The End Of The Dollar Hegemony

Posted on Wednesday, February 22 at 07:47 by Ed Deak
Though money developed naturally in the marketplace, as governments grew in power they assumed monopoly control over money. Sometimes governments succeeded in guaranteeing the quality and purity of gold, but in time governments learned to outspend their revenues. New or higher taxes always incurred the disapproval of the people, so it wasn’t long before Kings and Caesars learned how to inflate their currencies by reducing the amount of gold in each coin-- always hoping their subjects wouldn’t discover the fraud. But the people always did, and they strenuously objected. This helped pressure leaders to seek more gold by conquering other nations. The people became accustomed to living beyond their means, and enjoyed the circuses and bread. Financing extravagances by conquering foreign lands seemed a logical alternative to working harder and producing more. Besides, conquering nations not only brought home gold, they brought home slaves as well. Taxing the people in conquered territories also provided an incentive to build empires. This system of government worked well for a while, but the moral decline of the people led to an unwillingness to produce for themselves. There was a limit to the number of countries that could be sacked for their wealth, and this always brought empires to an end. When gold no longer could be obtained, their military might crumbled. In those days those who held the gold truly wrote the rules and lived well. That general rule has held fast throughout the ages. When gold was used, and the rules protected honest commerce, productive nations thrived. Whenever wealthy nations-- those with powerful armies and gold-- strived only for empire and easy fortunes to support welfare at home, those nations failed. Today the principles are the same, but the process is quite different. Gold no longer is the currency of the realm; paper is. The truth now is: “He who prints the money makes the rules”-- at least for the time being. Although gold is not used, the goals are the same: compel foreign countries to produce and subsidize the country with military superiority and control over the monetary printing presses. Since printing paper money is nothing short of counterfeiting, the issuer of the international currency must always be the country with the military might to guarantee control over the system. This magnificent scheme seems the perfect system for obtaining perpetual wealth for the country that issues the de facto world currency. The one problem, however, is that such a system destroys the character of the counterfeiting nation’s people-- just as was the case when gold was the currency and it was obtained by conquering other nations. And this destroys the incentive to save and produce, while encouraging debt and runaway welfare. [Proofreader's note: this article was edited for spelling and typos on February 22, 2006]


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  1. Wed Feb 22, 2006 8:59 pm
    I believe it to be a worthwhile exercise to follow the provided link and read all of RON PAUL's article paying special attention to everything from the following extracted part down.

    "In November 2000 Saddam Hussein demanded Euros for his oil. His arrogance was a threat to the dollar; his lack of any military might was never a threat. At the first cabinet meeting with the new administration in 2001, as reported by Treasury Secretary Paul O’Neill, the major topic was how we would get rid of Saddam Hussein-- though there was no evidence whatsoever he posed a threat to us. This deep concern for Saddam Hussein surprised and shocked O’Neill.

    It now is common knowledge that the immediate reaction of the administration after 9/11 revolved around how they could connect Saddam Hussein to the attacks, to justify an invasion and overthrow of his government. Even with no evidence of any connection to 9/11, or evidence of weapons of mass destruction, public and congressional support was generated through distortions and flat out misrepresentation of the facts to justify overthrowing Saddam Hussein."
    The impact on Canada by tying it's wagon to the US horse will bring about colossal damage to this country and in the mean time we have our own version of the village idiot braying inanities like "Good government is not a party government" while having no clue to the larger picture.

    People are more violently opposed to fur than leather because it's safer to harass rich women than motorcycle gangs.
    Alexei Sayle

  2. Wed Feb 22, 2006 11:12 pm
    Thanks for posting this,Ed. Nice to see an article by Dr. Paul. He is one of the few (what 5 or 6 all totaled?) decent people in the US Congress.

  3. Wed Feb 22, 2006 11:39 pm
    I`d like to know, since the USA under Nixon abandoned the Bretton-Woods agreement, or the gold standard, did the rest of the world also abandon the gold standard, and just print paper money like crazy,or did some countries follow the US example, while others stayed with gold?

    Dave Ruston

  4. Thu Feb 23, 2006 4:22 am
    I don't know of any so called Developed Country still on gold standards. The reason is very simple. Under the present fiat money, deregulated system, the banks in certain privileged countries, incl. Canada, are permitted to create unlimited amounts of imaginary capital against the assets and resources of another country, again incl. Canada at both ends of the fraud, to take over the resorces of others and drain the benefits from the rightful owners.

    It is the biggest con-job in history.

    Ed Deak.

  5. Fri Feb 24, 2006 1:40 am
    <p>Dave,</p> <p>all signatory nations to the Bretton Woods agreements established a fixed exchange rate (±1%) of their currencies to gold. However, since at that time the USD was the <i>only</i> currency still backed by gold (at 35 USD per XAU, significantly devalued compared to 20.67 USD per XAU in 1933), and since the IBRD and the IMF were created with the USD as their reserve currency, in practice the signatories’ currencies were pegged to the USD, and those countries tended to hold their USD rather than convert them to gold. When Nixon ended the direct convertibility of USD to gold, the exchange rate of USD to gold was then determined by open markets: within 18 months, the market price was around 70 USD per XAU. (Nowadays it’s around 540 USD per XAU.) By February 1973, the Bretton Woods fixed-rate currency exchange markets were closed, and by March 1976 the current régime of floating exchange rates were in place for all major currencies.</p> <p>No currency now is based on gold (or any other resource or commodity, for that matter.)</p><p>---<br>Shatter your ideals upon the rock of Truth.<br />
    <br />
    — The Divine Symphony, by Inayat Khan<br />

  6. Fri Feb 24, 2006 11:20 pm
    Thanks, fellas!

    Dave Ruston

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