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What happens in a Depression? - Argentina knows.Views: 705
Apr 15, 2009 11:53 pmWhat happens in a Depression? - Argentina knows.#

John Stephen Veitch
This video message was posted at the Information Clearing House on 7th April.


It's a message from Argentina.
Argentina was wrecked by military power, by corruption inside Argentina and by the IMF. John Perkins' book about "Economic Hitmen" is important here.

The USA has been able to ignore the signs that brought the economy of Argentina to it's knees three times.

1. The US$ has been the reserve currency of the world. That has allowed the USA to tax other nations by extracting value from their currencies. One estimate was this has earned the USA more than US$ 400 Billion a year, and is the reason why the USA can afford to have military forces spread across the world.

2. The USA effectively controls the World Bank, the World Trade Organization, and the International Monetary Fund.

3. With it's veto the USA can keep the United Nations powerless and ineffective.

So for the last 30+ years the USA has been able to ignore economic reality. The G20 meeting a week ago changed the nature of this debate completely. China gave notice that she would no longer keep the USA afloat by buying treasury bills. Several different forms of "reserve currency" are now sitting in the wings. The Special Drawing Rights, are likely to become the future reserve currency of the world.

See my essay of 9 weeks ago, where I talk about Keynes' idea of the "Bancor". Well, SDR's are Bancor's.
(See the end of the essay.)

So the situation is that the stimulus packages will buy time, but they will fail. The US$ will suffer a severe decline in value. Many of the banks and major businesses the Obama government is trying to rescue will in fact fail, they also NEED to FAIL.

The fall in the value of the US$ will be the beginning of the real recovery, but perhaps after a long delay. At a lower value, it will be possible for US industry to regrow industrial jobs and become a successful exporter again. But you can't get from here to there without paying the piper on the way. Lot's of economic pain ahead.

John Stephen Veitch
Open Future Limited - http://www.openfuture.biz/
Innovation Network - http://veech-network.ryze.com/
Building an Open Future - http://openfuture-network.ryze.com/

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