Friday 7 January 2011

you can pop a lot of trouble on the pop-o-matic bubble

The other night, I listened to an infomercial to its conclusion, or at least its unabashed sales push, regarding the precarious situation that the US and world economy is still in. The report was not terribly original and a bit pandering, underestimating the devious and willful intent of the rich and the allure of joining the rich.

Market fundamentals are being undermined by the burden of debt, governments leveraged in excess of the aggregate total income of their citizens, and new debt creation is being enabled by America's unique and unilateral ability and penchant to print more money, quantitative easing, when debts outstrip income. Other countries and monetary unions have the prerogative to do so as well, although the EU charter and other conventions in other cases confounds the process, and do not fold to temptation. Finances on all scales are still in shambles, and though other countries, like the UK and Yugoslavia, in recent times, have taken this course with devastating effect, the US has been thus far allowed to continue this hucksters' game of three-card Monte for so long because of the dollar's equally privileged position as the world's reserve currency. Though Russia, China, India and others are gaining independence from this hegemony, historically anyone not American became indentured to a middle man for international transactions. Ounces of gold, barrels of oil, fortnights and furlongs are all denominated in dollars, and a merchant from anywhere else in the world, buying a foreign commodity has to pay up a fee for the medium of exchange, and then to render it back to his or her home currency. Only Americans do not lose out in the translation, since not only does their endless money supply keep the international marketplaces lubricated, cheapening the dollar has also allowed Americans to acquire without offering anything more than fiat in exchange for quite some time. The economic collapse, I agree with the infomercial, will come quickly once more countries abandon the dollar as exchange-media and no one is willing to buy or hold more money itself in arrears and obligations go unmet. You sank my Battleship!