From Simon Black of Sovereign Man
Bankrupt Nations Try To Stop The Future From Happening, Fail
Debt is slavery… or at least indentured servitude of the worst kind.
That looming mortgage, the high interest credit card debt, the
short-term car loan– these are the forces that keep people from breaking
free and taking action.
Ironically, debt begets more debt. According to FinAid, the average
US student loan debt for a four-year private university graduate is
nearly $36,000, and $24,000 for public. Throw in that first car loan and
maybe a mortgage, and suddenly you’re staring at hundreds of thousands
of dollars in demoralizing claims on your future income.
At this point, most people figure… ‘hey, I’m already in debt up to my
nose, might as well get in up to my eyeballs and buy a new plasma
screen on credit.’
Debt is an enormous psychological burden that influences life’s major
decisions. It’s why so many people stay committed to jobs that are
unfulfilling in cities they detest under conditions they find
disheartening. Nobody wants to rock the boat too much… take too many
risks and you could lose your job, and hence the ability to make those
This familiar story has been playing out across the developed world
for years. This is not an ill, however, that exclusively affects
individuals and families. Even at the macro level, debt has the power to
subjugate entire nations to the whims of their creditors.
Enter the IMF.
In July 1944, world leaders gathered in Bretton Woods, New Hampshire
to be dictated terms of the new global financial system. The US dollar
was set as the global reserve currency, and the International Monetary
Fund was established to shower the world’s nations with the dollars they
needed to participate in this system.
Like most governmental and non-governmental organizations, however, the IMF eventually took on a life of its own.
(The CIA is a perfect example of this; formally established in
1947, the CIA was charged with… wait for it… being the ‘central’ agency
to coordinate US intelligence. It grew quickly into its own beast,
culminating in the creation of the post-9/11 National Intelligence
Directorate. It’s job? You guessed it: being the ‘central’ agency to
coordinate US intelligence.)
Over the years, the IMF became the roving economic police force of
the ruling class, coercing developing nations to take enormous loan
packages they had no hope of paying off.
As a result, the local IMF (or World Bank) representative in
developing countries became extremely powerful figures. Leaders in poor
countries were so terrified of loan default, the IMF was able to shape
policy and allocate national resources as the west saw fit.
Clearly the tables have turned.
By 2011, the IMF’s biggest customers have become ‘developed’ (i.e.
contracting) countries like Greece which are relying more and more on
the generosity of China. Now with the IMF’s former chief locked up in
disgrace for the foreseeable future, the race is on to see who will
The new order of things is very clear. The western hierarchy of the
past is insolvent, and its capital has migrated south and east. Western
leaders refuse to acknowledge this reality and are clinging desperately
to antiquated institutions like the IMF in order to retain control of a
now defunct financial system.
Newsflash: the IMF is only relevant to western leaders who live in
the past. French Finance Minister Christine Lagarde’s official bid to
become the new IMF chief only shows how pathetic their intentions are.
It’s like someone trying to take command of the Titanic as she’s headed
toward the ocean floor.
China, the world’s second largest economy, is routinely relied upon
to bail out the west… yet it has a paltry 3.65% of the IMF’s voting
power. Europe, however, is arguably the most insolvent region on the
planet, though it insists on remaining at the helm. Ultimately, the
market doesn’t care and has been orienting itself towards the developed
world for years.
Little by little we are seeing signs of a revolution in the financial
system– grumblings from Zimbabwe about establishing an asset-backed
currency, new exchange-traded gold contracts in Asia, more bank wiring
routes that bypass New York City, and corporations in the developing
world issuing debt on the international market in local currency with
I’ve written extensively that China’s renminbi is being increasingly
considered a reserve currency to compete with the dollar and euro. Other
developing countries have already entered into swap agreements to
accumulate renminbi reserves, and even western companies are issuing
There are signs of more liberalized exchange controls all the time;
it’s possible for individuals and corporations to hold savings in
renminbi through a variety of ways… you can even walk into the New York
City Bank of China branch and open an account.
The latest move is American Express’s new renminbi-denominated
Travelers Cheques– a ‘cash equivalent’ issued by a non-Chinese financial
institution. This is a major step, and its implications are far, fare
more important than whichever white person is jonesing to head an
irrelevant organization of the past.
Western leaders simply don’t want to accept their loss of primacy;
they’ve become enslaved themselves, not only by the insurmountable
sovereign debts they’ve accumulated, but by their stubborn refusal to
acknowledge the simple reality of a new system they can’t stop and don’t