[-empyre-] On Currencies, Capitalism, and the Fed

jeff pierce zentrader at live.ca
Tue Apr 7 12:26:13 EST 2009




My jaw literally dropped when I read your question about what would be wrong with a one world currency. Now let me preface this by saying that I don't have all the answers, but I think based on some of the events that have transpired over the last 6 months we can come to a few conclusions and go from there.


1. Government policies created this problem through easy credit, poor legislature, and low interest rates. If you let people borrow money at an historically cheap rate for an extended length of time, bad things will happen. I'm sure Greenspan was telling himself that "this time it's different" and we can leave interest rates low, but believe me it's never different. Every time a trader tells himself those 4 words they're setting themselves up for a fall. Greenspan took the interest rate down from 6% to 1% and kept it there far too long.


Easy credit encourages leveraged speculation. This fuelled the housing bubble as everybody thought their house would appreciate at 10%/year, every year. And all of this led to the ensuing subprime debacle and credit crises.


2. The SEC failed to do it's job allowing major corruption with the financial system like Madoff.


3. The Government's reaction to all of this proves time and time again that they have no real idea on how to handle this. They are throwing everything at this hoping something will stick, literally gambling the future of American on a hunch that massive money printing and quantitative easing will solve everything. Why can't they realise that you can't solve a problem with the very same cause of the problem in the first place.


So why is a one world currency bad? In theory it's not, but in the practical application and the greed that lives within the financial industry would ruin it.


It's puts to much power in the hands of too few. I'm so tired of hearing about "centralized this" and "globalization that" as every time I hear it in the media I get the feeling that they're just warming us up to what will eventually be. Governments are too big to begin with, as they are a big part of this problem. They can't handle their affairs on a national level, what makes anybody think they can handle the affairs at a world level. The thought alone makes me shiver. Where would you hide if you didn't like the system that is in place? At least now if you don't like the the United States, you can move (like me--to Canada). The world needs diversity as much in the cultural sense as in the financial sense. Checks and balances if you will. 


The currency should be the health barometer of a country. I can't even fathom how a one would currency would effect the business cycles between countries with different types of governments. I feel that people throw around the term "capitalism" too much. The United States does not operate under a capitalistic state at this point in time. It's some hybrid cross of socialism, capitalism, and possibly totalitarianism. At one point between October-December it was so hard to trade and carry any positions over the weekend because we (traders) feared some type of government intervention over the weekend which would cause the markets to move in totally random ways. This is still very much a concern, but it hasn't been as bad as of late.


This is not a free market system. Who are the government to decide which companies are bailed out and which ones aren't. Last time I checked the survival of the fittest in the business world was the model of choice. If a company wasn't profitable, then they should fail. End of discussion. Don't use taxpayers money, print unlawful amounts of money, and destroy the currency in the process.


The final piece of the problem is the Fed. It doesn't even make sense to me for the government to borrow money from a private institution to conduct business. Our federal taxes go to pay the interest only on the debt to the Fed, making those bankers filthy rich. This house of cards will collapse sooner rather than later as the money printing goes to exponential heights. It's so bad now that the Fed doesn't even report it's money growth anymore. No fiat currency lasts and this one will be no different. But instituting a one world currency will result in more of our privacies being taken away, more surveillance, and more control. It makes more sense for the government to print it's own money, thus relieving itself from hefty interest repayment.


My solution is dissolve the Fed, cut the government in half, stop policing the world and bring home the troops, stop the bailouts and quantitative easing, and focus on infrastructure and sustainable energy sources that would create a whole new sector of job growth. In my opinion everything else would fall into place. Yes it would be bad for a few more years, but at least we would come out the other end a cleaner, debt free nation.

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