Tuesday, March 31, 2009

G20 and The New World Order

G20 and The New World Order

This week the G20 will sit down in London for its meeting which will affect our lives and direction of the world economy. We are basically at an economic crossroads, why?

The Ditching

1. China and Russia are campaigning to ditch the US Dollar for another super currency which is more stable and they would like gold to be in the basket. The uncertainty of the US Dollar has been the major factor for this move after the US opts for quantitative easing in order to lower down interest rates to stimulate its dying economy.

2. The Chinese government is ditching the US Dollar to reduce its exposure to the US Dollar since it carries a significant risk factor.

3. When major government such as the US, UK and Germany has conducted fail bond sales. It shows that investors are losing faith in such bonds. Thus it is why the US and the UK government have resorted to printing money.

4. The act of printing money or also known as quantitative easing carries a high risk of creating hyperinflation due to the devaluation of the currency.

Inflation VS Deflation

5. Up to date, we have seen the weakening of the pound while the US Dollar is still maintaining its value which many says it is due to deleveraging.

6. Even though many economists are crying deflation, people in the main street are experiencing price hikes on food and essential goods.

7. The price of real estate is incredibly high in the US due to the cheap credit that the Fed has allowed. Thus it sparks a housing mania funded by cheap credit. Therefore the price o does not represent the real value of the property. I believe the call on deflation is just an excuse to allow the inflating of the currency.

False Claims

8. The US has claimed that the past few years their economy is growing at a good pace and we must note that consumer expenditure is also accounted inside the GDP calculation. However, when the crisis broke, we already knew that all this consumer expenditure is due to cheap credit and it is false. It does not reflect the productivity of the US. Besides its false GDP, US has a big trade deficit with all other countries especially China. China has been using its trade deficit to buy US Treasury Bonds. This shows that the US cannot pay its debtors.

The Stimulus and the Collapse

9. With the new stimulus package which has been announce not so long ago. I wonder where they got the money. If they failed to sell those bonds, who are funding them?

10. From what I have written earlier, it is concrete evidence that the US has no longer had the economic power. When they opt for quantitative easing, it is evident that most of their previous plan has failed, and quantitative easing is their last option or Nuclear Option.

11. Before the Nuclear Option start to show its effects, it is essential for all to ditch the US Dollar before its value drops and rendered useless … maybe it still has a use … as a toilet paper.

12. I fear that this economic downturn will spark a new era which will lead to world war 3. A war to secure limited resources.

Uncertainty and The New World Order

13. In this time of uncertainty, we will see that people will become jobless, hunger will reign, and people will do anything to feed themselves. This will lead to restlessness and lead to fascism. This terrible uncertainty will create anarchy and government will be turned over due to their failure to control the situation.

14. This uncertainty will be a great opportunity to extend the notion of a New World Order where the world is dictated by a single government and use the same currency and economic structure.

15. They will plunder everything from you and your nation

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