After the Dollar Dies

[machinehead]

Richard Duncan's The Dollar Crisis is, quite simply, a blueprint for the apocalypse; a modern-day Tunnel Through the Air about the dollar calamity. Its scope is the past, present, and future of the world monetary system. Its implications are chilling to the utmost degree. I read the book through in two successive nights. It made my flesh crawl.

 

Duncan explains how the classical gold standard, and the gold-backed dollar exchange standard of Bretton Woods, contained an inherent adjustment mechanism. Profligate imports in a boom economy would drain it of gold, imposing a recession, falling prices, and the need to export to earn new foreign exchange. The adjustment mechanism was quick, impartial, and effective.

 

When Bretton Woods broke down in 1973, unbacked paper dollars flooded the world with reserves, setting off bubbles in Latin America, Mexico, Asia ... followed by bank runs when the bubbles popped. But more importantly, the adjustment mechanism disappeared. Profligate imports by the U.S. do not drain it of dollars, because it can print dollars without limit. The ever-accelerating system has no brakes.

 

Duncan draws a series of shocking conclusions. One is that since the flood of dollars shipped overseas is recycled into U.S. securities, the U.S. current account deficit -- and its mirror-image capital account surplus -- is a vast transmission belt which fed Bubble I ... and is feeding Bubble II.

 

More shocking still is Duncan's assertion that the U.S. "trade deficit policy" is deliberate. Being able to buy real goods with worthless i.o.u.'s is f***ing miraculous. And like any boy who has found a magic lamp, the U.S. wants to do it on an even larger scale.

 

Pursuing these thoughts to their ultimate, appalling conclusion, Duncan reasons that only the U.S. government is large and creditworthy enough to absorb the $500 billion backwash of recycled dollars. And thus, the only adjustment mechanism in the dollar standard is the ultimate bankruptcy of the U.S. government -- i.e., its inability to service its debt, when Treasury debt eventually soars to some nightmarish, unthinkable multiple of GDP.

 

The dollar standard has careened along for three decades, leaving a trail of wreckage in its wake. But the ultimate sanction -- U.S. government insolvency -- is nowhere close to putting a brake on it. Duncan makes crystal clear that the worldwide bubble of the dollar standard is the granddaddy of ALL the bubbles in ALL the countries ... the stock, bond, dot-com, property, GSE bubbles; you name it -- all of them. And he leaves little doubt that the dollar bubble is probably the greatest, most disastrous folly in the history of human civilization.

 

Duncan pulls the veil from our eyes, weaving all the disparate, disturbing signs of insane speculation and looming financial distress into one comprehensive, lovingly-detailed tapestry. He demonstrates, step by step, with graphs and tables, how the backwash of capital from the out-of-control dollar standard feeds the mind-boggling excesses of the "leveraged speculating community" which Doug Noland chronicles every week.

 

Duncan's prose is executed with limpid precision. It functions as a rhetorical juggernaut. Duncan marshalls his facts, arranges them in a vast phalanx, and sallies forth in a stately wall of spears and shields, pulverizing any conceivable caveat. At a couple of points, MH was moved to fling down the book, leap from his seat and applaud, to the bafflement of the family pets.

 

This is a book to make your heart sing ... until your eyes fall upon page 233: "Chapter 12: A Global Minimum Wage." OMG. OMFG. It's like stepping out your door on a cloudless morning, only to be hit in the face with a diarrhea-filled water balloon. It's like attending a tub-thumping Fleckenstein after-dinner speech, only to have him rip off the rubber mask and reveal the rouged, rheumy mug of Greenspan, as the guests recoil in horror. It's like reading an inspiring guide to personal transcendence by a Buddhist holy man, only to find that he's dedicated the final chapter to praising Pol Pot.

 

And it gets worse. MUCH worse. In the final chapter (13 ... the Masonic number 13), Duncan issues the vilest threat against humanity since Khrushchev pounded the podium with his shoe and threated "to bury you." To wit:

 

There are three important tasks that the IMF must now master if it is going to succeed [in becoming a Global Central Bank]. First, the IMF must gain control over the global money supply - that is, over the creation of international reserve assets. Second, it must learn how to allocate the future supply of global liquidity in quantities that are neither excessive nor too sparse. Finally, it must learn how to allocate the global money supply in a way that both ensures global economic stability and, simultaneously, supports the global development agenda.

 

This satanic diatribe is the economic equivalent of the Marquis de Sade's farcical, faux-clerical moral appeals against buggery ... described in compelling, prurient detail. The dollar standard has gamely given head to the world economy for thirty years, avers Mr. D. But now it's time for the piece de resistance: a little IMF-sponsored fisting and reaming. This may HURT a little bit if you're not used to it ... mwa ha ha ha ha ... now why don't you just COME OVER HERE, cupcakes ....

 

Your first reaction to these pornographic maledictions is that the real Richard Duncan is tied up in a cellar somewhere, and the Matrix has drafted these final two chapters as a parody to discredit him and heap ridicule on his book. But then, heart sinking, you read the book jacket: "At the height of the Asian crisis, [Duncan] worked as a consultant for the IMF in Thailand. Subsequently, he joined the World Bank in Washington DC ..."

 

Duncan is a Matrix agent. He toils in the belly of the beast.

 

Your mind reels. Why ... why would the Matrix allow this book to be published? Why would they allow Duncan to describe so plainly, ex cathedra, how the bubble machine works, and why it's going to break? (Chapter 6 is titled, "The Fate of the Dollar: Half a Trillion Reasons Why the Dollar Must Collapse.")

 

You start to glimpse the unspeakable truth. They're going to let America blow out ... sacrifice it for the common good ... of the "global development agenda." But the Matrix will go on. And this is the bridge financing plan. The globalists are taking over, for once and for all. The great game is bigger than you thought.

 

The Dollar Crisis, then, is obligatory reading. It is a dark jewel, shat from the bowels of the Matrix ... a depraved masterpiece ... the product of a lyrical, diseased, perhaps coerced mind ... an Ezra Pound of the capital markets, propounding a seductive, poisoned, incantatory collectivism.

 

Somewhere below, lounging at a small poker table with Old Nick himself, the old Marquis quaffs the last of his brandy, rubs his hands with glee, and observes, "ooh la la ... cela serait dr?le ... touche pas mon pote Monsieur D., Vieux Nick" ... as night envelops the earth.

[Short'em High]

machinehead,

 

Unfreaking-believable review!

 

From your account, it is a must read. Astounding implications.

 

Recommendation for place of purchase?

 

SEH

 

P.S. Where did you attend college?

[mksloth]

'chine, kudos to you! Your words are finely drawn indeed - "rouged, rheumy eyes" - classic!!!

 

A dumb question - how did things get so f'ed up over what is essentially a medium of exchange? Doesn't the global quantity of said medium, have to, by definition, be constant? At least, in relation to the growth in quantity and number of economically value-producing activities? If so, which idiot savant managed to pull over which set of idiots' eyes to get us into this current state of wondrous (non-)bliss? I can understand, barely, at a first principles level, the concept of a depreciating currency (medium of exchange) because of an ever increasing number of units of it being in circulation. The history of civilization is littered with failed experiments in this regard. That said, it is also clear that the notion of concurrently floating currencies has never before been attempted - in any scale. So, my question is, how did the character who proposed this the last time, manage to essentially give the lie to "you can fool some people all the time, or all the people some of the time, but not..." and take, what should have been a petrie dish experiment and foist it on all of humanity?

[mjkst27]

'chine, kudos to you! Your words are finely drawn indeed - "rouged, rheumy eyes" - classic!!!

 

A dumb question - how did things get so f'ed up over what is essentially a medium of exchange? Doesn't the global quantity of said medium, have to, by definition, be constant? At least, in relation to the growth in quantity and number of economically value-producing activities? If so, which idiot savant managed to pull over which set of idiots' eyes to get us into this current state of wondrous (non-)bliss? I can understand, barely, at a first principles level, the concept of a depreciating currency (medium of exchange) because of an ever increasing number of units of it being in circulation. The history of civilization is littered with failed experiments in this regard. That said, it is also clear that the notion of concurrently floating currencies has never before been attempted - in any scale. So, my question is, how did the character who proposed this the last time, manage to essentially give the lie to "you can fool some people all the time, or all the people some of the time, but not..." and take, what should have been a petrie dish experiment and foist it on all of humanity?

sloth - Keynes was the mastermind behind Bretton Woods, but Duncan is quick to defend Keynes in the book, saying his ideas have been twisted out of proportion over the years, and that Keynes would certainly have known that today's dollar reserve standard is a recipe for disaster.

 

Machine - great review, I've read the book and couldn't agree more. Thanks for your interpretation of the last 2 chapters, I needed that. I'm still too green to know what I was reading, but knowing that Duncan was IMF, I knew something stunk. It was obvious when, after singing the gold standard's praises for 11 chapters, he never uttered a word about gold when he talked about how to solve the problem.

 

If what you suggest comes to pass, that the spectacle of the US economy crashing and burning will be used as justification for construction of a one world currency marshalled by a Global Central Bank, what delicious irony it will be, bookended beside the image of the toppling Trade Towers ushering in an eventual new era of One World Government.

 

We're doomed.

[mjkst27]

So, the matrix was kind enough to send a warning shot across the bow...any one want to venture some guesses as to how they'll tip the beast over? How will other countries become convinced to stop trying to devalue against the dollar? A GSE collapse?

[Yoshaviah]

I doubt the dollar will die before there is an attempt to form a world currency, maybe it will be called the "Euryendoll." Every Euryendoll will be backed on a fractional basis to gold. Da boyz will adjust the fraction and the interest rate for borrowing it whenever they need to. Europe is the model to watch. It is an example of how a monetary union precedes a political union. Once it is proven to work in Europe then it will be tried on a global scale. Keep in mind that a worldwide monetary union cannot succeed without a military to support it or rather to force it on smaller nations that are unwilling to accept it. Right now the US dollar is backed by plutonium and enriched uranium. At some point Da boyz will attempt to convince the citizens of the United States that they should consider themselves as citizens of the world. That will be easy once they hold the title to all US property while the citizens have no jobs. You have a right to a job you know. Think not? Just take a look at the new European Constitution.

 

Be happy. Slaves had jobs in the south. They worked on the master's plantation. He gave them a place to live, a shack maybe, but a place nonetheless. They could even have wives and children too, if they obeyed their masters. Just learn to think of the White House as the master's house and you will fit in to the new order without too much trouble at all. Be thankful that the US Constitution is a "living document." That gives it the ability to evolve into something the fathers never dreamed possible.

[Butterfield 8]

And in the Brave New World, I assume only IMF bankers are permitted to own gold and silver. The rest of us will trade in soylent green wafers.

[Yoshaviah]

soylent green wafers

Ah yes, the mutant form of the Federal Reserve Note, or the mana of Greenspan as I refer to it sometimes.

[Sphinxter]

Another unbelievable review! (the other is over on M2M, in case you haven't seen it).

 

While I agree with the central precept of the book, namely that the system is fatally flawed and prone to a massive disaster, I disagree that the corrupt, inept, venal institution known as the IMF is going to be able to engineer a massive centralized reorganization of the worlds monetary units.

 

Think about it. They're just people. They have some power but it's all fully vested in the current systemic structure. As soon as we experience something like a major dollar crisis, their power lessens dramatically as people everywhere will lose faith in paper assets.

 

When the time comes that it makes sense for me to trade you a cow for a jeep, it really won't matter what grade of linen they are printing some dead politicians face on.

 

The IMF is staffed by bozos and this will all end much more badly and with less apparent planning than you can possibly imagine.

 

Anything else will be a low-probability shocker.

[depends]

global development agenda

 

Nice review.

 

If you were meant to read it it must be misinformation.

 

Those guys are verrry tricky.

[Guest Icky Twerp]

So, the Blue Helicopters will be the ones dropping bales of money off on street corners? I got to wait to hear from Bare on this one before I can parse the plausibility of that scenario...

 

Isn't the promise of the US always being available to "step in" as a last resort the foundation of the IMF? What else besides the "full faith and credit" of the US would give the One Worlders the authority? This is the point Sphinxter makes, I think, and I agree.

 

When it got to such a stage, here in the US, the distinction between Entrepeneurs and Criminals might blur, as primitive barter processes re-emerge. Whose gonna have the muscle to impose such a will on this hemisphere?

[BigWave]

Word up Machine!

 

Thanks, ordering as we post...

[alceringa]

Last Friday night I visited with some old friends here in Oz that actually were once neighbors in the USA. They had previously lived in Britain, Canada and Germany also, but are fair dinkum Aussies who have finally returned here after 10 years abroad.

 

The topic of cultural differences between countries came up. My friend noted, with great laughter, the undercurrent of UFO hysteria, complete with tales of sinister government cover-ups, which seem to periodically show up on the covers of the weekly tabloids at the checkout counters in the USA. Unbelievable tales of alien abduction, aliens among us and conspiracies by monstrous government agencies with 3 letter acronyms to hide the whole matter, for reasons that no one can actually coherently explain, fascinated him as a part of the American society. He had not experienced such matters seriously elsewhere in his travels, other than the obvious hoaxes played with geometric designs in wheat fields.

 

The phenomenon had so struck him that he had researched the matter out of curiosity more than anything else. His claim, which I have little reason to doubt, is that about 70% of all UFO sightings world-wide are reported from the USA, with Canada a distant second. This would seem to be a clear case of cross border contagion with some of the more feeble minded Kanuckistans wanting to join in the American observing party. It doesn?t take a Geography Bee winner to realize that these reporting rates are significantly out of proportion to the populations and land sizes of these two countries.

 

Clearly there are aerial events that are witnessed but not understood by the observer. Anyone who has ever seen St Elmo?s fire or the ?Green flash? likely appreciates that. However, it is a tremendous leap to go from that simple fact of not understanding to the conclusion that such things necessarily prove a government conspiracy, the purpose of which is to harm society and the people in it.

 

My friend is quite convinced that the whole movement is an odd type of American quasi-"religion", where religion is simply defined as belief in something that may not exist. The powering force behind the religion is an emptiness some must feel in their lives combined with a society of such wealth that there are people with nothing better to do. It is more entertaining for some to fantasize than it is face reality, especially when they have time on their hands. His final thoughts on the matter are that the whole UFO matter in the USA is just an extension of the historical Salem witch-hunt phenomenon, cleaned up and modernized. The belief in secretive satanic evil among the people has just been replaced with the belief in secretive government evil against the people. Public humiliation of the ?guilty? in the town square has been replaced by public exposes at the checkout stand.

 

In my friend?s view of the matter, the movement is just large enough to allow for an undercurrent of mystery surrounding the whole matter throughout American society. Good storytellers have exploited that mystery to make a buck or two, in the tradition of American entrepreneurship. ?Star Wars?, ?Star Trek?, ?Close Encounters of the Third Kind? and ?The Matrix? are prime, recent examples. Those stories are all fairy tales, which take good and profitable advantage of the situation and for many, are quite entertaining. But above all else, they are fiction.

 

Sorry stoolies who may think otherwise, but there is no ?Matrix?. ?The Matrix? is a fairy tale. Projecting it onto the real world is an error, just as projecting misunderstood aerial phenomenon into a UFO conspiracy is. If you want to find your ?Matrix?, study the techniques of the Salem witch-hunters. Look especially hard at those who claim to ?have true religion? and be prepared to condemn them quickly if they make slightest misstep or fail to live up to your high standards and expectations of ?truth telling?. Apparently, that is what Mr. Duncan has done.

 

Thanks for the book review machinehead. It is superbly written and entertaining. Your line of reasoning is compelling and meritorious.

 

But for me, it is not sufficiently meritorious to be persuasive about the role of the ?Matrix?. I remain profoundly skeptical about the existence of this mythical organization outside the fairy tale land of the movie screen.

[longOnUranus]

I don't really care what the guy says and won't buy his book; I long ago decided that compelling narrative (fiction or otherwise) capped by farciful conclusions makes the whole endeavor a waste of my time - why should I pay to support it?

 

The power of the Matrix has been apparent to me since 9/11, and I have had enough painful lessons along the way to appreciate that, short of God, there is a much higher power on this Earth. These lessons were the result of my underestimating its universal reach.

 

One shouldn't mess with Mother Matrix.

 

 

MACHINEHEAD - you are a brilliant writer. You have obviously had experience. If you are published, please PM me with a reference or two. If not...you should be.TIA.

 

ALCERINGA - funny you should bring the UFO thing up. I actually saw some "unusual" atmoshperic event rafting on the Lower Island in New Zealand in 1979. It was a truly amazing show, but didn't think much of it until stories of it, as a "UFO" sighting, were splatered all over the America media for a week (my mother sent me news clippings).

 

'Just more testimonial that there are many things in life which we see, but do not understand. Personally, I look at this as evidence God's work in the universe (look at a few Hubble photographs to be REALLY humbled). However, "The Matrix" jargon essentially stands for the ever increasing elements of control in our lives, which we don't understand, and which we can't control.

 

In countries with some socialist roots, like AUS/NZ, there seems to be more acceptance of these things as a part of life. In America, these things are viewed with rebellion. Your laws about not being able to rest your arm on the edge of the window well with the window open while you are driving, are a classic example. In America, an officer attempting to arrest someone for such an offense would receive a brisk badfinger gesture, or a fist in the face.

 

It all started with mandatory seat belt laws, IMHO.

[mjkst27]

Whoa, before this thread spins out of control, y'all might want to hear what Duncan has to say:

 

abridged Duncan

 

The Dollar Reserve System is an important topic all Stoolies should master. Just because Duncan offers two chapters worth of proposed solutions that we Stools don't agree with is no reason to not listen to the total message.