Moral Outrage
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Keyboard Credit and the new Financial World War

What is to stop U.S. banks and their customers from creating $1 trillion, $10 trillion or even $50 trillion on their computer keyboards to buy up all the bonds and stocks in the world, along with all the land and other assets for sale in the hope of making capital gains and pocketing the arbitrage spreads by debt leveraging at less than 1 per cent interest cost? This is the game that is being played today.

The key is to persuade foreign central banks to accept this electronic credit. U.S. diplomats are threatening to plunge the world economy into financial anarchy. Foreign central banks find themselves obliged to choose between passively letting dollar inflows push up their exchange rates – thereby pricing their exports out of global markets – or recycling these dollar inflows into U.S. Treasury bills yielding only 1% and whose exchange value is declining.

Finance is the new form of warfare – without the expense of a military overhead and an occupation against unwilling hosts. Indeed, this “currency war” so far has been voluntary among individual buyers and the sellers who receive surplus dollars for their assets. It is foreign economies that lose, as their central banks recycle this tidal wave of dollar “keyboard credit” back into low-yielding U.S. Treasury securities of declining international value.

For thousands of years tribute was extracted by conquering land and looting silver and gold, as in the sacking of Constantinople in 1204, or Incan Peru and Aztec Mexico three centuries later. But who needs a military war when the same objective can be won financially? Today’s preferred mode of warfare is financial.

Victory in today’s monetary warfare promises to go to whatever economy’s banking system can create the most credit. Computer keyboards are today’s army appropriating the world’s resources.

[Excerpt of article by Michael Hudson, former Wall Street economist]

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One Response to “Keyboard Credit and the new Financial World War”

  1. All dependent upon where the physical assets are located we have been doing this for a long time. About 16 yrs when an Economic Summit forged the N.A.F.T.A. Free Trade agreeement and we became the largest Banking SYTEM ON EARTH.. AT WHICH TIME WE STARTED BUYING UP PRECIOUS METALS AND ART. COLLECTABLES AND HISTORICAL DOCUMENTSS TO ELEVATE OUR TREASURIES VALUE. THIS BOUGHT US A TICKET TO WEALTH NECESSARY TO MAINTAIN OUR INTERNATIONAL CREDIT LINES AND INVEST IN THE MARKETS TOO. SUCH AS REAL ESTATE AND BUSINESSES THAT THE GOVERNMENT WOULD NEED SUCH AS DEFENSE AND COMMUNICATIONS. NOW WE HAVE TO MAINTAIN GROWTH TO STABLIZE THE CURRENCY IN AT LEAST A CREDIT LINE THAT MAKES FINANCING LESS EXPENSIVE AND MORE PROFITABLE AS THE MARKETS, AND OUR ECONOMY GROWS BACK INOT PEACE AND PROSPERITY. WE WILL RECOVER TOO FOR WE HAVE INSURED OUR MARKETS AND OUR ECONOMY AGAINST DEFAULT TOO.


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