kluge Herrcher setzen auf friedlichen Handel und freiwilligen Austausch.
Lieber dottore, als kleines Begrüßungsgeschenk für Dich setze ich hier mal einen Text von Bill Buckler (Privateer) rein.
THE G-1 SUMMIT
As the other Heads of State of what used to be the G-8 arrived in Western Canada, they all knew in advance that the United States had given them all their geo-political and geo-strategic marching orders. President Bush did this in his speech at the West Point Military Academy on June 2.
Here is a quote from Mr Bush's speech:
"America has - AND INTENDS TO KEEP - MILITARY STRENGTHS BEYOND CHALLENGE, thereby making the destabilising arms races of other eras pointless and limiting rivalries to trade and other pursuits of peace."
Reflect calmly upon the above statement. It is a political statement of policy, which for the first time in world history, relegates all other nations to a secondary status. Literally, it lays down as a global law, the principle that the United States will act, militarily if it must, to deny all other nations a co-equal standing. Conversely, it condemns all individual Americans to sustain this global unchallengeable military supremacy economically as well as in actual military action. It will, inescapably, militarise life inside the United States. The U.S. civil economy will have, as its central purpose, the sustaining and maintaining of this global military supremacy, with the inescapable economic consequence that private individual Americans will be poor, or poorer than they otherwise would have been. The U.S. military will, on the other hand, be"rich".
There is only one way to avoid making the U.S. military"rich" at the direct expense of American individuals. In ancient Rome, this was called"tribute". It is the extraction of wealth - BY FORCE - from the rest of the world.
The Naked U.S. Underbelly:
According to Bridgewater Associates, foreigners currently hold 48% of the U.S. Treasury bond market, 24% of the U.S. corporate bond market, and, through their equity holdings, 22% of all U.S. corporations.
In total, foreigners hold $US 8 TRILLION of U.S. financial assets.
The U.S. requires an annual inflow of $US 420 Billion to fund its current account deficit. This inflow adds to U.S. net external debts. Were that inflow to slow or to stop, the U.S. Dollar would have to fall in value, as it is currently doing. But what would happen if this inflow turned into an accelerating outflow?
IT WOULD DESTROY THE U.S. DOLLAR - AND ANY PRETENCE OF A U.S. GLOBAL EMPIRE.
The Economic Nature Of Global Recessions:
Across the globe, world stock markets are in deep distress and in equally steep downtrends. As forward looking markets, which is what stock markets classically are, they are lead indicators for the actual economic situations which will soon be seen all around us. Real economy declines always follow stock market declines - later. The real economic red lights are flashing all around the globe. Brazil, Latin America's largest economy, looks to be following Argentina's economy downstairs in the next couple of months. Southeast Asia, wedded to the high-tech import side of the U.S. economy, is nervously watching their recent short-lived U.S. import wave diminishing as the American consumer slowly starts to pull back from the near hysterical spending splurge that followed the atrocity of 9/11. Trans-Atlantic economic relations are under fierce and increasing strain as the assorted U.S. tariff decisions are countered by the EU's counter tariffs. At the centre of all this, as usual, stands the main engine of the post 1982 boom, the amazing U.S. financial machine which, through the outflow of its credit expansions, fuelled the boom.
The Global Effects Of The U.S. Credit Engine:
The key and central point of the sum of market and economic events since 1982 is the United States. In 1982, the U.S. was still a creditor nation, the world owed the U.S. money. By 1985, it was the U.S. which owed the world. Now, the U.S. owes the world a NET $US 4.1 TRILLION and stands with a GROSS debt of $US 8 TRILLION plus. This debt is climbing at $US 420 Billion plus per annum. Internally, all the U.S. credit waves slammed the U.S. stock markets up to their blow- off highs in early 2000. Then, the Nasdaq crashed, the S&P 500 dived, but the Dow hung on, cycling between 10000 and 11000 for almost 2 « years in a massive"distribution zone" in which stocks went from strong hands into progressively weaker ones. But U.S. markets started breaking down terminally BEFORE 9/11. That breakdown led to a short-term crash immediately after 9/11, followed by a gigantic patriotic"recovery". But the imaginary earnings and the flagrant book- cooking were always there, and now they are coming to light.
In three HUGE waves since 1982, the U.S. has lent itself the money it wanted to spend. The rest of the world eagerly sent its goods to the U.S. to earn the money. Having earned the money, the world started re-lending it to the U.S.A. so that it could spend this borrowed money too. Finally, since about 1995, the rest of the world started to invest - directly by outright takeovers of U.S. corporations and indirectly by buying U.S. shares, and U.S. corporate and Treasury bonds. The U.S. spent all this money too!
The money has ALL been spent. It is ALL gone. Now, all that remains is the DEBTS. This is the end of the line for world economies and stock markets. Now, the world faces a GLOBAL economic recession.
Living In Global Recessionary Times:
First, each one of us must recognise that wherever we stand geographically, we are all in some particular place in the global economy. Second, we must each recognise that it has taken since 1982, that's 20 years, to get where we are today. It will take several years - likely 4 to 8 - to get clear of the mess. Third, and it is of the utmost individual importance to understand this, the focal point for each individual's personal understanding must be that in a global recession, most valuations will FALL.
The Start - The Middle - And The End:
In a global economic downturn, when most valuations and many prices fall, the best place to be is where the prices and valuations fall the least. Capital"gains" are no longer the name of the game. Instead, it's capital PRESERVATION. If one is faced with the choice of being placed where valuations/prices fall to 70% or where they fall to 30% of what they once were, which is best?
The answer is self-evident. Be where valuations/prices fall to 70% of what they were.
There Are Winners In All Global Recessions:
The real economic winners are those who can cut their prices - FIRST.
The other winners are those who can do something very old fashioned, they can pay CASH. The whole thing revolves around equity and yield. If you need any kind of capital equipment to operate, like a truck for instance, it doesn't really matter if market valuations of trucks fall, because you OWN the truck. You have REAL equity.
Look at most of the other truck owners, with their fancy and complicated financing, leases, etc. If the valuations on their trucks fell precipitously, they (or those financing them) would be in beastly trouble. In a recession, there will be a war to the knife for haulage rates. Those who OWN their trucks and don't have to service any financing, lease, etc. can afford to cut and CUT their rates and stay in business. Even better, as those who don't have equity in their trucks fall by the wayside, there will be other trucks to buy for a song in distress sales - if one pays CASH. One can also get spare parts and maintenance on the truck at VERY cheap prices - if one pays CASH.
Taking A Global Downturn Personally:
There is an inner and outer economic ring. The inner ring is what you personally own OUTRIGHT.
If you own something outright, your house, car, business, etc., it really doesn't matter much if the valuations of these things fall precipitously. After all, you still own them. They are all safely yours to keep. The outer ring is the area where you work to earn cash. If you have low or nonexistent personal debts, then you are the one who's able to cut your prices, your wage, salary, fees, etc., before anybody else. That means that you will manage to get paid all the way down the staircase of the recession.
In Global Recessions, Cash Is King But Gold RULES:
In a global recession, it is hard or impossible to buy on credit but you can always buy for cash. Valuations and prices do fall in most areas of any economy. Mostly it is not even worth bothering about where they fall and by how much as long as one has cash and earns cash. In some places, prices will fall by 70% or more, in others perhaps 20% or 30%. It is simply where prices have recently fallen the most where it might be an advantage to buy, with cash, that which is now relatively cheap in that area of the economy. But in terms of investments, the only place to be, in principle, is where the prices of the investment in question will fall the least. Here, in world-wide recessions, there is historically only ONE main candidate. That is GOLD, physical Gold, in bullion bar or bullion coin form.
What matters is not the daily/weekly/yearly value the market places on Gold. What matters here is the basic fact that one stands with a MONEY which is utterly clear and independent of the paper money that governments print. With Gold, one stands with global money. In economic terms, one is a citizen of the world. Now, if we all run into a deflationary contraction like the global event of the 1930s or the event in Argentina today, it is because the entire financial system implodes under its unrepayable debts. In this scenario, here, physical Gold will not fall much in value in global terms. Look at the 1930s, for example. If an American had stood with Gold coin (and kept his mouth shut) when Roosevelt devalued the Dollar from $US 20.67 to $US 35.00 to an ounce of Gold, he or she would have had an instant gain of 69.3%. Then when actual prices of shoes, food, milk, houses etc., etc., actually did fall, this American stood with even further gains because now, with the same amount of Gold, he could buy more.
If, Weimar Republic style (and many other governments have tried this one), a desperate government tries to inflate its way out of a credit implosion, it will be Gold which will soar in price as the value of the paper currency crashes against other paper currencies. Whether it is a credit implosion or a paper money explosion which lies ahead of us, it is the holder of Gold who will come out safely and as a winner.
Living In Very Dangerous Political Times:
Return for a moment to our front page and re-read the statement made by President Bush in his June 2 speech to the West Point Academy. Be assured, this geo-political statement will shake the globe to its very foundation. It is based upon a claim of complete global military supremacy, big enough to cancel and make void any attempt of any other nation to gain military equivalence with the United States.
Historical Interlude:
Geo-politically, our modern epoch came out of the Peace of Westphalia signed in 1648 which ended the Thirty Years War. This was a peace of total and utter exhaustion after a war which had devastated most of Germany. It was a war where unimaginable atrocities were engaged in by both sides. Out of this war came international law, also known as the law of nations. Later, when the early political ideas of Classical Liberalism came out for the public to see and examine, a Classical Liberal foreign policy came forward. All Americans can see and read this policy today, it is embodied in Washington's Farewell Address. This classical policy of the peaceful states simply required the political courage to maintain a national armament of a size one-third of that of any potential attacker.
The classical strategic principle was and is that any attacker has to have a superiority of three-to-one to have a chance of success. Maintaining this policy of"one-third" allowed any Classical Liberal nation to place a much lower tax burden upon the nation than the three times bigger burden which potential aggressor nations had placed upon themselves. Over time, this difference always showed up in the higher private savings which the lower taxes made possible. That was followed by higher private investments which these additional savings made possible. That was followed by a faster rate of capital formation, a rate of capital increase, which no semi-militarised nation could compete with.
All this was seen by the inhabitants of the semi-militarised nations. They saw the higher individual living standard in the Classical Liberal nations and they wanted to emulate them. Politically, the result was that it was increasingly the populations of the semi-militarised nations which resented their own nation's governments and political establishments the most. The Classical Liberal nations openly lauded their own greater internal individual wealth and what became their political punch line, their own greater internal individual freedom. This argument, as well as the actual demonstration of same, was what none of the more militarised nations could meet. In practice, their military costs made it impossible to increase individual internal well being. Those nations which did scale down their armaments, promptly found that the Classical Liberal nations acted with speed to also cut theirs, to maintain the one to three ratio and with it, their Classical Liberal geo-political and economic advantage.
It is this HUGE advantage, and ALL that goes with it, which President Bush proposes to throw aside.
The Geo-Political Consequences Of Bush's Speech:
NO other nation can accept this new"Bush doctrine" - not if it has any measure of pride left in its own national independence. Geo-politically, other nations will meet this challenge by joining together, officially or unofficially, to take such steps and actions necessary to subtract from the economic strength of the United States. The easiest way to do that, as the facts, presented by The Privateer make so clear, is simply TO TAKE ALL THE MONEY AWAY.
On top of that, simply by requiring that the U.S. financial and economic system start to REPAY its currently outstanding debts, the rest of the world can cause a gradual but financially fatal credit crunch.
Against these two steps, the United States stands both financially and economically helpless.
The only thing President Bush is counting upon is that the rest of the world wouldn't dare to take them.
Economic Versus ACTUAL Wars:
Great Britain - the real birthplace of Classical Political Liberalism and its offshoot, Classical Economic Liberalism - is in truth a historical exemplar of both. By sustaining its own internal civil society, i.e. never militarising it, Britain sustained the real economic means with which to send the Spanish Armada back to Spain in ruins, collapsing the Spanish Empire in the process. After that, it saw off the Absolute King Louis XIV in a sequence of thunderous wars, leaving France economically prostate.
Then, Britain had a small attack of"Empire-itis". It paid the price in 1776 when the American colonies rose in arms against the Empire. Here, in the interest of political accuracy, it must be stated that inside the U.K., the political opposition to the Crown's policy in regard to the American Colonies was ferocious, with Edmund Burke one of the foremost, as he made clear in his speeches in the House of Commons. Once over the mishap in North America, and again returning to its now better understood Classical Policy, it saw off not only Revolutionary France, but Napoleon too. But after that, Great Britain lost the sense of its own so successful policy by internally militarising its own nation in WW I, and bled itself to death in the battles in France. It went for total internal mobilisation and control under Churchill on May 10, 1940, utterly undercut its previous policy, and it irrevocably lost its global empire after World War II.
The Classical Liberal Policy:
It may well be asked, what was Great Britain's successful internal policy? It was first and foremost to do everything politically possible to sustain its own internal CIVIL society. Britain did this by maintaining a sound currency and a free prices policy. It also secured private property in law. The final principle was to NEVER establish an internal state of war regardless of the external wars Britain was fighting.
Since Queen Elizabeth I, by keeping civil society as free as possible and by keeping government costs as low as possible with no peacetime standing army and a navy where 80% of the fleet was at moorings in peace time, Britain's civil society was able to save, invest, and create an ever growing stream of capital goods and private financial savings. In times of war, this made the full mobilisation of the fleet and the formation of an army a simple straightforward matter. Time and again, continental powers got caught out, simply because they never noticed the latent capacity inherent in a free, private, wealthy economy.
The Foundation Lessons Of History:
The United States entered WW I in 1917, but the U.S. Senate, with sound historical sense, made it impossible for the United States to remain in Europe with an army of its own. The U.S. military force returned to the U.S.A., and it was demobilised. This follows the classical British Liberal policy.
But then the U.S. blew itself up in the 1920s, just as Great Britain had done with its credit expansions in the late nineteenth century. As a result, the U.S. abandoned free trade and then devalued its currency against Gold. This fatally undercut what had been a free, private and wealthy economy.
The United States entered WW II on December 7, 1941, after Great Britain had stood alone since September 1, 1939. This time, the U.S. did NOT return to its continental island when peace came. The U.S. kept its army in both Western Europe and in Japan. That, in turn, caused a semi-permanent militarisation of the CIVIL society inside the United States. Now, the U.S. military has itself become a fully distinct part of the U.S. political establishment, permanently altering it. In 1989-91, the global threat from the U.S.S.R. disappeared. If there ever was a real political chance for the United States to return to a version of the Classical Liberal policy that sustained individual freedom and liberty and economic growth and advance, here it was. Instead, in the 1990s, the U.S. blew itself up with another huge credit expansion. Fearing the internal consequences of this, the U.S. has decided to reach for WORLD Empire.
[b]IN TRYING THIS THE U.S. WILL FAIL - AS ALL OTHERS HAVE FAILED BEFORE THEM.
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