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A while back, Germany politely asked to audit its gold holdings in the Federal Reserve of New York. Seems that after World War 2, one of the requirements to keep Germany in its place was that it had to store a fair amount of its gold in France, Britain and the US. For the past 70 years, this hasn't been much of an issue, until the Federal Reserve began printing dollars like two-ply toilet paper and handing out bundles of 'bailout' to all their buddies.
Naturally, the Germans, being the second largest gold owner in the world (as far as we know), wanted to check up on its gold. Naturally, the Federal Reserve, being the nastiest bunch of liars in the world, hemmed and hawed over this request.
Smelling a rat, German then decided to call back a portion of its Federal Reserve holdings. If memory serves, they wanted 300 of their 3,000 tons of booked reserves sent home. The answer? No problem! We'll get that to you in seven years or so...
Seven years to collect and send over one-tenth of the gold that Germany supposedly has on deposit in New York. Wait a minute...do you catch the sent of rotting fish here? Even if you don't smell it, a lot of other countries did, and now they want their gold returned, as well. And the chorus of nations is growing almost daily across the planet.
Something is rotten in the state of New Amsterdam and its making plenty folks nervous.
Farrell speculates, and I agree, that Germany would not be making this much noise if it didn't have a back-up plan. The Germans know that a significant amount of its energy resources come from Russia, and that China is one of its largest trading partners. Meantime, the US debt is running at 107% of GDP and the dollar is showing significant long-term weakness.
If you were Germany, what would you do? Why, pack up the Chancellor and her Cabinet and head for China for extended talks, of course.
This whole gold repatriation thing might be a one-off event without a whole lot of context until you add in a few more data points.
After 9/11, there were numerous reports of dump trucks hauling gold (or something) out of the basement of the World Trade Center, which just happened to be one of the Federal Reserve's main vaults. At the time, this was easily dismissed as 'conspiracy theory', but in light of recent events, it deserves closer scrutiny.
Another recent development that is just starting to gain notice, and which I have been tracking here and on UrbanSurvival since last year is the wave of currency revaluations going on in Asia.
The rupiah trades at approximately 1,500 to 1 with the Chinese renmembi. Lop off three places and you get a near perfect parity with the Chinese currency.
Reports are that at least Vietnam and SKorea are also rolling out revaluations. I would not be surprised to see those currencies come closer to parity with the remembi than with the dollar in the aftermath.
To my mind, this is a clear signal that the Chinese economy is quickly supplanting the US as the global standard. The revaluations also reveal a possible long-term plan to issue a singleAsian currency along the lines of the euro, but perhaps with some adjustments to avoid the calamity sweeping the Euro Zone. One of them being realigning Asian currencies to be at parity before the debut of the single currency. That is something that was not done in Europe with the Greek drachma or the Italian lira, and guess which countries are having the biggest fiscal problems right now...
So, if we align all these dots - dump trucks full of gold, financial crisis, gold repatriation movement, Asian currency revaluations, German high-level visits to China - what is clearly emerging is a crisis of confidence in Anglo-American hegemony and a global realignment with the new top dog, China.
Even without other side issues, such as George Ure's Resource Wars and Richard Dolan's Breakaway Civilizations, we are seeing a massive shift in the basic power structure of the globe.
The only thing the US has to back up its economic hegemony is a powerful military, but its not enough to keep the whole world in line. In the wake of World War Parts 1 and 2, there was a similar shift that left the US as the only major Western economy with any strength, and Russia as the only Eastern bloc (China had not yet emerged from its dark ages). But the US sold out its underlying strength of manufacturing and innovation to the low-cost bidders, who in turn have taken the economic mantle with them.
Whether there is a bigger picture here is a matter of great speculation among a lot of thinkers, but one thing is quite clear: the Anglo-American empire is dying. It is losing traditional allies at an alarming pace as they bail out of a sinking ship and cozy up to stronger and more stable partners. The US response has been to deploy a global fleet of flying robots that can strike targets at will as a means of terrorizing nations into submission.
At home, the US is trying to keep the locals in line with similar, though more egregious means because it can not afford to allow its tax base to revolt, which would be a huge propaganda nail in its coffin.
The only ace in the Anglo-American hole is space, and we are seeing some interesting developments there, as well. Things like the Curiosity rover are not just scientific programs, they are technological displays of superiority in the new frontier. They are also the 21st century equivalent of running around planting flags in other people's lands, or really just a high-tech version of pissing on fire hydrants.
The current decade will see major changes in how the world works, with traditional leaders fading and new ones emerging. Currently, the sun rises in the East where low debt and manufacturing are creating wealth, while in the West they have sat on their laurels and diluted their wealth to the point of self-destruction.
It is safe to safe the West will act increasingly belligerent and desperate, which will in turn lead to more and more war fronts opening up (see Africa). The race now is to commercialize space before the king's coffers are completely empty. However, even those efforts can backfire like the influx of New World gold and silver into the Spanish economy in the 15th century.
It's a game of very delicate balances and one which is a fool's errand. History tells us these kinds of power shifts happen on a regular basis (even if the time spans seem quite long by human reckoning). The question is, what will be the tipping point? And when it all tips over, how many folks will die in the shift?
If, like George Carlin, we step back and become spectators no longer having a stake in the outcome, it is a fascinating process to watch, painful though it is to so many unsuspecting folks. The normalcy bias can be destructive when we refuse to observe and accept reality.
The forces are stronger than any one individual, or even groups of individuals, but as individuals, we can prepare to ride out the storm as best we can, if we admit to ourselves that these things are happening. The wheels are in motion and they will either run us over or offer us a lift, depending on whether or not we see the bus coming.
In the meantime, watch the gold games, the currency manipulations and the movements of 'leaders'. Also, watch the space game. There is a major shift there, as well. Controlling the high ground will have a profound affect on the outcome of current events.
In any event, it might be a good idea to sell stocks at the top of the market and buy a little gold as speculation. Certainly seems that markets are doomed and metals are favored in this environment.
Happy, happy, joy, joy, as Stimpy likes to say....