dollars globally, unprecedented in U.S. history! This added to the obscene amount of debt that the U.S. Government, U.S. Consumer, U.S. industry, and State and Local governments already have outstanding!

Now what has been happening before the global economy ground to a halt, is the rest of the countries around the world who have traded with the U.S. have had to accept an ever increasing amount of I.O.U. dollars in exchange for their goods as the U.S. dollar is the only global reserve currency for international business. But now that the U.S. consumer has stopped purchasing goods from overseas because they cant get credit, the economies of countries around the world are collapsing, and as their economies collapse their governments and central banks will be under extreme pressure to ensure they are not holding any foreign debt that they cannot redeem in order to use the proceeds to help prop up their economies via fiscal stimulus programs. (The U.S. is currently the only country in the world, or was until very recently that could print money at will to jump start its economy, as the dollar is the worlds reserve currency, and must be used for all international transactions which creates a high artificial demand for dollars)

This means that there is an expectation that sometime in the new year, 2009! Foreign countries will at an ever increasing rate have to stop accepting  U.S. Treasury bonds  which they exchange for the U.S. Dollars they have received in payment for their goods that they still export around the world (see this article about the U.S. Federal Reserve planning to purchase U.S. Federal Debt, because no one else will be buying it). This will cause the value of the dollar to collapse, as demand for dollars will collapse, and it will cause the U.S. Government Treasury bond issuance markets to stop functioning, as no foreign countries will be buying U.S. Treasury debt. Why buy bonds that you do not believe will be repaid! the banks that handle the auctioning of U.S. treasuries to foreign countries will not have any takers for the debt, and they will stop auctioning the debt triggering a domino affect in the rest of the international Dollar markets.

And this is where the destruction of global currencies finds its origin. Global corporate debt markets are denominated in dollars and based in and run by U.S. and European banks! All global businesses issue corporate bonds and pay their bills via U.S. dollar denominated debt and currency markets. If these markets break down and cease functioning because no countries want to take any more U.S. dollar denominated debt, those businesses cannot function as they can’t pay their bills or make purchases.

We saw this happen with U.S. businesses back in September and October causing the U.S. credit crunch where consumers could not get loans and businesses could not tap into the corporate paper market to borrow money to pay their everyday bills. This was concentrated in the U.S. and began when U.S. banks stopped accepting Mortgage Backed Securities or Collateralized Debt Obligations in exchange for cash payment’s between banks, who make loands to each other. As prior to the mortgage meltdown, Mortgage Backed Securities and Collateralized Debt Obligations were considered as good as and reliable as cash, and were considered the same as cash assets on a banks balance sheet! But after the mortgage meltdown, banks started refusing to accept these the same as cash as their value began to plummet when the mortages backing the securities began to default in record numbers. Then what cash they had they refused to loan out as they needed the cash to support the Banks Capital (asset) base. And since they all had large amounts of Mortgage Backed Securities listed as bank assets on their balance sheets, when the securities value began to plummet, their capital or asset base also plummeted poushing the banks into insolvency.

This will happen in 2009 but on a global scale when the U.S. Dollar denominated debt markets cease to function due to a drying up of buyers of US. Government debt. Global businesses will be running on the premise that the global reserve currency and the international currency of exchange is the U.S. Dollar but they wont be able to get dollars because the markets where they issue corporate bonds to get dollars will not be functioning! Ironic isn’t it? The U.S. issues over $8 Trillion in I.O.U. dollars but global businesses will not have access to that money as the markets will have collapsed from so much U.S. debt!

This is why this article: 2009: “Titanic Shocks and Changes to the Global Order of a Scale Perhaps Not Experienced in the Past Five Centuries” speaks of such dire consequences for the year 2009!

However a plan is under way by the global powers at be to conveniently “rescue” those economies, and it will entail doing away with ALL global currencies except for three or four currencies based on: The Dollar, The Euro & and an as yet unnamed Pan Asian Currency or basket of Asian currencies.

We know preparations are in place and have been for a long time to replace most currencies with a small number of regional currencies, this the rationale goes among the banking elite so as to be able “to better manage the exchange of goods and services around the world”.

The only thing that was needed to put this plan into action was a convenient global crisis. (Again read Colin Powell’s and Joe Biden’s comments above) Now the world has that convenient global crisis which will go full blown in 2009 and open the door to the destruction of global currencies, to be replaced by three to four global regional currencies.

This will enable the banking elites to “manage” all the worlds economies and destroy the national sovereignty of countries, as if you control the money you control the country!

Recent evidence of the impending collapse of U.S. debt markets and Reserve Banks preparations could be seen by U.S. Treasury Secretary Hank Paulson refusing to reveal to Congress who the recipients were of the lions share of the first half of the $700 Billion bailout program. The true recipients of this money were most likely foreign countries national banks, their equivalent to the U.S. Federal Reserve.

To explain how they received this money requires that I explain some esoteric financial terms. All countries around the world have their own equivalent to the U.S. Federal Reserve bank in order to manage their individual country’s money supply. Part of their job is to keep on hand sufficient foreign currency reserves where private banks in those countries can go, to obtain foreign currencies for inter-currency transactions.

When a country’s central bank wants a foreign currency it either goes to the international private currency markets (forex) and purchases foreign currencies or it makes an agreement with the central bank of the country it wants currency from to do a “currency swap”. This means that the two country’s central banks do a currency “loan” and agree on an exchange rate, and “swap currencies”. They also agree for how long the currency “loan” will last and when the currency “Loan” will end and at what exchange rate the currency “loan” will be repaid or the currencies “swapped” back.

Now in normal times these currency swaps are not large as most currency exchange for businesses and private banks takes place in the international foreign currency exchange (FOREX) markets.

But in the last month, The U.S. Federal Reserve has made unprecedented in history large “currency swaps” agreements with a large number of foreign countries central banks. The U.S. Federal Reserve has asked the central bank’s of these countries to keep the details for these swaps secret, however some of  the explanation for these outsize and unprecedented currency swaps can be derived from their historical reason and that is there is an expectation of an interruption in international U.S. Dollar denominated debt and currency markets.

Translated? Foreign businesses around the world who conduct international business via U.S. dollars will not have access to dollars in the international private U.S. debt and currency markets, as the markets will not be functioning, therefore forcing them to go to the their country’s central banks to borrow dollars to pay their bills and to make international purchases!

And secondly anyone holding any U.S. Dollar denominated debt will not be able to redeem that debt for dollars! They will also be forced to go to their country’s central bank to try and redeem their dollar debt instruments for U.S. Dollars!

In the end what all this means is that the U.S. Dollar as the global reserve currency used for all international business exchanges is coming to an end! Which means a hard fall for the U.S. Dollar. 

And if the International U.S. dollar markets are not functioning something has to replace them. And since the dollar has collapsed they will not be willing to see the U.S. Dollar markets revived, they will demand a replacement to the current U.S. dollar global currency reserve system, that spreads the responsibility for a global reserve currency among a basket of currencies, thereby preventing any one country from being able to flood international markets with their currency again.

The global monetary system to replace the dollar will be a system based on three to four global regional currencies. And most countries whose economies will have been ravaged by the previous system will be forced into giving up their own currency to participate in the new global order under the guise of ensuring greater international financial stability. And  businesses around the world will go along with this surrender of the local currency and the loss of national sovereignty that comes with it, in order to keep functioning in the international market place, and again under the premise that it will lower the cost and risk of them doing business internationally!

The impact of this disruption and change to a new global multipolar reserve currency system on a local level will be extremely harsh in the United States! Since it will mean that the U.S. will no longer be able to “print” its way out of a recession. The dollar will already be so devalued that the U.S. will be forced to impose strict limits on its money supply in order to reduce the amount of dollars floating around because if it is not longer the single global reserve currency, the global requirements for dollars will be exponentially decreased. In other words global demand for dollars will go through the floor!

Coupled with a mountain of U.S. Treasury debt overseas that will need to be repaid, U.S. citizens will be the one’s deprived of money in order that the U.S. can repay its overseas debt. In other words we will become slaves and serfs to the rest of the world to pay them back for our previous over extended debt binge!

What this will also do is shackle the U.S. into an international order and agenda. Most likely a European led western order. Our decisions domestically and foreign will be dictated to us by this international order. And no U.S. politician will be able to refuse, for fear of financial and monetary retribution from the countries who hold our debt, and from a more internationally focused monetary order, who would be able to at will refuse to take our currency in exchange for goods, if we try to print our way out of recession again, which in the past they could not do.

John Baker